President-elect Barack Obama, in a Meet the Press appearance yesterday, said that management of the Big Three had been deficient. From MSNBC:
…while President-elect Barack Obama accused car industry executives of a persistent “head-in-the sand approach” to long-festering problems.
Obama was pointed in his criticism of management, but came out for conditional assistance to the automakers. He called for changes that would have to be made by all big three stakeholders, including labor, creditors and suppliers. The Obama critcism was joined by Senator Chris Dodd, who called for the removal of G.M. CEO Rick Wagoner as a condition of any loan package. Dodd is a key player in formulating the package that will be submitted next week, and that package is now begining to take shape.
Behind the scenes, House and Senate aides were hammering out legislation that would dole out billions to automakers within a week — but yank back the money if a government-run board and overseer named by President George W. Bush decided the companies weren’t taking steps to overhaul themselves and become viable. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed.
The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said.
It would create an oversight board comprised of key Cabinet secretaries — from the departments of Treasury, Energy, Labor, Commerce and Transportation — plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring.
In return for the money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout: to limit their top executives’ pay packages, cease paying dividends, give the government a chunk of future gains and guarantee that taxpayers would be reimbursed before any other shareholders, the aide said.
The bill under discussion would place the special investigator overseeing the bank rescue in charge of keeping tabs on the auto bailout.
The bell is now tolling for G.M. CEO Rick Wagoner. Will government oversight of the Big Three include some sort of auto czar? And what shape would that job take? More to come this week as the package gets finalized and sent up for a vote.
Bill Manzi.com 
Your Honor,
You give “The One” cheers for stating the obvious. Those of us who are awake have been watching for years, as the American car companies have shrunk down to 3, wondering what the heck the managers were doing.
Case in point; How can you sustain a profitable business in a competitative atmosphere and pay laid off employees to stay home for up to four years? What were they thinking when they signed on to that.
Now that the foreign companies have set up shop in sensible places largely in the South and have shown the American companies, that foreign companies,the state and the workers can prosper, we’ll go back to the same old formula for fixing Detriot. You have noticed also that Michigan and Massachusetts share the same budgetary ability.
I guess college educations did not provide the Automobile industry with intelligent forward looking leaders in management and labor. Actually they should all be replaced.
Now they rely on the world’s largets collection of inept, corruptable people to solve their problems.
I have little hope for a good outcome.
Wasn’t Dodd the fellow getting preferential treatment along with his good buddy Barney “the coward” Frank from Freddie and Frankie? The beat goes on.
Jules
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Mr. Speaker,
It appears that sometimes the obvious must be stated, repeatedly, for it to have an effect. I suspect you were around for the ’73 energy crisis, where we sat in gas lines because our supplies had been choked off by OPEC, our car industry reeling from the import of those small, fuel efficient cars from Japan. What did Detroit do with the 35 years between?
Toyota is shipping Priuses. Detroit gives us Hummers.
Detroit is not alone in paying laid off employees: Japanese companies do the same, and I believe are currently doing it at the Toyota truck plant in Texas. They learned that keeping trained people on the payroll can be cheaper than retraining new people when the turnaround eventually occurs. Where did they learn this radical, leftist thinking? From us.
http://en.wikipedia.org/wiki/W._Edwards_Deming#Deming.27s_14_points
Rick Waggoner at GM made close to 14.5M on his own in 2007: the top 32 executives combined at Toyota made close to 20M. Maybe we should be outsourcing executive jobs to Japan? But, he’s a piker in comparison to those nice guys on Wall Street sucking on the 700B teat we’ve generously provided.
Is it is a coincidence that locating factories in the South makes sense because corporations can pay their workers less there? Be happy that we make more per capita here: the traditional blue states have subsidized traditional red states through our federal tax dollars for years.
http://www.taxfoundation.org/publications/show/62.html
I share your lack of hope for pulling Detroit’s head out of their nether regions, but I am buoyed by the fact that at least in Ford’s case, they are capable of building great cars. In Europe, anyway.
-FM
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Mr. Speaker,
Just finished my morning reading and found this article on point. What do you think of the analysis provided?
-FM
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