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)

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Comments
184 comments so far | RSS Comments RSS

Let the Oil Companies bail-out the Big Three. That’s who the domestic car makers have been in bed with all these years. Building gas guzzlers that keep us addicted to the oil companies, instead of sensible alternative cars the public wants, like Prius.
Just look who GM sold the patent to it’s original electric-car battery…..Chevron, the OIL COMPANY. And that move deprived everyone of electric cars for the last decade. Use oil company profits to bail them out, not taxpayers money.
F#CK GM.

Posted by Greg | Report as abusive
 

To Andy

Concerning you comments Posted below…..
People bash domestic because the are mechanically, sylishly, ergonomically and technically inferior.
1) the “fuel efficient” Domestic cars are in-fact
RE-BADGED IMPORTS from asia and korea. Obviously you need to get your facts straight.
2) domestic car makers are selling inferior cars RIGHT NOW…and 20 years ago. How many Chrysler mini-vans need new transmissions in the first year?
3) Gm can’t even get it’s ridiculous MILD hybrids (what a joke) right, having recalled ALL the batteries in ALL OF THEM.

Posted by Greg | Report as abusive
 

Let start by balancing our nation’s checkbook ! We should immediately start cutting goverment jobs at the national,state and local levels 33%. The benefits, salaries and cola’s can not be sustained and should not be sustained at the expense on all of the rest of America’s employeed workers. Military spending must be cut dramatically 50%, and we need to close all foreign bases and bring home all military personal, if we have any hope of trying to balance our national debit load.

 

I feel the big three auto makers should be helped, but how much is the problem. They have set still for too many years on their research and develop on alternative fuels and other unconventional ways to power their vehicles. I know they will say their customers dictate what they build because of the market. But they have been so busy paying their executives and management for non-performance their R&D budgets have suffered.

Some proponents of the “bailout” has said to put restrictions on Executives pay require them to do more research. That was brought up years ago and they resisted because they could sell what they built. They have shown they only care about profit. When hearings are held they will say other wise, they will be lying.

When the Congress started bailing out the financal institutions they started something that will lead to a horrorable recession and possible a depression. The lending institutions have for years made it too easy for businesses and individuals to borrow money. When money is borrowed without proper collateral bad things happen. For many years banks have been lending too high a percentage of the amount needed to buy a home or product and the American cunsumer is spoiled.

A change is needed!!!!!!!!!!!!!!!!!!!!!1

Posted by Clay | Report as abusive
 

the companies should produce some prototypes of green technology and detail plan to get to the green technology before getting a single cent.

The taxpayer should be buying if any at all tangible goods and IP rather than giving away money base on faith that the companies will actually pursue and create green feasible technology. Remember this is not the first time these companies had asked for and received help.

Posted by Cassandra | Report as abusive
 

TO WHO IT MAY CONCERN, I AM A FORD RETIREE. ITS ALL THE UPPER MANAGEMENT FAULT. WHO IS THE UPPER MANAGEMENT? OF COURSE ITS FORDS CEOS,BUT WHO IS THEIR UPPER MANAGEMENT? THE US GOVERMENT IS THE UPPER MANAGEMENT. WHO IS THE US GOVERMENTS UPPER MANAGEMENT? WHO IS REALLY CALLING THE SHOTS RIGHT NOW. GUESS WHO. THE BUSH ADMINISTRATION. PLEASE DONT BLAME THE POOR FACTORY WORKERS AND THE UNION. YOU HAVE NO IDEA HOW HARD I HAVE WORKED ALL MY LIFE, AND ALL AUTO WORKERS. I HAVE A RIGHT MAKE A STATEMENT. I DONT KNOW WHAT MY LIFE WOULD HAVE BEEN LIKE WORKING AT THE FORD MO COM WITHOUT THE UAW. THEY PROTECTED MY RIGHTS AS A HUMAN BEING. BELIEVE YOU ME I EARNED EVERY PENNY I WORKED FOR. AN HONEST DAYS WORK FOR AN HONEST DAYS PAY. GO NO FARTHER. SINCERELY,LANA GODSEA

Posted by LANA GODSEA | Report as abusive
 

Detroit makes junk cars that get poor milage and turn into a puddle of rust in a few years with prohibited repair costs. Hey Washington! Look at what people are saying in these commemtaries. You will not be re-elected if you don’t! John

Posted by John Dinneny | Report as abusive
 

GM pays their USA workers $73/hour, is not profitable and is asking for a bailout

Toyota pays their USA workers $42/hour, is profitable and is NOT asking for a bailout.

