A few things for Obama's auto task force

Posted by: David Welch on February 16, 2009

It appears now that there may not be a car czar after all. Instead the Obama Administration may set up a task force which reports to both Treasury Secretary Timothy Geithner and Lawrence Summers, chief of the National Economic Council, says the Wall Street Journal. That’s probably a good thing if it results in less bureaucracy. Plus, Treasury doles out the money that Detroit wants to borrow. So Geithner should play a key role.

Whoever the Obama Administration has overseeing the bailout and the restructuring plans that General Motors and Chrysler plan to put forth tomorrow, the task force needs people who really understand the complexity of the auto industry and the problems facing the domestic car companies. In November and December, members of Congress and various experts who testified in Washington threw out a lot of bad information. Let’s hope the people on this task force actually know something. Here are a few things they should be aware of as they assess the situation in Detroit:

1. Despite what the green wing of the Democratic party says, the Japanese do not make the hybrids that consumers crave. They make the hybrids that a small minority craves. Despite record gasoline prices last summer, hybrids are still less than 5% of the market. We don’t need to mandate more hybrids unless we mandate a gasoline tax that makes consumers want them.
2. Some southern Republicans think this is all the UAW’s fault. Not so. Wages are pretty competitive. The JOBS bank (that paid layoff clause that everyone hates) is on its way out. The union does need to give on its rigid work rules and its gold-plated healthcare deal. But you don’t save Detroit solely on the UAW’s back.
3. Some of GM’s bondholders will get hurt in a cram down of the debt to 30% of its value. But many of them also bought these notes at 15% to 25% of their face value. Treasury should assess how many of these bondholders will really lose something by taking 30% and equity in GM and use muscle to get them to play ball.
4. Watch GM and its plan to dump brands very closely. This company is culturally incremental. Without holding them to disposing of the brands, GM could hangdesign and onto some of them for years. That will sap billions of dollars in marketing and product development to peddle Saturns, Pontiacs, Saabs and Hummers that few buyers want.
5. It’s the retirees, stupid. That’s one of the biggest culprits when it comes to eating cash and profits. Pension and healthcare costs have been a big problem at GM for a long time. Management and the union are trying to set up a fund to pay for more than $50 billion in long-term retiree healthcare liabilities. They could make that easier to manage if they jacked up premiums and co-pays to equal 29% of total medical costs like the rest of us pay. The UAW pays less than 10%. Social safety nets in Japan and Europe keep their automakers out of the benefits trap.
6. Get credit moving. Obvious, I know. But nothing has managed to ease up lending much yet.

There’s my two cents. We’ll see who is on this task force and what they will do. Hopefully, there will be some sensible people looking at all of the problems and coming up with practical solutions.

Reader Comments

caspus

February 16, 2009 12:48 PM

Finally...someone with a rational understanding of the needed to do's

Don Childs

February 16, 2009 1:00 PM

Let the auto industry go chapeter 11, just like any other miss managed business

Public Perception

February 16, 2009 1:07 PM

I think the UAW plays a more central part of the problem than you lead on. While you acknowledge the pension and health benefits as a major culprit, you don't seem to be willing to say that that's the UAW's fault??? You have to add those benefit costs into the average cost of a vehicle and when you do, "American Made" becomes vastly uncompetitive. Now add the public's perception of shodily made cars and two decades of lip-service from top execs about "quality" and you'll begin to scratch at the bigger challenge here!

patrick

February 16, 2009 1:12 PM

You realize the Gov't has a cap on the number of hybrids that can be sold in the US, right? Do you know anything?

drew

February 16, 2009 1:13 PM

A lot of good points--you need to check your writing though. Too many typos--distracted from and clouded a good piece.

drew

February 16, 2009 1:13 PM

A lot of good points--you need to check your writing though. Too many typos--distracted from and clouded a good piece.

