In Outraged, an auto insider provides an inspiring account of what it means to lose your rights, property, and, in essence, the American dream. It begins with roughly two thousand men and women whose companies were destroyed by two automakers, General Motors and Chrysler, during their government-led corporate restructurings in 2009. Authors Tamara Darvish, vice president of DARCARS Automotive in Maryland, and Lillie Guyer, a Detroit area automotive journalist, show the collapse of the American dream from the perspective of an entrepreneur who was affected by the automotive industry bailout. In this featurized business story, Outraged details the founding of the activist group Committee to Restore Dealer Rights and its efforts to regain the economic rights of auto dealerships throughout the United States. It tells how they took their fight to Congress and to the steps of the White House. Outraged candidly examines the battles between dealers and the entities that engineered their demise. It also details the pain and the high points in government as its temporary power brokers ignore the significant role of Congress in lawmaking and the rights of ordinary citizens. This personal, controversial account shows what can happen when people unite in a common cause and stand up for what they believe is right.

OUTRAGED

How Detroit and the Wall Street Car Czars Killed the American DreamBy Tamara Darvish Lillie Guyer

iUniverse, Inc.

Copyright © 2011 Tamara Darvish and Lillie Guyer
All right reserved.
ISBN: 978-1-4502-8944-3

Contents

Introduction.......................................................................1The Fifth Amendment to the US Constitution.........................................8Chapter 1—Unraveling the War on Dealers......................................9Chapter 2—The Company Hit Lists..............................................44Chapter 3—The Woman Who Knew Too Much........................................67Chapter 4—Fast Cars and a White Cordoba......................................80Chapter 5—Revving Up: Trips to the Hill......................................88Chapter 6—Making a Difference on Main Street.................................111Chapter 7—The Big Lie Times Two..............................................125Chapter 8—Outraged: Killing the American Dream...............................157Chapter 9—Something Happened: Zombies and Stepford Wives.....................196Chapter 10—Eat Run Push Congress.............................................220Chapter 11—Hometown Heroes...................................................246Chapter 12—Pride and Politics................................................276Chapter 13—Showtime in Congress..............................................301Chapter 14—Who's Phoenix?....................................................308Chapter 15—Exile from Main Street............................................324Chapter 16—Legal Eagles Take Aim.............................................341Epilogue: Fixing Humpty Dumpty.....................................................364Acknowledgments....................................................................384Appendices.........................................................................387Glossary...........................................................................394About the Authors..................................................................397Bibliography/Index.................................................................399

Chapter One

Unraveling the War on Dealers

If you abide by the law you should be protected by it; if you adhere to our common values you should be treated no different than anyone else. —President Barack Obama's 2010 State of the Union Speech

A lasting image in America's collective mind is that day, November 18, 2008, when three chief executives of the Detroit Three flew into Washington DC aboard their corporate jets. The stories instantly made national broadcast news and major headlines.

General Motors CEO Richard Wagoner debarked from the company's Gulfstream IV jet, and ABC TV showed the descent in living color. Ford Motor Company CEO Alan Mulally, and Robert Nardelli, CEO at Chrysler LLC, also flew in on company jets, the media reported.

Broadcast stations were all over it after ABC News broke the news. The next day, in a story headlined "Shocker: Fat cat CEOs fly on private jets!" Reuters reported the story that was soon "heard around the world." Rick Wagoner told media he took a company jet because he's a busy guy. Ford's Mulally, who didn't say much, seemed to be following Henry Ford's motto of "don't complain, don't explain." Robert Nardelli tried to stay out of the limelight at the time as well.

While America watched, the CEOs had arrived to ask for a twenty-five-billion dollar lifeline, a taxpayer bailout, to keep their companies running. Their timing was atrocious. The "B-word" was becoming a dirty word in consumers' minds. Of the more than $700 billion in Troubled Asset Relief Program (TARP) funds available to rescue failing companies, the majority had been doled out to the financial institutions and Wall Street entities.

The automakers kept saying their request was a conditional loan, not a bailout. But that distinction was lost on many Americans. And they would ask for more in the coming months.

The executives took heat for the private jets and later changed to other transportation modes, as if just discovering them. Top-dog Wagoner tooled around DC in the new production model Chevrolet Volt, a combined electric and gas extended-range car that debuted in November 2010. The other leaders originally flew in on private jets but seemed to get less flack.

Big PR splashes were later orchestrated to show the execs arriving on commercial jets or driving more fuel-efficient company vehicles as they pressed for public funds. But the damage had been done. The earlier images of corporate excess were difficult to erase.

What "Joe and Josephine America" remembered was that executives earning millions of dollars a year and fat perks were asking for taxpayer-funded assistance, a new form of "corporate welfare." In a time when many Americans had to tighten belts and live more frugally, the execs were traveling on luxury jets on trips that cost upward of $20,000 to fly from Detroit to Chicago alone, a shorter distance than to DC, ABC News reported. In the public eye, it was like watching a welfare recipient buy tons of caviar and vodka with food stamps.

"This is a difficult time for a free-market person. Under ordinary circumstances, failed entities, failing entities, should be allowed to fail. I have concluded that these are not ordinary circumstances," President George W. Bush said on December 18, about a month before he departed office. Bush did not want to leave office knowing that the American car industry had gone down under his watch. The funding spigot was turned on then.

In exiting, the Bush administration punted the auto-rescue problem to the incoming Democrats. It was all tied to the huge money pot called TARP (Troubled Asset Relief Program) that was used to prop up banking, financial, and now the auto industries. But it came with strings attached. Money always does.

Fast forward to the Barack Obama White House in January. With the new president installed, the auto executives were asking for more money. Since their earlier November meetings with Bush officials, the auto leaders had one mission in mind: secure a massive infusion of cash to save their fragile, bleeding companies.

Earlier, the Bush Treasury, headed by Hank Paulson, had approved loans of $17.6 billion for GM and Chrysler. As it turned out, Ford backed out and said it would not ask for federal loans, saying it would go it alone by relying on private credit lines of financing and selling off assets. By the time GM and Chrysler asked for emergency loans, Ford had already tapped into its remaining credit lines—luckily well before credit markets froze nationwide.

In 2008, Ford had its worst year in its recorded history but was able to bring its cash reserves up to $24 billion by January, CEO Alan Mulally later said. They would tough out the lousy economy without the emergency federal loans, Ford leaders said Ford had borrowed about $24 billion in late 2006 right after Mulally arrived, coming from Boeing Company. The automaker also put up its major assets and began austere cost-cutting measures.

In the Bush White House, Paulson was a big proponent of saving the auto industry, as would Larry Summers, who served then as President Obama's chief economic advisor. He was joined by Timothy Geithner, the US Treasury Secretary who drove the bus that would lead to restructuring the auto dynasty...