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Bailout or Bust: How to Save the Big Three From Themselves

Posted on Nov 20, 2008
AP photo / Carlos Osorio

By Titus Levi

(Page 2)

So what to do? No shortage of ideas have floated through the media, the blogosphere (The Huffington Post has been especially active on the subject, including articles by Neil Young, GM family man Ricky van Veen, and Raymond J. Learsy), broadcasters’ letters’ sections, and probably over many a kitchen table conversation, including my own, where friends engaged in a spirited examination of Detroit’s tendency to confuse novelty—releasing “new models” each year—with genuine innovation.

First, let’s put together a careful cost-benefit analysis. To begin with, Detroit must open its books to thorough scrutiny, and that includes the tight-lipped Cerberus. As a taxpayer, I’m sick and tired of the leap-before-you-look approach to taking action. I’m equally exasperated with Detroit’s tired claims of “trust us, we’re professionals” in demonstrating genuine recalcitrance to changing its organizational culture.

Second, we need to produce a no-holds-barred assessment of the managerial dysfunction at these firms and come to terms with what needs to be done to improve performance and change organizational cultures for the better. Given the track record of these firms, and their reaction to the bad news that immediately had them pulling back on innovation and new product development, I’m not sanguine about the quality or nimbleness of the current leadership. They have to go as part of this process.

Third, jettison utterly hopeless brands and initiatives like Hummer while focusing on integrating innovative ideas into GM’s R&D, design and production systems.


Square, Site wide, Desktop


Square, Site wide, Mobile
Fourth, engage in a thoughtful analysis of what individuals, families and communities lose in an environment of sweeping job losses and what can be done to ease the pain. This is especially important in places like Michigan, which will suffer near-Great Depression levels of unemployment and disruption, at least in the short run.

Fifth, Detroit could become a public-private partnership built around encouraging innovative and viable ideas in transportation technology. This would allow the automakers to readily leverage the research going on in the U.S. on various fronts and to create systems for developing ideas into commercially viable packages and processes. Even if the Little Two lose some money, they will provide jobs and harness economic benefits that will accrue across the country and even the world.

Finally, if GM and Ford do go into bankruptcy, they probably need to be given some federal support in the form of debtor-in-financing, since financial markets will not back Detroit given the conditions of banks and the auto industry.

My instincts as an economist tell me to cut the Big Three loose, letting them go into bankruptcy so that “the market” can decide their fate, but my heart tells me that we must do something to assure that communities most dependent on the automotive industry and its jobs do not suffer as post-Katrina New Orleans—or pre-Katrina New Orleans—has. After all, that city suffered through a century of decline before its final humiliation and abandonment. Parts of Michigan have endured long-term decline as well, and this experiment in market adjustment has produced far too many losers to regard as anything like a successful treatment.

As a nation and as an economy, we probably can survive the loss of cities like Detroit and Flint, but letting that happen will likely bring on human losses that do not show up in economic statistics. As we decide the automobile industry’s fate, we need to consider something else in this process: What kind of lives will we consign the people of Michigan to living? What kind of people have we become when we plan for, and perhaps execute, the demise of whole cities and even states? How can we prevent genuine harm from coming about and begin the healing process for those who have been and will continue to be displaced by the shrinking of the U.S. automobile industry?  How can we, to borrow a sentiment from Albert Camus, strive our utmost to be healers?

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By used car warranties, June 23, 2011 at 10:00 pm Link to this comment

The gargantuan influence of the big three, can produce immense job losses that will indefinitely deal a long term blow to the entire economy as a whole. Where bailouts are concerned, an eventual financial package more often than not; can always be put together (although subjective in terms of the level of satisfactory). The significant decrease in staff however, could mean lower efficiency towards their service toward consumers as well, and this should also be a crucial point of consideration.

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By Auto Parts, May 25, 2011 at 12:29 am Link to this comment

I hate to be the one to say it but the bailout of the big three, without drastic and strict new guidelines for future environmental standards was a huge mistake. If the government had made outrageous demands in exchange for the money and the big three had refused they should have gone out of business. I’m sure there are any number of international car manufacturers who would have been glad to step in and reopen the plants.

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By KDelphi, November 25, 2008 at 1:40 pm Link to this comment

hemi*—Well, my old pc just did it again—I will try to rewrite what just disappeared from my desktop…sh**!! lol

I dont believe the statistic that we have “fewer doctors” (or did you mean “bright” drs only?) holds true, except perhaps in poor urban and rural areas.More and more seem to be going into specialites, which leaves a lack of enough family practitioners. I would submit that we encourage family practice, by canceling their student debt. (I think all state sponsored universities shoudl be free anyway)

In the EU, drs live a middle clas lifestyle, not so much the “many houses” lifestyle we see so much of here. I have been treated in three contries there, as wel as Canada. They go into medicine for the right resaons.There is a group of good drs here in the US who support single payer health care.

I did not say that people should have “30 years to play golf”. I dont know anyone who does.(I have no idea why anyoe woud want to—who was it that said that golf was a way to ruin a perfectly good walk?) But, there are alot of GM workers (and exs) here, and mostly after they retire, they do go back to work or school, and into some other field.

I submit that every human being is entitled to certain human rights. No one asked to be born. It is stil agaisnt the law to commit suicide in the uS. So, until we can change ataht, I believe in this:

“Universal Declaration of Human Rights” 12/10/48.

While this has not been universally achieved, of course, there is not another wealthy, “free’ country I can think of where there is more disaparity in rights than the US.
Article 23 (4) deal with the right to unionize. US unions suck, but that does not mean they shoudlnt exist. They need to be empowered.

Article 25 (1) deals with “well being, family, clothing, housing, medical care, education….necessary social deal with the insecurity of unemployment, sickness, old age, (childern deserve special rights—they do not pick their parents)..due to circumstances beyong their control…” You might be surprised how much of many peoples’ life circumstances were not “chosen”.

I would go further, and , say that people have other rights, which are dsecribed pretty well here:

“While the market functions to re-organize subsistence around that which can be given a price, the goal of socialism is to subordinate price, or relative market value, to subsistence…

A global market is, in a certain sense, still compatible with the perspective outlined here. But it should be a market in non-necessities, a market from which subsistence is gradually withdrawn. Another possibility is that ‘fair trade’ principles could be established between equal regions and nations. For such equality to be viable, however, it would seem to require the possibility of opting out, which would require that this option be a practical possibility. Thus, I conclude that subsistence should be, to the greatest possible extent, satisfied in a non-market fashion.

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By Suzie Kidder, November 25, 2008 at 9:49 am Link to this comment
(Unregistered commenter)

This is a nice piece - kudos.  I rarely see political/economic opinion that actually includes the “human factor.”  Unless, and until, we figure out how to redesign corporate america to function in a model that computes ROI as a “triple bottom line” - we are limiting our chances to be successful.  For far too many years we’ve calculated everything in dollars, and we’ve arrived at the destination that always lay at the end of that journey. 