Achiles

February 16, 2009 1:17 PM

You know I am generally a free market conservative when it comes to economics but I get so tired of people tooting the horn of market forces through increased fuel costs being the fix. There seems to be no real understanding of the difficulties people face intheir everyday lives. The problem isn't that people don't want hybrids it's that they cost twice as much as a similarly sized car! The people who can afford a $40k or more hybrid can also afford, or think they can afford, the gas bill that comes with a similarly sized luxury SUV! Give us the model T of hybrids and watch how fast they fly out of the lot. Make the prices low enough that the fuel savings actually pay for the car. economics 101 my friend cost to benefit ratio has got to be good and right now it isn't for the vast majority of the public.

National Security Hawk

February 16, 2009 1:22 PM

1. Sorry, you seem to have missed a giant trend here. The Prius, just one example, grew from nonexistant to one of the top 10 selling cars in the US, against all others, in only a decade. A new vehicle type getting 5% of market share in less than one vehicle turnover cycle is huge news. Keep in mind that market vehicle turnover occurs in multiple decades, that automobiles took over a century for market saturation in the US and that the US still has around 9 million horses.

Electric drive is simply the end game - energy efficiency says so and the costs are now competitive and will only go down. The real debates are mostly about the relative stengths and current limits of different energy carriers, distribution and storage devices and methods and systems integration, with very little discussion (unfortunately) on marketing and advertising, as, unlike oil, there are hundreds of little silver bullets and the mix and projections keep changing with incremental progress in each area. Motive power analyses and projections have suddenly become very, very complex and good enough analysis for pure gassers is simply inadequate to the demands of the present to understand vehicle products of the future, let alone the markets. It's time for reporters on this topic to step up thier education and do more sophisticated reporting.

Could this reporter please maybe do a series, getting into more details? Don't forget diesel, CNG, many, many different power pack chemistries and management systems, gasser performance emulation constraints, scale, fixed cost and investment constraints in the currect credit crunch (not just consumer contraints), alt energy, alt and nonpeak energy price differentials, the not so new metrics for full vehicle cycle average energy efficiency (everything full to everything needing to be refilled/recharged on one full vehicle range) (also know as why trying to combine vehicle efficiency with energy cost (which varies by energy source and type (esp. when multiple types go into the vehicles operation over its full range) over time and geography) in MPG is broken now (energy efficiency and cost are very different concepts), etc., etc. Thank you.

Getting Steven Chu, a broadly knowledable and current energy expert, to bang heads with a hard nosed alt energy economist (is that Summers' specialization, though?)seems like a good start to me, as both energy efficiency and cost are critical considerations.

Economic Historian

February 16, 2009 1:27 PM

Does this mean that Business Week is now a member of the Pigou Club (see Greg Mankiw, economic advisor under Bush)? We all know that gas tax proposals are politically unfeasible head fakes to prevent real, immediate action to get us off of depenedence on foreign oil and sending our money overseas to volatile, hostile areas of the world.

At this point, any flawed solution is better than continued inaction of the last 35 years. Don't make perfect the enemy of the good.

William Barber

February 16, 2009 1:33 PM

You are aware that the only saleried retirees that still get GM medical benefits are those that are under 65 years of age. Covered spouses under 65 years of age also get GM healthcare until 65 even though the retiree may be 65 or older.

As of 1/1/09, those of us over 64 are now responsible for our own Medicare supplement insurance and what is available isn't as good as what we had from GM, plus it is more expensive.

It is my understanding that if GM gets the medical insurance responsibility for the hourly retireees moved over to the UAW, they will have no more responsibility for that either.

By the way, my fellow employees and I worked for those benefits over the years that we were employed. That was ALWAYS understood to be part of our compensation and they, GM management, made that very clear on an annual basis. Like my pension, that was part of my retirement plan, long before there were any IRAs!

Considering the current state of the economy and more specifically the financial markets, maybe the government ought to create a program to encourage or require ALL companies doing business in the USA to have pension and healthcare programs for retirees. That would eliminate the need for the federal government to have to provide such services and maybe put more money in retirees' pockets to keep the economy going. At the moment, Social Security and devastated IRAs are going to do it.