Just think about it …

Posted by California Kid | Report as abusive
 

The problem with auto makers can’t be fixed by $25B or any amount. Yet it’s as simple as 3 letters – UAW. Unfortunately America can have auto industry or UAW – but not both.
Just think: semi-skilled workers are paid college grad wages with executive level benefits and public sector-like pensions. It was hardly sustainable when the Big 3 had the US market almost exclusively for themselves, and a good chunk of it around the world. The money that could’ve been spent for R&D went to line the pockets of UAW bosses. Instead of hiring scientists, engineers, and designers, the auto makers had to keep on the payroll the workers of idled plants. The competitors meanwhile were not standing still, cutting in both perceptions of US-built cars as the best, and the market share.
It used to be that foreign car buyers were either too poor or too eccentric. “I can’t afford a Chevy” was stamped all over Toyota or VW Beetle – the original one. Caddy and Lincoln were the symbols of luxury and prestige. Mercedes? Only if you must have something no one else on the block does. These days? It’s Ford and Chevy screaming “I can’t afford a Toyota”. The new Beetle is luxury European import. It’s Caddy trying to compete against Europeans, and Lincoln largely relegated to limo service and rentals.
Now that the Big 3 are not so big, and their share shrunk, it’s not sustainable.
Just think: foreign auto makers are opening new plants, one after another after another, and make good business. What’s the difference between Alabama and Detroit? Just one – no unions down there, and the foreign auto makers want to keep it that way. One of the reasons for Daimler to part their ways with Chrysler was the UAW demand to open Mercedes plants to them.
The funniest thing is, one way or another, UAW will die anyway. If they bleed to death the Big 3, they will also go into oblivion because their remaining manufacturing base – Caterpillar and who else? – will be too small to sustain them the way they are. The bailout will just prolong the agony.
The Congress can help. Not by throwing good money after the bad, but by legislating dissolution of UAW. If it could be done to air traffic controllers, it can be done to any union. Yes, the membership will suffer. But if we let UAW to stay, the price will be to high for everyone, including UAW members. If we help the Big 3 to hire hourly workers directly, there will be jobs – not as lucrative, but still decent jobs. There will be benefits – yes, the workers will learn the meanings of HMO, copay, deductible, and coverage limits – just like most of us had to – but still better than no coverage at all. If most of us regular employees can survive with only 10 days of paid time off in a year, the auto workers also will. And the retirees… I feel for them, but they’ll have to make do with Social Security and Medicare, just as all non-union retirees do. Anyway it’ll happen to them if the industry goes under.
Too bad unions, and especially UAW, are the sacred cow for the Democrats, and Republicans will be in minority for the nearest foreseeable future. But even the Dems will eventually have to decide, if they want to have UAW or the industry. There seems no way to keep both. Just as there’s no way to have the cake, and to eat it too.

Posted by Anonymous | Report as abusive
 

Speaking of bailouts…how much is iraq costing us? Pocket I mean chump change. Bail out the automakers.

Posted by jim | Report as abusive
 

These companies wd be solvent if America had a Federally sponsored, single-payer health insurance system, and a similar basic pension scheme. Although they’re behind on developing fuel-efficient vehicles, they’re catching up, and they’ve already improved quality to the point even I’d consider buying. What’s killing them is egregious pension and health benefits, the costs of which wd be much lower if the U.S. cd ever drop the albatross of ideological opposition to this so-called ‘socialism’. Every other developed country dealt with this sixty years ago. It’s bizarre that America ranks 28th in life expectancy in the world, and yet has the highest health care costs per person on the planet.

