Stop Subsidizing Vehicular Dinosaurs

I have spent the past 25 years in the automotive industry. I am the president of Oregon's largest vehicle leasing and finance company. I am an investor, an innovator, an employer, a fleet purchaser, a portfolio manager and the chief executive officer of a business that's central to the auto industry.

And I'm writing to ask Congress to stop interfering with the mechanisms of the marketplace, our industry and the economy.

The government recently pledged billions of dollars to General Motors, Ford and Chrysler for electric vehicle research and development. The purpose may have been economic stimulation, but little will result from this effort.

The business model shared by the Big 3 led them to stop developing innovative products decades ago.

Taking our existing transportation system and adding an electric motor to cars is not going to change a thing. We are subsidizing the dinosaurs, hoping to delay their extinction.

Industry publications are exhorting everyone in the business to contact their representatives and promote additional stimulus packages. Finance companies such as General Motors Acceptance Corp., which have steadfastly refused to be regulated like banks, suddenly are telling the feds that they are indeed banks, because banks are getting a bigger piece of the bailout.

Corporations have tremendous benefits due to the advantages of limited liability. Instead of focusing on building great products that satisfy the public, they are developing sophisticated strategies to succeed at the bailout window.

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I am not railing against this variety of corporate socialism as a matter of principle. I am mourning the loss of the innovators and entrepreneurs who would have met success if the market was left to take its course.

Three well-organized and well-funded startups in Oregon are working on transportation alternatives. Two companies have developed electric cars and the other uses compressed natural gas.

Now that the Big 3 have been gifted billions, these entrepreneurs will not be able to raise additional capital in this economic climate, especially when it's obvious that the dominant players will remain dominant. If we have three such enterprises in Oregon, how many similar companies across the nation have had their promise erased with their own tax dollars?

Early last year, GM, Ford and Chrysler announced they were exiting the leasing business. They had severely mismanaged their lease portfolios for more than a decade. Their exit is the best indicator that the leasing business will return to health. When the bad players leave, there's room for new players with new ideas and new energy.

It's frustrating and expensive to wait for the losers who are ruining an industry to leave the business. It's hard to come to work every day, risk your life savings, serve the public in an honorable way and watch your competitors take advantage of politics and pork.

We risk ending entrepreneurship as we know it by welcoming our largest corporations on the welfare line.

American taxpayers must be heard and respected.

I ask Congress to please allow the organizations that brought us the problems to crash and burn. They've done it to themselves.

Joseph McKinney

President and CEO