Living Car Free - Should we bail out the Big 3 carmakers?

GM said they might have to suspend operations very soon. Chrysler and Ford aren't far behind in the race to business failure. The lame duck Democrats in Congress say they'll push through a bailout plan to save the Big Three. President Bush (yeah, we still have W) would probably veto such a bill.

I have mixed feelings about a bailout, but I do live in a GM company town. We can't even imagine the devastation that a bankruptcy would bring to Lansing and Michigan.

What do you all think? Should we rescue domestic automakers? If there is a bailout, what form should it take? What will happen if there is no federal rescue of the Big 3?

What will these events mean to you personally? What will it mean to the carfree movement?

I don't know about the carfree movement (unfortunately I've had to accept that in certain parts of the US it's simply not feasible) but I'm against the bailout.

If they're destined for failure, then they need to fail. That's how evolution happens. It would be a shame, and I feel for any who would be negatively affected by it, but to artificially prop up a flawed system with taxpayer dollars would be negligent.

So- since people don't have the money to buy cars, the govt is going to take our money
from us, give it to the car companies, and not give us a car.

The people are the big losers in this scenario.

Toyota is doing fine and builds lots of cars in the USA. GM/Ford/Chrysler shouldn't be insulated from whatever mistakes they may have made, they should compete with the likes of Toyota or go out of business trying.

If any kind of bailout is needed, I think it's for the individual people with meager incomes who don't have enough money to pay their bills, rather than the large corporations that can't pay their bills.

Let 'em go to Chapter 11, and then figure out what to do.

More likely to get union concessions (and lots will be needed) to keep them in business.

Only do it as a loan, no free money.

The UAW has a lot at stake in this. Most of the "non-domestic" auto makers in the United States are not unionized. If GM, Ford, Chrysler go under they go under the UAW is essentially defunct. I would be surprised if our new democrat government will allow that.

The ability of Americans to continually rail against socialism designed to better the lives of people while falling over themselves in support of socialism designed to better the margins of corporations will never cease to amaze me. I guess it really speaks to how many folks have been thoroughly brainwashed by the media.

GM said they might have to suspend operations very soon. Chrysler and Ford aren't far behind in the race to business failure. The lame duck Democrats in Congress say they'll push through a bailout plan to save the Big Three. President Bush (yeah, we still have W) would probably veto such a bill.

With so many auto plants in Ontario shutting down or scaling back, this is a hot news topic here as well. I am firmly against any bailouts of auto companies.

First the obvious - it is against the best interests of society to use government funding for a product which is unsustainable, a drain on resources, and a cause of pollution. Would anyone support governments bailing out the fast food industry? Tobacco industry?

Secondly I see no reason for governments to bail out private industry, unless that industry is (1) unique and (2) provides an essential service. In this case we have other car makers out there, consumers won't be greatly harmed if one or two makers drop off the planet.

There is a much better role of government, and that is helping the actual people who are left unemployed, as well as the areas losing jobs. Re-training programs, grants to move to other cities, extended EI benefits for those seeking a career change (EI = Employment Insurance), etc. Meanwhile the former auto plants can be used to manufacture something else - with municipal, provincial, and federal governments offering incentives (e.g. tax breaks) for new owners to buy and convert the plants.

Corporate bailouts are often motivated by people (understandably but selfishly) wanting to extend their employment a few more months or years, and by corporations pressuring the governments. We can't afford that anymore.

I support bailing out any entity that has become too big to fail. However, I think it should look like this:

1. Bail out entity that is too big to fail.
2. Wait for economy to stabilize.
3. Break up entity into smaller entities that are not too big to fail.

Toyota is doing fine and builds lots of cars in the USA. GM/Ford/Chrysler shouldn't be insulated from whatever mistakes they may have made, they should compete with the likes of Toyota or go out of business trying.

If any kind of bailout is needed, I think it's for the individual people with meager incomes who don't have enough money to pay their bills, rather than the large corporations that can't pay their bills.

