Wednesday, June 25, 2008


Based on today's Wall Street Journal article, "Chrysler taps $2 billion credit line from owners", we have clear evidence that former President Jimmy Carter should have stuck to his initial instincts - a belief in the free market system -- when he was asked by Chrysler in the late 1970's to provide a financial bailout to the failing company. Unfortunately he caved in to the corporate/labor union cabal that rallied their government allies to support a bailout so by the time President Ronald Reagan was sworn into office in January 1981 the bailout deal was his to administer.

I hate to say it - especially since I am not the cold-hearted, greedy, capitalist pig dog that some readers will no doubt brand me as - but our US federal government should have simply let Chrysler go bankrupt in 1979 instead of putting it on life support so that 29 years later (this year) Chrysler's current owners, Cerberus Capital Management and former parent Daimler AG, are still bailing the company out via this latest cash infusion.

Why let them go bankrupt? Beyond the basic free market economics involved -- Chrysler failed to build vehicles that people actually wanted to drive!! -- there is a psychological reason known as "survivor syndrome" which I saw years ago when I worked in corporate life. The "survivors" in my case were the corporate employees who survived the massive lay offs my company announced over several years. The "syndrome" effect is described by psychologists are a feeling of "guilt, coupled with a 'why not me?' reflection........." (my paraphrasing). Personally I got sick of the corporate speculation/gossip about the "next round of lay offs" and did not want to fall into the "survivor syndrome" mind set so I left the company to join a consulting firm in an entirely new line of working and geographic location.

No, not every Chrysler employee would, perhaps could, make such a leap of faith like I did to escape the dark, negative corporate atmosphere I was working in but since Chrysler's future hasn't look very promising in the last 29 years what did the country gain by propping up this paper tiger of a corporation?

Upon reflection I have to believe the 100,000 plus employees at Chrysler in the 1979 time frame would have been better off if the company would have gone into bankruptcy so that new owners/management would have taken control to offer a new focus or simply to sell off all of its assets that would have phased out the company completely. I guarantee you that some of the workers who saw the very dark days in 1979 during the pursuit of the federal government bailout are still working there today. This assumption makes me sad for them since they could have easily completed a college degree and/or job training for a new career not in the automobile industry since they had 29 years to do it. Unfortunately the government "helped" them by perpetuating their dead end jobs.

Enjoy the ride (unless you are in a "K" car of course!),



Anonymous said...

With my complete admiration, I agree that you are the consummate cold-hearted, greedy, capitalist pig dog!! And good commentary by the way... DJM

Anonymous said...

I agree, as much as I like some of the latest designs and the innovations they made, and the Jeep brand, Chrysler has not been able to consistently perform; the bailout, the Daimler marriage and the Cerberus deal, all those have been lost opportunities. I think that the overall problem with the "big" three is the inbreed they have, it is like a redneck family in which brothers marry sisters: they procreate monsters, same thing with the american auto industry: they need to hire experienced people from other industries than automotive, they need new perspectives, new ways of doing things, fresh air, new ideas, and I'm not talking about young people, just people from other industries, I think Ford got it right by hiring the former CEO of Boeing, a little too late in the game but at least they are trying.