If all companies had to provide pension and retiree healthcare programs, the "playing field" would be more level and people retiring would have a far more secure future as well as being significant participants in the market place.

That is my two cents.

William Barber
36 year employee of GM
Gravios Mills, MO

Bob

February 16, 2009 2:15 PM

David - Are you positing these points as fact or interpretations based on your reading of the auto industry? If they are fact, and even if they aren't let's spin a couple of these. On point 1 I don't have any major disagreement as hybrid sales relative to all sales globally is a small percentage (I believe the U.S. is the #1 consumer of hybrids, but I question what the typical consumer looks like). The change to the rhetoric that I would make is that we actually need to do something with CAFE ratings and the like such that they matter and "more efficient" vehicles make it to our markets. Point 2 is interesting. It is a spin on present vs. past. Yes, wages currently are on a more equal footing. However, if you look at more longitudinal data I believe you will see discrepancies in that UAW is higher (I could be wrong, but doubt it). My sense is 20 years at a UAW facility reaps more than at a non-UAW (interesting how we never really talk in terms of time only in terms of the present). On point 4, what's your plan? Personally, I think some GM brands need to be euthanized as there is great overlap in terms of the markets catered to. You also have the problem of some real niche products and lines (e.g., Hummer, Corvette, Saab, etc.). This will be painful as the UAW will be involved and others may choose not to see the light. Let's also be honest and say there aren't a lot of brand buyers right now. Finally, you're a brave man going into #5. Its easy for us to point the finger, but if I'm a retiree I'm not sure I'm with you. Somehow, changing the rules on those not actively employed just doesn't seem morally right. Maybe there should have been a stepped system where different generations had different levels of benefits based on when their employment began. I guess going forward there still could be such a system. For this process to work there is going to have to be oversight and accountability. To be honest, I'm not sure if we're really willing to commit at the required levels and step up to solve the problems. After all, if nothing else, ECO100 should have taught us all that there is no free lunch!

Anon

February 16, 2009 2:27 PM

As an auto industy retiree, I find comment #5 troubling. I was under the impression that I 'earned' the retirement I was promised.

In the spirit of 'shared sacrifice,' how about all public employees sacrifice a portion of their retirement benefits at the same time those of us from the private sector are asked to do the same.

Bill

February 16, 2009 2:30 PM

I agree with most of David's comments. What the administration needs is a manufacturing guru; someone who really understands all the logistics necessary to make the systems work. In addition, remember that green technology means a lot of initial investment and unknown payback.

Paul (Vw)

February 16, 2009 2:34 PM

>>> Some southern Republicans think this is all the UAW’s fault. Not so.

OK, I'll bite.

Given that the few republicans remaining in congress are of no consequence to passing any legislation for the immediate future, I'd like to offer up the questions the above assertion brings to mind.

1. What specific republicans? Can you please provide names and quotes where they clearly state "this is [*]all[*] the UAW’s fault."
2. What do you mean by "think?"
3. At this point, as evidenced by the passage of the so-called "stimulus" bill, republicans are of no consequence. So what do you even care what they allegedly "think" at this point? Or is there no other non-pro-union (note, not necessarily anti-union) group of consequence to apply a straw man fallacy to at this point in time?

My guess is that southern republicans vote(d) in ways consistent with their constituency. So just as you might have a democratic senator from Michigan vote for pro-Detroit, senators from southern states who have foreign auto plants might vote a different way.

Other than that, good posting.

Hugo van Randwyck

February 16, 2009 2:40 PM

If the workforce at GM and Chrysler genuinely want better job security - they could set up company unions instead. Get rid of UAW, and have the GMAWU and CAWU, the General Motors AutoWorkers Union and Chrysler AWU. This will give flexibility and re-invigoration - even if all the union officials are the same. David you're right about the retirees, when GM had 40% market share, the retirees were manageable, at 20% market share, it's double per car. So the retirees need to contribute more - not the taxpayer. There is one flaw in all these arguements - and that is the greater success of GM overseas operations, who have also seen their market share fall, yet have had a better profit performance for years. The only difference is the management. Are GM changing their North American training/promotion process for managers, to include more time in overseas plants? Including market research?

