Friedman: Big 3 Were Brain-Dead

New York Times columnist Thomas Friedman on "Face The Nation."
New York Times columnist Thomas Friedman on "Face The Nation," Dec. 7, 2008.

As future shareholders of General Motors (by way of Congress' proposed infusion of taxpayer dollars to Detroit), Americans should not allow the management that "drove this company into a ditch" to stay on, hoping that the same management will be able to drive it back out.

That is the sentiment of New York Times columnist Thomas Friedman, who said that the proposed bailout of automakers by Congress - comprised of loans to GM, Chrysler and Ford to the tune of $15 billion - must come attached with a business plan that will not perpetuate Detroit's ruinous practices of building cars people do not want to buy.

Friedman also said blame must be shared by lawmakers who protected the Big Three's interests over the years - "protecting them to death," in a way - by blocking pressures to build more fuel-efficient, safer cars, and thus making them less competitive on the world market.

"These are people, remember, who opposed seat belts, rearview mirrors, just about any innovation you could think of," Friedman told Face The Nation host Bob Schieffer. "So we need a real change of thinking here.

"GM can only do two things today really well, Bob: They can lobby Congress, and they can advertise at the Super Bowl. That's about it."

Friedman said that Detroit was self-conditioned to make money from big cars, like SUVs, Hummers and trucks. "A couple of years ago, as gasoline prices rose, what was their response? Was it to move immediately to electric cars or more efficient cars? No, they came out with a program for $1.99-a-gallon gas for a year if you bought a Hummer or a Yukon or a Suburban.

"It was like a crack dealer saying, 'Bob, I'm going to guarantee you free crack, or reduced crack for a year.' It wasn't 'I'm going to get you off your addiction.'"

Ironically, Friedman said, Detroit's proficiency at lobbying was against their long-term best interests, as when they opposed then-First Lady Hillary Clinton's national health care program. Now the automakers are burdened with the costs of health coverage for their workers and retirees.

"Now they tell us, 'Oh, it's terrible, we've got these health care costs, woe is me!' But were they out there campaigning for a national health care plan that they would have been the biggest beneficiaries of? No, they were brain-dead.

"It's a travesty that the American people are in this terrible choice today," he said. But he is not in favor of simply letting the companies go under. "If we are going to save them, then I want new management and I want to see a real plan for their survival."

Friedman used the music business as an example of how the introduction of MP3 players, computer programs, Napster and iPods changed the way music was generated, distributed and consumed, forcing an entire industry to adapt, and said Detroit must adapt to advancing auto technologies as well.

"If we give money to these people and it is not with a plan to take advantage of this revolution, it would be, Bob, as if, today, we said, 'Let's give money to make RCA Victor record players in the world of iPods,' OK?"

Earlier on the program, Connecticut Sen. Chris Dodd (left), Chairman of the Senate Banking Committee, also said that new leadership of the auto companies should be a condition of their receiving taxpayer funds, and he would even consider a federally-appointed "car czar" to oversee the Big Three moving forward.

"I think you have got to consider new leadership," he told Schieffer. "If you're going to really restructure this, you have got to bring in a new team to do this, in my view." He said GM Chairman Rick Wagoner, for one, "has to move on."

Dodd also said that he believed a short-term loan package to Detroit would pass, even among those in Congress who don't like the idea. "None of us want to wake up on January 1 and discover we don't have an industry to save," he said.

However, Republican Sen. Jeff Sessions of Alabama, a member of the Senate Budget Committee, doubts that a short-term rescue plan for American auto companies would pass.

"I think Congress is tired of being stampeded, they're tired of being threatened that we've got to pass something [with] just a few days of voting or consideration. We haven't even seen a bill yet. So I think there's still a lot of skepticism out there, and I have my doubts that it would pass until we have an opportunity to really see what this is about. But it's a lot closer than it was with them waltzing in and going from $25 billion to $34 billion, pretending to be humble."

Sessions (left) was not comfortable with the notion of the federal government appointing a "car czar." "I am uneasy about the federal government telling these companies what they've got to do to be successful. They're the experts at it, not the federal government."

Sessions also said that Congress is having "buyer's remorse" over its handing over of the bailout package to Treasury Secretary Henry Paulson. "The idea that this Senate, in a panic mode before the election, would give one man $700 billion to allocate amongst his friends on Wall Street as he chooses, with virtually no oversight whatsoever, is just breathtaking to me. And I think we're having some buyer's remorse on that."

Dodd was also critical of the Bush administration's handling so far of the $700 billion financial firm bailout package, half of which has been allocated.

"I think if there were a vote tomorrow and they came up and said, 'Give us $350 billion, we want that second chance," I think it would lose overwhelmingly.'"

Read the full "Face the Nation" transcript here.

By producer David Morgan.