Playing Devil's Advocate here...why would bailing out individuals who got in over their heads be different than bailing out GM? Don't these people need to figure out how to live within their means or otherwise improve their lives so that they can earn more?

I really don't know what the solution's going to be, but I think we're all in for a major realignment of our collective expectations as to how we can live our lives.

Sounds so P&R to me/

Yes we should but only with conditions like building fuel efficient cars, stop shipping jobs overseas, etc. If they aren't willing to contribute to the greater good, then let them sink.

Should we rescue domestic automakers? If there is a bailout, what form should it take?
Throw in water rights to Lake Michigan and I think you've got a deal.

Too many jobs at stake, both direct GM and all the thousands of companies that are suppliers to let GM/Ford/Chrysler fail. A loan guarantee of some type is required, along with union concessions to prevent a complete shut down of the economy. We are talking TENS of MILLIONS of jobs in all job markets (including Agriculture) / manufacturing sectors if the "Big Three" shut down. And for what it is worth, GM sold MORE vehicles than Toyota last quarter. Not even Toyota or Honda are immune from the present economy.

Too many jobs at stake, both direct GM and all the thousands of companies that are suppliers to let GM/Ford/Chrysler fail. A loan guarantee of some type is required, along with union concessions to prevent a complete shut down of the economy. We are talking TENS of MILLIONS of jobs in all job markets (including Agriculture) / manufacturing sectors if the "Big Three" shut down. And for what it is worth, GM sold MORE vehicles than Toyota last quarter. Not even Toyota or Honda are immune from the present economy.

So you prop them up. What do we do in the next years and decades, as oil prices rise to new highs, government budgets sink to new lows, and the immediate environmental damage (e.g air pollution) is even more evident? Sounds like sticking a band-aid on an infected appendix to me.

Yes we should but only with conditions like building fuel efficient cars
I'm pretty ignorant in relation to the auto industry (my interests lie in two wheels of all types) but didn't the government issue some standards to that effect recently? Like, prior to the return of the Hemi and all that crap?

I don't understand how anyone could say (with a straight face) that 'they should make a new standard', because haven't we already seen that the government will make damned sure there's a loophole for whoever they want? Sure, 'your vehicle must be xxMPG, unless it's a sportscoupe/hemi/suvblahblahmobile'.

Look at how bad the airline industry has gotten since their bailouts.

Would anyone support governments bailing out the fast food industry? Tobacco industry?

Yes we have.There was/is bail out packages for tobacco farmers.

As far as the 'BIG THREE'; let them burn, and their fat unionized payrolls as well. I think that most people would rather have a well made, fair priced import anyways. If the three won't make them, someone else will.

How does one get in to P&R anyway?

Let 'em go to Chapter 11, and then figure out what to do.

Only do it as a loan, no free money.

Bingo! Chapter 11 is there for a reason, and this is the reason.

No - they have had 30 years to improve their product up to the level of half-way decent, and they have failed miserably. Crappy cars made by apathetic Union workers is not a concept that should be encouraged or rewarded.

First, Roody, get well soon.

Well, I gotta tell ya, I'm torn. I'm so pissed that people who live well beyond their means get by, when I see those who work hard and live responsibly struggling and falling behind. Folks are really getting pinched. So, why should there be a bailout of a company that has grown fat in the middle?

I really don't think that our local and state economies would go straight down the toilet without a bailout of GM. If GM goes bankrupt, they'll reorganize and everything will work out fine.

No, absolutely not. However I fear that backlash will be directed at the government for not bailing them out when the **** hits the fan, and not blaming the failing companies.

They will get a bailout because the politicians are so short-sighted. If they bail them out it might takes years for us to see/feel the repercussions, while if they do not bail them out there will be immediate repercussions. The politician will choose the option that could allow the repercussions to be felt in a different administration.