Joe Gatto

February 16, 2009 2:47 PM

In the auto industry it is clear that the total compensation costs per employee and the retiree pensions paid by the Big 3 in the US are unsustainable. President Obama has to insist on a radical change as a condition for a bailout. One potential contribution would be the elimination of health care benefits coincident with the introduction of universal health care. A more immediate and widely accepted condition should be a dramatic change in the model ranges to smaller more fuel efficient cars as rapidly as possible. This can be achieved quickly by the introduction and co-production in the US of their European subsidiaries’ suitable models from Vauxhall, Opel, Ford (the Fiesta World Car is an example) etc. to shortcut the otherwise very lengthy costly process of developing new models and re-tooling.

Many years ago, during a previous hike in oil prices, International Planning & Research Corp., an American consulting organization, carried out market research using European developed proprietary sophisticated trade-off software to assess how higher gasoline prices would affect car buyers’ model and feature preferences. Eerily, the findings are equally relevant today, though obviously in need of updating. The technique has been substantially developed and also applied to optimising the mix of salary and benefits for employees. Car buyer research would optimize the range of models/features. Employee research would provide the “least painful” “least unacceptable” necessary reductions in salary/benefits.

Chrysler’s strategic alliance with Fiat is an example of this direction. An American auto industry producing cars suitable for European, American and other markets would give economies of scale (as enjoyed by major competitors) and make the Big 3 much more competitive. Such a strategy would allow US manufacturers to compete more successfully against the Japanese and Korean manufacturers and the emerging competitors in China and India, and thus arrest the continual decline in market share.

Gordon Kemps

February 16, 2009 2:59 PM

GM pay scales should be cut by 20%
I agree GM should have changed it's production lines to New
Energy Saving Cars and Trucks 2 years ago!

GM Executives and Engineers have not been doing their jobs;
There has to be some rapid changes!

dylyo

February 16, 2009 3:22 PM

so dis-appointing

all this strong talk about what to do

even broken down into 6 points


and you forgot the biggest part of the auto industry!

suppliers:
they employ the most workers in this industry
they have been begging publicly for credit over the past 2 months now
they have been begging publicly for a change to their receivables which is currently almost 2 months


why is everyone forgetting the part that is about to fall apart and will take down the bigs in Detroit no matter how much help Washington gives if ignored any further?


I just dont get it


song

and

dance

=

bankruptcy domino's

watch'em fall if no credit to suppliers before months end

period

Jeff B

February 16, 2009 3:48 PM

David:
I disagree with your comment about hybrids. First, only a few short years ago hyrids were 0% of the market. Now they are 5%? On a large purchase item like a car, I'd say that's pretty good. It takes people a while to catch on. Just wait until Honda launches it's new low-cost Insight. This is not about Green Democrats. It's about Americans who want to opt-out of the stranglehold the oil industry & oil-exporting countries have on us.
Second, whether you fault the UAW's ridiculous work rules, their wages, or whatever, the overall cost of labor for GM, Ford & Chrysler is not sustainable. The real issue will be whther our elected officials -- whose campaign coffers are heavily padded by the UAW & automakers, have the courage to stand up to both, and demand necessary changes. Frankly, I doubt they do.
Finally, any plan for salvation will need to focus on short-term product-based solutions, NOT just cost-cutting. Toyota & Honda did not rise to where they are by cost-cutting. They did it by making superior products. GM & Ford must do the same. Chrysler is already dead.

Shaclo

February 16, 2009 3:52 PM

I am not interested in a hybrid because 95% of my driving is highway driving and I have been told that the hybrid only is an advantage at lower speeds, stop & go traffic. Also, I have checked the trunk of the hybrid Camry and it is about half the size of my current Camry! I need that space!

vax

February 16, 2009 4:53 PM

The last point about the credit market is amazingly neglected. Detroit is a victim of the credit stoppage more than it is a victim of mediocre cars or of that perpetual whipping target called the UAW.

