Bailout for automakers?

November 17, 2008

automakers

As Congress debates legislation to help struggling automakers, many Americans say they are uneasy with the plan, arguing that while it may save jobs, it would reward companies for pursuing bad business practices. Some even question whether automakers will be viable, even with support.

“They need to restructure. If they get bailed out they are not going to do it,” said Eric Smith, a paint contractor interviewed in Chamblee, Georgia, on the outskirts of Atlanta.

U.S. automakers say federal aid is vital to their survival, and there could be devastating ramifications for the broader economy if the sector is not stabilized.

“This is an issue of the whole auto industry, if that becomes under severe pressure, the impact on the whole U.S. economy will be devastating,” GM Chief Executive Rick Wagoner said in an appearance on a NBC-affiliated television station in Detroit.

Retired Gen. Wesley Clark says that a rescue of U.S. automakers is important both economically and for national security. In a New York Times opinion piece, Clark wrote that the U.S. auto industry has played an important role in successive military campaigns, from World War II to today, and its ability to continue to develop new technologies is imperative for national security.

Some are calling for executive shake-ups if it would ensure congressional backing for a bailout. “If it was the difference between getting this kind of support or not, obviously the management should consider resigning,” Carl Levin, a staunch industry ally, said on NBC’s “Meet the Press.”

As Democrats finalize a rescue plan, the question remains: should U.S. automakers be bailed out?

(Pictured above: G. Richard Wagoner (R), chairman and CEO of General Motors, testifies next to Robert Nardelli (2nd R), chairman and CEO of Chrysler, Alan Mulally (2nd L), President and CEO of Ford Motor Company, and Ron Gettelfinger (L), President of the United Auto Workers union, before the Senate Banking, Housing and Urban Affairs in a hearing on “Examining the State of the Domestic Automobile Industry,” on Capitol Hill in Washington, November 18, 2008.  REUTERS/Molly Riley)

Do you have an idea for The Great Debate? Please send your submissions to debate@thomsonreuters.com.

184 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

As I look over the comments left here I need to wonder if the powers that be are listening. Maybe “We the people” should have a bigger VOTE on what happens to all the hard earned money we have given. No one is giving me 25 billion dollars. I understand our government doesn’t want to be in the automobile business or any other business, so to speak. So if we need to be involved (our tax dollars)let the returns on investment come back to the American people not the CEO’s or any other executive. Hell I can run those companies into the ground and take a muti-million dollar salary and bonus.

I read an interesting artical the other day. Simply put. It says let them file chapter 11, produce a verifiable plan, reorganize and then support the loans needed to fix them. In this way the bail out loans would be 1st to be repaid. I like this idea.

All the comments listed above are all relevant to how the general population feels. Maybe its time for OUR government to listen.

AJ

Posted by AJ | Report as abusive

Auto companies bailout – Any “Bailout” must end the retiree’s health benefits, have them use the governments part B and part D like the rest of us. I do not want to pay for their health insurance; I have trouble paying for my own. If the union doesn’t like this let the companies go bankrupt, a quick reorganization would take place and more benefits could be cut, executive pay restricted, and the end of bonuses (if the pay is not enough they should get another job). The unions and the companies’ leadership are both to blame; there is NO reason why the taxpayers should bail them out. Any money that they get MUST have the retiree health benefit cut, salaries and bonuses restricted, and a potential for a HUGH government profit. And no more $31 an hour for workers to NOT work, let them get unemployment like the rest of us.

Posted by Richard | Report as abusive

Absolutely not!!!! In bailing out big business you are rewarding bad behavior with the little guys money. North American auto makers have been more than arrogant and have been shafting the public for too long with poor quality vehicles. I have no sympathy for them and thier grossly over paid work force. If they want to survive, it is time for them to get lean and mean and begin to build a quality and progressive vehicle that is in touch with a new generation. Thier “UNION BUILT” beer burp mentalitly does not fly with a well educated and savy generation. People want quality and fuel economy, Honda and Toyota realized that long ago. North Americas big three dinosoars have made thier own bed and pissed off a very angry pubic. Politicians beware, stop using our money to reward the fat cats.

Posted by Jim McCullough | Report as abusive

NO,NO,Nada,Nien,Nyet,Hindi.The 700Billion is too much already,we need as shareholders to restructure our corperations,the bonuses,salarys for ceos,executives is way out of hand,terribly OVERPAID,year after year,it multiplys,and is,has gotten out of hand,and is part of the problem!!Come on corperate america wake up.If we dont stop this “GREED”,our society as we know it is going down the “tubes”.This younger generation is too “materialistic”,they cant forsee that we are not headed for an recession,but an DEPRESSION!

