Automaker CEO’s - making as much sense as 125% LTV stated income loans
I know this is a few days late, but I wanted to get a few quick thoughts out on the automaker testimony. I know it has been a while, but I have been trying to decide where to take this blog next. Even though it began as a blog that talked specifically about mortgages and real estate, I think I am going to start talking about all things business and finance related. I enjoy doing the blog, and have been thinking of ways to regenerate my once large audience and get blogging again. The posts will most likely be shorter, but will come more frequently again. Besides, there are more than enough financial issues out there aside from mortgages. I have a few thoughts of my own on our current problems and since nobody knows how to fix this situation, and the people that are offering solutions didn't even see the problem coming, I don't feel too bad giving my opinion on things.
I am sitting here between work trips watching the automaker CEO's and the UAW (United Auto Workers) testify before the Senate Banking Committee. I'm sorry, but I thought for a second there I was watching a stuttering contest. If you can't put together a concise statement without stuttering, or answer a simple direct question without sputtering like a 20 year old trolling motor, then I can only assume you are not confident in what you are saying.
I am not buying the fact that it would be catastrophic if one or two of the 'big 3' went away or consolidated. I would definitely cause some problems in the short term, but I think it is a necessary evil in the long term. Let's face it, the numbers don't work and the 'big 3' are not competitive in this global economy.
One of the things that was most shocking to me was this: a union worker gets 100% of their money when they are working. But let's say a plant is CLOSED and they are not working, they still get 95% of their money!!! Yes, it is a 'great deal' for the 'worker' because they are getting paid for not working. How many people in the non-union private sector can get pay and benefits for NOT working?? People can tip-toe all they want around the 'powerful' unions, but the unions are NOT doing themselves any favors by acting this way. Michigan needs to become a 'right to work' state, and let workers do something complete crazy, and COMPETE for their jobs based on productivity!! Wow, what a concept I know!
It surely wasn't surprising when Barney 'Fannie is a solid investment going forward' Frank's buddy Christopher Dodd said that he wasn't offended by the people getting 95% of their pay and benefits when not working. In fact, he commended the unions for their work in 'taking good care of their people'. Geez...I would like to see Mr. Dodd run a company and offer the same thing to his employees. You get 100% of pay for working, and 95% of pay when you're not....and see how many employees show up to work! I know that isn't exactly the same situation, but I think we can all agree that you can't pay people to 'not work' at a plant that is shut down. I am not talking about being closed for a day or two, or even a few weeks, I am talking about CLOSED. Not operating. No work to be done.
I wasn't impressed with Rick Wagoner from GM at all. He looked like a deer in headlights and had trouble answering simple direct questions. That guy needs to go away faster than a pedofile at a pre-school. He does not help the image of GM one bit, and should step down. He couldn't or refused to answer direct questions asked of him. When he finally answered because he saw that he wasn't going to weasel out of things that easily, he lacked uh, uh, confidence, and uh, showed uh, that he, uh, was uh, void of uh, and CEO qualities. Maybe he shouldn't have taken the private jet, and instead flown first class and use the extra money for a years worth of dues to his local Toastmasters Chapter.
Of the three, Alan Mulally came across the best, with Robert Nardelli in second place. Maybe that is only fitting since the financial health of the 3 automakers was said to be 1. Ford, 2. Chrysler, and 3. GM. Ron Gettefinger from the UAW (United Auto (non)Workers) was also there. It was very entertaining listening to Mr. Union rationalize how the unions are doing a great job and how they have made so many concessions. Give me a break.
Anyway, it seems that a majority of the Senators were less than impressed with these guys. They couldn't say what the money would go towards, and they couldn't guarantee that they wouldn't be back. It only takes about 3rd grade math to realize that at their current burn rate, the 25 billion would only buy them a few months time, especially if they don't make DRASTIC changes to the way they are doing business. And according to Mr. Union, they were NOT going to make any more concessions. So, sounds like a stalemate to me. You can't compete in the this global economy, you aren't willing to make the necessary changes, so why should we help you? Make Michigan a 'right to work' state, and let the workers, NOT the unions, decide if they want to help the situation. Sounds simple, but it will NEVER happen, because the unions don't want to give up their 'good' deal.
Oh well, should be interesting to see what happens with the automakers. Will they make the tough decisions that need to be made, or will they try the 'status quo' of further whining to politicians? Only time will tell.
Look for more insight to the Wall Street bailout and the continuing financial problems right here.