ÿþ<html> <head> <meta http-equiv="content-type" content="text/html;charset=iso-8859-1"> <title>OnlineColumnist®.com: Putin Punishes Georgia</title> <meta name="generator" content="Adobe GoLive 4"> <style type="text/css"> .style2 { font-size: large; font-weight: bold; font-family: Arial; } .style3 { height: 69px; } .MsoNormal {} .style4 { font-size: x-large; font-weight: bold; } </style> </head> <body bgcolor="white" vlink="black"> <center> <table cool width="624" height="2719" border="0" cellpadding="0" cellspacing="0" gridx="16" showgridx gridy="16" showgridy> <tr height="79"> <td width="133" height="118" rowspan="2" valign="top" align="left" xpos="0"><a href="aboutdiscobolos.html"><img height="110" width="62" src="images/discobolos.logo.transp.gif" border="0"></a></td> <td width="7" height="118" rowspan="2"></td> <td width="482" height="79" colspan="2" valign="top" align="left" xpos="140"><img height="75" width="450" src="images/banner.GIF"></td> <td width="1" height="118" rowspan="2"></td> <td width="1" height="79"><spacer type="block" width="1" height="79"></td> </tr> <tr height="39"> <td width="182" height="39"></td> <td width="300" height="39" valign="top" align="left" xpos="322"><a href="aboutdiscobolos.html"><img height="14" width="267" src="images/divisionofNEW.GIF" border="0"></a></td> <td width="1" height="39"><spacer type="block" width="1" height="39"></td> </tr> <tr> <td width="624" colspan="6" valign="top" align="left" xpos="0" class="style3"> <table border="0" width="100%" bgcolor="black" cellspacing="0"> <tr> <td> <table border="0" width="100%" bgcolor="#99ffcc" cellspacing="0" cellpadding="4"> <tr> <td align="center"> <div align="left"> <a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> HOME</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> &#8226; <a href="articlesindex.html">ARTICLES</a> &#8226; <a href="books.html">BOOKS</a> &#8226; <a href="teflon.html"> THE </a><a href="teflon.html">TEFLON</a><a href="teflon.html"> REPORT</a> &#8226; <a href="mailto:letters@onlinecolumnist.com"> REACTIONS</a> &#8226; <a href="aboutdiscobolos.html">ABOUT DISCOBOLOS</a></strong></font></div> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr height="2"> <td width="133" height="2">&nbsp;</td> <td width="489" height="2576" colspan="3" rowspan="2" align="left" xpos="133" content valign="top" csheight="2573"> <p class="style2">Detroit&#39;s Devil</p> <p><b><font face="Arial,Geneva,Helvetica">by John M. Curtis</font></b><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b><a href="books.html"><br> </a></b></font><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><b> (310) 204-8700</b></font></p> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"><i>Copyright November 17, 2008<br>All Rights Reserved. </i></font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p> <p class="MsoNormal"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span class="style4">W</span>ashington s $700 billion bailout euphoria spread to Detroit with the Big-Three automakers, General Motors, Ford and Chrysler, hoping for a piece of the action.<span style="mso-spacerun: yes">&nbsp; </span>With record losses plunging the Big-Three closer to bankruptcy, the Democratic-led congress tried to fashion a $25 million bailout, hoping to stave off the inevitable at a time of great economic uncertainty.<span style="mso-spacerun: yes">&nbsp; </span>While the bailout, according to Treasury Secretary Hank Paulson, was intended only for financial institutions, Detroit wants in.<span style="mso-spacerun: yes">&nbsp; </span>News got better and worse for the Big Three, with the White House reluctant to shift gears and begin bailing out Detroit.<span style="mso-spacerun: yes">&nbsp; On the brighter side,</span> unconfirmed reports indicate the Bush administration&nbsp; has decided to only spend half the bailout during the remaining two-and-a-half months of his term, handing the discretion to President-elect Barack Obama and the new Congress.<span style="mso-spacerun: yes">&nbsp; </span>There s hope for the Big Three but not until after Jan. 20, 2008.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Regardless of the economic downturn, the Big Three have their own problems convincing American consumers to buy their goods.