Posted by Col.J D Dwyer | Report as abusive

yes, If they downsize and make better motors and longer lasting autos and trucks

Posted by Jym McCready | Report as abusive

Prepackaged bankruptcy, strip out legacy costs and close half the plants. David Hardie

Posted by david hardie | Report as abusive

No bail out — the worlds’ No.1 auto industry CEOs & exec bonus years should have been spent on research & dev — forging ahead with the new, not selling the obsolete to each new generation!

Back-up plans should have been in place for times of economic crisis to hold their No.1 market position — has the theatre not been one of GLOBAL economic shifts?
So why was there NO back up plans?

They suck as the strategists and protectors of the US auto industry.

Bonus pay? – you must be kidding.

R Hyodo

Posted by Rodger Hyodo | Report as abusive

I think the American public is to blame. We think we are ‘owed’ without having to work. We snear at domestic products because they arent trendy. We buy foreign products and then complain when our jobs are shipped to foreign countries. We watch Oliver Stone movies and then spout ‘facts’ about conspiracies. We’re too fat because of corn syrup rather than admitting that the only excersize we get is with our fork. We complain about gas prices but we leave the car running while run into the store. We complain that foreign companies dump products here but continue to buy at ‘mou-mart’

Posted by Eric | Report as abusive

Americans better wake up and realize what is happening before they find themselves living a 3rd world life. We have lost one industry after another in this country and our way of life is coming to a end. One only need look at our deficits, trade and fiscal to see that things can not continue on this path for long before a severe price is paid. We let countries like Japan, Korea, and China take one industry after another.

For example Japan and Korea ship millions of vehicles into the U.S. every year all while they keep their markets closed to American products. Ford thought they would crack the Japanese market by building a plant in Japan to get around their closed market policy. They had the land bought and at the last minute the government of Japan said no. They said they didn’t think it would be in the best interest of Japan.

All this while their industries are subsidized by their governments through direct and indirect subsidies for example like national health care. Where as domestic companies like GM provide health care for over a million Americans.

I can’t say that Americans won’t get what they deserve. Americans love to bash domestics even though their quality is on par or even exceeds that of the import brands. Ford is the current leader in the quality arena but many Americans are slow to catch on to the reality of the matter. We are our own worst enemy. People just can’t seem connect the dots as to why their standard of living is declining. Those millions of vehicles imported into the U.S. every year are billions of dollars that being sucked out of our economy and the decent jobs that go with it. It is not just auto jobs that are being effected by this.

Posted by lynn | Report as abusive

Oh and for those of you that say its the unions fault and the workers need to take cuts only shows your ignorant kool aid drinking mentality. I would think 50% pay cuts and giving up pensions and health care benefits were quite a scarifice. This is just another example of a declining middle class for America. Yes these one way trade deals have worked wonders. It just wasn’t for Americans. Just keep drinking the kool aid folks. They love pitting slave against slave.

Posted by lynn | Report as abusive

This de-industrialing of America is all part of plan of the Bilderberg group to destroy the middle class of America. Nixon didn’t agree with this and paid the price for going against them. Do yourself a favor and pick up a copy of “The Bilderberg Group” book and you will get a better understanding of what and why things are happening the way they are. The loss of our steel industry, textile, and now the auto, and housing industry are part of their plan to destabilize our country so we will fall into line with their master plan of a one world government. You might not believe in this but it is happening right before your eyes and all one need to do is open them and look at what is going on around you.

They want you to believe that it is the unions or this or that are the cause of the problems. The elimination of organized groups would only make their agenda that much easier to accomplish. They have sold you a bill of goods that there is a free market. There is no such thing. I find it amazing how many people just buy into this globalization crap and accept it to their own demise.

The aircraft industry will be one of the next to go. China has already targeted several hundred billion dollars to dominate this industry with all those dollars you sent them the way of Wal mart. They have forced Boeing to share their technology with them in order to do business there along with many other industries that we used to dominate. You can kiss the good ole US of A gone as the great country it once was. What kind of future do your children have. Pretty bleak at best. Just keep buying those imports and playing musical chairs with your future.