In Ontario, the government has a long history of interest-free loans, bail-outs and other investments in the big three and, quite frankly, I resent it. I've already written to our premier demanding he not give them one more cent of my money. These are the companies that bought out countless public transportation systems throughout North America and threw money behind pro-car politicians so they could develop urban sprawl on prime farmland, deny public transportation and bicycle infrastructure and divide neighbourhoods and communities so that people can no longer interact with one another. These companies initiated car-centric culture that pollutes our air, congests our streets, kills thousands per year in auto collisions, forces people into commuting 20, 30, 40 and 50km into work, keeping them away from their families and then convinced them they needed a second car for their wives. These companies have had 100 years of death and destruction and they want me to fund it? I don't think so.

On less of a rhetorical front, I honestly believe when they reduce the number of models to a mere handful each and ensure they are less environmentally damaging (for no car can ever be really 'green'), they will start to recover. The Big 3 need a major retooling from management down through product to manufacturing. After all, cars are needed, just not always.

Do you folks who are against a bailout believe that our economy can survive the death of Ford, Chrysler aand GM, on top of the trauma in the housing and finance industries? I don't think so.

If you have stock in a 401K, pension or mutual fund, I bet you've already lost money due to devluation of auto stocks. Do you want to lose more?

As I understand it, the crisis in thr auto companies is not totally their fault. Ordinarily, in a recession the companies will borrow money to cover operating losses. (IIRC, they've weathered more than dozen recessions this way--including the Great Depression.) However, this time they can't borrow money because of the credit crunch. So they're burning through their cash reserves to cover operating expenses including payroll and health care. It won't be long before the cash is gone and they'll have to shut down. The employees will be hit, and the billions of dollars in plants and equipment will basically be idle and worthless.

A well designed bailout might avoid much of this pain and waste. The Big 3 build good cars now, and they do have plans for celluosic fuels and plug-in hybrids. I hate to cover their past ineptitude, but I think the alternatives are even worse.

You may know that I recently suffered a serious injury. Like the carmakers, I have a severe cash flow problem. I hsd to tell my landlord that I will have to defer 2 weeks rent payment. He could have me evicted. That would probably be the "fairest" thing to do, and it would teach me the lesson that I should plan better for unforeseeable circumstances. It would also harm my innocent stepson, who depends on me for housing. And it would even harm my landlord himself. He would lose further rent from me and he would have the hassles and expenses of finding another tenant.

Luckily, my landlord did the wise thing and bailed me out. I'll resume rent payments when my disability starts, and repay the missed rent after I returnto work. I vote for something similar for the Big 3,

I've been dismayed with the quality of the Big Three over the past few decades. For the most part, they don't build bad vehicles but if I look at Honda and Toyota and others, I can get better quality vehicles which will run more reliably, give improved fuel economy and last longer. If the Big Three could have kept up with their competitors, the automotive industry wouldn't be asking for help now.

i don't really care either way, personally.

but i do think the big three need a slap in the face to make them realize that SUVs weren't a good business plan. maybe not getting a bailout would be that slap.

as for the union workers, i do hope they find good work if they end up out of a job. maybe they could make wind-mills instead? (e.g. something more positive)

Ideally the government wouldn't bail them out. Then create something akin to many of the works programs under the New Deal to help provide jobs for laid off workers. Jobs building new rolling stock and laying track on an expanded rail network throughout the country.

Do you folks who are against a bailout believe that our economy can survive the death of Ford, Chrysler aand GM, on top of the trauma in the housing and finance industries?

