Opinion

The Great Debate

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.

Comments
184 comments so far | RSS Comments RSS

yes the auto big 3 should get help.they are the backbone of our country!!!!

 

yes the auto big three should get help!!!!

 

Automakers should not be bailed out!!!!! They were working on the red numbers before recession hit us. Its like trowing tax money to the waste!!!! They are not efficient why give them money? Let them solve there problems by themselves!!! US should stop playing nanny to private business. Maybe they will get to grow up!!

Posted by Nina | Report as abusive
 

Several weeks ago I saw a picture in the newspaper of a group of soon to be laid off UAW auto workers leaving their jobs. For the most part they were overweight,middle aged men smoking, needing haircuts and a shave, wearing sweat shirts, track pants and baseball caps on backwards.
These guys were making $35.00 or so an hour and pissed at their employer.
Gee, I wonder why the industry is in trouble?

 

HELL NO! it will only prolong the inevitable. the big three are run like they are still in the 1950s. let them fail, deal with the results and a stronger country and economy will come of it eventually

Posted by richard kadel | Report as abusive
 

Why bail out a company that has huge manufacturing interests internationally? GM is hardly a solely American company any more. The 2003-2009 Monte Carlo, Impala, Grand Prix and Buick Regal were all manufactured in Canada. Holden auto of Australia now manufactures most of Pontiac’s line and many of the Vauxhall vehicles sold in Britain. Many of the engine blocks are now cast and machined in Mexico. GM is already investing heavily into SAIC of China. GM is not going anywhere but out of the USA. The UAW pension program is the crippiling factor for their bottom lines. You can bet the big three no longer have interest in supporting big labor. Instead you will be doing nothing but propping up a retirement program on the rest of Americas back. Let the company fail.

Posted by Matt | Report as abusive
 

No. This trend toward national socialism is getting way out of hand. Rather than a bail out as a vital industry to our economy and to prevent massive job losses, they ought only to make loans which are no different than the companies would have gotten from a bank.

This industry made mistakes that were easy to identify a few years ago when they decided that making the more then profitable trucks and SUVs were preferrable to correcting the product mix to reflect the growing reality of international competition and energy issues. If they are to go bankrupt in order to effect the necessary restructuring to make them into competitive businesses the government is in no position to interrupt the capitalist market correction. Major airlines managed themselves through bankruptcy and Delta went on to acquire one of it’s competitors. This is unnecessary government intervention.

Posted by Ray | Report as abusive
 

I see the auto workers are going to end up being shafted thanks to the incompetence of their bosses. History repeats.

In the late 60s and early 70s the US automakers didn’t start making small cars….and when the oil shocks hit they were badly caught out. OK…maybe that time it really was a surprise. But this tmie it wasn’t.

I – me – saw this coming 5 years ago. Bush’s war and tax cuts would SURELY lead to huge deficits, higher interest rates and a falling dollar. In economic terms, this is like can you spell “D’uh”? The new element compared to past cycles was “peak oil”…which isn’t really peak oil, but a lag between racing demand winning out over lagging ability to discover and supply. Plus all those US refineries shut down over the past 20 years to support higher prices by creating seasonal bottlenecks.

Never mind all that – did the US automakers plan for smaller,more fuel efficient cars? Did they back laws that would recognise the need to use less oil – for the environment, national security and to support a move to smaller, more efficient cars in advance of higher oil prices?

No. They built SUVs and Hummers and all sort of things no one in their right mind outside the US would ever buy…..and no one at home would either once oil became more expensive…and as it SURELY would.

These people don’t deserve saving….but I can certainly understand why the Unions are wondering why THEY have to pay for their bosses’ incompetence.

