Capitalism, And Roger Penske, To The Rescue

Capitalism, And Roger Penske, To The Rescue
Austin Hill
Sunday, June 07, 2009

Breaking News: An American car company will soon be taken-over by a business person who has expertise in the car industry. And the guy “taking over” is actually “happy” about it.

As the bankrupt General Motors corporation seeks to get rid of it’s “non core” car brands, Roger Penske, the American race car driver-turned global business magnate, will soon be purchasing Saturn, and taking over the sales, marketing, and distribution of Saturn cars and parts.

Penske‘s company will not be manufacturing Saturn cars themselves - he’s soliciting bids from other companies to design and build the cars for him - but will focus instead on what the Penske group does best. "Our success has been with handling the business that is closest to the customer,“ Penske stated when the news was announced, “so I don't want us to get into our own manufacturing business.."

You may have ignored this news, and it may seem like “no big deal” now. But consider how this conflicts with the predictions and assumptions made by Washington politicians.

Recall that fateful day (November 18th) back in 2008, when the executives of Ford, G.M., and Chrysler, took their turns before Congress begging for their “share” of bailout cash. “This is about much more than just Detroit," then- G.M. President Rick Wagoner stated, "It's about saving the U.S. economy from a catastrophic collapse."

And it was presumed that catastrophe would necessarily ensue, if our government didn’t “bailout” the car companies. “We're concerned about the hundreds of thousands and millions of people who are involved in the automobile industry” Senate Majority Leader Harry Reid rationalized 2 days later, “we want them to have the jobs..” If our tax dollars weren’t spent to save these companies from their own mismanagement, then, to follow Senator Reid’s logic, the companies would simply cease to exist, and “millions” would be unemployed.

But we all know what happened after the U.S. car exec’s groveled. Politicians insisted that without their meddling, the entire industry would collapse, and so they went about meddling. The Congress tried to pass a “car bailout bill,” but it failed. President Bush then used his executive powers to take money from the TARP (bank bailout) funds, and doled-out a few billion to G.M. and Chrysler (Ford had to good sense to say “no thanks”). In doing this, Bush completely defied the will of the people and the Congress, and kept Chrysler and G.M. afloat just long enough for Obama to get inaugurated.

And one inauguration and two additional car bailouts later, President Obama has now kicked and punched his way to the point of having GM and Chrysler in a headlock, and both companies are at his mercy. With Chrysler, President Obama has drawn law suits for his interfering in the relationship between the company and its secured creditors. Additionally, Chrysler executives are fearful of Obama’s coercive efforts to “force” a Chrysler-Fiat merger, believing that Fiat is in even worse financial health than Chrysler itself. As for G.M., President Obama claims that "our goal is to help GM get back on its feet ... and get out quickly, " but the Administration’s behavior suggests that G.M. will be, indeed, “government motors” for the foreseeable future.

So despite all the “without us they will fail” predictions from Washington, after some $50 billion of our hard-earned money being handed-over, and now with two of the nation’s automakers in the hands of one individual - Barack Obama - the companies are still failing. Yet in the midst of the doom and gloom, and despite the predictions of President Obama, Senator Harry Reid and other congressional Democrats, an American business owner and entrepreneur sees opportunity in the car industry and is excited to jump-in.

Roger Penske isn’t asking for a “bailout.” He isn’t even asking for special government-subsidized financing for his purchase. He wants Saturn, a product line deemed to be one of the least attractive on the G.M. roster, because he believes that he can make money with it, and he’s willing to risk his money and his good reputation to make it happen. “This (Saturn) is still a good business” Penske stated, “and we’re going to make it better.” In the process, it is believed that Penske’s acquisition will in the short-run save some 13,000 American jobs, and eventually create more.

For some, it’s hard to believe. But all this benefit is being derived- - for Penske, for his associates, for the can industry and for the global economy - without the expenditure of more of our tax dollars, and without President Obama coercing it. It’s happening at the hands of free people, freely choosing to take risks, to innovate, to create, and to produce.

This is the reality of American-styled Capitalism at work. I’m quite certain that most members of Congress lost sight of this reality long ago, and I suspect that President Obama knows nothing about it at all.

But it is a reality that the American citizenry must never forget.

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