Is it in the Bank?

It’s been a long weekend for Congress as they continue to work on the terms for a bridge loan to our struggling US auto manufacturers. No one should believe for one minute that this is an easy choice, as a good case can be made for each side. However with the backdrop of Friday’s Job loss reports of 533,000+ bringing the total job loss for the year over the 1,000,000 mark, I think the decision to go forward with some type of bridge loan as reported by the New York Times is a decision that makes sense.

I watched the debate extensively, and I must say I was impressed with the both the quality of the questions, and the depth of thinking that went into them. It appears as though they will agree on some interim financing that will give the companies life into March of 09, where it will become the problem of the Obama administration.

The CEO’s,Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler, owned by Cerberus, a private equity firm, have all agreed to work for $1.00 annually, and that ought to help bring about a real sense of urgency. It is also a sense of fairness in line with the layoffs that will be coming as they re-structure. No matter what, and President Elect Obama concurs there will be tougher times coming for not only the auto workers, but for Americans in general, as we weather our current recession.

With all that has happened in the auto debates, I still have not seen or heard of ideas that will ensure success. There has been talk of a committee, and we should all know that Washington committees take forever, and rarely produce positive results. I have also heard talk of a car czar with Jack Welch being mentioned, but I would like to see someone of the ilk of Michael Porter of Harvard University (recognized as one of our country’s leading strategists) who recently wrote an article for Business Week on our need for a national economic strategy.

Of course, any strategy the companies look to implement needs to be in conjunction with the UAW and it’s President Ron Gettelfinger, who seems to understand the urgency in getting this done. We are way beyond niceties, and into survival mode. Others that need to be involved going forward will be suppliers, bondholders, and anyone else with equity stakes.

However, no one mentioned above can do anything about the situation as WE CAN, with we being the car buying public. We alone, as suggested in my earlier post, have the deciding power to determine the fate of our automobile manufacturers, buy either buying or not buying their cars. We will be the ultimate decision maker!



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