Please support federal loans to the Big 3 US Automakers. At first I thought that Chapter 11 Bankruptcy was the way to go for the Big 3, but after seeing the possible consequences I have changed my mind. Unless it a perfectly prepackage Bankruptcy there is too much risk if even one of the Big 3 file Ch 11. The job losses would be tremendous, the suppliers would have to file Ch 11 soon after, the Federal Pension Guaranty Corporation would have to cover hundreds of billions of dollars of pensions, billions of dollars of health care benefits would be lost for hundreds of thousands of employees and retirees, and the US could fall into double digit unemployment spirally the economy into a serious depression.
The claims that the Big 3 do not make vehicles that the people want are unfounded. GM is still the most popular manufacturer in the United States. Yes, they sold more cars than Toyota in 2007. Ford has produced the first Hybrid SUV (Ford Escape Hybrid) and Chevy will be the first major manufacture to offer an electric vehicle (Chevy Volt). The problem is that the Big 3 have been handcuffed with major liabilities imposed on them by the United Auto Workers (UAW) for higher wages, pensions, health care, and other benefits. While the Big 3 have been paying out $29/hour for unionized autoworkers plus hefty benefits Toyota, Honda, Nissan, and others have been allowed to bring there production from oversees into southern states with no import taxes and instead hand outs to entice them. These companies do not have unionized workers either. This gives foreign manufactures an unfair advantage to produce vehicles in the USA. The Big 3 are not in trouble because they do not make the right products, but because the US has allowed foreign manufactures to come in and produce vehicles in the US at a much lower cost because they do not have to offer the same pensions, health benefits, or wages that domestic manufactures do.
So please tell Congress to support loans to the Big 3 or we could endure an economic depression not seen since the 1930's. Why should we give hand outs to foreign manufactures and not support the backbone of American industry the Big 3?
4 comments:
I believe we need to support them but I also believe we need to move this industry into energy independence along with the rest of our country. Jeff Wilson has a wonderful new book just out called The Manhattan Project of 2009 Energy Independence NOW. It is full of interesting facts about oil, it's other uses besides gasoline, our depletion of it. It also covers every source of alternative energy and their potential to replace our oil consumption. Did you know it costs the equivalent of 60 cents per gallon to drive an electric car. The electric used to charge the battery could also come from solar or wind. Have you seen what they are doing in the Bay Area in Cali. Check out Project Better Place. and check out this book. www.themanhattanprojectof2009.com
I would agree. GM tested a Hydrogen Fuel Cell but lately the car has fallen off the product line with the current termoil. The Chevy Volt is a great example of what you are talking about. VW is also testing Bio-Fuels from Alge and Hybrid Diesels that get 70+ MPG. If the Big 3 want to succeed in the future they will have to compete with fuel efficient vehicles, but they need a loan to get them there first. If not these future technologies could be set back further because of the potential hit the suppliers could face if one of the Big 3 files BK.
Rocky Mountain News – Opinion Editorial
Speak Out for Rocky Mountain News
Support for Big Three U.S. automakers is hardly “charity”
By Tim Jackson
Automobile dealers in Colorado and around the nation compete with each other energetically for the business of consumers, but on some points they are generally on the same side.
Regardless of what brands automobile dealers sell – and no matter whether they focus on vehicles made by foreign or domestic-based manufactures – they for the most part agree that this nation cannot afford to lose the so-called Big Three U.S. automakers (Ford, GM and Chrysler).
Former National Automobile Dealers Association President Ron Tonkin – who owns 18 dealerships, only two of which sell domestic vehicles – this month wrote in an open letter that “the importance of the domestic side of our industry is paramount to the employment base and health of all America.”
Echoed U.S. Chamber of Commerce President and CEO Thomas J. Donohue: "The financial crisis and the resulting steep drop in car sales are not only putting American automobile makers at risk, but also their network of suppliers, vendors, workers, and other businesses that provide goods and services to them."
As the U.S. Chamber noted, the automotive industry represents 4 percent of the U.S. gross domestic product and accounts for one in 10 American jobs. The Chamber cited a recent report from the Center for Automotive Research that found if the Big Three American automakers were to cut U.S. operations by half, 2.5 million jobs could be lost in 2009, including nearly 250,000 jobs lost at the automakers and nearly 800,000 at suppliers.
That would trigger an economic earthquake that would be felt far from Detroit. Coloradans would certainly feel the shock waves, no matter what brand of vehicle we favor or where we work.
Fortunately, President-elect Obama declared at his first news conference since his victory that he takes this problem seriously, urging the current administration to accelerate federal loans to the industry. Obama added: "I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel efficient cars here in the United States."
Support for U.S. automakers is not just pro-America, it is pro-consumer and pro-economic growth. This should be an issue that can bring us together during this difficult period.
Let’s be clear: The auto industry isn’t looking for a handout from the government. The proposed federal loans would give automakers a needed lifeline but the manufacturers would be responsible for repaying this debt. However, they can work their way out of this crisis if they’re given the tools they need.
Unfortunately, there’s no simple panacea for the problems that ail the Big Three. For example, the Rocky’s reference to the sales model of Dell (“No to Detroit,” Nov. 2), ignores fundamental differences between the auto and computer industries, such as the fact that many consumers want to trade their old vehicle in as they buy a new car.
GM celebrated its 100th birthday in September. Similarly, Ford’s Model T’s made its debut in 1908. The nation can’t afford to let its storied domestic automobile industry wither away in this challenging period.
Continued federal support for the U.S. automakers would not be “corporate charity,” as the Rocky editorialized. Rather, revitalizing the U.S. auto industry is a way to help revive the U.S. economy.
We’ll all reap rewards from that.
Tim Jackson is President of the Colorado Automobile Dealers Association.
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