 

No, No, No, After the President of the Auto Workers Union said that they were not willing to make concessions to help out I say let them stew in their own juices. If the auto makers file for bankruptcy how much do you think they will be forced to cut. Just look at the airline workers after the airlines filed. The bankruptcy couldn’ say yes fast enough to the airlines to cut wages and benefits.
The US Auto makers have screwed the consuming public for decades by putting out poor products with poor designs ever since I can remember and that goes back to the 1950′s meanwhile the Japanese have captured the market buy producing good auto with good design that the public wants.
I’ve only owned 2 foreign auto since I bought my first one in 1962, but my next one will be foreign unless the US makers make a 360 degree change.
By the way I am pro-union and pro buy American but I’ve simply had enough.

Posted by Phil | Report as abusive
 

From reading the early comments …most seem driven by nationalism … a thing of the past … such pride, like religion, is often the cause of many of the world’s problems. We are no longer in “Kansas” … we are becoming part of one world … like it or not. Assistance is needed, but with restrictions … no bonuses, no raises for labor, and no dividends for stockholders.

Posted by John | Report as abusive
 

NO, NO, NO, the auto industry cannot be bailed out. They have resisted change for the production line. They continued with the gas guzzler cars, and now, they refuse to make concessions. Yes, the unions backed Obama, but we should have to pay for a bailout. The vehicle and parts are not even made in this country too many times. Let the strongest survive or sink. Stop the dividends and high bonus and benefit packages. Stop paying someone just to show up for work. They must change like the rest of America.

Posted by Mim | Report as abusive
 

approve of keeping the automotive industry viasble as a matter of national defense and fiscal policy.Mass unemployment must be avoided.

Posted by sid millman | Report as abusive
 

Exactly when did making cars become vital to national security? These dinosaurs should be forced to close plants, cut costs and lay off workers the way any other business does in a recession (Citigroup, Circuit City). Adapt, evolve or stop making cars. 25 billion dollars just gives them more time to fail, and the sooner they fail, the faster they will be acquired by another multinational competitor who will retool the assembly plants, rehire valuable employees and start ordering parts from suppliers. Sure some people will lose their jobs-they’re going to whatever happens-but the US auto industry will not disappear. And if pension plan health care costs are included in the acquisition, the retired autoworkers are protected. Crisis? What crisis?

Posted by Robert Bornhorst | Report as abusive
 

They should not be bailed out. They are part of an \”old\” economy based on perpetual growth in consumption. This economy must eventually be replaced by a more sustainable model, and before we can get there we have to scale back seriously.

The sooner we start scaling back the better of we will be in the end.

If they get bailed out now, how much time does it buy before they are in even deeper sh*t?

Though the consequences of them failing now will be severe, no matter we do, they will fail anyway. Its better we deal with the consequences now rather than later.

Posted by picoday | Report as abusive
 

The auto industry has spend a lot of valuable financial resources lobbying for lower safety and fuel standards than investing in technology to get out of the funk like the Japanese companies are doing. This is remniscent of of the Pinto Days when the US automakers lobbied heavily against car safety standards rather than fix the fuel tank issue. This industry has had a poor record of survival and will use the tax payer money on lawyers (to lobby) rather invest in technology to become profitable.

Posted by Anant | Report as abusive
 

yes but the end product must be improved and unions must backoff from excessive demands and control

