Reader comments
Be careful with auto bailout

The reason why | 6:24 a.m. Nov. 10, 2008

Part of the reason why we need to do a bailout of the auto industry is the US needs to keep a core capiblity of manufacturing within the US.

However if the US does this, we need to put representatives on the board of directors that will ensure that they don't return back to the days of gas hogs, as they did after the 1973 oil crisis.

I'm tired | 8:13 a.m. Nov. 10, 2008

of these companies that get themselves into trouble by deliberate and poor decisions, and then just assume that we taxpayers will bail them out. That that $25 billion and put it into green jobs for the workers who lose their jobs.

RedShirt | 8:15 a.m. Nov. 10, 2008

In reading this, I found the following statement quite interesting: "would they merely postpone the demise of these companies or hasten a sell-off to more nimble nonunion competitors such as Toyota, Nissan and Honda". On the surface it sounds like it just speaks about the possibility of the US automanufacturers dying. But, when examined closer, it comes to a possible root cause. The US automanufacturers themselves. They have become huge, and unable to change direction quickly, unlike the Japanese manufacturers. The next question that should be asked is what has caused the US manufacturers to become so slow to change. Is itthe unions and all of their rules? Or is it management that does not see any reason to change business philosophy?

Comments continue below

Dave | 8:17 a.m. Nov. 10, 2008

The number 1 reason the big three are doomed is unions. The dems will pay as much of our tax dollars as needed to keep them afloat, as they are deeply obligated to unions.

Earl | 8:40 a.m. Nov. 10, 2008

Be careful? Is that all you can say? How about NO!?? You know what they'll do in congress. They'll hem and haw, ask "serious" questions as they peer over the tops of their spectacles and express their reservations and fears. Then they'll vote for the bailout. It's a circus.

wrz | 10:50 a.m. Nov. 10, 2008

A bailout of the auto industry is essentially a program to line the pockets of unions and auto workers with billions of tax dollars. The hourly wages of auto workers, per Jeraldo, is around $85/hour. And their pension and health benefits are in the billions. Any taxpayer bailout should require that these obscene wages and benefits be cut by at least two-thirds.

Is it any wonder that our auto industry can't compete with foreigners.

Anonymous | 12:39 p.m. Nov. 10, 2008

wrz God forbid American workers should get decent wages and benefits. Why should corporations be held to contracts they made? You try not to comply with a contract and see what happens to you.

Lets put American workers on a downward side in to third world conditions so, we can compete with China.

Republicans always blame average American, the people who work and produce in our nation.

You will never hear a republican blame a CEO. Union workers may be paid too much but, to republicans, even if a corporation fails CEO can never get paid enough.

RedShirt | 1:12 p.m. Nov. 10, 2008

Let me get this straight, we have had to listen for years about how the Bush administration is only concerned about lining the pockets of their buddies in the oil industry and other industries. Now, we have the Democrat leadership pushing to simply hand over money to the failing US auto industry and other failing businesses.

So, Bush requires that his cronies work for their government money, and the Democrats just give out government money. So, which is worse?

Lionheart | 1:20 p.m. Nov. 10, 2008

The ineffecient US auto industry should fail. New and better cars will come of it.

Geezer | 1:30 p.m. Nov. 10, 2008

Sorry, "wrz" and "Dave," the root of the problem is not the unions. The unions did not decide to sell the huge dinosaur SUVs and trucks that GM and Ford insist on perpetuating. The unions did not insist on making uncompetitive, unreliable vehicles. The unions did not ignore fuel economy, except for the occasional ugly American econobox. The American automotive companies sat by while Japan and South Korea engineered the kind of cars that Americans really need---well-designed, highly reliable, economical, high-gas-mileage cars with great warranties. Now the American auto companies want you and me to pay for their decades of bad judgment. It's time to let the American automotive industry die a long-deserved death. That won't mean that Americans won't still need the volume of cars that they have been buying from GM, Ford, and Chrysler. The Japanese and South Koreans will step up production, probably hiring some American workers, and we'll all be better served.

Earl | 2:41 p.m. Nov. 10, 2008

@Geezer: what is the cost of labor built into each Detroit vehicle, compared to a non-Detroit one? If labor costs were competitive, at what price could Detroit sell one of their vehicles? If Detroit had everything it needed to make a Toyota, for instance, how much would they have to charge after paying union-enforced wages?

Mike K. | 3:10 p.m. Nov. 10, 2008

@Earl. Please do a bit more research. The Toyota and Honda plants here in the US are unionized. One of the reasons is even with the unionized labor costs it is cheaper than building them in Japan and shipping them here.

And I would still rather give a loan to the automakers to help fund them make the changes they need and would have to pay back rather than just dump money into companies so that the government can own part of them.

Earl | 3:21 p.m. Nov. 10, 2008

@Mike: I was actually asking the question, not making a point. Are the labor costs that much different? I was hoping someone could throw some light on the discussion rather than heat. I also wonder how much the Big 3 are paying out in pensions and benefits. There's no question that the Big 3 have made impossibly stupid decisions, so my only point, if I have one, is that they shouldn't be rewarded for making them. Let them fail.

Truth-Sayer | 4:10 p.m. Nov. 10, 2008

What good will it do to bail out the auto manufacturers when people can't afford to buy a new vehicle or get a loan anyway?

Bailing out the auto industry at this point makes about as much sense as bailing water out of a submarine with screen doors!

Nephi | 7:04 p.m. Nov. 10, 2008

Give a bailout to Toyota and Honda, too. They have plants in the U.S., hire American workers, and build good cars--and, most importantly, they will still be here in a few years. Even with bailouts and loans, GM-Ford-Chrysler may still fail, and take all that money from the taxpayers down a rat hole.

Anonymous | 7:46 p.m. Nov. 10, 2008

Auto companies have in the past stated that employer paid health care makes America uncompetitive with countries with national health care.

Anonymous | 10:21 p.m. Nov. 10, 2008

I agree that if you can't evolve you should perish. However, Michigan would go down the crapper if the Big 3 imploded.

The Auto industry is much more crucial IMO to the American economic scheme than Wall St.

The problem w/ General Motors IMO is they can't leave well enough alone i.e. They "upgraded" the Canyon & had to put a 5.3 L V8 when the 3.5 L inline 5 was ideal.

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