I don't think it was a good idea to give these companies another excuse to not make hard decisions on where they fit into the larger over-all auto market. The big three have bigger problems than just deciding what car to build or what car does the general public want.
The major problem that all three face is what to do with the Untied Auto Workers, UAW. Given the mess that exists right now with a large percentage of their costs going to nonproductive works, fringe benefits for those that are working, i.e. health care and retirement, the big three must find a way to get out from under this handicap that is a drag on becoming profitable. The unions have to be part of this process or all of the same problem will follow the big three into the future. Nothing will be gained except the tax payer will loose again. Making it easy on the auto makers is not the answer.
The problem was started in the sixties when management never negotiated in earnest with the unions. They just rolled over and gave them what they wanted so everyone could get back to making money. They figured they would just pass the costs on to the customers. Now this complacency has come full circle. They can't compete with the foreign auto makers that don't have the same union constraints.
Why is this clear to me and not to congress? Why didn't congress mandate unions rework their agenda to make this work? hmmm - is it just Democrats?
Keep the faith -
U.S. Loans for the Detroit Auto Makers Include a Mandate for Big Changes
Car Companies Who Survive Slump Will Build Smaller, More Profitable Vehicles ·
By JOSEPH B. WHITE
The U.S. government is about to offer billions to an industry that spent much of the past decade indulging itself in short-term strategies to boost profits and avoid reckoning with harsh reality. No, this isn't about Wall Street. This is about Detroit's auto makers. Compared to the $700 billion in federal aid proposed to salvage the financial industry, the $25 billion in loans that Congress approved for the beleaguered auto makers don't any longer look like such a big deal -- even for people who opposed the idea on principle.
Free-market conservatives have a bigger target now. These loans -- and other forms of federal assistance that may be offered through the tax codes and, potentially, the financial-system bailout -- could form a vital bridge to get the Detroit auto makers across an economic abyss that now threatens to swallow them. [Loans to auto makers Eyes on the Road] Associated Press
Ford World Headquarters in Dearborn, Mich., sends out a "Happy 100 GM" message to its crosstown rival on its 100th anniversary earlier in September. But the companies that make it to the other side of the current slump won't look much like the companies we've known for the past 100 years -- from the vehicles they offer to consumers to their business structure and possibly ownership they will be radically changed.
The Detroit auto makers need a lifeline from the federal government for a variety of reasons. Some aren't entirely their fault, such as the mess in the credit markets that's choking off their access to capital to finance operations and consumer lending. Still, the Detroit auto industry has only itself to blame for clinging to an approach to business that was in deep trouble 20 years ago, and has been obviously doomed since early in this decade.
If America's taxpayers lend a helping hand to the Detroit Three, in the form of subsidized loans, the auto makers will face enormous pressure not to squander the opportunity by using the money to do business as usual.
The government loans are targeted to subsidize the production of cars with breakthrough technology to reduce oil consumption. That means that to get the money, the Detroit Three will have to stop showing off prototypes of high-technology vehicles and start building them. They seem to be prepared to do this. General Motors recently showed off the production version of its forthcoming plug in gas-electric vehicle, the Chevrolet Volt
Chrysler LLC last week surprised the industry by declaring that it intended to put an electric vehicle into production by 2010 the same year GM has vowed to start building the Volt. Ford Motor has its fleet of hybrids including the hybrid Escape, and has embarked on a speeded up program to bring more of its fuel efficient European car designs to the U.S. market. [Capital dome]Associated Press
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