Bailout for automakers?

November 17, 2008


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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Hey – I haven’t seen one of the Big 3 send out a memo and ask for help and support from the employees, retirees, and the UAW. I haven’t seen the labor/management sit down at the table to see what the 2 can work out between themselves. If it’s such a good thing, then why aren’t they scrambling internally to make things work. They just want to keep the status quo and believe they all “deserve” what that is. High wages, protected jobs, luxury benefits, etc. etc. I think there’s other alternatives to this problem than just throwing my money at it for them to keep doing the same thing. I believe it was Einstein that said the definition of insanity was to keep doing the same thing and expect different results.

Posted by Roundup_Logan | Report as abusive

Absolutely the US auto industry should be bailed, no question about it. The bottom line is what matters, millions of jobs lost, millions more families destroyed, an American icon our auto industry folds and the cost to the US economy ifs far greater than this bailout. The main thing to get this done correctly is to put alot of conditions on it and make sure none of these big execs get any of the money. This should be for the industry to survive and the auto workers that build the cars along with the thousands of suppliers that supply the industry that would also fail. This is not just some hand out for the CEOs of the industry, this is to prevent further unemployment and an American industry.

Posted by Democrats 08 | Report as abusive

GM has many assets it can sell to help obtain cash to help their situation. They must do what ever it takes that includes top brass removing the glass slipper.

Posted by anonomis | Report as abusive

I liked what Rep Sherman said as this tells me he is not one of the ones in his field that uses a helicopter to go to work himself. Yes help them but only if they are willing to kick in themselves. First drastically reduce the perks at the top and second you have to take down the workers pay as it is way over average. It’s sheer folly for the leaders of Ford and the UAW to beg to congress both totally unwilling to do a trick for food. If they won’t let them go. We’ll get over it.

Posted by Bob Arkansas | Report as abusive

Roundup Logan has it right.
The key is the Unions. Hello anybody!
They must make concessions. They are the reason why the Big 3 cannot be competitive.
People forget that for the longest time there has been a fine line between turning a profit and losing money. Only by big volume were they able to survive.

If the UAW does not want to play ball, the Big 3 must play hard ball. Even at the point of filing for Chapter 11-Chapter 13.
Then somebody else like Tata Motors or VW will step in to pick up the pieces of these behemoths.

But it is not up to the tax payer to bail out, what was causes by uncompetitiveness and which can be resolved by normal market forces.
Let them go. And they will be resurrected into profitable mean, lean and competitive companies.

But Dems of course are in the pocket of the Unions so I am not holding my breath. And so we will see a bailout, and 3 months down the road again, 6 months later again and again and again.

Posted by rudolf | Report as abusive

I am for a large bridge loan to the car companies. BUT with the exception of Nardelli, the other three came off as clowns. When asked if they would forego their salary until the businesses became profitable, Mullaly and Wagoner balked, but Nardelli said unequivocally “Yes”. They all refuse to admit their part in the failure that has occurred, and instead talk about which of their recent changes seem to be successful. The UAW has offered to give nothing, instead saying “we cut our retirement burden by 50% two years ago”, as if to say “we did our part, don’t look at us.” The Execs should forego salaries at least until 3rd quarter 2010, and the UAW should agree to a cut in all benefits by 10% during the same time, and Congress should change the quota system, which has up to now permitted the car companies to produce large gas guzzlers and small dumpy cars. And THEN, Congress should bail these guys out.

Posted by John Inc | Report as abusive

First to agree that seeing the big three go down the tubes. If that happens, who do we buy tanks from when we go to war?
These guys in the top slots in all most all industries being paid 15 million dollars per year? Insanity, stop bashing the unions, Regan broke the backs of the unions when he fired the air traffic controlers.
If you think its bad now, what do you think its going to be like, now that the great divider, G.W. Bush has turned the reins of the economy over to the E.U.? Which he has done, according to an articile by Dick Morris, who all so stated, with friends like G.W. Bush, who needs enemies?
The USA is going to be dam lucky to surive as a free nation, since China now owns more of our debt than Japan.
IF the big 3 is bailed out, it needs to be done with strict oversight, including how much the bigs shots get paid, as well as the guy screwing the bolts to hold on the fenders.
Let face it, now that all these wonderful free trade orgs. that have sucked the jobs out of the USA are in place, can we as a nation afford to see another 3 million jobs go down the sewer pipe?
If the bail out takes place, the forward thrust needs to be in cars that get 40 miles per gallon, no how many GPS toys can be installed, lets face it, do you really need a 10 disc, quad sound, a.m., f.m., GPS guide bemoth to drive to the train station to go to work? Or take the kids to the ball games? Or go to the super market to take home the food, grown in Mexico and Chile? Since we do dam near nothing except consume in the USA any more.
Hooters and Wal-Mart cannot support the USA own their own.

Posted by james sexton | Report as abusive

Complex issue with tremendous ramifications for sure, why is it “The Democrats” are finalizig a rescue plan? Where are the republicans?

Whatever is done or not done we will all live with what results and a bipartisan approach going in would at least promote a spirit of cooperation for the long struggle that lies ahead.

