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

James It sounds like we have to do it, but I don’t want to.

By Frannie Em on 11/18/2008 10:40 pm

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Well, even some intelligent reporters I respect, like Campbell Brown on CNN, is perpetuating myths about the auto industry. For example, she writes in a CNN.com column today that some auto workers are making $30 to $40-per-hour. Uh, try $14, Campbell.

By James the Game on 11/19/2008 1:49 pm

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This is another one of those things I don’t really feel like I understand well enough. I know I don’t think it’s a good thing to allow auto makers to fail in this country. BUT… with our money AGAIN??? Because a bunch of greedy assholes couldn’t manage their business? How EXACTLY does bailing these guys out benefit the rest of us?? that’s what i want to know. and i’m not saying it faceitiously. i mean it. how does it help US. we’re the ones whose money they want to use.

By Chrome Toe on 11/18/2008 8:56 am

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How it helps you out, at least in terms of keeping the American auto industry afloat, would take a book to write. Millions of jobs, the economy, spinoff businesses, infrastructure, manufacturing-related business, etcetera. The auto industry isn’t like some of these other groups with their hands out for money, and no payback. Investment in the auto industry = millions of new jobs in alternative, green technology not only in the auto industry, but other areas we can’t even forsee yet. That’s what’s at stake. The greedy, slimy, stupid executives are another matter. But this issue is much bigger than them.

By James the Game on 11/18/2008 8:16 pm

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May I insert a little history? During the last energy crunch, the state of Oregon reduced speeds to 55 to save gas. After about a year the rest of the country followed suit. I personally bought an American Motors car called a Pacer. It was big enough to carry 6 adults and had a bench front seat to commidate. It aeronautically designed and got 35mpg. Which was pretty darn good for those days. It had large window and had no blind spots. It was a hatch back so could b e used to carry anything and side enough inside to carry a sheet of plywood if the seats were down. I owned one for four years and other than oil changes I spent $54 in repairs and that was front end alignment when I hit a curb. People made fun of the car because it looked like it came from the jetsons cartoon. So few sold that I was told it broke American Motors. Over time the country went back to 65mph and up and started wasting gas again. The american government and american people got bored with being careful about wasting energy and refused to buy cars the reflected that mindset. Is that the fault of DETROIT?

By beverly linens on 11/18/2008 11:25 pm

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BRAVO, Beverly. I was just talking to some people about this yesterday. We all remember getting up at 4 am to get to a gas station and wait in line for our gasoline, and then dashing home to get the kids up for school, etc. We took turns in fact - my X and I. Eventually we found 1 little station equidistant from the others that meant we could sleep until 5 am, etc. We all adhered to the 55 mph limits, and it saved lives, to boot. The PDs and troopers had a heyday issuing tickets for speeding. In the early 90s, no one bailed us out of the horrendous “buy-down” mortgages that the S & L’s put millions of home-owners through, either. Most of those ended up with 13%-17% mortgages once their “buy-downs” were over with, usually after 2 years. In truth, many homeowners thought they could then merely re-finance, and builders were infamous for pointing that out, but … by that time, the proverbial fan was shatted upon, and there were no options for the Middle Class home-owners. Worse, HUD had permitted VA inspections to “cover” for FHA inspections, without the buyers knowing it, and that led to a cataclysmic effect on new home construction to the extent that a major national home builder was thrown out of Delaware (no less!). Who helped us then? No one. Yet, in truth, it is the job of a Democratic government to help citizens in situations like those mentioned, and now. The greed was again at the top. Yes, most of those home owners were over their heads in house payments once that buy-down was over but … and I worked with many of them - the snarling hyenas came down out of the hills, to yap up their assets, including one Ft. Worth evangelist! That was a horror! What Bush #43 and Obama do not realize - we remember! We suffered! And, as far as the auto industry in America, their hiring practices are an excellent case study for social psychologists. High school drop-outs have been hired for “the line” (look at Michigan’s drop-out rate), and yet those same employees moved right up in hourly wages, with the bonuses and benefits we would all drool for - with my non-auto industry peers still in MI and those we have vacationed with when the kidoos were still in school, we’d all marvel about “the bonuses the auto workers can rely on …” Now, its a fact that such workers have not taken the hint that they must either parallel train for other employment (as happened in the late 80s aerospace industry), or find new livelihoods, because they have been lulled into passivity by the high wages, bonuses, and incredible benefit packages. I’m all for the unions, and think we need them more than ever now - there is plenty of money “at the top” that should be squeezed down to the workers, but that does not mean to the detriment of all. Anyone who knew the auto industry empathized with the “conditions” on the line but, again, that certainly was no different than we used to have to go through in medical training when 24/7 was great if it ever happened and that was for little or no income after 8 years of college. This is where the principles of Marx come in - yet, Americans have a knee-jerk reaction to such, borne out of lack of knowledge. Equity must supplant the term “equality.” Equal pay for equal work is a must!