No, I don't. I think it would destroy our country and reduce us to something akin to the setting of a 'Mad Max' movie, obviously. :rolleyes:

I think you're attributing a bit more importance to them (the Big 3) than they deserve.

i don't really care either way, personally.

but i do think the big three need a slap in the face to make them realize that SUVs weren't a good business plan. maybe not getting a bailout would be that slap.

as for the union workers, i do hope they find good work if they end up out of a job. maybe they could make wind-mills instead? (e.g. something more positive
I think SUVs were a great business plan. A company that wants to make a profit has to supply a desired product. The Asians and Europeans were also making SUVs. I mostly blame consumers and the government for SUVs not the carmakers.
Make windmills--an excellent idea. Gov. Granholm, Pres. Obama and the UAW are already working on it. Bill McKibben also suggested home insulation as an up and coming industry for states like Michigan. Instead of bailing out automakers, maybe huge tax credits for alternative energy and weatherproofing? And tax incentives to set up plants in the hardest hit areas?

Do you folks who are against a bailout believe that our economy can survive the death of Ford, Chrysler aand GM, on top of the trauma in the housing and finance industries? I don't think so.

If you have stock in a 401K, pension or mutual fund, I bet you've already lost money due to devluation of auto stocks. Do you want to lose more?

No clue what a '401K' is, and too lazy to Google it when context will do ;-) Back to the question...

I don't think our current economy will survive, as it now stands. Oh, we'll bounce back (most of the way) from the current recession, but eventually one or other factor will trip us up again. And the next fall will likely be worse, and the next recovery less significant. Our economy is based on mandatory growth, low-cost and unlimited resources, and no long-term consequences.

I believe there is a near-zero chance of private motor vehicles surviving the next 5 decades, at least not in the way we know them now. Bailing out the auto makers thinking it will "save" the economy is, at best, delaying the problem. If you want to save the economy - and the species - the emphasis must be on offering no support for dead-end industries, while helping individual workers, society as a whole, and industries move to jobs/products with a future.

I'm grateful I've never wanted to have children - the next few generations are in for a really rough ride. The best scenario I see ahead is a global depression - while it would hurt and millions would die, we as a species might finally get our act together before it is too late.

Back to the issue of savings and retirement - I do feel sorry for the many friends I have in their 50s or early 60s realising that they can't afford to retire after all. For me its a foregone conclusion - I'll be 37 next month, and all the way back when I was 19 and in university, guest speakers told us our generation may never enjoy "retirement" as such.

As I understand it, the crisis in thr auto companies is not totally their fault.

Um, wrong, if they had spent the last few decade creating a superior product rather than being in bed with the oil companies with trying to shackle the American consumer, they'd be just fine right now.

Also, as to your other example, about your landlord bailing you out. A more appropriate analogy was if you had shown up to work drunk on a regular basis and gotten yourself fired. The big 3 aren't victims, they screwed themselves.

Chapter 11 allows (requires) reorganization of the corporation. This is what NEEDS to happen to the big 3, period.

why prolong the inevitable? i think it wise to free up these (to be) 2.5 million job seekers to new industries where u.s.a. ingenuity can prevail. if not now, i fear it will be exponentially worse at any point in the future. it's high time to quit the short-term solutions.

as long as uaw jobs are involved with the big three, i do not see them ever being a viable competitor. and how many more decades will the japanese survive the auto industry with korean auto quality getting better by the year.

and a.a.a., is it true that u.s.a.-made toyotas have a higher percentage of parts in their cars than any of the big three? i heard 'them' say it, but i've never personally researched it to be true. if so, toyotas are more 'american' and better quality???

You guys have no idea how fascinating it is listening to your comments after having spent a fair bit of time on the automotive blogs - usually written by people who, if not enamored with automobiles, at least don't consider them the enemy to be destroyed as quickly as possible.

OK, folks, a couple of reality points - and these are NOT going to go away, no matter how they don't fit in your environmental/political reality:

1. The American automotive industry directly and indirectly employs 1 out of every 14 people in the USA and Canada.

2. While there will be massive unemployment if GM, Ford and Chrysler go under; that unemployment isn't just going to be limited to the UAW members employed by those companies. It's also going to affect the parts suppliers, who almost make the parts for Toyota, Honda, Nissan, et. al. And the business that supply the parts suppliers. And the businesses who's total involvement is selling stuff to those folks who work in the aforementioned businesses. No, nobody has figured out exactly how many people could end up unemployed, and all sorts of figures are being bandied around. However, nobody's talking in small numbers.

