Should the Government Bail Out the Big Three U.S. Automakers? HuffPost Bloggers Weigh In

Bail Them Out!

Leo W. Gerard: Congress Bails out Those Who Shower Before Work, but not Those who Shower After Work:

When the representatives of blue collars went to Congress hat in hand, lawmakers insisted that to get loans automakers would have to present viable business plans. Congress didn't impose similar conditions, however, when Bernanke and Paulson went to Congress seeking grants for reckless white collar firms.

Jim Moore: A Kid from Car Country:

The idea that GM and Ford or any of the big names might be on the verge of bankruptcy would be incomprehensible to my father. How could that happen when the UAW built the cars that were designed and the American public gladly purchased them? Consumers wanted SUVs and they came off the line, until the price of gas hit $4.00 a gallon and suddenly Detroit was left with shining, glorious dinosaurs. Is that the workers' fault?

Grant Cardone: How to Create a Successful Auto Manufacturer Bailout Plan:

I believe it is important to our entire economic structure that the auto manufacturers are assisted at this time. However, regardless of where the money comes from, it should never be given without having a solution in place that will resolve the entire problem. Any program that does not address and handle all the components of the problem will not result in any real solution.

Dave Winer: What to Do with Detroit?:

We're giving Detroit money we don't have to feed and house their employees and bail out their suppliers. We're doing it to save our country, not to save the auto industry as it's currently configured.

Dean Baker: Will Henry Paulson Sink Detroit?:

Congress has used its regulatory muscle before to force Detroit to make other improvements to our cars, from seat belts and air bags to catalytic converters, all of which Detroit refused to do voluntarily. Now that the tables are turned and Detroit is doing the begging for a handout to save itself, Congress should demand in return a serious, long-overdue increase in fuel efficiency standards for new cars and trucks.

Laurie David: Adding Teeth to a Detroit Bailout:

Congress has used its regulatory muscle before to force Detroit to make other improvements to our cars, from seat belts and air bags to catalytic converters, all of which Detroit refused to do voluntarily. Now that the tables are turned and Detroit is doing the begging for a handout to save itself, Congress should demand in return a serious, long-overdue increase in fuel efficiency standards for new cars and trucks.

Toby Barlow: Romney's Idiotic Plan for Detroit:

Having the Big Three go bankrupt may lead to some "restructuring," but when you think about the local dealers, the suppliers, and all the businesses contingent on their success -- somewhere between two million or four million jobs are tied to the domestic car business -- your plan stands a good chance of restructuring our economy right into the garbage can.

Matthew DeBord: Bail Out Detroit -- Right Now!:

We'll never have another opportunity to take millions of U.S. workers and transform them, practically overnight, into Green warriors. And we need to do it before Christmas. The North American International Auto Show, which will be staged in Detroit in early 2009, can't be a funeral. It has to be a rebirth.

Robert Creamer: America Needs a Strong, Unionized Auto Industry -- That Requires Government Action:

If we allow the unionized American automobile industry to collapse, we will accelerate the reduction of middle class incomes for everyone. That collapse would start a tidal wave of lower wages and, in turn, lower buying power throughout the economy. The auto industry and its suppliers represent a huge chunk of the American manufacturing sector. The collapse of GM or Chrysler would throw hundreds of thousands of workers onto the shrinking job market. It would start a domino effect of bankruptcies and layoffs among suppliers and dealers all over the country.

Robert L. Borosage: Free Fall:

The time to get started has already passed, as the downturn is accelerating. Tomorrow, as Senate Majority leader Harry Reid suggests, Congress should pass a $100 billion down payment on recovery, while instructing the Treasury Secretary to use some of the $700 billion rescue fund to help keep the auto industry from going belly up, with devastating effects throughout the Midwest.