Posted by John | Report as abusive

No bailout, bankruptcy. Ralph Nader should then be appointed to the federal bench specifically to serve as the bankruptcy judge for the immanent reorganization of the auto industry. Who could be better than Ralph Nader to oversee the transformation of Ford, GM, and Chrysler from profit-hungry wasteful dinosaurs to lean and green transportation production outfits? Ralph is a lawyer (qualified to be a judge) and already knows all the ins and outs and legal snares that will have to be unravelled in the labyrinth of Detroit executive organization. The car company lawyers will have no chance of manipulating Ralph, nor can they intimidate him. Once Ralph is through with the big three, you won’t recognize them and they will be producing vehicles that are safe, practical, and efficient.

If the Obama government does not want to go through a bankruptcy with the automakers, then it can use Ralph in another way. Why not buy up all the auto stock and simply take over the companies and hire Ralph as CEO of GM? The price of all the outstanding shares is so low now that the cost of simply buying the companies outright would be far less than all the loans being considered now, Fire the current management and with Ralph as the new head of GM, he could lead the green revolution that the auto industry has so long avoided. One could not imagine that Ralph would keep on making gas-guzzling rollovers or that he would brutally screw all the pensioners and slice off workers’ health care. We know Ralph would not require excessive compensation; he could be a model for the next generation of corporate managers.

Barack Obama recently made a big show of pledging to work together with John McCain, Hillary Clinton and other political rivals for the common good of America. Old foes working together to forge a new and better future. What better opportunity to prove this position than by putting Ralph Nader and the auto industry together in a common cause. Detroit has been asking for this for over forty years. America is ready for it.

Posted by eddie zawaski | Report as abusive

NO BAILOUT (yet): Severe structural changes are required for long term success and they can be achieved in Chapter 11. Later, the government may have an important role to play in providing DIP financing to avoid Chapter 7.

It’s easy to say that “It’s management’s fault”, but that doesn’t make it untrue. And although manifest hypocrisy doesn’t prove anything, management did claim credit, in words and in sinfully large amounts of money, when things were going well.

Let ‘em go bankrupt… it’s the best thing for the companies, the country as a whole and for the workers, as long as it’s Chapter 11 and not Chapter 7.

Posted by DaveF | Report as abusive

A Japanese company ( Toyota ) and an American company (General Motors) decided to have a canoe race on the Missouri River Both teams practiced long and hard to reach their peak performance before
the race.
>On the big day, the Japanese won by a mile.
>The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.
They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rower. There was discussion of
getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the
next year’s racing team was out-sourced to India .
Sadly, The End.
Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can’t make money paying American wages.
TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter’s results:
TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.
Ford folks are still scratching their heads.

Posted by gaella | Report as abusive

The Big 3 domestic automakers must be bailed out. First of all if the so-called taxpayers think they are footing the bill, it is not a bailout, it is a loan, to be repaid with interest. If the loan is not made it will force GM and Chrysler into almost immediate bankruptcy. Their bankruptcy will then force suppliers into dire straits and their collapse will bring down Ford as a result, as they will not be able to secure the parts needed to build their vehicles. Then also as a result, Honda, Toyota, Nissan etc risk collapse of their North American operations because they use a lot of the same suppliers as the Big 3 do. North American auto production will vitually cease for a year or better. The imports may rebound in time, but in the interim the demand will far exceed the supply of autos and the consumer will pay more for the product. Parts for all those who currently own a domestic will be sold at premiums as they would no longer be produced and you would have pandemonium. Secondly, you as a result will now have about 5.5 million people applying for unemployment benefits and another 2 million in addition applying for medical benefits. The State of Michigan would be in collapse and need Federal assistance because of the lack of property, sales and income tax that would no longer be collected by those individuals and corporations. In short the federal bailout of all these people and the State of Michigan would far exceed the 50 billion that they are asking for, so the taxpayer in essence would be in worse shape.
Also, we have spent the last year harping that we need to rid ourselves of our dependence on foreign oil, but it’s ok for us to be dependent on foreign cars? That doesn’t make sense. The Big 3 is our largest manufacturing base, we cannot continue to survive on credit default swaps to fund our economy. The collapse of this industry will certainly effect us all in a very negative way. Traditional economic ideologies do not apply in this situation, the consequences are too dire.-

Posted by Mike Sur | Report as abusive

To get the scope of this solution, begin by looking at what GM and Ford are currently offering in Europe, look at the quality and mpg they offer: and

They both are manufacturing a wide range of cars and trucks that get 50+ and 60+ mpg.
These autos all meet the EU regulations on safety and emissions; these are fine autos. While I haven’t looked, I’m sure that other manufacturers are also making equally fine automobiles for both the asian and european markets. This is current engineering and tried and true manufacturing efficiencies. Why the difference from the US market? Lots of reasons… but we are looking for solutions to our current problem with GM and Ford so lets continue. However, remember these levels of efficiencies are what we are looking for in the far future. They are available now in a win-win solution!

But first:
GM, Ford, and Chrysler want the tax payer to bail them out of their problems. They indicate that the costs of loosing one or more of them is more than the bailout request of around 25 billion dollars, or more. GM at least is saying that bankruptcy is unacceptable to them, even though history and the very intent of the law says otherwise. I believe Chapter 11 is the only way they can shed their higher legacy costs, a step that is needed in today’s competition. I also believe that giving them money will not secure the employment of workers. We need to have sales to prop up production, that is the only way to ensure employment.

