This is a hard one. I was watching Hardball the yesterday and Dennis Leary said something to the effect of " if we are supposedly the model for democracy across the world there is no way we shouldn't me manufacturing our own cars" and he is right, but we can't keep making a lesser quality product either, maybe this could be the catalyst that is needed so that we can start focusing on education so that we can have the best and the brightest designing and hopefully manufacturing better American Made vehicles.

I'm torn on this, but what something I am a little miffed about is how much of a hypocrite Romney turned out to be. Just a few months ago he was telling anyone who would listen in Michigan how he would protect their auto industry and their big 3 jobs - 1.2 million jobs! He called out McCain on not being supportive and for not fighting harder for the auto industry and not he makes a full 180 and says let Detroit go bankrupt? I know all politicians lie in one way or another, but this goes beyond that imo, it is a slap in the face to people who supported him and took him at his word, at least other politicians make an effort to seem like they are altering the stance, not completely reversing it, or at least offering an explanation when they completely reverse their positions - he has basically just admitted to talking complete bull while a candidate.

I sent an email to Dianne Feinstein asking her to seriously consider bailing out the Big Three.

In a 'Freakomics' way, I can foresee how their demise would have a catastrophic long term effect on our economy and just life in general.

Plus in NASCAR would be all Toyota uggh.

Some "foriegn" cars are manufactured on American Soil. Some Toyota Trucks are manufactured right in the SF Bay Area.

I can see the long term picture of the economy and how it would certainly be rosier if they are bailed out, but I just can't get behind it. If they hadn't made so many crappy cars for so many years they would not be in this position right now. The quality has certainly improved in recent years, but I think they took in the overseas threat too little too late.

Add me to the list of "torn" people.

On the one hand:

I have not been a big fan of most US cars, and a part of me says "YOU GUYS SAW this coming and could have helped the American consumer and led the pack for innovation and efficiency..but nooOOOoo. And now you - and the people who work for you - have to pay for it. (So does the American consumer who has high gas bills, low mpg, and has more repairs than he should in a relatively new car.)

I like smaller, sportier cars but I totally understood why my parents needed their truck and jeep - despite the frightening gas mileage, and the fact that the Jeep would have had HEINOUS repair bills had they not known an awesome mechanic who knew his stuff.

I often chose to drive Hondas because I just loved them, and they lasted so well...though I had a Saturn I quite liked also, and an Audi, Hondas were my "go to" brand because, quite simply, they were dependable as hell. I knew many a rancher who swore by Dodge trucks (and also Toyotas, for that matter) - but when I dug through Consumer Reports and reviews every time I wanted a car, time and again I was lured into choosing a Honda (and I looked at Mazdas as well.) My parents had a basic system "American trucks, Japanese cars" and that worked for them, and I guess it rubbed off.

So the cynical side of me says "tough noogies, you screwed up, and have been slowly doing so for decades, appealing to people's vanity instead of common sense, and not making your cars economical and dependable enough."

Now the other side..and forgive my waxing nostalgic and fuzzy, idealism:

I remember when I first moved to the UK and driving stopped being fun. Cars were tiny, and I mused at how "dorky" they were compared to American ones.

Driving - which will, sadly by necessity die as a leisure activity - someday, was something I truly loved. Jetting down I-10 on the way to a holiday in Big Bend, with good rock on the CD player and nothing but open skies and distant mountains is a feeling I cannot expect someone in Edinburgh to know. The sheer pleasure of movement, it was a prime time for me to think, to sing to myself (or with friends), to just enjoy the sheer massive special-ness of America.

I grew up drooling over 68 Camaros and sexy GTOs, and slick little Mustangs. NOTHING sounded like those musclecars, and on the very rare moment I saw one on the UK streets, I had to smile like an idiot. I still love them.

I realised - when I moved to a place where driving became more of a chore, and later when I just gave it up and opted for the really good bus system - I really loved cars, and driving. And a part of me would miss it.

There is a unique history between America and its cars, and to some extent its car manufacturers.

Without our cars, there was no Kerouac's "On The Road". Without cars, we would have no white T-bird in "American Graffiti", no "General Lee", nor any other of the dozens of iconic, unique automobiles that drove part of our culture since they hit the highways so many decades ago.

Saying all that - I don't know if sentimentality or symbolism is a REASON to save an automobile company, especially when they haven't always acted in our best interests. I do think saving the jobs is important, if at all possible....but a part of me says we have to save them, because in a way...these are part of our story, our history, and what makes America..what it is.

Maybe though - its time to see how to revisit that, and update it, for the times we live in today.

Cars are part of our culture in a way that isn't always responsible, but it is undeniable.

Just a few thoughts, and sorry for the long post.