I’m not arguing for us to go all “squishy and touchy feelie,” but I am arguing for a more balanced and evolved corporate model that looks at the return on investment for any company as one that includes a heterogeneous group of “shareholders.”  Yes, a company is responsible to its “primary” shareholders - but that should include both those who have invested capital and the employees who provide the on-going infusions into its value.  It’s also responsible to its customers (a constituency w/which Detroit obviously lost touch quite some time ago).  And finally, for lack of better terms - it’s also responsible to the community, the country, the planet.  It really is possible to do the jugging act that takes all of these into some balanced, ethical, and prudent consideration, and the companies that do appear to be thriving.  That may actually be the very best “economic argument” in favor of that approach?

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By Hemi*, November 25, 2008 at 8:46 am Link to this comment


The main point we disagree on is that there is a good solution to this problem. I just don’t see it. If we had government healthcare it would be severely watered down in no time. You’ve got to pay for it out of taxes and eventually there’s more people in retirement not contributing much and less people in the workforce contributing most. There’s no union fix for that. Another social security style debacle.

Currently, we have fewer bright people becoming doctors and dentists in this country because it does not pay. Malpractice insurance is driving that. With government healthcare you wouldn’t be able to sue for malpractice that would be one caveat I’m sure. You take what you get and like it. And in the long run you would not get the best and brightest people in medicine. BTW, why after 30 years of MRI technology does it still cost thousands of dollars for an MRI? Things that make you go hmmmm. But I digress…

You said: “I think that, when a person works all of their lives, they have a right to a secure retirement.” That’s an interesting statement, why do you believe that? When a person works “all of their lives” they work “all of their lives”. Where does the “retirement” stage come in? In the next life? Historically people did not retire. That’s a very recent concept and a contrived one in my estimation. Are you saying that people beyond a certain age have nothing to contribute? Or that these same people have no responsibility? Perhaps the Jimmy Carters, Barbara Mikulskis, John McCains and Gore Vidals of the world should get themselves to a nunnery. Hey, there’s a foursome, all they need is a tee time.

Many people throughout the world work in some capacity from birth till death. I don’t see that as an injustice. Where were this country’s “retired” in the early 1900’s? Most were living with their families and not in nursing homes or “retirement communities”. I don’t believe everyone has the right to 30 years of uninterrupted bridge and golf at the end of their lives. It’s a sweet almost heavenly concept but not practical. Social Security and the concept of “retirement” were contrived to get older workers out of the workplace. Yes, times have changed but not the consequences of irresponsibility. With a little fact checking I know you will find your “other civilized countries” have problems looming if not currently being felt for their attempts at providing everything from cradle to grave.

Someone has to pay for these programs and it should be those that benefit from them. Social Security will be a vapor trail before I’m eligible and my children and I continue footing the bill. These pyramid schemes always dump a load of crap on someone. A fed take-over of the auto industry is just another pyramid scheme with no justifiable end. The sh*t will hit the fan and someone will pay the bill eventually. A big bailout now just increases the total on the bill. Bite the bullet and start paying now. Or we can crank up the printing presses as I said earlier.

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By KDelphi, November 24, 2008 at 6:50 pm Link to this comment

Hemio*—I guess we will just have to disagree.I think that, when a person works all of their lives, they have a right to a secure retirement. Social security doesn t"work”, only because the neo-cons, and neo-liberals, have used the fumds for war and pet projects.

Other countries do pensions….very well!!

You might want to look into stats about the type of bailouts workers get. I have heard people recently quoting “$75 an hour” and huge bailouts. These are just lies.I dont think “buying a guy out of his contract” for $100,000, when he is 52 years old, is top much to ask from CEOs making $250 million.

When people get older, they need their benefits more than ever. I consider health care, housing, etc. to be human rights. The corp. might not be going bankrupt, if we had pensions and health care, through the govt, ilke other civilized countries…

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By Hemi*, November 24, 2008 at 6:34 pm Link to this comment

No KDelphi, no chip. And no stock investment either. I’m not a gambler, I work too hard for what little I have.

I am in agreement that the laborers shouldn’t have to pay for the sins of the CEOs. My point is that if the auto makers are paying for these exorbitant union negotiated retirement and health packages you wind up in the same boat as social security. The bill eventually comes due and there’s nothing in the kitty. You have retirees (and spouses) receiving the same benefits for 30 years or more in retirement that they were receiving at the height of their productivity. The company would have to double in size every 2 to 3 years in order to maintain those benefits alone. That’s not going to happen in any industry. The unions helped kill their members benefits provider. Benefits are wonderful but you also need to save knowing that life expectancy is far greater than ever before and that your earnings decrease exponentially. It only makes sense but most people are short sighted.

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By KDelphi, November 24, 2008 at 4:31 pm Link to this comment

Hemi—Geez…chip on your shoulder much?

You seem like a free market capialist. Didnt you invest in the market like a good little capitalist? Yeah, and where is it now?

It is not working..

I am not “(lol) Mr. Union Man”!!

There were too many union busters where I used to work, so everyone remained stupid. Thanks to that, I lost my penison when I had to apply for federal health “care”.

I would most certainly help you were it in my power, if I thought I could get close enough to you without you breaking my nose!!

Just because some US Unions are crappy, doesnt mean we should do away with them, They work very well in more advanced countries.We need to empower and fix them. The members need to be able to get rid of the bosses, and, should own a part of the corporation—then, they will have more stake in its being run properly. And, once we BUY a company, WE shoudl be able to out anyone we want!

I was not if favor of any of ethe bailouts, but it was hardly capitalist’s first “shot across the bough”!!@ I just dont think that the laborers shoul have to pay for the sins of teh CEOs. They have really f**ked up our country,—but maybe you think, they are great guys, who should retire in luxury..

Maybe you have been watching too many GOP anti-union commercials…I wish theyd spend that towards their fricking war!

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By Hemi*, November 24, 2008 at 3:32 pm Link to this comment

KDelphi, I am a non-union hourly laborer, who will back me in my hour of need? Not you, that’s apparent. Only union members are worthy of protection by our government and from our government?

I was a Teamster 30 years ago. I was making $4.25 an hour cleaning offices and factories. The only union “benefit” I received for my dues was not getting bloodied on my midnight shift.

And what will any of the current fed programs do to your “Capts of Industry”? The best of the criminals are long gone. Did you see any accountability/transparency for the first package Paulson airmailed? Want a little more of that? Maybe there are a few “Capts” that haven’t gotten theirs yet. And who will run your auto makers once we’ve bought them? Not much of a plan there Mister Union Man.

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By KDelphi, November 24, 2008 at 11:36 am Link to this comment

hemi—“I repeat”—where did you say it before?

