EMANUEL FILLS USUAL ROLE AS CLOSER. WASHINGTON - The CEOs of Detroit's automakers and the President of the United Auto Workers Union have asked Congress for "immediate and necessary funding" to help the troubled auto industry weather an economic crisis.
The big three had already requested $25 billion to retool for energy efficiency. Thursday, the chief executives of General Motors (GM), Ford (F), Chrysler (OY), and UAW (UAW) President Ron Gettelfinger met with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to discuss an additional "sawbillion-plus-five" to help honor their obligations to employee health care and retirement funds.
In a statement, GM said the companies would work with Reid and Pelosi "to ensure immediate and necessary funding to keep the auto industry viable and its transformation on track during this critical time."
The CEO’s assured the legislators that they were not asking for anything fancy, they just wanted an additional $25-billion to get them back and forth to work, until they land on their feet at the end of a golden parachute drop.
Speaker Pelosi brought up the sensitive issue of Japan's lead in hybrid and high mpg vehicles. Before considering this latest request, she wanted to know what the American people could count on for the original $25 billion that had been intended to green-up Detroit. The executives stressed that it was important for Detroit to concentrate on what it did best, and there ensued some enthusiastic discussion about the introduction of biodegradable cup holders. The greening of Detroit.
Sen. Reid said he’d have to run that by his manager (at the Bureau of the Budget); also suggesting that at the same time he’d get a better handle on the APR.
The auto executives balked at a suggestion from Speaker Pelosi that they consider leasing the $25-billion, thereby not only avoiding maintenance costs, but allowing the lease of the money to be covered in twenty-five easy $1-billion monthly repayments. This even after both Reid and Pelosi reassured the executives not to worry, that they could get out of the lease at any time, with only one single payment of an additional $359.
After leaving the room temporarily to consult her own manager, the Speaker returned and said, "Tell you what. I’m going to write a figure down on a piece of paper, and when I show it to you, I think you’re gonna like what you see."
She then folded the paper and passed it across to Ford CEO Alan Mulally, who then shared it with GM’s Rick Wagoner and Chrysler’s Bob Nardelli, The number on the paper was $14-billion-four-hundred-and-thirtynine-million-dollars-and-change. But with the new administration, taxes and certain other adjustments, including something vaguely described as a "stimulus package," the Democratic leadership felt confident everything would come in at just under the $25-million the three automakers had been asking for.
GM’s Wagoner seemed incredulous that $14 billion could mushroom into an eventual $25 billion value with just a few add-ons. Reid explained, "Well as you can see the government gets a big chunk of that, but what can you do? In your current cash-strapped situation you may not think of yourselves as living high on the pork – er, hog – but GM, Ford and Chrysler are still in the top 1% bracket of US auto manufacturers, and there’s no free lunch anymore."
This is where a disappointed Mulally chimed in, saying that he had really hoped there would be free lunch as part of the deal, to help partially compensate GM’s production line employees for the health benefits and retirement funds they would be losing in order to hold the line on executive compensation. Even if the lunch included only whatever was left of those blocks of government surplus process cheese from the 80’s. He was advised by Reid that, despite the block cheese’s estimated 200-year shelf life, everything that remained had been fossilized and committed to rebuilding a bridge in their adjoining state at someplace called Fond du Lac, Wisconsin.
Since the loan would presumably be issued either electronically or at the very least in paper currency rather than coinage, Wagoner questioned the $49-million in rust proofing, which was only one of the adjustments listed on the contract.
Both Reid and Pelosi then gave him the "look" that implied he was nickel and diming them—which, under certain circumstances, could actually benefit from the rust proofing.
Reid in particular warned the industry to tread softly. Neither Congress nor the American people were in any mood to bail out a bunch of Detroit fat cats, and everyone was also tired of waiting for the big three to come out with one of those all electric or hydrogen family vehicles they had been promising. Pelosi warned that a political action committee had already been formed to create an entity able to provide Americans low interest loans for the purchase running suits and athletic shoes, so they could walk instead of drive to work. Modeled after a combination of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, the jogging lobby has already been labeled "Fannie Pac."
