Do the U.S. automakers deserve a bail-out? No.
Should they get a bail-out? Yes.
Ford, Chrysler and GM have had plenty of time to retool and change their product line ups. They have refused to do so and now they are paying the price. Simply put, they don’t produce cars that many of us want. Trucks? Yes, they produce plenty of those and the rising gas prices have squashed sales. Since it takes the automakers years (on the order of 5) to develop a new car, they are stuck and in trouble.
This is the path they have chosen and should pay the price — Chapter 11.
However, the financial industry also created their own problems by funding, buying and selling bad mortgages. The housing bubble was not something that happened out of the blue, those in the mortgage industry knew what they were doing.
That is the path they chose and they were given $700 billion to fix it.
The precedent has been set: we are bailing out bad decisions by the banks; we should then bail out the bad decisions of the auto industry.
When we look at the possibility of nearly 3 million people out of work, we have to do something. Congress is right to demand a solid plan from the auto makers before any money is handed to over.
As for the CEOs, I have no sympathy for them. They shall not hurt no matter what happens. I only respect one of them: Mr. Mullaly at Ford. His salary is an obscene $22 million per year, however, this year he has waived that and is only being paid $1. When asked by Congress if they would do the same, Mr. Nardelli (Chrysler) and Mr. Wagoner (GM) said no. Gentlemen, that is the wrong message to send to those from whom you seek money.
In the end I think the auto industry will be much leaner, more efficient and cost-effective in the future. I just don’t know when that future will arrive.