Jeffrey Feldman: Mitt Romney's Ye-Olde-Times Plan For Detroit:

Now is the time to compel change in the auto industry, not rush into bankruptcy and hasten a wave of layoffs. What Republicans fail to see is plain to anyone with a moral conscience and increasingly apparent even to some who lack one: a bankruptcy for any of the Big Three would bring eruptions of unemployment so destructive it would make Krakatoa seem like a baby's burp by comparison. Sure, millions of auto workers would lose their jobs from Michigan to California (that's right...it would not just be pain for the Mitten State, but everywhere). But that would just be the beginning. Every industry in America would also be destroyed by the eruption of unemployment that would result from a Big Three bankruptcy.

Bill Scher: The Next Bailout: Handouts or Hybrids?:

Such irresponsibility shouldn't be rewarded, but exploited. With the auto industry in dire straits, we taxpayers have maximum leverage to demand the cars necessary to help lower energy costs, cut carbon emissions and reduce our dependency on foreign oil.

Randi Rhodes: Bridge Loan to Nowhere or Bridge Loan to the 21st Century?:

Disaster Capitalism is alive but may be on life support. Time to pull the plug. Republicans may grieve if they wish, but we should dance on its grave and get our money back! We can start with getting $25 billion of the $700 billion back in the next few days. Let's take it from the bank bailout and loan it to the auto industry and build a Bridge Loan to the 21st century.

Michael B. Laskoff: Class Warfare with a TARP:

I am not advocating socialism, but when it comes to bailouts, Motor City and Wall Street should be equal.

Aemilia Scott: Objects in Mirror Seem More Relevant Than They Appear:

As distasteful as it may seem, a bailout of an entity like GM or Chrysler -- companies that employ over 3 million Americans -- are a hell of a lot closer to Main Street than the bailout of a lending institution.

Let Them Fail!

Don McNay: CEOs Need to Run for Sheriff Just Once:

I've been opposed to the bailouts since day one.

Alan Schram: Let GM Fail:

We must not be afraid of the bankruptcy process. Bankruptcy does not mean liquidation. The process will help the company, not eliminate it. It would give GM the cover to do what it absolutely must: close plants, eliminate unprofitable brands and dealerships, and shed its bloated cost structure. It will enable GM to wipe the slate clean and emerge stronger. Going forward it will be able to compete again, without the inspissating heavy burden of past obligations.

Chris Kelly: What's Good for Cerberus Capital Managment Is Good for America:

Autoworkers are aces with me. And so are cars. Very useful for getting around. That said, there are only two reasons to save an American car company: Nostalgia and nativism. And neither of those is a very good reason.

Francine Hardaway: Poor Obama... It Gets More Complicated Every Day:

I am heading to a conclusion that we ought to let these companies go bankrupt, and throw our energy into restructuring them forcibly while shielding them from creditors so they can continue to operate, which always happens in a Chapter 11 filing. They will get DIP (debtor-in-possession) filing, won't they? The board can then throw out the CEO if he isn't doing the job, can't it? And the company will come out stronger.

Pam Atherton: Memo to Automakers Wagoner, Mulally & Nardelli: Fire Your PR People:

Now, there are plenty of other things you three guys could do to win over our confidence and get us on your side to back a bailout plan. But these first mistakes are so significant, it will be extremely difficult to win us over, if you can at all.

Overhaul Them, and Other Options

Nathan Gardels: Woolsey: Any Detroit Bailout Must Break US Oil Dependence:

A mounting chorus of voices -- including President-elect Obama's -- are linking any economic stimulus or any related bailout of Detroit to environmental and energy independence objectives.

Leo W. Gerard: Congress Bails out Those Who Shower Before Work, but not Those who Shower After Work:

When the representatives of blue collars went to Congress hat in hand, lawmakers insisted that to get loans automakers would have to present viable business plans. Congress didn't impose similar conditions, however, when Bernanke and Paulson went to Congress seeking grants for reckless white collar firms.

Joel Shukovsky: Get Your Head Out of Your Detroit:

President-elect Obama risks making the first big mistake of his administration if he condones a $25 billion bailout with these corporate yahoos still at the wheel. Current management has to go the way of the Edsel. America loves a reinvention. The great American automobile is our legacy and Americans deserve to take it back.