Posted by lynn | Report as abusive

I would also like to ask a question for those opposed to giving the domestic auto industry a loan to get them through these problems much of what has been brought about by our own government policies. Where is your outrage at the tens of billions we are spending rebuilding Iraq all while the Iraq government has a $70 plus billion oil revenue surplus? I might add that the tens of billions of U.S. tax payers dollars are going to Bush and Cheney’s cronies companies with contracts that have no over sight on the cost. You complain about giving loans that would help American workers and tax payers but where is your out rage on being fleeced by Bush and Cheney in Iraq. Something is not right with this picture. Just keep drinking the kool aid fool.

Posted by lynn | Report as abusive

Nature has a well established mechanism for dealing with systems that fail to adapt to their ever-changing environment. It may not be pretty, but it is effective, and has enabled our ancestors to obtain for us a position at the top of the food-chain. Yes, there have been times when altruism and co-operation have been more effective at promoting our species than pure competition for scarce resources. But, the fact that we are here today speaks to the wisdom of those who were able to discern when making sacrifices for the greater good was in our best interest, and when it was time to abandon the irredeemable.

It is now time to adapt to the new environment.

Yes it is quite apparent that Europe and Asia have done a much better job of nuturing their industries through their protectionist policies while the elitist have sold the avaerage American citizen a bill of goods with these so called free markets theories that don’t exist in reality of the true markets. Wake up people!

Posted by lynn | Report as abusive

JUST SAY NO to those arrogant hot heads. They think that they can blackmail the American taxpayer. Particularly those GM bosses, they think they are gods above the universe. It will be a crying shame on the U.S. government if they hand over huge billions as extra Christmas stuffings for the likes of Waggoner at GM. Let them crash and burn. Maybe, just maybe, then they will listen to us consumers. Wake up America !! If we succumb to this extortion, then what next? These bosses need to learn that they too can live on less than $50 million/year. What if they set an example by reducing their pay by 10%? Is it possible that one could live a decent life on $20M – $30M/year, even for just a couple of years? I know it’s a sacrifice, but they wouldn’t starve, most of us make less.

Congress: SEND THE DUDS BACK HOME TO DETROIT.

Posted by Errol Thomas | Report as abusive

The auto industry suffers from excess capacity, too many automakers competing for a limited pool of buyers means less factories and less jobs somewhere.

Planned Obsolescence, building cars that are hard to repair and have a limited life-span has been a strategy for US manufacturers to be able to build and sell more cars. Ultimately this is wasteful of labor and materials and inefficient. Cars should be designed to be more easily repaired and built to last longer.

The principle of interchangeable parts was promoted by Eli Whitney and made possible the industrial revolution and moderm manufacturing. The US Auto industry has virtually turned this principle upside down and designs and manufactures virtually all new parts for every one of too many similar models. I can evision the remote possiblity of cars & trucks being designed with “standardized” parts somewhat like the working so of computers are standardized and somewhat like “Big Rig” trucks are standardized. Such standards might be applied to (agreed on by) auto manufacturers that grow so large, they have the economic impact of small nations with smalled manufacturers left to innovate. With standards in place, large manufacturers could compete beased on efficiency, quality of product and ultimately price.

If cars are manufactured to be repaired and to last, jobs lost in manufacturing will likely be more than made up in repairing.

My first car was a 1937 Chevrolet. It weighed about the same as a new Monte Carlo and got fairly good gas milage.
If “bolt on” improvements” as fuel injection were available, I would be happy to drive that car today.

Saving the industry as it is configured is almoste certainly a waste of taxpayer money, unless some of other non- Manufacturers are going to go belly up.

the auto executives are morons to put it simply. they have let the strongest industry in this country go into the crapper because of ignorance of the changing market and refusal to go head-on against the UAW. Its absurd what UAW employees make and the demise of the US automakers should NOT be bailed out by taxpayer $. We have been paying exorbidant prices for US cars and now we have to fork over more $ to bail their dumb asses out of financial collapse? Are we crazy.
First order of business – FIRE EVERYONE IN CURRENT MANAGEMENT OF GM & FORD they are all incompetent, greed driven idiots.

Posted by Rich | Report as abusive

If the workers really believe that they are viable and have a future then use their pensions to support the companies first. Rob

Posted by robert h | Report as abusive

I say the auto industry wants a bailout? Maybe they shoudl get it from the oil companies they’ve been in bed with for decades who are STILL posting record profits. I don’t want them to have a single red cent from the government coffers. It is lunacy to think that bailing out companies who have proven themselves time and again to be uncompetative in the marketplace. Let the fail and let true capitalism work for a change.

Posted by James | Report as abusive

no. period. let the oil companies with the record profits based on any excuse they can give to raise the price bail out the soft bellied fat jawed cigar chomping idiots that knew this was coming. Maybe the unions will now understand that they can live on less money.