Posted by Pete Perry | Report as abusive
 

I can’t believe how stupid, blind and idiotic most of the american people are showing themselve’s to be! GM is not asking for a free handout like your wallstreet buddy’s! GM wants aloan to not only save it’s self from distruction, but try to save alot of american jobs. If you forgotten what that is. I bet most of you probably shop at Walmart!!!!!Sending most of the american money to where you ask????? chinia…not the U.S.! THIS IS NOT INTIRELY ABOUT THE AUTO WORKER , IT’S ABOUT EVERONE IN BETWEEN. The steel’glass,rubber,plastic,Bank’s Sear’s the locale carpenter,the locale mechanic, your locale home heating & air conditioning maint. Guy, just something as simple as going to your personal Barber.Not to mention where would the healthcare go with over a million job’s gone?with no one buying healthcare, because no one has a job!!!!! But maybe we could go to chinia, for healthcare!! If you thought the Great depresstion was bad with only almost a 30% unemployment rate, Try about 80%+ out OF work lost there pention’s medicare, medicde, S.SUCURITY BECAUSE THERE WOULD’NT BE NO ONE WITH A JOB LEFT TO PAY SS.I can’t believe this great county we live in, after 911,,,,,were like lamb’s being led to slauder!!! And an other thing It’s the dam GREED OF THE CORPARATE CEO’S THE REASON YOUR AMERICAN CAR’S & TRUCK’S COST SO MUCH!!!!!!!!!!!!!!!!!!!!! It’s not because of the laber cost like the ceo’ make us to be. It’s the fat cat’s ceo’s sitting in there Ivory towers squeezing the life force out of there LABOR, BECAUSE THERE TRYING TO MAKE A FAIR DAYS WAGE! Why can’t you (americans) see it!!! WAKE UP PEOPLE! It was the auto worker, carpenter, janitor,electrition ect.ect. working 12 -16 hour shifts so the son’s & dauters could go to collage and get so SMART…..Now you want to trow us to the curb? Wake up !who set you up on your way to your Ivory tower? And what type of job did your mom & dad have. This is Truely the (ME GENERATION) NOT THINKING OR CAREING ABOUT THERE AGEING PARENTS,OR THERE GREAT,GREAT GRAND kID’S….I only hope and pray this new PRESIDENT CAN LEAD US TOWARD’S NEW PROISPERITY & UNITY AS AMERICANS. HOPEFULLY WE CAN TURN THIS COUNTRY AROUND AND START EXPORTING MORE THAN WE’RE IMPORTING! AND CHARGEING A FAIR EXCISE TAX FOR IN COMING IMPORTS. THE WORKING CLASS PEOPLE HAVE GIVEN & GIVEN&GIVEN, NOW HOW ABOUT THE FAT CAT’S TOP 20% START GIVING???????? FOR A CHANGE.

Posted by MARK | Report as abusive
 

It’s imperative that Ford and GM be bail out as soon as possible and let Crysler merging with another foreign auto maker to unclog our economy.

Posted by Lewis Chavez | Report as abusive
 

Yes, let’s bail everyone out. Where is our American Spirit? Let the big 3 sell their Gas Guzzling SUVs at cost. They really should’ve been making Fuel Efficient Autos (Years Ago). I think Bush should just “give” every Man, Woman and child $25,000 (Tax Free) then I can buy a new Vehicle. That will help Bail ‘em out and we’ll all be stylin’. Also, give every Family $250,000 (Tax Free) so we can all buy a new Home. That will end all the Fore-closures. Come on Guys, just fire up those printing presses, who cares what the rest of the World thinks!!!

Posted by Zeppelin | Report as abusive
 

So $700 billion for the finacial sector is alright, but not a meer $25 billion for the auto industry? Unfortunatly, we have to bail out the auto industry. Say the entire world is against us and we are at war, how will we manufacture the equiptment we need to defend ourselves, idiots? The same reasons we don’t want to rely on the rest of the world for oil apply here.

What needs to be fixed is the way the auto industry is run. Unions need to be out – that way we are not paying someone $35 an hr to literally watch paint dry while also funding a 100% pension.

Also, do we really want to lose another 200,000 jobs? You may think yours is safe but for every job lost, losing yours becomes closer.

Posted by Mark | Report as abusive
 

Will $25B enough to let the Big Three survive and come back? Don’t fool ourselves. There have been no short-term and long-term plans workable for a long time. The only reason we are considering the rescue plan is that we can not afford letting them down. The point is that $25B will not turn things around. $25B will just let us wait for several months to hear another amount needed. Special case needs special means to handle. Unfortunately, the very critical and best solutions will normally be put aside for political and regional(or group)-interest reasons until we are forced to abide by a natural and worse selection. This world needs visionaries with lest self interests in the businesses.

