Detroit's car crash: Worth salvaging? (AP Photo/Kevin Tew)
Bailing out Detroit
“It’s tempting to call it a car crash,” said the San Francisco Chronicle in an editorial. Detroit’s Big Three automakers are hemorrhaging cash and market share, and they want a second $25 billion in federal loans to survive. Detroit is “anything but cocky, but it’s confident it won’t be turned down on its latest tin-cupping mission,” relying on the “too big to fail” argument—about 1 in 12 U.S. jobs is tied to car manufacturing.
Fine, letting GM, Ford, and Chrysler collapse “isn’t politically viable,” said Paul Ingrassia in The Wall Street Journal. But if taxpayers are going to be on the hook, we need a “thorough housecleaning” at the companies—replacing management and boards with government technocrats, wiping out shareholder equity, and “tearing up existing contracts with unions.”
Let them fail, said David Olive in the Toronto Star. “Detroit has been a significant destroyer of jobs and shareholder value for the past decade,” and the automakers have been “cosseted by taxpayers and motorists” long enough. Just maybe, “several smaller, more nimble and competitive firms” will emerge from Detroit’s “hidebound” morass.
At least one of the three, probably Chrysler, won’t survive anyway, said Daniel Howes in The Detroit News. But letting all three fail would result in an industrial collapse that “would give new meaning to the word ‘ugly.’” Still, to merit yet another taxpayer handout, Detroit management and unions need to make it clear they'll use it as more than a crutch.
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Recent comments | 18 total
“tearing up existing contracts with unions.” That's going to be a politically interesting stance to take. Ought to make things real fun.
NOT ONE PENNY FOR TRE AUTO MAKERS. They haven't upgraded in years, just continued to make stupid, big, gass-guzzlers when other cars like Honda were sane. Go back ten or twenty years and take the obscene salaries back from the heads and retool. Remember $8 million dollars to Iacoca to put 240,000 real people out of work, but don't fix the product!
We should not accept any promises from the companies, themselves. I agree with Paul Ingrassia. If they want federal dollars, they need to give up control of where those dollars are spent. Rewrite those union contracts.
“tearing up existing contracts with unions.” Like that will ever happen! Why do we keep supporting unions who demand wages and benefits for their uneducated workers without college educations? Why can't we understand that the jobs are going overseas to countries with less worker demand for wages beyond their intelligence level? Can't the union members understand there is a ceiling wage for them? No, we can expect more of the same demands because unions vote dem and as a voting block they are more valuable than the whole society itself. Limits on management is a must and no more lavish meetings and golden parachutes! Please no government technocrat involvement! Remember the postal service, the socialism of the indian reservations, and the government itself are nothing but ways for inepts to get a job they couldn't qualify for in the real world.
RE: “tearing up existing contracts with unions.” With the Dems in charge of both Houses of Congress and the White House, and all of them in debt to the unions after the election, any new contracts would probably be even more generous to the unions than the present contracts.
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