Posted by Tatvam Asi | Report as abusive
 

The US automakers should know how to make a better car but no they just keep on building junk! Hondas’ and Toyotas’ they are not! Honda is the company that has the highest rate of happy customers in other words they buy Accords over and over again. Even in Arkansas there are many a family reunions where the Accords cover the lawn! Just ask a person who drives a Toyota/Honda and they will tell you that they will buy another one over and over! They offer the highest resale too!
HUM WHY do thousands of Chevy, Ford, and Chrysler dealers go to auctions praying for the chance to buy a used Honda, or Toyota does this tell you something about H& Ts? They last forever with very very little maintenance other than oil changes ect. The US auto makers should go bankrupt instead of asking for bailout money for their poor products and miss management! Ford dealers could not survive without all the shop fees the Fords bring in $$$$s! Ask a Ford man if he has ever had an modular go out- and how many times he has had his car in the shop. I bought a new Corvette once and the rear end went completely out on it on the way to be serviced and with less than 100 miles on the unit! My brother in law bought a New Corvette and believe it or not the door come unhinged and fell off!!!!! A friend of mine has a 70,000 mile Chevrolet SUV with the transmission out on it, he will not buy a GM product again! For pure satisfaction and resale put your money in a H or T and have some fun for a while!!!

Posted by Mike Crowell | Report as abusive
 

I like drfixu’s comment earlier today. I understand that the Federal Government employs 1.2+million people. Surely we can cut that by 33% and not miss a lick. Like drfixu, I think we should close ALL military bases outside the US, bring ALL our troops home and let western Europe, maybe France for example, police the world for a change, and thereby cut our military budget by at least 50%. I’m tired of the job, for as the old saying goes, ‘no good deed goes unpunished.’ Let Sarkosky get the chaos under control and we’ll just kick back and criticize for a change.

Posted by ken whitley | Report as abusive
 

Since it is not enough to solve the problem and can’t effect the eventual demise…I say NO now and save that 25 billion. Each and every Americans portion of our debt is about $175,000 already and its not looking good down the line…use that money to retrain the workers or prolong unemployment benefits or some program to the benefit of the worker only(they were offered $186,000 each for early retirement a few years back weren’t they?) Now is the time to be solution oriented and not prolong this to the benefit of who? There are still millions of autos that will need parts and servicing down the line, so many of the suppliers will still be able to continue. Its similar to the housing crisis…the builders want concessions…well why not rehab all that existing inventory instead of building new? Isn’t is a supply and demand thing? If they build more now won’t that inventory just compete with the existing supply? Decrease the existing supply and the demand will follow. I am puzzled though about how oil got to $140 a couple of months ago and is now $56….did someone locate some lost oil? Finally, I heard Paulson state that the money wasn’t needed where they originally intended to put it but I also remember he said the financial system would shut down if it wasn’t done that way….well it wasn’t done that way and it didn’t shut down…maybe we should see what the auto industry bosses can do, those guys are supposed to be the best in the business(being paid as they are)and I think they should be reminded that its their job to locate those billions.

Posted by Kath Olmstead | Report as abusive
 

I do NOT favor a taxpayer bailout for the automobile industry. GM and Ford have heard the ‘wolf’ scratching at the door for years and have done nothing of significance in response. Chrysler simply does not have a place in the automotive future. Technology and design have moved on and GM and Ford are stuck in the mud. The US auto industry failed way back when the future was obvious. The taxpayers of America should NOT be called on to reward ineptitude. Again I do NOT favor a taxpayer bailout of the automobile industry, and particularly the UAW.

Posted by ken whitley | Report as abusive
 

These automakers (and also the banks) are businesses, not charities. Why would they need to survive on taxpayer’s money when they can’t run their businesses efficiently? Lets not forget huge pay packet for some of their Chief Executives who are proven to be very good at extracting huge pay packet for themselves, but not good at all in running businesses. And now, they one bailout from taxpayers’ money! What a fuss!!!

