Big Three Bailout? Not So Fast

Declan McCullagh Says A Better Solution Is To Let The Automakers Declare Bankruptcy

(CBS)  This column, Other People's Money, is written by CNET's Declan McCullagh. It appears each Wednesday on CBSNews.com.

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One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work.

A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.

To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader's Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time.

During those six years, Toyota surpassed GM as the world's largest car manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan developed the GT-R, a technological marvel with a 0 to 60 time of 3.2 seconds and a lower sticker price than the Corvette ZR1. Honda kept its focus on smaller cars such as the Civic and Accord, and saw its sales continue to increase this summer while GM, Ford, and Chrysler have slid.

The United Auto Workers union and Detroit executives concocted the Jobs Bank idea in the early 1980s. Now these same economic whizzes are lobbying for handouts in the form of your tax dollars. UAW President Ron Gettelfinger said in a statement last week that the Feds must "provide liquidity to auto manufacturers so they can get through the difficulties caused by an across-the-board decline in auto sales."

Not quite. Detroit's problems aren't caused by a one-time slump. They can't be fixed by another infusion of cash. One cause is that union labor and legacy costs are too high and make the so-called Big Three companies uncompetitive. Another is that their profitability is tied to large, heavy trucks and SUVs that Americans no longer want to buy, at least in such large numbers.

That's just common sense. Unfortunately, such a virtue is in short supply in Washington, D.C., where politicians are scurrying to find excuses for a handout.

President Bush has made plenty of missteps, as I wrote about last week, but at least seems somewhat skeptical this time. Democrats, on the other hand, are eager to loot taxpayers -- and reward unions and domestic automakers which made choices that benefited them handsomely in the short term, at the expense of long term competitiveness.

President-elect Barack Obama apparently agrees, saying at his first news conference that he supports "additional policy options to help the auto industry adjust" and "weather the financial crisis."

Meanwhile, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are drafting legislation that would direct a $25 billion torrent of cash from the U.S. Treasury to bank accounts in Detroit; Pelosi said on Tuesday that a vote could happen in a lame-duck session next week. (See a related video from CBS News.)

The better solution is a simple one: Allow automakers to declare bankruptcy.

Contrary to popular belief, that will not mean the end of a company such as GM, which has indicated it may run out of cash by the end of this year. Under Chapter 11, a bankruptcy judge will weigh the different interests of GM's creditors, labor unions, shareholders, and so on, and the resulting company will emerge leaner and stronger. Many current customers of United Airlines, Texaco, Global Crossing, and Pacific Gas and Electric probably don't even know that those companies once filed for Chapter 11.

Chapter 11 also would let a judge alter gold-plated union contracts and benefits that have hamstrung the Big Three and crippled their ability to compete against Japanese and European car makers. Toyota, Honda, and other non-Big Three manufacturers that employ over 100,000 Americans, mostly in right-to-work states, have shown that they can make money building cars in the United States. The best way to keep U.S. auto workers employed in the future -- tens of thousands already have lost their jobs -- is to make it profitable to keep them on the payroll.

One explanation for Washington's haste is that while bankruptcy would alter union contracts, a bailout probably won't. The labor movement spent, according to Financial Week, a whopping $385 million to elect Obama and other Democrats last week. Nobody writes such large checks without expecting something: now it's payback time.

It's true, as bailout proponents argue, that GM employs about 263,000 people. But corporations including AT&T and IBM employ more, and by that line of argument, WalMart (2.1 million full-time employees) would always be far too big to fail. The Feds have already been profligate in doling out cash; a GM bailout would invite a long line of supplicants, with the most politically-connected companies muscling their way to the front of the queue.

If you don't like this use of your tax dollars, now's the time to phone your elected representatives. You can find contact information for your House of Representatives member on their Web site, and the Senate has a similar list. My e-mail address is below -- please let me know what you hear.