Posted by handa | Report as abusive

Wow. Where do I begin? First off, the idiots in congress required NOTHING of the banks to receive bailout money. No oversight to speak of, no one answering to anyone. Just give ‘em the cash.
Next, they stated that maybe the CEO’s should all be thrown out and replaced with “outsiders” and also take pay cuts. The problem with this? Chrysler’s and Ford’s CEO’s are already outsiders, Chrysler’s from Home Depot, and Ford’s from Boeing. Ford has been dealing with impending collapse since 2002 or so , and had already done the necessary legwork for their recovery. Chrysler was on the way until those same bakns pulled the rug out from under them.
This leaves GM and Rick Wagoner. This guy needs to go.
As for the EV1, I was a service manager for a large Saturn dealer from 1996 to 2002. Saturn was given the job of servicing and maintaining the EV1′s. I got a chance to drive one in Spring Hill at Saturn’s HQ. It was impressive for its time, but nothing truly cutting edge beyond the high pressure tires and inductive charging system. Lead acid batteries in a lightweight body. Technology easily done today. Why was it killed? Pretty simple actually. All of these were leased vehicles, meaning GM maintained ownership at all times. They were meant as research vehicles to gauge public reaction and also to get real world data as to how real people would operate them. Nothing more.
So why wouldn’t they sell them? Government regulations require an automaker to maintain sufficient spare parts for years after the production stopped. These parts would have been very expensive as all of these cars were heavily subsidized by grants. To repair one would be extremely expensive in the case of a failure. They were basically hand built . I once heard a story about a prototype Ford Escort sustaining damage by a tree falling on it in a storm, doing millions in damage. That $1.9 million for those 80 cars wouldn’t have come close to covering the actual cost of those cars .
The second reason? Liability and unforseen lawsuits arising from what is essentially unproven technology. Why open yourself up to unnecessary litigation?
As for the “super” battery technology, that’s total BS. If it were true, they could have licensed that technology to laptop makers, cellphone makers, etc… the possibilities would have been endless. That just makes no economic sense.
Besides, the new Volt will be an infinitely better and far more practical car.

Posted by tbird635 | Report as abusive

Forgot to add something… If I were a an “outsider CEO” and I was being recruited by an automaker forced by the US Gov’t. to hire an outsider, what idiot would take that job for $1 a year?
You want results from a CEO, you have to pay him what he’s worth. Ford and Chrysler have done just that. And Ford’s seems to be doing all the right things.

Posted by tbird635 | Report as abusive

No bail out. No loan. No nothing. Companies should not be rewarded for failure. These executives don’t seem to be giving back the money they took over the last 20 years when business was great. They should have taken less and saved more so they could weather the downturn. If congress bails them out with MY money, it will signal to everyone that when times are good you can take advantage of your employees and customers and when times are bad you can take advantage of everyone else. I may think differently if GM gives me a full refund for my 1979 cutlass diesel (my last ever American car and a real piece of junk), but I doubt it. I’ll vote out anyone I can who approves the automakers requests under any condition other than the complete bankruptcy of the companies and the personal bankruptcy of the executives.

Posted by Jim B | Report as abusive

Also, I don’t think I have ever heard anyone dumber than Westley Clark. The technology developed by these companies was not developed for the military. My duce and 1/2 did not have keyless entry, tinted windows, three position 10 way electric seats, a computer made in china with hatasahi chips, a bose stereo, plastic wood and chrome. The developments in Detroit have not been in the areas of reliability or usefullness, the developments have been in fluff. I might add that we recently spent a few billion with GM to develop a better armored vehicle and the entire program was overcome by the terrorists with a couple extra pounds of high explosive. Just another example of fixing the wrong thing and throwing good money, MY MONEY AND YOURS, after bad. Finally, I live in Los Angeles and wonder why we even need more cars there are sure a lot on the docks that can’t be sold now. This is not an “if you build it, we will buy” problem, this is a “you lost out to the competition problem” and now that times are hard people will buy only the good stuff or fix what they have. Lots of automakers have gone under over the years. What’s a couple more. Let those who are left fight it out among themselves by building things that don’t break, things that don’t cost much to run, and things that cost less than the competition. This is a situation where less is more.

Posted by Jim B | Report as abusive

No bailout or loan. Let the companies fail and the profitable parts be bought and run by other companies with the non-profitable parts be discontinued.

Why aren’t the foreign car companies among this group of CEO’s asking for help when they also build cars in the US and employ US citizens?

