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December 8th, 2008
09:02 PM ET

Evening Buzz: Rescue America's Automakers?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/12/08/t1home.rally.gi.jpg caption="Autoworkers rally Monday for a bailout. "]Maureen Miller
AC360° Writer

Should the U.S. government help out America's automakers?

The White House is looking over a congressional proposal to give $15 billion dollars in federal loans as soon as next week to General Motors, Ford and Chrysler.

That's less than the $34 billion requested by the industry last week.

You may be asking: Where would the money come from? The answer: Out of funds designated by the Energy Independence and Security Act to help the auto industry produce the next generation of fuel efficient vehicles.
Whew! That's a mouth full, isn't?

House Speaker Nancy Pelosi admits it's a rough move.

"This is a bad choice," she said on Capitol Hill today. "This money is meant to be used for innovation ... but it is our hope that there will be a viable automotive industry with transparency and accountability to the taxpayer," Pelosi added.

There is some accountability in the proposal. The plan calls for the President to appoint a so-called "Car Czar" by January 1st, who would set up guidelines for the big three automakers to reorganize. Within 45 days, if the "Czar" doesn't see progress, he could recall the government loans

Should there be tougher rules for Detroit's big three automakers?

We'd love to hear your thoughts on the proposal.

We'll have this breaking story and tonight's other headlines staring at 10pm ET on AC360°.
Hope you can join us.


Filed under: Maureen Miller • The Buzz
soundoff (53 Responses)
  1. Duane M

    First, why would anyone reject a "loan" to the automakers and not have a problem with the "assistance" provided to the banks? Admittedly, the big 3 have issues that need resolved, but the outcry is far less concerning a far greater amount given to the banks. I have misgivings on both accounts, but do we really want to see a collapse in both markets? Or one? The ONLY option at this time is for a loan compromise for both markets(with strings obviously). Anyone can see that the players in the subprime markets behaved recklessly, and those at the domestic auto makers had on the blinders that they have always had on. Regarding the financial institutions, how could they be so adept at making money, but so reckless to lose it all? As far as Detroit, it was a combination of the unions stranglehold and mismanagement.(sorry, but unions cannot take ALL the blame here). It is in the nations best interest to support the loans to both industries. We'll be the better for it in the end.

    December 9, 2008 at 2:47 am |
  2. Leo Clarksville, TN

    I share Keith Vogel's comments, quality is the problem. As a former Army Aviation inspector, I understand quality. GM has never in over 20 years had a handle on quality. You buy one and the brand does not matter, the service is a disgrace and like with Ford and the Triton V-8 sparks plug problem they refuse to really resolve the issue. They don't give a you know what about the very consumer they are now begging to buy their cars! This loan is going to do nothing but pay certain folks high on the food chain bonuses and just like the bank bail out that has done nothing to help the very home owners it was designed for, this will only give them more time to come up with better ways to ask for more money. Yep, people are buying foreign cars because they last. Yep GM made the Flex fuel vehicles but you have to have somewhere to get the gas (oops, we forgot there is no infrastructure for that type of vehicle). So give them the money, they will just get more like the banks. Guess who paid for Bank of America to buy Merrill Lynch?

    December 9, 2008 at 2:01 am |
  3. Galley

    I am against the auto makers getting this bail-out. When you can not meet your financial obligations, our system allows you to file for bankruptcy protection. Be it a business or an individual.

    I know the dangers involved with the fall-out of the automakers failure. I just lost my job at a Lincoln Mercury dealership that Ford Motor Corporation decided to close it's doors on. The cars were shipped out to another dealer, and the employees were left out in the cold. No job and no future, in the worst of economic times. Why should these Automakers get a break from the taxpayer, when they clearly do not care about those of us that have lost out already. The bail-out will not help me,but it will cost me in taxes that I can not pay! How does this fix things?

    I say let them fail! Soon another automobile manufacturer will come up with a product worth building and buying. The people who work in the factories that might lose their jobs will work again, making better cars than what we have from the current automakers.

