Big Three failure would raise job losses
Detroit's car makers will try again to get help from the U.S. financial bailout today. The Big Three claim it would be more beneficial to the U.S. to be bailed out, and Janet Babin explains one bank report backs them up.
More on Jobs, Auto Industry, America's Financial Crisis
TEXT OF STORY
Scott Jagow: The leaders of Detroit's car makers will try again to make their case before Congress today. They'll testify before the House Financial Services Committee. So far, Congress seems pretty resistant to a bailout, despite the pleas from GM's CEO Rick Wagoner:
Rick Wagoner: What exposes us to product failure now is not our product line-up, is not our business plan, is not our employees and their willingness to work hard, is not our long-term strategy. What exposes us to failure now is the global financial crisis.
Wagoner says the collapse of the auto industry would lead to the loss of three million jobs and a total collapse of the U.S. economy. Marketplace's Janet Babin has more from North Carolina Public Radio:
Janet Babin: The Big Three auto executives warned law makers that the cost of keeping the industry afloat would be far less than the price of fixing the economy if they go under.
A report from Deutsche Bank backs them up -- it found that if the Big Three were to go bankrupt, unemployment in the first quarter of 2009 would jump by almost 2 percent. GM is asking for $10 [billion] to $12 billion, while Ford and Chrysler want about $7 billion in government aid.
The credit crunch and economic downturn have stalled auto sales across the board. Today, Toyota said it will shutter its North American factories for two days in December. This summer, it cancelled all U.S. production of light trucks. Senate Democrats have proposed a $25 billion dollar loan to the industry, but many law makers still aren't convinced.
I'm Janet Babin for Marketplace.
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From Detroit 'burbs, MI, 11/19/2008
Normally, I find this "column" informative on my ride to work, but lately that is not the case.
I weary of your parade of so-called experts & other acadamic baffoons that wax eloquently on the option of bankrupcy for the Big 3. Their comments make it clear that they have no understanding of the consumer, nor the industry.
A few years ago, when GM & Chrysler dropped a brand, the customers IMMEDIATELY stopped buying those cars. Chapter 11 would have the same effect on the OEM, but accross all brands & products. Econ 101 tells us that if you can't sell your stuff, you can't stay in business.
I wish NPR would consult experts that have covered the topic at hand & knows that topic well, rather than use some tenured lay-about that has never worked in the industry.
The media hyperbole of a "bailout" is nonsense too! The OEMs are asking for a L-O-A-N. Big difference, because the taxpayers get a return on investment, unlike the AIG mess that Paulson has cooked the books on.
Filipczak
11/19/2008
This BS about how we have to bailout the automakers because if we don't the workers will suffer is simply BULLSHIT - it's completely ridiculous.
The automakers have gotten themselves into this mess over and over and over and over (and I am so sick and tired of hearing them whine every year) because:
1. EXECUTIVE PAY IS RIDICULOUSLY HIGH AND THE JUSTIFICATION USED BY ALL CORPORATIONS RE THESE PACKAGES IS COMPLETE AND UTTER RUBBISH (as evidenced by the lack of common sense these executives have shown in how they transport themselves, for example, to and from meetings, et al)
2. THE US GOVT. REFUSES TO GET RID OF BIG BUSINESS/PRIVATE INSURANCE CO'S (which are 2nd ONLY to the OIL industry) which take 30% PLUS of every healthcare dollar for profit, exec compensation, paper-pushing and parties (I know - I worked for them), and making sure you don't use your healthcare insurance
SOLUTION:
DUMP THESE EXECS, turn the co. over to the workers to own and manage (like SW Airlines), put into place a universal healthcare program like all other civilized nations, produce ONLY electric vehicles, provide a job to any qualifying American citizen student who graduates from an American university or college, and make every executive volunteer at least 1 day a week working on cleanup and maintenance (actual sweat - no paperpushing) of roads and streets. PERIOD.
From Chicago, IL, 11/19/2008
When will the media start talking about the retirees and workers that will see their pensions drastically cut if the auto makers go into bankruptcy. A bailout of the auto industry is not just about throwing dollars to companies and their upper management, it's about protecting benefits to the workers that dedicated years to those companies.
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