Should Congress Bail Out the Big Three?

Not even First Class is good enough for the CEOs ofof the automakers declared bankruptcy, if we also
the biggest three automakers, Rick Wagoner ofinclude the workers that produce materials and parts
General Motors Corp., Alan Mulally of Ford Motor Co.,and the people that work in dealerships, some
and Robert Nardelli of Chrysler Corp. Each CEO flewestimates put U.S. job losses next year as high as 2.5
in style in one of their company's luxurious jets hopingmillion. A GM shutdown alone could push the U.S.
to make their case to Washington that the autounemployment rate next year to 9.5 percent.
industry is running out of cash and needs $25 billion inAccording to a forecast, a GM collapse would cost
taxpayer money to avoid bankruptcy.the government as much as $200 billion for expenses
Wagoner, who flew in GM's $36 million luxury aircraftassociated with unemployment insurance and other
to ask for $10-12 billion for GM alone, cost his ailingprograms. Other statistics suggest that a 50%
company an estimated $20,000 roundtrip toreduction in U.S. automaker operations will cause over
Washington! Even as the companies are running out of$108 billion losses in Federal, state and local
cash, Ford Motor continues to operate a fleet of eightgovernments in tax revenue over three years.
private jets for its executives. GM and Ford say that itTherefore, some argue, it is a choice between $25
is a corporate decision to have their CEOs fly onbillion in loans now or several times more billions in lost
private jets and that is non-negotiable. This is a slap intaxes in the future. It is estimated 850,000 retirees, and
the face of taxpayers" said Tom Schatz, President oftheir families, depend for pensions and health care on
Citizens Against Government Waste. If the Union ofthe Big Three. The Big Three contribute $21 billion a
Automobile Workers (UAW) is blamed for costs thatyear to Social Security and Medicare. If we add in all
add about $2,000 to the cost of a car, one wondersthe businesses that depend on the auto industry, and
how much the executive multimillion legacies would addwe are talking about one-tenth of the U.S. labor force.
to the cost!Japanese and Koreans are setting up factories in
Detroit's automakers burned through nearly $18 billion inUSA. Do we want them to pick up all the slack? We
cash reserves during the last quarter-about $7 billion atbail out Wall Street plutocrats and big banks. To let the
GM, $3 billion at Chrysler and $7.7 billion at Ford. GMauto industry die is to write America out of much of
said it may run short of funds before the end of 2008,the economic future of the planet. The truth is that our
and Chrysler said that survival would be difficultauto industry is important to our country and its
without aid.industrial basis. A lost manufacturing capacity, if needed
The CEOs claimed to congress that what exposedin war, will raise a threat to national security. If this is
them to failure now is the global financial crisis whichtrue, why don't we think like President Roosevelt during
has restricted credit availability and reduced sales.WW2? He kept the American workers busy with the
They claimed their problem is neither their businessmanufacturing of what was needed.
plan nor their long term strategies but the financialYes, we can bail them out but with big stipulations. Just
situation we are in now. However, for years the Bigasking for a plan for "viability and accountability" is not
Three kept building what they wanted without payinggood enough. We can demand "radical" changes.
attention to the economics of the world around themThen, leave the ball in their court, so they can be
and the needs of consumers who started to preferconsidered responsible in case they refuse to comply.
cheaper and safer cars with better millage. At theOff with their hands. They can take it or leave it.
same time foreign car companies were building betterOtherwise, we may as well suffer the consequences
performing, more reliable and fuel efficient cars. Theof their fall now, because if such a deal is not made,
truth is that the American car industry for the mostAmerica will lose the industry anyway along with the
part had snoozed.taxpayer money.
No matter what your political persuasion, no one thinksWhat are these "radical" changes? The incompetent
the auto company executives are doing a good job. Itmanagers will have to be replaced. The buck stops
is hard to be sympathetic to an industry that has beenhere! No golden parachutes. No outsourcing. The
so grossly mismanaged. People fear that they aregovernment needs to have decision making,
going to take this money and continue the same stupidvoting-stock, to ensure that the industry will help us
decisions they have made for 25 years. Let them gobuild a nice transit system, and create inexpensive, fuel
down, they say. Taxpayer money will go up in smokeefficient cars that are environmentally friendly. Of
if given to such incompetent management. Money tocourse all this work must be done domestically. By
bail out GM will go to build a $300 billion factory outsideplaying their role in reducing our dependence on foreign
St. Petersburg in Russia to continue making SUVs!oil, the auto companies can be part of a much desired
Redesign and retooling will end up with jobs shippedsolution. Such a transformation would help the US
overseas! Companies fail every day and others takeeconomy in countless ways, and I am sure most of us
their place. We will still get automobiles, but they won'twould be happy to see our taxpayer money be used
be made by American companies!for that purpose.
Easy to say, but there is so much at stake. If just one