Why is Detroit Being Held to This Double Standard?!

Detroit Auto Bailout In Trouble

Posted December 10 2008 01:25 PM by 55Guy
Filed under: Chevy News

This is really, really starting to piss me off! While the federal government is still dolling out cash, no questions asked, to the banking and finance industry, Detroit is being villified and lambasted by the same government for their financial woes...

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It is a double standard of the worst kind. When Washington bailed out the collapsing finance and banking industry, there was no mention of a "Finance & Banking Czar", no mention of increased oversight of the finance industry, no mention at all of the industry paying back the 100s of BILLIONS of dollars they were getting, and absolutely no mention of requiring CEOs in the banking and finance industry to give up their enormous salaries, bonuses, or even resign their posts.

Yet, somehow that's exactly what Congress has been demanding of the Auto Industry. Congress saying "Detroit did this to themselves" and one senator even saying hte head of GM should resign because it was his fault GM was in trouble. WTF?! Yes, the Big Three have made mistakes, GM more so than the others, but those mistakes are not near as bad as what Wall Street and the banking industry did with the subprime mortgage market and other investment aspects. And lets remember, a lot of the victims of the mortgage market work for the auto industry.

If Detroit doesn't get help, we should take to the streets in whatever way necessary to convince our government that we won't stand for double standard politics like this, and that the American citizen isn't as politically apathetic as Washington D.C. might think!

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Reader Comments:

1. There is definitely a double standard. While GM may be the victim of the perfect storm (bank failure, housing market failure, skyrocketing gas prices), the America haters out want it to collapse so they can say, "I told you so," at their Sierra Club meeting.

A lot of people don't think GM can survive, even with the bailout. Just because the government doles out the cash, it doesn't mean consumers will buy new GM cars. It takes a long time for customers to forget things like the Cadillac Cimmeron and Pontiac Aztek.

Jim Campisano - Posted December 11 2008 05:58 AM

2. Big problem for anyone to buy any car right now is a lack of financing if you have less than perfect credit. That would be where the government could really help the auto industry, offer a government backed financing and incentive plan for people to buy new or newer american cars.

The aviation industry has had this for years. The EU offers any European airline ridiculous incentives, tax breaks, and discounts if they buy aircraft from Airbus Industries.

55Guy - Posted December 11 2008 07:32 AM

3. 55Guy - thanks for posting this. Totally a double standard. And, if thats not enough, the domestics also are fighting against our own government's lack of an industrial/trade policy. Check out this op-ed:

http://www.freep.com/apps/pbcs.dll/article?AID=2008812100354

General57 - Posted December 11 2008 07:03 PM

4. Check out this article from the Washington Post:

Reluctance to Help Detroit Reeks of Class Bias
Washington Post
By Warren Brown
Dec. 7, 2008

It has happened repeatedly in the last several weeks -- well-paid, well-known journalists questioning the wisdom of "bailing out Detroit," of helping an industry whose union-represented workers have substantially better wages and benefits than other manual or skilled laborers, or, more precisely, who are better compensated than their nonunion counterparts working at foreign-owned rival companies building cars and trucks in the United States.

The questions are tinged with outrage and ridicule: Why should Americans who earn less, have inferior pension and health-care plans, help the United Auto Workers union? Why can't the UAW be satisfied with the same pay packages given at Honda, or with an even less-expensive compensation agreement for workers at the Hyundai assembly plant in Montgomery, Ala.?

The queries often come from people who earn substantially more than the estimated $71,000 annually in wages and benefits paid to UAW members. They come from people who, having reached upper-middle-class status by virtue of their college educations and communication skills, certainly wouldn't settle for earning less.

So, why are the questions being asked?

Might I suggest class bias?

There is a feeling in this country -- apparent in the often condescending, dismissive way Detroit's automobile companies have been treated on Capitol Hill -- that people who work with their hands and the companies that employ them are inferior to those who work with their minds and plow profit from information. How else to explain the clearly disparate treatment given to companies such as Citigroup and General Motors?

Let us stipulate for the record that both Citigroup and GM have made their share of management errors. Citigroup made loans it should not have made and sold lots of commercial paper it should have trashed. But Congress offered barely a whimper of protest to the government's emergency action granting Citigroup $25 billion in bailout money. Similarly, the Mob of Pundits seemed not to care much that many of Citigroup's managers remained just as rich after the federal bailout as they did before receiving the government's aid.

What Citigroup manager was dragged to Capitol Hill to publicly present a long-term plan for business profitability and viability? Did I miss something?

Now comes GM, Ford and Chrysler -- supplicants all, companies that bet wrong on U.S. gasoline prices (the same error made by Toyota with its Tundra pickup, by the way) and that were as shocked as the rest of us by the fiscal carnage caused by bad loans made by banks such as Citigroup.

It apparently matters not that the domestic car manufacturers account for 3 million to 5 million U.S. jobs. It matters not that, despite some bad guesses on product development, they've remained engines of U.S. innovation. (Their work with biologically derived fuels and emergency communications systems are examples.) Nor does it matter that they pulled us through several wars and one terrorist attack (GM's zero-percent financing plan after the Sept. 11, 2001, horror).

And, of course, it does not matter that the domestic manufacturers for decades have been operating in a country wide open to foreign competition, but bereft of anything resembling a sensible industrial or energy policy. That's quite different from Japanese car manufacturers that have benefited mightily from financing and cooperation via Japan's Ministry of International Trade and Industry.

No. The only thing that matters is that Detroit's automobile workers have earned enough money to allow their families to dream, to send their children to the colleges and universities from which many of their critics in the media graduated. How dare they!

Implicit in the criticism of UAW compensation packages is that union-represented automobile workers are being paid above their social class. Greedy, bad people. They are supposed to be satisfied with wages that cover only the basics -- food, acceptable clothing and housing. They are not supposed to receive pay that allows them to aspire to or dream of more. They should be happy with the development of America's Wal-Mart economy, one in which less-expensive skills, talents, products and services are imported to satisfy the American consumer's insatiable lust for the highest-quality goods and services at the lowest possible prices.

That is what stuff-makers and other manual laborers deserve. Wall Street's money people and well-paid journalists, on the other hand, deserve much better. They studied, went to college. They use their brains. They should be paid more.

So, let Detroit's automobile companies slide into bankruptcy. We'll lose a few million more jobs. But those of us lucky enough to remain employed will still be able to buy cars from Honda, Hyundai, Nissan and Toyota. Or, if we are doing quite well, we can snatch something from BMW, Porsche or Mercedes-Benz.

What the heck? If things get really rough, we can always catch a sale at Wal-Mart. Citigroup most certainly would be willing to finance our purchases at favorable interest rates. What a country! We once rejoiced in building things, innovating, racing to the top. Now, at least for the people who use their hands to make this country go, we're celebrating a mad dash to the bottom.

Are we not better than this? Is this the America we want to be?

HTBuilder - Posted December 14 2008 05:00 AM

5. Wow!! this was an interesting list of readers comments. I do agree that there is not enough people making enough USA made products these days. We just ship it somewhere else to have it made cheaper. I always try to find the highest quality USA made stuff first but it is just not made here anymore. Too bad that some of the products that are still made here are just too expensive for most of us so we opt for the cheaper one.

chevelle83 - Posted December 17 2008 09:50 PM

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Detroit Auto Bailout In Trouble

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