Posted by Juns Fuller | Report as abusive
 

I’m a proud American. I’m not proud of how this country wants to have its cake and eat it too. In our capitalist society, not only in business but in our daily lives, where over 40 million of us cannot afford health insurance, we accept that the strongest will survive. Detroit has for years been behind the foreign competition in quality and management. It is the reason why millions of Americans drive foreign cars. It would be a crime to bail out the inept domestic auto industry while millions of people in this country are lacking the most basic human rights, such as health insurance and affordable education.

Posted by G | Report as abusive
 

Oh, by the way, once these Gas Guzzling Hogs are cleared from Inventory, It’s time to learn from Honda. I drive a 2003 Honda Civic LX (with a 5 speed) It averages 36 MPG. I used to drive nothing but American for almost 30 years, I am sticking to Honda. As far as the UAW, you guys live in an unrealistic world. You are way overpaid vs. the average Manufacturing Laborer (By at Least 100%). Deep inside, you know this. You push for higher “EVERYTHING” due to watching the OUTRAGEOUS Profits your employers make.The American consumer keeps getting into longer and longer LOAN TERMS (60 and 72 Months) to pay the (Higher and Higher Prices) for your overpriced junk.
Since Detroits Housing Market is in the The Toilet, what happened to all of your outrageous Paychecks???

Posted by Zeppelin | Report as abusive
 

Mark, should we also negotiate with terrorists? That is what you are insinuating here. Let’s bail everyone out because we have become this Reckless push everything to the Max country. Because we are American we are under the ILLUSION that it is our God Given Birth Right to have anything we want. We are through!!! We are going to suffer GREATLY for the next 10 years, to pay for the last 30+ years of Reckless Abandonment. We are heading for another Great Depression, whether you think so or not. The New “Debtor Nation” is now owned or will be owned by the Countries Corporate America Advanced. How Ironic that China sit on $2 trillion of what was our Wealth… We Globalized the World, at our expense…

Posted by Zeppelin | Report as abusive
 

you know I have to believe there are Smarter people out there writeing a lot of these POST’S….It truely amazes me at all the ignorance there is….why do you slam the little guy makeing *$25.00* which is afair day’s pay for afair days wage. my husband, father in law father ect. all worked probably just as, or more than likely harder than most of you. There’s alot of you that do not even come close to working as hard AS THE AUTOWORKER’S AND NONE OF YOU HAVE GOTTEN INJURED AS THEY HAVE AND ARE NOW!(THANK GOD YOU DONT HAVE TO)! ALOT OF YOU WOULD NOT LAST THE DAY!!!! UNTIL YOU KNOW PERSONLY THE PAIN & HARDSHIP’S THAT COME WITH THAT BIG $25.00 AN HOUR…. I WOULD KEEP MY MOUTH SHUT!

Posted by Joanne T. | Report as abusive
 

It would be criminal to give the automakers money and a free pass. There needs to be some very strict restrictions put on the money given to them.

Management needs to be changed. They should be required to submit their plan to Congress as to how they will change their business plan and the steps that they will undertake. There must be penalties for them if they do not abide by the plan.

Contracts need to be renegotiated and they must bring themselves into the 21st century and make automobiles that people would actually like to buy.

Cars need to be better designed and to be more fuel efficient. Further, GM has spent over $1billion to lobby Congress each year. Are they going to continue with this madness. Why are we rewarding them for wrecking the US auto industry?

Madness is doing the same thing over and over and expecting a different result. They have been running that company into the ground for the last twenty years with completely unsound policies and bureaucratic thinking. Why are they being rewarded for their atrocious management.

Throw them out , without any perks and golden parachutes.

 

So…why are we not hearing people screaming about the lack of financial assistance from the OIL industry to the AUTO industry?

I mean, after years of outrageous profits and without ever an offer to help even the poor pay for their ever increasing cost of oil & gas; isn’t now the time for big oil to come to the aid of one of it’s biggest users, i.e. the U.S. auto industry?

Or…does “big oil” not care if the auto industry fails?

Do we (you-me-Uncle Sam) once again have to step up to the plate to pay for the stupidity and excesses of executives who care only for themselves?

