George Will on the Automakers

http://www.futureofcapitalism.com/2010/04/george-will-on-the-automakers

George Will has an excellent column on the auto bailout, pointing out that an "initial" public offering of the new General Motors could value the company at $50 billion, or more than Ford. Writes Mr. Will: "This is justice under today's state capitalism: Ford took on $23.6 billion in debt to avoid becoming dependent on Washington, whereas GM shed much of its debt by becoming dependent."

More great details from the column, which relies in part on Paul Ingrassia's book Crash Course: the contracts between the United Auto Workers and the automakers were "so complex that the table of contents of the contract was almost 20 pages long."

"When Lee Iacocca ran Chrysler, it spent $2 million on gold-plated faucets and other trimmings on the company's suite at the Waldorf... Chrysler survived to be rescued 30 years later by an administration that, as a wit has said, can imagine the world without the internal combustion engine but not without Chrysler."

Mr. Will, with the reference to "the world without the internal combustion engine," seems to be referring to the Obama administration. But the federal intervention in the auto industry began under the Bush administration. The Bush administration put $4 billion into Chrysler on January 2, 2009 and $1.5 billion into Chrysler's financing arm on January 16, 2009. All this was before President Obama took office.

by Editor  |  Apr 8, 2010 at 8:39 am Related Topics:  Auto Industry, Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list