DEATHNOTE TO MICHIGAN? The Auto Bailout

Earlier today, the CEO's of the big three US auto makers (General Motors, Ford, and Chrysler) pleaded for Government aide. The basic argument was that the big three can run out of funds without government support. The bill will provide the major US auto companies and suppliers with "bridge loans" for at least ten years with favorable interest rates (think of it as a government investment). Of the $25 Billion package, ten to twelve billion will be lent to GM, seven to eight billion to Ford, and seven billion for Chrysler. The money will be used to pay employees, cover current current operating costs and development of new products. GM states that they have placed some vehicles on hold due to financial troubles. The hearing was a good opportunity to listen to both sides of the argument. I definately agree that the US automakers are an important part to our economy because they employee a majority of Michigan residents. If these companies go under, a large number of jobs will be lost. However, it is too soon to call. Yes, the auto industry is running out of cash daily but so are other businesses that are directly affected by the economic downturn. Its just the nature of the game; not all businesses are recession proof, and it takes good management for a successful transition. I fear that if this bailout plan goes through, it may spread a mission that government is the bank for failure. We have to realize that this will be a serious decision. The true question is whether or not the auto industry has a large enough impact on the US economy for a bailout. Let us look at other scenarious for comparison. The bailouts started off with Fannie and Freddie; major mortgage lenders that desperately needed government assistance. I think that this call for assistance is a surrender to keep pushing. Look at the airline industry; they were struggling since 2000, then got scarred by the unexpected attacks on September 11, 2001, struggled with a spike in fuel costs, and more. They never asked for a bailout and instead filed for Chapter eleven and immediately worked to restructure operations. To this day the airline industry is suffering. In my opinion, if a bailout is to be issued... no one qualifies for a bailout more than the airline industry that employees far more Americans than any one of the major auto makers and greatly affects the US economy. After all, the US airlines transport money (from tourists) into this country. I dont think that the automakers will tank anytime soon, and filing for Chapter eleven bankruptcy is a better route than using tax dollars for a bailout. Again, if this bill passes, then all businesses hurting from the economic downturn qualify for a bailout. For example, Circuit City recently filed for Chapter eleven (bailout? This company is not giving up the battle), restaurants are suffering from the lack of consumer spending and they employ the greatest amount of Americans (mostly poor and middle class)... again, bailout? The auto market still has time to recover. They need to refocus and pay attention to consumers. Toyota (a Japanese company) is doing just that; with the Prius and other sustainable innovations, this company is in fact "moving forward". GM continues to create gas guzzling vehicles and Chrysler has yet to innovate according to consumer demand. Ford has taken the necessary steps but again, they need to take a risk and restructure. It's too soon and too much for a bailout that does not seem right.