Should we bail out Detroit?

  Some Detroit church congregations are praying for cars. If you've never seen an SUV on a a church altar, just click here. 
   But should we bail out Detroit?  This month's bailout is only the first, so there's plenty of need for discussion.
   Amtrak is begging for more cars - - rail cars that is. Trains are packed and train ridership continues at a 50 year high even as the price of gas plunges.  New Nine Shift original evidence suggests that Gen Y is driving less than any previous generation in the last half century.
  Here's our top 4 reasons why Detroit Bail Out #1 won't work:
1. There's no one to buy all those cars piling up on the lots.
2. If we want to save auto jobs, then let them make train cars. In World War II, the auto makers shifted to making planes in less than 12 months. 
3. Bail Out #1 will only lead to Bail Out #2.
4. Long term, there is no future to the auto industry. People under age 30 from here on simply don't want to buy cars.
   What do you think?  Should we bail out Detroit? And is the decline of the auto unstoppable? Click on Comments and tell us.

Comments

[school_dubl]

Happy New Year! Happiness and success in 2011.

[Antivirus_man]

Hi, I congratulate you on Merry Christmas!

[Music_master]

I think you are not quite right and you should still studying the matter.

[Buy_Viagra]

Have you been turned down by other lenders?

[RamonGustav]

I think you have a thorough understanding in this matter. You describe in detail all here.

[Lisa]

I am against the bailout. If we help the auto industry then who's next? Someone else will want a handout. I don't see anyone in a hurry to bail out average Americans, but they sure want our tax money to bail out everyone else! Bailing out the auto industry would be throwing good money down the drain. File Chapter 11 and either successfully reorganize to be competitive or go out of business. They should have seen this coming when Toyota and Honda were selling more fuel efficient and alternative fuel cars. They refused to accept the fact that not everyone would want an SUV and now they are paying for it. They should take the advice of one of their own - Lee Iacocca - who used to say "Lead, follow or get out of the way."

[Jim Moulder]

I think your opinion that we should not help the automakers is short sighted. You stated that it took the automakers less than a year to change over to war products, acutally some army trucks were coming off production lines is a week. If there are no American auto makers where will we get them in the future in case of a war and a imediate need? Japan? I do think there shold be tight restrictions on the funds and executive pay and bonuses, but it we loose these well paying jobs they will not come back. Commubnities will not recover and families will be uprooted an changed forever. We were so quick to give money to the greedy bankers who made very bad decisions about loaning money they knew they would never get back, but they knew the loans were guaranteed by the Federal Government. These loans to the automakers would actually help save jobs!

[Judy O'Dwyer]

My preference - let the "normal" flow happen - Chapter 11 or is it 13??? - Bankruptcy is a logical step - one that all businesses - large and small are expected to follow –
While it’s true that individuals will suffer in the domino follow through – I believe that it’s imperative that procedures that are already in place be followed.

[Sue Nielsen]

I don't believe the automobile will become extinct. Everyone does not live in a highly populated area where there is public transportation. I do believe the auto industry needs to make drastic changes in the future automobile. I support the bailout/loan as long as the auto industry comes up with changes that make cars more energy efficient with realistic timelines for changes.

[Thom Lowther]

Marketing 101:every product has a life cycle. If there is a need or possible profit, others will fill the void until the product is past decline...Move on!

[michael arbow]

As a Canadian, I am greatly interesting in what your government does bail-out or no. The Canadian government has committed to match the US government bail-out but for the Canadian divisions of the big three at 20%. Thus if you bail-out the big three for 30 billion the Canadian government will add 6 billion to the big three's Canadian bank accounts. Now that is neighbourly.

Unfortunately for the Big Three they are all located in one province (state) - Ontario. For decades Ontario has been complaining how they have to support the rest of Canada and even our current Prime Minister has cited us in Atlantic Canada for being lazy and not wanting to work. Interestingly, the other 9 provinces and three territories are expected to pitch in. This then creates an awkward position for the Canadian federal government as all the money is going to one province. Soooo,... the federal government is now looking at non-Ontario based companies that it can bail-out and I would expect the bail-out levels to be matched or exceeded (by GDP or population they should be).

So,... please my US friends, if you take the bail-out route remember the little guy who lives next door. Thanks.

[Judy]

I think we need to look at the long range effects of not helping. How many jobs does this actually impact not only in the plants but across the country. I live in a very rural area and it will be a long time before we have anything but car/pickup transportation. How many of our dollars are going to other countries if we don't help?

