Ben Stein Votes "Yes" On Big Three Bailout

Says Gov't Must Save Detroit To Avoid a Depression

(CBS)  What economic problem should be the government's top priority? Contributor Ben Stein has his nominee:

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It's getting ugly out there.

America's Big Three automakers - GM, Ford and Chrysler - are not so big any more. They are on the ropes, in urgent danger of simply running out of cash.

Their executives and the unions who represent their workers, are pleading for a massive bailout from us, the taxpayers. President-elect Obama agrees with them.

Now there are plenty of good reasons to say no. After all, the Big Three have made every mistake in the book: far too lush employee contracts, poorly designed and poorly built cars that often burn too much gasoline.

Meanwhile, the Asian and German automakers with plants in the southern U.S. do a far better job at making cars people want to drive.

Mr. Bush, egged on by his own Dr. Evil, Henry Paulson, Secretary of the Treasury, is saying that Uncle Sam will not agree to a bailout. And in a way, I sympathize with President Bush and Secretary Paulson.

Still, the Obama team and the Democrats have this one right: The taxpayers just have to save Detroit.

We are in an economic tailspin. We cannot allow the roughly three million workers connected to the Big Three auto industry to fall into the ranks of the unemployed. It is possible that this nightmare could push the oncoming recession into being a Depression, something we definitely do not want to ever again experience.

Plus, we need a powerful domestic motor industry for defense purposes, to be able to convert to making tanks and military trucks if they had to.

Bankruptcy is not a good option. Who would buy a car made by a company in bankruptcy? After all, would the company even be there when you wanted your car serviced or repaired? And how could workers handle extended layoffs while it all got sorted out?

Yes, we need strict standards for revamping Detroit, maybe even bringing in supervisors from Toyota, BMW and Nissan. Yes, we need to make sure Detroit makes cleaner, more efficient vehicles.

But this economy is in enough trouble already. With our hearts in our mouths, we beg you, Mr. Bush, save Detroit now before it's too late for them, and too late for us.

America is not America without a big domestic motor industry. And yes, what's good for General Motors is good for America.

[likelyvoter]

Why does anyone listen to this fool? This guy has been saying "financials ar strong" for the last 3 years. He was even telling people Merrill Lynch was a "steal" at $75 a share (hey, what''s it worth today Stein?). Google "Peter Schiff Versus Ben Stein" and watch the YouTube. It would be hillarious if not so sad.

[hitoyou1]

COme on CBS take this off of here. This is a joke, having this guy on here.

[messiahx4eve]

Hey mister Ben Stein, how about giving the BIG 3 YOUR money instead of ours??? Like that idea, I sure do....

[hitoyou1]

d33pthroat1: ALl I will say is you are WRONG. I know fist hand. They have a real real real "plush" contract. A real "plush" contract. And they do NOTHING for it. They don''t know what the word work means. The UAW must GO.

[d33pthroat1]

The concept that auto workers have a "plush" contract is absurd.

-- Posted by zebra8835 at 12:29 AM : Nov 17, 2008

Read this article:

http://www.cbsnews.com/stories/2008/11/12/politics/otherpeoplesmoney/main4595068.shtml

[crisch1]

Conclusion is right for the good of our nation but some perceptions were wrong.

Per J.D. Power Vehicle Dependability Study, Mercury and Cadillac are in the top 3, along with Lexus. And in 2007, Buick was tied with Lexus for the top spot.
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008115

According to Business Week, Volkswagen had the most recalls at this time a year ago. Second worst was Toyota.
http://www.businessweek.com/autos /content/aug2007/bw20070810_455098.htm

Highest initial quality:
a. Cadillac: better than both Acura, BMW
b. Mercury: better than both Honda, Nissan
c. Chevrolet: better than Acura, BMW
This is according to J.D. Power%u2019s Initial Quality Survey.
http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008063

Midsize sedan highest initial quality? Chevrolet Malibu has better initial quality than any competitor, including the Honda Accord, Toyota Camry and Nissan Altima. Ford Fusion also beat all 3 Japanese competitors. Per J.D. Power Initial Quality Survey, which also reveals that above average are American brands Mercury, Ford, Cadillac, Chevrolet , Pontiac, Lincoln, and Buick. Below average are import brands Acura, Kia, Nissan, BMW, Mazda, VW, Subaru, Scion
http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Midsize-and-Large-Cars
http://www.jdpower. com/corporate/news/releases/pressrelease.aspx?ID=2008063

The problem with loaning/giving money to the Big-three is that there is no clear way to gurantee its proper usage, especially not in this down-turn. If people aren''t buying cars, why should the auto companies keep employees. They will instead pay their previous creditors, and dole out bonuses.
We will still see big layoffs.

