Why Detroit is Different: Why We Should Bailout the Automakers

[Better Believe It]

November 17, 2008
Why Detroit is Different
Bailing Out the Automakers
By DAVID MACARAY

First, even though we’re being bombarded on all sides with news of economic doom, let’s not delude ourselves. The Big Three automakers aren’t just another industry, so let’s not pretend they are. Let’s not pretend they’re a chain of coffee joints or convenience stores, or even a big-time outfit like American Express, who, reportedly, is already sniffing around for some of that government money.

Detroit is different. Automakers are not only the largest manufacturing industry in the United States, they are, undeniably, the most glamorous, prestigious, loyal and uniquely American corporate enterprise in our history. They’re Industrial America’s version of the Liberty Bell, the Alamo and the Lincoln Memorial, all rolled into one. Smirk if you like, but it’s true.

I bring this up only to establish the fact that when we talk about the auto industry, we’re talking about a legacy enterprise, a cultural icon. And I’m saying that people who cavalierly assert that allowing one or more of the Big Three to go bankrupt don’t have the first clue as to the enormity of what they’re suggesting.

Besides the 240,000 people who work directly for Chrysler, General Motors and Ford, there are an estimated 2.7 million more who work in related industries, who supply parts, raw materials, sales and technical services. It’s been predicted that a collapse of the auto industry could affect as many as 3 million people, a full 5% of manufacturing jobs in the U.S.

Instead of giving away billions of dollars with no strings attached (as we’re doing in Iraq), let’s attach some economic and environmental requirements. Insisting that Detroit develop a car that gets 85 mph, with drastically reduced carbon emissions, would be a good start. By bailing out the automakers (albeit with stringent conditions) we’ll be saving one of America’s truly valuable institutions. We’ll be giving it a second chance. Twenty-five billion dollars is less than we spend in two months on this war. Doesn’t Detroit deserve a small fraction of the generosity we’re showing the Iraqis?

Please read the entire article at:

http://www.counterpunch.org/macaray11172008.html

[Parche]

1. i am mixed

First of all, they were making those fukin gas guzzlin stupid utility vehicles
and fukin hummers, instead of smaller cars, and more fuel efficient ones

:hi:

[gateley]

2. I'm mixed, too. The fact is people were buying the gas guzzlers and that's

where they were making the majority of their revenue -- and as a publicly traded company they DO have a responsibility to the shareholders to show profit.

On the other hand, it should have been a mandate that the auto makers also SERIOUSLY develop hybrids and flex fuel vehicles.

Don't know what to do now. I agree with some of the arguments on both sides.

We're really in a pickle. Thank god Obama and not McCain will be at the helm.

[Better Believe It]

3. The Choice Is Very Simple .... just ask yourself if you .....

want to put up to 3 million people out of work. And ask yourself, how much do you think that would cost compared to a "bailout"? The ripple effects involved in the destruction of the domestic owned auto industry would impact millions more. This would all but guarantee another Great and perhaps even Greater Depression. The big three and other auto makers didn't fail even during the 1930's Great Depression.

We will continue to spend more than 25 billion dollars a month for the Iraq war even after Obama takes office. Meanwhile, Iraq is sitting on about 80 billion in oil profits.

[gateley]

7. Of course I wouldn't want to put ANY people out of work -- which is why I would

support the bailout. If it was just a 'company' and the jerks at the top who manipulated what was available for us to drive, I'd say 'no'.

It's the people that make me lean toward this.

My suspicion/concern is that like the MUST DO $700 billion, the actual people will be on the bottom of the list of recipients.

[Romulox]

4. "Never mind what's been selling/ It's what you're BUYING."

Americans have such a scapegoating mentality that SUV drivers have no shame in saying, "But they made me want it!!!"

The fact is that the Big 3 didn't coerce a single one of their buyers into buying a gas guzzler.

Nor did the Big3 coerce people into buying Nissan Pathfinders, Toyota LandRovers, or Honda Pilots. Consumers want gas-guzzler, and they will continue to buy Japanese gas guzzlers when the Big 3 are gone.

[Better Believe It]

5. I Like SUV's .... They Could Be Made Fuel Efficient

I have a 2005 Buick Century (wonderful car) but if I and my wife take a long trip I rent a SUV.

They don't have to be "gas guzzlers". I'm sure the automakers could develop the technology that would see a doubling or more of mpg's in traditional gas using SUV's and also produce hybrids and electric SUV's for local city driving.

[Romulox]

6. The same Big 3 propagandists that made you buy that NISSAN PATHFINDER would never allow it

Oh, that's part of the psychosis too, btw. Detroit makes crappy cars, and they're suppressing the 100 mpg car.

Japan makes wonderful cars, but they are clueless as to the Big 3's 100 mpg secrets! :wtf:

[Better Believe It]

8. ?????

"Detroit makes crappy cars"

What's crappy about my 2005 Buick Century? My wife and I think it's a fine car. We had a Volvo until we bought the Century.

[Romulox]

10. I'm referring to the speal the anti-labor types routinely trot out.

I should've used a sarcasm emote.

[Parche]

9. its ego

I despies SUV's

Joe neighbor has one, so I have to have one too.........

The mentality of people

[Kalyke]

16. Bingo.

[Kalyke]

15. Sigh. They made what Americans wanted.

Up until this summer, Americans weren't interested in small, fuel-efficient cars. They wanted trucks and SUVs.