Of course the other side is the workers who would have no jobs if the Big 3 go out of business. I would be okay with some sort of help for them, but for the upper level management they took a risk and it didn't pay off so too bad for them.

I'd rather see Detroit get the money than many of the companies that have been bailed out so far. Build in serious oversight, be hardassed with them, but I think letting them fail could have long-term effects that wouldn't be good. The Bush Administration already has gone through the looking glass with the bailout - let's try rebuilding an industry that has a tangible product with growth potential.

Bailing them out just so people can have jobs ( no matter how deservedly) is not a justification of course it plays to our hearts. I mean even with the wall street bailout package I know many people who work in the banking/housing industry that are barely making ends meet. So Bailing Out the big 3 doesn't guarantee job security or that peoples jobs will stay the same.

I just wish we can take that 70 billion back and divide it up....

NO! If we bail them out now, we will only be delaying an inevitable collapse. Since I was born (1984) and even before then, American cars have been losing the battle with foreign cars. If there is really going to be "change," then it should start with restructuring, greatly reducing and eventually completely eliminating the Big 3. And, I agree that if America doesn't want to see this effect continue in other areas, we need to GREATLY increase funding for schools and encourage kids to really be the minds of tomorrow and make an investment in the education and intelligence of our future.

But if the unemployment rate raises, that means there is less money out there for consumer spending, which will drive down revenue in other sectors. America has become a country of buyers, and we're about to lose the little production we still have. I think some sort of bailout, either making them use funds already allocated or something else, with serious strings attached is necessary. Besides, their pension programs are basically ghost-government retirement since they serve so many people. Can medicare handle an influx?

no.

It's not just auto workers that will lose their jobs. My oldest brother lives in Zion, IL. He works at a steel plant that makes industrial grates. As soon as this came down I knew that some how this well effect his job even though the company he works for does not make anything directly for the Big Three. No my brother's employer makes grates that are used by companies that make components for the Big Three. His employer makes grates that are used by companies that provide products and services to people who work for or make components for the Big Three.

Sure enough without even talking to my older brother he called and said that the CEO of his company just came down to the floor and spoke to everyone about what's going on in Detroit. He told them that he had reduce his staff and let go of some White Collar workers but that at this moment provided the Big Three don't collapse that the steel workers are safe for this year. The CEO said that he will try not to reduce the number of steel workers and instead he will ask that they forgo the Christmas bonus and he will forgo any and all bonuses he's supposed to receive and he will reduce his own salary and pump that money back into the company. My immediate concern was never for me and my livelihood but for the bigger picture. Geez, I've gotten a cousin who might actual benefit if the Big Three collapse because she work in the Honda factory in Indiana. But in the long run she would end up losing too, if everyone's spending is slashed people will keep their old cars longer and the Foreign automakers will suffer too.

If these companies collapse the toll booth taker, the people in grocery stores and the elementary school teacher will lose their jobs too as a result of the economic impact of losing these major industries and the companies who make products and provide services to the Big Three.

Personally, as I wrote to Sen Feinstein I drive a VW New Beetle and have only fleeting interest in the Big Threes products (I would like to buy the new Camaro when or if its released) but I went for low emissions and above average fuel mileage over a US manufacturer. I suggested that if Congress (nay we the people) bail out the Big Three that we demand complete accounting for how and where the funds are spent, we demand they give up the ghost on the low fuel efficiency vehicles and sell us the same high efficiency low polluting vehicles they sell to the Europeans and that they restructure and become more environmentally conscious as well as promote innovation rather than stifling it.

I'm not nostalgic about the US having automakers and being the originator etc, I am concerned with the dismissal fiscal and sociological effect this will have on everyone.

Here is the thing, every person in every sector is in danger of losing their jobs right now. It is not just the automakers and those who are associated with the automakers. So, if we bail them out, then what, real estate developers? Construction? It will just keep going down the line. The fact of the matter is that this recession is going to have a long-lasting change. We should not be pumping money into an industry that is not going to give us anything back in return. I think it is time that supply and demand balanced itself out to a more realistic level, and if that means that some people have to lose their jobs, then that is what will have to happen.

This is much like those who went up-side-down on their homes or maxed out their credit cards and can't pay. It is time for both consumers and corporations alike to live/operate within their means. And the means for the Big 3 happen to be meager and won't support continuing operations.

The big 3 and the uaw have dug their own graves. It's time we let them die, and let a better managed company rise up from the ashes. UnDave35 motor corp has a nice ring to it.

