Let Detroit Go Bankrupt

Mitt Romney must know just a few things about business, so today's Op-Ed he wrote should be a mandatory read for anyone seeking information about the automakers' begging spectacle before Congress yesterday.

Just a few facts on this situation:

1. It costs an extra $2000 per car to produce an American UAW car over that of a non-union foreign car. That's one reason a Toyota or Nissan is a better deal. (Romney said: "That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it.")
2. From ABC News: "Big Three CEOs Flew Private Jets to Plead for Public Funds
   Auto Industry Close to Bankruptcy But They Get Pricey Perk" Ya, it always looks good to take a private jet at a cost of $20,000 or so instead of flying commercial (for around $200) when you go to beg for money--really smart. ("While Wagoner (GM Chairman) testified, his G4 private jet was parked at Dulles airport. It is one of eight luxury jets in the GM fleet that continues to ferry executives around the world despite the company's dire financial straits.") Could this be one of the reasons they're bleeding money????
3. Bob Nardelli (CEO of Chrysler) makes $1 million/year but refuses to detail his other compensation that would come from the company. Why should he considering how much it cost Home Depot to dump this guy? Read this: Nardelli "hardly had time to count his $210 million severance package from Home Depot before being tapped by Chrysler's new owners, the private equity firm Cerberus Capital Management, for the top job at the automaker," wrote Martin Howell of Reuters… Here's another great article about this supposed genius: Once Tainted, Nardelli Now Has Chrysler’s Keys
   
4. The chairman of Ford said this: "We have also reduced our work force by 51,000 employees in the past three years," Mulally said. In the ABC News story: Yet Ford continues to operate a fleet of eight private jets for its executives. Just Tuesday, one jet was taking Ford brass to Los Angeles, another on a trip to Nebraska, and of course Mulally needed to fly to Washington to testify. He did not address questions following the hearing.
5. And then there's this: "Kelley Blue Book, a well-known vehicle appraiser, plans to announce Wednesday its annual ranking of the top 10 brands for projected resale value -- and not a single one will be American." So why buy an American car? Patriotism--that's one reason I have 2 Fords, but they're great cars (one 8 years old and one almost 4 years old) but I can tell you I won't be buying any new cars for quite a while...and they probably won't be American cars.
   

I don't know about you, but my private jet is parked. And if I went to the bank asking for money to pay my bills I certainly wouldn't drive up in a new car, carrying a Gucci purse, and wearing YSL clothes. But I pay my bills and don't live beyond my means.

Check out this chart of costs for cars in the US: