Axelrod: No Blank Check for Automakers

Presidential advisor David Axelrod said this morning on “This Week”that President-elect Obama would be against any bailout for the big three that does not show a business plan that brings them back to solvency. While Axelrod did not say what such a plan should entail it sounds suspiciously like the restructuring that many have called for in order to justify a massive government infusion of cash. It does not appear that Obama desires to just give over $25 billion without someone showing how that money will be spent, and what the BUSINESS PLAN is for recovery. Show him the numbers, and he will show some government money. Axelrod also suggested that the CEO’s fly commercial on their next trip to Washington. Pretty good advice! From the “This Week” website:

“We all have a stake in the survival of the auto industry in order to do that they have to retool,” Axelrod told me on “This Week.”

Obama’s former chief strategist said Obama hopes the Big Three automakers come back to Washington in early December — with a plan.

“If they don’t do that then there is very little the tax payers can do – I hope automakers come back to congress, hopefully on commercial flights,” Axelrod said.

“He said from the beginning that we need to help but we can’t give a blank check and I agree with that,” he said.

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3 Responses to Axelrod: No Blank Check for Automakers

  1. Jules Gordon says:

    Your Honor,

    Let me understand this, if the automobile companies don’t come up with a business plan to make them competitive, the US Government will let them be vulnerable for failure? Investors and the workers will all lose everything?

    Do you expect me to believe the Democratic President and Democratic dominated congress will let their Union masters become unemployed? It will never happen.

    So I assume the automobile companies will go back to Detroit and photocopy a business plan from a “Business Plans for Dummies” book and present it to the congress who will speak in admiration of the fine presentation and fork over the big bucks.

    What changes? Nothing. The companies operate at a loss. Actually, something does change. In their manic drive to save the planet the Congress will mandate (the golden rule; “those with gold make the rules”) the type of cars that will be manufactured, whether or not the public wants to buy them.

    The federal government can only run the military. Nothing else.

    If the companies don’t renegotiate with their unions or go bankrupt there is no future. Just take a tour in New Jersey which had lost it’s steel manufacturing base due in part to a uncooperative union. The union preferred not make a high salary rather than actually make lower salary to save jobs.

    By the way, what right does Axlrod have to admonish the travel mode for these guys? They own the airplanes.

    We are going to see the end of large scale manufacturing in this country.

    Happy Days–Jules

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  2. Bill Manzi says:

    Jules,
    I did laugh about the business plan reference you make. Since you reluctantly call Obama a pragmatist I would approach this by saying that a bailout of the type mentioned ($25 billion)would lead to another request in under one year. Since Obama does not want failure on his watch I believe that we may actually see a plan that is more than a page from “Business Plans for Dummies”. We are beyond the point as a nation where we can cover up bad numbers. As I mentioned in a post on deficits some time ago there are some that believe that the laws of math do not apply to us. If the money is given without condition, or with fakery substituting for reality, the crash will come a little later, but come it will.
    As far as the planes go the CEO’s may fly by whatever method they think appropriate. But like the managers at AIG it is difficult to tell the public that we ought to subsidize that flight. If they want to remain private concerns fly, baby, fly. But if they want government help then fly coach, baby, fly coach!

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  3. Jules Gordon says:

    Your Honor,

    What ever happens the unions must give back quite a bit in order for the companies to be competitive. The non union people wage packages will need to be moderated as well. A review of dealerships is mandatory.

    The car companies must be free to manufacture cars THEY feel customers want. Success or failure must be complete in their hands. The federal Government cannot dictate how business is conducted.

    All will fail if the wage structure is not taken care of.

    QUESTION: How is success accomplished without the protection of bankruptcy. And remember the union leadership has refused to cooperate.

    Did the union fellow fly to Washington by coach?

    Jules

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