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A bailout for domestic automakers is a tough sell. The urgent need for it? To avoid disaster downstream
Published on Sunday, Nov 16, 2008
Unfortunately, resistance from the White House and in the Senate, where Reid and fellow Democrats need 60 votes, and thus Republican help, to overturn a veto from President Bush, appears to be building. That could delay action past Jan. 20, when President-elect Barack Obama takes office, his position bolstered by newly elected Democrats.
The pressing question is: Will that be too late, forcing auto companies into bankruptcy and spreading searing pain throughout an already weakened economy? Ohio employs more than 250,000 in car plants, supplier industries and dealerships, with more than 70,000 jobs in the northeastern corner of the state. Ohio ranks third in auto manufacturing employment, behind Michigan and Alabama.
Working on a plan to use a portion of the federal financial bailout fund (about $25 billion out of $700 billion) to help automakers is George Voinovich. The Ohio Republican is huddling with Democratic Sens. Carl Levin and Debbie Stabenow of Michigan. The former governor and Cleveland mayor understands the stakes involved, the need to give automakers room to regroup, to make the changes they have long avoided but must accomplish for long-term viability.
Meanwhile, governors and mayors from across the country, among them Ted Strickland, are pressing for help. The Ohio governor is asking fellow Democrats in Congress for direct aid, rather than loans, to keep the state's fund for jobless benefits from going dry. that could happen as early as December. Without aid, borrowing could get costly, the unemployment fund facing a whopping $1 billion shortfall by the end of next year.
Many Republicans argue for an end to ''bailout-mania,'' for letting the auto industry suffer the consequences of years of poor planning. In the House, John Boehner has sharply criticized a bailout of Detroit. The Republican leader, from West Chester, Ohio, sees no promises to ''reform the root causes crippling automakers' competitiveness.''
That misses two essential points. One is that lawmakers can craft language holding the auto industry's collective feet to the fire. The other is the essential role federal spending must play to get the economy back on the right track, cushioning the impact on millions of workers.
Get the full article here.
Comments
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stow, oh
Posted 06:55 AM, 11/16/2008
Give GM a loan only if the UAW is decertified.
Akron, oh
Posted 10:00 PM, 11/16/2008
The UAW is mostly about maintaining a living wage. Business and govenment along with lobbyist brought us this greedorama of bad planning. If rescued the industry will most likely go back to, short term, high risk, gotta feed the shareholders, business as usual. GM isn't a car maker anymore they are a banking investment company, cars are a sideline.
Davenport, FL
Posted 03:54 AM, 12/30/2008
Even with bailout plans in place, making a corporate turnaround is still a very tough job for the management.
I tried out various business strategies at http://rescue-detroit.industrymasters.com
This is the strategy that worked best for me:
1. Sell off the high stocks for Luxury Cars and SUV with reduced prices and high marketing budget
2. Rise customer service level to get more competitive
3. Invest in Compact Cars, Small Cars and Hybrid Cars as these segments grow a lot
4. Discontinue the old Luxury and SUV product lines
