Bailout General Motors?

Dear editor:

We hear it every day. If the auto industry does not receive some bailout help from the federal government one or all three of the Big Three American automakers will go into bankruptcy. They are running out of money. General Motors alone, if bankrupt could threaten the livelihood of about 100,000 North American autoworkers. The failure of GM or one of the other companies could wipe out 2.5 million jobs, including associated industries, and $125 billion in personal income in the first 12 months, according to a report by the Center for Automotive Research. Needless to say, this is frightening news.

But, how did this happen? Is it all because of the meltdown of the financial markets and the tightening of credit? Is it all because of the loss of a million jobs that has caused a fear of buying in the American public that now is “playing it safe” and close to the vest? Or are these the final straws that broke the camel’s back after decades of poor management decisions? Did labor unions play a part in this by demands that tied the financial hands of management with the need to keep raising the prices of cars to cover retirement and health care for current and previous employees? Is it the fault of the American auto industry for not realizing the change in the desire of the purchasing public that drove them into the arms of foreign made cars? Is the problem exacerbated by the fact that Japanese and Korean cars have taken the lead in making fuel efficient cars with American manufacturers playing follow the leader? The answer to all of these questions is a resounding “YES.” All of the above.

So where do we go from here? Will a $50 billion bailout loan to the industry from Congress and the President solve these problems? Or will it be throwing good money after bad into a deep hole that will change nothing? Will it be “business as usual” in Detroit that won’t be solved by a meaningless cut in executive pay? What will our government be buying with this hard earned taxpayer money? Why is this day different than all other days?

Perhaps $50 Billion should be loaned with the stipulation that the old management and decision makers are swept out of the control, put on the unemployment lines, and a new hand-picked group of experienced executives be named by the government (not political insiders and big donators) to take these companies into a new direction.

Or perhaps, and you’ll pardon my cynicism, we should let GM go bankrupt, put those new executives in, free them from the old contracts and debts and let them start out fresh. Maybe by doing this, 2.5 million jobs can be saved and American ingenuity can once again gain the upper hand and we can rescue our most important manufacturing industry. I know this is a rather simplistic solution, but it might work and be the cheapest way to handle things.