Posted by Sad | Report as abusive
 

I can’t imagine giving a bailout to the automakers after they had produced a viable electric car in 1996, the EV-1, and then proceeded to recall and destroy them all in 2003 due to the extremely short-sighted policy of selling more profitable gas-guzzling Sport Utility Vehicles. Imagine how well those electric cars would have weathered high gas prices, or how the technology might have progressed had the program continued.
Although I don’t relish the thought of so many workers in the auto industry and related industries losing their jobs, the Automakers most certainly DO NOT deserve a bailout.

Posted by Molenaar | Report as abusive
 

The U.S. auto industry has for a long time needed an overhaul. Yes, the economic situation has caused a great deal of losses, but that is not the core problem. The auto industry has not changed its basic business core, even as other major sectors have, realizing that they needed to in order to compete with the global market place. Unfortunately one of the main problems has to do with there workforce. Pay and benefits are still based on times in our past that only 1 person worked in a family and 1 stayed home to raise the kids. A time when the American Dream was running full steam. This is no longer the case and has not been for many decades. The unions have served their purpose to get the workers the best possible, but reality is that this level of pay and benefits are not sustainable. Not in this economy, not even before this collapse. The auto industry has to look long and hard on how to make these companies into something they have not been in a long time, strong, lean, a focus on quality, service,and a very close watch on the current consumer needs and wants, and based in reality.
Unfortunately the only way to make the changes needed in current law and contracts is to file for bankruptcy. With bankruptcy they can do the reorganizing that is greatly needed to transform these companies into the icons they truly are. If the government is to give the auto industry or any industry or company any financial help, they owe it to all tax payers to expect, NO demand the changes needed in order to help them survive now and to prepare them to be able to build their futures and ours, not on sand but on solid ground from the bottom up.

Posted by sky peterson | Report as abusive
 

Although taxpayers helping private business is unpallatable to any American, we have to realize that we are in danger of loosing the largest domestic manufacturing base we have. Further, the human, social, and real dollar cost to every one of us of failed domesitc auto companies will absolutely be catastrophic. This will damage evereyone in America, not only those who are employed by the industry.
We must prevent the unorganized an uncontrollable failure of this industry in America and we must act immediately. Any plan must have an exit strategy for the taxpayers, and the taxpayers must earn a return, but this is only possible if we have a domestic auto industry. Failure to do this will leave us all picking up the pieces of 2 million plus lost jobs and the attendant catastrophe in all corners of our economy.

Posted by Paul | Report as abusive
 

Sometimes an alternative, while not a good thing, is the best of two evils.

The late Maurice Chevalier once said;

” While growing old is sometimes depressing, the alternative is much worse “.

” While aid to the Big 3 auto companies may not be too popular, the alternative is much worse “.

Some, many, have predicted that if the big three were to collapse, five million direct and at least another ten million supplier jobs, in the US and Canada, would disappear overnight. As well another million and a half retirees would suddenly be left with no pension income and no health plans.

22 % of the total North American GNP would be instantly gone!

We could then be very close to an out and out depression!

I respectfully suggest there is a way to help these companies to immediately sell hundreds of thousands more new and used vehicles, AND NOT ONE PENNY OF OUR public monies would be injected directly into GM, Ford & Chrysler to pay pensions and health plans for retirees and multi million dollar severance packages for executives.

This is how I would suggest this be accomplished;

The US and Canadian governments grant anyone – individuals and company fleet vehicles alike – a $5,000 tax credit for each new and up to 3 year old used vehicle that they purchase.

This tax credit would be a direct deal between the governments and the buyers and the buyers could still cut other deals with the auto dealers like “ thousands off “ and “zero percentage financing”.

NO PUBLIC MONEY GOES DIRECTLY TO THE AUTO COMPANIES!

This initiative would result in the immediate sale of hundreds of thousands of vehicles – which, after all, is the main objective.

AND other positive spin-offs – hundreds of thousands of less “green” and some unsafe vehicles would be taken off the roads immediately thus adding to a cleaner environment and a little less dependency on foreign oil.

