Money | 11/18/2008 7:30 am

Detroit Bailout Reader Forum and General Motors 'Ripple Effect' Video

A reader forum on the proposed Detroit bailout

By The Staff at wowOwow.com

Remember the saying, "What’s good for America is good for General Motors"? This week, that notion will be put to the test as the heads of the Detroit automakers, each under extreme financial distress, sinking stock prices and showrooms full of cars that nobody is buying, meet Washington’s decision-makers to defend their request for $25 billion in bridge loans.

General Motors CEO G. Richard Wagoner Jr., Ford (F) CEO Alan Mulally and Chrysler CEO Bob Nardelli, as well as United Auto Workers President Ron Gettelfinger, are scheduled to be heard in front of the Senate Banking Committee on Tuesday, November 18, and the House Financial Services Committee on Wednesday, November 19.

To help influence popular opinion, General Motors, which has claimed it will run out of cash by the end of the year, released a video on YouTube that uses words and images to describe a devastating ripple effect on the rest of the country if the Detroit auto industry was allowed to go under.

66 Reader Comments (so far…) Sign In or Register to comment

The American auto companies have had at least a decade to be changing their ways of making vehicles, going to smaller, more fuel efficient cars, instead they went to the SUV’s and then when they had problems, tried to get them classified as trucks so that they would be ok in the amount of gas they used. They made almost no effort until recently in the hybrid field. They were given government grants to work on that but didn’t see money to be made in that area. Now they are feeling the results of their own greed. And I know everyone will blame the unions, well auto makers here have been sending their cars to Mexico for several years now to be assembled but they haven’t lowered their prices so that doesn’t seem to be the solution. And Toyota makes vehicles right here in Texas - they can do it, why can’t we. I didn’t waste my money on an American car when I was shopping because they wanted $8,000 more for anything comperable. I couldn’t afford it. So I really hate to see my tax dollars going to those same companies unless they are watched closely as to how they are operated.

By Sandbee (FB) 54 on 11/18/2008 7:59 am

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sandbee, you are right that the big three didn’t make choices that were good for the environment or the consumer, but what everyone who cries “bailout!” fails to realize is that all three companies have made big changes structurally and in their union contracts recently. the workers’ wages were cut in half. all three bought out a lot of both blue collar and white collar employees as well as shutting down a lot of production of the gas guzzling lines. one move counter to that was announced about a month ago as ford got set to produce f150 pickups at its (rouge complex) dearborn assembly plant. they will hire around 1000 workers at $14/hour to produce them. it takes time and planning as well as cash to implement anything so complex and expensive as starting up a car company. remember delorean? here we have functioning car companies asking for huge loans. call that a bailout if you must, and maybe they do need strings attached. but help our auto companies get through this next cash poor year, and they will help our economy AND pay back the loans.

By mary lou s on 11/18/2008 10:15 am

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Wish it wasn’t pick-ups that the new factory is producing - the sales on them is way down. And that is not the type of vehicle that we need to see on the road. See so many of them here and 80-90% have nothing in the back, they could be driving a small car except for the macho pride involved.

By Sandbee (FB) 54 on 11/18/2008 10:44 am

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sandbee, the dearborn assembly plant, while not the oldest auto manufacturing plant in the world, certainly predates the miller road battles between the workers and ford motor company that resulted in the formation of the united auto workers. yes, i would have preferred for ford to build more of the ford focus, but maybe their demand predictions suggest that ordinary pickups would sell better. toyota also has problems building the right thing: the prius is always on back order. you are so right about the macho pride.

By mary lou s on 11/18/2008 11:01 am

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Well, there should definitely be oversight, Bee, but anyone who thinks the American auto industry should be left to die on the vine has no idea the domino effect that would have on the entire country. Millions of jobs lost not only in automotive, but every other type of industry that pertains to it, such as auto suppliers, etc. The lesson learned with AIG, the Big Three, etcetera, is that there needs to be regulation and oversight, the salaries of top executives reined in.

By James the Game on 11/18/2008 8:09 pm

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I agree that we can’t afford to let the industry die but we need to have it make some major changes in its life. As you say, it cannot keep paying its top executives the salaries and bonus packages they now receive and the union needs to have a fair but reasonable contract. But the major thing is to start making vehicles that are competitive with the foreign market, both in price and performance. And they have to provide the hybrids that we all need to start driving if we are to become independent from the foreign oil. I know that all of this can’t happen over night but if our tax money is to be handed out in such large quantities to these corporations some differences need to come about right away, not go on about business as usual or we would be throwing good money after bad.