Do we want to try and hold at recession or risk a depression?
With auto jobs go parts makers & retailers, dealerships, businesses in towns that depend on them for business, advertisers, marketers - that's a lot of jobs taken out of the mix. Once the auto companies are gone, what kind of manufacturing jobs would replace them, or would that sector finally die in the U.S.? Right now, reforming what we have seems smarter than tearing down and hoping to rebuild someday.

i think the Big 3 need a good smack in the face for being pompous asses, but at the same time if they fail I honestly don't think Detroit will ever recover. I can't see my city get torn apart anymore, so I definitely think they should go forward with the bailout, if only to keep the pin in the grenade for another year or two. If banking gets a bailout the auto industry absolutely should too, you're punishing people who don't necessarily have the skills to change their lifestyles (we don't have enough jobs in the area as is, let alone for the 50 year old non-college graduate line worker who's being screwed out of a job because of the car gods couldn't get their act together.)

Do you honestly believe that someone won't come in and purchase the companies and create a company that is more profitable?

Are there any serious offers?

I am torn as well, here are things I am wrestling with:

1.) In 2010, the labor union (United Auto Workers) will take over responsibilty of health care costs for employees, which will increase the efficientcy of the car companies.

2.) The "bailout" would be a loan and the last time that the government did this in the early 80s for the auto industry, the government actually made money from it.

3.) The auto industry employs 10% of our workers, and funds 20% of our economy. (Per NPR).

4.) With bankruptcy of just one of the Big 3, the resulting lay offs could push unemployment to 10%. (The year following the crash of 1929 unemployment was only 8%!)

5.) The dealerships and divisions of the brands NEEDS to be reorganized, but can it be done with out bankruptcy?

"We should not be pumping money into an industry that is not going to give us anything back in return"

They do give us something in return: they spend $30 Billion dollars a year on parts and supplies in the US, fueling other businesses. They employ a vast amount of our citizens.

People in the US will not be stop buying cars anytime soon. That means that we are conceeding defeat to imports. IMO, the more US companies that thrive, the better for our economy.

I'm so happy to see this post! Too bad it's after hours EST...

I would be in favor of the bailout IF the big 3 were willing to restructure, but they aren't. They don't want to get rid of upper management or renegotiate UAW contracts. They are bleeding money and were doing so WAY before the economic downturn (they pay $2000 per vehicle produced for union entitlement packages, they lose money on EVERY car they sell). Their issues are not going to fix themselves in the next 5 months (GM admits to losing 5 billion a month... thus 25 billion equals 5 months of operating expenses). Americans by and large are opposed to this bailout... I am surprised at the lack of astonishment on this board that the Dems are so involved in big business' interest.

I have family in GM and I do not want to see them out of work, but why throw good money after the bad? The bailout wil NOT settle this situation - bankruptcy restructing would be best. I sincerely believe that the American people have paid enough for poor big business management... enough if enough.

(Not to mention that the 3 CEOs flew up here in private jets. GM owns 8, with no plans to sell. Give me Lee Ioacocca who took no salary while repaying a government loan over these bozos any day. My rant is probably NOT over.)

What if the loan was conditional on the acceptance of restructuring?

It seems this is an ultimatum where they really have no choice but to go along with what the people holding the lifeline are demanding.

Kranky, I do think that labor unions have hurt the industry, but I also think that their taking over health care costs would save the auto industry huge amounts of money (as they are going to do in 2010). What are your opinions of that transfer of responsibility?

Jill-

I would be in reluctant support of the loan if restructuring AND repayment were part of the process. I do think that GM needs some tough, tough money love right now - they are SO very disfunctional. At the moment, the big 3 CEOs are not willing to restructure... my hope is that Congress does not let them get away with it.

Transfer of responsibility? You mean the UAW setting up a separate entity for retirement and health benefits? I'm all for it (my grandfather draws a GM pension and I sure as heck do not want to see his benefits cut), but I understnad that the companies will still pay a hefty sum into the system. Beyond that, I do not see how the whole thing would work without a LOT of financial backing. Does that answer your question?

FYI - my uncle works at a plant in Mexico. Yup, some of these cars aren't made in (North) America.

Jill-

Maybe I didn't answewr your question. I do not think the problem is only UAW benefits. The transfer will help the issue, but not fix the problem - which is much bigger than 'cash flow.'

The big 3 put out an inferior product - the market has spoken. There's good in the industry (for example, the OnStar System is pretty innovative), but not enough to pull it through the next year without major restructuring and some pretty painful cutbacks.

"FYI - my uncle works at a plant in Mexico. Yup, some of these cars aren't made in (North) America."

Durr - I meant the USA.

Jillness, this is not about "conceding defeat to imports," there comes a point where the smartest thing to do is cut your losses, i.e. the war. BTW, the imports have been wining for a LONG time!

Also, I do not think that the next session of Congress is going to be doing the autoindustry any favors in terms of legislation.

On top of the Big 3 doing poorly now, what happens when they (and their suppliers) don't have energy to run their plants when Obama has promised not to allow even clean coal energy and has offered no alternative.

It's boggling to see politics in action.

