On the Automaker Bailout

by Eyck Freymann


Unions are not the problem, despite much that we hear on the media. The failing car industry in the US is a direct result of laziness and wastefulness on the part of the executives. While Japanese and European carmakers have spent the last three decades coming up with new ways to make their vehicles more efficient, Americans have been striving for the most wasteful, boxy, gas-guzzling machines possible.

Meanwhile, the fatcats at the top have been gorging themselves on goodies like private jets and multimillion-dollar bonuses.

This has to stop. But the issues transcends just the American auto industry. There are two problems which in the world economy will have to be resolved if the US wants to stay competitive:
1. American companies are no longer answerable to their country
2. Company executives are no longer answerable to their companies

As long as we have Halliburton and others like it neatly sidestepping our regulations and taxes, we are fining the taxpayers for things they did not do. Our nation's first priority in business, banking and otherwise, must be to implement intelligent regulation so that companies are held to reasonable environmental and worker treatment standards. This current banking collapse was the result of a potent combination of greed and no regulation. This must end.

Second, we have to make corporate executives accountable for their actions. Enron CEOs Ken Lay and Jeff Skilling screwed their employees out of retirement accounts and their kids' college funds while walking out of the failing corporation with billions in their pockets. Just last week, we saw the CEOs of Ford and GM arrive in Washington on individual private jets to beg for more money. Meanwhile, they are each receiving eight digit incomes as they drive their companies into oblivion (no pun intended).

It is not fair to the workers and the American economy to withhold the 25 billion dollars. BUT it should come with excessively severe penalties and restrictions on executive pay and benefits. The corporate leadership must be held responsible, compulsory benchmarks for fuel efficiency must be set, and worker pay and benefits must be secured.

If we can do this, it is money well spent. Will the new Democratic congress be able to show some backbone? We'll see.