[Heather]

I live in a community of 100,000 people and we have an almost non-existent public transportation system. I live in a state that is mainly comprised of rural communities who’s economic base is farming. I don’t think that cars are going to be disappear in the next few years, but I do think that what people are looking for in cars has changed dramatically. I’ve been looking to buy a new car for over a year, so have many of my friends. All of us are looking for an attractive flex-fuel, high performance car. (We like cars that look nice, run like crazy, but don’t want to decimate the environment.) Unfortunately, there isn’t much out there that fits the bill so we keep waiting, which means we are driving our old cars and not buying new cars, until the auto industry starts listening to our desires.

On another note, I do think some automakers should look at expanding into producing other products for transportation; however, they didn’t switch over to planes by themselves. The government invested a fairly significant amount of money in helping companies make that transition and in training the workers. Once the war was over, the government had created the GI Bill as an incentive for returning service men to go to college and give the companies time to transition back from tanks & planes. Right now, we are hearing talk for a bailout, but little talk of revamping product lines and no talk of retraining workers. Perhaps the government would be better spending our money by issues those types of conditions.

[wolfy]

Let them have a prepackaged Chapter 11 deal-if they then fail to make ends meet, they must face the inevitable.

[mvputnam]

I'm from Michigan. I'm biased. I don't see the bail out as yes/no. The auto industry needs help to reshape itself in the world economy. They have been ridiculously slow to respond. They need assistance to continue to exist but they also need a kick in the pants. They are not viable in their current form. To the future of cars. Rail and bus are great for the cities but what about the rural areas? Is it realistic to think that everyone will live within walking distance of mass transportation? Would love to hear some ideas on that as I would be happy to give up the car for a viable, earth friendly alternative.

[David Reilly]

No we should not bail out Detroit. When has the Government bailed me out? Jobs? Have them check with the Auto Union I will not get 95% to 98% of my retirement. The Car Mfgs. Should make less cars. Maybe one model per division/

[Deborah]

When you do a science project and the steps you've taken don't give the desired results--in fact, something explodes--you *don't do* the same steps again! You must learn from mistakes--yours or those of people around you. Similarly, Detroit needs to stop what they're doing now and rethink. Nonetheless, even if given the funds, I am not sure that The Big Three owns the courage to fix what needs to be fixed. I can't support money going to any old-fashioned, old-boy network if there will not be a distinct change in thinking, processes and leadership...Perhaps someone from the assembly line who has the soon-disappearing notion of common sense as well as a good home credit rating and knows how to run a home and budget at median wage can be made CEO. Get someone else as CFO to teach the financial part, like a mathematics teacher. Yes, that's it. We need to go Jeffersonian and have the common person step up to show Detroit how to think creatively, make the car many people dream of: smaller than an SUV, truly fuel efficient, and doesn't break easily. (The vehicle actually lasts for 20 years without doubling the cost of the car to the owner through service and repairs.) The Big Three CEOs need to be connected to the real world.

[Erik]

First off, I have to say I am against a bailout for Detroit. I feel strongly that chapter 11 would be the best way for the auto manufacturers to reorganize. It would give them an opportunity to get out from under the burden placed on them by the UAW, they could divest themselves of some of their dealerships, they could drop unprofitable makes and models, and set realistic expectations for the future of the industry. That future most certainly includes a significantly diminished role in the transportation mix, but I doubt cars will go the way of the dinosaur.

Rail transportation has a long way to go if it is to become a reliable, efficient, cost effective means of transportation. Amtrak represents .007 percent of all daily commuter trips and just 0.4 percent of all intercity trips (Cato Institute figures), and cost the American taxpayer $900 million in 2008. At the state level, in Massachusetts for example, the MBTA cost taxpayers $391 million in 2008.

The decline of the US auto market provides the catalyst to rethink how rail transportation in this country is managed. It is time for state and federal governments to get out of the transportation business and open the rails to the private sector.

[Gemi Powell]

I believe there is a life cycle for everything and if the car companies cannot make it without bail out then perhaps their life is spent and it is time to move on. That system works for just about everything in life, some things ebb and flow while other just run their course and die out. I might just be time to move on.

[So I biked to work in -20 F windchill, big deal.]

It would be like bailing out the Pony Express. Sure, the riders and horses need jobs, too, but just perhaps they would be wiser to seek new careers in something with a future.