3. At that point, we're looking at an act that could take the current annoying-but-not-really-killing-anyone recession that we're in and turn it into a genuine 1929-1932 depression (which actually didn't end until WWII affected the US). Go read your history books on that one. Happily, I don't have to - I'm old enough to have had parents who actually lived through it, bored me to death with all the stories about it, and quietly affected my way of life to the point that I'll probably get through this whole mess without too much trouble, despite having a mortgage and a wife who's permanently unemployed (physical disability).

4. Oh yeah, that favorite whipping boy about the companies now being punished for wasting all that time making those nasty SUV's. Those SUV's were built BECAUSE THE CUSTOMERS WANTED TO BUY THEM!!!!!!!!! And they bought them to great profit to the Detroit 3, Nissan, Toyota (you don't really think they've made their profit on the Prius, do you? If you do, you're dreaming.) Where the Detroit 3 went wrong was in almost completely abandoning their more fuel efficient automobile line, letting it whither on the vine while chasing the cheap, easy truck/SUV profits. Then when the truck/SUV market collapsed due to gasoline prices, their cars were ill-equipped to compete with the imports.

No, I'm not in favor of a wholesale government bailout, given the current management of GM (which I've always followed closely, my late father was a Chevrolet dealer) and UAW attitudes, that'd be like buying crack for addicts. But the government is going to have to do something, otherwise this entire nation (and Canada) is going to be in for a world of hurt.

Chapter 11 is very tempting, given the possibilities of dropping dealers despite state franchising laws (desperately needed), abrogating union contracts (needed, but not quite as desperately), and culling production lines that are affected by the union contract - but there's a serious question of:

Will the buying public be willing to spend $10-30,000 on an automobile built by a company in Chapter 11? There's a very strong line of thought that they won't, and any company going into any form of bankruptcy is doomed to failure. And if the Depression is any historical indication, no automobile firm that went into bankruptcy back then to reorganized survived. Buying a car is a bit different than buying a washer, dryer, bicycle or iPod. Customers expect a lot more backing the product.

Maybe not, maybe they will survive - but that's one hell of a big, important industry to take a chance on.

Keep a minor fact in mind during the course of this discussion: Unlike most other forums of discussion on this matter, this is the only one I've followed where a significant proportion of those discussing flat out hate automobiles and wish they would just go away. Ain't gonna happen, not without serious repercussions to this country, and ALL of our ways of life.

You may think you're immune to whatever happens to the American automobile inustry since you live car free, travel on a bicycle and live in an urban area. Trust me, you're not. The automobile industry is a major part of your life, even if you don't have a driver's license or even intend to set foot in an automobile. It's just not a direct part.

i don't really care either way, personally.

Uh, maybe you better. This is going to affect you, too. And everybody else on this forum. It's called general standard of living, and if you're happy with the way you currently live, I seriously doubt you want to lose it.


but i do think the big three need a slap in the face to make them realize that SUVs weren't a good business plan. maybe not getting a bailout would be that slap.

Shows how much you understand about the auto business - they sold like crazy, were more profitable than small cars, and made serious profits for the manufacturers. Like it or not, as a saleable product, they were an EXCELLENT business plan. Until the double whammy of the housing bubble bursting and gas prices rising. At which point the market tanked. And then Detroit's mistake became apparent: They put everything into trucks/SUV's and ignored the cars.


as for the union workers, i do hope they find good work if they end up out of a job. maybe they could make wind-mills instead? (e.g. something more positive)

Big problem here. All those wonderfully environmentally-correct technologies are currently not going to employ anywhere near the amount of people who are going to lost their jobs over this. None of those technologies are anywhere near developed to take over from the nasty, dirty, un-environmentally correct methods that are currently powering your life.