Chrysler is owned by Cerberus, a private investment firm; they also own half of GMAC. I see no reason to support a private group with tax payer money. Any production or labor lost with their collapse will either be taken up by the remaining firms or is a level of over capacity that will be lost anyway.

Here’s what we can do:
Production / Employment support:
-Allow them to go into a reorganization plan if that is the result of their missteps.
-Contract with them for production of those same cars that they currently make for the european market at say 50+ mpg for cars and 30+ mpg for trucks. Use that 25 billion to buy over a million autos… adding nearly 20% to their current production levels.
-Allow these “World Cars” to be made with their current engineering and manufacturing so that development costs will be nil to only slight costs. All the EU rules offer a safe and efficient, and low emission auto. We need to work to minimize costs of production everywhere, and this is a swell way to truly present a world car and truck.

-Re-sell these autos to retailers, financial markets, car rental, lease, and temporary alternate transportation firms such as “Zip Cars”. Offer them at discounts and on a consignment basis, thus negating flooring costs.
-Consumers will be able to least, rent, purchase them at discount, but only with a “disposal agreement” for recycle of an old auto that had less than say 25 mpg; trucks 15 mpg.

-Real stimulus by a large order to produce autos so that employment will be supported. Forecastable & controllable cost at a net amount, say 2 to 5 billion.
-GM and Ford will be able to obtain bridge loans or DIP loans to maintain them through re-organization and re-tooling. Likewise all their suppliers would have contracts in turn from GM and Ford to support any needed borrowing they might require.
-Public purchase of these discounted and efficient autos will occur, and we will want additional cars – once they have been produced and on the roads. The complaint from the auto makers that they were only fulfilling the market demand with large pick-ups and SUV’s is specious. The public demanded them because of advertising and marketing. Let them earn a living from economical cars as they do in Europe and you will see demand quickly shifting.
-These highly efficient autos happen to be diesel. This will give a kick start to bio-diesel and alternate fuel production, that will in turn give us additional support in the drive to cut petroleum. We’ll not only reduce consumption by increased mpg, but will further cut imported oil with alternate fuel. While we want to quickly go to electric power, this can be in that same path; and with a very efficient hybrid (diesel/battery), a system currently being beta tested in Europe by several manufacturers.
-Emissions will decrease; petroleum use will decrease; financial activity will increase.
-We will also demonstrate that we can work with foreign countries in obtaining economies by acting in concert with them in auto regulations. We can drive to Bretton Woods in our new World Car!

dump the union turn every thing over to the ceo’s at toyota and they will educate them .toyota can make any thing that the big three can make.

Posted by gene | Report as abusive

US auto makers are Troglodytes. Out of date, out of touch. Destined to die. No amount of cash will save them. For the simple reason that smart, talented people do not go into cars any longer. Let Koreans and Chinese take over and give us cheap, reliable, cool-looking automobiles.

Posted by ginger | Report as abusive

Bailout will NOT save jobs. OK for only 1/2 year maybe. Is it worth it? NO, NO and NO: the amount of money available for investment is limited, throwing 25 bil down the crapper means 25 bil less for viable (profitable and growing) projects. The automakers in the US will not change because: talented and clever americans don’t go into cars. Only stupid and unambitious do (just look at those 3 faces at the hearing – imbeciles all)

Posted by Millicent | Report as abusive

Absolutely not!!! let them use the courts, file for Chapter 11., get their act together so they can go ahead in the world for the 21st Century. We cant bail out every Tom, Dick and Harry that wants a handout.

Posted by Lee Bane | Report as abusive

Lee Iacocca went with no salary when he negotiated Chrysler bail out. These guys have been paid millions for their mismanagement and won’t give up anything???

Folks are being laid off in the thousands in the financial industry. Non big-three auto workers earn far less in pay and benefits. And these workers won’t give up anything???

If putting them out of business is undesireable, then at least make any aid contingent on serious concessions by both executives and employees. Anything else would be a complete sellout of the electorate by the government.

Posted by be_tough | Report as abusive

No!! We cannot bail out every Tom, Dick and Harry who wants a handout. Let them file for Chapter 11, regroup and go forward in the 21st Century to compete with the world

The majority of the opinions against the bailout of the Auto industry revolve around the fact that union employees cost more than non union employees of foreign companies located in mostly Southern states. This is where wages of any kind are welcomed because the alternative is minimum wage jobs at Wall Mart. Essentially the American worker is again being told that globalization is good for him and that in order to keep his “new living wage job” he should work for less and that he is lucky to have a job that pays like Mexican, Korean and Chinese workers and be happy! Of course no one remembers that the 8 hour work day, 40 hour work week, paid vacation, paid holidays, retirement pay, health insurance, work rules and many other progressive workplace benefits taken for granted, were not the result of corporate benevolence or globalization, but of hard won concessions fought for by unions. These benefits are one of the cornerstones of what has become the middle class and we are now asked to lower our living standards in order to survive. There is plenty of blame to go around and the government is one of the biggest culprits because for the last 40 plus years they have promoted the interests of the few at the expense and detriment to the many. Our trade policies are the laughing stock of countries like Japan, Germany, China, Korea and many others because we opened our markets to their products but they have not reciprocated. How many cars made by American union workers do we sell to any of these countries? Yes we sell Boeing airplanes and Caterpillar tractors and even some microprocessors to these countries but all these items have increasing local content as a condition for their purchases. And ultimately they will be made entirely of local content because their goal is to capture high valued items so that they can create high, by local standards, paying jobs for their immense population. This problem needs serious attention that has been lacking in the last 50 years, from all parties, labor, government and corporations. Here is a statistic that is worth pondering in 1953 75% of the cars made in the world were made in the USA, today it is likely the reverse of a much larger market. But no one in their right mind then would have believed that that situation would last forever. The trick obviously has always been how to get from there to the new reality without marginalizing a large segment of the population namely the middle class. If foreign workers are happy to work for serf wages that does not mean that American workers should compete with them on a race to the bottom.