By Sandbee (FB) 54 on 11/18/2008 8:56 pm

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Right, Bee. I heard that some of the bigwigs at GM flew to Washington D.C. for the Congressional hearings today in a private jet, with a tax that came to $20,000. Silly stuff. Also silly is the constant Republican talk about Obama and the Democrats turning this into a Socialist country, and fretting about “what Obama and the Democrat Congress will do to this country in four years.” Hello? What do these Republican talk-show wags like Neal Boortz think that Bush and the Republican Congress have done over the past eight years? They’ve blown $120 billion a year fighting winless, never-ending wars overseas while creating a massive deficit that imperils the future of this country.

By James the Game on 11/19/2008 1:55 pm

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The whole situation is crazy. They got into this and wonder how he is going to fix it over night. None of it can get done that fast. And most people aren’t going to change their everyday way of doing things unless it hits them personally. Saw someone driving a Porsche Truck here the other day, it was a Cayenne they had done into a truck - that just shows money to waste. Wish I knew the answers..

By Sandbee (FB) 54 on 11/19/2008 5:10 pm

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James, I think you and some others here will be interested in an organization that I’ve belonged to and subscribed to for many years. It served me well, especially when I was facilitating strategic planning workshops, and in cultivating planned gifts (trusts, etc), and for public speaking. It’s a passion, really - unless we have an eye on trends, and that which will impact our future we may as well do what I’ll probably do in 5 years - relax, and reap the benefits. http://www.wfs.org/tomorrow/

By C jay on 11/19/2008 5:50 am

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Thanks for the Email link, Carol. I don’t have time for that right now, but it does look interesting. Cheers.

By James the Game on 11/19/2008 1:46 pm

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Sandbee Wasn’t it also driven by the consumer? They were buying up those SUVs and trucks like crazy, since the 1980’s. Then we have an extreme rise in fuel prices, they can’t unload the vehicles to buy more fuel efficient cars, and the dealer can’t unload excess stock. Kaboom, and then many people lose their homes and vehicles at the same time. I read a report that GM had fuel efficient cars in their lineup but I guess no one is buying them.

By Frannie Em on 11/19/2008 1:00 am

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It was but more and more were buying foreign even in those categories, that’s where we seemed to lose it. Oh, I agree that like I said above that the consumers have to change their ways, too many pick up’s on the road with nothing in the back, silly waste.

By Sandbee (FB) 54 on 11/19/2008 6:04 am

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I don’t have the figures, but Toyota and Honda sales are much higher than the Big 3. And yes, the market should be driven (no pun intended) by consumer needs. So it seems that the Big 3 were still in the pockets of the oil companies instead of the consumer. GM may have fuel-efficient cars, but I have never seen them market them to the public. Funny that the Big 3 want this bailout, but don’t seem to be happy with the strings that would come along with it. Again making me think that the oil companies are still pulling their strings. This bailout is necessary only because it will hurt the economy more than we are hurting now in terms of jobs and loss of pensions. It will cause an increase in the welfare and unemployment rolls, and that is just as costly as a bailout. The last bailout proved that no one was watching the fox in the hen house when Paulson changed the game plan. If Congress gives the Big 3 too many loopholes, it will be money wasted.

By Brooklyn Gal on 11/19/2008 11:26 am

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I believe that we should help out the auto industry. First of all we need Americans to be working. We can’t afford any more mass lay offs. I do however believe that we should bail them out and make sure that they are making energy efficient cars. No more of the gas guzzlers that are a danger to the road because you can’t see around them, or the SUV’s that pull next to your parking spot and then you’re stuck there because you can’t see to get out. (That really bothers me!) With the bailout we should have more “green” and “friendly” cars being made. They should be made with lower costs so Americans can afford to buy and operate them. It wasn’t that long ago when people couldn’t afford the gas to drive back and forth to work. The gas prices were way too high to fill up those “tanks” that people were buying up. With holidays, I have a feeling that these lower gas prices will not last forever. Who knows, this may be the jump start American needs to become independent of foreign oil. We need to work together during these hard times. Other companies have made mistakes and we have bailed them out, just so they can go on vacation and visit the spa’s. Let’s bail out the auto industry and do it so America can get something back from a bailout not just another bill to cover with taxpayer’s money.

By Joan Brown on 11/18/2008 8:10 am

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I’ve been reporting on this every morning on WILS and WXLA in Lansing. The auto companies need to be kept afloat, for the good of workers, the economies in Michigan and Ohio, and so on. This country will go headlong into a depression, if the Big Three go bellyup. The auto industry is tied to so many other industries, it’s mind-boggling. Yes, there needs to be oversight and accountability, to keep the greedy, short-sighted bigwigs in check. They’re to blame, not the employees. Some right-wing radio outlets are living in prehistoric days, yapping about $40-per-hour employee salaries. No, it’s $14 nowadays.

By James the Game on 11/18/2008 8:13 pm