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Friday, November 7, 2008

GM bailout prospect angers electric-car builder Bernsten

  We don't want to see General Motors go under. We'd feel more secure if our neighbors, the 1,000-plus GM workers at the Wilmington plant that builds Saturns, keep their UAW wages and benefits instead of collecting unemployment and scrambling for lower-wage replacement work like their brothers and sisters at the doomed Chrysler plant in nearby Newark, Del. 

  And we want the 1,300-plus GMAC workers still employed in Ft. Washington, whose company depends partly on GM auto loans and partly on crippled ResCap home mortgage loans, to keep their jobs, too, if that company can raise enough money to stay in business.

  But we also understand why Barry D. Bernsten, the Philadelphia-based global steel wholesaler who wants to assemble electric cars in Philadelphia from Chinese bodies and U.S. batteries (PhillyDeals story here), is outraged over the prospect for federal government investments and cut-rate loans to his much bigger competitors, ailing GM, Ford and Chrysler.

  "This is a hot issue for me," said Bernsten, who is seeking state aid and electric-car legislation to help fledge his own car-making enterprise, BG Automotive Group Ltd. "Every time the North American companies experience gross mismanagement, they go to the government for a bailout. I bet the average Main Street business would do just the same if they could... But only big business has the opportunity.

  "There are thousands of MBAs sitting in Michigan, including the board members and executives that all decided producing $35,000 to $50,000 SUVs was the best product for the U.S. automotive industry. They were wrong! Why should the American public bail out their mismanagement?

  "The big auto makers all produce smaller, fuel efficient cars for the EU, the Far East, South America, Australia and New Zealand. They have the know-how, the tooling and expertise. They should have realized that the markets in North America will also require the same fuel efficient cars. Their competitors did -- Toyota, Nissan, Hyundai...

  "The auto (and) gasoline crisis started well before the financial crisis, and now the Big 3 auto companies are in Washington trying to obtain $50 Billion in loan guarantees using the financial crisis as their excuse...  

  "I say let the free market work. The firms will all go bankrupt, they will reorganize as stronger and leaner companies, hopefully only producing what the North American market wants to buy." As for those Michigan auto company bosses, "let them look for a job, just like they did to the tens of thousands of employees that were assembling the wrong vehicles." 
Posted by Joseph N. DiStefano @ 1:31 PM  Permalink | 1 comment
Comments   
  • 0 like this / 0 don't   •   Posted 2:17 PM, 11/07/2008
    I totally agree with Mr. Bernsten. Seeing the picture on the front of the NYT's Business Section of Pelosi, Hoyer and the heads of the Big 3 makes me want to rip my hair out. Their lobbying power is enormous but it was the federal government that paved the way for production of gas-guzzling SUVs and F150s. Hopefully a greener Obama administration will help folks like Mr Bernstern.
    — philliestew


1 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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