RUSH: The automobile companies are next in line with their hands out. General Motors and Chrysler are asking for, what is it, the number being bandied about is $16 billion for General Motors, but I’ve seen a total of 30 mentioned elsewhere. Let me find it here in the Stack. Yeah, GM needs up to $30 billion. Yes, and, by the way, we’ve got official news, both Obama and the Congress are calling for a second stimulus package. I’ll have the details in just a second. First I want to tell you about the automobile dealers. ‘General Motors Corp said on Tuesday it could need a total of up to $30 billion in US government aid — more than doubling its original aid — and would run out of cash as soon as March without new federal funding.’ Now, GM and Chrysler, back in the fall, said they would run out of cash when, if they didn’t get the first bailout? January or something like that? My point is, regardless how much money they’re given, at some point they’re going to run out. The focal point here is that people need to buy cars. If General Motors, Ford, Chrysler, if they’re going to rebound, people need to buy their cars.
‘The request for additional aid from the top US automaker came in a restructuring plan GM submitted to US officials on Tuesday. The GM restructuring plan of more than 100 pages was posted on the US Treasury website.’ Now, here’s the dilemma about this. The first thing you have to understand, these automobile dealers are located in Michigan. There are no jobs in Michigan. So here’s the question. Do we the taxpayers bail out the auto companies, which is essentially bailing out the unions, I mean when you strip it down to bare facts, we are talking about bailing out employees, or not bailing out employees. If we bail out the car companies, the theory is that at least their people will be employed in the state of Michigan, where there are no jobs. And then General Motors and Chrysler can go about continuing to try to make cars that people want to buy, theoretically. Or, we don’t bail ’em out and they run out of money and they have to file Chapter 11 or just plain go out of business, at which case all the autoworkers are unemployed and you know what will happen then. We will subsidize their unemployment with unemployment benefits.
Now, we will not subsidize their unemployment at their current salaries, their annual salaries and benefits and all that. But that’s the dilemma, and there’s a third option here. Filing Chapter 11, which the automobile companies say they don’t want to do because people aren’t going to buy anything made by a company in bankruptcy, the question has to be asked, are they buying anything now? Are they buying enough product from Ford, General Motors, and Chrysler, to stave off any crisis that they’re facing? It doesn’t appear so because they keep coming back and asking for more money. So if we let ’em go Chapter 11, they can reorganize and at least start to run the company, reorganize in a way that they can run responsibly. That would put the unions out and this is all about saving the unions. I want to prepare you for the argument, ‘Well, we’ve gotta protect these jobs.’ There are no jobs in Michigan. So if the auto companies go belly up, if they go out of business, all these union workers, the United Auto Workers employees, the subsidiaries, where are they going to go to get work? They won’t and that’s bad for all of us, it’s bad for the economy, so the pressure to continue to provide bailout money for the autoworkers is going to be to keep people employed because that helps all of us.
Now, I want to make one last comment on all of this and then I’m going to get off of this because it really bothers me. A business plan that focuses on cuts and reductions only, which is what we’re dealing with, I mean, they’re gonna cut Saturn, they’re gonna eliminate Saturn, they’re gonna basically have four brands with Pontiac as a special order. Going to do Buick, GMC, Cadillac, and Chevrolet, get rid of Saturn and so forth, they’re going to keep the Hummer. They’re going to get rid of the small cars that Saturn makes. A business plan that focuses on cuts and reductions, I mean, it must be done, obviously, but it frightens me a little bit. Bankers and creditors are an important part of any budget going forward, but so are customers. A business has to be relentless in how it markets itself. It’s always talking to its customers, its future customers, it’s always building confidence in the future, and not just by promising cutbacks. Right now, the auto companies are not even concerned about talking primarily to customers. They are concerned with persuading Washington. The automobile companies are forced into a situation here where they have to sell whatever they have to sell, and it isn’t cars in this case, to Washington.
Governments are better by being smaller. Private companies are at their best when they’re expanding, efficient spending is supposed to be a given. A business plan does not exist in a vacuum, is my point. Customers are going to watch how this is marketed as closely as how the cars are marketed. See, the thing is, we all want General Motors to succeed. General Motors is a legacy in this country. It’s a tradition. We want Ford to succeed, Chrysler. We want these companies to succeed. They say they can’t take bankruptcy because some studies indicate people won’t buy cars from a bankrupt company. Now, I think that if a company can tell the world why they have never been more excited about the future post-bankruptcy, they can inspire confidence. Trump understands this. Trump, regardless what’s going on, is always confident, he’s always positive, he is enthusiastic, and you have to be. That’s part of the job. Selling is always part of the job. The car companies have lost their swagger. I wish they could get it back. The American people want to support General Motors and Ford and Chrysler. The American people are rooting for those companies. But we want to feel like we’re rooting for people who refuse to fail.
We want people to lead, who are fearless, promise to make products we’ll absolutely fall in love with. That’s not going to happen as long as these companies are cowering in the corner in fear of Congress. The American people want to see courage; they want to see leadership, independence. We want to see out of those executives exactly what we want out of the cars that they are selling. I see a totally defensive, negative posture, and who can blame ’em. They’re totally prisoners now to Washington. What’s happening to the automobile companies is a microcosm of what’s going to happen to anybody who becomes totally dependent on Washington, when you live in constant fear. You can’t make a move without their approval. They don’t know what to approve or what not to approve because they’re not experts and their motivation for approving things is going to be based on satisfying constituencies that have nothing to do with selling cars. This is a vicious cycle.
Cessna, on the other hand, set the standard. Here is an industry that’s under assault by the federal government, the Cessna CEO runs a full-page ad telling CEOs to buck up, to grow a pair, in essence, and remember what it was like to dream big things. That’s how you market yourself, boldness, strength, independence, be your product. You got a car that goes zero to 60 in 4.5 seconds, be an executive that can do it, too.