Is it lights out on the U.S. auto industry? Ford, GM, and Chrysler may not survive to ring in the New Year, but neither Congress nor the Bush Administration is likely to help.
U.S. Treasury Secretary Henry Paulson is free and easy with his $700 billion, dropping the approved plans to buy toxic debt and instead investing directly in financial institutions—in effect, nationalizing the banks, as we’ve talked before. But last week he said ailing U.S. automakers will not get a penny of the bailout funds.
This week, Democratic leaders in Congress intend to move forward with a multi-billion-dollar rescue plan for the Big Three, but many Republicans are against it. Without bipartisan support, it won’t happen.
Opposition runs deep. Alabama Senator Richard Shelby, the top-ranking Republican on the Senate Banking Committee, said:
“The financial straits that the Big Three find themselves is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force. The financial situation facing the Big Three is not a national problem, but their problem. I do not support the use of U.S taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers in such a way that allows them to continue and compound their ongoing mistakes.”
Excuse me, but didn’t mismanagement on Wall Street contribute to our current economic downturn? The failure of the Big Three would set off a chain reaction, experts say, resulting in the loss of 3 million jobs and $150 billion in tax revenues. Isn’t that a national problem?
All this makes me wonder about what we’ll have left if the auto industry vanishes. Neal Stephenson in Snow Crash describes a near-future America where globalization and privatization have run their full course. The only true competitive advantage left is music, movies, microcode (software), and high-speed pizza delivery.
Maybe Michigan can revive Motown? And we are the capital of pizza delivery…
But, please, tell me what you think? Should the government—that is, us taxpayers—rescue Detroit automakers? Or, should we just say goodbye and check out the 2009 Honda and Hyundai car models?
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