Should America bail out Detroit?

Written by Jennifer Krill

Topics: Oil

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After three decades of cheap oil, the rising cost of gasoline is finally driving consumers away from gas guzzling cars trucks and SUVs, the mainstay of Detroit’s profit margins. Now General Motors, with its 100,000 workers, 1300 suppliers and thousands of dealerships around the country, may go bankrupt without federal support. If Wall Street is worth a $700 billion bailout, then what should Detroit get?

Our answer – nothing, not without conditions that reduce our dependence on oil. Our money should be offered on our terms. No automaker deserves federal funds or loan guarantees unless it commits to producing and selling at least 30,000 plug-in electric vehicles by the end of 2011 – and after those three years have passed and they’ve met the terms of the bailout, then let’s talk about more support for more plug-ins. Taxpayers’ dollars should be used to stabilize the industry and the jobs that depend on it by producing vehicles that end the downward spiral of our dependence on oil. Electric vehicles recharged by a green grid means green jobs, less greenhouse gas pollution, a more competitive domestic auto industry, not to mention saying no to tar sands development and good bye to wars for oil.

President-elect Obama has pledged to put one million plug-ins on the road by 2015 and grow five million green jobs. Sounds great – let’s get started with GM.

25 Comments For This Post I'd Love to Hear Yours!

  1. SHERRY says:

    Our last stimulus package cost 168 BILLION. It didn’t do a thing to improve our economy. Not enough credit is being given to the role the record breaking cost of gas played in the downward spiral of our economy. We have so much available to us in the way of FREE energy sources such as wind and solar. We have modern technologies such as hybrid and electric plug in cars. Why don’t we invest in America becoming energy independent. 168 billion would go a LONG way towards getting some of these things set up plus would create millions of badly needed new jobs. Jeff Wilson has a new book out called The Manhattan Project of 2009 Energy Independence NOW. I highly recommend this book for anyone worried about our economy and our dependence on foreign oil.

  2. kaylin says:

    we should not bail out ford, gm and chrysler! we will go into more debt the cars will be cheaper and the companies will come out of it themselves!

  3. (Ms.) Meryle A. Korn says:

    Under no circumstances should we bail out Ford, GM, and/or Chrysler! They’ve fought every safety advance and proposed requirement for fuel efficiency for decades, then whined when they lost market share to foreign car manufacturers which have been legally mandated to make safer, more efficient cars. If they’re too stubborn to make those changes without bribes from the taxpayers (or too frightened of reducing their management salaries and dividends to shareholders in order to invest the savings in upgrading their plants for the production of the kind of vehicles we need), let them go out of business. Perhaps their workers can buy the plants at “fire sale” prices and incorporate themselves to build modern, safe, fuel-efficient cars for America.

  4. Steven Handwerker says:

    Do not unconditionally bailout detroit under any circumstances…CEO’s should go and all top heavy management and administration…accountability a must and some payback along the way should be stipulated!

  5. No unconditional bailout. All CEO’s in question and top heavy management and administartion should be fired! Seriously modified severance as well. Congressional Oversight and Accountability and stipulations for payback a must.

  6. We should assist the one company that has invested the most into fuel efficiency -while giving them clear instructions that they must continue fiercely in this direction- while sending a loud and clear “No” (no bail out) to the companies that have done nothing.

  7. Julie says:

    The saddest part about all of this is ‘we’ were going to work toward energy self sufficientcy back in 1973 when we had lines at the pumps in California. Then later GM actually produced a plug in hybrid, but you could only lease one. when they tied of that, they recalled all of them and hung them out to dry in the desert. Smart thinking…NOT. The American people have some culpability in that they only bought bigger, faster gas hogs until gas was four dollars a gallon. On a recent trip to CA, they had signs everywhere saying Slow Down, Save lives, conserve gas. The 55 mph speed limit never worked, but people could do all of the above independently and save a lot–money, gas, and lives.

  8. Donlon McGovern says:

    The big three auto manufacturers in the U.S. have had years to change their ways and produce fuel efficient, practical automobiles. They have willingly ignored the handwriting on the wall all that time and now they fly into Washington in their corporate jets to beg for a taxpayer funded handout. It is time for our elected legislators to show some responsibility in what they do with our money and let the market’s evolutionary forces lead either to productive mutations or extinction

  9. John Huddle says:

    The first oil embargo was back in 1973 . Since then this entire joke of a nation has vowed to reduce its dependence on foreign oil . Of course nothing at all has been done . On a much grander scale the entire country is guilty of the same thing that the oil companies are guilty of . Waste and greed . No , unfotunately the automobile manufacturers must be made the scapegoat . If anyone should get a subsidy it should be the car buyer in the form of a tax break if he buys one of their gas saving products . I doubt that will happen

  10. No. If the CEOs of the three came to Washington in private jets, and had no plans to sell same………… They only want a handout to support their ancient manufacturing ideas and lavish lifestyle.