Very nice anti-union rant.

I didnt hear the same disdain for the CEOs, though. The laborers already pay considerable sums towards all of these benefits. You have been fed a line of bullshit by the anti-union groups and have bought it.

Wall St, despite your disain for it, must love you! In spite of your rage, still just a rat in a cage…

Why unions? Because, since people like you insist on capitalism (moneyism), unions become the only way that the hardest working people can have a decent lifestyle. Our unions are crap. But, in countries where unions are supported, the average person has a much higher standard of living , and, more say in their own lives.These are generally societies where tehe richest have less chance to bully people.  If you dont want that—fine.

But, you have no right to decide it for anyone else..I think that the public has decided that the excesses of the Capts of Industry has gone way too far.You rail agaisnt them, yet, object to anyone else trying to stand up to them.

We should BUY the Big Three, like we practically have the banks. We should have stringent regulation. And, the first part will (for all practical purposes) happen. The second wont. Because the duopoly is bought and paid for.

No one would stop you from accumulating all you can get your hands on. Dont worry. It is still fricking supply side capialism.

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By Hemi*, November 24, 2008 at 11:11 am Link to this comment

I repeat:

A very simple solution to this nonsense.

First, anyone buying a car or truck manufactured within the United States receives a $5,000 tax write off. $1,500 for a motorcycle. All loan payments on these vehicles become tax deductable. Second, impose a tariff of $2,500 on any imported car or truck. $750 on a motorcycle. Would other countries bitch? You bet. But they’ll get over it quick and get back to selling us sh*t. Where are they going to go?

There are plenty of economical choices available from the “Big 3”, new buyers are not going to be flocking to buy more “personal tanks”. There will need to be transition to new fuels and the first step is to downsize what we are currently driving. My suggestion would give incentive to buy current inventory from US based manufacturers as well as provide incentive for foreign firms to continue building manufacturing facilities here. In this the taxpayers are getting something back from their dollars. More jobs, better competition, increased short-term sales and no need for a bailout. If the “Big 3” don’t survive after this they don’t deserve to. Paulson is robbing us blind. You have to draw the line.

We would be better backing an upstart with $25 billion rather than simply sticking a finger in the dyke that is the big three. An upstart can hire non-union. What’s wrong with the auto workers being closer to the pack as far as salaries and benefits? We’re not talking slave wages here. Imagine them having to contribute something toward healthcare and perhaps… shudder… save for their retirement. I don’t know about you folks but I have no union, I contribute heavily to my medical plan and have no company contribution toward retirement. And who the f*** says anyone’s guaranteed a “retirement”? An upstart loan can also be tied to transparent earnings and management. By the way, Daimler/Chrysler is not a US manufacturer. Ford and GM are no better with many of their facilities in Mexico and Canada. How can we bailout these pseudo US firms? F*** them all.

Or we can just crank up the printing presses because the line for bailouts will be endless. By the way, move to the back I’m next in line.

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By dirtfarmer, November 23, 2008 at 7:24 pm Link to this comment

All of this talk of a bailout for Detroit automakers misses the most fundamental point and that is the corporate culture that brought these huge companies to this sorry state of affairs. There is no public purpose served in saving them unless we can simultaneously restructure the manner in which top executives are awarded bonuses. At present they are only rewarded for short term, immediate gains and this is often at the expense of long-term strategy. That mind-set leads to blunders like GM’s scrapping of its very successful 1990’s California electric car and subsequent need to play catch-up with Toyota just a few years later. Surely there’s a way to structure Executive bonuses so they’re only activated if the company is substantially better off in 5 or 10 years. If American corporations are going to survive they must shift their focus to the future instead of the immediate past.

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By dihey, November 23, 2008 at 8:37 am Link to this comment

I have pointed out elsewhere on this site that the DemReps cannot let Toyota build the needed tanks and other military hardware needed to maintain “Empire USA” although it would be an interesting reversal to the 19-th century when weapon-barons like Krupp built arms for whoever was willing to pay.
With nasty consequences because Krupp cannon in enemy hands sank German naval ships on the Yangtze and in Oslo harbor. Kaiser Wilhelm and Der Fuehrer went apoplectic.

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By P. T., November 22, 2008 at 10:10 pm Link to this comment

Ultimately, they are going to get bailed out.  Michigan, Ohio, and Indiana would be wiped out without the U.S. auto companies.  Those states are where the auto companies and their suppliers mostly are located.

Backruptcy won’t work because people won’t buy from a bankrupt auto company.  They would fear there might be no service departments or parts available in the future.

In addition, bankruptcy would mean the auto companies wouldn’t have to pay their suppliers all the money they’re owed.  That would force suppliers into backruptcy.

So, there’s going to be a bailout.

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By frank67, November 22, 2008 at 7:33 pm Link to this comment
(Unregistered commenter)

As Toyota, Nissan, and Honda go, so goes the Nation. 
Did you really think I was going to say GM,Ford, and Crysler?  Take a look at their dealership inventories.  At least, the ones that are still in business.  At last count, over 600 dealers have gone belly up. 
But I must say, even Honda and Nissan dealers in my area have a tremendous number of cars on their lots, too.  I suppose much of the inventory is the result of no credit being available.

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By KDelphi, November 22, 2008 at 5:46 pm Link to this comment

Looks like GM, alone, pays $8 billion in health care (active and retired) If you add on private pensions and such, I have no doubt, it wouldve helped them alot.

But,people just like to focus on “unions” (they have given up so much already!) and “red herring” private jets. Sure, if it was up to me, I’d take everything from the CEOs of the Big Three AND Wal St, except the clothes on their backs.

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By KDelphi, November 22, 2008 at 5:30 pm Link to this comment

cann4ing—I agreee, mostly. But, what about the role of GM et al having to pay for what, in other “free” countries, would be costs upheld by teh state (taxes)?

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By blueshift, November 22, 2008 at 4:19 pm Link to this comment

Dropped out of the labor force? Voluntarily? Or like an airplane disappearing from a radar screen? I think we need a new metric for unemployment if people simply ‘drop out’ of the labor force.

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By cann4ing, November 22, 2008 at 3:08 pm Link to this comment

I think, KDelphi, Obama has in mind a middle of the road reform to trade, replacing so-called “free-trade” with “fair trade” that stresses workers’ rights and the environment.  The problem I have with this is that I think we should be abandoning the entire global trade format, negotiating, instead, bilateral trade agreements that lift workers up but do not infringe on the ability of local governments to protect the health and safety of their citizens.

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By Washington Bubble, November 22, 2008 at 2:44 pm Link to this comment
(Unregistered commenter)

Cann4ing wrote:
“...Under to cover of “protectionism is bad,” America’s economic elites utilized NAFTA, the WTO and a host of other so-called “free-trade” agreements to outsource most of our manufacturing base in search of the $2/day laborer.”

