By Michelle Seitz

Republicans in Congress, who are being closely watched by their constituents, stood their ground and killed the bailout bill for the “Big Three” automakers. Finally, a victory against corporate welfare; and Republicans are acting like conservatives again! Not so fast…

Until today, the Bush administration was opposed to using funds from the Troubled Asset Relief Program (TARP) to aid the ailing auto companies according to a Bloomberg report. “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.” This statement is indicative of the Bush administration’s position according to Treasury spokeswoman Brookly McLaughlin.

The last line of President Lincoln’s Gettysburg address states: “and that government of the people, by the people, for the people, shall not perish from the earth.” It seems that the people no longer have a voice in their government. Our elected officials spoke on our behalf, yet President Bush feels he has the power to override the decision.

Bush’s use of the term “czar” is very disconcerting. His administration has presided over government intervention at extraordinary levels in every aspect from national security to the most disturbing involvement in the economic sector. The administration’s intervention in the financial sector has led to forced partial nationalization of nine of America’s largest banks. Billions of dollars have been given to politically connected institutions to jumpstart and continue peculiar monetary policy along with the continued abuse of credit.

As for the auto industry, the government takes a stake by way of the bailout and will appoint the industry with a “car czar.” Why the term czar? Is there an advantage to using the governing style of former Russian emperors? Just who will this car czar be, and what gives him/her the expertise in overseeing such a transaction? A business does not have to look any further than the federal government for examples of gross mismanagement. With the federal debt approaching $11 trillion and deficits that are likely to surpass $1 trillion, the government isn’t the institution to seek cost structure advice. Therefore, how does a person appointed by a President who has presided over the worst monetary policy arguably since the Hoover and FDR administrations going to get the “Big Three” back on track again? Answer: It won’t happen.

We loan the industry the money so they can pay their bills, then what? Without the major changes that I and other writers have outlined in previous columns, the American taxpayers will be at a crossroads again shortly – this time with a $15 billion sunk cost.

The events that have transpired over the latter half of 2008 have fiscal conservatives and free-market advocates in frenzy. True conservatives know that crisis is a friend of the state. Crisis and people’s desperation give the government the power to overrule the will of the people in order to experiment – experiment with trillions of dollars as if it were pennies. As Herbert Hoover laid the groundwork for FDR, George Bush has laid the groundwork for Barack Obama. George Bush has set up the framework for the largest governmental intervention experiment in possibly all of America’s history, as I believe it will surpass the New Deal.

For those fiscal conservatives who still think they have representation in the Republican Party, it is unwise to have blind faith. Don’t be fooled by temporary victories such as the Senate’s. There is no need to be frustrated with Barack Obama or the Democratic Party. Obama will do what he was elected to do and execute the principles his party has always stood for and conservatives have always opposed. After all, it’s not his administration who is agreeing to appoint “car czars,” approved government handouts to select income groups passing it off as “fiscal stimulus” and handed out billions of dollars to irresponsible companies as if it were pocket change.

Sadly, the world will have to see the fallout first before it sees the light…

By Michelle Seitz

If I were in the “Big Three’s” top management, I’d be ASHAMED to send this kind of a letter to customers – pathetically asking for financial aid. As a matter of fact, this is so pitiful; I’ll commit it to a column. My comments are in italics below each paragraph.

Dear Michelle,
Dear under-worked and overpaid GM executive,

You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

I’m glad you think I made the right choice, but I wish I could say the same for the decisions GM has made over the years. If GM is making their “best vehicles ever,” why are 4 of your 6 brands’ market share rapidly evaporating to your competitors? GMC, Pontiac, Saturn and Buick have not been viable players in the market for quite some time. Exactly what are those exciting plans for the future? I’ve been hearing about all of this good news in your annual reports for the past 10 years – I’m still waiting.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

Repaid, how? Has GM realized that they cannot continue on the current path? Explain to the taxpayers what changes your company intends to make and convince them that a loan will not simply prolong the inevitable. Chrysler’s Lee Iacocca at least had a sound PLAN… not just a promise of a bright future and to make the “bestest” vehicles ever! He also did not use federal dollars. The government simply guaranteed private loans in exchange for stock warrants. Seeing that Chrysler is now back in the same predicament, why should the taxpayers commit resources AGAIN?

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

Successful efforts? Why is GM’s labor cost almost double that of their competitors’? Exactly what has GM restructured? Why do losing divisions like Pontiac, Saturn and GMC still exist? Why did the executive team use corporate jets as transportation to beg taxpayers for money? Is that an example of cost reduction? I think GM’s problems go far beyond the limited access to credit markets.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:

• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk
• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Please don’t insult the average consumers’ intelligence by quoting an Ann Arbor think tank. Let’s look at the bigger picture. This is not about lost jobs and tax revenue because a reckless loan to a company who STILL doesn’t have a firm grasp of competition in a global environment will only make the OVERALL economic environment worse, and put GM, Ford and Chrysler in a shoddier situation in the future. How many jobs and lost tax revenue will be at stake at that point? Do we patch the leak here, or do we figure out what is causing the leak?

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives. Please take a few minutes to go to www.gmfactsandfiction.com, where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

I’ll show my support for GM by offering the following suggestions:

1) Stop whining to taxpayers, and file Chapter 11. You’ve let the United Auto Workers’ Union govern you, and as a result your labor costs are almost twice that of your competitors. Chapter 11 bankruptcy laws will allow you renegotiate your labor contracts, pension plans and other employee entitlement programs in an effort to reduce costs. GM, Ford and Chrysler can no longer afford to sacrifice the quality of their vehicles to make up for higher labor costs.

2) Replace management across the board. Your leadership is horrendous. Your current CEO has seen GM’s stock drop NINETY-FIVE percent during his watch. If an NFL team loses ninety-five percent of their games, do the head coach and his coaching staff return next year? Hire leadership who has an understanding that corporate jets and other executive perks cannot be afforded in a highly competitive global environment. A cost-reduction effort needs to be implemented at ALL levels – not just the bottom.

3) Dissolve your unprofitable brands, and consider joining forces with one of your American competitors – perhaps Chrysler. These actions will result in an immediate costs savings of billions.

4) GM is still lagging behind in fuel efficiency in spite of your boasting about new hybrid vehicles. Fuel efficiency is the road to victory in regaining market share.

Please share this information with friends and family using the link on the site.

I most certainly will – just not in the way you intended.

Thank you for helping keep our economy viable.

Thank you in advance for scrapping your plan to beg for money and devising a long-term strategy that will restore confidence in our markets.