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Declan McCullagh is the chief political correspondent for CNET. He previously was Wired's Washington bureau chief and a reporter for Time.com and Time magazine in Washington, D.C. He has taught journalism, public policy, and First Amendment law. He is an occasional programmer, avid analog and digital photographer, and lives in the San Francisco Bay area. His e-mail address is [e-mail]

[triplet-man]

There is one word for what the Federal Govt. is doing RIGHT NOW. IT''''s called Socialism - look up the definition.
Taking "ownership" of the banks, loans, credit lines, Automakers. What is next?
Someone else in South America did this. Hugo Chavez - The only difference is, he just said it outright. I''''m "nationalizing" all of this. It''''s MINE now. The Feds are using FEAR tactics to take over this nation.
We the people..... are falling for it.
WAKE UP AMERICA!

[infe5]

Nice article. This is what happens when labor unions are able to bully their way to outrageous contracts. Sure, the workers get great pay and benefits, as long as the company can tread water; but the same great pay and benefits ultimately mean the company cannot sustain itself long-term. The workers are then left out of a job altogether. Now that unions have huge political leverage in their back pocket, I expect these sort of contracts will be the norm. It is going to be an interesting 4 to 8 years coming up.

[triplet-man]

THe unions are going to continue to fight for the working man. The executives are the ones that are running the companies so close to either "bankrupt or disgusting profit" The workers are just trying to survive.
Study your unions. Their "influence" is used to prop up the middle class, the STRENGTH of America.

[ertyui4]

use union dues to pay for auto bailout,,,,maybe they would rethink 1500 per car in health benefits and paying 30 a hour for a job you could learn to do in a week ,,,,these next 4 years will be great entertainment ,,,,,i hope barney frank is secretary treasury and chris dodd chair of fed reserve

[triplet-man]

Next 4 yrs will be great for me I''m a union electrician at an oil company! LoL My point is - The middle class TAXPAYERS are paying for, and always have- some with union wages - most of the bailout we are seeing. AND the govt is betting on my good wages to pay taxes in the future. That is their "credit line" if you will.
Why don''t you get one of those "learn in a week" high paying jobs?

[drputt45]

Hey UAW, what''s in your wallet? Oh, the prez and a bunch of dumocrats. I see, looks like you got it made.

$385m buys a lot of favors.

[triplet-man]

Another is that their profitability is tied to large, heavy trucks and SUVs that Americans no longer want to buy, at least in such large numbers.

Did you MISS this part of the article? Mis - manangement!

[infe5]

@ triplet-man,
I have no problem with the concept of unions. However, when they have the clout (and political backing) to impose ridiculous contract terms on companies, there needs to be something to keep them in check. The author described a very specific example of a completely wasteful union designed job (i.e. twiddling your thumbs in a shed for 60k + a year).

[pensacola98]

GM has nothing that I want. They sell inferior cars, trucks and vans. While they did improve over the past 20 years, they still miss the target for economical and high quality transportation.

I desire cars with 1.4 litre engines that can get at least 33 MPG and last 250,000 miles.

Most of all, I desire models that don''t change every year, but instead remain constant for 3 years before models are being changed.

GM needs to build a vehicle platform that remains upgradable with interchangable parts for 35 years.

I also like a car that can be interfaced into a home computer and diagnosed with software given to the owner at the time of purchase.

I also desire engines and transmissions that are completely dependent on 100% synthetic lubricant.

I also desire engines with two spark plugs per cylinder, just as in aviation piston engines.

Those are the marching orders for an automaker that gets my business.

Cars need to hold value and not be depreciated so quickly, as in the past.

When you build a car like a chunk of metal and plastic and goes down in value each year, it will.

[ramos937]

The big three''s weighted man-hour cost per unit is about $98.75 whereas Toyoda/Nissan''s is about $48.75. Both offer health and retirement benefits.

Giving these three auto manufacturers one dollar is a waste of money. Until they can be competitive with Toyoda/Nissan, etc. they will always be in financial trouble. If they are given the $40 billion this year, they will be back sometime in late 2009 asking for more. Also, executive pay will still be scandalous.