Cann4ing, you are right on the mark with that point.  I, as I’m sure many of you find yourself in conversations over politics as of late.  When the topic comes up regarding the state of the US, as well as global economy I have to bring up the very point you have made.  There has always been the arguement that US wages were considered too high in regards to the cost of producing goods. Therefor US-based industries should be allowed to produce their goods outside of the US borders to lower their production costs to stay competitive with foreign competitors.  The problem that I have seen with this concept, (NAFTA for one), is that instead of the US industries being a leader in the rise of cost of living wages that their competitors would have to adopt the industries intead have, for the lack of a better term, thrown the US workers under the bus and now we have to work against the low wages and benefits that are found in other countries. The US now has displaced workers and the wages that they once earned are not flowing back into the US economy. Meanwhile in some other countries workers are barely making a wage. These are the same countries that our goverment goes on about having the worst working conditions yet our goverment and businesses have no problem sending work there to support those very same working conditions. When you put profits before moral values you will always lose…either in the short run, or long run but you will lose.  I fear that we, as a country, are losing this battle.  We could’ve been a leader in how industries respect their workers as that is what makes the industry thrive. Instead we were sold out for short term profits.

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By KDelphi, November 22, 2008 at 2:42 pm Link to this comment

Here is another HUGE difference, that politicians do not like to acknowleege.

“The big difference that establishment politicians turn a blind eye to, and media pundits refuse to mention in print or on the air has always been government-paid universal health care as a human right in Europe and Japan compared to a health care system in the hands of private for-profit insurers in the US. Unless and until this competitive advantage is equalized, manufacturing automobiles and practically everything else will be far more expensive inside the US than outside it. No amount of money thrown at the auto industry can solve that, and without medical and retirement expenses, foreign automakers are guaranteed to have the extra cash to match and beat anything US automakers invest in innovative green technologies…...

....Most US politicians omit this vital contextual information because they or their parties take big money from the private insurers. The private health insurance industry eats one third of every health care dollar to finance its executive salaries, its bad investments, its marketing campaigns, and the bureaucratic machinery with which it denies needed care even to the insured. Since they are integral to the our nation’s permanent ruling elite, corporate media shamelessly speak for them and exercise remarkable discipline in keeping nearly all discussion of single-payer medical care away from the eyes and ears of the American public. But thanks in part to the internet, the mainstream media’s conspiracy of silence against single-payer health care is not working as well as it used to….”

cann4ing—Can you honestly say that you believe that PE Obama will “re-negotiate” NAFTA, and not sign in CAFTA? How would he do that?

Like I said before—there were two articles in the NYT , soon after Obama was elected. One path, suggested by Brooks, urged “caution” and “governing from the center”.(The only good I see coming from that perspective, might be that it would enable the death rails of capitalism to carry out their sentence) Krugman urged, what most would call, a “New New Deal” type capitalism—-some of which PE Obama posited today/yesterday.. It is up to PE Obama to choose—if he will. And not let it be chosen for him.

The best we can hope for with this administration, I think, is a further lifeline to capitalism. Until USAns realize, that, our unregulated “markets” are the cause of most of the pain of the working classes, we are doomed to keep serving the (not so)almighty dollar.

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By cann4ing, November 22, 2008 at 12:24 pm Link to this comment

By P. T., November 22 at 9:31 am #

Economist Dean Baker has pointed out: The story is that the big three automakers are struggling with record sales declines. This collapse in car sales in turn is the fallout from the collapse of the Greenspan-Bernanke housing bubble.

As the story goes, Henry Ford once took Walter Reuther on a tour of his plant; showed him some new, fully automated machines and said, “Bet you’re gonna have trouble collecting union dues from these guys.”  Reuther’s retort:  “Yeah, and who’s gonna buy your cars.”

While deregulation, the housing bubble, the Bush tax cuts and unbridled greed on Wall Street go a long way in explaining why we are now staring into an economic abyss, the bigger story, much ignored in the corporate media, can be found in the decision by Bill Clinton to join with Reagan & Geo. H.W. Bush in ramming NAFTA through on the fast track.  Under to cover of “protectionism is bad,” America’s economic elites utilized NAFTA, the WTO and a host of other so-called “free-trade” agreements to outsource most of our manufacturing base in search of the $2/day laborer.

Their unbridled greed led these supply-siders to focus exclusively on the short term profits in immediately cost reduction, never considering that over the long-term they would destroy the ability to purchase their products, to pay for mortgages or for health care, by destroying the middle-class aspirations of the American working class.  This was masked by a culture that encouraged excessive borrowing, but it was only a matter of time before an over-extended credit system would collapse of its own weight.

We should be focused not merely on issues of liquidity and keeping car companies afloat but whether it makes any sense to maintain an irrational capitalist system that places the greed of the few over the needs of the many.

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By coloradokarl, November 22, 2008 at 12:11 pm Link to this comment

My dream for America is a plug in hybrid in every garage and solar panels on every roof!! It’s all about control. Control peoples energy, and take control of a large part of their incomes Governments control 1/3 of our income, food producers control their share, Energy, Big Pharma, Credit etc. etc. If we each produce most of our own energy and drive cars that can use that energy we take control of that part of our income stream. Plus the huge Industry and the jobs it will create for small businesses .

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By P. T., November 22, 2008 at 10:31 am Link to this comment

Economist Dean Baker has pointed out: The story is that the big three automakers are struggling with record sales declines. This collapse in car sales in turn is the fallout from the collapse of the Greenspan-Bernanke housing bubble. While the domestic automakers have been hit hardest, all manufacturers have seen sharp drops in sales. Toyota’s sales were down 23.0 percent compared with its year ago levels. Honda’s sales were down 25.2 percent, and Nissan’s sales fell 33.0 percent.

These huge plunges in year over year sales by the world’s top car manufacturers can’t be blamed on the industry. Responsibility for this plunge lies with Henry Paulson and other economic policy makers and their Wall Street friends.

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By cann4ing, November 22, 2008 at 9:32 am Link to this comment

By Washington Bubble, November 21 at 7:25 pm #
(Unregistered commenter)

If you haven’t watched “Who Killed the Electric Car”,(2006), yet I would suggest you do as you’ll find that if you had any urge to help GM that feeling will probably disappear after watching it.

I agree.  What is especially telling is when, near the end of the movie, GM turns down a multi-million dollar offer from the remaining lease holders to purchase the last of the EV-1s.  Instead, they forced the lease holders to turn them in, put them on the back of flat bed trucks and shipped them to the AZ desert where they were destroyed at a wrecking yard.  They wanted to make sure that the technology would not be around for someone else to copy.

When I was in the 7th grade (1959) a rep from GM came to my school.  He demonstrated that even back then the technology existed for solar powered vehicles, shining a light on a tiny model car which then moved.

