Washington Anyone Home

By Author: Mel Joelle
Total Articles: 4328
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Dear Members of Congress, the Bush Administration and President-Elect Obama,

Help!!!

We, as a people, witnessed another circus this week in Washington as the 3 heads of the Auto Industry and the head of the UAW testified and answered questions before respective committees in the House and Senate. Its enough for me to wonder if there are any signs of intelligence in the universe of the Washington scene all of it Congress, the Administration, the new incoming administration, the Press and the whiz kids who visited this week from Detroit.

There seems to be an utter lack of ideas, creativity and conviction to really address this problem. It makes me wonder if we are to see the Dust Bowl of the 30's evolve into the Rust Bowl. We have a once gargantuan industry in need of life support. They are seeking a loan of $25 Billion and I, for one, have no idea if that amount is enough or is warranted at all. I do know this: This industry and our country are facing the consequences of 40 years of playing ostrich. Foreign competitors clearly make better cars, and with the notable exception of SUV's, make cars that ...
... people actually want to buy. We are transferring our national treasure to import oil and fund our enemies so they may continue to pursue mischief and worse. All of this has been true for decades and we haven't addressed it at all.

Now Barney Frank disingenuously rails against bankruptcy as a viable option because he claims it just allows the auto industry to not pay its debts. But this is really more of the same from Frank. He is just trying to protect the unions, even if it means that the major problem is not effectively dealt with. On the other hand, we have other congressional leaders who don't want to lend any money to the auto industry, saying that bankruptcy is the only option. Here, we have the same old Washington; taking on two separate stances and not really seeking a creative solution that will achieve the best result.

Where are the ideas? Who is there that can think outside the box? Anyone Home?

Here's my input: Make the loan conditional on one thing: A complete reorganization under a modified, undeclared Chapter 11 where those owed money will still have valid debts owed to them by the industry. The reorganization must be voted on by the shareholders AND Congress and must include a completely new Executive Staff and Board at each company. The plan must include a complete renegotiation with all of the labor unions under the threat of binding arbitration. The plan has to make sense to include the production of vehicles that meet the needs of consumers, use new emerging technology, cut the cost / mile for fueling the vehicle. The pro-forma needs to show a clear unit profit model that includes all revenue and cost factors. All supplier and labor contracts need to be on the table for renegotiation. It is not acceptable that the UAW, for one, can take a hands off approach. This is going to cost everyone and they need to be included. If the UAW proves to be unhelpful or uncooperative, other non-union arrangements must be made with the help and involvement of the management of better managed car companies. UAW members will be free to seek employment but without the shackles of their former union.

I am not asking them to do anything that my Internet Marketing Services Company doesn't have to do; service our customers and make a profit so that I can pay competitive salaries to those who provide valuable work. No hand-outs for me; I don't want them. But please don't ask even for a loan if you don't have a reorganization plan after having blown out virtually all of your cash. Why do you think we will have a different result if you are simply suggesting that you are going to continue doing the same thing?

The fact the Car Companies and the UAW came to Washington in their own private jets with absolutely no plan is a clear indication that fundamental change has to occur. However, Washingtonians show the same lack of insight and the same political posturing. Just listen to the talk shows; Barney Frank and Senator Richard Shelby of Alabama; they are both stuck in their positions and we hear the same thing over and over.

How about the federal government offering a $10,000 tax credit for the purchase of all vehicles with gas mileage exceeding 35mpg? I think there will be some buyers and you will force the car companies to actually make cars people want.

While we are on the subject, how about getting involved on the part of home owners; intervene to establish work-out rules for troubled mortgages. Since the banks aren't being helpful, impose the work-out-rules on the lenders. Terms can be established that will provide long term recovery for the lenders, the mortgage holders and the federal government.

The stock market is now down 52% in little more than a year and has dropped 10% in the last 2 days. Including inflation, the stock market is 40% lower than it was 12 years ago. The financial and credit markets are voting and rejecting the ineptitude of the largest manufacturing industry and our federal government.

President-Elect Obama, I am hoping beyond hope that you involve yourself between now and January 20th in a strong consultative role in the executive and legislative branches to come up with thoughtful and innovative solutions here. The time is now. You said, change you can believe in. The time is now. These are extraordinary times and you mustn't wait. The country is melting.
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