Ned H.
Chicago. IL

 

No, they shouldn’t be bailed out unless the goverment will bail me out.I have to pay my bills and so should they. I would consider a loan with stipulations as to where the parts are made and where the cars are assembled. This could be done in such a way to create jobs and stimulate more exporting rather than importing things from other countries that put Americans out of work. The negative start for America and jobs was when a past President pushed a NFTA law through.

Posted by Ron | Report as abusive
 

The United states automakers should be helped.

First of all, regarding SUV and gas guzzling cars versus small cars is based on supply and demand. Look at 10 years ago, if everyone was thinking conservation, it did not show! Consumers purchased SUV’s and trucks because that is what the demand was! No body wanted small cars and they did not sell as well or obtain a good profit. The profits from these sales of SUV and trucks translated in distributed profits to all including me as automotive engineer working for a suppler. I used this money to purchase a house, buy furniture and distribute the wealth onward. Second of all, trucks and SUV’s are not going away simply because there will still be a demand for them. Think about it, if you want to go on a trip with the family of 4 or 5 are you really going to cram everone into a pint size car? or better yet buy two of them to make sure everyone can go on the same ‘s trip? Waste of more gas, money and a bigger carbon footprint. Family’s will purchase a truck or a suv no matter what. Also, keep buying Honda’s and Toyota’s. They set up plants here and most of the money is sent back to Japan. How come the U.S. cannot set up shop in Japan to make Ford Fusions, Chevy Colbalts or Dodge Nitros? Japan does not want it and they shut down thier ports to U.S. exports. Also, U.S. carmakers design, manufacture and ship a product within the United States. What else is left in the United States to design and manufacturing? Not much as lot of imports come from China and so forth. Just think about it.

Posted by Jim | Report as abusive
 

I’m not for saving the automakers, although I have heard some arguments that are very valid such as Gen. Clark’s which is as much a scare tactic as anything else.
Unions are easy to attack which I’m all in for… but there is also a deeper more significant problem than just the unions and that is heathcare. As of 2004 $1500 of every car built, by GM specifically, went to pay for employee healthcare. Now are the autoworkers crazy for wanting heathcare? No, but framing this issue in a small perspective won’t help us any. This is a multi-facetted problem stemming from high oil prices to unions.

Posted by Nathan Rockman | Report as abusive
 

No, they\’re dinosaurs and subject to extinction. I grew up in mid-Michigan, the heart of US automotive country, and witnessed these titans of arrogance first-hand my entire life. While the boomers and earlier generations collected fat wages and benefits even while not working (pension? what\’s a pension?) – their gen x/y children were left out in the cold. Our ideas, innovations and educations went to waste and were squashed by the greed and corruption of our elders. The jobs and ways of life these industries promised to us growing up never materialized, and for 30+ years these companies (as well as so many others) blatantly refused to acknowledge consumer needs and the technologies needed to strive forward into the future – while every single social and economic warning siren blaired shrilly in their smug faces.

Do they have a super-secret-awesome car hidden away that they\’re going to sell to us if we bail them out? No. They purposely and with malice squelched every idea offered by their peers, science and even their own internal units dedicated to research on the subject over the past 30 years. They spent billions suppressing new fuel efficiency legislation and with their ever-willing buddies in the UAW created a mess of their own industry. Let\’s ask them all: what happened to the steam-powered car? Yeah, I thought so.

When I graduated college I was forced to move out of Michigan to the American Southwest in search of work and a chance at a career – as the Big 3 offered nothing but grey skies and a bleak future to the generations now eating at the barren table they themselves set for us.

Bail out the Big 3? Why? Why not bail out the Vegas Casinos while we\’re at it? They also, without question, support millions of jobs in the economy at large and have taken a massive hit. The Nevada unemployment rate now matches Michigan\’s. No casino bailout? Then screw Detroit, too. Welcome to Free Market 101. Welcome, Boomers, to the sinking ship you were warned about for the last generation (or more). You made your bed – time to lay in it. Go ahead, gnash your teeth – goodness knows your children are. We can even all do it together – since we\’re moving back in with ya soon – ya know, since our houses have been repossessed and our educations were (apparently) for nothing. All thanks to this impressive economy ya\’ll layed out for us. Good job! Well done!