Then again, why worry? It's only guaranteeing that there will be enough baristas available to your local coffee house. No doubt, lots of members here will consider that a fair trade-off.

Where the Detroit 3 went wrong was in almost completely abandoning their more fuel efficient automobile line, letting it whither on the vine while chasing the cheap, easy truck/SUV profits. Then when the truck/SUV market collapsed due to gasoline prices, their cars were ill-equipped to compete with the imports.
While GM was putting its attention into trucks and big SUVs, it farmed out its small car construction to a Korean company with a less-than-stellar reputation. At best, the reviews of the Chevrolet Aveo were mixed. (I was looking to purchase one a year ago and my mechanic strongly warned me against it.) For a similar car, the Honda Fit and Toyota Yaris are both solid offerings with better reviews.

You might have a bigger problem.
10.5 trillion and climbing very fast. Should be 12 by summer rolls around if not more.


The problem I have is I can't set aside my emotion and passion aside for someone who makes a Hummer?
Then when there business model of cheap gas goes poop I have to bailout people who make six figures.

I like the free market who knows maybe the chevy will pump out a plug in hybrid volt and rule the world.

Or maybe they will be bought out by Toyota.

Loosing jobs is not a bad thing, for fifty billion dollars we can create jobs like building National Parks, etc.
I think we are headed for a Depression big time By propping up the fall you only fall harder.

This is going to be one of the most difficult decisions the American government will make in the current global crisis.

And I emphasis global crisis, because whatever happens with the big carmakers in the US will have reverberations for economies right around the world, wherever these car manufacturers operate with factories and dealerships.

I don't know what the right solution is. Like skyerocker says, it's a hard problem. In this state, the manufacturing jobs are roughly equally split between breweries and cars. Trek just doesn't make many bikes in the US anymore. And while I'm all in favor of beer, there's only so much beer we can drink. And having that many UAW members out of work will not magically make Trek go back to producing bikes in the US.

If the big 3 fail, Wisconsin would be hurting like hell. And we're by no means the only state that would be hurting... Every state in the US has big 3 car dealerships. Those employ a lot of mechanics, salespeople, and accountants.

Whether they fail or not, we are all affected. Even if we hate cars.

I like the free market who knows maybe the chevy will pump out a plug in hybrid volt and rule the world.


What free market?

And are plug in hybrids really better? I mean, there has to be a reason they tell you to conserve electricity.

President Bush (yeah, we still have W).

Really? Bush is still pres? If he's "W" does that mean our next pres will be "H?" Sorry, couldn't help myself. No, the government shouldn't keep bailing out companies. The problem with the big 3 is that the union is raping them.

And I emphasis global crisis, because whatever happens with the big carmakers in the US will have reverberations for economies right around the world, wherever these car manufacturers operate with factories and dealerships.

If there is a government bailout, other countries might stand to profit by buying up the securities the U.S. likely will issue to fund said bailout. The interests will probably be high too.

No, I don't. I think it would destroy our country and reduce us to something akin to the setting of a 'Mad Max' movie, obviously. :rolleyes:

I think you're attributing a bit more importance to them (the Big 3) than they deserve.

There was a thread about building a bike for the apocalypse - I think it was in mechanics. Perhaps y'all should mosey over there and read that one. A super bike might be handy in the Thunderdome.

If the US government feels that a failed domestic auto industry would decimate too much of the country, they should consider investing heavily in the Big Three. Although, I believe it has done exactly the same for Chrysler in the 1980s... so you wonder when the business will ever learn.

Here's a good idea from Thomas Friedman (qutoing Paul Ingrassia) in the NY Times yesterday (http://www.nytimes.com/2008/11/12/opinion/12friedman.html?_r=1&em&oref=slogin)



How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.