[william_lerd]

Oh ya, like who is going to buy a car from a company in bankruptcy?

OK, GM, Ford, Chrysler, UAW: It''s time to pay the piper. Let them all go in to bankruptcy and end these outrageous work rules and rottenly designed cars they have been trying to push on the U. S. consumer. Take your lessons from Toyota, Honda, Nissan---all of whom successfully manufacture autos in the U. S. that consumers love.

If you need a financial bailout, I recommend you make a call to your local Jobs Bank. They could probably help you with a bailout.

[hitoyou1]

No bailout for the no good UAW. They do nothing and then they do less. They don''t need a windowless shed, all they need to do is show up at work, they do nothing there. They sleep, play cards and some times leave, all while on the clock. Like I said, No Bailout for the no ggod UAW.

[omega40]

Another anti union hack job while giving a pass to the clowns that manage these corporations. I remember in 2004 both the CEO''s of Ford and GM proclaiming their strategy to stick with SUVs and trucks. At about the same time they were professing their undying love for these dinosaurs gasoline was running about $2.60 a gallon here in CA after a small spike. Gm didn''t officially abandon this strategy until Jan of this year and we all remember where gas was sitting then.

[dooddad]

I''m with the writer. If you reward bad management, (whether it''s the company or the union), there is no incentive for change. GM/UAW has had their head in the clouds for years . . . and that''s why millions of people, just like me, stopped buying their klugy, out-of-date products years ago. We may as well bite the bullit, and let em go, or we''ll be just be propping up a business that will eventually fail anyway. We''re a capitalist country, like it or not, and loosers should loose. That makes room for a winner to come along.

[georgiadog8]

The stock market has been diving WELL before Obama was elected. The republican spend and borrow and the new world economy and trade agreements will destroy our country or maybe it already has. Possibly Obama can clean up the disaster caused by the stupid policies of the last 8 years. Maybe it is so messed up it cannot be fixed by more of the same - let the markets fix themselves!

[serioussandy]

First, the UAW did not spend that kind of money to get anyone elected. The only money they can use by law is CAP money and very few UAW members contribute to CAP. I do, as a retiree, but $3 a month does not add up to anything like a billion. They use that money to help get the word out to their members and they talk to all officals that are up for election. Then they recommend those that are labor friendly. Please get your facts straight before making comments.

[txlakeside]

Cost per unit is skewed if you do not take into account that Japanese CEO''s make about 7 times the average floor worker while US CEO''s make anywhere from 40-70 times the aveargae floor worker. This is not just in the Auto sec but across all sectors.

The bloat at the top is what chokes Americans the most when they try to purchase anything made in the USA!

[huntchen]

Absolutely opposed this bailout plan.

[serioussandy]

I really don''t agree with the jobs bank myself, but that was the UAW''s way of trying to get GM to stay in this country. They make their money off the backs of the workers, then take that money and build plants all over the world, so they can make more profit. While talking with GM lobbists a few years back, they explained that GM was only allowed to make so many trucks that were over the recommended CAFE standards, so they built plants in other countries so they could import them. Duh! Our government at work. Let''s put the American worker out of work, so they can hire slave labor in Mexico, China, Brazil..etc so the government can get the money they loaned those governments back. It''s a vicious cycle. Check it out.

[hodgy67]

That''s it, blame the union. GM builds very good autos
but rely to much on trucks and SUV''s. The workers build what they are told, and do everything to make sure the quality is there. Unions are formed to protect workers with safe jobs, a living wage and health care. Workers have a huge interest in building quality autos, and should not be blamed for mis-management.

[samthetvcat]

---"Chapter 11 also would let a judge alter gold-plated union contracts"---

Okay so even when they''re working UAW workers are pulling in like $100k? Whereas the market rate for their services is probably somewhere more around maybe $30k?

