Thursday, November 20, 2008

The Big Three and Thee

Are there any people out there who still believe that what's good for General Motors is good for America? Those are the people who will no doubt support the $25 billion bailout package being sought by GM, Ford and Chrysler. Others, like me (and some members of Congress) have to question whether this is a wise move or more likely throwing money at a problem and hoping it will go away. The Big Three may become the Big Two or the Only One after this financial crisis resolves itself, but the industry has been in trouble for some time, hemorraging losses year after year as foreign car companies steadily captured more and more of the U.S. market. American consumers are not buying American cars as they once did. Credit Japanese and German carmakers with building a better, more fuel efficient series of vehicles that have left American car buyers clammoring for more of the same from their domestic carmakers. When gas prices were hovering around the $4.00 mark, those in fuel efficient gas-powered foreign autos or hybrids weren't exactly smiling, but they weren't wincing in pain like those driving American guzzlers. With the exception of a used Datsun that I drove back for a short time in the 70s following an accident and an ill-fated day that I bought a used Porshe only to have it fail, I have only owned one foreign car for more than a year, a Volvo. I don't believe there are quite as many American consumers who can claim that track record. Nevertheless, I can understand the need to move to a better, more efficient product. The American people have cast their votes with their wallets and pocketbooks. I believe that a handout is not necessary, but a hand up is. I am concerned about the possibility of American workers losing as many as two million jobs and the residual fallout from that. I'm also concerned about what those lost jobs could mean to local communities as car dealerships reel in economic disaster. The Big Three need to realize that the federal government doesn't want them to fizzle, but it's not willing to prop up failing businesses with wads of cash that will quickly evaporate. There's no doubt they would be back for another handout in short order. At $154 million per day in losses, it's time for the Big Three to start figuring out how they can work with the United Auto Workers, rein in these staggering losses, and come up with options on how they can maintain what little part of the marketplace they still cling to. These hard decisions will have to be made soon whether a bailout is possible or not. Perhaps the CEOs of the Big Three had this to mull over as they flew back to Detroit aboard their private jets, winging their way back to their boardrooms.

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