Terence M. O'Sullivan: Working People and Good Jobs are the Foundation of Our Economy, Not the Problem:

As pundits address the various reasons for the American auto industry's problems a frequent target won't be bloated CEO salaries, a lack of executive accountability or a flawed business plan. The target will be the men and women who go to work every day doing the best job they can.

Logan Nakyanzi Pollard: Do It For Me, Matchbox Man:

Someone needs to envision and direct the car industry for today. And when you've got half a bucket full of money and the other party has its hand out, that's a good time to start making demands.

David Paul: Will We Let Detroit Go and the Recession Deepen Out of Disgust Over Financial Bailout?:

We have watched one bailout unfold, and we have not been impressed. We heeded the Wise Men, and now we feel violated. But how do we now hold failing auto companies to a higher standard?

Ben Yarrow: A Universal Bailout:

The Big Three automakers are on the brink. So is America's health care system. Done right, bailing out Detroit could save both.

Steve Parker: Detroit's Day of Reckoning (with Thanks to David Halberstam):

Well, it looks like the jig is up, the party's over, the lights are out and Detroit has left the building. And instead of a $25 or $50 billion golden goose, it appears Chapter 11 bankruptcy, which allows a company to stay in business while they reorganize with a government overseer, seems to be where the Detroit Three are headed.

Laurie David: Detroit Bailout -- Let ExxonMobil Foot the Bill:

The best idea I've heard in the last few days comes from an unlikely source, the actor Ashton Kutcher on the Bill Maher show, who repeated the suggestion that the auto industry go meet with the oil industry -- their partner in crime -- and ask them for a bailout. At least we know ExxonMobil can afford it.

Neil Young: How To Save A Major Automobile Company:

The government must take advantage of the powerful position that exists today. The Big 3 are looking for a bailout. They should only get it if they agree to stop building autos that contribute to global warming now.

Jane Hamsher: Chinese Want To Buy the Big 3 Automakers:

All the Shock Doctrine fanatics cheering to drive the the Big 3 into bankruptcy "restructuring" (like Mitt Romney, who can kiss future hopes of electoral victory in Michigan goodbye) might want to think about the implications of this.

Jonathan Tasini: Big Media: Screw the Auto Workers:

We can have an honest, public debate about whether the auto industry should receive taxpayer dollars to keep it from sinking. But, in my opinion, the traditional media has played an irresponsible role in feeding the pro-business, anti-union line that UAW workers are "overpaid".

Charles D. Ellison: Elements for a New Economy:

Let's admit, a reasonable "big idea" alternative to the "bailout" plan is in short supply. Our imagination these days only goes so far as what fixes we can buy ourselves out of. In desperate times we reach only for the most desperate of measures: more money. Should that mean we lose all sense of common sense?

Carl Pope: The Peculiar Politics of Bailing Out Detroit:

The choice facing the federal government is not whether to spend billions on a bailout. It's whether to bail out the company now, in the hope of rescuing it, or to bail out the medical, pension, and unemployment costs of GM retirees, workers, and suppliers after a bankruptcy.

Amitai Etzioni: Bail Out the Workers, Not the Plants:

Rescuing the workers should take the form of paying for their retraining, relocation, and extended unemployment benefits, and even assuming responsibilities for their health insurance and retirement funds, now paid for by the Big Three. The costs of bailing out the workers are much smaller than keeping them afloat by bailing out the plants.

Mitchell Bard: The Meaning of Change Will Be Tested by the Auto Industry Bailout:

The question shouldn't be whether or not to bail out the U.S. auto industry. Rather, the debate should be how assistance to the car manufacturers fits within the larger national energy plan that is greener, self-sustaining and economically positive.

Mitchell Bard: GM Goes Grassroots. A Son is Torn:

In the 27 years we've been a family, our story has never been more important to the country. On the one hand, Dad, if we don't bailout your company and the backbone of our economy, it seems we're doomed. On the other, if we don't work now for our future and a transition to a clean energy economy, we're doomed. It's heart wrenching, Dad. I'll go ahead and tell you now that I will help you, but I need you to be willing to help me too. Please hear me out.