I totally agree with Mike Thomas’s suggestion below…the American auto companies know exactly what kind of cars to make to attract American drivers…they just don’t want to spend the money to re-tool their ancient, sprawling factories. However, I believe this bailout –in the form of loans– should be accompanied by massive government oversight, so much that the CEOs and other executives should go to sleep in sweats every night…not unlike many other suffering Americans. The Iacocca standard should be gladly adhered to by the executives: 1$ a year in salary until their butts are out of the fire. That also means flying Southwest and eating at McDonalds. Also, FIRE THE OLD DESIGNERS. Nobody buys lumbering, inefficient Buicks anymore.

Posted by Dylan | Report as abusive

They need to take advantage of the Chapter 11 bylaws, etc. Under Cap 11 they can regroup and eliminate the practices that have led to this disaster!

Then come out with the changes needed to compete in todays and tomorrow’s market!

If they need a loan after reemerging, then the Gov’t (taxpayers) could possibly grant a loan. To loan money satus quo – will not solve the problem!

Posted by randy | Report as abusive

Absolutely no bailout of any kind. The Big 3 are the epitome of leaderless, mindless, trend-following, obese & cost ineffective companies in the world. Even Chapter 11 is to good for them but it’s the only hope of purging the terrible union hold on manufacturing and mindset in the companies. After Chapter 11 and resignations by all senior management, then, and only then, should the taxpayer think about buying into the carcass.

Posted by Chief Elf | Report as abusive

Mark my words… This bailout will not do anything other than buy the automakers time to come up with another proposal for aid in ten years . Don’t do it!!!

Posted by ubu | Report as abusive

Although I believe that the situation the auto companies find themselves in is entirely their own fault, (in 2005 GM purchase Hummer and closed their EV electric car production one month later. The EV could have save the company this past year – See “who killed the electric car”), We are past the “let them eat their own stupidity” stage and we need to give them the money for Tax Payer self interest and the over all health of our economy. That said, It’s clear that the companies and unions need a full restructuring and to focus on the fastest way to build / market/sell alternative energy cars and that’s to bring back the EV program by mandate if they won’t do it on their own.

Posted by Kevin C. | Report as abusive

Here’s and idea! Let Chrysler die, and give GM and Ford $50Billion but only AFTER they file for Chapter 11 so the market will know they will emerge an emerge strong. That way they won’t die while in the courts. This will send a strong message of support while they “clean house”.

Posted by Kevin Chase | Report as abusive

Absolutely, we should provide goverment financial support for the U.S. automakers. They are critical to our economy. However, any suppport should be conditioned upon a complete re-negotiation of the labor commitments of the automakers, reducing those commitments in terms of wage rates, pension commitments, health insurance, termination protection and other items to levels which make them specifically comparable with other major auto manufacturers, particularly the Japanese. Without that change, any bailout will fail and should not be given. Also, both senior and middle management should be required to accept long-term cuts in basic compensation at the level of around 20%, with future benefits to be based on corporate performance focused on profitability.

Posted by Steve Merrick | Report as abusive

Cerberus Capital Mangement must be doing handsprings of joy that the US Gov’t is saving their A–, Now the taxpayers have put a safety net under the automakers so they can continue their corporate culture of “What’s good for General Motors is good for the country” Not so, wish our Congress would bit the bullet and let them go bankrupt so they could reorganize in some intelligent mode. Is that too much to ask?

I just read the last four posts and they are all excellent. A few days ago I emailed my Senator, Patty Murray, and told her “Let them go bankrupt, don’t spend my tax money to save them.” The American auto industry has insisted on making cars that were planned to fail at around 98,000 miles, as did my 1982 Buick Century. After that, I never bought an American car again, and my family had always been a GM family. Let them go through bankruptcy reorganization, get rid of the dead weight, and start making cars that will last and that are eco-friendly. Get rid of the corporate jets and the huge CEO salaries, and reward innovation and the employees for making a great product. If they can’t do that, let them all go and instead spend money to help retrain the people who used to work for them. No one would bail out any of us if we operated the same way the American auto industry has!

Posted by Nancy Boddy | Report as abusive

The American auto industry is well worth saving, for many reasons. One reason is that for the past decade Detroit has made heavy investment and steady progress in improving its competitiveness, what it calls “altering the DNA” of American cars. US automakers spend $22 billion annually on plants, equipment, research and development. Breakthroughs are at hand in developing alternative fuel propulsion systems, and our national well-being and security depend upon seeing them through to completion.

If we allow U.S. automakers to go under out of anger, resignation, or ideology, it will only mean all the work and investment of the last decade will be ceded to our foreign competitors instead of being plowed back into the U.S. economy.