“Who killed the Electric Car?” is not only an indictment of GM but of capitalism.  Not only is the size of CEO compensation divorced from company performance, but the profit motive is most often at odds with the public good.  I saw an example of that last night on PBS’s “Now” which documented how the desire for pecuniary gain led companies charged with rating the risk of investments to provide AAA ratings to the credit default swaps that amounted to an unregulated Ponzi scheme.

Throughout the campaign, McCain/Palin claimed Obama was a Socialist.  Unfortunately, he is no more Socialist than was FDR.  And like FDR, I suspect he will reinstate regulations not to destroy capitalism but to prevent the avaricious beast from devouring itself.  Certainly, a new “great compression” as Paul Krugman describes it (a relative leveling of incomes between rich and poor) would be far preferable to the gaping wealth disparity of this new Gilded Age, but like the New Deal, the forces devoted to the economic exploitation of life will be left in tact, plotting to rise again.

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By samosamo, November 21, 2008 at 11:38 pm Link to this comment

By Washington Bubble, November 21 at 7:25 pm

I agree with you about the BIG 3 killing an idea that would maybe not have prevented the recent oil bubble, which will most certainly reappear sometime in the not too distant future if and when the U.S.of Excess returns to its unbridled consumption, but at least made for less dire times. I could imagine having an electric car that would suffice for the mundane trips to work and back or the quick jaunt down to the store for something forgotten, quite nicely.
But that is not the way the BIG three does business and I am NOT talking about Ford, GM and Crysler, I am talking about those big 3 in your comment, american auto makers(ford,gm,crysler), big oil and big government. Always with the tricks when any or all of these corporatist pals play. Always with the unbridled quest for money with little in return for their offerings.
And, since these big 3 are on to it for ‘kicking the can a little futher down the road’ into perpetuity, you can bet the people will subsidize their gluttony again and again and again, unless congress wakes up enough to dump reid and pelosi to be replaced by real people trying to fix the real problems beset by the big 3.
And I will add here also, that any other support for transportation that does NOT require the ignition of an internal combustion engine for power other than human muscles would be most benefical for any and all countries or at least if we caught up with the countries that do benefit from human power.

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By Washington Bubble, November 21, 2008 at 8:25 pm Link to this comment
(Unregistered commenter)

If you haven’t watched “Who Killed the Electric Car”,(2006), yet I would suggest you do as you’ll find that if you had any urge to help GM that feeling will probably disappear after watching it.  GM had a great chance to be a leader in their industry when they introduced the EV in 1996 but intead felt it better to turn out vehicles like the Hummer.  Other manufacturers such as Ford and Honda followed suite with elctric vehicles as they saw how the EV was starting to sell and be accepted by consumers. Who’s to blame for the EV’s demise is a bit of a finger pointing game but you can imagine the usual players, Auto Industry, Big Oil, and the Goverment would be a safe bet though.  The point though is where would we be now, 12 years later, had that technology been allowed to stay on the market and improved on? Now though GM states that they are working on the all electric Volt and that is why they need a hand-out , (even though they have the technology from 1996 sitting there gathering dust).

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By MAR, November 21, 2008 at 7:48 pm Link to this comment

Cann4ing, KDelphi;
Don’t forget the Auto Pact where cars are made in both Canada and the US for sale in either country. There are factories that make nothing but a few models.

My solution for both the US and Canada is to let the much-vaunted free market due its work and then invite Toyota, Honda and Hyundai in tpo show them how to do it but buying up the bankrupt production assets.,

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By KDelphi, November 21, 2008 at 5:20 pm Link to this comment

cann4ing—I think your suggestion is excellent. It is the only way to justify us bailing them out, really..

bandz—I like everything you say, but how could we give everyone $1 million? (Most people wouldnt need that much anyway) If it was to every *person*, it was cost about a quintilliion. If , just taxpayers, under $100,000, I cant do that math! lol

I think it would be better spent on what is making people (and some businesses) go bankrupt. Like you mention—single payer health care…how much are the big three spending on that, anyway?? Also on private pensions, which, if we properly funded social security, would not be necessary.

Money goes alot further when it is “pooled”. That is why “choice” in things like health care, is silly. YOu dont ned a “choice”=—-eveyone should get what they need! (people should be able to turn down care, of course)

In any case, the workers should be helped and NOT blamed (ie unions) for what has happened to the big three. Production is at an all-time high.

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By cann4ing, November 21, 2008 at 4:45 pm Link to this comment

I know to some this may sound a bit radical, but instead of talking “bail-out,” I believe we should be talking about the U.S. “purchasing” one of the big Three, preferably GM at a low price after it goes into bankruptcy.  Think about it.  You would not longer have the need to feed millions of dollars into the pockets of an inept CEO.  Product decisions could be made democratically based on the true need for green technology—solar aided, plug in electrics that require no fossil fuel whatsoever, and, unlike a private manufacturer, there would be no risk that a U.S.-owned auto manufacturer would outsource jobs.

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By tdbach, November 21, 2008 at 3:46 pm Link to this comment

Boy, there’s a lot of piling on going on in here. Screw the auto industry - especially those fat cats at the top, who have driven their industry over the cliff! You can almost hear the rattle of pitchforks and the feel the heat of torches, as the mod gathers steam to hang ‘em high.

Wake up, people. These CEOs at the big three are simply riding a trend of overpaying executives, a trend they didn’t begin. They’re not incompetent; they’re not responsible for the demise of their companies. You’re witnessing the death throws of an industry, or maybe a more accurate metaphor is the transformation of tadpole into a frog. ALL companies are hurting, including the big two of Japan.

And if you think they’re on the way out because they based their profitability on SUVs and trucks, you don’t understand either markets or their business. If they had made a decision to curtail those kinds of vehicles in favor or gas-sipping subcompacts, they would have been gone a long time ago.

Ironically, the only CEOs who really are responsible for the huge mess their companies are in - the ones on Wall Street - are the ones who are getting a 700 billion with few questions asked, and their greedy blunder is what dragging into extinction every other weakened species in the marketplace, including the barely ambulant auto industry.

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By bandz, November 21, 2008 at 3:42 pm Link to this comment

The so-called bail out of Wall Street recently passed by Congress is like trying to bail out the sinking Titanic. The problem is too big and too top-heavy to bail out.  It won’t work. A REAL bail out for the short term should be geared to those in financial need, not to those who have far more than they need and who have created the current problem. Instead of undertaking a hopeless task of bailing out a sinking ship, give the passengers a life jacket.

Here’s a formula for the life jacket instead of bail-out approach that would really help in the short term: Have the government give $1 million dollars to every U.S. registered voter (or taxpayer)* whose income is less than $100,000* per year. No strings attached. It would help those who need it most. They would spend much of that money, which would give the economy a needed boost. Most of it would be spent in this country rather than overseas. (*Details of eligibility and amount are negotiable - within reason.)