    December 9, 2008 at 1:42 am |
  4. Roi

    i completely disagree with this auto bailout. first of all, the big three needs to negotiate with uaw about removing jobs bank. have people seen how much the big three pays for this? its insane. uaw is one of the big reason why the big three are on a downward spiral. they helped drove these companies down by pushing these companies for more money. i can't blame the workers because if my union said they could get me more money/security then why not. right?

    Chrysler asked for a federal loan in the past, and look, here they are again. i don't need to say more.

    on an annual report by one of the big three (i believe it was ford) in 2005, they stated that they would turn it's company into profitability by 2008. if they couldn't do it during a strong economy, then how could i believe a turnaround is coming. i am not one who believes a company who is about to go belly up.

    lastly, if these big three just sold quality cars, they would not have lose so many customers. it is very hard to earn a customer's trust back once you lose it. in my opinion, american car's quality is still not in par with japanese cars.

    thank you.

    December 9, 2008 at 1:34 am |
  5. Rick Larsson

    Concerning the big 3 auto bailout- I think the congress again are getting the priorities out of order. Without NATION WIDE employment, it doesn't matter what the auto makers produce. We the people have to be able to afford these new cars. Seems pretty simple to me, no jobs mean no purchasing anything other than basic needs.
    Respectfully, a concerned citizen.

    December 9, 2008 at 1:19 am |
  6. Angie Parlionad

    Survival of the fittest.

    December 9, 2008 at 1:17 am |
  7. Bryan

    I think we are in transition from the old liberal democrats that have been linked to unions for a long time in politics, to the new progressive democrats a more center leaning younger generation
    of voters who are more education and technology driven. I believe
    that we need to purge the excesses of both management and unions.
    This bail out is not neccessary, let them go bankrupt like so many
    unempoyed people are.

    December 9, 2008 at 12:49 am |
  8. Lynne

    Let's kill two birds with one. Figure out whatever every american would get divided by the 30+ billiion that the the big three are asking for. If that number is about $20,000, give a voucher to every american to buy a new car from the the big 3. It's a win-win situation. After all, Its OUR tax money that we can buy a new car with to bail out the big 3. Working from the bottom up. Americans would be alot happier using our tax payer money if we ACTUALLY got something for it. If you don't like this idea. Take back some of the bank money that some of the banks didn't even want (like bank of america), and use that money for a bailout. C'mon, start thinking out of the box a little bit. America mainstreet has been thinking like this, why can't you (government people!)

    December 9, 2008 at 12:43 am |
  9. April

    Have any of the automakers considering building trains instead of cars? I realize that laying millions of miles of new railroad track would cost in the billions or trillions, but in the long run, high speed trains would transport so many more people, more efficiently and more environmentally conscious. My two cents...

    December 8, 2008 at 11:56 pm |
  10. Jimmy Smith

    Yes, bail out the automakers. And, how about the Congress and Senate and all other career politicians, take a 25% pay cut to help and cut out their perks as well. Remember when our forefather politicians took off time from their real jobs to serve as the leaders of the country?
    Our congress and senate need a makeover as well, a permanent makeover.

    December 8, 2008 at 11:41 pm |
  11. Joe Miami

    I serviced GM business for 8 years – worked on all their brands, I experineced the arrogance and ineptitude first hand. With that said, I believe the industry still needs to be saved – BUT IT MUST be forced to be smaller and nimbler.

    In my opinion GM and Chrysler should be combined into a single Holding Company. Further, their North American combined operations should be allowed to only keep Chevy/Jeep/Cadillac – I believe that if Buick is important to China then it should stay there, just like Opel stays in Europe and Holden in Australia.

    Also as a combined company, keeping
    GMC/Chrysler/Dodge/Pontiac/Saturn and Saab will only perpetuate the situation of too many products for the scope of the current and foreseable market. – perhaps Nissan and Suzuki want to purchase the Dodge Truck production capacity. No one will miss the other brands.

    As it relates to Ford, it should fold Mercury, sell Volvo and be allowed to focus on the Ford and Lincoln brands while sustaining a strong strategic alliance with Mazda – as together, they can share cost of important economy/small and mid-size cars.