If most cars are bought on loans, or sometimes home equity, then uh, duh, no wonder few cars are being sold these days!

"fixing Detroit" really means fixing the credit markets, then dealing somewhat with some residual, but not completely acute issues like labor costs, retiree health care and marketing choices....

Viking

February 16, 2009 5:38 PM

So please tell me again what makes Geithner and Summers qualified to oversee the auto industry?? It seems to me they would be better qualified to oversee people who want to cheat on their taxes!!

Jimmy Cartier

February 16, 2009 8:14 PM

Had a Chrysler - It was piece of JUNK.
Chrysler should not get a dime of bailout money.

David Welch

February 16, 2009 9:40 PM

David Welch here. I’m the magazine’s Detroit bureau chief and writer of this post. Thanks for reading and writing in. I have a couple of comments in response to what some of you have posted. One reader asked which Republicans think the UAW is the problem. How about Richard Shelby and Bob Corker? Recall that Corker was negotiating with the UAW, not the bondholders’ committee, during last year’s vote on a bailout. I’d say he is pretty focused on the UAW as Detroit’s cost problem even though excess debt is clearly a huge problem.

Another reader argues that hybrid have gotten to nearly 5% of the market in just a few years. Well, it’s actually been 10 years since the Prius and Insight were launched. I support the technology, but consumers aren’t there yet. Another said that the government limits hybrid sales. Untrue. The government does limit the tax incentives, but that proves my point. Without some kind of incentive, hybrids haven’t really captured America’s imagination the way the hype machine would have you believe.

And last, the irate retirees. I agree that it is really poor to strip away retirement benefits that were guaranteed years ago. But in the case of auto industry retirees, if they don’t accept weaker healthcare benefits now, there may not be much of a company left to provide any kind or retiree benefits later.

Hilary Smith

February 16, 2009 10:36 PM

I hope the UAW doesn't give one inch. Auto jobs are some of the last remaining middle-class jobs in this country. There are risks associated with bond investment and that fact is stated clearly at the time of purchase. And even if the auto workers agreed to have their wages cut in half, socialized medicine and living-wage retirement security are the only things that will make American industry competitive again. And what's with this "czar" business? The word implies absolute power, something that is decidedly un-American.

Jim

February 16, 2009 11:03 PM

just 2 additional points:

1. need to address "fair trade" rules to "really" level the playing field

2. Cafe doesn't do it - need to put the burden on the consumer to pay for the precious resource - that will drive demand for fuel efficiencies. We have been doing it wrong.

econguy

February 16, 2009 11:03 PM

Dylyo--
Good point.
But the big picture though is that the UAW has taken down the industry to this point. If you look at cost shift effects of them you answer and explain the reliance on SUVs for profits leading up to oil crunch time as well as continuous hits on suppliers and gutting of the designs, safety failings, automation failings, product cycle failings, and starving of Saturn etc etc

Fact Checker

February 17, 2009 11:25 AM

The author responded:

"Another reader argues that hybrid have gotten to nearly 5% of the market in just a few years. Well, it’s actually been 10 years since the Prius and Insight were launched."

It's clear that the author did not read the earlier comments of National Security Hawk:

" Sorry, you seem to have missed a giant trend here. The Prius, just one example, grew from nonexistant to one of the top 10 selling cars in the US, against all others, in only a decade. A new vehicle type getting 5% of market share in less than one vehicle turnover cycle is huge news. Keep in mind that market vehicle turnover occurs in multiple decades, that automobiles took over a century for market saturation in the US and that the US still has around 9 million horses."

But why let facts get in the way of dragging your feet and getting left in the dust?

The article author's views appear behind the times and uninformed. If that was the intent of the author, success. If not, please try another article again after doing some research on electric drive efficiency and elctricity cost.

Reality Checker

February 17, 2009 12:22 PM

That must explain why, of established auto make/models, hybrids were among the top gainers in January, relative to other vehicle types, year over year:

"Two hybrid models did post gains from their year-ago, marks..."

Nissan Altima Hybrid joined Lexus in winner's circle with an increase from January '08 sales.