Of course, it would not solve the long term problem. That would require legislation imposing stringent regulation of Wall Street and the whole banking, financial and corporate-industrial system. It would also require legislation to bring about a greater financial equality of the population, including higher taxes on wealthy corporations and individuals, leveling of the inequalities of compensation, limits on corporate bonuses and retirement packages, and surcharges on incomes (individual and corporate) of over, say $1 or $2 million per year. Finally, we need to call a halt to our country’s political and military adventurism and attempts to impose a pax Americana on the rest of the world, and to implement a national, universal, comprehensive, not-for-profit, single-payer healthcare system in the U.S.

Those steps would give us a START at reducing the national debt and assisting those among our population who NEED help. Unfortunately, the addiction of the American population to long outdated ideological positions and notions regarding economic and political issues make those goals ALMOST as difficult as bailing out the Titanic. They would, however, offer a HOPE of success in which our present efforts are totally lacking.

Bryce Babcock
Cottonwood, AZ 86326
.(JavaScript must be enabled to view this email address)

“In principle there is no difference between welfare for the poor and tax breaks for the rich.  Both consist of government aid to groups of people and are designed to ‘spread the wealth around.’  It is only the recipient groups that are different.” — Bryce Babcock

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By KDelphi, November 21, 2008 at 2:51 pm Link to this comment

Bravo, Alan Mcdonald! Lets hope, for the Chinese peoples’ sake, that they follow the Japanese/EU models…

One reason the EU social democracies will not “throw the working classes” “under the bus” (or high speed train), is because THEY (the people) will NOT take it! And, apparently, the Am people will….

Wont you? Fellow citizens? DC wants to know: Are you just going to take this crap?

I hope that the election results are not your final answer…

As Eugene Debs said, the Am. people can have anything they want,. It seems that they dont want anything. (paraphrase)

Lets not humiliate our great grandchildren.Lets get on the right side of history.Imperialism or true citizenship—we get to decide.

We could make it—anythign we want. That terrifies them. Lets do it anyway.

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By Alan MacDonald, November 21, 2008 at 2:29 pm Link to this comment

Can anyone imagine the ’social democracies’ of Japan and Europe allowing the keystone of their ‘working-class’ / middle-class, stable political economic societies: their advanced, industrial, manufacturing, high-wage, auto industries, being allowed to fail?

Certainly, their top execs. might start driving C-class, instead of S-class Mercedes, but Japan and Europe would never let the heart and soul of their cohesive and relatively egalitarian ’social democracy economic model’ push their low GINI indexes of income inequality (0.23 to 0.32) up into the danger zone of the US’s socially unstable 0.48 — well above the level at which our own CIA warns of systemic “civil unrest”, and approaching the 0.53 level of Zimbabwe.

All other normal, modern and advanced social democracies, like Germany and Japan, will resist the American model ruling-elite corporate financial empire’s demand to pauperize their working-class, assert imperialist control over all assets and productive labor value, and extinguish democratic self-government —- except the US itself, which will turn against its own people as it has in its abnormally high GINI index of income and wealth inequality, unequaled in any democracy, and matching only banana republics, military dictatorships and royal family oil monarchies.

Ignoring and breaking laws and regulations on the global oceans is called piracy.

Ignoring and breaking laws and regulations in global finance is simply called ‘American-style capitalism’, aka hedge fund banditry, and private equity piracy.

Well, the Somali pirates may still be doing well with their lawless high-seas looting of everything from fishing boats to super-tankers, but it looks like the global private equity pirates may have more trouble looting China than their own ‘home turf’ in the US.

During the spreading global financial crisis it has been widely reported, in the BUSINESS PRESS, that China is carefully considering the differing business models of Japan and the European ’social democracies’, compared to the rougher, wild-western ‘American model’ of anything-goes-financial-capitalism.

One wonders if a minor legal skirmish between the American based private equity and hedge fund outfit, TPG, vs. China is just an isolated case, or a foreshadowing of a bigger battle between the laws and acceptable practices of sovereign countries and the more ‘flexible’ needs of private equity pirates and hedge funds to govern/pillage what they view as ‘their own global sphere’.

Will China decide that the laws their own country defines will protect their citizens and their country (a somewhat antiquated model outside a few dozen advanced ’social democracies’ in Japan and Europe), or will China follow the ‘American model’.

Even Francis Fukuyama is probably watching to see how this series develops on the new; ‘(End of) History Channel’.

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By Myron Hoitomt, November 21, 2008 at 2:06 pm Link to this comment
(Unregistered commenter)

I am a concerned lifelong (73) US Citizen and resident of Wisconsin. I am deeply concerned about the US Auto Industry. In 1981 I ordered the first front-wheel drive available in the US, which was a Toyota Tercel. It turned out to be an excellent small car, good gas mileage and low maintenance. Our daughter was driving it when she was side-swiped by another driver on a very busy in-city Interstate Highway. The car was demolished, but fortunately she escaped with only a few bruises. I disliked the idea of driving a foreign car, so I purchased a new Chrysler product and have continued to buy from the Big-3 since. I now own a 2005 Chrysler Mini-van, 2005 GMC 3500 Truck, and a 2007 Ford Focus. I have not had any appreciable service problems with any of my vehicles.

Enough history. What can be done to revitalize the US Auto Industry (AI)? Before the problem can be fixed, the cause must be acknowledged:

1.  The US AI quality and reliability were not keeping-up with the Foreign AI, especially the Japanese in the 1980’s and early 90’s.
2.  The US AI technology was falling behind the Foreign AI in the development of front-wheel drive, better transmissions, better fuel economy, specializing in smaller cars and pick-up trucks, etc.
3.  Americans tend to be overly proud of their possessions, which is especially true about their cars. Once they had a foreign car or truck that had better features than their neighbors Big-3 car or truck, they now had bragging rights that they, to this day, have no intention of changing.
•  Today there is very little difference in the quality of US cars when compared to foreign cars or trucks. The difference is now more of a perception based on past-history, not on reality.

1.  Create an environment in which the American public wants to buy from the US AI.
•  Flood the communication lines emphasizing the need for the American public to once again embrace and endorse the “Buy American” philosophy, which will provide American jobs and renew American workers savings-plans.
•  Emphasize that Foreign Car Plants in the US may provide jobs, but the profit realized from the sale of those cars go directly to the Headquarters of that Manufacturer ( which now includes Toyota, Nissan, Mazda, Kia, Hyundai, etc).
2.  Reduce the price on all US AI inventory to a point where only a very rich or a total fool will not thing seriously about buying a new US AI car or truck now.
•  The difference between sale price and actual cost could then become part of the “bailout package with stipulations” provided to the Big-3:
o   Replace the present Management with visionaries who understand the present and future market.
o   Start an immediate retooling of the US automotive factories to small fuel efficient cars. This should happen as quickly as the change from cars to tanks in WW II; no more Hummers, Suburbans, Expeditions and Corvettes.
o   No dividends on stocks until there is evidence of the adoption of the latest technology in design, mechanical, electronic and assembly. The stock-holders have been as negligent as the Management. 
3.  Provide a 100,000 mile warranty on the entire vehicle, regardless of the US Manufacturer.

