Typically, one would think that in a particular industry, if one corporation is suffering mightily, then others would follow suit.  Apparently, that is not the case in the automobile industry as while Government Motors General Motors and Chrysler are struggling with the bottom line, Ford Motor Company seems to be doing just fine.

And they’re doing well without the benefit of federal bailout money, Treasury-led restructurings or bankruptcy judges.  To illustrate how well they are doing, their U.S. market share increased during the month of May, and their sales even surpassed Toyota’s last month; apparently, they’re doing something right.  Meanwhile, GM’s stock has become nearly worthless, falling into penny-stock territory.

What’s even better news for Ford and their stockholders is that the automakers’ stock even outperformed Honda so far this year.  Yet there are stockholders who are under the belief that when GM and Chrysler eventually become “debt-free”, Ford will have difficulty competing.  But again, Ford got to their current position by doing just the opposite of what got GM and Chrysler in their current state.

They didn’t take federal bailout money – basically cutting out the government’s involvement – or allow the union to participate in their restructuring, better positioning themselves for better flexibility and long-term financial health. 

And to think – if GM and Chrysler had at the very least had a better business model – even emulating some of what Ford has done – they wouldn’t be in the poor shape that they’re in.  Suffice it to say, Ford learned from lessons past.

Earlier today, I reported about the Big Three making their return engagement as they went to Congress yet again in their final plea for a $25 billion handout; I also provided to you the Ford Motor Company business plan, which was requested by Congress.  As promised, I also have the business plans for General Motors and Chrysler, as well; many thanks to my friends at the Fox News Channel for the knowledge. To view the business plans of GM and Chrysler, please click here and here.  Make sure you have Adobe reader in your PC as the documents are in PDF format.

Guess what folks?  We already know that the Big Three automakers made their trip to Washington for another visit with congress for another round of begging.  We also know that Congress told them that they better come back with a comprehensive business plan.  Thanks to my buddies at Fox News Channel, I have a copy of Ford’s business plan – all 33 pages of it.  If you have time to kill, I’d take a stab at reading some of it, at least.  when the GM and Chrysler business plans become available, The Republican Temple will have them for you, along with the most up-to-date GOP news and commentary available.  To view the business plan, please click here. (Make sure you have Adobe Reader)

The auto industry is an odd bird.  They’re odd in at least this respect: they claim to be hemorrhaging money – billions according to them – yet at the same time they seem to find millions to hire lobbyists so they can secure billions in bailout money.  In the first three quarters of this year, the Big Three (GM, Ford, Chrysler) spent more than $20 million and donated $1.3 million to federal  – and probably auto industry-friendly – candidates, according to the Center for Responsive Politics, a Washington watchdog group.

As expected, politicians from Michigan (but of course) have received contributions from the political action committees which were set up by….guess who?  That’s right – the Big Three.  and yes, The Republican Temple is naming names: Michigan Republican Joe Knollenberg and Democrat John D. Dingell, who ironically heads the House Energy and Commerce Committee.  And the auto industry doesn’t really play favorites as to who they throw their money to; as a matter of fact, this year alone the money has been been a 50-50 split between Democrats and Republicans – who are the ones solidly against the $25 billion bailout.

Knowing this is happening is troubling as quite honestly, the automakers really need to simply file Chapter 11, reorganize, build a better business model (that’s what got them in their current predicament in the first place) and emerge a better corporation economically.  If they cannot do that simple task, then perhaps Chapter 7 is what they deserve.  The costs they they have accumulated (legacy costs, dealing with unions, etc.) are costs that could have been managed if they had nipped it in the bud much earlier, hence the need for the automakers to create a better business model.

As it were – and I am not the only person who has voiced this opinion – the proposed $25 billion bailout money is merely a band aid.  All this money does is delay the inevitable (shutdown of the automakers), which means lots of lost jobs that would not be lost if they simply filed Chapter 11.  None of this is rocket science at all, and you do not have to be an tax attorney to know that Chapter 11 will allow you to reorganize, build a better business model for your company and just as importantly, allow jobs to be retained that would otherwise be lost.  Perhaps that’s an argument that the Republicans can present on the Hill before more money gets thrown away.

John Boehner, the House’s top Republican, has been wondering what a lot us are not in a position to ask: why are Democrats adding an additional $25 billion on top of $25 billion already earmarked to bail out an ailing auto industry?  Boehner on Thursday, according to The Washington Times, slammed plans by leading Democrats in Congress to double the amount of an auto industry bail-out package, saying that there are no assurances that the extra monies would be well-spent.

The Big Three – GM, Ford and Chrysler – are going through big financial losses, and GM execs say that they may run out of cash early next year without outside help.  The Bush administration doesn’t want to use any of the Wall Street money to assist the automakers – I don’t blame him – despite pleas from President-elect Barack Obama.  The White House is looking to wait and see what Congress passes and how the money would be spent.

Tuesday found House Speaker Nancy Pelosi directing House Financial Services Chairman Barney Frank (D-MA) to begin drafting a bill designed to authorize the Treasury Department to use some of the monies in the $700 million bailout fund and send them Detroit’s way; according to Pelosi, the bill would have provisions including new limits on pay packages for auto execs and could possibly give the federal government an ownership stake in the automakers.  Congress is expected to reconvene next week for a lame-duck session that may possibly consider both the auto aid bill and perhaps yet another economic stimulus package.

What I find troubling about all of this is the fact that the automakers made the mistake of manufacturing automobiles that the consumer didn’t have the taste – or pocketbook – for.  And the end result is the current red ink that they’re swimming in.  There is no reason why the Big 3 cannot file for Chapter 11 and re-organize and get their ships righted.  The idea isn’t exactly new as many other corporations have dome this and came out just fine, as a result.

These “handouts” are simply fostering apathy at the corporate level and giving them no incentive to succeed on the financial bottom line.  And yes, this goes for the bankers on Wall Street – not just the automakers.  AIG is a good example of that.  It is rather unfortunate that these corporations are using the federal government as their personal piggy bank because of their mistakes in their ivory towers.  The buffet table needs to be shut down, and shut down immediately.