Here’s another reason why not: I will be buying a new car within the next 3 months and no American car company is on my short list.

Why? Quality, reliability and resale value.

Please note that I didn’t mention price.

Posted by new car buyer | Report as abusive

THIS IS NOT A BAILOUT FOR THE AUTO MAKER’S IT IS A LOAN. IT WAS A BAILOUT FOR THE BANK’S AND AIG. I GUESS THAT’S BECAUSE WHEN IT COME’S TO BANK’S AND INSURANCE COMPANIES IT IS HITTING THE POLITICIANS POCKET’S, THAN THEY GIVE MONEY NO QUESTION’S ASKED AND BY THE WAY DOES AIG, CITI BANK AND THE REST OF THE BAILOUT FOLK’S FLY IN PRIVATE AIRCRAFT? GEE NOBODY ASKED THAT QUESTION.
AND I BET MOST OF THESE POLITICIAN’S DRIVE FOREIGN CAR’S TOO. THE AUTO INDUSTRY IS PRETTY MUCH THE LAST IN THE UNITED STATE’S TO PAY A DECENT WAGE AND OFFER A DECENT BENEFIT-AND THE GOVERNMENT WANT’S TO TAKE THAT AWAY, I GUESS BECAUSE THEY WOULD LIKE US TO BE THE SAME AS MEXICO YOU ARE EITHER RICH OR YOU ARE POOR NO MIDDLE-AND YOU CAN STAY POOR BECAUSE THAT’S THE WAY THE GOVERNMENT WANT’S IT.

Why is it that the Sentate and Congress do not see the big picture. If this country let the big 3 go under it will cause the biggest ripple effect that they have ever seen.
This country cannot afford to lose more jobs, more tax revenue, more depression. If you want to help the economy wake up and see the big picture.
Does anyone up there have any common sense???????????????

Posted by Diane Miley | Report as abusive

I believe we should help GM and Chrystler, but only with a restructured plan with all of the Executive perks taken out, and a plan to manufacture and sell electric and solar vehicles. As for Ford, they have another plant already in Europe putting out a car this year that gets 60 miles to the gallon of diesel. Why doesn’t Europe bail them out? And why doesn’t our country allow us to have clean burning diesel vehicles? Ford has said that they won’t be selling any of these vehicles in this country because our government will not allow them. I understand that they burn cleaner than the traditional gas burning vehicle, so what is the problem? I think we should let the government know we want these cars in our country. We should bail out Ford, although I believe that Europe should help bail them out. Europe is getting the most benefit from Ford’s staying in business.

I also agree with prior comments, we need to look at the big picture. We spend more money rebuilding Iraq, Afganistan and other Middle Eastern countries than we spend on rebuilding ours. Who ever said that when we go in and blow something up, we have to then rebuild what we destroy. No other country does this. The Middle Eastern countries have plenty of surplus money from the recent rise of cost in oil to rebuild their on countries. Didn’t the Americans go to their countries to help them? We have already spent enough money in their countries by supplying the military support they needed. Why do we then have to spend more money on rebuilding their country, when our own is in desparate need of repair. We need to bring the military home and rebuild our own country. If you have not seen the I.O.U.S.A. video you should. I went to the Countrywide broadcast at the Theatre. The basic point of the whole thing is that we need to buy American!!!! For this country to survive, we need to buy American!!! I’m not saying that Walmart is at fault. It is our fault for sending our manufacturing out of this country. And it is not all China. When I went to buy envelopes yesterday, they were made in Mexico. It is getting harder to find items Made in the USA. I believe that the government needs to invest in new start-up companies that will begin to manufacture more American made products in this country. At the same time they also need to help the manufacturing companies that still remain here to keep their businesses going. Although, that all depends on you, the consumer, to Buy American!!!

Posted by Kamaria | Report as abusive

U.S. Automakers and UAW must take heed from the foreign Automakers that are manufacturing cars and trucks in the good old U.S.A. and apparently making money. I have not heard of any of them asking for a rescue loan. It is common knowledge: American autos are as good as any automobile manufactured in the world. The Big Three were strong in the SUV and truck market because there was good strong demand and limited completion from foreign companies. However, providing small economical cars with a good safety rating in this current environment seems impossible. Let us face it; with “the Cost of Sales” generated by both labor and management and competition of the foreign companies makes profit margins very small. In the case of the Big Three, they are non-existent. As we know, at this time large SUVs and pickups are very hard to sell. What can be done?