The money should be used to directly help those that are laid-off with serious re-training and extended unemployment benefits.

The other option is give smaller grants explicitly for bringing down the cost of battery technology...but that will take a few years to get right.

Meanwhile, the down-turn will help root-out the sloppy executives also.

[tmittelstaed]

mycountry1st: "...As an example, it''''s astonishing that since the 1970s there is still not a 50+ mpg vehicle produced by detroit..."

Baloney. GM produced the EV1 which ran entirely on electricity and had a *** good range. People lined up for them. However the company was losing $4-6K per vehicle, and quiet surveys of the customers who had the cars showed that while they were happy enough getting a new electric car at the same price of a new gas car, no way would they pay the true cost of making the car. So, GM killed the model line. The successor to it is the Chevy Volt, which is going through design right now.
In last ''88 through ''92, Chrysler produced 4 cylinder turbocharged minivans with stick-shift. These got much better gas mileage than the 3.8L engines with the same power level and auto-tranny that replaced them later on - not 50mpg, but this is a big heavy minivan we are talking about. These models were a market failure, few were sold or ordered. Why? Because American Soccer Moms (who drive these vehicles) won''t buy a stick shift, and people think a 4 cylinder engine has no power. Despite the fact that today, people are racing these minivans with boosted turbos.
Chrysler today sells a turbo diesel minivan with stick shift in Europe, it''s popular there. Much better gas mileage than any minivan we have in the states and cheaper to run. But people won''t buy diesel vehicles here, with the exception of the 3/4 ton and larger pickup truck market.

[tmittelstaed]

Kudos to Ben Stein! People love to s h i t on Detroit because they always have some complaint or other about their car, but the fact is that for most of the last decade, GM and Ford -were- making a profit. Why? Because they were making big gas guzzler SUVs that people wanted to buy, and enviro-nuts hate.
Every other country in the world either outright government-subsidizes their automakers, or they erect bureaucratic red tape that make it very difficult for foreign automakers to sell cars into the country. In Japan for example, they have safety standards and annual reinspections that are so difficult that it''s impossible to get a car with more than 50K miles on it to pass - so millions of cars with plenty of miles left on them are scrapped, which strangles the used car market and guarentees Toyota and Honda a market.
And the Japanese public has a tremendous cultural bias against anything NOT made in Japan, even if it''s cheaper to buy an imported car. That is why Toyota is creaming GM and Ford in the US, and GM and Ford aren''t making a dent in Toyota over in Japan. It''s not a fair market, and never will be until the Japanese culture itself changes (and good luck with that!)

[downtowner97]

Go put some Visine on your beach ball, Ben. We realized how un-funny you were when you made a movie attacking science. Now we should listen to you about the "Big 3"? Do you drive a Ford, Chrysler or GM car or truck? I doubt it.

Imagine if we offered a $25 billion "X prize" for developing a car that runs on sea water. There''d be three in a year ready to go into production, and the winning company, even if it''s Honda or Toyota, could sell them to the masses here in the US and elsewhere.

The "Big 3" already sell fantastically fuel-efficient cars in Europe. They don''t sell them here because they''ve been MANDATED by US lawmakers and oil companies to make big gas guzzlers.

[zebra8835]

The concept that auto workers have a "plush" contract is absurd. If you would start working in a Ford or GM plant today you would be looking at about $13 an hour with a top rate of $18 an hour. There is no more pension. There is also casual summer labor at about $11 an hour. This is about as plush as a burlap sack. About 60% of their cars and trucks are made in foreign countries anyway. Mostly in Mexico and Canada. The management gambled on large trucks and SUV''s now the employees will face the loss.

[opedanderson]

Sure. Bail them out. But why are we not firing all these executives. These Masters of the Universe who come from such good schools?