Another reason is the industry’s importance to the job market and the wider economy. Automobile manufacturing directly employs a quarter of a million workers and indirectly about one in ten U.S. jobs are related to some degree to the automotive sector, according to GM estimates. So the effects of a collapsed U.S. auto sector would not be limited to Detroit – they would be magnified as the ripples spread to related industries.

If we allow U.S. automakers to fail, millions of retirees depending on auto company pensions will be at risk and auto manufacturing jobs will disappear. The ripple effect won’t end there; millions of jobs in related sectors, such as U.S. manufacturers of steel, aluminum, iron, copper, plastics, rubber, electronics, and computer chips, will also feel the pain.

Worse yet, the promise of a meaningful future for American manufacturing would fade. As that promise dims, the role played by manufacturing jobs as a passport to the middle class would likewise disappear. Simply put, we can’t have them fail now. Alexander Shlepakov

Posted by Alexander Shlepakov | Report as abusive

What is wrong with the US,
You want your Government to give your money to obscenely rich business people, when you can’t even go and see a Doctor in your so-called Democratic country. Give the 25 Billion to small enterprising Business’ that employ many more people and might come up with some new revolutionary ideas. Don’t forget Henry Ford. The belief that large organisations create more jobs is a myth you gullable people all fell for. Take a minute and have a good think about it. Who employs & supports most of middle America? It’s not the corporations, it’s the small business’. Remember the small butcher, baker, fruit shop. How many families did they employ, many more than your mega stores of today. Remember the bulk of a corporate profits go to shareholders & company executives not to the workers. Why bail these fools out, let them sink and give other people a go. Do you realise that corporations usually pay less than 10% in taxes, while the individual or small business has to pay 30-50%. These bail outs are just a redistribution of wealth from the small business & taxpayer to the mega wealthy, and let me tell you many of the owners of your corporations aren’t even Americans. Don’t be fools.

Posted by brad | Report as abusive

This is getting absurd. Congress, and more pointedly the Democrats are dragging this on trying to find a good excuse to get this bailout through in order to save their relationship with their bed-fellows the unions. If these companies file Chapter 11 they can restructure and reorganize and come out better in the end.
The Big 3′s problem is years of extremely bad management and equally bad marketing of their products combined with too much government influence and regulations and union demands all of which has only made them non-competitive. If anyone doesn’t believe this then explain to me why the Japanese can produce cheaper in U.S. than Detroit can, and actually produce in Japan and sell here cheaper.
Congress can’t admit that their trying to solve the auto industry problem is really just addressing the symptons and not the disease. The reality is that the disease is the credit mess plus the excess number of unsold houses which if that isn’t solved they won’t have to worry about Detroit, they’ll be history. Without solving the credit issues nobodys going to buy cars regardless where they are made, or buy anything else for that matter.
Butler PA

Posted by Paul | Report as abusive

Talk about credibility, Nancey presides over congress who is over a TRILLION dollars in debt and has the gull to question the CEO’S of the auto industry. She will get on her 747 and fly to Cal. every weekend. Yep, typical government austerity program.

Offer the auto companies workers substantial unemployment benefits. Offer the companies limited funding while they redesign more environment friendly vehicles; executives get the same compensation as the workers, no bonus plan, no stock options. Benefits fall gradually and drastically after three years. Spend a large portion of the bailout on construction of roads, bridges, etc., and another large section for innovative uses of solar and other alternative sources energy.

Posted by john shelton | Report as abusive

Yesterday, Nancy Pelosi says bankruptcy is off the table. Today, Obama said that he wants a form of “structured/revised bankruptcy” for the Big 3. I didn’t vote for Obama, but I applaud this position. It is a shrewd and effective one. Also, it tells Pelosi that he, and not she, is running the show. Anyone who squashes Nancy Pelosi will get my support. Do it, President-elect Obama.

Posted by Above Average Citizen | Report as abusive

Similar to the banks and financial entities, greed is the business model. Why should we, the taxpayer, continue to save these arrogant shysters, with nothing to show for our efforts except depleted portfolios and increased taxes? I agree with Jubek, let the auto industry enter into a structured bankruptcy and no taxpayer bailout. Enough already!!!

Posted by Janet Calhoon | Report as abusive

we need to wake up and start supporting our country!Eevery other country in the world has pride in their industries like japan does in toyota.We need to take notice before all of are industries gone in the U.S . We need to support and protect our country. Unlees we want to start living like a third world country.Where their is no industries only hand outs from the U.N !

Posted by cilo | Report as abusive

Everybody, you gotta read the post by somebody named gaella, 11:47 on Nov. 20th. Humor like that really sums it up. Congrats on a great little piece of writing, and thanks for the grin you brought to this reader’s face. The last line in Roundup-Logan’s piece, 7:01 a.m., was another that’s right on the button. Way to go, you two!

Posted by June | Report as abusive

If the CEOs are culpable of mismanagement, and they may very well be, at which point do we ask investors to take responsibility for their poor investing?

Posted by Mary | Report as abusive

The USA central bank is the enemy… What are they thinking?
No stimulus yet? – Screw the people, protect our money.
Selling housing debt forward? – Screw the people, lets make a quick buck.
Huge US debt? – Screw the USA, let’s make a quick buck.
Bail outs? – Same banks that own your FED.