The Lexus 400h was up 28.3 percent from sales a year earlier [and up from the previous month] while Nissan's Altima Hybrid ... was up 36.1 percent ... in January ['08]."

That's from Edmunds, who knows way more about cars than Business Week.

Darin

February 17, 2009 9:23 PM

Dear Econguy, the cost shifts you refer to that put the Big 3 behind the eight ball are the unfair trade advantages given to those imports allowed to compete in this market while not bearing the same cost structure as a matter of their home nations policy. For example, currency manipulation, Value Added Taxes, Universal health care. Many of these imports carry $4,000-$10,000 cost advantages according to the House Ways and Means Committee. Toyota executives have stated publicly that they could not afford to sell the Prius if it wasn't for sales of their "gas-guzzling" trucks and SUV's. Toyota executives have also stated their intention to reduce wages to the "area manufacturing standard". In Georgetown, KY that standard is $12.64. The reason people say the UAW built the middle class is that they led the way to higher pay and benefits for millions of Americans, not just their members. Those that advocate draconian reductions in UAW benefits should realize that the pattern works the same on the way down and millions of Americans that don't belong to a union will soon find their standards of living reduced. Talk about decimating the consumer base. Henry Ford had it right when he said his employees should be able to afford the product they make.

Paul (Vw)

March 3, 2009 7:02 PM

>>> Some southern Republicans think this is all the UAW’s fault.

>>> One reader asked which Republicans think the UAW is the problem. How about Richard Shelby and Bob Corker? Recall that Corker was negotiating with the UAW, not the bondholders’ committee, during last year’s vote on a bailout. I’d say he is pretty focused on the UAW as Detroit’s cost problem even though excess debt is clearly a huge problem.

Ok...so Mr Welch presents two republicans who have pursued ends which is inconsistent with union desires. Where have they specifically stated that they "think this is all the UAW’s fault." Do we have any quotes?

To assert they take such an extreme position to "think this is [*]all[*] the UAW’s fault"...based purely on inferences seems a bit much to me. I could see Mr. Welch saying some southern republican senators have not championed union causes. But to say that they would be so dim as to think Detroit's problems are "[*]all[*] the UAW’s fault" without supporting statements...well, I just don't get it.

Mr. Welch...do you have any quotes by any of those southern republicans to say as much?

David Welch

March 4, 2009 12:16 PM

David Welch with BusinessWeek here. Paul, you’re getting pedantic again. When Republic Senators who represent nonunion automakers in the south attempt to negotiate with the UAW—and not, I repeat not—with the Wall Street firms who hold debt, or with parts makers or dealers, then they’re putting the responsibility for restructuring squarely on the UAW. As an aside, the UAW has a massive role in this. But you won’t restructure Detroit solely by rewriting the labor contract. If that’s unclear, please reread about 10 years worth of coverage on General Motors.

Did the Republicans say from the pulpit or in a written press release that, “it’s all labor’s fault?” No, they didn’t. I guess you got me there. Maybe that’s because the party you so ardently defend isn’t stupid enough to try to negotiate union concessions while maligning them in the papers. Delphi’s Steve Miller tried that and it blew up in his face.

Corker and Co. spoke with their actions. They went straight to the UAW and no one else. They didn’t try to work with creditors, dealers, suppliers or any other constituent before voting on a loan. Corker even spoke about the debt being renegotiated at some point. I credited him for that at the time. But the only constituent he wanted concessions from as a condition for passing the first loan proposal was the UAW. How else would anyone interpret that?

Paul (Vw)

March 4, 2009 11:26 PM

Thank you, Mr. Welch for kindly clarifying that it was an conclusion you made.

>>> When Republic Senators who represent nonunion automakers in the south attempt...