BTW: I am also a lifelong auto enthusiast. I have owned, restored, raced and enjoyed more grand-daddy (US) autos in my 31 years than most 50+ year old UAW members can boast. I have enjoyed this hobby my entire life. But I will also be the first to admit the technology \”stinks\” (at best) – and there\’s only one car I\’m \”happy\” to have in my driveway: my trusty Honda Civic. The rest are now, for all intents and purposes, several tons of scrap. Hey GM/Ford! I got some cars you can buy back from me for pennies on the dollar! Heck, I might even PAY you to get \’em outta my driveway.

No, no bail out. No way. Bad for the US, bad for the free market, bad for the generations who will be left holding the massive bill when the inevitable tumble happens despite any potential bailout money. Welcome to you New World Order. Oh? This isn\’t what you had in mind? Oh well. Suck it up and move on like the rest of us have had to. Let the Big 3 fall, their day of reckoning has come.

Posted by Joel | Report as abusive
 

$38,954,972

GM CEO’s compensation jumps 64 percent in 2007

http://www.companypay.com/executive/comp ensation/general-motors-corp.asp?yr=2008

Sure! Let’s bail them out.

Posted by Will | Report as abusive
 

What happened to the entrepreneurial spirit and the opportunity to build a business in America? Remember when businesses could rise or fall on their own merits? Even today, over 75% of new businesses fail within the first two years of their start-up date. Was the Federal Government there to bail out a bad idea? No. There is no question that men and women who have an “idea” or a “vision” and have invested, barrowed, and devoted a lifetime of sweat equity to make their dream a reality were aware of the risks and the rewards of their venture. The risks can be disasterous but the rewards can be great. At one time, the rewards didn’t include a “bailout” by the Federal Government to further failing businesses. If companines got big enough they could go public or issue bonds to entice investors. If companines were to survive they had to offer a marketable product to deminish the risk faced by the investor. The question to be asked is: shouldn’t it be the same for the auto industry? Currently, the leadership of the auto industry hasn’t provided a product that entices the American investor. Why would the Federal Government step in to prolong the inevidable and disrupt a system that has been in effect for over 150 years?

Let’s look a the poor union workers. If it were not for the captains of industry willing to face the risks of surviving a grulling education, building businesses and creating opportunities; union workers, especially those feeling so lowly employed and being abused for profit, would have never had the opportunity to work in the first place. Unfortunately, union members have relied on poor leadership that serves their own self interest to the point of “hell with the company” let them fail we deserve more. All at the memebers’ expense. Read Obama’s Audacity of Hope. Go to school. Get an education. Get a good paying job. Create a skill set that isn’t dependant upon a shop steward’s whims for employment and promotion. In many areas of the United States today, Chinese, Indians, Latinos, Japanese and just about every other ethnic group in America are here working hard for their chance to get family members educated and schooled in hopes of realizing the American dream. Families work hard late hours in 7/11′s, local laundries, landscaping, resturants and any number of menial jobs to support the education efforts of family members. Unfortuantely, the union mentality of our workforce starts with those first jobs; we have American born kids who wouldn’t think of taking a job at McDonal’s for $10.00 an hour because it is beneanth them. Nor will they spend the time to seriously apply themselves school or after graduation to obtain a better paying job. Prime fodder for the labor unions. The tenured union elite will be spend efforts unionizing these young people, preying upon them and guaranteeing them jobs from cradle to grave. All at the expense of some poor bastard who believed in the American Way of life, built a business and risked everything she had to reach her goals. Does she deserve to be bailed out? No; and most of her peers don’t expect to be bailed out either. But she should have the right to seek the best way she can to build her “widgit” with limited government interference and taxation without some self serving union boss closing her plant down all in the name union benefits.