By C jay on 11/19/2008 3:28 am

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I want to know how the bail out has helped us at all? I mean really…are banks lending, NO…are banks still laying off, YES…I mean Citi is laying off 52,000 employees…Bank of America is next…I am in line to loose my job here at BofA b/c we had to buy out Countrywide and then all the top BofA execs bailed out on us leaving us in the hands of the Countrywide Execs…man they ran that company into the ground NOW there going to do it to BofA…. Oh well…I am not sure how any of that bail out money is really going to help? I mean the banks are too scared to lend even with the money they were given… I want to see how this plays out in the next 6 months to a year with our new POTUS…I bet he is kicking himself in the butt right about now…I mean now that he really knows whats going on and how bad things really are. I wish him well with our futures.

By C Hardy on 11/18/2008 9:32 am

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Right, Lily - all of us “responsible” people purchased gas-economical vehicles at every turn. In grad school we drove a ‘55 VW Bug, and even in the 90s, I never had a car that didn’t get at least 32 mpg, and those were some dandy cars, to boot. We did not have to replace luxury for gas economy. And, all the engines in Japanese cars are good for 250K miles, and mine all made that, at least - even the kids used cars. What the American consumers refused to realize, and do - read the manuals - was that these high RPM engines require frequent oil changes, and from there on it’s a shoe-in. I told my teens that my “account” at our local gas station would show me that their oil had been changed every 2000-3000 miles, and the first time it wasn’t, or the first time their tires were not rotated (free at Discount Tire) every 3000-4000 miles, their car would GO. One of my off-spring still brings up the fact that I made her pay a large bill on “her” car when she was “just” in high school (as she sits in her $1.75M home) for that reason. She’s right. She let a needed repair go so long after I’d made an appointment for it to be done, that the final cost was 4X the estimate - so the dealer leased me space until she could pay it off - she had decided to drive it into the ground. Tut! The US auto industry is an expert at amassing sentiment. So far, not one has had a CEO worth their salt, much less worth their salaries, incentives, bonuses, or benefits. And, whoopeee - I thought that Chrysler’s chairman was boasting that it wasn’t a public company any more so it could be turned around much quicker. Well, have at it Chrysler. Prove your worth. Lead the way!!!!

By C jay on 11/19/2008 3:46 am

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Nostalgia nudges me to say, Help them out… common sense says, Let them go.

By Marjorie C. on 11/18/2008 10:34 am

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One thing I heard recently, can’t remember where, was T.Boone Pickens talking about the need to stop using foreign oil. He said that while it is true we need the hybrid cars, the main vehicle that uses most of the gas on the highways is the 18 wheeler, they cannot run as hybrids. For the U.S. to really become self-sufficient or at least stop buying from the middle-east, we need to change to natural gas which we can supply here. It was a very interesting subject. We usually only hear about the cars using gas.

By Sandbee (FB) 54 on 11/18/2008 10:36 am

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The semi-trucks run on diesel, Bee. It will take decades to ever wean ourselves off oil; we import a humongous amount from other countries outside of the Middle East. By converting over to hybrid and other green-energy transportation sources, our demand for foreign oil will drop exponentially in the years to come. That’s a natural-security interest of the U.S. It all ties together. Pickens is right about working hard to cultivate new energy sources. I attended a news conference today at the Granger Co. They and the Lansing Board of Water & Light are using methane gas extracted from landfills to power thousands of homes. Solar energy is a minimal solution in states that are cloudy much of the year, and wind energy is only a piecemeal solution. But Pickens is right that we need to get going right now on these things. It all adds up, not only in terms of weaning ourselves off oil dependence, but cleaning up the environment and producing new jobs and technologies.

By James the Game on 11/18/2008 8:22 pm

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Was going by Pickens statement on the semi’s - what does deisel come from? I don’t know. :-) He was very interesting to listen to, I know he has a large area of windmills and is all for working on new types of enery production. Having been in the area of Three Mile Island when the incident happened, I am not a big nuclear power fan but there are so many new ways to produce energy nowadays. We must be able to come up with good ones.

By Sandbee (FB) 54 on 11/18/2008 9:03 pm

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Sandbee, the Diesel burner is different from the “average” gas combustion engine is most vehicles, so there isn’t an option; “Deisel-burning” vehicles have a different engine - it’s still a petroleum product. On the otherhand, my community school district is more than 100% powered by wind turbines, now. It took less than 5 months to implement, and has been going strong, and then some, for over 18 months. To be honest, it’s rather pleasant to see the “windmills” down the street. My only complaint was and still is that our entire municipality could have bought into this wind power, and we’d all have been far ahead. I think X-Cel is doing quite a bit on that, now. Our electric caol-based power is certainly far less expensive than natural gas is “out here.” Mr. Pickens is a sensible gentleman - always has been, but his current challenge is the funding and the delivery date for his turbines. Everyone’s bank statment reflects our sick economy, and his is no different. I was in the process of contacting him, in fact, to posit that perhaps as a nation, we could all ‘chip in’ on his efforts. Nothing like a continuous flow of annual dollars. ;-))

By C jay on 11/19/2008 2:46 am

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correction: sb “coal-based power” (I must swich back to Firefox!)

By C jay on 11/19/2008 2:51 am

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There is an area in west Texas where you drive for miles with the windmills going as far as you can see and I think it is lovely to look at, sure a lot better than any coal mine or nuclear power plant. I know his point when he was on the show that night was that if we are to become independant from foreign oil we need to convert the tractor-trailers to natural gas engines somehow, he seemed to have an idea on it. He is a very interesting person.

By Sandbee (FB) 54 on 11/19/2008 6:14 am