Hypocrisy on the Hill

Thursday, November 20, 2008

For the last two days, the CEO’s of the three largest American automakers have been before congress lobbying for $25 Billion in loans to keep them afloat for the next year or so. Much of the news coverage of their appearance has been of lawmakers ripping the CEO’s to shreds for everything from CEO pay, to building SUV’s, to flying corporate jets to Washington.

Clearly the current big three CEO’s don’t have the public relations skills that Lee Iacocca had nearly thirty years ago. At the time Chrysler was in need of similar assistance, and Iacocca worked for $1 per year.

These particular CEO perks don’t get me too worked up. CEO pay nationally is way out of hand but that problem won’t be solved by beating up the big three. That didn’t stop Congressman Peter Roskam, (R- Ill.) from demanding the three CEO’s work for a buck.

Need I remind Roskam that the United States has been running a sizable deficit for decades? When will Roskam begin working for one dollar? He won’t. It would be pointless and it won’t seriously benefit the national budget. But the point is, Roskam works in a body that regularly gives itself raises, regularly drives SUV’s, likely rides in private jets and helped contribute to the mess this country is in.

Roskam isn’t my Congressman, so I doubt he will respond to my e-mail, but I am sending the letter below to point out his hypocrisy.

November 20, 2008

Congressman Peter Roskam
507 Cannon House Office Building
Washington, DC 20515

Dear Congressman Roskam,

This morning on several news programs, the country witnessed you asking the CEO’s of the big three automakers to work for one dollar per year as part of the effort to get the companies back on their feet. While this would likely prove to be a nice public relations gesture, as Lee Iacocca did when Chrysler needed similar assistance nearly thirty years ago, I am sure you are aware that this would have little significance to the automakers’ bottom line.

Like the automakers, I am sure you have noticed that the United States Government has been running in the red for the better part of three decades. Since you find it so important for people in positions of authority to work for one dollar, when their organizations are running in deficit, will you be giving up your Congressional salary this year?

CEO compensation is out of control, but you won’t fix that problem by letting the big three go out of business. Instead of showboating, isn’t it time to consider the 3 Million workers and retirees who are supported by the American auto industry? There are Illinois jobs at stake.



You too can contact Roskam here:
UPDATE: Roskam doesn't accept e-mail from outside the distrrict, so snail-mail it is.

You can also write other members of the House Financial Services Committee to let them know what I think of their showboating. It's a long list, so hopefully one of them represents you.


John R.,  10:00 AM  

We all apparently have failed to realize how much the average American hates "Detroit". I'm honestly surprised by the animosity from all sides on this and did not know "Detroit" had been reduced to a political talking point.

Bob 10:07 AM  

I knew it was bad, but it is really bad.

Most of it is driven by a horrible amount of PR, some of it deserved, some of it not.

What the big three have failed to realize ids that they don't need advertising agencies, they need campaigns. GM needs to hire a Karl Rove type to pump up their image and detroy their competitors.

GM is about to start buidling the Volt, a car that they will lose at least $10K for every one they sell. This isn't just an engineering excercise, its a PR excercise.

B Mac 10:50 AM  

We all apparently have failed to realize how much the average American hates "Detroit".

With good reason. Detroit is the reason babies cry, and old people are slow in the checkout of your local grocery store. I know, because a congressman said so.

Pete 11:06 AM  

In all of this, I wonder what exactly the $25 billion would do - be it a loan or a handout. Will it actually change things, or just let them bumble along for another year?

I think that's where the animosity comes from - they fucked up, the public in general is tired of it, but there doesn't seem to be any hint of accountability. They've been hosing things up for decades, what good is $25 bil going to do? At least with AIG the public "owns" a part of it.

Now, I don't necessarily think they can just give the Big 3 the boot, and watch them crumble. You think Michigan's economy is in the toilet now? Holy crap, if the automakers actually tanked bankruptcy-style, it would decimate the state. It sucks that we're so dependent on one industry, but that's how it is. So it seems irresponsible to NOT offer some assistance to Detroit.

Has there been any discussions outside of pundits and economists (does anyone in Congress listen to smart people, or do they all consider themselves to *be* the smart people?) about something other than the "free money or show them the door" dichotomy? Couldn't they give them the money, on the condition that the management and boards are completely replaced and something is done to actually turn the companies around?

I guess my point is, I don't feel like I am aware of *how* more money will help Detroit, other than putting off what is happening now. The Volt itself isn't going to save everything. They're being driven into the ground because of poor management, poor market savvy, and the monkey-on-their-back that is UAW benefits. Somebody has to do something about the reasons *why* Detroit is in this situation, else $25 billion is only going to be pissed away until next year. Soooo....will somebody do something?

Bob 1:40 PM  

Pete - a few things:

One - the big three made SUV's becuase people wanted them and they were profitable. Whose fault is that? The consumers.

Two- they could make smaller cars, but why? The market is so screwed up that no car marker makes significant money on those cars.

Three - the union has made substantial concessions, much of which won't kick in until the 2010 contracts, but these changes take time and money, which is not unique to the auto industry.

Four- conditions. You bet there will be considitons, but I am not sure firing the top management is the way to go. That seems to me to be more short-term Wall Street thinking. Heck two of the three CEO's have been there two years or less.

I also refer you this my previous post, which says that we should give the auto comanies time to finish their trasnformation. Congress and the media want to make it sound like they have been sitting on their hands.

steves 2:35 PM  

Detroit sucks big time, but they are still our Detroit, dammit!

Bob 4:03 PM  

Oh, BTW, if the big-three go under, I am buying the oldest, heaviest, fastest piece of Detroit iron I can find. I will install three, four-barrel carbs on it's big-block, iron V-8 and will run it as fast as possible in city traffic without enough air in the tires. Screw the environment.

B Mac 4:36 PM  

If the Big 3 go under, we're looking at 2.5 Million jobs lost on the front end, with maybe another million in the years to come.

Asking the average American to sacrifice $83 to save 3% of all American jobs seems like a decent trade in the short term...

Bob 7:38 PM  

Asking the average American to sacrifice $83 to save 3% of all American jobs seems like a decent trade in the short term...

Asuming these LOANS go as well as Chrysler's loans in the 1980's the taxpayer will make a profit.

steves 8:33 PM  

Good point, B Mac. The Big Three are also the largest buyer of domestic steel, so if they go under, the steel industry and most likely, the iron mining industry will be deeply hurt.

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