Do you have a bad roommate stereotype? For me, The Bad Roommate is constantly in a bathrobe that I’m sure belongs to me, has just, without even enjoying it, finished off the leftovers I was counting on, and isn’t sure what they did today, yet certainly created an unfathomable mess in the kitchen. Among other things, the worst part about my Bad Roommate is that they defiantly occupy an essential space in the house and aerate bad vibes while doing so.

Put another way, the Bad Roommate is a kind of angry, bathrobed, vacuum, that ironically doesn’t clean. (My apologies to any roommates, current, or fondly and formerly, who think I’m writing about them. In any case, I kid because I love).

I conjured up this image while reading reports that Atomic Energy of Canada Limited (AECL), Canada’s federally-owned and beleaguered nuclear technology company, is set to receive a $200 million bailout from the Harper government. The bailout, disclosed in the Conservative’s supplementary budget estimate, is the second the Crown-Corporation has received this year and makes the grand total of taxpayer subsidies doled out to AECL in 2009 $651 million. According to the document, this additional funding “will be used to address a cash shortfall caused by unexpected technical challenges on CANDU reactor refurbishment contracts.”
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President Barack Obama & Treasury Secretary Timothy Geithner Speaking About Executive Compensation

Although Obama’s term as president is only in its infancy, he’s already impressed me in many ways. First was his ability to quickly put together an extensive stimulus plan (which took far too long for Canada to do) and then his plan to close Guantanamo Bay within a year. Now, it’s his idea to impose a salary cap for many U.S. business executives.

Obama’s plan is to place a $500,000 salary cap on executives at troubled U.S. financial institutions that accept federal bailout funds. And it’s a brilliant idea.

Here’s an excerpt from Obama’s announcement:
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Just a day after the US unveiled its plan to provide $17.4 billion to cash-strapped General Motors and Chrysler, Canada has announced its intentions to provide $4 billion of emergency loans to support the Canadian subsidiaries of the Big Three automakers. Harper also announced that auto parts suppliers will get improved insurance while vehicle buyers will get more access to credit.

“We will extend additional account-receivable insurance coverage for automotive suppliers through the Export Development Corp. And we will create a new facility to support access to credit for consumers. Taken together, these measures demonstrate that Canada is taking a holistic approach along the supply chain — manufacturers, suppliers and consumers,” he said.

Ontario will provide $1.3 billion with the rest funded by Ottawa. During his speech, Harper made clear that this was not a “blank cheque,” and by March 31st, 2009, the automakers must show that solid restructuring plans are underway. In another excerpt from his speech:

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The Detroit News reports that President Bush has announced Friday morning a $13.4 billion bailout for General Motors and Chrysler.

The structure of the bailout is different from that of the financial sector’s recent $700 billion bailout, in that it is in the form of a short-term loan, with apparent strict conditions. 

The 3-year loan calls for another $4 billion in February, bringing the total to $17.3 billion.
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Regardless of your views on his political ideology, it is hard to debate Sam Gindin’s arguement and suggestion from a November 26^th article:

“First, as absolutely essential as the bailout is, it won’t end the crisis in the auto industry even if the Detroit-based companies adjust their models. That’s because the industry has so much excess capacity and slow growth will characterize at least the next few years, if not beyond. This means that even as the union lobbies to achieve the bailout, it needs to raise its perspective beyond auto. It needs to start thinking about the application of existing facilities and skills to a larger set of products. Here, the environment re-enters, but rather than being a threat to jobs it holds out the potential of adding jobs. If the environment is going to be seriously addressed in this century, it will mean changing not just the kind of cars we drive and how they are powered, but everything about how we work, consume, travel, live. To that end, auto’s assembly, component and tool and die shops, along with its body of skilled and committed workers, are an asset that can be converted into producing wind turbines, solar panels, parts for mass transit vehicles, more energy-sensitive industrial machinery and more energy efficient home appliances.”
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The Big Three

Just a month and a half after the financial sector in the United States received a $700 billion bailout package, the U.S. auto industry is begging for it to be their turn. U.S. auto executives are seeking $25 billion to save an industry on the brink of collapse. And Canada wants in. Industry Minister Tony Clement will be traveling to the United States to try and set the framework for a joint deal. But is another bailout plan using taxpayer’s money really justified? I’m not fully convinced.

There’s a lot of data that seems to indicate a bailout plan for the automotive industry is an absolute necessity. GM, Chrysler and Ford employ nearly 250,000 people in the United States, and affect nearly 4 million other jobs including suppliers, dealers and rental companies. Up to 70,000 of these people are Canadians, as automobile parts often cross back and forth through our border up to 7 times prior being installed into a vehicle. A filing for bankruptcy by any one of the Big Three could have catastrophic consequences for our already fragile economy. These facts seem to suggest that a bailout of the industry is crucial and an absolute must.
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