<span style="mso-spacerun: yes">&nbsp; </span>You can t run a car company only selling to government or auto rental companies.<span style="mso-spacerun: yes">&nbsp; </span>They also have trouble convincing Wall Street that the Big Three have a viable business model, where well-intentioned concessions to unions have priced them out of the market, at least with regard to profitability.<span style="mso-spacerun: yes">&nbsp; </span>Many in Congress legitimately worry that $25 billion will only postpone the day of reckoning, where the Big Thee must face the music that their products can t compete in a global market.<span style="mso-spacerun: yes">&nbsp; </span>While that s probably premature, years of corporate inertia have left the Big Three with the wrong priorities, putting too much emphasis on<span style="mso-spacerun: yes">&nbsp; </span>SUVs and trucks.<span style="mso-spacerun: yes">&nbsp; </span>GM and Ford divisions in Europe seem to compete quite well with most European brands. </p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>GM has already started bringing in popular Opel models from Europe and selling them under their Saturn brand.<span style="mso-spacerun: yes">&nbsp; </span>Despite the recession, those models seem to be doing quite well in the states.<span style="mso-spacerun: yes">&nbsp; </span>Ford, too, announced recently it intends to bring in its European best-sellers, giving reason for hope.<span style="mso-spacerun: yes">&nbsp; </span>Before Detroit gets a dime, Washington must have reassurances that there can be no business-as-usual at the Big Three. <span style="mso-spacerun: yes">&nbsp;</span>Treasury Secretary Paulson caused a big stir last week announcing that he would shift gears and not buy up so-called  toxic assets or bad debt.<span style="mso-spacerun: yes">&nbsp; </span>Paulson realized it s difficult, in not impossible, to assess the government s ownership of bad debt, preferring instead to buy preferred stock in financial institutions.<span style="mso-spacerun: yes">&nbsp; </span>While there s nothing wrong with that, showing inconsistency at a time of upheaval causes more panic.<span style="mso-spacerun: yes">&nbsp; </span>Since Paulon s statement, the Dow Jones Industrials has lost 1,000 points.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Today s recession could be the last straw for Detroit, no longer a viable business under current contracts and conditions.<span style="mso-spacerun: yes">&nbsp; </span>American autoworkers probably don t care whether the Big Three are bought out by European or Japanese automakers.<span style="mso-spacerun: yes">&nbsp; </span>When Chrysler was sold to Daimler Benz May 7, 1998, it s was a seamless transition, preserving United Autoworkers contacts and benefits.<span style="mso-spacerun: yes">&nbsp; </span>If it becomes clear that the Big Three won t survive, then Congress must pressure European and Japanese automakers to begin manufacturing all models here in the states.<span style="mso-spacerun: yes">&nbsp; </span>Toyota, Mercedes, BMW, Mazda already manufacture some models in the U.S.<span style="mso-spacerun: yes">&nbsp; </span> GM, Ford and Chrysler could retool to accommodate popular European and Japanese models, preserving employment for American autoworkers and suppliers.<span style="mso-spacerun: yes">&nbsp; </span>European and Japanese automakers can t thrive without robust U.S. auto sales<span style="mso-spacerun: yes">&nbsp; </span> </p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>No one wants to see Detroit fail.<span style="mso-spacerun: yes">&nbsp; </span>But U.S. automakers must perform urgent CPR to salvage an industry out-of-touch with the vast majority of consumers seeking stylish fuel-efficient cars.<span style="mso-spacerun: yes">&nbsp; </span>European divisions of GM and Ford already meet or exceed those expectations<span style="mso-spacerun: yes">&nbsp;&nbsp; </span> There s a high degree of urgency for federal help said GM Chairman and CEO Rick Wagoner, urging White House and Congress to fork-over $25 billion from the existing bailout coffers.