Anybody know how much bankruptcy judges have actually succeeded in altering pay rates of union workers during reorganization on average?

Contrary to the article, GM is still the largest producer of vehicles on the planet. Toyota is close.

GM is still the largest producer of vehicles in the US, Toyota first in cars.

Nobody held a gun to the heads of consumers to buy SUV''s. They bought them because that was what they wanted.

Business generally follows the money, for years it was SUV''s, trucks both GM and Ford were successful and profitable doing that.

Americans by and large are lemmings, the neighbor buys an SUV, you buy an SUV. In the last couple of weeks guess what has come out of hiding? SUV sales are actually up some, more SUV''s are at the pumps. Why? Gas is down around 2.20 nationwide.

Plenty of fingers to point, what Detroit did was walk away nearly completely from cars, there in lies the mistake. Management mistake, yes, but they went for the quick profit, like most American companies do.

The union situation compounds their problems and this is where bankruptcy might just make sense, renegotiation of benefits, wages etc:

Comparing the wage structure of one company VS another is a fools game if you don''t ask the whys. Much has to do with the benefit package and age of the workforce.

As to the union question, virtually all vehicle makers worldwide are union, where are they not? The US.

The simplistic answer is bankruptcy, that might not be the best answer. In case you haven''t noticed Germany, Japan and yes even China are looking at automotive bailouts or assistance.

[jt_lancer]

Yeah, why not let struggling middle America taxpayers bailout failing auto companies and their employee pension plans? Who cares that the average US union auto worker gets about $73 per hour in total compensation when considering wages AND benefits?

Unions care nothing about their customers, taxpayers, or anyone else. All they want to do is soak everyone else so they can maintain their lifestyle.

Unions care nothing about their customers, taxpayers, or anyone else. All they want to do is soak everyone else so they can maintain their lifestyle.


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Posted by JT_Lancer at 11:06 AM : Nov 12, 2008

In case you didn''t know, union workers pay taxes also, perhaps more than you do if they make more. Hmmmm

[samthetvcat]

Imagine how much cheaper cars would be if they could get workers'' wages down to market rate . . .

[jeannettelj]

I voted for Obama but I do not agree with a bailout for the auto industry. These companies have dug their own graves because of practices listed in this story. These auto companies need to figure out what to do just like the rest of us who are in jeopardy have to do.

[omega40]

Imagine how much cheaper cars would be if they could get workers'''' wages down to market rate . . .

Posted by SamTheTVCat


Nike pays their workers in Vietnam $59 a month, have you seen any $12 "Air Jordans" down at the local sporting goods store?

[McHineguy]

That''''s it, blame the union. GM builds very good autos
but rely to much on trucks and SUV''''s. The workers build what they are told, and do everything to make sure the quality is there. Unions are formed to protect workers with safe jobs, a living wage and health care. Workers have a huge interest in building quality autos, and should not be blamed for mis-management.


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Posted by hodgy67 at 11:01 AM : Nov 12, 2008

You are wrong. It used to be that unions protected workers but today they acutally harm them in the long run. I have witnessed as unions prevented their companies from mondernizing the factory (often making it safer) and hiring special skills (often because it is from a foreign competitor). America''s unions have become large and powerful (cash donations of $385 Billion) but they arent willing to do business like grown ups. The result is our union operated auto industry WILL go bankrupt. Did you notice that this so called "job bank" was an agreement between the union and management? Do you really believe management was in favor of such a thing?

[mrcook128]

For once, Bush seems to have the right idea! The Big Three are not victims of the credit crunch or the stock market collapse. They are victims to their own bad business. GM has been selling more cars worldwide than any other manufacturer and has struggled to keep up with its own astronomical costs. An infusion of cash will help these companies stave off bankruptcy, but will not bring them to profitability or ensure that they produce the kind of cars people want. The government is supposed to use tax dollars to run the country, not every company that can''t run itself. Obama''s comment that these companies are responsible for reducing our dependance on foreign oil is laughable considering the amount of foreign oil that gets burned up in every Suburban or Excursion. GM has been around for a century; it''s time they caught up with the rest of the world!

