End Of The Line?

A new report suggests that American automaker GM is considering a Chapter 11 bankruptcy filing as its deadline to submit a restructuring and viability plan draws near. GM has already received nearly 10 billion dollars in bailout money.

GM has already announced plans to cut 10,000 salaried workers worldwide, or 14 per cent of its staff, impose pay cuts for most remaining white-collar U.S. workers and has offered buyouts to its 62,000 U.S. workers represented by the UAW.

GM's CEO Rick Wagoner, perhaps sensing that times are tough, recently took a voluntary pay reduction to $1. This brave move has forced him to survive on the remnants of his 2007 compensation of 15.7 million dollars, a 64% increase which he earned for steering his company into a record 39 billion dollar net loss that same year. One wonders how such a profoundly ill industry has managed to survive even this long.

Bonus: Here's The Onion's take.

Bailing Out

Jim Arnett, appointed only 3 weeks ago as special auto industry advisor to Stephen Harper and Dalton McGuinty, has quit his job. Although he will continue to work with McGuinty, he appears to have had irreconcilable differences with the Harper Conservatives over the plan for restructuring the auto industry.

Federal insiders said yesterday the Conservative government never really saw eye-to-eye with Arnett on what needed to be done, and Ottawa has no immediate plans to look for a successor.

That sounds pretty bad. This sounds even worse:

Instead, Ottawa will rely on internal advice on how GM, Chrysler and Ford can be made more competitive.

Fantastic. Hopefully, these advisors will be as productive and credible as other giants of Conservative "internal advice":

Wajid Khan: Harper's former special advisor on mid-east affairs. Khan's report on the middle east was so top-secret it was never released to the public, and so influential that Stephen Harper was single-handedly able to use it to bring lasting peace to Arabs and Jews. Khan worked all of these miracles while possibly only violating Elections Canada spending laws to the tune of $30, 000, which most Canadians considered a bargain.

Jim Prentice, Lisa Raitt, John Baird: Together, these three intellectual superstars comprise Harper's environment & energy committee. Just like Obama's energy czar Steven Chu (who won a Nobel Prize in Physics and is the director of the Lawrence Berkeley National Laboratory), this team's scientific credentials speak for themselves. Prentice is a lawyer who specializes in physical property rights and served as director of the Calgary Winter Club. Raitt is a lawyer who was the former CEO of the Toronto Port Authority. And Baird has a Bachelor of Arts from Queen's and has been a vegetarian since 1997. Toss in Rona Ambrose, and you have a true scientific powerhouse that has helped to make Canada the envy of the world when it comes to action on the environment.

With internal advisors like this, I have no doubt that Canada's New Government can guarantee the automakers a rosy future, just as Jim Flaherty projected bugdet surpluses for the next five years. And we all know how that turned out.

Needing A Lift

As American lawmakers contemplate a 25 billion dollar bailout of the Big 3 automakers, and as Canada considers following suit, let's take a moment to consider the absurdity of this situation.

American automakers have for years been committed to producing poorly built gas guzzling monstrosities, and their total failure to anticipate a changing marketplace has finally caught up with them. This isn't rocket science folks, and it's not as though the writing wasn't on the walls for the past, oh, twenty-five years. And now, finally faced with the stark reality that people simply don't want their cars, these free market privateers have turned to the public sector to backstop their ineptitude.

On Friday, Ontario Premier Dalton McGuinty met with executives from the Big 3 to hear their pitch for a cash infusion.

The presidents of Honda Canada Inc. and Toyota Canada Inc. were also at the meeting. Mr. Bryant stressed that those companies are not facing a liquidity crisis but wanted to ensure that any aid provided to the Detroit Three does not leave Honda and Toyota at a competitive disadvantage.

The Japanese car makers are doing just fine, thank you very much. For decades they have been in the business of making smaller, high quality, fuel-efficient cars. And now, to no one's surprise (except, seemingly, Detroit's) they are on top.

If the prospect of using taxpayer money to bail out bloated dinosaurs like GM isn't frightening enough, ask yourself what our federal and provincial governments are doing to assist enterprising home grown electric automakers like Zenn Motor Cars and Dynasty Electric Vehicles. The answer - nothing.

With the exceptions of the province of Quebec and the municpalities of Vancouver and Oak Bay BC, Zenn electric cars are not even permitted to operate on Canadian streets. Likewise for Dynasty's IT electric cars, whose parent company is being forced to shift production from Delta BC to Pakistan. And if their cars seem a little too...pedestrian, check out California's Tesla Motors, which is now producing the impressive electric Roadster to backlogged demand, and promises to deliver a $60,000 luxury electric sedan by 2010.

Surely these are the automakers that deserve a slice of that 25 billion dollar pie. Let Exxon Mobil bail out GM. If public money is to be spent in the auto industry, let us invest it in the future, and not in the past.