To those in the auto industry who may complain of Government subsidies and protectionism – while you have a point, drastic times call foe drastic action.

Respectfully submitted.

Posted by Ted | Report as abusive
 

I think that GM, Ford & Chrysler should go to Toyota & Honda & ask for 25 billion & see how much help they get.
Get rid of the Unions & maybe the US Govt. will loan the money. Congress should look at the Auto Industry hard before they shell out that much money or read what the public has to say. Read what the public has to say is not in their(congress)vocabulary.

 

No, they should not be bailed out, they should be jailed for ripping off the american people and made to sell everything they have and then get a 8:00 to 5:00 job and live off less than 400.00 a week like a lot of us. that bail out money should go to help people losing their homes and paying their bills.

Posted by sage | Report as abusive
 

The most important thing is to make sure workers are compensated at the same level as the competitors — Toyota, Honda, Volkswagon, etc. Executive compensation should also be in line with that of those companies. The companies do appear to be concentrating on green vehicles. That also must be a part of their business plan. If bankruptcy is needed to achieve these objectives, so be it but how will bankruptcy affect the no. of jobs and the saleability of the autos. With the right kind of advertising they may be able to convince the public that all the cuts in salaries and wages will mean bargain autos. They may also need a written guarantee from the government that spare parts and service will continue to be available.

Posted by Gordon Johnson | Report as abusive
 

Reduce hourly wage and benefits to level of competitors. Reduce the ratio of executive compensation to hourly compensation to the historical low.

Posted by ultima | Report as abusive
 

No bailout under any circumstances. The mess they are in is entirely their own doing. Unions are not at fault. The lack of health care reform is not at fault. The companies themselves are at fault. They talk like capitalist, until the butcher’s bill arrives. The companies elected to make the same ol’ product because they thought they could get away with it. Clearly, their model does not pass the sniff test in the market place of ideas. As Roy Batty said, “Time to die.”

Posted by Mike Nomad | Report as abusive
 

Why not everybody go bankrupt?
Erase all jobs. Then what?

Posted by why not everybody go bankrupt? | Report as abusive
 

I am a GM retiree and I would like the Government to bail out GM and Ford’s. Chrysler borrowed and paid back the government once before. I depend on my Pension check.
Our people of USA should be buying ‘Made in USA’ products, but everywhere you look products say ‘Made in China’. If the government bails out GM and Ford then a credit could also be given to the American people to ‘ONLY BUY’ the ‘GM, FORD, CHRYSLER CARS’.
I worked for GM 35 years and I need my pension check – I deserve it!
Granted the auto companies listened to some bad advice along the way – just like our government – EVERYONE makes mistakes.

 

Would you pour water into a glass cup that had a crack on the bottom of it? Will pouring more water into it solve the problem??? That is essentially what you are doing if they decide to give money to the big 3.
We should not reward bad decisions and greed.

If you sell Doughnuts but no one wants to eat them because they found other shops that sell doughnuts that taste better than your…then you either sit there and hope…until you go out of business or QUICKLY find a way to make your doughnuts taste better than the competition. This is the way things work. Unfortunately, the big3 did not choose the latter.

Posted by James Choi | Report as abusive
 

Listening to all this, I (your basic professional woman who owns cars made by Honda and Acura) think no amount of money can save these companies while they are obligated to pay the pension and health benefit obligations on their books. If I were running one of these companies, I would dash as fast as possible to file for Chap 11 relief in order to get out of or reduce these obligations, and go on with life. Frankly, I would be much more inclined to buy that corp’s stock (as opposed to the non-filing companies) since I don’t believe that any amount of retooling will make them stable if they don’t reduce those obligations. Contrary to the nonsense I have heard about consumer reaction to a Chap 11 filing, I would buy a car from that company if I otherwise thought the car was a good car. And since the oil companies depend on these guys making it, if my Chap 11 company throws in 6 month’s worth of gas (gratefully provided by an oil company of the consumer’s choice), I will probably be less fussy about the car.

Posted by map | Report as abusive
 

“All three CEOs – Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler – exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM’s $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone.