    Keep Jim Preston's team... they rock and could easily resucitate Chevy!!!! Mulally Rocks!

    December 8, 2008 at 11:35 pm |
  12. kali rushing

    i think congress should not bailout these us auto-makers do you think any one is going to buy any cars in this recession the sales are plumiting in the car market ,i think they should let the companies go bankrupt, then slowly rebuild these three companies the right way making them more dedicated towards energy efficiency. maybe it's for the better.

    December 8, 2008 at 11:32 pm |
  13. Janet Sbihli

    GM has great fuel efficient cars. I have a Cadillac XLR and it gets 30 mpg. A sports car that doesn't take premium gas and looks great. A great American car. Congress wants everyone to build little fuel efficient cars like the rest of the world but nobody is going to give up their SUVs. People don't buy new cars because they are small and fuel efficient – culturally we are different from the rest of the world. I did a poll, nobody would give up their bigger cars even if gas was $4 per gallon. Poor people don't buy the new cars, they buy used ones. People with money buy new cars that fit their needs not society's needs or the used car buyers needs.

    December 8, 2008 at 11:30 pm |
  14. Rick Bender

    What good is the bail out if cars and trucks aren't moving off the lots because the rest of us now can't afford them? Or the banks don't loan out the money.
    Have the Big three do what we would do, figure out on their own and keep the Gov. out of the car business.

    December 8, 2008 at 11:28 pm |
  15. david pannell

    Is it me or is this bail out going to be the wrong thing why give a company money that thrives off of the consumers to keep them rolling why not give the money to the people they can give vouchers to people purchasing automobiles that way the economy is affected in more ways then one the people get something as well as the big three are bailed out because we the people is whats going to keep the big three a float and by giving to the bigs the people doesn't benifit because in two years a broke economy the bigs go under anyway think people please think

    December 8, 2008 at 11:27 pm |
  16. jennifer

    If I were about to be let go from a high paying auto-maker job. I would take a 50% cut in pay, let go of the Union, and work a 4 day week. Beats unemployment. The money should go back to renovate and make process improvements. They could learn something from auto makers in Japan, by teaching the customers what is best.

    December 8, 2008 at 11:27 pm |
  17. steve kitzman

    Howdy, watching the goverment debate the " bail-out of the auto industry" makes me want to hurl. The free trade policies, and the housing crisis are what got the big 3 in the condition they are in. For example, Kia sells the U.S 666,666 autos in our country, and korea's goverment allows american auto manufactures to sell, 6,000.
    The bailout of AIG, and others were due to failed policies of their own making, yet our goverment practicly threw money at their problem, no questions asked. I have a solution that would create good jobs and protect our manufacturing base. Adopt a fair trade policy, rather than free trade. We will buy so many of your products as you buy from us. Any excess one way or another is subject to tariffs.
    I've been an auto worker for 34 years for chrysler, thank you steve

    December 8, 2008 at 11:25 pm |
  18. Teresa Goodpaster

    I am a retired auto worker who is retired from Chrysler. I am 62 yrs. old and do not qualify for Medicare yet. I depend on my retirement from Chrysler. I am scared to death! What am I going to do? I would gladly go back to work but who is going to hire someone my age, especially in this job market. I cannot live on what social security pays. I had counted on this retirement. I agree that this money should have lots of oversight and conditions but if they don't do this, millions of jobs will be lost. I live in Indiana and most of the factories in this state are connected to the auto industry in some way. I am afraid if the auto industry is lost, it will throw us into a depression. It will effect ALL of us! Not only will jobs and retirements be lost, but almost all 401's will tank. This will be a snowball that cannot be stopped. It will effect each and every American.
    Teresa Goodpaster

    December 8, 2008 at 11:21 pm |
  19. Pedro Rivera

    If these guys are getting a bail out, first they need to cut the fat:
    1. Eliminate the union, unions are the cancer of the US economy
    2. Cut everyones salary by what ever the union dues are
    3. Revisit salaries. Salaries in that industry are out of control
    4. Bring efficiency experts to redesign their manufacturing procedures. Too many manufacturing jobs can be made better or even eliminated, but the union wont allow it.
    5. Reduce volumes
    These are changes in line with how other automakers operate, which are not asking for help, such as Honda, Toyota, BMW, etc. They are feeling the pain of the economy.