Why is this all happening? – Because Americans do not own America.
USA take your central bank back, they are screwing you blind.
Look at who owns your money, the shocking truth will show itself.
They sold and are still selling America!
The worst is still coming, Americans are now going to be asked to fight for their central bank!

Wake up America!
Your businesses are failing because your central bank is being mismanaged.
Think about this… you have two wars running and the dollar is still very strong?
What country gets richer when its fighting wars?
If the strong dollar is killing your auto industry, believe me when I tell you, you are next.
Don’t fight the auto industry; fight the absolutely rotten banking system that is now actually your proxy government.
Don’t spend money on banks, they add no value; spend money on your REAL economy.
You need STIMULUS PACKAGES, yesterday.
Until they there, you the voter insists that EVERY REAL economy company is bailed until the central banks fix monetary policy.
Business is breaking because-non-US shareholders own your central bank.
They don’t give a damn about the USA they are UK and Israeli shareholders.
Take your central bank back and make these rotten bankers pay for every US business they have broken.
You can end up with just one nationalized bank, banks are easy to fix, but you WILL NEVER EVER get your car industry back.
Listen to your politicians on the FED (foreign ownership) payroll and you really will be a third world country.
Did you know that the FED and Paulson changed the USA law so that housing owners could be screwed… yes its true, the old law would not have allowed it to happen. You US treasury is now trying to fix what he broke, along with the war mongering FED shareholders, that are using the USA to fight another countries battles.
WAKE UP AMERICA – the enemy is sitting in Washington.

Posted by Johnny | Report as abusive

Auto manufacturors from foreign lands manufacture and sell their cars under the same legal restrictions as the Ford’s, Chevy’s or Chrysler products.
Management must have had knowledge of the trends and did not submit and even obstructed them. Let the companies reorganise under the bankruptcy laws. They are outmoded.
There will be changes but the auto industry will not die on the day for the application to the bankruptcy court.
Even the dinosaurors died out. But we have oil !
Buffet may be interested in buying those stocks or may be not for reasons of obsolescence.
Are the pensions of the workers fully funded ? I remember the fiasco with US Steel.
W Moller
San Jacinto,CA

Posted by w moller | Report as abusive

Who killed the electric car and how President Obama can save it right now?

**************************************** ***************************

In 1996, electric cars began to appear on roads all over California. They were quiet and fast, produced no exhaust and ran without gasoline………..Ten years later, these futuristic cars were almost completely gone.”

‘Who Killed the Electric Car’ is a documentary which unfolds a complex set of events around the development and demise of modern electric cars stemming from California from the early 1990s to 2006. The film maker, Chris Paine, has woven together interviews and archival footage of over 65 people involved with the events.

The movie starts with a brief history of the first electric cars created in the early twentieth century, and how they were killed off nearly 100 years ago as gas powered cars became cheaper. The movie then paints the current picture of gas car problems being smog and related health problems, CO2 emissions, global warming. Later, the use of the US Military in the Middle East is also mentioned, but the loss of life and financial costs are not mentioned.

The film then moves forward to 1987 when General Motors, with the SunRaycer, won the World Solar Challenge, a solar electric car race in Australia. GM’s CEO Roger Smith challenged the same design team to build a prototype practical electric car which became known as the ‘Impact’ when announced in 1990. The project expanded to small scale production vehicles with the aim that it would give GM several years lead over any competitor car companies.

The Californian Air Resources Board (CARB) saw this as a way to solve their air quality problem and in 1990 passed the Zero Emissions Vehicle Mandate. The ZEV Mandate specified increasing numbers of vehicles sold would have to be Zero Emission Vehicles. “For the car companies there were only two options. Comply with the law or fight it. In then end, they would do both.”

The movie continues to reveal what the car companies and other participants did to kill the concept and reality of the electric car, plus the efforts of EV supporters to save their EVs.

GM started leasing small numbers of the production car, called the EV1, in 1996. Other car companies also produced electric vehicles by converting existing production models and then leased them to drivers. But the GM board of directors never really wanted the car to succeed as they didn’t think they would make profit from the car. They saw losses from development costs and the virtual absence of maintenance and replacement parts which, for gas cars, bring in ongoing profits. They were worried that the popularity of the cars was growing and that other US states were considering ZEV Mandate laws which meant that they may have to convert all their cars to electric drives which represented even bigger losses.

GM initially installed poor quality Delco lead acid batteries in the EV1 and produced advertising that, it is argued, was aimed at repelling public interest.

Car companies argued that using coal for electric power would produce worse emissions than using petroleum. In the film, these arguments were casually dismissed as false indicating that there were studies showing overall emissions would reduce. Emissions would improve due to the increased efficiency of electric cars over gas (plus no idling, & regenerative braking), and the ability to control emissions from hundreds of power plants in ways not possible for millions of vehicles.

The car companies then argued that they would not be able to technically and financially meet the requirements of the ZEV Mandate. Car companies, oil companies and the Federal Government sued (The Justice Dept. joined the suit on Orders from George Bush and his Oil Family) the State of California to overturn the Mandate. The Justice Dept. joined the suit on personal orders from George Bush and his Oil Family. The America people should put George Bush on trial for TREASON.

