| Auto Industry Bailout? Not So Fast! |
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| Wednesday, 19 November 2008 01:14 | |
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Top executives from three Detroit automakers are back on Capitol Hill today looking for a $25 million hand out to keep their businesses afloat. Yesterday they appealed to the Senate, today it’s the House. In the hearing entitled, “Stabilizing the Financial Condition of the American Automobile Industry,” some lawmakers argued that a bailout was unfair, while others claimed that an immediate rescue was necessary, not just for the auto industry, but for the overall economy. But don’t look for any quick fixes. There are too many details to weigh before a vote can be taken seriously. Many congressional leaders were blatantly skeptical and critical saying that bailing the industry out in the short term does nothing to change the fundamental management problems in the long run. They questioned Detroit’s ability to compete in the global marketplace and pointed to what they perceive as the major problems: the vehicle quality, high labor costs and the competence of their senior management. Senator Christopher J. Dodd, Democrat from Connecticut and chairman of the banking committee was previously known as a staunch supporter of Detroit. But now . . . not so much. “Their discomfort in coming to the Congress with hat in hand is only exceeded by the fact that they are seeking treatment for wounds that are to a large extent self-inflicted,” Dodd said. “No one can say they didn’t see this coming.” Automakers are defending themselves saying their problems don’t stem from poor management, their product lines or lack of dedication of their workers, but rather it’s that the global financial crisis has restricted their own access to credit as well as the consumers’ inability to get financing to buy cars. But vehicle sales in the U .S. had already been week—down by 14.8 percent from January through September. Then in October the credit crunch plummeted sales 31.9 percent lower. There are so many unanswered questions it’s highly unlikely that this will reach a vote during the lame-duck Congress. Last night we heard a lively debate on the PBS News Hour. Senator Sherrod Brown, Democrat from Ohio argued in favor for the bailout while Senator Jon Kyl, Republican from Arizona pointed out why it was a bad idea. If you were asked for an opinion, how would you vote? If you’re not sure, you can read a transcript of that debate here.News Hour Maybe you’ll find something that will change your mind. Comments (0)
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