Those on both sides of this issue need to open their eyes and walk in one anothers shoes. It is going to be painful. Pray to God our new president can provide the leadership we have been lacking. it is not red, it is not blue; it is an American problem. We need to come together to solve this huge delima.

Posted by Steve Smith | Report as abusive
 

I have a Maquilia foundry in Mexico a few weeks ago we were asked if we would do work for a newly planned Chrysler plant that will be built in central Mexico at a cost of 1.9 billion dollars. Why waste our tax money on companies like this that push work out of the US? GM built 3 times the capacity it needed in China, if they survive they will bring cars to the US eventually, made in China! The car companies treat there vendors horribly, predatory pricing policies that drive many out of business. Those that live by the sword should die by the sword..its there turn..dont help them until they are in bankruptcy then the government can back the warrantee’s and help the leaner company they must become.
Thanks,
Dean

Posted by Dean | Report as abusive
 

Absolutely not. They need to restructure, and will not do it unless required. The business, and the economy, will be healthier in the long run. A bailout will only preserve a decayed system.

Posted by Sue Young | Report as abusive
 

The ignorance I see in some of these posts is amazing. You call for the collapse of the big 3. If that happens just wait and see how much worse we will be. I’m for a bailout of the big 3 but with conditions. I feel management needs to be replaced with fresh individuals with fresh ideas. I’ve always driven a GM car and I’m proud to say that I buy american. The ripple effect of a big 3 collapse will be far reaching and for the ignorant ones that say collapse just wait until the ripple gets to you.

 

Bail out the auto companies? Absolutely not! Shouldn’t be bailing out any company, including the banks.

Posted by Hugh | Report as abusive
 

No Bail Out – No Way!

Bottom line: GM, Ford and Chrysler make horrible cars.

I switched to Toyota after 20 years of trying out Chevys, Chryslers, etc. AND spending many hours in and out of dealerships for repairs.

The quality of the Toyota and Honda cars put our American autos to shame!

Build a crummy product – no customers! No Bail Out!!

Posted by Cat Smith | Report as abusive
 

Shame on all of you naysayers who pay lip service to refusing help for GM. It was the greed of some of the real estate and financial community that has brought us to this extreme difficulty in money flow. We gave the financial industry money and they have parties, vacations and increased dividends with our money! Have most of you forgotten that it was the auto industry that gave up some or their profits to the banks after 911, by introducing 0% financing to jump start the economy after the Twin Towers fell? The real estate and financial monoliths did not do their share to ease that burden and yet we bailed them out, courtesy of two of their own: Paulson and Kashkari. That is like asking looters to watch your property during a natural disaster. If GM is allowed to fail, then all of the millions of people who supply GM and their billions of people who supply them will also fail. This is the core of our economy whether you like it or not. Letting GM down will be worse than any natural disaster or terrorist act, and helping GM survive deserves to be considered a national state of emergency.

 

Yes, sell ‘em.. to the Saudi’s.
UK just sold a big chunk of one of the biggest banks to the oil rich.

Posted by Sueco, London | Report as abusive
 

I don’t really agree with saving the companies. They couldn’t make money in the best of times so what’s propping them up going to do? But I feel we have to. Imagine the impact to the economy. Imagine another 2-3 million people with decent paying jobs being out of work… bad news, unemployment poverty of epic proportions, death of towns, separation of families… What does need to happen is that the sweeeet deals that these workers have been riding $70-100K per year to work on a factory line, mad benefits, pensions, overtime they gotta go simply. Auto workers union strong arm tactics gotta go. Simply doesn’t make sense anymore.

Posted by J Tirmandi | Report as abusive
 

The automakers knew they were in trouble long ago & yet,
while losing money, they kept on giving their ceo’s & top
executives millions & millions of dollars in bonuses, which is inexecusable. This is true of just about every enterprise that asked for bailout money. I know there will be a tremendous & awful ripple effect if the government does not step in. However, there must be a way to retrieve some of the bonus money that was given to these top executives.

