Dec 05 2008
Should the Auto Industry be Nationalized?
CEOs from the Big Three Detroit-based automakers once again returned to Washington yesterday to beg for a bailout. Representing General Motors, Ford Motor, and Chrysler, the CEOs argued for up to $34 billion dollars in federal loans to avoid bankruptcy. Prior to this second round of hearings, which continues today, the Big Three submitted detailed plans on Tuesday outlining how they would go about using the funds if they were granted. Public opinion on the possibility of an auto bailout has reversed since the CEOs last visited Congress two weeks ago. At that time, one survey found 55% supporting federal aid for the auto industry. A more recent CNN/Opinion survey taken earlier this week found that 61% of Americans now oppose an auto bailout. The political debate over the auto bailout has been far more contentious than the 700 billion dollar Wall Street package. With the U.S. economy in recession, bankruptcy for the Big Three could mean a loss of three million, mostly union jobs in related industries. The Senate is expected to debate the auto bailout on Monday.
GUEST: Robert Weissman, editor of Multinational Monitor and the director of Essential Action.
For more information, visit www.multinationalmonitor.org.
3 Responses to “Should the Auto Industry be Nationalized?”
The automotive bailout will help the rest of the world and only marginally impact the USA. Both Ford & GM’s 2007 annual report indicate that only 40% of the manufacturing footprint remains in North America. Chyrsler is private but we can assume the same platform. That means if they receive $38B; $23B will go overseas. The overseas entities, are just as much part of the company and have bills to pay. The remaining $15B will need to be divided up among the North American entities (Canada, USA, Mexico). The amount in the USA will be split among the big cost sector, raw material, energy and labor. So the workers will be getting almost nothing. If fact, will be required to make concessions to keep going.
What the auto industry needs to do to save their own butts is clear. Evolve or die. Capitalism dictates there must be demand to meet the supply. Who goes through cars like potato chips??? Sure you need a new computer every few years to keep up with evolving technology but who needs a newer car if the one they got is working fine? What they need is a product that will be valuable and an investment for people in tough economic times. You guessed it: the electric car. Like the ZENN (Zero Emissions No Noise) car they manufacture in Toronto or the speeder Tesla Roadster set to be released next year. We have the technology!! People will buy cars if it means they will save on gas in the long run.
The bail out should be contingent on a change of focus to this type of technology.
If the government bails a company out the government should own it