For Used Cars’ Sake, Auto Manufacturers Need a Bailout
There’s a lot of debate going on about the federal government “bailing out” the Big 3 automotive manufacturers: Ford, GM, and Chrysler. I’m all for it because not doing so is going to absolutely kill the used car market in this country for the consumer in two to three years. Let me explain why.
If a major manufacturer goes into bankruptcy, it’s going to decimate a lot of suppliers. Quality is going to go downhill as prices drop. Plus, with bankruptcy comes staff downsizing. There will be less quality control on the production lines, which means more problems are going to slip through.
Create enough quality control issues and nobody is going to want to buy a 2009 domestic used car in a couple of years. That means foreign companies will have an edge and charge higher prices. Less people will be able to afford good, high quality used cars. I’m not being xenophobic about this. I know a lot of foreign manufacturers have domestic plants. This isn’t an us vs. them rant. Maybe I should say bailout vs. non-bailout companies.
I do have one “caveat” to my support. There has to be changes with this money. It has to be a loan. The government needs to own part of the company and have seats on the boards of director of each company.
My fellow automotive guides have chimed in, too. Christine and Scott Gable at Alternative Fuels have this to say. Jonathan Lamas, our guide to Mustangs, has a strong perspective on the issue, too.
What do you think about the bailout? Good idea? Bad idea? Share your comments below.
U.S. Capitol Photo © Getty Images
Declare bankruptcy, restructure without unions and golden retirement parachutes, then start over fresh. The leeches have killed the host.
Any ‘bailout’ will just extend the inevitable death by a short while, and the money hemorrhage will continue until that point at the expense of the taxpayers.
just my $0.02
-AndyS
Here is my dilemna with all this -
I see a lot of union bashing going on, but the Union is but a small part of the whole picture. With the way workers are being treated nowadays, I fear with some sort of Union that they will be worked to death while those at the top live the life of luxury.
Look at what’s happening. We keep rewarding failure in all the industries. Make a bad decision and are filthy rich? Here is a handout from the taxpayers for a couple billion! Meanwhile, the average American is struggling to make their house payment. Who is helping them? Certainly not the companies who are rewarding themselves with huge bonuses while they fire the lower level workers like crazy.
The auto manufacturers need help — we cannot let this industry die. However, they need fresh ideas and a new way of doing business as well. We need to get 21st century thinkers and doers in leadership positions and send these “we always did it this way” people out to pasture.
We are going through one of the most trying periods in history, and the outlook isn’t looking good — but instead of rewarding those who brought it all about, we can use this period of time to bring about changes and reforms that will help us rebuild America and help everyone out — not just the rich.
i believe that we shouldn’t help the manufactures out because if we gave the money back to the familys they would get the newer cars and help them stay in business. If we gave each household family $100,000 we wouldn’t even reach the 7 billion dollars. everyone will be able to purchase the newer cars and help the manufactures get back on their feet