Posted by R Citron | Report as abusive
 

I left GM almost 40 yrs ago because I could not stand to make poor quality products. They would ship a car to a dealer and leave him with the problem to fix. It has improved since then but they still have their mind set on large vehicles. Wtihout a quality small engine and an appropriate light weight body, the Big 3 will not be competitive. My son was an engineer for Cadillac Hamtramick. When we would talk about automotive he reminded me that…. “I should not be familiar with his present design, assembly, etc. problems. What he was saying is that the system has not changed in a generation. Detroit’s day has gone. Lope off their heads and get on with a new day and design!

Posted by boobyprize | Report as abusive
 

Bailouts

Bail out the Student Loan People.

If you bail out the Student Loan People and remove the disgusting debt, then they cn stary buying stuff again, including cars.

Yeah, Trilion dollars for the gambling bankers, and the opportunity for bankruptcy. But no money for the people that invested in education and only DEATH can get you out of it.

Cancel the STUDENT LOANS and free-up Amerian SPIRIT, millions of dollars, and happiness from suffocating debt.

 

A few points…

Many of you here like to bash American cars, saying they’re horrible because you owned a bad one 20 years ago. Obviously you haven’t read recent critics reviews (see Consumer Reports…Edmunds…anyone) that indicate that many of them run with the best.

And no fuel-efficient American cars? Hello…all make fuel-efficient small cars that meet or eclipse the fuel efficiency of the Civics, etc. that some of you seem to think are so unique.

Instead of bashing American cars, why don’t you educate yourselves instead of regurgitating what mommy said 15 years ago.

Also, those of you in pursuit of “fairness” should research how many jobs the industry provides, and then think for 2 seconds about the effect its collapse would have on your lifestyle.

Posted by Andy | Report as abusive
 

Give the auto workers union a federal loan to buy the automakers at distressed prices, the loan to be paid back by payroll witholding from the rank and file. Then they can negotiate with themselves! Also, try modest fiscal incentives for them to make competetive and responsible cars. Vehicles are a huge import item, and if we don’t slash imports it’s just possible that you’ll be blowing your nose on $20 bills because you don’t have enough $20 bills to buy a box of tissue!

Posted by Kurve Ball | Report as abusive
 

I think a mix of the two proposals should be considered. The US auto makers desparately need to reorganize, replace management and corporate boards. The required change in culture can only hapen from the very top! On the other hand, just allowing them to enter chapter 11 runs the grave risk of their markets disappearing altogether. After all, unlike the airline industries which are protected from foreign competition through ownership limitations, there is plenty of Asian and European companies to fill the remaining void. To prevent a total collapse and dump another 2 to 3 million people onto the unemployemnt role, the government should remain the lender of last resort in the case that the private sector will not step in with debtor in possession financing to assure thatn companies can continue to operate during the reorganization process.

 

BAIL THEM OUT! Wouldn’t it cost more in the long run through unemployment, food stamps, medicaid, not collecting income taxes, not collecting sales taxes, list goes on and on!

Posted by Lorenda | Report as abusive
 

I’m generally against the bailout. I don’t see why we should reward companies with bad business practices. The Big 3 for too long have been dinosaurs unable to keep with foreign competition. Let them go into bankruptcy and restructure. It worked with the airlines, why not the auto industry?

I think for the Big 3 to be successful, they’ll need to stop letting the unions have so much power. Unskilled American workers demand high wages and cushy benefits just because they were born in the US. Foreign workers will do the same job for much less. However, the unions have been dragging down the Big 3 for too long. American workers to get the skills to compete in the global job market. The Big 3 shouldn’t pay a premium to Americans with a sense of entitlement.

Posted by CJ Burgbacher | Report as abusive
 

Sorry to say the American auto industry is is need of systemic overhaul, from their willingness to feed the public’s gross excesses in vehicle design to the corrupt and out of control union behaviors. Sending them bailout money will not force the changes needed.

Posted by Fred Wilson | Report as abusive
 

Post Your Comment

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/
  •