    December 8, 2008 at 11:21 pm |
  20. sue

    Another question that I have – Why are we only bailing out the companies and the executives of banks and auto makers? What about the regular person who is having trouble making their monthly bills? Who is helping these people?

    December 8, 2008 at 11:19 pm |
  21. Cuccia1948

    Hi,

    Should the U.S. govenment help out America Automakers? No, No,No.
    I think it's an attacks on America people to help them out. They should file bankruptcy like the rest of the America people who can't pay their bills. Automaker should be treated like other people who owe student loans. The CEO of these company needs to go to jail for what they did to American.

    December 8, 2008 at 11:18 pm |
  22. sue

    No, I don't think we should bail out the auto makers unless there is very clear and specific control over the money and how the auto maker companies can use it.
    I also think that the head of these companies should be replaced.

    And why are we bailing out companies that have so many factories outside of the US?????

    How is this helping American workers? It just seems like it is helping the executives of these companies.

    December 8, 2008 at 11:16 pm |
  23. elizabeth laur

    One rule that should be imposed on the Detroit 3 is revised hiring guidelines. Past practice has been to hire mainly family members of it's current workforce. In one way or another we are all helping with this bailout. Therefore, future jobs should be offered to all Americans and not exclusively to relatives.

    December 8, 2008 at 11:06 pm |
  24. Annie Kate

    There should be tougher rules for the auto-makers, otherwise they'll be back in the same sad shape. Renovation is expensive and timely but its been needed for years now and they are just going to have to get it done if they want to survive.

    December 8, 2008 at 11:02 pm |
  25. Dee

    No Bailout! Why don't they all just take a healthy pay cut .And for for the love of humanity lower their prices, so the middle class could afford to buy a new car and afford to be able to maintain it, without having to sacrafice our first born?My husband knows a guy that is retired from Ford in Sandusky, Ohio and he has stated that his wage was $27.00 an hour for pushing a broom all day! He was a janitor! Not to mention several people have told me that they would take turns punching each other out on the clock, and they would go to the local bar or go home!Cut the Fat Auto Companies!!

    December 8, 2008 at 10:42 pm |
  26. John glenfield

    The senate and congress are asking the ceo's to work for a dollar a year. I wonder if they would be willing to do same until they get the U.S. back on line.

    December 8, 2008 at 10:34 pm |
  27. Keith Vogel

    No.
    I wrote Rick Wagnor (doubt he read it) back in February when we traded our troublesome Chevy TrailBlazer in for a Toyota Highlander. I never complain, but as a proud American, avid auto hobbyist and mechanical engineer, I felt I had to tell him what their real problem is: Reliability. If GM could raise their dependability, people would pay a premium...problem solved. Every industry has a "best" product, that consumers pay more for. The letter, which I still have, was titled, "Throw this in the trash or read it and save the company".

    December 8, 2008 at 10:33 pm |
  28. Mark Anderson

    I believe the domestic automakers should recieve the bridge loan. America needs a strong domestic manufacturing base. We as a people need to stop fighting over the scraps and learn that we are all in this togther. The bankers and wallstreet always take care of each of other.

    December 8, 2008 at 10:29 pm |
  29. davis

    I think the oil companys should bail out the automakers. They caused this whole economic crisis. When fuel goes up everything else goes up except wages. Thus people quit spending.

    December 8, 2008 at 10:26 pm |
  30. Rosie

    No, the Government should not help out these Money inhaling giant Automakers.

    How about helping out organizations looking to help people find affordable homes, health care, education etc.

    too many offerings been inhaled by these giant automakers
    and not enough left for hard working people

    December 8, 2008 at 10:25 pm |
  31. Vickie MO.

    Sure they should bail out the automakers. Did they not bail out Wall-Street? Which, by the way, created "no" jobs?

    December 8, 2008 at 10:25 pm |
  32. Richard

    The bailout for the big 3 should strictly be on a loan basis with interest as was done with Chrysler in the 80's. I feel any bailout to any sector should be strictly basis–loan + interest; afterall this is taxpayer money being loaned.

