What will Obama mean to the auto industry?

Will he bring relief to the Big 3?

Will he bring relief to the Big 3?

I’ve written in this blog that I don’t believe the U.S. auto industry should be bailed out by the federal government. I’m a believer that people and companies need to suffer or be rewarded the appropriate consequences of their actions.

I can see the point, though, that a failed auto industry would wreak havoc on other businesses and cost the country thousands of jobs. That’s certainly not a good outcome, and it’s why the government is considering a bailout.

President-elect Obama addressed the issue briefly in his first news conference, saying, “The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted.”

That’s an eloquent way of saying he wants to fund a bailout. Obama appears in strong support of a proposed $50 billion bailout package, with $25 billion in direct loans and another $25 billion to come later, intended to help fund a United Auto Workers retiree health care trust.

I’m absolutely thrilled that Obama won the election and am proud to live in an America with him at the helm. I’m also a huge supporter of the auto industry and am a true car-nut. Yet I can’t bring myself to support the bail out of companies that have made poor choices.

Under Obama, the U.S. automakers will likely receive the help they need and avoid bankruptcy. If, that is, they can hold on until President Bush hands over the presidential reins.

My opinion, though, is that Ford, GM, and Chrysler would be better off – and we’d see better vehicles and stronger companies in the future – if they were forced to reorganize themselves under bankruptcy.

Do you agree?    

-tgriffith

 

3 Comments

  1. I’d like to be against the stock market bailout but when the entire country’s economy is at stake I’m forced to accept and support it. The auto industry is different. No doubt the failure of any of the Big 3 will result in job losses. It’ll also weed out the strong companies from the weaker ones. Hey, if Honda and Toyota build cars in the U.S. and hire our workers as the “domestic” makers fail… so be it.

  2. How do you feel about the Stock market or the banks getting bailed out?
    Are you against all bailouts or just the car companies?
    I live in Michigan and without this bailout – that has been approved but got caught up in red tape – thousands of people would lose jobs

  3. That is an interesting Idea but I have to make a comment about all three of them so hold on to your hat.

    Ford has already restructured and has quality products that will effectively compete with what will soon to be the world heavy weights. Ford was completely prepared for this recession since it was the first (of the big 3) to declare that it will slow production of trucks and that it would focus on the quality, technology, and safety of its product which it has done but it is not going to be able to hold on much longer. Ford has been in a recession on its own and if it were not for economic recession Ford would be thriving by 2009.

    GM obviously was not prepared at all since (according to consumer reports) they have not been focusing on quality nearly as much as they should or efficiency. Their stock is worth $1 more than Ford yet they do not think they will be able to survive another year with a loss like that. GM out-sources more of their equipment than any other automaker. This is going to be the fall of them.

    Chrysler is thinking like they are still in the 70’s. They have the wrong focus altogether. They should get punished for their lack of focus on MPGs and Quality. They are expecting somebody somewhere to bail them out. I say don’t help them out at all. They need to learn from making gas-guzzlers in the generation of gas sippers. They are hoping somebody will throw money at them like Mercedes and Cerebarus. Leave them to pay for their stupidity. Chrysler did this in the 70’s and somehow they got out so I think they should learn from ignorance now since they did not learn from it in the 70’s.

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