My husband had an interesting suggestion regarding the possible bailout for the auto industry...

[Contrary1]

He believes that the auto makers should not get a single penny of it. He thinks that if there was to be a "bailout" at all, it should go to consumers in the form of incentives. He suggested an automatic discount (not a rebate) of anywhere from 15 to 30% on purchases, with low financing for the life of the loan.

No bonuses to CEOs for the next two years, with a wage freeze for workers for a time to be determined, maybe 12 months.

I told him I would bring it up here. Could something like this work?

[valerief]

1. It wouldn't work for the thieves with their hands out. Maybe for the industry, but not for the gimme

guys.

[klook]

2. That's a great idea.

It helps the auto makers and taxpayers at the same time.

[FarCenter]

3. It wouldn't work

It wouldn't have any effect on reforming the car company's management, resolving health care and pension costs, changing the plants to be more flexible and efficient, or eliminating the excessive number of dealerships.

[NewJeffCT]

12. The pension costs, however

have increased dramatically mostly because of the outrageous increases in executive compensation, which also includes executive pensions. And, that liberal bastion The Wall Street Journal was the one that did the study on that... otherwise, pensions for the rank & file employees have stayed steady over the years.

[navarth]

4. tariffs. protect the jobs.

those foreign auto companies, here in the US and overseas aren't saddled with the costs of environmental standards, worker safety, union protection, and legacy costs like medical insurance, etc.

It costs Detroit automakers that much more per car.

I say bail them out with strings. Cut the pay at the top. Force them to keep jobs here and bring jobs back. Stipulate that any bailout money goes towards making better cars.

[scarletwoman]

5. My first thought is that I would restrict those discounts to strictly low-mileage hybrids.

But even then, I'm not sure I like it. As technology advances, the current models of hybrids will become obsolete. I also think that we don't really need to encourage more consumerism.

I would far prefer that the government invest any "bailout money" in speeding up R&D in post-petroleum vehicles. No money for the auto industry unless it drastically changes its business model and fires all the current executives.

sw

[wtmusic]

6. GM Volt buyers will already get a $7500 tax break

If they sell more than 133,000 we've already got a $billion bailout going.

[salguine]

7. The oil companies should bail out the automakers, if anyone should.

[PeaceNikki]

9. Ridiculous but fun idea.

Who do you think would pay for that? Yup, the consumer. The execs and shareholders won't be foregoing any profit to pay for that.

In addition, we do NOT want big oil with a stake in the auto industry. That will not get us closer to better fuel standards, less emissions and alternative energy.

[PeaceNikki]

8. It would promote a lot of needless consumption.

We need to compel them to work towards better fuel and emissions standards and work on alternative energies.

[amandabeech]

10. Some of that has been done and some of that is in the works.

Accoring to today's testimony, wages are pretty much frozen for those workers who are now employed under the 2007 contract. New workers will start at $14-15. I'm not sure about the wage that would be given to recalled laid off workers.

Under that same contract, the present defined benefit pension plan has or shortly will be changed to a defined contribution plan, which works much more like a 401(k), except the employer or the trustee make the investment decisions. I don't have the details.

Again under the 2007 contract, each automaker will contribute to a medical benefit trust, called a VEBA, run by the UAW, and after 2010 contributions, the auto makers will have no further obligation for UAW retiree health care. That is huge!

Ben Bernanke is talking about a new program to lend to consumer finance companies, like the auto makers' own financing companies, student loan companies, and the like. If he does that, more people may be able to buy cars.

At today's hearing, one of the Senators asked if each of the CEOs would be willing to work for $1, like Lee Iacocca. The guy from GM said yes, and I think that the other two could be coerced along, so long as they get this help.

Really, the crisis came now because of the general seizing up of the credit markets. Admittedly, the Big 3 aren't in particularly good shape, but the current situation wasn't foreseeable, and GM is in worse shape than Chrysler, and particularly Ford.

Unless Bush and the congressional dodos can get the banks lending again, I think that many, many companies are going to need loans or loan guarantees. These are not usual times by any stretch of the imagination, and solutions that would have worked a few years ago probably won't work now. Read about what FDR did in the depression. He had to do things completely differently from his predecessors to get things going, and when he tried to go back to business as usual more in 1937, the economy tanked. In my opinion, we need to be similarly bold, or we'll go down for sure.

[sad sally]

11. Sounds like a Republican plan...

let's just freeze auto workers pay for "a time to be determined," like maybe, oh, forever? Maybe the pay could be minimum wage, maybe foreign workers could be brought in on work visas and paid sub-minimum wages, live in the factories, and states and counties could feed and provide health care for them, maybe we don't need an auto industry, maybe some other Country - say China can make all our cars, trucks and military vehicles, like they do our food and clothes.

American taxpayers bailed out the airline industry, we're bailing out wall street hogs, and greedy poorly run insurance giants and banks, but no way can we lend - and that's what the auto industry is asking for, a loan - companies that employ pesky labor union employees who work for living wages and benefits.

Cut CEO's pay - yes; cut workers pay and benefits - no!

[Contrary1]

13. I said maybe a year, not forever.

Minimum wage, foreign workers, live in the factories? :eyes:

If the auto makers go belly up, their wages and benefits will be frozen...at zero.

[yodoobo]

14. 0% interest for 5 years, 50% discount

Might, and I say might be enough to make me go shopping.

But even if I were convinced, I would want to wait for the next quarter or two to see if my job will be stable.

Last thing I would want to do is buy a car, then lose my job.