    December 8, 2008 at 10:22 pm |
  33. Peggy Pearson

    It seems that one of the big "legacy" costs the automakers are dealing with is the health plans that they still provide to their retirees. Many other corporations have long ago had to drop that and their retirees went onto Medicare. Why don't the auto workers, their labor unions, and the auto makers give up that benefit, so we (the public) don't have to pay for it when we buy a vehicle. Granted, we will pay it anyway via our taxes for the Medicare program, but those retirees could get by just fine on Medicare versus a "rich" health insurance plan.

    December 8, 2008 at 10:20 pm |
  34. Billy Tuttle

    I am so upset over this whole deal. I am still not over the bail out from wall street. When I haed about one of the auto makers ceo,s was asking for ten million dollar bonus for him self, just really ticked me off, some one needs to be held accountable for this problem, some one from wall street should be sitting in prison, and i dont belive its my problem that they dont no how to BUdGET there money. and stop being greedy.

    December 8, 2008 at 10:19 pm |
  35. Richard

    I am for the auto bailout; however, there must be controls on pay for ceo & employees. No More gigantic bonuses or percs for CEO. Have pay raises approved by someone under govt. authority.

    December 8, 2008 at 10:18 pm |
  36. Douglas McKee

    How much, if any, of the bailout, will be required to go for development of Hybrids, Plug-In Hybrids, Electric, Hydrogen, or fuel efficient cars instead of just supporting the manufacture of Hummers, SUVs, and Pickup trucks?

    If they will "burn through" the money in four months, it does not appear they have any real intention of changing anything.

    December 8, 2008 at 10:17 pm |
  37. Brian Wade

    Let the Big Oil companies loan the auto industry the money. They have proffited billions of dollars from the american people.

    December 8, 2008 at 10:16 pm |
  38. Peggy Pearson

    Here's a novel idea! How about requiring the banks that got the money to use some of it to make loans to the auto makers?!!

    Also, how come the bankers didn't get "grilled" like the auto makers did? The bankers just got "handed the money"...they didn't even have to beg!

    December 8, 2008 at 10:16 pm |
  39. Mike L.; Durham NC

    I have a hard time providing my tax money to already rich, greedy and gluttonous people when I see people holding signs on every exit ramp in my town saying "I will work for food." Any one of us could be next, but will there be jobs to work for food?

    This is going to be like shampoo directions: Lather, Rinse, Repeat

    December 8, 2008 at 10:15 pm |
  40. Mike

    I can't believe that our government is going to back a loan to manufacturers that can't even compete with the foreign competitors due to labor costs. It doesn't appear that they will be able to compete and will need to have additional monies in March.

    Question is, why is it that the tax payer have to burden this problem especially since our back is against the wall. Why can't we get another company in to start running our manufacturers since the big 3 apparently cannot perform

    December 8, 2008 at 10:09 pm |
  41. Rebecca, Hartsville, SC

    I think the money should be given ONLY if the big three agree to major restructuring during the next year. Who do they think this "Czar" is going to be? Would Obama be allowed to replace him if he doesn't do a good job? I agree that innovation is the only way to go to make the auto industry in America competetive worldwide. Making innovation part of the deal should be manditory.
    The major players of the auto industry should be personally held accountable for the mismanagement. Bonuses should be placed "on hold" and made "off limits" until the money is paid back. All spending by the industry should be closely monitored. If they don't like the terms, what are they going to do, shop around for a better deal?

    December 8, 2008 at 10:08 pm |
  42. yolonda spinks from memphis

    There should be no car Czar. That is another salary coming from tax payer pockets. There should be regulations. They dont need a babysitter. I am pretty sure they understand that if they dont follow the rules then they will get nothing else. In addition, Chrysler shouldnt get a dime. Private companies need to find private money.

    December 8, 2008 at 10:05 pm |
  43. ketan

    How this bail out is going to make people buy the cars? If this does not happen the bail out money will be useless.