[billcholee]

the uaw killed the goose that layed the golden egg. now they whine they need my money,so they can beg again in 4 years. pelosi is a drooling idiot. simply speaking, NO , hell no, they brought this on themselves, if my so called government gives them the money i call for a revolution to flush these geeks down the toilet.and i mean all of them dems and the gop. my god this has to stop some where. again . no,hell no.

[downtowner97]

Hondas are made in Marysville, Ohio. Toyotas are made in Long Beach, California. Why don''t we call them American car companies?

I have heard complaints about what Toyota pays its workers. The lower pay for workers translates to better, more innovative cars and trucks at competitive prices. During hard times, sacrifices need to be made by workers who can be replaced at a lower cost.

Northwest Airlines is a good example of a company where the emmployees have had to make sacrifices. Pilots took a 40% pay cut and let go of thier retirements. The alternative was failure of the company. If the pilots had decided to quit instead, they would have had to go to work for another airline with no retirement, and at least 40% less pay.

2003

Part of the agenda of President Bush is to reform fuel economy standards for cars. In this regard, he earlier announced his proposal to require automakers to meet new fuel efficiency standards. Bush, in his State of the Union address, proposed that the automakers improve the efficiency of the vehicles by 4 per cent annually starting in 2009 for passenger cars and 2011 for light trucks. The administration also intends to cut gas consumption by 20 per cent by 2017

The proposal is mainly to promote the production of green cars and it is undoubtedly helpful.

Some automakers were disappointed because the proposed $500 million budget over 5 years to speed research into advanced batteries was not contained in President Bush''s State of the Union address.

It can be recalled that General Motors Corp. has earlier asked Congress to significantly increase federal support for the development of advanced powertrain technologies and the promotion of alternative fuels. The call is also anchored on the need to improve vehicles efficiency. The automaker added that the industry needs billions of dollars to make the vision a reality. Moreover, it needs considerable aid from the government and such is expected to come in the form of cash

[paidgopshill]

omega40 - you must have slept through your economics classes.
$12 Nike sneakers don''''t exist because Nike dominates the market, not because of Nike''''s production costs. Nike has a name and trademark that people want on their shoes and clothing so consumers are willing to pay a premium for Nike''''s goods. There are no major foreign competitors in the sports apparal market.


The comment was that cars would become cheaper if wages were reduced, I gave an example of that not being the case. In fact, I read that Toyota pays their US factory workers an average of $14 an hour and yet, a Toyota costs more than a comparable US model.

[nikosk11]

NO money for the "Big Three"

For years they could [and did] build electric cars and hybrids, but the oil mafia was calling the shots.

Let the "Big Three" ask Exxon/Mobil, Chevron, Texaco for money.

[dawa33]

GM going bankrupt may bring some common business sense to a managament team blind to cost cutting measures businesses face to be competitive. A judge would also be able to restructure contracts that are unrealistic in today''s competitive auto market.

[fgoeddeke]

1) The JOBS bank was renegotiated with the last contract (2007) between GM and the UAW. Now there is a 2-year limit for a person to stay in the JOBS Bank. On the face of it, it appears the company is paying people not to work. But when you look at the auto industry across the world, job security provisions or the concept of lifetime employment is not unique to this context. Autoworkers in Japan, Germany, Korea, all have some kind of lifetime employment provisions.

2) The job security provision also has shop-floor motivational aspects, as people are more likely to invest in firm- or career-specific skills, and it can build commitment to the company. Contrast this with Ciruit City, who several years ago fired their $11/hour workers and replaced them with $8/hour workers. This move was hailed on Wall street as cost-savings. But look at the negative aspects that resulted on the floor. And look where the company is now (in bankruptcy).

3) Also notice that Toyota (non-union) in North America is having a production slowdown, but they have publicly stated they aren''t laying off workers. Your article fails to mention this, and it somewhat negates your thesis.