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By KDelphi, November 21, 2008 at 1:37 pm Link to this comment

And Geithner is going to hold Wall St and crowd to account?

It is not Larry Summers—but he used to work for them

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By bestpix, November 21, 2008 at 1:09 pm Link to this comment

Please stop bailing out the millionaires, the private jet flying people who actually think they are worth $500k/week

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By bestpix, November 21, 2008 at 1:09 pm Link to this comment

Please stop bailling out the millionaires, the private jet flying people who actually think they are worth $500k/week

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By KDelphi, November 21, 2008 at 12:38 pm Link to this comment

I dont think that we should bail then out, unless we could completely restructure the entier coporations (make them one) and fire the management.And not just the goons we saw the other day.Production is at an all time high among assembly line workes—why should they pay the price for bad management?

That being said, I was made nauseated by the finger waving that Dodd, most of the GOP, Reid, etc., did about the “Big Three”—-why??Because, they did no such thing concerning Wall St. which cost us a hell of alot more! This is starting to reek of classism. It is OK to lose working class jobs, but not finance jobs? Go to hell, duopoly!

Most car companies are subsidised by their own governments.

And, I am tired of union bashing!! These workers have to “re-consider their standard of living” , but CEOS and Wall St do not??!! Just because US Unions are crappy, is no need to scrap them—anymore than FEMA’s Hurricane Katrina response was evidence of needing to scrap FEMA.

We simply have to make them work.They do in the EU, and, everyone who is making much better than minimum wage, has Unions, by influence, to thank. But, not lately..they have been so de-fanged by neo-cons and DLC, as to almost be irrelevant.

The corporate jets—well, they got rid of two of then today, in response to public pressure. Do things look beter? Let me check…nope! The jets were red herrings—-what did Wall St execs fly in on—-commercial? As for “some of us flew in commercial business class”, that I heard the Dems touting—I havent been able to afford to fly anywhere for years.

coloradokarl—Yes , that would be partial socialism. When the wage earners own most of the stake in a corporation they will see that it succeeds.CEOs, that depend only on the Bd of Directors whims, do not care. As long as they refuse to give up their huge salaries, their houses, jets, yachts, etc., tell execs to go to hell, and keep extending unemployment benefits.Sell their luxuries and put them into the industry , which would be owned by workers.
I like the idea of them being bought up by the Unions (Steve E—Unions have made far too many conceession in this country already—that is one reason why everyone hates them, but internationally, the standard of living of the middle class is based on them—and they live alot better than the average worker here)

What if the govt had decided years ago to provide singlepayer health care? The Big 3 pay more in health care and legacy benefits than they do for steel! If these workers had sufficient health care, public pensions, and other social safety net benefits, the auto industry might be productive today.

If we let the Dems shore up Wall St, and ignore “Main St” ( I know, I hate that cliche), how can you expect “joe the assembly line worker” to be a Democrat?

There are ways to bail out the workers , without rewarding the bad business mgmt.—just as there were ways to bail out peoples’ pensions without rewarding Wall St. The question is, will Dems have the balls to do it.

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By What!?!, November 21, 2008 at 10:52 am Link to this comment

So many are critical of US quality and then you find they recently haven’t or never have owned a US car in the last 20 years.  In my lifetime I’ve owned 7 vehicles, 1 GM and 6 Chryslers.  I just bought my third minivan (2009) and the last two vans I drove over 150,000 miles each with regular wear and tear, and few problems.  My son drove my 94 van for 3 years after I sold it to him.  Bicycles are great if you live in the warm south; in northeast winters you won’t go far.

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By Spiritgirl, November 21, 2008 at 10:40 am Link to this comment

Whatever happened to that laiseze faire attitude, you know “let the free-market decide” or does that only apply when it’s homeowners facing foreclosure!  These yahoo’s showed up to Congress courtesy of private jets!  Before any bail-outs are handed out to Detroit - these bozo’s need to be jettisoned!

While I have massive empathy for the workers, these d—kwads have a lot of nerve making $30m and the companies they have been in charge of are bleeding like slaughtered animals!  They’ve kept their guard-dogs (in the guise of lobbiests) from increasing fuel efficiency standards, and their whole attitude is not to make better cars that last!  The have refused innovation even as imports have outpaced them in sales.  It is the steadfast refusal of these people that have doomed the workers - all while they are profitting!

While they may need help, maybe a combination of bancruptcy & federal help - the current crop really needs to get the boot, minus the golden parachutes!

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By samosamo, November 20, 2008 at 9:27 pm Link to this comment

Save by let em sink or swim. Who will be able to buy a car anyway, who could afford to maintain a car if they bought one, who would trust an america auto maker to produce a quality vehicle?
Povide for bicycle roads for bicycles and walking only.

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By coloradokarl, November 20, 2008 at 7:45 pm Link to this comment

Buy the company???  hmmm….... interesting. Stock options for the union members could get wage concessions. Controlling interest could get rid of the bloated management,sell the jets etc. Wait, wait….is this Socialism?

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By DavidM, November 20, 2008 at 3:40 pm Link to this comment
(Unregistered commenter)

I think it’s been proven over and over again that if we just hand $25 or $50 billion over to GM, the money will all go to the fat cats at the top to fly around in their private jets and get $20,000 massages at the Four Seasons Resort.


Why not have the government buy a controlling interest (60-65%) in GM’s stock. At less than $3 a share (the current price) that would cost us $1 to $1.5 billion.

Then give those shares to the workers of GM. And immediately call a shareholders’ meeting.

They would then elect their own Board of Directors, and likely force out the current managers- (the MBA paper pushers that got them into this mess because they know nothing about the auto industry)- and replace them with people from their own ranks (people who understand the ins-and-outs of making cars).

Then the workers all have a stake in making sure that their company is making the best products possible, integrating new technology, and building cars that people want to buy.

All while saving us taxpayers a cool $24 billion.

What do you think?

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By Steve E, November 20, 2008 at 3:00 pm Link to this comment
(Unregistered commenter)

I believe it is just a matter of how much time spent on theatrics before the bailout happens. The Dems are as usual owing to the parasitic unions. The fact that irks me is the bailout of the moneylenders, a truly devious bunch, at a much greater cost.

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By Trigger Finger, November 20, 2008 at 2:51 pm Link to this comment
(Unregistered commenter)

This is the season of giving - Better to give than to receive.
Give AUTO companies whatever the hell they want.

