The prospects of a $14 billion government rescue of the American auto industry seemed to vaporize on Thursday morning as the Senate Republican leader, Mitch McConnell of Kentucky, spoke out forcefully against the bill, effectively dooming its chances despite the urgings of the White House.
In a speech on the Senate floor, Mr. McConnell said he and other Republicans had drawn a clear distinction between the Treasury’s $700 billion economic stabilization, which they helped pass in October, and the proposal to aid the American automakers, which he said raised questions about which industries or individuals deserve help.
“A lot of struggling Americans are wondering where their bailout is,” Mr. McConnell declared. Although Mr. McConnell voiced support of an alternative plan that was developed by Senator Bob Corker, Republican of Tennessee, it seemed unlikely that there was any possibility of compromise at this late point in the year, although some Congressional aides still expressed hope and said talks would continue.
And this is why the Republicans are, and ever will be the minority party. Admittedly, I see this closer here in Michigan, but the disastrous effects of letting this industry fail (when you simply threw $700 billion at a bunch of crooked bankers without a moment’s oversight).
Why are banks getting a free pass and bailed out without much Congressional abuse and the car companies want a loan – get it a loan – less than a tenth of what the banks were handed and everyone wants them to fail.
Trust me, it may feel good at first, but everyone will eventually feel the effects of the loss of the domestic car companies.
Forgotten is the big losses the car companies took by offering huge discounts after 9/11 to help right the economy.
By the way, my wife and I just purchased a 2009 Chevrolet Tahoe. It is the sixth GM product I have owned in a row. And not one of them had more than just a minor glitch and all had more than 100,000 miles on them when I traded them in.
Please stop with the bashing of the American car companies.
The job bank needs to go. It is ridiculous for walmart workers to pay for folks making 3 times their income to sit around playing cards.
But the banks should not be bailed out. Every bonus should be paid back with clawbacks for the past 3 years. (Hey it happens in Medicine if Medicare finds an error in your billings). The regulators and those who enabled liar loans are guilty of fraud and should be so charged.
The banks may need to be nationalized, but they should not be bailed out. Neither should Detroit.
Jim were you here in the 90s? Republicans controlled both houses of Congress. And opposing this ill conceived bailout is one step towards regaining that majority.
Jim,
Companies fail: AMC, Renault, MG, etc. Industries don’t “fail.” The Big 3 lose money on every car they make. Unless they can junk their cost structure, these loans will be swallowed up in negative equity and they’ll be back in D.C. next year.
And in the meantime, people continue to purchase foreign cars that are subsidized directly and indirectly by their home foreign governments. This is not just about business, this is about national security. We have so little of our manufacturing base left that is controlled by Americans that someday folks are going to wake up and realize we have not only mortgaged our future, we have turned it over to China and Japan.
As for the 1990s, yes, I was here (I’m 61) and when the Republicans controlled Congress they spent like drunken sailors and acted more like Democrats, than Democrats.
Back in 1990 I was a supporter of Republicans (even though I have and always be a no-preference voter) but they have only proved they cannot be trusted to govern.
The Republican controlled Congress made only feeble attempts at ending abortion, the greatest evil of our time, they filled their wallets and Congressional Districts with pork.
And then there’s George W. Bush. Don’t even get me started on that disaster.
Interesting that the GOP Senators we hear opposing the unions are from the South, states which hope to pick up more (non0union, therefore cheap labor) auto workers and plants in their home states. Shelby of Alabama is a perfect example of this hypocrisy. He isn’t trying to ‘protect America’ — he’s trying to satisfy the fat-cats back home who lined his campaign coffers!
Essentially the Big Three were lending instuitions – thats were they had been making their money for years. They need to restructure – Chrysler needs to die as an idependent auto maker and most of tis models dicontinued- the Chrysler 300 could become a Buick 300 the replacement Impala (or both with a sheet metal makeover)- perhaps the dodge truck could become the GMC truck – thereby making GMC and Chevy not the same but with a different badge. Jeep could become a division of GM and perhaps absorb Hummer. The auto industry needs to be reformed but we cannot afford it to destruct as part of the finance debacle for at least three reasons 1) loss of domestic manfuacturing base – bad for national security and our trade imbalance; 2) inflation in the market would mushroom if a large percentage of the industry died overnight as in Toyota could charge 20% more for a Camry if it did not have the Malibu and the Fusion to compete against. 3) the loss of jobs would likely cause a recession – I am an ideologue but I am not brave enough to take the gamble that my party seems to want to make.