4) In any event, at this point, the job security provisions are not what is driving GM''s problems. It is a secondary or tertiary concern at this point, behind issues like too many dealers and brands, no consumer credit, and low consumer confidence.

[gvscmr-2009]

I''ve never been in a Union but the underlying problems are the Chiefs, not the Indians plus ties back to Big Oil. Back in the late 70''s when the gas lines were forming in California that should have sent an alarming signal and wakeup call to the auto industry. It did not. What was the Big Three''s response to the gas crunch back then? Build huge gas sucking land yachts and market the hell out of them. Then we have a **** ant response from GM 30 years later with the Chevy Volt. This car is a joke and an insult to the intelligence of the American people. So you plug this piece of *** in to your house current to drive it up to 40 miles. And just where is the likely source of the Electricity in your house? Burning fossil fuels such as coal. So, instead of burning it in your tank you are contributing to burning it in a factory with dirty coal. Sort of a step backwards wouldn%u2019t you say?

In July of 2009 we will celebrate the 40th anniversary of the historic moon landing and in 40 years the Chevy Volt is the best that the management morons at GM can come up with?

I say let them all fail for their stupidity and lack of innovation

[fgoeddeke]

5) Chapter 11 bankruptcy is not a viable option for GM as you state. First, it will be unlikely to get DIP financing in this financial environment. If DIP financing was that easy it would likewise be easy for it to get loans to carry it through. Second, consumers are unlikely to buy a major durable purchase froma company in bankruptcy, due to warranty and service concerns. Chapter 11 works for some companies but won''t work in autos. A more likely scenario is Chapter 7 (liquidation).

6) A GM failure would cause a domino effect causing suppliers to go bankrupt, in turn causing other OEM''s to fail.

7) A Big 3 failure would lead to a dramatic increase in imported cars (sending the profits overseas, even though foreign automakers only make 60% of the cars in the US that are sold in the US).

8) A Big 3 failure would also drive up the price of cars for consumers in the US. The industry would be dominated by a few major players (Toyota, Honda, Nissan, etc). The result would be a return to oligopoly market pricing.

[mim13]

Japan was making quality cars, while the big 3 continued the gas guzzlers, that cannot be sold on their lots. Peloski loves to give away taxpayers monies, and that would be a problem with the Democratic controlled Congress. The big 3 should not be bailed out by taxpayers. The auto industry has had plenty of time to produce quality cars. The auto industry needs to get with the real world, and reduce some of the benefits, and the incrediable pay to come and sit and play trivia games for payment. The people that vote for this bailout, needs to remember, that election will come again. Additional monies should not be directed to AIG, either.

[professorai-2009]

CAP AND TRADE AUTO STIMULUS PACKAGE

it is a lose lose situation. If they fail, will be worse than Lehman, with devastation and rust-dust bowl. If they survive as socialized "US auto", a part of the government, cars will suck even worse than in the USSR.

Nobody is buying a car today because of uncertainty; its amazing to see so many TV advertising dollars being wasted on nonresponsive consumers! Nobody will spend their "stimulus" check, just cash it and stuff the mattress.

So the next stimulus could be a 2-year-expiring $1500 rebate on a US made car which gets 25MPG or more (or maybe escalating value with fuel economy)... If you don''t want one, trade/auction it for $1000 or so on ebay, bundle them up, buy cars.

[takebackusa]

the autoworkers will be fine...dont sell them short...they have seen this coming for months and have been going to night school and getting educated for a new career....dont anybody tell me that any of them have been to stupid to do that!!

Posted by jamesm12341 at 11:34 AM : Nov 12, 2008
+ report abuse


Jimmy boy - the spelling monitor of the CBS site. You forgot to check your own spelling this time Jimmy boy!

you SHOULD have typed:

dont anybody tell me that any of them have been TOO stupid to do that!!

TOO with two o''s not one !