Everyone else grab a number and take a seat.

Next up # 87   Who has # 87?

Ok, # 87 Big Oil, you’re up.  Lucky for you, were in a giving mood so don’t low ball it.  How much you need?


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By eduardo, November 20, 2008 at 1:52 pm Link to this comment

why not let their partners over these many years, the oil companies, you know, exxon mobile, shell, sunoco, etc..
lend them all the money they need to retool and step up to the plate they should have stepped up to twenty-five or more years ago; of course, under close regulation so no further closed door compromises can be engaged in. remember the 100 mpg car? where’s the patent for that one? eaten up by the oil companies and burried.

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By felicity, November 20, 2008 at 12:58 pm Link to this comment

Not a rarity for sure, but still good to read such enlightened comments on TD. 

Back in 1955, GM alone generated 3% of America’s entire gross national product.  So what happened.  In fact we used to have a saying, “As General Motors goes, so goes the nation.”  (Actually, kind of prescient in a perverted sort of way.)

Detroit, like the dodo bird, has directly led to its own extinction by not adapting to its changing environment; therefore, it’s now at the point of adapt or die.  Any money injected into the present stasis will only prolong the time between now and its inevitable death.

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By Blackspeare, November 20, 2008 at 11:22 am Link to this comment

The answer to the US automobile industry is so simple that maybe its too simple.  GM, Ford, and Chrysler have too many divisions and too many models.  Pare them down, reduce overhead and labor costs, produce a competitive car and voila back in business!

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By What!?!, November 20, 2008 at 9:55 am Link to this comment

Congrats on a thoughtful essay.  I live in southeast Michigan and the recession here has been going on for years.  When Mound Rd engine closed so did many small shops and businesses nearby.  It’s never just the auto companies that are hurt.  Organized labor has made many concessions over many contracts.  The auto company’s loss is also Michigan’s tax base.  As a health care worker we have our own reductions now directly related to our increasing population of the uninsured. Detroit’s hospitals are closing in alarming numbers.  We even started our own food bank because our patients are not only sick but hungry too.  Twenty five billion is a lot of money (what is that, 2-1/2 months in Iraq?) but it’s a loan.  Salary caps, payment plans, conditions – bring ‘em on.  Any thing is better than benign neglect from the Fed.

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By davidperi, November 20, 2008 at 9:49 am Link to this comment

I watched Michael Moore on Larry King Live and he suggested that they go through chap 11 and kick the ceo´s out with the top management until the car industry gets it right.  No bail-out because of the ceo´s are just double-talking what they will do in the future.  It has been many years since I bought one of those U.S. made rust-buckets.

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By Samson, November 20, 2008 at 9:44 am Link to this comment

Two issues ...

One, for a long while there, these companies focused on SUV’s.  They did so because there was short term profit in there.  Lots of people tried to warn them that this would end, and that oil prices would rise.  But instead they focused on the short term profits in selling those SUVs.

So, now that that trend has ended, we should reward these companies?  They cashed in on the short term profit, but failed to plan for the future.  This should be rewarded?  That seems to be today’s model for crony capitalism in the US.  Cash in short term, and buy politicians for insurance against problems in the long term.  Apparently its the tax payer that is supposed to pay all the costs for lack of long term planning.

Also, I want to choke when I hear these execs hiding behind talk of all these American jobs.  Of course, they’ll close any American plant and move those jobs to Mexico or China at the drop of a hat.  But, now when they want billions of tax payer dollars, they are suddenly so concerned with the American worker.  Yeah, right?

Why don’t we just buy the companies and nationalize them?  The arguments about how important these jobs are leads to that solution ... not just feeding them more and more of my tax dollars.

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By oldrnsin, November 20, 2008 at 9:09 am Link to this comment

In my opinion, Detroit needs to scrap everything that isn’t fuel efficient, which means their entire line.  Retool to manufacture electric cars and hybrids.  GM has shown they can do that by manufacturing 100 of the EV1 back in the 1990’s.  The government has already set aside 25 billion dollars to help in that endeavor.

Second, consumers have to be given a reason to buy even in a bad economy.  Profits have to be set at the minimum and prices have to be affordable. Union workers have to take pay cuts, but that’s better than no job at all.  A cap of $250,000 per year should be placed on top level management salaries. Incentives such as tax credits and deductible interest payments must be provided by the government to encourage the public to buy. 

Bailing them out so they can continue business as usual is a mistake.  The mandate is for more energy effecient vehicles and less dependency on oil and the quicker we get started with that the better off we’ll be.  A bail out will only postpone the inevitable.

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By Fahrenheit 451, November 20, 2008 at 9:01 am Link to this comment

@ Titus Levi;

Well done, bravo.  IMO you have nailed it, but I fear it’s too cerebral for the masses.  Alas, your analysis is spot on, but it will fall on deaf ears.  In a society already numbed into apathy and lacking in critical thinking skills, like water, we will seek the easiest route to continue our sleep of ignorant bliss.  We elect our leaders so as not to disturb us too much.  The die is cast and it is up to thinking humans to make their choices and act accordingly.  It is long past for us human beings to swear allegiance to mere governments; it’s time to form communities that are outside of, yet operating within the corrupt governments that would control us.  The novel, Fahrenheit 451 is operational at this time.  This is a time to be vigilant!

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By hippy pam, November 20, 2008 at 7:59 am Link to this comment

These CEOs got BIG MONEY for moving the jobs OUT of AMERICA….They wanted CHEAP LABOR in UNREGULATED COUNTRIES in order to REAP LARGE PROFITS with which to LINE THEIR POCKETS.All this was done with “the bullshit bunches” blessing…Now “they” are asking for a BAILOUT.They should receive NOTHING.They should have to SELL ALL ASSETS and live like the rest of us…..

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By G.Anderson, November 20, 2008 at 7:50 am Link to this comment

Brother can you spare a dime?

What’s it going to take before people realize that their righteous anger and indignation are misplaced?

Our country is fighting for economic survival, how angry will we be when GM and Ford, and Chrysler are gone, and along with them millions of jobs? Possibly even yours.

Why not give the workers the money, and let them run the car companies, like Southwest Airline.

Economic Doomsday is here, right now, at the front door.

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By coloradokarl, November 20, 2008 at 7:11 am Link to this comment

nobody has mentioned the OTHER option. Low interest loans to buy high gas milage cars for people who have lass than a 700 credit score. Too simple?????
Bottom up or top down?

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By Blennylips, November 20, 2008 at 6:52 am Link to this comment
(Unregistered commenter)

With Peak Oil approaching, the individual vehicle may be (or should be) dead.  Lets get the car companies helping to create a functional railroad / light rail infrastructure.  Or, get them in the Zipcar business.

Point is, why keep the buggywhip business alive…we should be looking for something that fits the new economy that will arise from the ashes of this one.

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