<span style="mso-spacerun: yes">&nbsp; </span>GM, Ford and Chrysler find themselves caught between a rock and a hard place, begging for money during the current economic crisis.<span style="mso-spacerun: yes">&nbsp; </span>Wagoner should be reassuring Congress that GM intends to urgently change its paradigm from big SUVs to its stylish and fuel-efficient European models.<span style="mso-spacerun: yes">&nbsp; </span>White House officials aren t inclined to hand Detroit bailout money intended for frozen credit markets.<span style="mso-spacerun: yes">&nbsp; </span> Congress must create a separate program for Detroit.</p> <p class="MsoNormal"> <![if !supportEmptyParas]>&nbsp;<![endif]><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>President-elect Obama has already signaled he has no intention of allowing Detroit to fail.<span style="mso-spacerun: yes">&nbsp; </span>While it s good to show sympathy, it s not good to throw hard-earned taxpayer dollars down a rat hole.<span style="mso-spacerun: yes">&nbsp; </span> For the auto industry to completely collapse would be a disaster in this kind of environment, said Barack November 16 on CBS  60 Minutes, urging the White House and Congress to fashion urgent bailout legislation specifically designed for the auto industry.<span style="mso-spacerun: yes">&nbsp; </span>If that doesn t happen, he ll have the discretion after Jan. 20 to designate $25 billion from what s left of the original bailout.<span style="mso-spacerun: yes">&nbsp; </span>No one wants the U.S. auto industry to drag the economy down into a protracted recession or possible depression.<span style="mso-spacerun: yes">&nbsp; </span>But the White House and Congress must get tough with the Big Three about making urgent changes.<span style="mso-spacerun: yes">&nbsp; </span>With or without today s economic crisis, Detroit must change its ways or close up shop.</p> <p class="MsoNormal"> <bAbout the Author</u><b>John M. Curtis</b> writes politically neutral commentary analyzing spin in national and global news.&nbsp; He's editor of OnlineColumnist.com and author of <i><a href="books.html">Dodging The Bullet</a> </i>and <i><a href="books.html"> Operation Charisma</a></i>.</p> </td> <td width="1" height="2576" rowspan="2"></td> <td width="1" height="2"><spacer type="block" width="1" height="2"></td> </tr> <tr height="2574"> <td width="133" height="2574" valign="top" align="left" xpos="0"><img height="172" width="111" src="images/johninframe3.jpg"></td> <td width="1" height="2574"><spacer type="block" width="1" height="2574"></td> </tr> <tr height="1" cntrlrow> <td width="133" height="1"><spacer type="block" width="133" height="1"></td> <td width="7" height="1"><spacer type="block" width="7" height="1"></td> <td width="182" height="1"><spacer type="block" width="182" height="1"></td> <td width="300" height="1"><spacer type="block" width="300" height="1"></td> <td width="1" height="1"><spacer type="block" width="1" height="1"></td> <td width="1" height="1"></td> </tr> </table> <table border="0" cellpadding="0" cellspacing="2" width="597"> <tr> <td><font size="1" face="Arial,Geneva,Helvetica"> <hr noshade size="1"> </font><a href="index.html"><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> Home</strong></font></a><font face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular" size="2"><strong> || <a href="articlesindex.html">Articles</a> || <a href="books.html">Books</a> || <a href="teflon.html">The Teflon Report</a> || <a href="mailto:letters@onlinecolumnist.com"> Reactions</a> || <a href="aboutdiscobolos.html">About Discobolos</a></strong></font> <div align="left"> <p><font size="1" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">This site designed, developed and hosted by the experts at</font><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular"> <a href="http://www.cmeonline.net" target="_blank"><img height="30" width="138" src="images/cmelogoANIM.gif" border="0" align="absmiddle"></a></font></p> </div> <p><font size="2" face="Arial,Helvetica,Geneva,Swiss,SunSans-Regular">©1999-2005 <a href="aboutdiscobolos.html"> Discobolos Consulting Services, Inc.</a><br> (310) 204-8300<br> All Rights Reserved. </font></td> </tr> </table> </center> </body> </html>