This included striking special deals with Congress that allowed the Detroit automakers to count the mileage of gas guzzlers as being more than they really were — provided they made some cars flex-fuel capable for ethanol. It included special offers of $1.99-a-gallon gasoline for a year to any customer who purchased a gas guzzler. And it included endless lobbying to block Congress from raising the miles-per-gallon requirements. The result was an industry that became brain dead.

Nothing typified this more than statements like those of Bob Lutz, G.M.’s vice chairman. He has been quoted as saying that hybrids like the Toyota Prius “make no economic sense.” And, in February, D Magazine of Dallas quoted him as saying that global warming “is a total crock of [expletive].”

These are the guys taxpayers are being asked to bail out.

O.K., now that I have all that off my chest, what do we do? I am as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse. But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.

“In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company ... Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”

The big 3 is just that: 3 companies, not one. If there is a bailout, why not bail out just 2. Make some
kind of contest- they have to have clear, achievable streamlining and efficiency plans.

For those who think letting the 3 fail on their own would put us into the dark ages, do realize that there are foreign cars that are constructed in the USA. As far as jobs go, there is opportunity there.

Lastly (its been mentioned somewhere in BF before) The big 3 are all too big for their executives to
handle. Why not break them up into smaller companies? For example- Chevrolet would be a seperate
company from Cadillac, and so on. Shared manufacturing of parts could be spun off onto a parts manufacturing company, which could also open up competition to other parts companies who can make things better and cheaper.

In all fairness to the Big Three, it is a fact that when the economy was humming along through the 90's and first half of the current decade, gas prices were relatively stable, there was money to be made and the public cried out for bigger, heavier, more luxurious vehicles under the assumption that SUV's provided greater safety. The Big Three really only responded to market demand. However, they ignored the minority of customers who, perhaps foreseeing the future, were calling for smaller, alternative-fueled vehicles and continued to produce some so-called economy vehicles while neglecting to be truly innovative. The cancellation and subsequent destruction of the EV-1 comes to mind. Their long-term vision was clouded by greed, plain and simple, not with any desire to inflict less damage on the environment or have contingency plans for when the economy went sour. Now, today, the world economic organization has confirmed we are all in a global recession, the Big Three find themselves in the worst position they could find themselves in at the worst possible time. Serves them right. It's their own damn fault.

But, realistically, we need the auto industry. As much as I think they are to blame for many of our woes and should be held accountable for the horrendous damage they have caused around the world, the auto industry is both necessary and vital. Not everyone lives in an environment where they can be car-free like me, after all. Granted, some could and should move closer to their work so they could take public transportation (if available), bicycle or electric scooter---that is the responsible thing to do. Many more could drastically reduce their car-usage and change their mindset to considering their cr as only one of many options, not the only option when they are travelling. But that is unlikely to happen. At least not right away. So, we will continue to have most folks reliant upon cars and trucks whether a good many of them could make a significant lifestyle change or not.

The Big Three are going to have to become lean, mean and truly green to survive, however. They must dump all the 'cousin,' 'sister' and 'brother' models and offer one vehicle only in each segment. If employees have to take a pay cut so they can ensure the quality is comparable to foreign competitors, then that is a sacrifice they'll have to make. It won't be easy undoing decades of inferior quality at bloated prices, after all. That will reduce their production by about half. They need a leaner management and sales environment and, if they commit to studying and producing vehicles that will slow their deterious affects upon the environment, I would grudgingly approve of a limited bail-out, but if, AND ONLY IF, when the market rebounds, they pay all that money back with interest. If not, they can go to hell in a handbasket, and take the economy with it. We'll survive. We're durable. It won't be easy, but we'll manage. People are remarkably capable and resilient when faced with crisis. I have no doubt we'll suffer, but maybe it is the sort of cleansing we need after 100 years of the auto industry transforming our world and making it a far uglier place in the process. And we allowed it to happen.

The big 3 is just that: 3 companies, not one. If there is a bailout, why not bail out just 2. Make some
kind of contest- they have to have clear, achievable streamlining and efficiency plans.