[mechengr9]

Remember in 1979 when Chrysler Corp got 1.5 billion in loan guarantees to avoid bankruptcy? Why not loan them the money rather than giving. Chrysler paid back the money in full in only a few years. A loan is OK a bailout goes against the free enterprise system. The Wall Street situation should be handled the same. (too late)

[professorai-2009]

CAP AND TRADE AUTO STIMULUS PACKAGE

it is a lose lose situation. If they fail, will be worse than Lehman, with devastation and rust-dust bowl. If they survive as socialized "US auto", a part of the government, cars will suck even worse than in the USSR.

Nobody is buying a car today because of uncertainty; its amazing to see so many TV advertising dollars being wasted on nonresponsive consumers! Nobody will spend their "stimulus" check, just cash it and stuff the mattress.

So the next stimulus could be a 2-year-expiring $1500 rebate on a US made car which gets 25MPG or more (or maybe escalating value with fuel economy)... If you don''t want one, trade/auction it for $1000 or so on ebay, bundle them up, buy cars.

[anniereegins]

I don''t think it''s only about the Job Banks, I think it''s about the fact that while we were doing nothing but upping the prices of American cars, which are not 100% American, the foreign cars surpassed in quality, kept prices fairly affordable, and gas usage lower. It''s time the Big 3 took a good, long, hard look at themselves. Bring back the jobs (how can you pay less for all of the outsourced work, and charge more?), and just maybe, I''d feel better about a bailout.

2003

Part of the agenda of President Bush is to reform fuel economy standards for cars. In this regard, he earlier announced his proposal to require automakers to meet new fuel efficiency standards. Bush, in his State of the Union address, proposed that the automakers improve the efficiency of the vehicles by 4 per cent annually starting in 2009 for passenger cars and 2011 for light trucks. The administration also intends to cut gas consumption by 20 per cent by 2017

The proposal is mainly to promote the production of green cars and it is undoubtedly helpful.

Some automakers were disappointed because the proposed $500 million budget over 5 years to speed research into advanced batteries was not contained in President Bush''s State of the Union address.

It can be recalled that General Motors Corp. has earlier asked Congress to significantly increase federal support for the development of advanced powertrain technologies and the promotion of alternative fuels. The call is also anchored on the need to improve vehicles efficiency. The automaker added that the industry needs billions of dollars to make the vision a reality. Moreover, it needs considerable aid from the government and such is expected to come in the form of cash.

Hmmmmmm

[doctorwho6]

If a company can''t compete on the world market, then they should go the way of the dodo. Products of questionable quality, bloated union contracts, perks for workers no longer needed (we used to call it being fired/laid off), etc.... let them declare bankruptsy and allow the chips to fall where they may.
Possibly one or more new, efficient and profitable companies will arise from their ashes.

This situation is very different than 1979, that was before the Asian car companies had any control of our American Market with the competion we have today. These Big Three are already getting "retooled" in China, where they really want to go and produce cars and trucks for the 21st Century GLOBAL Market. Let them GO!!!


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Posted by scb1111_1 at 11:46 AM : Nov 12, 2008

SOS Different day, you really should get a clue.

When BIG OIL comes knocking on Congress door will Pelosi and Reid come to their Aid???


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Posted by scb1111_1 at 11:41 AM : Nov 12, 2008

Why would they, they''ve been making huge profits, if they come hat in hand, it''s lie. They''d hire the ex pres as there spokesperson, because he''s such an "oil guy"

[takebackusa]

doesn''''t change the fact that autoworkers better be training for new careers


Posted by jamesm12341 at 11:49 AM : Nov 12, 2008
+ report abuse


Doesn''t change the fact Jimmy-boy, that if you are going to comment on everyone else''s spelling, you need to learn to spell yourself !

You seem to have this psychological need to point out everyone else''s spelling errors rather than comment on the topic. Just giving you a taste of your own medicine Jimmy-boy. Poetic justice.