Majority Of American Public Against Auto Rescue
By Justin Gardner | Related entries in Business, Cars, Economy, Jobs
I think this has a lot more to do with the fact that this has been spun as free money as opposed to giving these companies loans (GM and Chrysler) or at least access to lines of credit (Ford), but nonetheless…
Overall, 55 percent of those polled oppose the latest plan that Chrysler, Ford and General Motors executives pitched to Congress last week, on par with public opposition to earlier, pricier efforts. But with 42 percent support, the new request for up to $14 billion in emergency loans has more backers than previous proposals to secure up to $34 billion in loan guarantees.But as with the earlier bids, those who strongly oppose the measure greatly outnumber those who are strongly supportive.
Opposition to the automaker bailout is fueled by the widespread perception that the companies themselves are responsible for their predicament, not the faltering economy. In the new poll, three-quarters of Americans said Detroit’s woes are mainly the fault of its own management decisions, and a sizable majority of those who blame the front office object to government help.
Nor have Detroit’s Big Three made significant progress persuading the public that bankruptcy proceedings would deepen the broader economic slowdown. Sixty percent said it would make no difference or would be good for the economy if one or more of the companies were forced to restructure under the protection of bankruptcy laws.
And there we have it. I know my fellow contributors will disagree, but I think it’s completely irresponsible to allow these companies to go into bankruptcy when they would never have done so in a normal economic climate. Access to credit would be readily available, and we all know that.
What’s more, the money that the White House is now looking at loaning GM and Chrysler was already set aside for the car companies. So how this is a handout or a bailout is beyond me.
And one last thing…the government has loaned car companies money before and we made money off the deal.
Oh well.
This entry was posted on Tuesday, December 16th, 2008 and is filed under Business, Cars, Economy, Jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
December 16th, 2008 at 2:27 pm
Every time Ford, Chrysler or GM sells a car, they lose money. Every time any other auto company sells a car, they make money. This is not a result of the recent credit crunch, it has been happening for the last 10 years or so. The big three have a failed business model. We will be paying them to lose money.
December 16th, 2008 at 5:19 pm
@Jimmy,
I think this is why so many Americans are resistant right now–there is no clear plan to turn the businesses around. And the plan that might work long term–that would enable them to be profitable–would be met with amazing partisan resistance from both sides. This is because CAFE requirements need to be repealed (companies should be allowed to make products that they can sell for a profit; if the government wants a certain kind of car, then they can take some of the billions and start AmCar), compensation models have to be drastically changed ($30.00 an hour for repetitive manual labor? Seriously? And the bennies? And the executive compensation?), fair trade practices with other nations would need to be established, and there would need to be government oversight of how the money is spent.
That’s what it would take to turn these companies around, to truly make them viable in a 21st century economy. I (and apparently, most Americans) don’t want to see any money sent their way until we see changes (from the govt. as well as the automakers and the unions) that result in a new business model.
December 16th, 2008 at 11:58 pm
I do hope they get some money from the TARP, since I think that money is being looted, and any use is better than that.
But seriously, the American auto industry has been having problems for some time. Unfortunately, boomer pensions are the #1 problem with auto company profitability, just like they will soon be a major problem for the federal budget.
It’s unfortunate, but the auto companies must continue to make money to stay in business so hard choices must be made, either in the form of reducing benefits to pensioners or reducing benefits to current employees or repealing government standards as ExiledIndependent suggests.
The government sets a bad precedent by continually running deficits and then throwing up its hands when faced with calls to correct the problem. The auto companies are finding that throwing up their hands to their problems, rather than solving them, eventually leads to bankruptcy. I wish there was a real compromise available where the auto companies could have a clear path to profitability, but without that continuing to prop up failed business models with government money reeks of communism and is actually unfair to other failing businesses which are not high profile enough to receive the same treatment.