From 1999 to 2004 Alan Lloyd was chairman of CARB and he presided over changes to the ZEV Mandate. He strongly influenced the weakening of the Mandate’s requirements on the automakers and gave favor to unproven hydrogen fuel cell technology in place of battery electric vehicles. Four months before these decisions were made; Alan Lloyd became Chairman of the California Hydrogen Fuel Cell Partnership. You talk about a conflict of interest and a crooked deal.

Some Members on the CARB board said this was a Bait and Switch tactic proposed by George Bush, GM and the Oil Companies. They said no one wanted the Plug in Electric car (even though it was proven and available right now) and they want to push Hydrogen Fuel Cells, even though all the experts said was at least 20 to 40 years in the future at best.

The film then shows how the Federal Government and oil companies put forward hydrogen fuel cells as a better alternative to gas and battery electric cars. Interviews with two hydrogen experts gave details why fuel cell vehicles are not likely to be available for another 35-40 years, if ever, whereas battery electric technology has been rapidly improving since the mid 1990s and is cost effective now.

One of the concessions that CARB gave the automakers was that they would only have to keep making EVs to meet public demand. Of course, automakers were already obstructing public demand through poor advertising, using an inexperienced sales team and exaggerating the limitations of the car to potential leasees. They argued that the cars had a limited driving range of 60 miles per charge and that consumers would not want to pay more for a car that does less. These arguments were disputed by others as the average daily commute is only 29 miles and the battery technology rapidly improved to increase driving range to beyond 100 miles per charge. Mass production of the cars would further bring down the cost of manufacture.

In 1999, having won some initial concessions in the Mandate, US automakers started shutting down their EV programs. GM bought the rights to manufacture the Hummer, as they saw it would make them money. In 2002 the maximum Federal tax credit for an EV was $4000. In 2003 the same tax credit for a 6000+ lbs vehicle was $100,000. Of course, many members of the US Federal Government Bush Administration were former employees of oil and car companies.

In 2004, as EV leases expire, car companies started recalling back all of their EVs and sent them to crushing facilities to, it is asserted by EV advocates, remove any record of their existence in the minds of the public. The film maker takes a helicopter and flies over GM’s ‘Proving Ground’ in Mesa, Arizona, to get photos of some of the crushed EV1s.

From 2004 to 2005, there are many emotional and rational public protests against the continued crushing of the EVs. Seventy-eight EV1s were found in a GM back lot in Burbank waiting to be sent away for crushing. Protesters put together a list of 80 buyers for the EV1s and offered GM $1.9 million to put them back on the road. GM did not respond to the offer.

The film maker gives a verdict on who killed the electric car:

Poor Battery Technology – Not Guilty
Oil Companies – Guilty
Car Companies – Guilty
Government – Guilty
CARB – Guilty
Hydrogen Fuel Cell – Guilty.

Although the EVs of the 1990s were killed, the concept and technology could not be killed. The film ends detailing the current environment where the future is being reshaped and new electric and hybrid cars are gaining popularity.

Higher oil prices, further entanglements in the Middle East and the increasing threat of global warming are increasing the pressure to reduce the US dependence on crude oil.

General Motors Chairman/CEO, Rick Wagoner was the main guy who pushed to recall all the EV1 and destroyed everyone of them. At this point in time GM owned a small battery company that had the only PATENTS on this SUPER ELECTRIC BATTERY Technology that the whole world has been searching for many years.

Rick Wagoner with all his infinite wisdom sold this little Battery Company along with the all patent rights to manufacture this SUPER SPECIAL BATTERY to Chevron Oil Company. Rick Wagoner conspired with Chevron to purchase these battery patent rights because he knew that Chevron would never let anyone use these Batteries in a Plug in electric car. That’s exactly what Chevron has done. I understand that these Battery Patents will not expire till 2015. America can not wait that long for this Special Battery.

I would like to propose that President Obama and congress never give the automobile industry one penny until they fire all the top management and insist they make a really cheap plug in electric car that the American people can afford.

President Obama should instruct the Justice Department to file an “Eminent Domain” suit against Chevron Oil Company and retrieve all these Super Special Battery Patents that are needed to build the plug in electric car and the American Government should retain the sole title to these patents and then let the American Automobile Industry lease or use them. That way no one else can interfere like Chevron has done to screw the American people out of this much needed battery technology to produce a cheap plug in electric car.

Then the next thing would be install Solar Panels on your House Roof to charge this Super Great Electric Car Battery for Free. I understand that this new battery can drive an electric car well over 100 miles on a single charge and has a battery life of well over 100,000 car miles. Then America can save well over $700 billion dollars a year on imported Oil from the Middle East and then tell them to fight their own wars.

Please go read to and view this movie
“who killed the electric car” : 5871495968130273402

Most of the American has no idea what the problem is with the car companies.

Before you people give to much HELL to the UAW Unions:

The American Automobile Companies pays for the UAW union employees and retirees Medical Benefits just like every other large companies in America.

The cost of these Medical Benefits are outrageous because the American Politicians have allowed the American Medical Ass. and American Pharmaceuticals Ass. to rape the American people year after year. Plain and simple our political Leaders are being bought and paid for again, same as usual.

Prescription drugs cost, on average, 30 percent to 50 percent more in the United States than in Europe. But the difference in doctors’ salaries is far larger, Dr. Goldman said.

