No Bailout

There should be no bailout for automakers. Before we get too far into this, our love affair is with cars*, not the makers. Their short-sighted motives for high-profit (and low fuel economy) vehicles have created a mess that they themselves are responsible for and we see no reason to foot the bill.

For years Detroit shrugged off suggestions that fuel economy rules were unfair and so they put no serious money into research and development of newer technologies that would help with fuel economy. This sounds so familiar... Oh, safety!

And understand this: It will not turn out to be a loan.

What should happen:

• The government should say no and tell them to get their loans elsewhere.

What will probably happen:

• Congress will pony up the loans
  
• CEOs will not be canned (they should be)
  
• Unions will take a larger portion of the blame than they should
  
• China will come in with big investments to one of the Detroit Three

It's funny that once this depression (it will be labeled a depression before long) subsides, unions will have been fully busted (as a relic of the past and as part of the problem) but folks will need them more than ever before.

No one could have predicted these horrible sales were going to happen.

Referenced articles
NY Times: Frank Sees ‘Disaster’ if Auto Industry Fails

McClatchy DC: No commitment on auto bailout despite union concessions

Huffington Post: Big Three Promise Green Future But Spent Almost $50 Million Since 2007 Lobbying Against It

*And Claire, Alison and Summer. Oh, Summer, have mercy our on catalytic converter!

Comments

[Magnaflow Catalytic Converter]

its sad whats this will do to our industry

[dragdreams]

Yeah. I am really against auto bail out!

[dragdreams]

Yeah I am really against auto bailout because with this kind of crisis who has the money to buy one?

[dragdreams]

Yeah I agree. No bail out for automakers. With this kind of crisis who has the money to buy one?

[WebSurfinMurf]

BTW remove ) at the end of my links for them to work. :)

[WebSurfinMurf]

I disagree completely with this premise.

Its OK to spend literally TRILLIONS of dollars for wall street, but not 100 Billion for automakers?

As for the Unions to blame, how much do these union workers make? From what I understand, 28 bucks an hour. That's about 58K a year. This isn't the 1970's, that isn't break-the-bank kind of money.
And in NJ, you can't support a family on that level of income. (Rent 24K year alone)
(http://malaysia.answers.yahoo.com/question/index?qid=20070924073107AAuGk8O)

And we are talking only 74,000 UAW members left in the USA.
(http://money.cnn.com/2008/02/12/news/companies/gm/)

The top 5 execs at GM combined got 39 million dollars for 2008.
(http://www.companypay.com/executive/compensation/general-motors-corp.asp?yr=2008)

From what I understand, UAW has made plenty of concessions (probably not enough) in the last 10 years. What about Execs making on average 8 million each?

In general, I am 100% against ANY government bailouts, but if the financial industry has backing of over 10 TRILLION dollars in backed risk, and direct US debt of about 1 trillion, I'm hard pressed to not see how the US shouldn't "lend" 100 Billion to automakers.

[Tom Torcelli]

I think America owes a lot to GM and Ford, and at the same time I think the CEO's of these companies, including Chrysler, owe a lot to the companies they were in charge of and to the American people in general. But that's the thing, this is not about the CEO's, it's about the companies that have been an important part of the economic strenght and development of America, that's the reason why Congress shouldn't just let them die like it is nobody's business. Those CEO's that have people so upset, with reason, will continue to have hundreds of millions of dollars even if the companies go down, and will retire some place nice, probably without a care, I can assure you they won't be the people that are going to suffer if the Big 3 dissapear, the rest of us think we're teaching them a lesson, but, come on, let's get real...
But at the same time, because those irresponsible and uneffective people are in charge we can just write them a blank check and hope they figure the way out of the mess, they need a very good plan that include a very detailed scheme of things, specially the ones related with new technology, and more importantly the need to pay the money back. But at the end, we have to stop painting these companies as if they are just the CEOs, think of all the good things, all the jobs, and all the progress these companies have brought to America in times of peace and in times of war, since the first time a Model T was fabricated in the Ford factory.

[kenn]

Agreed that a Bailout is a horrible idea, but to claim that Unions are going to receive a larger portion of the blame than they should is ridiculous! They are as much to blame for the financial troubles as the companies themselves. Poor business decisions are one thing, but demanding Job Banks, ludicrous pensions and hourly rates, and strikes when they don't get them is outrageous. Unions are a blight to the economy.

I'm not saying companies should be free to do whatever they want in terms of labor, but gone are the days that we need unions to help keep them in line, they are useless. Other industries are just fine without them. I believe unions place an unrealistic (read: inflated) value on the labor performed by their workers.