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EDITORIAL: With a bailout, what will change?
Romney, Frank lay out the competing arguments.
FINALLY, TRUTH. Key individuals from the two political parties have defined the real argument at the core of the pending decision on a bailout for Detroit's Big Three automakers.
From Republican presidential candidate Mitt Romney, whose father George Romney was both a top auto executive (with American Motors) and governor of Michigan: “Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.”
Romney argues for what he calls “managed bankruptcy” and restructuring.
Democrat Congressman Barney Frank argues for a bailout and against any kind of bankruptcy filing. Frank opposes allowing the issue to get into a bankruptcy court because, he said, that would allow a judge to abrogate United Auto Workers labor contracts. “We already have too much union busting,” he said.
EITHER WAY, with or without the bailout, eventually the market will determine whether GM, Ford and Chrysler survive. When all the politicians are done talking, it will come down to whether the manufacturers can build the product people want at a price they are willing to pay, and whether that price will support the companies' costs and return an acceptable profit for shareholders.
If the answer is yes, they survive. If the answer is no, they die.
We continue to believe U.S. automakers and their employees can compete with foreign brands, but not without radically changing the ways they do business. This business model failed. What makes anyone think it will succeed on taxpayers' money?
Americans will always buy cars. Whether they buy American cars or foreign cars depends on whether Detroit makes the necessary changes. The question is: Will a bailout now help or hinder that effort?
FINALLY, TRUTH. Key individuals from the two political parties have defined the real argument at the core of the pending decision on a bailout for Detroit's Big Three automakers.
From Republican presidential candidate Mitt Romney, whose father George Romney was both a top auto executive (with American Motors) and governor of Michigan: “Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.”
Romney argues for what he calls “managed bankruptcy” and restructuring.
Democrat Congressman Barney Frank argues for a bailout and against any kind of bankruptcy filing. Frank opposes allowing the issue to get into a bankruptcy court because, he said, that would allow a judge to abrogate United Auto Workers labor contracts. “We already have too much union busting,” he said.
EITHER WAY, with or without the bailout, eventually the market will determine whether GM, Ford and Chrysler survive. When all the politicians are done talking, it will come down to whether the manufacturers can build the product people want at a price they are willing to pay, and whether that price will support the companies' costs and return an acceptable profit for shareholders.
If the answer is yes, they survive. If the answer is no, they die.
We continue to believe U.S. automakers and their employees can compete with foreign brands, but not without radically changing the ways they do business. This business model failed. What makes anyone think it will succeed on taxpayers' money?
Americans will always buy cars. Whether they buy American cars or foreign cars depends on whether Detroit makes the necessary changes. The question is: Will a bailout now help or hinder that effort?
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Mr. Data wrote on Nov 21, 2008 7:40 AM:
First he said Congress and skeptics are failing to recognize the gains / changes made by the American autopmakers over the ast decades - to their cars, the MPG (they lead in many models), labor / benefit cost reductions, etc. Then he said this bailout request is ONLY about financing because normal credit markets are in a quandry. Then he said juts think of all the jobs that will be lost through restructuring or relocating off shore. And finally he asked who will make our military vehicles if we lose our American auto manufacturing?
He also said that Toyota, Honda, Nissan, BMW sales are also way down and that their governments have already provided them financial support.
All good thoughts to be considered before making a hasteful decision to deny help to our nation's most important businesses. "