  11. Jim Fenn says:

    If we bail out Detroit to continue making gas oriented transportation there will be less money to invest in new technologies that damage the environment less like natural gas, electricity or invest in technologies that don’t damage the environment like wind power and solar generated electricity.
    Many politicians will be oriented toward just saving jobs. We should not allow them to do this. All monies loaned should be used for producing environment friendly transportation.

  12. William Lee Kohler says:

    Absolutely! There are hundreds of thousands of jobs directly or in supporting industries on the line. Yes the big 3 must be made to get serious and develop the cars of tomorrow at all due speed. At the same time we need to get rid of the oriental imports and especially allow NO cars or other garbage from china in our country. Why should we economically support the worst environmental polluters and destroyers in the world?! We all need to support American workers and American industry. It was manufacturing and NOT todays service industry nor “housing” that made us the greatest economy in the world and we need to get it back and bring our jobs back home so Americans FIRST can make a living.

  13. SUSANMARDEN says:

    NO BAILOUT

  14. Rind says:

    Why do we continue to support and reward bad behavior? We have all known of this problem for decades. The employees who work for GM, Ford, and Crysler have not done enough to tell their employers they are going down the wrong road and need to re-tool! They play the victim card, instead of putting that energy into creativity. They must enjoy being in fear of losing their jobs year after year or keeping their heads in the sand. Tough love is needed, just say NO to the BAILOUT!

  15. Brandon P. says:

    The bailout should not even be a consideration. These car companies have doomed themselves. Their ideology has actually screwed them over. If they had innovative ideas, green initiatives, lower prices and better warranties….they wouldn’t be in this mess. Sorry for the employees but, SCREW the EMPLOYERS!

    Peace

  16. Sadly, even at the very brink of bankruptcy, automakers are wishing for business as usual. Congress needs to hear from all of us.
    Plug In America has made it easy to send a message through their “No Bailout Without Strings” page. http://www.pluginamerica.org

  17. Susan Flynn says:

    As I understand, GM has been paying $75/hour for their laborers. They can take a lesson from Toyota and pay $50/hour which would help costs. Also, from what i’ve heard from NPR,”filing bankruptcy would force reorganization – management would be forced to change.” – It seems to me that this Company needs to figure out that the CEO and top management are way overpaid and they need to start supplying this country what we need and want – more fuel efficient and less polluting vehicles.

  18. Isabel says:

    NO BAILOUT!! Take a good look at those wealthy CEO’s with their hands out. How pathetic and worried they seem to be now that they screwed themselves. They should NOT get the help they are looking for. The money is only to pad their pockets even more- they want help to keep their business alive-which does not help the environment at all. NO! They need to consider making fuel efficient vehicles for the sake of the environment. They are only in it for the green- and it’s not to help America- SCREW THEM!!

  19. Ray says:

    The last stimulus package left many citizens out unfairly. Bailing out the big three will again favor the few over the many who have lost jobs previously with no aid. Besides I applied for employment at two auto plants repeatedly over the years only to be told I would be put on file and then I watched the nepotism play out. Now they want me to lend a hand? I don’t like to see anyone lose a job but our leadership keeps pushing illegal immigrant amnesty on top of 10 million unemployed Americans and welcomeing more and more working Visa holders passes to take our remaining jobs anyways. As citizens we wonder if were fighting a looseing battle. Let’s see if Obama lives up to his promises, I sure hope so after the last administration.

  20. Val says:

    Couldn’t we just pass HR 676, a single-payer healthcare bill that would solve at least 50% of the car industry problem. Much of the rest of the problem is that we have allowed CEO’s too much money and they are so busy counting their $$ they never saw the writing on the wall, or on the earth.

  21. Margaret Beck says:

    Yes Detroit auto companies should get a bailout. The loss of jobs would be devestating and it might cause one or more to collapse. It would be too hard to start up another auto company in this country and we would be dependent on other countries for cars.

  22. M.L. Browne says:

    I agree that the massive loss of jobs would deal another crushing blow to the US economy (and no doubt to the global economy, as well). However, what’s the point in sending good money after bad? If there are no conditions on the bail out money that a) replace the management teams that made such bad decisions for so many years; b) make the payscales reasonable (somebody should be reading Malthus) so that the unions don’t have a death squeeze on the companies’ throats; c) there is real transparency and accountability (how is that money being used? Bonuses for executives? Sales boondoggles? Facility frills?)–without all three in place, what’s the real point?

    I’ve been unemployed for almost three years, and nobody is offering me a lifeline into solvency. If my tax dollars (yes, I still have to pay taxes) go into the pockets of people who claim they need them more than I do, then I damned sure want to understand why their need is greater than mine, and why I should be willing to support their status quo.

  23. Laura says:

    I have two family members in the auto production industry.