Sorry I meant real depression not recession we already are in one.
Actually MG died because of nationalization and British government mismanagement. Had successive British governments made investments in the nationalized industry and then sold them – it could have survived – the 1964 MGB was very long in the tooth by 1980. The government bailout of the auto industry needs to be about the companies survival – jobs are secure once companies are profitable.
RE: “Interesting that the GOP Senators we hear opposing the unions are from the South, states which hope to pick up more (non0union, therefore cheap labor) auto workers and plants in their home states.”
Not certain how it’s “hypocricy” to oppose labor unions and also hope to have nonunion workers in one’s state.
I myself, were I a business owner, would oppose labor unions and welcome nonunion workers in my state.
Following WWII, E. Deming went to Detroit to promote his ideas to the auto industry to improve their manufacturing processes — they essentially told him to take a hike. His next stop was Japan, which was under reconstruction due to the war. His legacy of total quality management is what Detroit ignored to their present peril. Non-union transplants while seeing sales decline due to the recession, are not at the Federal feeding trough and are producing car Americans want.
[i] [When] Deming went to Detroit to promote his ideas to the auto industry to improve their manufacturing processes—they essentially told him to take a hike [/i] —LeightonC [#11]
Indeed, the Big Three instituted “planned obsolescence” to promote increased sales. Planned obsolescence and similar short-term thinking ultimately helped destroy the Big Three’s reputation for quality and value.
_ _ _ _ _ _ _ _ _ _ _ _
[i] Were you here in the 90s? Republicans controlled both houses of Congress. And opposing this ill conceived bailout is one step towards regaining that majority [/i] —Chris [#3]
After presiding over a lava-like bailout of the financial system, it must be nice for the party to have a bailout it opposes. Cleansing, sort of.
I think what worries many of us is that the Government will start dictating what cars look like, and that those cars will not meet with consumer favor. Should the Big Three go under, other companies will surely buy the factories and move in under much more efficient terms. After all, the demand for cars will not lessen.
Declaring bankruptcy does not mean you go out of business. It might be the only chance the auto makers have of restructuring to survive. Also, isn’t Chysler now owned by a private equity firm with deep pockets? If that’s the case, why are they taking government money? I also heard on the radio today (so I’m not sure how accurate it is) that Ford said they didn’t need government money, so it’s really GM that needs the immediate help. We should have required much more oversight and accountability to what we gave the financial institutions, but let’s not double our mistakes by bailing out the UAW.
[blockquote]Not certain how it’s “hypocricy†to oppose labor unions and also hope to have nonunion workers in one’s state. [/blockquote]
I think it’s because “hypocricy” [sic] is the most grievous sin on the Left, and therefore tossed about with abandon. Ultimately, the only way one can avoid the accusation is to abandon all standards of belief and behavior.
Saw an email today– New car being introduced in ’09, The Bailout. No one wants what they make so now they just want to force us to give them the money. Good business plan, no?
“No one wants what they make.” Really? GM sales are still greater than Toyota in the U.S. and by a whisker in the world. Or, at least they were until the financial crisis and a daily dose of ignorant finger-wagging from pompous senators filled the airwaves each night. Honestly, millions of dollars of free negative advertising from dull witted senators is the best way to create the self-fulfilling prophecy of a collapsed domestic auto industry any foreign carmaker could ask for.
Kentucky’s own, Mitch McConnell, says what most of us are thinking: Where’s my bailout? The Fed rewards bankers and car builders for poor management, penalizes the competent, and never considers cutting the average American a break. Something stinks and the stink is growing stronger.
No, Mr. Jeff, there is no way to prevent the “accusation” of hypocrisy, but there are ways to avoid being an actual hypocrite: Hold yourself to the same standards as those you hold others to. For example, if a senator wants to point the finger at people whose income is lower than their expenses, he might consider voting to cut government expenses, starting with his own benefits and privileges, to levels commensurate with revenues. He might consider voting for measures that fully fund future social security obligations, like the domestic automakers are required to do for their pension obligations.
My brother has always suggested that we tripple Congressional salaries and require that they be paid out of Government surplus.