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 {} .style5 { width: 179px; } .style6 { 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 height="118" rowspan="2" valign="top" align="left" xpos="0" class="style5"><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 height="2" class="style5">&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 Lifesaver</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 December 6, 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span class="style6">C</span>oming to Congress with hat-in-hand, the Big-3, GM, Ford and Chrysler, begged for cash to keep hope alive, trying to stave off bankruptcy a while longer.<span style="mso-spacerun: yes">&nbsp; </span> Skeptical members of both the House and Senate don t see how throwing more money down a rat hole will make a difference in the long run.<span style="mso-spacerun: yes">&nbsp; </span>All three automakers face spiraling deficits, plunging through cash reserves at a furious pace.<span style="mso-spacerun: yes">&nbsp; </span>Regardless of their systemic problems, they face an ugly recession in which consumers are sitting on their wallets.<span style="mso-spacerun: yes">&nbsp; </span>With the latest jobs report showing the economy lost 533,000 jobs, prospects for Detroit got a whole lot worse.<span style="mso-spacerun: yes">&nbsp; </span>While the Treasury and Federal Reserve have spent $7.7 trillion bailing out financial institutions, they showed little generosity for Detroit.<span style="mso-spacerun: yes">&nbsp; </span>Squabbles at the Treasury, Fed and Federal Deposit Insurance Corp. have left Washington scrambling for how to spend the bailout.</p> <p class="MsoNormal"> <span style="font-size:16.0pt;mso-bidi-font-size:12.0pt"><![if !supportEmptyParas]> &nbsp;<![endif]></span><span style="mso-tab-count:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Detroit was low on the food chain for lawmakers trying to figure out the best way to save the economy.<span style="mso-spacerun: yes">&nbsp; </span>House Financial Services Chairman Rep. Barney Frank (D-Bos.) urged his colleagues to spare Detroit, believing that bankruptcy at any of the Big 3 would have a catastrophic effect on an already bleak unemployment picture.<span style="mso-spacerun: yes">&nbsp; </span> What we need to do is keep this alive until he becomes president, said Frank, reluctant to fork over the Detroit s $34 billion request for emergency funding.<span style="mso-spacerun: yes">&nbsp; </span> No one thinks it will be the final bill, reserving the right to revise allocations pending more reorganization.<span style="mso-spacerun: yes">&nbsp; </span>Unlike some of this Democratic and GOP colleagues, Frank believes saving GM, Ford and Chrysler will pay off someday.<span style="mso-spacerun: yes">&nbsp; </span>It remains to be seen whether the Big 3 can survive without a merger or acquisition.<span style="mso-spacerun: yes">&nbsp; </span>GM and Ford currently have profitable division in Europe, Africa and South America.</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 CEO Rick Wagoner expressed doubt that the once blue-chip company could survive without an immediate cash infusion.<span style="mso-spacerun: yes">&nbsp; </span>What distresses some is the fact that GM s European Division named Opel builds state-of-the-art fuel-efficient cars, competing successfully with any European or Japanese line.<span style="mso-spacerun: yes">&nbsp; </span>Ford, too, commands a very competitive line of in Europe, sporting one of the best-selling brands.<span style="mso-spacerun: yes">&nbsp; </span>Detroit has wasted years while their foreign competitors have marched ahead with successful product lines.<span style="mso-spacerun: yes">&nbsp; </span>GM s Wagoner said his company needs $4 billion by the end of the year and $6 billion more by March.<span style="mso-spacerun: yes">&nbsp; </span> Personally, the only course I could possibly endorse would be limited transitional assistance to allow the American domestic automobile industry to return to solvency and profitability, said Rep. Spencer Bachus (R-Ala.), a member of Frank s committee.</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>Most conventional wisdom seeks to keep GM, Ford and Chrysler from bankruptcy, believing, in the auto business, that bankruptcy would destroy brand- credibility to consumers.<span style="mso-spacerun: yes">&nbsp; </span> Most elected officials think either black-or-white with respect to the U.S. auto industry, meaning, bail them out or accept bankruptcy.<span style="mso-spacerun: yes">&nbsp; </span>Like the troubled financial industry, mergers, acquisitions or a government takeover are all viable options.<span style="mso-spacerun: yes">&nbsp; </span>While there s been talk about Chrysler seeking a buyer, that option hasn t presented itself for GM or Ford.<span style="mso-spacerun: yes">&nbsp; </span>Ford claims it has enough cash to keep operation alive while they pursue an urgent restructuring plan.<span style="mso-spacerun: yes">&nbsp; </span>GM s Wagoner made it clear, the company can t keep going without taxpayers cash.<span style="mso-spacerun: yes">&nbsp; </span>Maybe it s time to consider GM s eventual merger or acquisition.</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>United Autoworkers union didn t flinch when Daimler-Benz bought Chrysler May 7, 1998.<span style="mso-spacerun: yes">&nbsp; </span>All union contracts, employee benefits and company name were preserved.<span style="mso-spacerun: yes">&nbsp; </span>With GM stock at $ 4 a share, it would be a bargain acquisition for any Japanese or German car company.<span style="mso-spacerun: yes">&nbsp; </span>Stopgap aid from Congress isn t the only viable option for the Big 3.<span style="mso-spacerun: yes">&nbsp; </span> Many taxpayers and elected officials resent an auto industry bailout because they don t believe Detroit has a viable domestic business model.<span style="mso-spacerun: yes">&nbsp; </span>Whether or not foreign divisions are profitable doesn t change the lack of domestic viability.<span style="mso-spacerun: yes">&nbsp; </span>While the auto industry suffers through a global economic slump, it doesn t mean that Nissan, Toyota, Volkswagen, etc. wouldn t be tempted to buy GM.<span style="mso-spacerun: yes">&nbsp; </span>Europeans know firsthand the success of GM s German Opel division.<span style="mso-spacerun: yes">&nbsp; </span>It wouldn t take long for a foreign company to turn around domestic sales.</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>Washington should consider more creative options to preserve Detroit than simply providing more cash.<span style="mso-spacerun: yes">&nbsp; </span>When President-elect Barack Obama takes office Jan. 20, he should consider encouraging foreign automakers to manufacturer more cars in the U.S. Toyota, Mercedes and BMW already have limited production in the states.<span style="mso-spacerun: yes">&nbsp; </span>Expanding production of more popular models domestically would take some of the heat off Detroit to preserve what s left of GM, Ford and Chrysler.<span style="mso-spacerun: yes">&nbsp; </span>With GM and Ford stock under $5 a share, a foreign carmaker should find either ripe for potential acquisition.<span style="mso-spacerun: yes">&nbsp; </span>When GM bought Opel back in the  60s, it preserved one of Germany s best lines, while, at the same time, helped GM establish a firm foothold in Europe.<span style="mso-spacerun: yes">&nbsp; </span>Japanese or German automakers could find the same opportunity here in the states.<span style="mso-spacerun: yes">&nbsp; </span>Throwing more good money after bad is no answer for Detroit.</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 height="2574" valign="top" align="left" xpos="0" class="style5"><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 height="1" class="style5"><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>