GM’s Wagoner pled poverty, saying he had not only been forced to lay off 13 thousand employees and close three assembly plants, but the board was seriously considering downsizing the executive dining room and removing several items from the dessert cart.
Speaker Pelosi then allowed that the rust proofing question could be held in abeyance, since there was a considerably more important decision to be made: which of the three automakers wanted the money to be transported over from the Treasury in vinyl briefcases, and who wanted the custom leather package? By that time the auto honchos were so shaken, they looked like those seven big tobacco CEOs testifying before Congress.
GM had already published a written statement admitting that production of its formidable Cadillac Escalade SUVs was a nasty habit. However the statement also suggested that with counseling and the help of this $25 billion "patch" they thought they could get that production line off their backs – and more importantly, have it stay off.
The Senate Majority leader interjected that GM, Ford and Chrysler were already subprime credit risks. The initial $25 billion requested had been to assist them in going green, but simultaneously they had talked about using it to enable mergers, acquisitions and buyouts.
Ford’s Mulally protested that his company did not realize its lumbering Expeditions would be running at less than 13 mpg in the city, because they were headquartered in Detroit, where nobody wanted to go into the city if they didn’t absolutely have to.
In a supportive statement, Wagoner pointed out that none of his company’s original research had shown the larger vehicles would require more fossil fuel to operate than those ridiculous little Smart Cars he felt should only be sold to Shriners in the first place.
Nardelli took umbrage, saying DaimlerChrysler was in a difficult position. The company’s Smart Car division had really counted on the downsized Shriner market, but due to the high cost of gasoline there were fewer and fewer parades. Shriner. Shriner SUV.
"We felt we were acting in the best interest of consumers," explained GM’s boss. "How could they continue calling themselves true consumers if they didn’t consume as much gasoline as they possibly could in a week’s time. The last thing we wanted was to have somebody drive something home with one of those little Tinker Toy engines, slap himself in the forehead and say, ‘Wow. I could have had a V-8.’"
He then added, as if to stress the company’s tradition of excellence, "Sure I’m CEO of the company right now, but this is a philosophy that has guided my thinking since I was only GM of GM.
Reid pointed out that the two explanations were mutually contradictory – either they knew or they didn’t – it simply didn’t register.
Already worn down by the dickering, Mulally and Wagoner were kind of glossy-eyed, while Chrysler’s Nardelli could best be described as ashen. Now in the hands of a privately held equity company, Chrysler didn’t even have to go glossy if it didn’t want to, because there were no longer any of those pesky shareholders to be damned.
"I don’t know," said Mulally, "I think we should go home and think it over."
"Maybe we should shop around?" suggested Wagoner. He didn’t want the group to make any kind of precipitous statement and then go home with something he labeled "Biden’s remorse."
However Speaker Pelosi pointed out that she didn’t think her manager, Rahm Emanuel, would go for anything like that, and the offer would only be good for one day. After that it would be whatever is the opposite of the sky’s the limit.
That is when the three already shaken executives exclaimed in unison, "Rahm Emanuel? I wouldn’t even buy a NEW car from that guy."
"Hey watch it," said Pelosi, "when the President-elect said he wanted the congressman to bring everybody together, I don’t think this is what he had in mind."
So as to disrupt this alarming degree of unanimity, the Speaker offered to throw in naming rights to the nation’s capital for DaimlerChrysler only, since they already shared the same initials. This ploy did not fly, however, when Mr. Nardelli reminded there was no longer a DaimlerChrysler. The company was now owned by Cerberus – under the thinking that the public would really clamor for a vehicle named after the three-headed dog said by the Greeks to be guarding the gates of hell. None of senior management saw how they could have gone wrong with that.
