As Congress debates legislation to help struggling automakers, many Americans say they are uneasy with the plan, arguing that while it may save jobs, it would reward companies for pursuing bad business practices. Some even question whether automakers will be viable, even with support.
“They need to restructure. If they get bailed out they are not going to do it,” said Eric Smith, a paint contractor interviewed in Chamblee, Georgia, on the outskirts of Atlanta.
U.S. automakers say federal aid is vital to their survival, and there could be devastating ramifications for the broader economy if the sector is not stabilized.
“This is an issue of the whole auto industry, if that becomes under severe pressure, the impact on the whole U.S. economy will be devastating,” GM Chief Executive Rick Wagoner said in an appearance on a NBC-affiliated television station in Detroit.
Retired Gen. Wesley Clark says that a rescue of U.S. automakers is important both economically and for national security. In a New York Times opinion piece, Clark wrote that the U.S. auto industry has played an important role in successive military campaigns, from World War II to today, and its ability to continue to develop new technologies is imperative for national security.
Some are calling for executive shake-ups if it would ensure congressional backing for a bailout. “If it was the difference between getting this kind of support or not, obviously the management should consider resigning,” Carl Levin, a staunch industry ally, said on NBC’s “Meet the Press.”
As Democrats finalize a rescue plan, the question remains: should U.S. automakers be bailed out?
(Pictured above: G. Richard Wagoner (R), chairman and CEO of General Motors, testifies next to Robert Nardelli (2nd R), chairman and CEO of Chrysler, Alan Mulally (2nd L), President and CEO of Ford Motor Company, and Ron Gettelfinger (L), President of the United Auto Workers union, before the Senate Banking, Housing and Urban Affairs in a hearing on “Examining the State of the Domestic Automobile Industry,” on Capitol Hill in Washington, November 18, 2008. REUTERS/Molly Riley)
Do you have an idea for The Great Debate? Please send your submissions to debate@thomsonreuters.com.
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?
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Oh and for those of you that say its the unions fault and the workers need to take cuts only shows your ignorant kool aid drinking mentality. I would think 50% pay cuts and giving up pensions and health care benefits were quite a scarifice. This is just another example of a declining middle class for America. Yes these one way trade deals have worked wonders. It just wasn’t for Americans. Just keep drinking the kool aid folks. They love pitting slave against slave.
Americans better wake up and realize what is happening before they find themselves living a 3rd world life. We have lost one industry after another in this country and our way of life is coming to a end. One only need look at our deficits, trade and fiscal to see that things can not continue on this path for long before a severe price is paid. We let countries like Japan, Korea, and China take one industry after another.
For example Japan and Korea ship millions of vehicles into the U.S. every year all while they keep their markets closed to American products. Ford thought they would crack the Japanese market by building a plant in Japan to get around their closed market policy. They had the land bought and at the last minute the government of Japan said no. They said they didn’t think it would be in the best interest of Japan.
All this while their industries are subsidized by their governments through direct and indirect subsidies for example like national health care. Where as domestic companies like GM provide health care for over a million Americans.
I can’t say that Americans won’t get what they deserve. Americans love to bash domestics even though their quality is on par or even exceeds that of the import brands. Ford is the current leader in the quality arena but many Americans are slow to catch on to the reality of the matter. We are our own worst enemy. People just can’t seem connect the dots as to why their standard of living is declining. Those millions of vehicles imported into the U.S. every year are billions of dollars that being sucked out of our economy and the decent jobs that go with it. It is not just auto jobs that are being effected by this.
I think the American public is to blame. We think we are ‘owed’ without having to work. We snear at domestic products because they arent trendy. We buy foreign products and then complain when our jobs are shipped to foreign countries. We watch Oliver Stone movies and then spout ‘facts’ about conspiracies. We’re too fat because of corn syrup rather than admitting that the only excersize we get is with our fork. We complain about gas prices but we leave the car running while run into the store. We complain that foreign companies dump products here but continue to buy at ‘mou-mart’
No bail out — the worlds’ No.1 auto industry CEOs & exec bonus years should have been spent on research & dev — forging ahead with the new, not selling the obsolete to each new generation!
Back-up plans should have been in place for times of economic crisis to hold their No.1 market position — has the theatre not been one of GLOBAL economic shifts?
So why was there NO back up plans?
They suck as the strategists and protectors of the US auto industry.
Bonus pay? - you must be kidding.
R Hyodo
Prepackaged bankruptcy, strip out legacy costs and close half the plants. David Hardie
yes, If they downsize and make better motors and longer lasting autos and trucks
NO,NO,Nada,Nien,Nyet,Hindi.The 700Billion is too much already,we need as shareholders to restructure our corperations,the bonuses,salarys for ceos,executives is way out of hand,terribly OVERPAID,year after year,it multiplys,and is,has gotten out of hand,and is part of the problem!!Come on corperate america wake up.If we dont stop this “GREED”,our society as we know it is going down the “tubes”.This younger generation is too “materialistic”,they cant forsee that we are not headed for an recession,but an DEPRESSION!
Absolutely not!!!! In bailing out big business you are rewarding bad behavior with the little guys money. North American auto makers have been more than arrogant and have been shafting the public for too long with poor quality vehicles. I have no sympathy for them and thier grossly over paid work force. If they want to survive, it is time for them to get lean and mean and begin to build a quality and progressive vehicle that is in touch with a new generation. Thier “UNION BUILT” beer burp mentalitly does not fly with a well educated and savy generation. People want quality and fuel economy, Honda and Toyota realized that long ago. North Americas big three dinosoars have made thier own bed and pissed off a very angry pubic. Politicians beware, stop using our money to reward the fat cats.
Auto companies bailout - Any “Bailout” must end the retiree’s health benefits, have them use the governments part B and part D like the rest of us. I do not want to pay for their health insurance; I have trouble paying for my own. If the union doesn’t like this let the companies go bankrupt, a quick reorganization would take place and more benefits could be cut, executive pay restricted, and the end of bonuses (if the pay is not enough they should get another job). The unions and the companies’ leadership are both to blame; there is NO reason why the taxpayers should bail them out. Any money that they get MUST have the retiree health benefit cut, salaries and bonuses restricted, and a potential for a HUGH government profit. And no more $31 an hour for workers to NOT work, let them get unemployment like the rest of us.
As I look over the comments left here I need to wonder if the powers that be are listening. Maybe “We the people” should have a bigger VOTE on what happens to all the hard earned money we have given. No one is giving me 25 billion dollars. I understand our government doesn’t want to be in the automobile business or any other business, so to speak. So if we need to be involved (our tax dollars)let the returns on investment come back to the American people not the CEO’s or any other executive. Hell I can run those companies into the ground and take a muti-million dollar salary and bonus.
I read an interesting artical the other day. Simply put. It says let them file chapter 11, produce a verifiable plan, reorganize and then support the loans needed to fix them. In this way the bail out loans would be 1st to be repaid. I like this idea.
All the comments listed above are all relevant to how the general population feels. Maybe its time for OUR government to listen.
AJ
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.
NO !!!!!!!!!!!!!!!!!!!!!
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.
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.
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!
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.
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 youtube.com and view this movie
“who killed the electric car” :
http://video.google.com/videoplay?docid= 5871495968130273402
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 youtube.com and view this movie
“who killed the electric car” :
http://video.google.com/videoplay?docid= 5871495968130273402
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
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.
FIRE THE BANKERS
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.