(I read an article the other day about this issue, I'll try to track it down if anyone is interested.)

I know the imports have been winning for a while, and I think the industry is VERY foolish for not getting on the better fuel efficency/ higher quality bandwagon long ago.

However, I think that there will be serious nationwide consequences to letting one of our biggest industries and employers implode. If we were in a better situation, I would be more willing to let them just go bankrupt. But right now, it is still not certain whether we will be going through a very hard recession or a depression. I don't know if we could sustain the consequences of more than 1 of the Big 3 going bankrupt.

Believe me, I wish it would be the best thing to keep taxpayer money out of this and let the automakers suffer the consequences of poor management. But I think the reality is much more severe than that.

" when Obama has promised not to allow even clean coal energy and has offered no alternative."

As far as I know Obama hasn't said anything about not allowing clean coal energy.

Jill-

I DO often get Obama and the general Democratic party mixed up, but I clearly recall Biden saying as much on the campaign trail (about the clean coal thing - in PA of all places). You are the Obama-expert, so I'll concede - Biden has been known to get it wrong, afterall.

So the automakers are too big to fail? I disagree. I think UnDave is right - small business will take up some slack and we will survive. Not that it won't be painful. But I do think that the first bailout has shown that government intervention does not help. Have you read any of the recent publications on how FDR actually made the Depression last MUCH longer than it should have?

Back to present day, I just wonder how much money will we have to give struggling industries before it's too much? GM is already getting $25 billion from the first bailout and they say it's not enough. If they were more willing to restructure, it would be a different scenario all together. I believe they are relying on Obama and the Democratic Congress for some easy money.

Jill-

I gotta sign off for the evening. Feel free to pm me or I'll check to board tomorrow.

Thanks for the nice convo! If the bailout goes through in it's current state, then I resolve to be as optimistic as you. I mean that with highest respect.

factory workers in UAW earn twice as much as the average factory worker..... that is the main reason for the big 3's problems.

and the fact that mast uaw pensions are more than what they made while working????/

jill-
Sen. Barack Obama's claimed support for coal comes with a qualification: He'll make it so expensive that Americans won't be able to afford it.

http://www.charlierose.com/view/interview/9498

Count me in as one of the torn ones. On the one hand, I generally think most American cars are crappy and that the American auto industry really needs to catch up to the rest of the world's major auto manufacturers, and I do think the industry dug its own grave in that regard, but on the other hand, allowing the industry to collapse would lead to the loss of a terrible number of jobs, workers' health care and pension plans, and so on--a terrible human cost. So...I'm not sure about this.

Someone on TV defined the Big Three: a giant pension fund masquerading as businesses.

So we bail them out now. 6 months later here they come again. Does anybody seriously believe that people want to buy these cars? The answer is NO.

HELL NO!

Get rid of upper management, the union, the SUVs, the gas guzzlers, then let's talk about bailout.

In an attempt to not let my feelings about the bailout in general overwhelm this response, I'm going to keep this as short as possible....
I'll just say they should be helped to an extent up to $25 billion. The ticked off part of me says give a billion to each company and say figure it out. Either way, if they need more in the next few months, they don't get any.

All I can think about is the episode of Tabatha's Salon Takeover where the salon owner had a lavish life and Tabatha got him to understand change his way of thinking and he began to put the money back into the salon (and other changes of course) and saw growth.

what about the fact that gm supplies parts to most of the country including other manufacturers? without gm, the entire auto industry in the us and canada will fail. thats jobs, and more money gone. our economy cant handle that at this moment. although i do agree that they need to do some massive restructuring. no more private jets, bonuses, golden parachutes. use that money to put back into the company

ok question to anyone who knows anything about stocks - if they do fail and foreign companies buy them out - what happens to the stocks people own - do they transfer or are they worthless when the company fails? (their stocks are around 1.80-2.80 right now, I am wondering if it might be a good time to buy some) and I'm in the camp that thinks they will probably get bought out by some foreign company sooner or later, with or without money.

You know what, GM? How about you effin remake the EV1 and then you can get the bailout? That electric car would have saved many Americans a lot of trouble and would have pushed them ahead of foreign cars. Oh well, at least I can get excited about the Electric Smart.

NO, they need to declare bankruptcy and move on from there.

No way, they aren't on the right track to get back to profitability at all. Think about it as if we (the American taxpayers) where venture capitalists. Would you invest in their current business plan? I sure wouldn't and the #1 reason is the UAW and those freakin pensions. Its the same with my city, the pension is 75% of the budget!! No one in modern industry should get a pension anymore, especially the rich ones the UAW and government workers enjoy.

Enough is enough!

No more bailouts!

Here's the message we're sending these people: If you find yourself in a rut, no worries. The government will take care of you. How bout take care of yourself. Personal accountability, that's the message these people need to hear.