Would you bail on the auto makers?

Christina Lewellen
December 17, 2008
THE TALK... | Management

Well, it turns out our poll was pretty timely. Even though the majority of industry voters were against the bailout, President George W. Bush pushed the deal forward last week.

Survey Results for 12/17/2008:

Should President Bush issue a bailout to U.S. auto makers?

No

  

 

76%

Yes

  

 

24%

So now let's get to the fun stuff. Worms, c'mon outta your can!! I had to cut down the waves of responses I received, but here are a few industry comments, starting with my favorite:

"Ms. Lewellen,
Are you sure you want to pose such a question to such an opinionated industry? Wow, you either 'got guts' or a lot of time to read the flood of e-mails you'll get. ...Okay, here is my two cents (down from a dollar in the past year) worth... They aren't too big to fail. They are too poorly run to survive. Period.
But America will have the last say. We cannot be forced to buy their products, no matter what the incentives. They will fail now, or they will fail later, but two out of the three will be gone within two years. And I ... will never buy another car or truck from any of them."

"Fiscal irresponsibility does not warrant a bailout. Run your company into the ground, (I use the term 'your company' loosely, as it’s the stock holder’s company) continue to receive executive compensation in the millions for poor performance, allow the union to break you with benefits that are unheard of for the bulk of U.S. employees--and in particular blue collar workers—and what you have is a formula for failure. Bailout or no bailout there will be minimal opportunity for a successful business moving forward."

"My stand is, if the union,the auto workers and the Big 3 don't want to make the required concessions for federal help, then let them go bankrupt."

"After the bank bailout fiasco, I feel the only way to get accountability with bailout money is to force these businesses to file Chapter 11... The only way to really stimulate the economy would be to put the citizens back to work and make home loans that make sense."

"Our economy succeeds with less government, not more. This is no exception...[C]hapter 11 bankruptcy will widen the impact and involve creditors as the interested stakeholders they should be. The world will not end. Cars will still be made and sold. But hopefully they’ll produce cars that people want and need and that don’t drop a transmission after a year of use."

"No bailout, they need to fix their business model. Chapter 11 would give them the chance for a clean slate."

"...[M]ost of these factory/manufacturing workers may not have a college degree, but they are making a lot more than someone with a degree, yet when they are let go, they can't find a job to pay for their lifestyle. Realistically, GM, Ford, and Chrysler need to revamp their whole system, and align wages with reality! So there should be a bailout but only with change. If they are not willing to change, then NO bailout."

"The Big 3 are American-owned companies which provide jobs to millions of people—from the plants to the suppliers to the dealerships to the restaurants and grocery stores that feed all these people. The country will be responsible for paying more to unemployed workers. We think it's bad today, just wait until suppliers and dealerships go out of business. Is the country ready to send all manufacturing overseas? Why are we so opposed to helping fellow Americans?"

"Solution: Give the loans but insist on terms such as limits to executive bonuses, workers’ wages and pensions have to be re-nogotiated... All of this has to have an auto czar with powers to control the money until it is paid back... Just my thoughts for people who say, 'Don’t help them,' be careful what you wish for."
 

"Well, I'm somewhat torn with this. My wife works for a spin-off of the auto industry which if not bailed out could have an adverse affect on her/us. Having said that, my gut tells me, to let them survive on their own....The biggest problem is the number of people that will be affected by this. There are smarter people in this world than you and I, whom should be able to devise a compromising and comprehensive plan where wages, health plans, pensions, etc., can be altered and brought more in line with comparable industries."

“The term ‘bailout’ is a misnomer for low-cost, short-term loans. That loans would be offered implies an expectation of repayment. The money needed to pay suppliers and workers wages is tied up in unsold inventory. Fuel prices at the pump, a major reason for the unsold inventory, have dropped to level at or below where they were before the big run-up to $4.25 - $5.00 a gallon. Seems the solution would be to find creative ways to sell that inventory into a somewhat improved market while cutting cost of operations, then use the money to pay their bills. To sell that inventory, the auto companies may need to do what the rest of us do. Sell inventory at garage sale prices to get whatever money they can to pay the bills. Then ask for help on whatever they can’t cover.”

"...[O]ur body of government has already voted the proposal down. The fact that our President wants to go above and beyond our body of government and tell them they don't know what they are talking about and give the automakers a loan from the finance bailout is a slap in the face to democracy. Our body voted no for several reasons and the President should adhere to that thinking and allow democracy and government decision to be preserved."

"The auto companies ... should go through bankruptcy so that they can significantly reduce union labor costs and legacy costs. The management has caved in to the unions for decades and a lot of the problem is their fault. They have also built products of questionable quality. The public has already voted with its dollars on this issue."

"The Big 3 must make the better mouse trap. Otherwise, they should rightfully decline as all businesses do if they do not deliver the products the public wants."

"I voted no, but not because I think it shouldn't be done because I do. However, it must be done only with major concessions from the UAW. If the Big 3 automakers are to return to profitability, then costs need to be cut. Sure, some of the 'bosses' probably do make a princely wage, but they are few in comparison the the numbers of Union member workers who make, on average, more money than graduate engineers."

And last but not least.....

Courtesy of BusinessandMedia.org and Artizans.com.



 

Contact Christina Lewellen, senior editor, at clewellen@glass.org.

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