It is one of eight luxury jets in the GM fleet that continues to ferry executives around the world despite the company’s dire financial straits.

Wagoner’s private jet trip to Washington cost his ailing company an estimated $20,000 roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class.”

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
 

I fear the government will pay to keep 3,000,000 people or so working but the product will pile up with no buyers. Cars need customers with money to justify their production. The auto makers can shift production to build trucks and construction equipment for government make-work projects as part of a real bail out. Giving the same old auto executives more money to continue business as usual will do more harm than good.

The auto market has people who don’t need cars and people who can’t afford to finance cars.

Posted by Christopher | Report as abusive
 

The Goverment has a limited role – Guaranteeing the pensions and health insurance for retirees and displaced workers.

Reorganizational bankrupcy is required so the Big three can emerge with cost structures competative with forign competition.

Posted by Andy | Report as abusive
 

and just where do people think this pay back money will come from!! the people need to take a stand and not put up with it, if all would stand together it Could be done…america needs to wake up, and all the CEO’S should take a short walk to a jail.. we the people will pay for it, just like all the rest of the crap our taxes go for and we have no clue what they spend it on.. they could have made cars that cut fuel cost, They did not want too..

Posted by rain | Report as abusive
 

Unfortunately, the auto industry has been running hard for years just to stay in place and hasn’t been able to. If the companies were worth anything someone would have stepped in and bought GM for cheap at $3.00 per share. Everything sells at a price if it has ANY value. GM isn’t worth the debt obligations on it. A prebankruptcy government loan is a transfer payment from taxpayers to GM’s creditors and employees. Like the airlines, once one of them goes through bankruptcy and comes out a competitor without all the baggage, it will make it more difficult for the others to avoid the same fate.

Posted by Mark Simpson | Report as abusive
 

“During a hearing Wednesday before the House Financial Services Committee, Rep. Brad Sherman, D-Calif., asked the three auto chiefs seated at the witness table before him to raise their hands if they had come to Washington on commercial airliners. No hands went up. Then he asked if any planned to sell their corporate jets. Again, no hands went up.

Sherman and Rep. Gary Ackerman, D-N.Y., told the auto executives they were having a hard time justifying to their constituents bailing out companies whose chiefs fly around in expensive private jets.

Ackerman said there was “a delicious irony in seeing private jets flying into Washington D.C. and people coming off them with tin cups in their hands.”

Posted by Mike | Report as abusive
 

Absolutely Not!!!
This is not a bailout of the US automotive industry. It is simply a bailout of the UAW who destroyed the US auto makers in the first place. Palosi and Reid would never have survived their pathetic political careers without the unions or the mentality associated with it, “create a sense of protecting the little guys,and we can exert tremendous political power unfettered and our greed will go unchallenged by the masses”. The Dems want the continued support of the unions and will do and say anything to get that support. Are the unions going to get something that the Dems promised them again,this time around? Do the Dems shake in their shoes thinking maybe they can’t deliver to the unions. And now that the Dems have won this election, skewed by the MSM, will we also be hearing bail-out requests from the Main Stream Media? Probably, since they are having such a hard time selling their liberal rags and are themselves failing financially. What about free enterprise and competition among all entities of the WORLD. We no longer have even one US auto manufacturer who is in the top ten rankings of auto producers. Let the dinosauers die. Let free markets rule.

Posted by Thomas | Report as abusive
 

The tree company that I’m working for is struggling right now, can we get a bailout?

Posted by Dan G. | Report as abusive
 

Back in the late sixties – early seventies, companies like Honda, Toyota, Datsun began to compete with U.S. auto makers with cars that were affordable and offered very high gas milageage per gallon. Why should we bailout companies like Ford, G.M., or Chrysler for not competing for thirty years? why are they even making “Hummers” or SUVs period? And then charge us just as much for it as an imported vehicle? Let them fall, they have already failed and put only the workers on welfare instead of the CEOs and entire industry.