Ah...there is the gem I was looking for. Was that so hard? So it isn't that they "think this is [*]all[*] the UAW’s fault"--they are advocating a position that is consistent with their constituents. This area could use some more serious explanation. Are these southern senators seeking to gain an advantage for their states..or do they just not see the sense in spending money from a limited federal budget that does directly not benefit their states (ex: are the eastern state senators as keen on ethanol subsidies as in the agricultural midwest?). Were they positioning themselves for concessions from democrats on some other bill if they backed off on UAW concessions? To reduce the motivation of their empirical behaviour to something as silly as sole assignment of blame to the UAW takes away from reasonable discourse. These are critical times we live in and no one group owns the whole truth.

Out here in the peanut gallery, I expect that fellow posters like (and including) myself won't always be adept with their logic. But I rely on seasoned journalists like yourself for articulate expression of thought. I read your sentence and immediately my mind was engulfed with the image of those rascal southern republicans running around with tin-foil helmets and drawling on about a cabal by the UAW and the Flat Earth Society. Granted, my mind is usually quick to such silly interpretations, but the written word is powerful and I am easily influenced. I don't have the time to watch every congressional session on C-SPAN, therefore I have to rely on what I trustingly read on established news sites--who have limited space to provide important details. Again, I appreciate your taking the time to respond/clarify (though my previous 3 or so postings asking for a clarification on this never seemed to show up on your blog--I figure it must be a web server problem).

>>> the party you so ardently defend

I'm saddened you came to that conclusion. Rest assured--if I ever come across a posting by a BW automotive journalist making a statement which sounds like a straw man fallacy toward a democrat, socialist, or even Flat Earth Society member...I will post a comment the same way.

Anyway, I can't say it enough...I do enjoy the reading BW Automotive blog. Good job.

David Welch

March 5, 2009 9:22 AM

David Welch here again to join Paul in a bit of dead-horse flogging.

Well, Paul, since you’re so fond of reading our automotive coverage, I’m shocked—-shocked-—that you missed this little gem. During the bridge-loan hearings in December, a leaked memo circulated among Republicans who opposed the bailout had this say about the proposal:

“This is the Democrat's first opportunity to payoff organized labor after the election. Republicans should stand firm and take their first shot against organized labor... If we could hold the Republicans, we can beat this.”

Since you hate when I interpret things, I’ll leave that one to you to decipher. All I can do is report what they say, Paul. I think (don’t let me interpret here) that they wanted to take a “shot against organized labor.”

One more point. Let’s look at this statement from you. “I read your sentence and immediately my mind was engulfed with the image of those rascal southern republicans running around with tin-foil helmets and drawling on about a cabal by the UAW and the Flat Earth Society.” I’m truly sorry. But I simply can’t be held responsible for your vivid imagination conjuring up such bizarre imagery.

Paul (Vw)

March 6, 2009 6:23 PM

Mr. Welch, you do make a convincing argument:

>>> “This is the Democrat's first opportunity to payoff organized labor after the election. Republicans should stand firm and take their first shot against organized labor... If we could hold the Republicans, we can beat this.”

Gasp! You've won me ov--

Uh oh. Wait. This is just another moot point. That quote only underscores an assertion I long ago agreed with you on. The republicans are not acting in the interest of the UAW. Even in ways potentially negative to the UAW's designs. I have _NEVER_ contested this. No surprise here. No gotcha moment. Nowhere in that quote is there any substance to the claim you made which is in question:

>>> "Some southern Republicans think this is all the UAW’s fault"

Complain about the actions of those rascal "southern republican senators" as you want. But where is your evidence that they are so silly to believe the ludicrous thought you attributed to them? You made a statement that is patently false, my guess a simple error. There is no way you can read their minds and I doubt they believe that the UAW is responsible for the Pontiac Aztec, for example.

miscellaneous...


>>> since you’re so fond of reading our automotive coverage

That's right. Your advertisers, who I now patronize as a direct result of reading your blog, should be very happy.

>>> Since you hate when I interpret things

Again I'm saddened by another conclusion you've made. This one is definitely wrong. I enjoy your writing. And...you can't read my mind, I wear a tin-foil helmet (but no cape).

>>> I simply cant be held responsible for your vivid imagination conjuring up such bizarre imagery.

Fair enough. But please do not feed it with unsupportable hyperbole.

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