Extension of Remarks: Automakers need a plan

The lead editorial in today's Buffalo News calls on the Big 3 American automakers to go back to the drawing board before asking, again, for another federal bailout:

Unless the automakers come up with a plan instead of a plea, Congress might do better to save its $25 billion for the unemployment, welfare, Medicaid and other government accounts that will be so horribly strained when the Detroit industries collapse under their own weight.

Meanwhile, guess who is crusading in print and pixels for an auto industry rescue? As documented on the Editor & Publisher Web site, it's The Detroit Free Press and The Detroit News. "It is a survival issue for us," said Freep Editorial Page Editor Ron Dzwonkowski.
Indeed. Detroit is one of the few cities that still supports, barely, two daily newspapers. The collapse of one or more of the big auto companies could well take one of those newspapers down with it.
[Federal newspaper bailout, anyone? I'm not going there. But Jon Fine does: No newspaper ever bankrupted a country or peddled a product as patently putrid as the Pontiac Aztek.]

Elsewhere:
- The Indianapolis Star rejects the Detroit papers' argument that the auto industry is at least as deserving as the financial sector of a huge federal bailout: The key difference is that the goal of the financial services bailout was to thaw out the credit markets, a move designed to help other industries, including automakers. In contrast, the bailout for car makers would be little more than an expensive patch, one that does nothing to resolve deeper problems within the industry.
- The Rochester (the one in Minnesota) Post-Bulletin also worries that an automaker failure would hurt local dealers, lenders, mechanics and their families. But: The only bailout we support is one that leads to an overhaul of the domestic automobile industry, not one that simply fills its empty gas tank and keeps it limping along for another six months.
- On The Boston Globe's Political Intelligence blog, writer Foon Rhee follows the money: "Most lawmakers, especially those on the finance committees that heard this week from pleading GM, Ford and Chrysler executives, don't owe much payback to Detroit. Perhaps as another sign of its hard times, the automotive industry ranks 34th among contributors to Congress, far behind Wall Street and even below crop producers, retailers and accountants," the Center for Responsive Politics says.
- In BusinessWeek, Jack and Suzy Welch say no bailout. GM and Chrysler should go into reorganization bankruptcy and emerge merged into one company.
- The same debate is going on in Canada. The Globe and Mail editorial reluctantly urging Ottawa to help the Canadian arms of the Big 3 is headlined Time to feed the dinosaurs.

- George Pyle/Editorial Writer

Comments

[Buffalo Libertarian]

The federal government shouldn't be bailing out any industry or individual business! There is no constitutional authority for it and it is just rewarding bad business decisions.

But, hey, who cares about the Constitution anyway? It's just a 220+ year-old document written by a bunch of 18th century aristocrats. Or, as Dubya has reportedly said on occasion "It's a g-d piece of paper!" It has outlived its usefulness and has no place in 21st century America...

Or so you media idiots, the Democrats, the Republicans, and a significant portion of the American people (who don't have a clue what the Constitution did for America) would have us believe.

[Don H]

If they didn't have a plan (other than to fly to Washington in their individual private jets) on their first visit before Congress, can we expect an authentic plan next time? They will concoct something. Whether it will be feasible or not, the politicians will provide public money because the pressure not to allow this big,regional and unionized American industry to fail will be immense. Welcome to the United States of America Automobile Company!

[Neil]

They should have a plan like NY State has a plan huh? Unfortunately, the Big 3's plan probably involves going into Chapter 11 bankruptcy, abrogating it's union contracts to bring their costs in line with the foreign automakers which the public seems to prefer. Hope all those retirees also have a plan, not to mention active employees. You can't compete if your labor costs are 43% higher than the competitions, can you?

[Mark]

There is a report today that part of the GM plan is eliminating Pontiac, Saturn, Saab and Hummer. This follows the model they have used in China and the far east where the brands are Buick, Cadillac and Chevy.