Please! I wish more on this board would get OFF of this board and out into the real world for awhile.

[wuushew]

24. Advertising like religion is about subverting free will

The psychology of marketing has been quantitatively known for almost a century.

How did so many people come to the "rational" conclusion that large truck like vehicles were inherently safer or would be used in a frequent entrepreneurial manner to justify the expense?

Any type of personal audit would show that the expected fantasy was far out of step with reality.


Some external factor is work. The external factor is advertising.


The only form of advertising I can abide is when both a seller and buyer have a mutual goal and exchange information via the dry non-glamorous medium of the yellow pages.

[trueblue2007]

19. I am NOT mixed. We can not let the auto industry to collapse.

People....think about this!!!!
It’s been predicted that a collapse of the auto industry could affect as many as 3 million people, a full 5% of manufacturing jobs in the U.S.





Obama even said we can't let the auto industry to belly up in his 60 minutes interview.

http://news.aol.com/main/obama-presidency/article/obama-pledges-action-on-economy/250096?icid=200100397x1213570774x1200877554


One of those challenges -- a proposal to bail out the auto industry -- has been all over the headlines in recent days. Obama favors a bailout. Here's what he said about it in the interview:
"For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check."
He said he favored an assistance package that would require the industry to remake itself so that it's in a "sustainable" position for the future. "So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere," he said.

[TahitiNut]

11. Oh, I think cutting off our nose to spite our face is an honorable habit.

Let's consign the largest remaining manufacturing activity in the U.S. to the dustbin of history. With it, we can purge ourselves of our resentment at organized labor for not being pure and perfect. We have a host of targets for blame-shifting and can pat ourselves on our backs for being far more intelligent and insightful than those wicked management folks. The opportunity for selective "evidence collecting" is boundless.

[david_vincent]

12. Yes, but...

While I agree with you, it's also hard to be sympathetic to companies that have deliberately pushed the most wasteful product lines to extract maximum profits, while fighting tooth and nail such things as CAFE standards and air bags.
So while I agree on a rational basis, I feel no sympathy or fondness whatsoever for the corporate "leadership" that has displayed little else but arrogance, backsliding, and boneheadedness for decades.
There's an extremely long list of car companies that went out of business during the 20th Century. When Studebaker went under, did anyone go crying to the government begging for money to keep it alive? American Motors? Powell? Graham? Crosley? Cord? Auburn? Marmon? Doble? Pierce-Arrow? This list has hundreds of names on it.

[Better Believe It]

14. Your analogy is flawed.

This is not 1957 or 1967. Our industrial base was maintained and the nation did not face the prospect of an economic depression when American Motors and Studebaker went under. They were pretty small operations compared to the Big Three and the auto industry was hardly impacted, much less destroyed, when they went out of business. 3 million people did not lose their jobs.

So I don't think your analogy holds much water.

[amitta]

13. too big to fail

the same people who destroyed this country's labor by passing NAFTA now suddenly pretend to care about jobs....lol
don't take the bait (again)

[Lance_Boyle]

17. Why are auto jobs more important than textile or tobacco jobs?

There was no "bailout" money to keep textile factories in NC from closing up or moving out, and there was active federal participation in the movement to crush Big Tobacco... what makes these jobs less worthy than auto manufacturing jobs? They're gone. NC is coping. MI might ought to consider the same.

[Better Believe It]

18. You Want To Spread North Carolina's "Example" Nationwide???

North Carolina has one of the lowest standards of living in the nation and one of the lowest levels of workers unionization.

I'm sure corporate CEO's (especially in the tabacco poison industry)are doing very well in North Carolina. It's the workers who are suffering from low wages, few benefits and general poverty .... I suppose you could claim that North Carolina residents are coping .... it just depends upon what class your part of.

While I would certainly like to see the remaining North Carolina textile workers keep their jobs and win a living wage, I don't think destruction of what remains of the domestic textile industry would have nearly the impact of the domestic auto industry shutting down. Do you understand the difference?

[FarCenter]

21. Median Household Income - Michigan – $47,950, North Carolina – $44,670

Michigan is ranked 26th, North Carolina is 37th.

[Karenina]

20. Put them to work building

MASS TRANSIT. THEY and the tire companies put the country in 4-wheeled vehicles. That model don't woik no mo'.

[FarCenter]

22. Companys come and go, the auto industy hasn't see enough turnover

Mainframe computer manufacturers -- IBM, Burroughs, Unisys, NCR, Control Data, Honeywell, RCA, GE -- only IBM survived after a near-death experience.

Minicomputer manufacturers -- HP, Varian, Digital Equipment, SDS, SEL, Concurrent, ..., -- only HP survived

Workstation/server manufacturers -- Sun, Apollo, Silicon Graphis, Intergaph, ..., -- only Sun survived.

Network equipment manufactures -- Cisco, Wellfleet, Ascend, Cabletron, ..., -- only Cisco survived.

[knitter4democracy]

23. Exactly. Chrysler's been bailed out before for good reason.

At least we get something out of this bailout, as opposed to billions and billions for AIG and all we get is more paper and screwed in a constant way.

[aldo]

25. If the auto industry goes, America goes

The middle class will disappear. It's that simple. It's too bad they were allowed to get too big to fail (all three are) but that is the current situation. It's the American way of life we're talking about. Anyone against helping the auto industry is un-American and an anti-patriot.

We have to make sure the populace knows they've been ratf*cked by the ratf*cklicans.