How to Lose an Auto Company in 15 Days

So 14 days after getting sent back to the drawing board to come back with viable business plans, the auto companies are back, ready to belly up to the bailout bar for a total of $34 billion– well less than their brethren in the banking business but still, in Everett Dirken’s phrase, real money.

GM is asking for an immediate $4 billion just to tide it over until the end of the year, and wants a total of $18 billion in loans — an increase of $6 billion, or 50 percent, in just 14 days. Now there’s a business plan for you. Need to work on one like that. I could become “viable” for the rest of my life just putting $18 billion in the bank for a couple of days.

Chrysler is only asking for $7 billion, along with $6 billion in financing from an Energy Department fund subsidizing “Advanced Technology Vehicles.”

Give Ford a little credit (pun fully intended). They are only asking for their $9 billion as a standby and seem to think they can get by without it — although they also want their $5 billion handout from the Energy Department slush fund. (To which Michelle Malkin responds: “Hey, can I have a billion-dollar-line of credit if I promise not to use it, too?”)

But dig this: according to Monday’s Journal, Ford wants to invest its share of the government largess to go green:

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In a phone interview Monday, Mr. Mulally said Ford will explain to Congress it is rushing to launch new hybrids and electric vehicles by 2011, including a battery-powered commercial van and compact sedan. A plug-in electric vehicle that can be recharged from a standard electrical outlet should follow in 2012, he said.

In a separate interview, Ford Chairman William Ford Jr. said the company is looking beyond survival to opportunity. “We want to come blasting out as a global, green, high-tech company that’s exactly where the country and the Obama administration want us to head,” he said. Ford’s recovery plan “isn’t just about slashing — we’ve already done that slashing and burning — but about building for the future.”

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In fact, in a press release, Ford indicated that 90 percent of its vehicles would qualify for subsidies under the Energy Department plan by 2014.

But as the Washington Post pointed out last week:

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(T)he car company Schumer and other lawmakers envision for the future could turn out to be a money-losing operation, not part of a “sustainable U.S. auto industry” that President-elect Barack Obama and most members of Congress say they want to create.

That’s because car manufacturers still haven’t figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them. After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold.

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So let me get this straight. Ford is banking its future … and expecting us taxpayers to bank a big chunk of our future … on a technology it knows is going to lose money for years to come?

Let’s do a scenario here. I walk into a bank to ask for a loan. The loan officer says to me, “How much do you make?”

I answer, “Oh, I don’t earn anything. In fact, last quarter I lost $3 billion and burned through nearly eight billion in cash. But that’s ok. Because I’m going to go get a job in which I lose even MORE money.”

That conversation will net me some scratch, for sure.

Not.

This is what happens when you allow your company to be taken hostage by the denizens of the puzzle palaces on the Potomac and their patrons in the UAW. You’re forced to near bankruptcy in overpaying for labor, then you have 15 days to create a purely PC business plan that will doom your company to failure.

The good news is that as part of earning their government largess, Ford has also announced that it will sell its company planes (which Ed Morrissey at HotAir deadpans that they only used “to get back and forth to church on Sundays, and to panhandle on Capitol Hill during the week”) and that its CEO will accept a $1 a year salary.

So even as he is trying to make a hopeless, Obamandated business plan earn enough to pay back the $14 billion in loans the taxpayers will be handing over, the underpaid CEO of Ford will be wasting his company’s and our precious time waiting in the security lines with the rest of us. That’s comforting.

UPDATE: Michelle Malkin links to a Wall Street Journal article on why GM’s business plan stinks just as much as Ford’s, if not more.

Tags: auto companies, bailout, Chrysler, Congress, Ford, GM, hybrids, Obama, plug-ins