Wednesday, December 3, 2008

Chris Matthews: Why Doesn't the Government Just Buy General Motors?

Chris Matthews, on Hardball, seems to be arguing that the government should buy General Motors rather than just bailing out the car industry. Read the transcript here (12-2-08).

CHRIS MATTHEWS, HOST: Is what`s bad for General Motors bad for America?

Let`s play HARDBALL.

Good evening. I`m Chris Matthews. Leading off tonight, take two for the big three. To paraphrase that 18th century author Samuel Johnson, nothing concentrates your mind so much as the realization you might go bankrupt in the morning.

Two weeks ago, the heads of the big three flew to Washington in separate private jets, all pleading poverty. Now Ford`s CEO is driving to Washington in a hybrid, and all the CEOs say they`re going to work for a dollar a year. They`re all submitting their turn-around plans to Congress today, but can they convince the government to bail them out? We`ll talk to one industry expert who says it`s time -- catch this -- to simply nationalize General Motors -- just buy the baby.

And speaking of people with their hands out, the country`s governors met with President-elect Obama in Philadelphia today. They`re asking for a big chunk of Obama`s planned federal stimulus package.


SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I`m not simply asking the nation`s governors to help implement our economic plan, I`m going to be interested in you helping to draft and shape that economic plan.


MATTHEWS: More on what the governors want in a moment.

And those Nixon White House tapes are the gift that just keeps on giving. Nearly 200 hours worth were released today, including this sugar plum between President Nixon and Henry Kissinger, who was then his national security adviser and who had just met with Ivy League presidents, people Nixon didn`t like.


RICHARD M. NIXON, PRESIDENT OF THE UNITED STATES: The Ivy League presidents? Why, I`ll never let those sons of bitches ever in this White House again. Never, never, never. They`re finished. The Ivy League schools are finished.

Henry, I would not have had them in. Don`t ever do that again. Don`t ever have them in. They came out against us when it was tough.

Don`t ever go to an Ivy League school again ever. Never, never, never.


MATTHEWS: Like him already. There`s so much more where that came from, and we`ll talk to former White House counsel -- boy, he knows what he`s talking about -- John Dean. He`s coming to HARDBALL tonight.

Also, voters are going to the polls, of course, tonight in that Georgia run-off election for the Senate between incumbent senator Saxby Chambliss and his Democratic challenger, Jim Martin. Plus, there`s news about Senate seats in Florida, Illinois. And here`s the wild card for everybody watching HARDBALL -- could Bill Clinton replace Hillary Clinton in New York in that Senate seat? More of that in tonight`s "Politics Fix."

And if Sarah Palin is thinking of running for the Senate in two years, she`s getting the "Bring it on" treatment from her fellow Alaska Republican who now holds that seat, Lisa Murkowski. And Alaska snowball fight in the HARDBALL "Sideshow" tonight.

But we begin tonight with the bail-out of those big three auto makers. Joining us from Detroit is the president and chief operating officer of General Motors, Fritz Henderson. Mr. Henderson, well, you look like a happy guy tonight, sir.

FREDERICK "FRITZ" HENDERSON, GM PRES. & COO: I don`t know, Chris. I`m just glad to be here. Thanks for taking the time with us.

MATTHEWS: Well, let me ask you about this. There`s been a proposal out there that the government simply buy General Motors. If we`re going to pay for the bail-out and the bail-out of a company that`s basically broke, why not just buy the company and produce cars at the federal level? If the private sector is not working, why not try the public sector?

HENDERSON: Chris, I guess a couple things. First, we`ve crafted a plan, drafted a plan that`s intended to allow us to be competitive, viable. We`ve asked for support. We have a plan to repay the support. And we think we can get General Motors on the right path. I do have some experience working around the globe, including a number of places where governments have owned auto makers in total, and generally, it doesn`t work.

MATTHEWS: You know, Lee Iacocca, when he borrowed the money for Chrysler back in the `80s, repaid that billion dollars. Can you guarantee that you`ll repay it? If this is a bridge loan, then you should be able to repay it. And what terms do you offer the government in exchange for borrowing $18 billion?

HENDERSON: We -- our plan -- what we did is we sized our plan based upon a number of different scenarios, including a very pessimistic or downside scenario in order to stress-test it.


HENDERSON: Based upon that scenario, we certainly feel confident that we`ll be able to repay the loan. And in terms of protections, we would offer the normal taxpayer protections, senior status, warrants, ability to call the loan in case we don`t meet milestones, and frankly, an oversight process to make sure we`re hitting our milestones.

MATTHEWS: How do you hit milestones, as you put them, sales goals, if we`re going into a long recession, it looks like? According to the National Bureau of Economic Research, we`ve been in one for a year. Projections are that it could be a long and deep one. How can you sell cars when people really don`t have to buy cars, they choose to in most cases because they want a new car? What stops people from keeping the old car in a recession?

HENDERSON: Well, we`ve been in a blizzard-like recession, actually, since over the last year in our industry. Consumer durables -- second largest for a consumer. The auto business has been turning down. And if I look at this year, first quarter down versus `07. Second quarter down versus the first quarter. Third quarter down versus the second quarter. And then October and November have just been bleak.