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Motives of those unwilling to save GM may not be pure



Published: Wed, November 19, 2008 @ 12:00 a.m.

Motives of those unwilling to save GM may not be pure

Richard Shelby, an Alabama Republican, has emerged as the face of Senate opposition to a federal bailout of U.S. auto makers.

When Shelby says, “I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers,” Shelby may sound like nothing more or less than a solid fiscal conservative.

Or maybe Shelby is just a good old boy politician doing what good old boys do best: cater to their constituents. And who would those constituents be? Well, a lot of them would be workers in the Honda, Toyota, Hyundai and Mercedes plants in Alabama.

Making foreign marque cars has become big business in Alabama. There are six assembly plants, two engine plants and nearly 300 supplier plants. Those facilities provided more than 48,000 jobs in Alabama last year. Indirect jobs, defined as those created in the rest of the economy as the result of goods and services purchased by workers and companies in the auto manufacturing industry, were estimated at more than 85,000.

Those are figures assembled by the Alabama Automotive Manufacturers Association, which estimated direct and indirect payroll from auto jobs in the state at $5.2 billion last year. The state ranks sixth in the nation in auto production, but there’s no Detroit iron coming out of Alabama.

What is and isn’t

We’re not saying that there isn’t reason for Congress to discuss the terms of a bailout of U.S. auto makers.

And we’re not saying that foreign car makers aren’t welcome in the United States. Honda has certainly added to Ohio’s economy.

But when an influential senator is adamantly opposed to helping the domestic industry, its worth asking whether he is acting in the interests of the nation or the more parochial interests of Alabama.

To be sure, Shelby should be an advocate for his constituents. But does the Republican Party want to follow the pied piper for Japanese, Korean and German automobile manufacturers on a road that could lead to the ultimate collapse of the American automobile industry?

Democrats in the Senate should call the Republicans bluff. If the Republicans want to join Shelby in protecting the interests of foreign makers to the detriment of Detroit, let them do so.

Our guess is that a party that is reeling after its November defeats will not be eager to tie its future to Shelby’s unique brand of protectionism.

GM, Ford and Chrysler should get no blank checks from the government. Some are arguing that the only thing the government should do is offer to help the “Big Three” after they have filed for bankruptcy.

That would allow the abrogation of contracts with managers, unions and dealers, stock would become worthless and suppliers and retirees would get stiffed. It would undermine the value of the brand everywhere in the world. But it would allow for the kind of radical restructuring that some say is required.

That is too drastic a proposition. At a time when Congress has committed up to $700 billion to bail out banks and brokers, investing $50- or even $100 billion in a well-structured plan to save the U.S. auto industry is not outrageous.

Shelby may be ready to dismiss Detroit as a dinosaur. It would be good for business in Alabama to bury the Big Three, but what’s good for Alabama is not necessarily good for America.


Comments

1Tugboat(759 comments)posted 5 years, 7 months ago

Your poll question shows 70% in opposition to a federal bailout of U.S. auto makers. Looks as though more than just "some" are for radical restructuring.

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2Erplane(473 comments)posted 5 years, 7 months ago

Great article. I was thinking something similar about the Republicans - that they want to use this to destroy big labor. I wonder if they are thinking that if the big 3 dont get bailed out, they go into forced bankruptcy/liquidation, and the holders of the new assets get plants without union work. It would be a major setback to the organized labor. Now, I have my disagreements with unions, but I would never go down this route in a time when people are talking 10% unemployment before any auto disaster. Now is not the time for idealogy, its time for practicality.

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3DoctorGonzo(728 comments)posted 5 years, 7 months ago

This article is so skewed that I question the ability of the author to function in society.
Save GM? Now it is on the taxpayers to "save" GM? If some are against the loan they don't want to "save" GM?
I favor the loan for several reasons, but do not start this illogical pandering to the sheep.
If you cannot or do not want to face the facts that GM brought 95% of this whole ordeal upon themselves you are remedial at best. If GM could not see this fiscal problem shaping itself a DECADE ago, they must be run by apes.
Now you try and spin the reasoning behind those who may be opposed to the loan? That is audacity.
How about this: Some people may oppose the "saving" of GM because GM had umpteen chances to right the ship and didn't. GM is going to take the loan and do the same bassackwards things within their business model and will wind up in the same spot in 12 months. GM has about as much chance of paying back this loan as I do. Maybe these are too logical for you.
Finally, there are plenty of dems opposed to the loan as well.
How in the hell can you be such a jerk face and wake up in the morning? You actually tried to spin the issue so it seems like GM is the oppressed? I hate you journalist guy.

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4bcim(13 comments)posted 5 years, 7 months ago

You people have to understand that down south, the Civil War has not ended in their minds! This is God's truth. There are very influential senators & house members who would love nothing better than to watch Mr. Wagoner "take it" where the sun don't shine(and the other 2 Ceo's w/them). The union must give concessions in wage, vaca, health care coverage,& pension benefits. Mgm't. must get rid of their bonuses, meal money, company cars,gas cards and take massive salary cuts. All 3 companies need to "hatchet" the upper echalon of mgm't. from CEO on down allowing "new- young- blood" w/ new age ideas that could work w/ the gov't. to make these companies viable once again. But it will take CONCESSIONS ON BOTH SIDES or the SOUTH will win this MODERN DAY VERSION OF THE CIVIL WAR!!!

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