Senator Tom Harkin says bankruptcy “isn’t the worst thing that could happen” to General Motors, Ford and Chrysler. “If they could then come out of bankruptcy immediately, with new management, new ownership, new directions on which to go in terms of really fuel efficient cars and electric automobiles and things like that, well, then maybe I would be more prone to help them out, ” Harkin says.
“But just to leave the same management there — the same people that brought you all these problems — and give them $25 billion of taxpayers’ money, I’m not there.” The top executives at the “big three” automakers were in Washington this week, pleading for a $25 billion federal bailout.
Harkin, who’s a Democrat, says bankruptcy would let the automakers renegotiate contracts for both unionized workers on the production line and company executives.
“If you could get through a bankruptcy procedure, get rid of all that management. Get new people in there. Now there’s no doubt that the automobile companies need to retool, but then you’ve got to be asking: why weren’t they doing that over the last 30 or 40 years? I mean, you think about it, 40 years ago there or Toyota or Honda dealers or Nissan or Hyundai dealers anywhere in the United States. In 40 years, look what they’ve done,” Harkin says. “Where was this management. Where were the brainiacs, all this management? They just kept letting it go.”
Harkin says the big three automakers “thumbed their noses” at taxpayers by flying private jets to Washington, D.C. this week rather than cutting company costs and flying commercial. “Someone pointed out to me that they’re asking for $25 billion in government funds — taxpayer money — yet when you add up the stock value, the whole value of Chrysler and Ford and General Motors it’s $5- or $6- or $7-billion, something like that,” Harkin says. “I mean, you can buy the whole kit and caboodle for about a fifth of what they’re asking for.”
According to Harkin, it’s “unlikely” the auto industry will get its wish for a federal bailout before Christmas. “It’s been taken off the table,” Harkin says. “…They’re really at a dead end right now.”
Harkin made his comments this morning during a telephone conference call with Iowa radio reporters.