Ray Kimball: Industrial Base:

There are certainly some powerful economic arguments for a bailout of the Big Three. But national security is simply not one of them. In order to tap the best ideas and processes, the whole world must become our industrial base.

Harvey Wasserman: GM Must Re-Make the Mass Transit System it Murdered:

Bail out General Motors? The people who murdered our mass transit system? First let them remake what they destroyed.

Comments

[THEVOICEOFMODERATION]

For the life of me I can't understand why so may "middle class" people want to let the Big 3 auto manufacturers die. I can understand why some Republicans from Southern states that have foreign auto companies' plants would love to see their constituents' competitors be eliminated. Other Republicans want to use this as an opportunity to crush the auto unions, because of their support of the Democrats. Most Democrats are feckless, so while Congress fiddles, Detroit burns (actually the whole Midwest). It just gets worser and worser. It's very simple... the government ruined the financial industry and haven't restored liquidity... people can't borrow money for car loans and the Big 3 can't get the bank to provide bridge loans until liquidity is restored and they start to sell cars again.The guv'mint broke it, they need to fix it.

[ranchero42]

There's only one way to make this work: priority one is to make sure the first outlay of the bailout money is used to buy up a majority of stock in G.M. and Chrysler. As long as there is the slightest chance of oil companies controlling decisions inside these golden parachute mills, we all lose.

[PleiadianPrincess]

I may not think that they should bail out the Big Three because I do not see them bailing out anyone else. However, I do not see this as Democrats "caving in" to Bush demands either.
It is quite likely that there are real reasons for this decision.

1. It will keep the automakers producing cars in AMERICA rather than Brazil. Obama has made a point of speaking of job creation to keep people working.
2. I am sure that there will be some stipulations as to what kinds of cars to produce that will meet with energy changes away from fossil fuel consumption. One of his expressed goals.
3. Obama has been quoted as saying that the big execs need to leave. This is an extremely good point as they take huge salaries so why should they provide bailout money to continue to finance those big execs salaries. Let them work to bring order as we all must do.
4. I have confidence that Obama will ensure that that bailout money is spent in accordance with his goals for reconstructing America. Keep in mind he is coming into office to a completely destroyed economy and has proposed very excellent ideas at fixing these problems.

We need to give him, Congress and his administration a chance to do this. Have faith! The man has not even taken office yet!

[lolcopter]

Let them fail. GM, Ford, and even Chrysler to a certain extent are all international companies with factories all over the world. Who are we to prop up these international companies while providing no help or relief to others (Toyota, Volkswagen Audio Group, etc.)

They should file for bankruptcy and be restructured and sold.

[lolcopter]

edit: Volkswagen Audi Group, not audio, haha

[Mikey48]

Let them fall !!! These companies have been out of control for to long. Overpaid exec's, overpaid workers. And where are the economical cars that we so desperately need? The big three are in with the oil companies, and big oil says "build them big and powerfull". Let them fall. PERIOD. No tax money for them. Let them borrow from Toyota or Nissan.

[DVK]

Let them borrow from the Big Oil Companies. I heard this suggestion on NPR. Makes the most sense to me of anything I've heard. Tell your congressional reps.

[TheSolver]

Auto Industry Problem, lets spend the money wisely.

The facts:
Auto sales have virtually stopped.
Auto inventory is stacking up.
Huge numbers of people are dependent on continued auto sales.
25 billion is a suggested figure to help the auto industry.

Suggestions:
Do not just give the auto companies the money.
Have a 1/3 or ½ off price sale on a first come first serve basis.
The companies advertize the discount price.
The consumer pays the discounted price (Minus government portion and any company discounts.
A loan is made for the rest of the price of the car to the companies from the government.
Only one car is eligible to a family and/or business.
The government gets the same interest rate that the auto company charges the customer.
The government does not own any of the cars.
Other restrictions could be placed on the loans by Congress.

