hey you! sign up and become a contributing writer to this site! no blogging experience required! register here then leave a comment here!!
« RockYou Detroit
» Saturday: Shop Detroit Midtown

There is no plan B, we still need an automaker bailout

12.03.08 | technician | In dearborn, auto, ford, auburn hills, bailout

The Big 3 domestic automakers returned to Congress to present more detailed requests on how they would use government loans. I’ve already blogged about why the Big 3 should get a bailout. Now I’m wondering why it hasn’t happened yet. I realize the Congress is basically on holiday and that a special session would be needed for this to happen by the end of the year and if it doesn’t GM and Chrysler will probably not continue running at the start of next year. Some bloggers actually want this. I don’t think they realized the calamity that would have been caused if the government failed to do anything to stabilize the financial system by injecting $700 billion. Perhaps they need to see Armageddon happen to see how serious the situation still is with our economy and how critical government intervention in the auto industry is.

Public support is coming around to aiding the automakers because people are realizing the reason is that not doing so could push us into a depression from the recession we are in now, not because people like the automakers or think they deserve it. But the financial industry was in the same exact position, they created a much bigger mess to begin with, and they got $700 billion with basically no strings attached.

A lot of attention has been paid to aspects of the automakers that are mainly cosmetic such as their corporate jets and the salaries of a tiny percentage of the workforce. And attention has been paid to how they have gotten rid of their jets, driving hybrid cars from Detroit to Washington, DC, and reducing CEO salaries to $1. That would be a small price to pay to get billions of dollars but the bigger issues are how they are going to reduce labor costs for all the union workers, what to do about the jobs banks, how many American factories will have to close due to restructuring, and what they are going to do about excess dealerships. GM’s plan specifically calls for reducing the number of employees by more than 50,000 by the year 2012 and reducing the number of brands from eight to four. Meanwhile it seems that Congress could have given the bailout if they could only agree on where the money would come from, either the $700 billion that is otherwise all going to go to the financial industry or from the Department of Energy.

Ford, on the other hand, is a pretty good position and says it would only need to use the money from the loan in the case that one of the other two big automakers fails which would affect Ford.

“There is no Plan B.” The American people need the American economy to stabilize and eventually strengthen. The American economy needs to not lose 3 million more jobs right now. The American automakers need to not go into bankruptcy because doing so would doom the company and the millions of jobs they create. And the automakers need a loan from the American government to survive this economic crisis. They are counting on it and there is no plan B.


Leave a comment

Add your comment below, or trackback from your own site. Subscribe to these comments.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>



« RockYou Detroit
» Saturday: Shop Detroit Midtown