Big Three’s Top Three Living in Bygone Age of Laudable Excess
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Related subjects: Denver Lessing, Mortgage & Credit Crisis, Opinion, U.S. Economy Comments (1)
Cable news yesterday and today’s newspapers are full of references to the embarrassment Detroit’s “big three” automakers’ chief executives occasioned by flying to DC in 3 separate private jets to ask for a $25 billion “bailout” bridge loan. Pleading poverty while showing off the extravagance of one’s expenditures is poor form, no matter what the season, but it clearly displays a lack of awareness of how much the economic culture of the nation has changed.
What just a year ago may have seemed like a sign of value and seriousness now seems like the very opposite, a total lack of seriousness about the gravity of the problems at hand and one’s being more a burden than an asset to one’s enterprise. It is not possible to overstate the gravity of the current economic climate: banks have stopped lending, to an extent where companies that successfully weathered the Great Depression, and which have had no credit troubles of their own, are now finding it hard to come by extra operating cash needed for routine business funding.
We need to recognize that the lavish surroundings of such powerful corporate leaders can, in good times, demonstrate a sense of purpose, not only the trappings of success but a hint of the underlying drive to excel, in short, an inherently serious approach to doing business. But in times like these, where the rust belt is corroding beyond recognition, and those same powerful executives are forced to beg for money, using three separate corporate jets is merely an extravagance, and a sign of poor planning and organization.
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We are not a depression culture yet, but there has been a decided shift away from the easy-money attitudes of the last decade. Unemployment is at a 16-year high, with over 1 million jobs lost this year to date. There is endless moralizing taking place, with the middle class blaming corporate corruption and political cronyism, with pro-corporate politicos chastizing victims of foreclosure for “refusing” or “deciding not to pay” their loans, as if people waltz happily into foreclosure because it excites them. The November election was a decisive vote against class warfare, in favor of pragmatism and the public good, but anger over ill-advised financial dealings is on the rise.
The chief executives of three major corporations who claim to be the deciding factor in as many as one in every ten jobs in the US, over 13 million people, contemplating tens of thousands of layoffs in a not-too-distant future and whose unions have renegotiated long-term contracts to take cuts in pay and benefits, should be more aware of what is happening. They should know that tightening the belt is the necessary fashion for those who claim they are in such straits. It’s a necessary show of decency, especially if what you want is public assistance.
This is more than a moral point of contention: it’s a matter of the practical issue of whether or not the Big Three can be persuasive about the legitimacy of their claim on public financing. There was no deal yesterday, and the vote scheduled to set money aside for a bankruptcy-averting quick infusion of capital via low-interest “bridge loan” was canceled, apparently signalling rising opposition among members of Congress, even in the politically liberated “lame-duck” session.
One wonders at the arrogance of the approach the automakers’ chief executives have taken: not reforming product design or marketing strategy, in anticipation of petroleum troubles or emissions-related politics; not restructuring profit and research-investment ratios to account for the obviously imminent need of restructuring; impeding new model designs, to increase fuel efficiency or eliminate fuel use altogether; demanding the UAW approve cuts to pay and benefits in order to forestall mass layoffs; closing factories, outsourcing overseas; wasting huge amounts on failed mergers; demanding money from Congress, while threating to kill hundreds of thousands of jobs.
The apparent lack of deference or humility seems endemic to the industry’s leadership, and one has to wonder if the industry has reached a point where the people who know the most about the technology and the future of automotive transport have little if anything to do with running the show or steering the ship. Pres. Franklin D. Roosevelt, upon taking office in 1933, explained that:
rulers of the exchange of mankind’s goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence…
This, clearly, is part of the climate of our times. We should watch carefully how the ship of our economy is guided through these troubled waters, lest we fall into the vices that deepened an initially financial crisis so radically in the years between 1929 and 1933. People like the automakers’ chief executives, in leadership positions and with real responsibility to the quality of life of potentially millions of people, must take seriously that their efforts must comprehend the nature of the times, or they will be a dangerous drag on recovery.
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[...] Big Three’s Top Three Living in Bygone Age of Laudable Excess … The chief executives of three major corporations who claim to be the deciding factor in as many as one in every ten jobs in the US, over 13 million people, contemplating tens of thousands of layoffs in a not-too-distant future and whose … [...]