Posted by Dave | Report as abusive
 

Arguments for and against any manufacturing industry assistance program is a moot point for the next 2 months. Paulson has made it abundantly clear that he intends only to bail out Wall Street while the rest of the nation waits for the trickle down. No one will miss him when he is canned in January.

As for US automakers, they have no excuse for their incompetence. Their product portfolio for the North American market is shameful, with only a handful of vehicles that achieve over 25 miles per gallon in mixed city/highway driving. Now that they can no longer sell their oversized gas guzzlers and retro-muscle cars, dramatic changes are needed. This would be nothing less than a complete reorganization of the auto companies, including not only major divestment of plants and employees at all levels, but also substantial change in corporate mission and operating procedures. One could argue that it doesn’t matter who does this (federal officials, the bankruptcy court, or new private investors), it will be painful and expensive for everyone.

But events in the last two weeks should alert us that asking for assistance from the Bush administration doesn’t gain you anything if you aren’t in political favor with the administration. What’s more, any bailout architected by Paulson would throw money at the problem-makers without forcing solutions to the fundamental problems. Paulson has done more damage than good so far with his “TARP”. He as actually made matters worse. The bailout money that has already been blown on the likes of AIG has gone toward everything but what it was advertised to remedy, instead being funneled into stock buyback programs and executive compensation. Has anyone at AIG been fired for their shady dealings? Clearly any plan that allows the Bush administration to manage assistance for automakers is a recipe for more disaster.

Let us hope that world leaders lay out regulation and incentives that help private industry create long-term value for everyone rather than volatile short-term paper wealth for the politically connected.

Posted by Michael | Report as abusive
 

Didn’t the Airlines file for Chapter 11 a few years ago? And did the economy collapse because of it? Even Mitt Romney, known for his ability to help companies in distress, has said the auto industry needs to file Chap 11. They need to clean out those overpaid, uncreative minds that can’t see beyond their perks! They need to bring in new people with ideas other than more gas guzzling SUVs.

Posted by Roger | Report as abusive
 

OK, if the bailout is granted, is the “top management” willing to take a 80% pay cut or take home a meager pay check like that of a shop floor engineer?

Posted by Larry | Report as abusive
 

Let e’m go, they do not deserve a bailout. They are ignorant and can’t change thier old ways. Coming to town to ask for money without a future plan for viability is like coming to a shoot out with a pistol and no bullets.
Send e’m home to work it out amongst themselves and may the best man be left standing.
First question they have to ask is “why have we lost market share, doh”

Posted by Mike | Report as abusive
 

Given that the CEO’s have collectively stated they are burning cash at a rate of 8 billion a month, the proposed package will buy them a further 3 or 4 months. Where is the plan to say how they will restructure so significantly that this will be reversed? I don’t believe it is possible for that to occur in that timeframe.

Perhaps the US should have a look over the shoulder at what happened in the UK when they tried to rescue the car industry there. Most of those companies wound up nationalised, then collapsed anyway.

It cost hundreds of millions of pounds, and achieved nothing.

You have Chapter 11 in the US – they should use it to rebuild a competitive industry.

Posted by Warren | Report as abusive
 

Mike posted an excellent comment! I couldn’t stop laughing.
How about they sell the jets, all of their real estate, and more assets they all have combined, and they will come up with the money they need. If all three companies sold all the extras they have and do not need,no, we should not have to bail them out.

Why didn’t they design the smaller, more fuel efficient car 10, even 15 years ago, when Toyota was on the rise?These idiots don’t know how to compete I guess.

Japan must really be laughing at us now. Hey, maybe the Japanese will come over here and take over the auto industry.

Sell your assets!!!

See, this is where a life style of GREED will take us.