Doctors in the United States earn two to three times as much as they do in other industrialized countries. Surveys by medical-practice management groups show that American doctors make an average of $200,000 to $300,000 a year. Primary care doctors and pediatricians make less, between $125,000 and $200,000, but in specialties like radiology, physicians can take home $400,000 or more.

In Europe, however, doctors made $60,000 to $120,000 in 2002, according to a survey sponsored by the British government in 2004.

Why in some Foreign Counties all Prescription Drugs are sold right over the counter without a Medical Doctors request.

Why in some Foreign Counties anyone can go to the hospital and get a x-ray without a Medical Doctors request.

Why in some Foreign Countries anyone can go to a Testing Laboratory for tests without a Medical Doctors request and pick up the results within 60 minutes.

In fact most of the American politicians are totally against any Americans crossing into Canada to purchase cheaper Drugs. They have passed a law making it a Criminal offense to purchase Prescription Drugs in Canada.

Then you have GM back in the 1990s made a Plug in Electric Car called the EV1.

General Motors Chairman/CEO, Rick Wagoner was the main guy who pushed to recall all the EV1 and destroyed everyone of them. At this point in time GM owned a small battery company that had the only PATENTS on this SUPER ELECTRIC BATTERY Technology that the whole world has been searching for many years.

Rick Wagoner with all his infinite wisdom sold this little Battery Company along with the all patent rights to manufacture this SUPER SPECIAL BATTERY to Chevron Oil Company. Rick Wagoner conspired with Chevron to purchase these battery patent rights because he knew that Chevron would never let anyone use these Batteries in a Plug in electric car. That’s exactly what Chevron has done. I understand that these Battery Patents will not expire till 2015. America can not wait that long for this Special Battery.

I would like to propose that President Obama and congress never give the automobile industry one penny until they fire all the top management and insist they make a really cheap plug in electric car that the American people can afford.

President Obama should instruct the Justice Department to file an “Eminent Domain” suit against Chevron Oil Company and retrieve all these Super Special Battery Patents that are needed to build the plug in electric car and the American Government should retain the sole title to these patents and then let the American Automobile Industry lease or use them. That way no one else can interfere like Chevron has done to screw the American people out of this much needed battery technology to produce a cheap plug in electric car.

Then the next thing would be install Solar Panels on your House Roof to charge this Super Great Electric Car Battery for Free. I understand that this new battery can drive an electric car well over 100 miles on a single charge and has a battery life of well over 100,000 car miles.

Then America can save well over $700 billion dollars a year on imported Oil from the Middle East and then tell them to fight their own wars.

The Big Problem was GM’s Management, Large Oil Companies, President George Bush and the Bush Oil Family.

Please go read to and view this movie
“who killed the electric car” : 5871495968130273402

Don’t give the anything let them earn it the old fashon way let the Ceo work for a living not beg from the tax payers.We already are flush with taxes and debit . When will we relize that one cannot live by bread alone.

Posted by steven | Report as abusive

Bailout seems to be the buzz word these days. Maybe a sentence that says “keep the slaves in their place while we change the rules to benefit us” would be better. Maybe then, the citizens of the country, and their masters would take notice that bailout is not a flowery term of “assistance” but an unconstitutional removal of sweat equity from the pockets of the slaves, and that deserves notice, maybe even a revolution to keep the jerks in power sensitive to what they are doing. It doesn’t look like the rest of us will ever be thought of as nothing but slaves, unthinking, unwilling to take a stand! Stop these thieves from getting the bailout dollars, let them make or break on their own. If they receive anything, make them PAY IT BACK WITH INTEREST!

Posted by mray44 | Report as abusive

Do the Math! Divide 25 Billion, the amount of the proposed auto industry bailout by $20,000, the average cost of a new car. Result 1.25 million cars.

Send 1.2 million vouchers to taxpayers who actually pay taxes. Do this by lottery.
They must buy a car within the next 12 months. That way the taxpayer benefits from companies receiving tax dollars. Car companies do what they are suppose to do – build cars.

Use the same concept for bank bailouts. Tax paying citizens would own shares by lottery. This way everyone benefits and the government / corporate megaliths do not end up owning everything. Power to the Folks.

Posted by Grayson | Report as abusive

They should fail, after failure someone will pickup some of the pieces and build a really strong auto company, maybe even two or three really strong companies that can compete in the real world because they are not owned by old money and family ties that no longer work. The unions have the money to buy at fire sale prices at least part of the assets and if they are as smart as they think they are the Union car company could be one of the real winners.

Posted by john koonce | Report as abusive

NO !!!!!!!!!!!!!!!!!!!!!

Posted by RICK | Report as abusive

The US Automotive industry has been myopic and arrogant, presuming the rules of a global marketplace do not apply to them. They are wrong. Bailing them out enables and rewards the ongoing introverted sense of entitlement which permeates these firms, and enables them to sustain their dysfunctional organizational structures and cultures. Rick Waggoner’s 2007 compensation package was valued at approximately $16M. This was compensation to “reward” him for the $37B record loss posted by GM during this same period. Get real. They contend customers would not buy a car from a firm in bankruptcy. I contend that I would not consider buying a car from them unless they file for bankruptcy. A comprehensive reengineering of these firms from the bottom up and the top down offers their only chance for long term survival…and by the way, they would need to produce a vehicle on parity and competitive with those being produced by their competitors in Germany and Japan.