For those who think letting the 3 fail on their own would put us into the dark ages, do realize that there are foreign cars that are constructed in the USA. As far as jobs go, there is opportunity there.

Lastly (its been mentioned somewhere in BF before) The big 3 are all too big for their executives to
handle. Why not break them up into smaller companies? For example- Chevrolet would be a seperate
company from Cadillac, and so on. Shared manufacturing of parts could be spun off onto a parts manufacturing company, which could also open up competition to other parts companies who can make things better and cheaper.

Mmmm... I think I like that idea. The two that put together the most compelling (environmental, etc) reorg strategies (similar to what would be required under Ch 11, but without having to resort to Ch 11) get the bail (which is in the form of a interest bearing loan or, better yet, social security gets some form of stock in the two companies), the other gets eaten by the 2 good ones.

While GM was putting its attention into trucks and big SUVs, it farmed out its small car construction to a Korean company with a less-than-stellar reputation. At best, the reviews of the Chevrolet Aveo were mixed. (I was looking to purchase one a year ago and my mechanic strongly warned me against it.) For a similar car, the Honda Fit and Toyota Yaris are both solid offerings with better reviews.

Exactly - I test drove an Aveo about six months ago. Still haven't pulled the trigger on buying one, however. It's OK, but not something that turned me on, and I love small cars. Actually the Yaris gets panned pretty much equally, most reviews are in the "Toyota could do better, why didn't they?" category. Yet, the general public only remembers the bad reviews for the Chevy.

Welcome to problem #1 for GM.

Problem #2: The Honda Fit has suddenly become God's Own Car. Nothing in the world, at any price, is better.

Loosing jobs is not a bad thing, for fifty billion dollars we can create jobs like building National Parks, etc. I think we are headed for a Depression big time By propping up the fall you only fall harder.

That's something that's debatable, nobody has the certain answer. The only thing we absolutely know is that President Hoover deliberately did nothing between 1929 and 1932, and the situation got way worse. Can't really blame him too heavily, because this was the way all the previous Panics (what they called them before they got big enough to become a Depression) were handled - lassaize-faire (my apologies to the probable butchering of the spelling) capitalism.

In fact, if you go through the old newspapers, by a month after the October 1929 crash, stock prices had picked back up, and it was being looking at as a couple of day anomality - sort of like what the 1987 crash was like. Nobody expected it to get worse.

The bad news for the other side is that all Roosevelt's tries didn't accomplish much either. While the economy picked up for a few years, by 1938 it was nosediving again. It took that German guy with the funny mustache to finally get the US out of the economic doldrums. Unfortunately, at the cost of quite a few million lives.

So quite honestly, we have past proof that doing nothing won't help. We have past proof that doing something doesn't necessarily help. Hopefully the upcoming administration can think of something different. However, given Congress and all their political IOU's, I'm not counting on it.

If the US government feels that a failed domestic auto industry would decimate too much of the country, they should consider investing heavily in the Big Three. Although, I believe it has done exactly the same for Chrysler in the 1980s... so you wonder when the business will ever learn.

Actually, the Chrysler bailout worked quite well - the government profited from it, Chrysler came up with some stonking new products (minivans, anyone?) and pulled themselves out to the point that they were able to buy AMC to get Jeep.

There's another bailout story that even a better example of how bailouts should be run - Harley Davidson. They went from barely surviving under AMS to insanely profiting under their own management. To the point that they asked that the government intervention be ended early.

Since tax money comes from the people anyway, we should all receive stock in the companies that
get bailout money.

It took that German guy with the funny mustache to finally get the US out of the economic doldrums. Unfortunately, at the cost of quite a few million lives.

I don't think that's really what it took. It took wild deficit spending, widely distributed throughout the population (i.e. almost every young man in the country was on the government payroll due to being drafted).

Thankfully World War II is over; nowadays we might do better spending the money on wind-electric generators instead of "killing people who kill people to show that killing people is wrong".