Results:
If the average price of a car sold is $25,000, that could mean sells of 2 million cars.
If the average price of a car sold is $10,000, that could mean sells of 5 million cars.
$50 billion will go the auto companies.
A big chunk of car inventory will be gone.
The car market will be active again.
Banks will be more likely to lend because they are on the hook for less than ½ of a usual car loan because of the government paying and any discount and any customer down payment.

[slemay]

What if I want to buy a Toyota?

[Beamreach]

Perhaps Japan will offer you a discount.

[tommie2]

I dont like the bailout but dont want to see the loss of jobs. Then I was watching some of the speeches on c-span and learned that there was a rider on the bill' to raise the salaries of federal judges, they are in for life, they receive the same pay when they retire, they do not need a raise, why is hooked onto this bill and how do I find out who added it on. Senator from Louisiana would do well on the stage, the facial contortions were bad. Have you noticed that the people that dont want the bailout are states that have some car plant of some kind in their states. We allowed wall street to keep their jets, salaries, and make no fuss about the salaries of their employees.. It is just so frustrating. I was always under the foolish belief that U.S. Senators were suppose to look out for the people of the U.S.

[Collielady]

The Big 3 aren't asking for a "bailout", like Wall Street gets. They're asking for a "loan". The current White House, along with their elitist corporate cronies, have driven this country over a cliff and won't be satisfied until they've gutted the treasury and reduced the middle class to third world living standards. This has been the neoconservative goal. With just a few months left of the current administration, the time had come to cash in on their shrewdly crafted "financial crisis". Iraq hadn't quite finished this country off.

Conservatives hate government that is by, for, and of The People; the kind of people who work for the Big 3 and whose taxes are bailing out the bank and insurance cronies. Unions are a threat to conservatives. They want a citizenry that is too overworked, underpaid, and overwhelmed to expect anything of government. Conservatives concocted the term "government handout" and used it to turn Americans against each other, all the while raping the treasury for themselves and their cronies.

The Reagan legacy is unfolding. The unions are all but abolished. The president elect won't have enough money to enact his "socialist" programs. And, don't forget that Social Security is going broke, so don't expect it. Your check was cut to Wall Street.

[greenriverkate]

I second every word you say!

[kiter1]

No the government should not bail them out . The government should give every tax payer 1 million dollars and let them use it to start small businesses, put it in the banks so banks can have capital to loan to businesses and customers, and the people could buy thier own health insurance and not have a government run health care system. Also they can use it to get current on their home mortgage.Put the people first

[greenriverkate]

We, the people would do a better job than is being done now. AIG using the money for CEO's is a crime in itself. We could buy houses, cars, groceries, invest and build this country from the bottom up. Something we have always done as they are living on our tax monies with their big pay in Congress. All of us working people would know just how to use the money. Since we have lost wages for years and the cost of living has continued to go up up up, we could catch up and put the money back into many systems. Why should we front the rich that have already misused the money.

[lobear00]

If the people have to bail out the Auto industry, then the people should take control of it and get rid of all their management people and let the employee's run the companies. Take away from the Executives their' "Million dollar wages, their "Golden Parachutes, their "Bonuses", and put these "Rats " on the "Federal Minimum Wage Program". And of course seize all their assets.

[sueinmn]

If we allow the unionized American automobile industry to collapse, we will accelerate the reduction of middle class incomes for everyone. That collapse would start a tidal wave of lower wages and, in turn, lower buying power throughout the economy. The auto industry and its suppliers represent a huge chunk of the American manufacturing sector. The collapse of GM or Chrysler would throw hundreds of thousands of workers onto the shrinking job market. It would start a domino effect of bankruptcies and layoffs among suppliers and dealers all over the country.

As distasteful as it may seem, a bailout of an entity like GM or Chrysler -- companies that employ over 3 million Americans -- are a hell of a lot closer to Main Street than the bailout of a lending institution.

