Dem's squash plans for auto industry bailout - stocks are tanking again

Sheesh, what a week. As I write this, news came across the wire about 4:10pm ET, that the democrats delayed an auto industry bailout package. The broader markets were already down for the day, but then the free fall started and the Down ended the day down another 5.28% and the S&P 500 finished down 6.71% while the NASDAQ, that beacon of hope in this stock market, only finished down 5.07% (that was obviously sarcasm if you didn't pick up on it).

The stakes are high. The Detroit automakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. About 1 million more people work in dealerships nationwide. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million. I honestly don't know how I feel personally about these bailout packages. Undoubtedly we all know someone whose employment might be affected by these companies (not just Auto Manufacturers) going out of business. However, the interesting thing is the corporate greed that manifested itself in the hearings earlier this week when the CEO's of GM, Ford and Chrysler made their way to capitol hill to plead their case.

Think about this... there are 24 daily non-stop flights from Detroit to the Washington DC area, but these CEO's each took their own private jets. Even if they flew 1st class on commercial flights, which would still be despicable, at a cost of somewhere north of $1,000, it would still dwarf the cost of the private jet flights which were estimated at anywhere from $10,000-$30,000 EACH.

The following is an excerpt from an article in the Washington Post (full link here) that is just one more example of why these guys and their companies don't deserve any help whatsoever!

So it was hard to feel sorry for the executives when Rep. Peter Roskam (R-Ill.), late in the hearing, reminded them again that "the symbolism of the private jet is difficult," and mischievously asked the witnesses whether, in another symbolic gesture, they would be willing to work for $1 a year, as Nardelli has offered to do.

"I don't have a position on that today," demurred Wagoner (2007 total compensation: $15.7 million).

"I understand the intent, but I think where we are is okay," said Mulally ($21.7 million).

"I'm asking about you," Roskam pressed.

"I think I'm okay where I am," Mulally said.

And don't even think about asking him to fly commercial.

Until next time
- Steve