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To Bail Out Detroit, Or Not To Bail Out Detroit?

November 17, 2008 - John Whittaker

I saw a commercial last night for a new Chevy Cobalt - only $12,995 for a brand new car.
My dad looked at me and said, "Wha'ts the difference between that car and yours?'
"$10,000," was my reply.
I got back to work and found an AP story on the Washington wire about the bailout of the American auto industry. Here's the gist of the article -- automobile manufacturers are begging Congress for help. There's too much competition, too much debt, too few people buying cars, too many retirees to take care of. They can't hack it right now, and they're going under. What will happen to our workers? What will happen to the support industries that rely on us? What can you do to help us?
Those are all valid concerns. Really, they are. I don't want to see 3 million workers heading to the unemployment line. I love my 1960s muscle cars, and would hate to see the Corvette or Mustang come to an end. At the same time, I have a hard time swallowing billions of dollars on another bailout plan when there are people who don't have enough to eat or have a roof over their head. Itás hard to rationalize a bailout when people can't pay their mortgages, when the nation's infrastructure is crumbling, and when companies can't find qualified workers to fill open positions.
But, I don't know if there is an alternative to a bailout. Before Congress approves any sort of bailout package for car makers, however, the Whitless Wonder has a few suggestions:
1. Stop making cars that cost as much as the average house. I'm really tired of seeing advertisements for cars and then cringing when the car companies get around to telling you the price. A 2009 Chevy Trailblazer will run you between $28,000 and $39,000. A brand new Aveo will cost "only" $12,000 to $15,000. If you want people to buy new cars instead of a used car, make less expensive cars. There's a reason people will buy used cars - they don't want to be locked into a never-ending cycle of leasing cars or spending $250 a month on a car when they can spend the same amount of money a month and have a car paid of in nine months.
2. Make more cars in the United States. I understand that labor costs in the United States are a big problem. Trust me, I get it. But, if you want American taxpayers to pick up the bill to keep you afloat, don't make cars in Argentina, or Paraguay, or Chile, or the Middle East. Make your cars here. Unemployment in New York is supposed to hit 8 percent next year - and let me tell you, putting a Chevy plant in Buffalo or Jamestown would make a huge deal to the local economies. This might make me a bad person, but I really don't care about the economy in Argentina or Peru. I care about the AMERICAN economy. Now, this means the good ole UAW will have to make some concessions. Workers might have to accept less money to bring those jobs. Prospective workers might have to educate thesmelves in blue-collar work, rather than hiding out in computer labs. I think we can make it work - if everyone comes together at the table.
3. Don't spend another dime on auto racing. Seriously. GM, at its peak, was spending between $120 and $140 BILLION on NASCAR. Add that to all the other auto sports they were involved in, and we're wondering why GM is about to go bankrupt. Was this a shock? I like NASCAR, so let me fill you in on something - YOU CAN'T GET THE CARS YOU SEE ON SUNDAYS AT YOUR LOCAL DEALERSHIP. That ship sailed back in the 1960s. The only thing the cars Dale Earnhardt Jr. and Jeff Gordon drive have in common with your car is the insignia on the hood. That's it. So, why are the car companies spending money on NASCAR? Trim your budgets. Make sacrifices. If you can afford to spend money sponsoring NASCAR, then you don't need government help to pay your bills.
4. We need a national health care plan. About $25 billion of the proposed bailout is for future health care payments for 780,000 retirees and dependents. Local governments are hit with payments into retirement and health care systems. Anyone who has been to a doctor recently or gotten a prescription knows how much it costs. If the economy is the first thing Barack Obama needs to focus on as president, 1A is reforming health care. Companies can't be competitive and keep jobs in the United States because of wages and health care. Governments can't keep taxes to a manageable level because of health care and wages. People can't afford to pay their bills in the winter because of health care and heating their homes. Sense a trend here? Health care is a problem, and the problem isn't going to be solved locally or at the state level. Barack Obama, welcome to the Presidency!
I might lean Democratic, but I'm pretty fiscally conservative. I have a real problem with government spending tax dollars to bail out private enterprises. I really have a problem bailing out private enterprises that arenát fixing their systemic issues, meaning this will happen again in 15 years or so. Should we just tie old Chrysler to a tree and beat it a few times in the head with a shovel? Probably. Lee Iacocca isn't walking through that boardroom door this time.
But, too much rides on Detroit and the automakers. What will the Shults brothers sell on their dealership on Washington Street if the auto market collapses? What about the local parts stores. Where will Cummins put its engines?
I hate the idea of a bailout, but I don't think there's a choice in the matter. If we have to bail out automakers, then at least make this a one-time shot in the arm.


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I know these are "Toyotas," but picture this in a Hendrick-owned fabrication shop. Do you want your tax dollars spent here?