Americans uneasy over bailout for automakers

[TheLancinator]

Americans uneasy over bailout for automakers
By Matthew Bigg


ATLANTA (Reuters) – As Congress debates legislation to help struggling automakers on Monday, many Americans said they were uneasy with the plan, arguing that while it may save jobs, it would reward companies for pursuing bad business practices.

In interviews from New York to Los Angeles, everyday Americans said the proposed $25 billion rescue plan was unfair and said it would make it harder to reform U.S. automakers.

"They need to restructure. If they get bailed out they are not going to do it," said Eric Smith, a paint contractor interviewed in Chamblee, Georgia, on the outskirts of Atlanta.

Democrats crafted the plan to help General Motors Corp, Ford Motor Co and Chrysler LLC, and hope to pass it during a post-election session of Congress starting on Monday.

The three companies, whose gas-guzzling vehicles have been losing market share to Japanese rivals for years, are lobbying for the money to help them restructure and survive the economic downturn.

The stakes rose on Friday, when Goldman Sachs suspended its rating on GM and said the automaker needs at least $22 billion in aid. Goldman also said it would be difficult for Chrysler to survive without help.

All three companies said Chapter 11 bankruptcy restructuring was not an option.

In interviews, many people said all of the options facing the automakers had drawbacks, including the proposed bailout.

"If they don't do it, a lot of people are going to lose their jobs," said Kevin Austin, 36, while fixing a car in a mechanic shop in Atlanta.

"But every big company is getting a bailout and the little people don't," he said.

The automakers are a symbol of industrial muscle in the world's richest country and their financial straits are seen as a sign of the trouble facing the U.S. economy as a whole.

Even so, the bailout is unpopular with many conservatives and others who say in a capitalist society businesses must stand or fall with a minimum of government interference. On Sunday, Arizona Republican Sen. Jon Kyl told Fox News American taxpayers should not be burdened with bailing out the auto industry.

"It's like nature's law: Only the fit survive," said John Berrotto, 50, a security director in New York who drives a Lexus and said he does not support the idea of a bailout. "Sometimes companies just don't make it," he said.

DOUBTS

In Los Angeles, which hosts the Los Angeles Auto Show this week, many people said they doubted a bailout was the best course of action. Some said it might be better for the companies to go bankrupt. Others said the industry could not survive long-term and that the bailout would be throwing good money after bad.

"I'm not sure they (the automakers) can be salvaged. Part of me says that if Honda and Toyota can make better cars in the U.S. with American workers, so be it," said Tom Reiter, who was interviewed in Los Angeles and drives a 2001 Jaguar XJ he said was a "big gas guzzler."

Scott Porter, a 34-year-old attorney, drives a 1996 Honda Accord, which he said he chose for its reliability. He said he opposed the bailout but might be willing to consider it if it was done the right way.

"Everybody is trying to claim they're poor. Everybody wants a handout. This (financial trouble) is something that's been a long time coming," Porter said in downtown Los Angeles.

"I don't see why it's a massive emergency all of a sudden," Porter said, adding that many other sectors were also in trouble.

Asked about claims by U.S. automakers that they could not make a profit manufacturing small cars, he said: "If you can't make a profit then you are going to go bankrupt."

[Meursault]

It's a good thing people are skeptical and don't fall for the whiny rhethoric of the corporate management. Seeing how massive overproduction in the car industry all over the world is, it seems evident that there are a few car companies going spare.

[DemonGeminiX]

Y'all should see the editorials that NY Times and the Wall Street Journal posted this morning.

NY Times: Saving Detroit from Itself

http://www.nytimes.com/2008/11/15/opinion/15sat1.html

WSJ: Why Bankruptcy is the best Option for GM

http://online.wsj.com/article/SB122688631448632421.html

Opinions?

[AnthemZ]

I just saw the report this morning about how Germany wants to save Opel, but doesn't want to give them money fearing G.M. would take it.

[Tinysmasher]

It's all about getting rid of the UAW and the related insanity of paying some guy $70 an hour for unskilled labor and then giving him a pension to boot.

We simply can't compete with the rest of the world doing that.

[Meursault]

Originally Posted by AnthemZ

I just saw the report this morning about how Germany wants to save Opel, but doesn't want to give them money fearing G.M. would take it.

It's a populist thing, everyone in the government coalition is afraid to be the one who let Opel go bust (in light of next year's election). But then again if Opel went bankrupt alongside GM, most of their customers would buy other german cars so that'd help the remaining companies.

[AnthemZ]

Originally Posted by Meursault

It's a populist thing, everyone in the government coalition is afraid to be the one who let Opel go bust (in light of next year's election). But then again if Opel went bankrupt alongside GM, most of their customers would buy other german cars so that'd help the remaining companies.

It might in Germany, but outside, they will turn to every other car but Por., Merc., and B.M.W.! Like here in Switzerland, allot of people own the small Opel's, they will just buy French!

[Meursault]

Originally Posted by AnthemZ

It might in Germany, but outside, they will turn to every other car but Por., Merc., and B.M.W.! Like here in Switzerland, allot of people own the small Opel's, they will just buy French!

There's always VW and Skoda. Skoda ate a big part of Opel's market share in Germany over the last years. In spain, you already see an awful lot of Skoda taxis and company cars, that kind of ride used to be clasical Opel sales in Spain.

[TheLancinator]

Bail them out now, I bought Ford stock on a calculated gamble

Go democrats go!