They suck! Get rid of them!! Its the least we can do!

[jschmidt27]

http://www.kudlowsmoneypolitics.blogspot.com/
''Total compensation per hour for the big-three carmakers is $73.20. That%u2019s a 52 percent differential from Toyota%u2019s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59.''
No bailouts without the UAW contracts being cancelled and renegotiated. Also executive compensation limits need to be put in as well as Congressional oversight of the corporation until they payback the loans. This is similar to the Chrysler bailout of the 80s. Arnie is correct and the same requirements should be forced on any city or state that applies for aid. We can''t afford the auto workers and all those associated to be on the unemployment line but we can''t let the UAW hold all the cards and get off free from blame.

[rushlimpdrug]

It would have been in CBS'' best interest to
preclude this article stating whether ben
stein actually owned any big three stock.

Otherwise, ben just suxx.

I say give the money to the other auto makers
then for sure we''ll get our money back.

[ioweign]

I agree with Ben we need to assist GM, Ford & Chysler.

My reasons

1. It is a loan we will get paid back!
2. The Foreign car companies all developed smaller fuel efficient cars in their home markets because their governments taxed fuel to conserve fuel. We have not done that.
3. The pension benefits of UAW retirees while good are not as good as our state and federal employees.
4. For every UAW employess making a good blue collar wage there will be thousands of 14 dollar and hour workers who will loose their jobs with a bankruptcy.
5. Bankruptcy is not an option for these companies in this environmnet. Nobody will buy a car from a bankrupt company.
6. Over the last few years toyota & Nissan have entered the pick-up truck, larger SUV market in the USA. Why CHEAP GAS!

The lack of a government energy policy, the lack of banking regulation, and the lack of spending control have gotten us into this mess. The source of the problem "US Congress".

Posted by jackbardol at 05:47 PM : Nov 16, 2008


I agree with you on everything except your last sentence - Congress does not make an Energy Policy.

http://www.commondreams.org/views05/0503-22.htm

[danielle_mom]

Why is the big 3 suffering while all of the foreign car makers are thriving? It sounds like mismanagement.

[hitoyou1]

Who cars what this gay asssssss hooooooooooooole thinks are says. No money to the no good car companies. Let them shut down and out put all the UAW people that ran the auto companies down out of work.

[noboundary]

Everything is wrong with the U.S. auto industry:
1)Excessive wages for workers and CEO''''s alike - workers get the equivalent of $156,000 just for putting on lug nuts; and the CEO''''s get their $25 million for their incompetent management.
2) Lousy products - not fuel efficient, not innovative and certainly not as durable as foreign made.
Answer: Let them file Bankruptcy, which is what many analysts see as best for everyone.

Just for the record, the rest of the governments bail out for the financial industry is equally absurd, so no bias here against auto companies...

[mycountry1st]

The government (we citizens) should help only with the following conditions:
1) All top management should be fired and their assets distributed among the workers
2) Ownership of the company be divided up 50% to workers, 50% to remaining stockholders
3) Once the workers ''own'' the company a breath of fresh creativity will result in the production of vehicles that will appeal to the various market segments. As an example, it''s astonishing that since the 1970s there is still not a 50+ mpg vehicle produced by detroit.

[cbsblogger]

I make about $14 per hour and it infuriates me that taxes might be taken out of my check to pay for some walking-dead dinosaur company like GM and $73 per hour UAW workers. They refuse to make quality vehicles with good gas mileage that are more affordable than the competition. snip
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Posted by mattboynton at 05:27 PM : Nov 16, 2008


I don''t entirely disagree. The CEOS must be fired in GM just as a Goldman Sachs. The latter have cost us far more.

But why don''t you also complain about the billion dollar a year hedge fund managers, many of which have directly contributed to this crisis with their reckless over leveraged buying and selling financial instruments, and which do nothing to contribute to a real economy and a productive USA?

Secondly the hourly GM workers had a contractual agreement with the company, the same as the captains of capitalism, i.e. the overpaid CEOs that should be paid 100% based upon risk and reward. But they get paid well even when companies go bankrupt or mis-managed .

Also it should upset you about the many government workers and Congree people who are called public servants but get paid and pensioned far better than anyone of those they serve.