In an effort to save costs during an extremely difficult economic environment, all of the Big Three auto makers (Ford, GM and Chrysler) are idling at least some of their production over the holidays and into the first quarter of 2009. As the White House continues to consider a bailout package for the struggling auto makers, dealers are complaining that the continuing credit crunch has reduced the number of sales they’re able to close by 20-25%.
I recently got a note from a friend that I’d like to share with you: Someone suggested to me that the auto companies’ requests for loans [via bailout package] should be denied because they don’t operate efficiently. Even the idea of giving the loan and making it a stipulation that they develop only green cars is no good, because the technology would be out of date by the time it’s put into practice. When asked if the downfall of the car makers wouldn’t spell disaster for U.S. manufacturing, the analogy was given of the buggy makers going out of business with automobiles coming on line (aka, progress).
If so many millions of people wouldn’t be affected by the demise of one (or more) of the auto makers, I think I could agree with that. It would make sense to “punish” the executives who, through their ineffective leadership, put their companies in the positions they’re in today.
But those executives have made millions of dollars over the years; even if bankruptcy is the only answer, they’ll be fine. The people who will really, truly suffer are those who work in the plants, not only at the auto makers themselves but the literally thousands of suppliers that rely on the auto industry. Surely they deserve to be rescued, especially since they had no part in creating the problem?
What do you think? Please weigh in on this important issue by entering your comments below.