Random thoughts and questions on the automobile intervention:

Does the equity stake in GM and Chrysler awarded to the UAW make you more or less likely to buy one of their cars?

If oil prices remain low for years to come (Yes I am a contrarian), will the Federal imposed effort to make more fuels efficient cars back fire and make their federalized companies even less profitable?

If that happens will the Federal government pour even more money in the companies to continue to protect the union jobs threatened by governmental management decisions? Will the union owned companies be held any more responsible for bad decisions than the publicly owned companies were?

If that happens will the Federal Auto Consortium (FAC) legislate that their private competitors be forced to manufacture “acceptable” cars to minimize their competitive edge?

Whether because of luck or wisdom Ford is much better off financially than Chrysler or GM. Normally in a properly functioning competitive market, this would reward them with a growing market share, and thus far it is. (They outsold Toyota last month.) Will the Federal Consortium’s billion dollar aid to the losers further penalize sound management decision making by trying to protect the market share of the weaker companies?

By giving the unions a bigger share in GM and Chrysler at the expense of the banks’ and lenders’ share, which had a higher legal priority in a normally functioning bankruptcy proceeding, has the administration not simply looted bank assets and given them to the union? Is this just a political payoff or do they really think this is in the best long term interest of the auto companies?

Will this action impact future decisions of banks to lend money to heavily unionized companies? Is this not a slightly different corporate version of the mortgage cramdown that was just rejected by the Senate?

Are the unions free to sell their shares or swap them for shares in other companies? If the share prices climb are they allowed to take their profit? Will the future dividends, if there are any, be used to grow the union infrastructure or will the potential benefits be forced to be used for the benefit of the union members? Will there be salary caps on the union officials who run the union that now owns half of two major auto companies? Will the union officials be allowed to use private aircraft?

Will the Federal Automotive Consortium become another Amtrak, subsidized far into the future?

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