Sounds like the fair thing to do BUT get rid of those CEO's!!

[mmz]

P.S. Keep gas at $4 per gallon! Where else is the money going to come from to fix everything!

[mmz]

Let Exxon bail them out. They seem to have plenty of pocket change--at least, a lot more than the tax payer does. Don't the oil companies and the gas guzzlers have a rather symbiotic relationship?

[akaJohnQ]

The main argument i"ve heard against allowing GM to go bankrupt is that it would not be able to get the loans and financing it would need to re-tool and re-invent itself. Could that not be where the bailout comes in? GM is broken, and it must be re-structured from the ground up if it is to regain it's status a self-sustaining company. A permanent fix will require a new CEO with a vision for the future of the industry, new union contracts, new product lines, and more streamlining and less duplicity. (no Chevy truck and GMC truck...one or the other) Change must happen. Allow GM to file for bankruptcy; then use the bailout money as the financing needed to re-form, re-tool, and re-organize GM into a more efficient company for the 21st century. If GM gets the bailout without requirements for drastic change, it will continue with business as usual, (which got it into this mess in the first place) and it will be back for another bailout in 5 years.

[Beamreach]

Yes! That's the American way! Let them file for bankruptcy - that way they can defeat the unions - you know, those folks that built the middle class. Whatever workers they manage to hang on to will be glad to work for much lower wages - of course their kids won't be able to go to college and they can't afford as much cheap plastic crap from China.

They can also default on all those "legacy costs" - you know the pension and health care benefits of all the retirees- that's the way to treat retired workers -send them to the poorhouse. It's a great deal for almost everyone - oh wait - those vendors that don't get paid off will probably have to file for bankruptcy next. And then all the cleaners, beauty shops, and other businesess that support those communities will have to shutter the doors. Oh well, sh*t rolls downhill. Welcome to the leaner, meaner, more efficient American economy.

[BobinPgh]

But bankrupcy would also allow the automakers to shed some of the excessive, sleazy dealers that cost them a lot of money. I heard the hearings today and it sounds like they are going to have an "almost bankrupcy" - that is shed dealers and workers and plants as if there was a bankrupcy but not declare so. Meanwhile 71 dollars to put 1 bolt in 1 place all day? Even a doctor doesn't get that much and when you see a doctor, hopefully you don't have to see them again and again. When I see clips of automakers none of them are smiling and do they really WANT to work there?

[entropygal]

Please do not blame the automakers for the mess they're in with low MPG cars. I began carpooling, conserving and recycling during the 80s because it was the right thing to do.

When I saw the SUV era, SUVs driven by, I'm sure, liberal people who would call themselves environmentalists, I was aghast. At the time, even Bill Maher said that the government should be leading and guiding us to change . In the meantime we see nothing wrong with driving gas guzzlers that pollute. (I'm going to smoke for years until someone tells me for sure that it's bad for my health....then cry and blame everyone else?...)

The auto industry offered high mileage and electric cars but these never took off and sat on the shelf. Now we blame them. It just doesn't make sense. The companies put products on the shelf, what you buy is up to you. Now we pound them for not retooling in advance....

[isthatso]

I was also struck by all the big trucks and SUV's I saw on the roads. Everyone is blaming the auto makers but until gas reached $4.00 a gallon it seemed everyone was buying them. I do blame the car makers though for not making fuel efficient cars and trucks, they just don't see thing coming until its to late. I think they need a drastic re-vamp of the top people who just are not forward looking people.

[adey]

Give them the money, with conditions. All money stays in the US. All manufacturing returns to the US, must remain for 20 years from date of loan repayment. Must provide living wages for all workers, must provide proof of citizenship for all employees. All Execuctive perks (retreats, jets, etc) taxible as wages. They are part of the problem. Make them be part of the solution.

[mmz]

Let Exxon bail them out. They seem to have plenty of pocket change. Alot more than the tax payer does! Don't they have a rather symbiotic relationship?