The U.S. Automakers need a large loan from their Uncle Sam, and they need the loan right now! However, before that can happen, they must provide a plan of action. For both the Big Three and the UAW to show good faith and reality adjustment, they must cut wages, benefits or both for labor and management to show America and the Congress they are intent on long-term survivability. Some people say, “Let them go under”. Some say, “The UAW is bad and we do not need unions anymore.” Without the standard of living that unions have afforded America and working conditions they have improved through legislation, America would be unfriendly and unfair to the worker. Fact remains that unions as well as manufactures must change with the times or goes the way of the dinosaur. If the Big Three go under, we could see a loss of as many as 14 million jobs* in this country. It is my understanding that without that 25 billion dollar loan the Big Three will go into bankruptcy. I think I can safely say that being the highest paid unemployed manufacturing workers and managers in the world without a job is not as preferable as being a worker, manager or CEO with a somewhat diminished but livable income. I think that it is time the Big Three to step up for America and themselves. I think Americans would appreciate a similar sacrifice by all the upper management of the many financial institutions that have received rescue payments from the U.S. Government. I believe it is said, “Self sacrifice is good for the soul” and it is also good for our economy right now.

I know that giving part of ones’ earnings back to stay in business and remain employed is a good strategy because, in 1980 I was a union electrician whose market share was suddenly being reduced through a large influx of non-union electrical contractors going after industrial construction projects which were the union contractors forte. We took a 40% wage reduction in wages and benefits to stay competitive. Believe me, it was a difficult period, but our union and our jobs survived and we eventually regained our market share by keeping track of what the competition was providing and proving our value. It’s time for the U.S. Automakers to do the same thing.

*Rampell C. Economix: How Many Jobs Depend on the Big Three? nytimes.com November 17, 2008, accessed: 12/01/2008.

Posted by david pear | Report as abusive

This is a very simple case. The three automakers will never be competative with the noose of the UAW and its outlandish contracts around its necks. The only way this makes sense is to allow each company to reorganize under bankruptcy protection, disband the union, drastically reduce its pension and healthcare liability to all of its retired workers and then, get financial aid from the American Taxpayer. With a clean slate and cash on hand, the US Automakers have a chance to survive and thrive. Otherwise we are postponing the inevitable. We all know the US Government will take the easy path and just give them the money even though any sane individual knows bankruptcy is the right course of action.

Posted by Len | Report as abusive

By the way, those that comment that allowing bankruptcy will cause a big ripple in our economy is mistaken. Look at the airlines, they all reorganized under bankruptcy and people still flew their airlines during the reorganization. Nothing will change the moment they file. The dealerships will still sell cars. They will still service them. And, the automakers will continue make them. The only thing bankruptcy will do is allow the companies to eliminate big liabilities, namely the pension, healthcare, and the unions. Listening to Rick Wagner testify that a consumer will not buy from a bankrupt company is bull. I for one will purposely buy American if they file bankruptcy even though I haven’t bought American since 1999. I would do it because I would be encouraged that the automakers could finally compete now that the unions were dead.

Posted by Len | Report as abusive

For years the auto industry (manufacturers, unions and dealers)has led the way in overcharging for its product and over compensating its employees at the expense of its customers, parts suppliers and stockholders. And they didn’t start to provide good quality, more fuel efficient products until foreign competition forced it. Now they should continue to reap the rewards of that behavior even though it has turned negative for them. I would not support a bailout unless and until I see sufficient contrition demonstrated by the actions they take in their restructuring.
(For example, how would you evaluate an executive giving up one years salary against what he has already been paid in salary, stock and bonuses over the years and against what he will gain if the company survives and the stock goes up?) Don’t you think those whose actions caused the problem should pay (or at least help to pay a large part for the correction?

Posted by Ed Sand | Report as abusive

Asian car companies invest for the long term. Japan finaced Toyota and Honda with low interest goverment backed loans. Loosing money for decades was OK as long as it helped eleminate the competion. Lately southern states aided asian car companies to the tune of over 4 billion in incentives, not loans but free money if they located in thier states. Add that to the billions already loaned and it only seems fair to help our local auto companies. Countries around the world are helping automakers in thier countries because the industries are so important to local economies.

Posted by kev | Report as abusive

Let the bad quality auto makers go under. Then, buy out the foreign automakers who are successful and conduct business as successfully as they do. After all, this is the U.S.of A. Why should bad products be celebrated and protected? As far as the employees are concerned, if they are good they can find jobs elsewhere.

Posted by Nick | Report as abusive