Posted by Cindy | Report as abusive
 

Every employe of Big three should consider themselves as owner of their company with highy motivated without any expectation regarding their salary by great sacrifice by reducing their monthly salary, benifitis by 60 % of their cost to the company. It should starts from the top to bottom. Big support needed from unions, directors should relenquish their salary to 60,000 dollars maximum. The challanged can be met by combined efforts without giving any unfair advantages to the HR department, suppliers, directors. Great organisations cannot built up without great sacrifice, emotional attachement to the company, determination.*

 

As a person who would be affected by the bankruptcy of the auto industry, you might say that I have a vested interest in their survival. Well, I do. It is true that the auto companies should have been making hybrids and alternative fuel vehicles years ago, instead of the SUVs and trucks that are currently manufactured. And as is the case, when the public’s requirements in new vehicles changed, the auto companies were slow to respond.
As I said, I do work in the warehouse of one of the auto companies. I do this not necessarily by choice, but by neccessity. The area where I live has high unemployment due to a lack of jobs. I drive 50 miles each way every day to work. Again, not by choice, but because I have to. It’s the only game in town, so to speak. It’s easy for senators and others who don’t rely on the auto industry for their livlyhood to say “Let them go under”/ perhaps you’d feel a little bit different if you had to depend on these “dinosaurs” to support your family and to survive.

Posted by Rick | Report as abusive
 

Today, these 3 auto giants are before the committee and tomorrow, there will be a thousand more Companies big and small who will line up for bail-out. And what about those individuals who lose their jobs? Who is going to provide the bail-out?

Posted by Sunit | Report as abusive
 

Is there only two alternatives??? 25 billion bridge loan or Chapter 11 ? Is that all this world leader of a nation an come up with? Come on, we are smarter than that! I am sure there are many plausible alternatives besides those two that might be far better alternatives. Our legislators can put together a package of anything that they want – they have the power to put pass a temporary emergency legislation law bill for automaker assistance.
One senario might be: structure a bridge loan to each automakers need with tight conditions on that loan. Loan conditions being: During the loan and until the loan is fully paid back (1) Senior executive management compensation will be reduced by some percentage. (2) Middle management compensation reduced by some percentage (3) Union workers compensation and benefits reduced by some percenage. (4) An agreed upon independent audit of the company to review operations and make recommendations that would lead to future viablilty of the company- possible cost reductions -reduction company model lines, etc.
Also, an assigned tight government company/loan oversight board uring the loan period to ensure that the company is following guidlines duringthe loan period. The oversight oard wouldhave the responsibility of making timelyreports to congress /american public. Any future assistance would be dependent on progress of the company to progress in becoming more financially independent.

Posted by Alan Greber | Report as abusive
 

Hi
i think that somebody will have to take the poison pill and let ford and gmc fail and then see what appears on the other end of the tunnel But i don’t think that current management of both these company’s have the courage and the balls to take that action with all the money spent rescuing these companies we could start from scratch and have maybe 5 or 10 smaller companys but more specialised and more dinamic.

Posted by harrison | Report as abusive
 

Why not ask everyone that has a job tied to the auto industry to pony up some bucks. Will any of the retirees or current workers be willing to throw $2-5K of their money into the companies to keep them going? I worked at GM in Kansas City back in the late 70′s. I couldn’t believe the mindset of the unions back then and the horseplay that went on. Heck on friday nights, there was whiskey bottles stuffed in carberatuors, there was apple cores and trash stuffed inside fender wells, I watched a union worker shoot long screws through the roof of cars mounting dome lights because he was out of the right length – it wasn’t his job to get the right screws. There was no sense of ownership by any of the union employees. I was paid over $18.00 and it was 1978. That’s what the current Alabama Hyundai workers are making today. Yeah the money was good back then, but as a young man I didn’t think the industry would survive with people like that. So I left and 30 years later guess I was right. The industry is on the verge of collapse. I worked 20+ years for Honeywell in the maintenance department for a non-union plant. We could send 1 maintenance man out to change a pump – something our counterparts at union plants couldn’t do. They would have to send out an electrician to unwire it, a plumber to unhook the plumping, a mechanic out to remove the pump, a laborer to clean the area, and then do that in reverse to install a new pump. We would send one man out and do the job in just a couple of hours. The unions have structured the jobs in detroit with such stringent guidelines it’s a wonder they all have had jobs this long.

Posted by Roundup_Logan | Report as abusive
 

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