The Three Stooges Go To Washington

With half of the civilized world weighing in on whether the Detroit auto manufacturers should be bailed out by us taxpayers, let me add my big mouth to the discussion (need I mention, this is Daria!).

A bailout will only temporarily delay the inevitable for General Motors, Ford and Chrysler. Within a year, if they finally get their handout, the Three Stooges will be back in front of Congress, rattling their same tin cups once again.

Now, you may think that I'm being unduly harsh by referring to Robert Nardelli of Chrysler, Alan Mulally of Ford and Rick Wagoner of GM as the Three Stooges, but how else can you categorize them?

You don't go to Congress begging for money for your car companies by flying in on your private jet at a cost of about $20,000 each for the trip from Detroit to D.C. Car pooling would have been a nice touch!

And, for heaven's sake, when queried by a Congressman about how much you'll need to tide your company over this serious fiscal hump, have a number ready ... any number, even if it's $700 billion!

Oh, and did I mention that it might also be helpful to your cause to have a business plan to pass out, explaining how you'll pay OUR money back to US?! For crying out loud, even a fledgling entrepreneur knows enough to have a strong business plan at the ready to show a prospective lender.

What am I missing here?

No wonder the heads of the Senate and House sent Moe, Larry and Curly back to Detroit to try again the first time.

The Real Problem

You know why this bailout won't work even if these three CEOs provide business plans etched in gold? Simple … they don't sell cars at a profit!

There ... I've said it.

Honda and Nissan make a profit of $1500 on every car that they sell in the U.S. GM, on the other hand, loses $700 every time it sells a car in the U.S. and Ford loses $1500 on every car!

The Big Three's motto should be, "Stop us before we sell again!"

This brings up the old joke, "It costs us $100 to make and we sell it for $90. But what we lose in profit, we make up for in volume!" It would be laughable if only there weren't so many jobs in jeopardy.

So, of course, you're asking, "Why do they lose money selling cars?"

There are two reasons; the first is the United Auto Workers union and the second is the same people that they're asking to save Detroit: Congress.

Let's start with the union. Toyota pays workers about $45 an hour when you include all the benefits, but GM has to pay around $72 an hour, thanks to the union contracts. Because of the added expense of the workforce, even if the Big Three designed cars that American consumers wanted to buy, they can't sell them as cheaply as Toyota, Honda and Nissan.

To add to the Big Three's expenses, Congress insinuates itself into the manufacturing process every chance it gets by adding layers of regulations and mandating high hurdles for added gas mileage.

Even the $25 billion already allocated to help Detroit was only given to develop "green" cars, NOT to keep them in business now.

If Congress wants to manufacturer cars so badly, let them put an assembly line on the floor of the Senate where nothing is getting done anyway. At least the Senate might finally start earning its inflated salaries.

Next: The Only Plan That Will Work