Wagoner noted that the real goal was in building shareholder confidence and restoring profitability – even if it meant they would no longer be actually building cars and trucks. Initially they thought they could project that image of confidence simply by mustering a smug facial expression. But as Mullaly pointed out, Congressman Emanuel had already set the bar for that quite high. Closer confidence.
"Aw please, can’t we just get it," whined Chrysler’s Nardelli.
To which the Ford and GM CEO’s also responded simultaneously, "Look, you’re only getting to use the loan on weekends, you have no say in this matter. If you don’t stop this nonsense, we’re going to turn these negotiations around and go straight back home. We mean it."
Altering his approach, Nardelli then looked plaintively at the Speaker of the House and asked if the $14 billion+ rust proofing offer was "the best you could do?" He strongly implied that if the big three could not secure adequate financing, the Detroit automakers might have to take things into their own hands, even to the desperate measure of carjacking an entire Japanese auto plant in Smyrna, Tennessee.
"You’re killing me!" replied Pelosi. "Look what’ll it take to put you guys back on a $25 billion production line today!"
The three automakers then huddled for a moment. Then Wagoner attempted to Blackberry GM’s general counsel (GC) for a legal opinion.
"How do we know you can reach him?" asked Nardelli.
"What do you think the GPS is for?"
The legal opinion returned was that all three men should agree on their lowest offer, then just stare at Speaker Pelosi to see who blinks first.
Sales manager Rahm Emanuel then emerged to ask if there was any problem. The sales manager pointed out that the three were already offered a hell of a deal, because it was getting toward the end of the year, and they had to make room for the $770-billion they had already promised to the banks and Wall Street.
"So in comparison to that, I think you can see where the $25-billion you already had asked for to come up with a vehicle that doesn’t kill the planet, and now another $25-billion to bail out the trust fund, seems just a little out of proportion," added Emanuel.
"Wrong comparison," injected Nardelli, almost jumping up from his seat. "Next to the $210 million-plus Home Depot paid me just to skedaddle, this seems like a pretty good investment in America’s future."
Not being able to think of a new negotiating tactic, the Chrysler CEO then re-asked Emanuel if $14-billion and change was still the best he could do. Unlike Mulally (MIT Sloan Business School) and Wagoner (Harvard), Mr. Nardelli received his MBA from the University of Louisville. You can look it up.
"It looks like we’re going to have to go higher and run this by the one guy who has the final say in everything we do," agreed Emanuel, Reid and Pelosi. "He can be one tough sonofabitch," but it wouldn’t be the first time we were able to schmooze him into something that wasn’t necessarily in his best interest."
"Hey, I’m sitting right here! Alright?!" said the UAW’s Ron Gettelfinger. But if you’re asking me to sign-off on you giving me and these other guys $25-billion, who am I to stop you?
The deal thus having been completed, House Banking Committee Chairman Barney Frank entered and asked if the automakers would require financing?
"I thought this WAS financing?" replied Nardelli.
"You’re right," said the Congressman, "but this is when the Speaker usually calls somebody like me in, because we’re so good at clearing a room full of people like you. Before we seal the deal, of course you’re going to want the warranty. Right? This is Washington. Stuff happens."
After obtaining their signatures, the Speaker said she wanted to start the ball rolling again on more eco-friendly American automobile production. Each of the CEOs departed the Capitol clutching one of those pine tree hanging air fresheners.
Former Dallas Film Commissioner Roger Burke published a satirical newsletter Occasional News Events From Around Texas And Selected States (acronym intentional) until he realized 10,000 others making up fake news on the Internet were probably already sufficient. He's still driving his snazzy red 1993 Toyota Supra nonutility sport vehicle, except, much to his wife's satisfaction, now it can't even help him attract the attention of fifty year-old women.
A Texan with a horse but still no cattle, as you can see, he still has been known to milk a premise to death from time to time on his Kos diary page.