    December 8, 2008 at 10:05 pm |
  44. Esther M Cuyahoga Falls Ohio

    wouldn't give them a dime they just goingt to be like AIG and run to the spa with it and that will really make me run out and buy japaneses auto again

    December 8, 2008 at 10:02 pm |
  45. phil64

    A person with another title is not what is needed. If the government gives them the help they need then we should have field agents supervising the work to ensure progress is made and everyone is held accountable.

    December 8, 2008 at 10:00 pm |
  46. Ken

    After reading the proposed Legislation at Detroit Free Press
    on line. It is a joke! The Czar has NO authority over the union, can only make suggestions? Then why have one? This is just another "Big Emergency Show". Just like the last time they rushed thru the $700 billion dollar bail-out. Look at the Great success that was ? They need to take their time, this is OUR MONEY that they are throwing away. I totally agree with Senators Shelby and Corker, they are two of the heros here for the Taxpayers. Chapter 11 Bankruptcy was created for just this kind of problem,and puts NO taxpayer money at risk !

    December 8, 2008 at 9:57 pm |
  47. earle,florida

    First, and foremost is the $15 Billion dollars actual money collected (tangible assets) or is like all other government (EISA) programs,"projected collection of revenues for a specific period of time,example:10 years 2007-2016) and the intrinsic value is approximately $3 Billion dollars(2×1.5/yr.) of "Real Money"? Hopefully that will be addressed by congress,but why do we need a "Car Czar"? It's so socialist sounding, or borderline communist. Our democratic society was founded ( Alexander Hamilton) on "Free Market Capitalism",and were throwing it out the window! No,I can't buy into the argument that the foreigner's subsidize their auto manufactuers like France and others in Europe,so we should level the playing field? Socialism (basically a two class society) doesn't work ,and it's mentally taxing ,and financially (social unrest) crippling. Finally my discust is with GM's humongous auto-manufacturing base in communist China,what gives?China currently subsidizes trains,planes,and automoble's and everything else under the sun, it's a communnist country folks, and when their done copying off all our patents, they'll sell there junk back to us! Remember,there are, "No American Jobs Being Created in China",period,none, and ironically the only place GM's breaking even. So, once again are we helping americans find work,or our we employing a communist country workforce? I know this is harsh, and a bit strong for some of us, but for "God's", let the bankruptcy court be the "Master Chapter 11 Czar",.... "Two Wrongs don't make a Right", concerning Paulson &Co. bailing out of "Wall Street

    December 8, 2008 at 9:56 pm |
  48. Ron , West Coast

    The " big three ", should get a bail-out . Afterall , Toyata , BMW , Honda , Kia , and the rest of those " transplants " as they are being called , got incentives to come to america , in they way of , preferred land to build on , tax-payer funds to build the plants , and " Cover from the likes of Sen. Shelby , Corker , and a host of southern law makers with foreign auto makers in their states.".....
    The republicrooks always say they are patriots , well how can I tell ?
    Seems they are doing the bidding for the likes of Toyota , and BMW....
    Could it be that the foreign auto makers are trying to eliminate the compitition ?
    The Senators like Shelby and others had better be prepared for the backlash that is sure to come when their constituants learn the real reason for their opposition to the bailout of our american auto industry.

    December 8, 2008 at 9:51 pm |
  49. Ken

    If Washington is determined to shove this Bail-out/Loan down our throats then MITT ROMNEY should be appointed the New Car CZAR. He is a good businessman and would ensure that NO TAXPAYER dollars were wasted. He would have the overwhelming support of the American People in this position.

    December 8, 2008 at 9:50 pm |
  50. Christie - Scottsdale, AZ

    I wish that these auto co bailouts would come with stringent regulations that the American auto co's would have to start spending more effort and cash on building cars of tomorrow rather than to continue building the cars of yesterday. Provide us with vehicles and modes of transportation that are better for the environment than the fuel burning, gas guzzling, environmentaly hazordous cars that we now have. The old American car maker tradition of building vehicles to break down every 25k miles should be stopped too. It makes me angry that we are bailing these co's out and they build less than adequate vehicles.

    December 8, 2008 at 9:16 pm |
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