    The job loss and the economic down turn is not solely in the auto industry.Our economy would benefit from more people able to afford transportation to jobs and areas of higher learning.
    The industry has long since needed to innovate;cross market, get into public transport.The old car payments could be the new commuter pass payments.

    The natural world changes and is changed, whatever the reason wherever the blame.

    The green car initiative has been ignored since at least the 70′s, Remember Citicar?

    PBS’s NOW has ben running programs about the history of the electric car. I remember learning in highschool that when the industrial revolution started,America didn’t think there’d be enough fuel to last and the dark smoke and smog was troubling then ,as well (These facts are often quoted by people to support the continued use of unrenewable resoureces-the ” see, they were wrong,we’re still here” approach).

    No matter when or how change brings destruction.
    The car industry has been in a slump for years,especially the American car industry,again, remember the 70′s “buy American, buy a Ford”?
    The people losing their jobs should have been phased into sustainable employment areas by now like recyled car uses, scrapping, maybe greening the industry- welding is not just for cars, management is not just for one type of factory.

    Why aren’t the car companies cross marketing? Start building Public transportation empires and the vehicles for them.
    The old car payments can now be the commuter pass.
    And there are plenty of people who need homes (old trains= diner, old SUV =day spa?)and needy people need cars, create tax exempt aid agencies.

    Again:

    Our economy would benefit from more people able to work because they’re able to afford to get transport. The old car payments could be the new commuter pass payments.

  24. Public_D says:

    Economist David Gordon wrote in his book Fat and Mean, “In the 1980s, by common measures, the proportion of managerial and administrative employment was more than three times as high in the United States as in Germany and Japan.”

    He also wrote that the US has a higher percentage of supervisors than Germany, Sweden, and Japan combined.

    According to Gordon, 20% of the purchase price of every product made in the USA goes to supervisors and monitors, not including secretaries, assistants, and accountants.

    That means if you buy a $20,000 vehicle, $4,000 goes to pay for the burden of supervisors, managers, and executives whose sweatless efforts add fat, no value, and whose only solution to every blunder of their own creation is ‘cut the muscle.’ It’s been said the Big 3′s distraction with its muscle power (the workers) has put their decision-makers’ minds on all manner of schemes to weaken the union and cheapen the value of autoworkers around the world. They don’t think about cars anymore. They don’t think about consumers anymore. They think about labor markets and Super Bowl ads. Going so far as spinning off Delphi, tanking it, and shipping it out of the country piece by piece, job by job ( http://vids.myspace.com/index.cfm?fuseaction=vids.individual&videoid=3601455 ).That’s what bankruptcy and union busting is about.

    Less than 10% of the purchase price of a domestic, union-made vehicle can be attributed to assembly line workers. 20% for ‘monitors’ based on 1996 figures (when Fat and Mean was published). Gordon observed at the time that “the proportion of managers and supervisors in private non-farm employment has grown during the 1990s, not shrunk.” And you can bet the Big Three have a lot more supervisors, managers, and executives today. There have been a lot more college graduates looking for desk jobs than there were in 1996. And there are a lot fewer workers on the floor, working a lot faster, than in 1996.

    Those workers shouldn’t give up anything else. The UAW has been on the back-peddle for decades, to the detriment of workers here and overseas. The 2007 contract cut wages to $14.50/hr., no pension, no retiree health benefits for new hires. These are the workers who are suppose to be the backbone of the glorious Green Revolution, building what would remove the planet’s number one climate changer (the internal combustion car) from the equation. The President-Elect promised to create millions of new Green Jobs. The benchmark for manufacturing jobs, the standard-bearer for the world, has long been the UAW. Now that line in the sand is on a fast retreat that will make the Green Jobs revolution this country and planet desperately need as appealing to workers as a Wal-Mart shift.

    Understand the connection: it is utterly foolish and dangerous to lambaste and cheapen manufacturing workers out one side of your mouth, and ask them to ‘Save Our Planet’ out of the other. That is the bigger issue and longer view we need to consider during this Auto Loan debate. The current blue-collar, future green-collar workers (with and without college degrees) understand the critical role their labor must have in successfully addressing climate change. The question is: do white-collar college grads get it? Does the media? Does Congress?

  25. Studio650 says:

    Let’s use the Bailout money to retool Detroit to start building trains, High Speed light rail, electric trolley ( a more modern version) and Industrial to haul goods across the US. Already in China, Japan and Europe they have realized the headaches caused by simply building more cars and further clogging our roads and polluting our air. They are investing billions into their infrastructure to support rail while we are still debating the merits of cars. More cars is not the solution, I don’t car what type they are. We should be investing in our national rail systems that can move people and goods efficiently. Trains move more with better mileage and efficiency than any other method we have.Lets let the stock pile of cars we already have thin out before we build any more. Then lets get it right and build cars that work.

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