Wednesday, November 19, 2008

Bail out the auto industry?

A road map for Detroit
Don't scrap the US auto industry. Overhaul it. Here's how.

By Mark Lange

SAN FRANCISCO - When your car is burning oil, you have a few choices. Buy quart after quart and watch your money go up in smoke. Scrap it and try to manage without. Or overhaul the engine and keep it for the long run.

As it stands, the $25 billion US auto industry bailout championed by congressional leaders amounts to another quart of oil. The only jobs it may save – temporarily – are those of executives, without forcing real accountability for management and unions. Hope, maybe. Change? Not a chance.

But Republican resistance to intervention – the scrap-heap strategy – amounts to principle (or dogma) divorced from reality. With 2.5 million American jobs at risk, from dealers to admakers, we'd abandon the industry at our peril.

Consider a third way: Provide $25 billion in federally guaranteed loans only after company management seeks Chapter 11 protection, to finally and fundamentally restructure their operations, and prepare to compete.

In other words, offer the carrot only after the stick.

I am torn, I don't want the auto industry bailed out, but then, there are job losses to consider. Where is my bailout?????
I think if the auto workers become our first "national healthcare" members, that should help the auto industry. Then the exects can give up their bennies and take care of the workers.


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