Thursday, November 20, 2008

The case against the automotive bailout

The CEOs of the top three U.S. automakers (Ford, General Motors [GM] and Chrysler) recently met in Washington DC before lawmakers to lobby for an industry bailout plan that would cost an estimated $25 billion. Their claim is that a failing automotive industry spells disaster for the U.S. economy, which will eventually have a ripple effect in the global markets. President-elect Obama supports the bailout plan and believes immediate action should be taken to prevent a major meltdown of the U.S. economy......but I have an opposing point of view on this.

OK, let's cut to the chase. First, it was $700 billion to bailout the corporate hot shots that were (and still are) gambling our savings and 401(k) money away in the Wall Street casino. Now, the millionaire, Cessna jet-flying automotive CEOs want a piece of the pie. When Michael Moore predicted back in about 1990 that GM could go "belly-up" within approximately 20 years, his predictions were viewed as blasphemous and "unpatriotic", but as we now see, he was right on the mark. Moore was recently on CNN - Larry King Live blaming the automotive industry crisis on inefficiencies, greed and overall disregard for consumer choice and concern. He said they should not get one red cent of this bailout money and I totally agree.

The automakers had an opportunity in the past to produce a more fuel-efficient line of vehicles, but chose not to pursue this product line in favor of mass producing gas-guzzling pick-up trucks and SUVs. Not surprisingly, soon after this, the cost of fuel at the pump began to creep up and eventually skyrocket recently reaching a national average of over $4.00 a gallon. Makes me wonder if the automakers and big oil companies were in cahoots, but that is merely speculation. When you add on top of this years of fiscal irresponsibility and mismanagement, you end up with the big mess we are currently facing.

Bottom line: whose fault is this? The automakers themselves; not the U.S. labor workers who watched their jobs get shipped overseas in favor of cheaper labor which resulted in a lower quality product and not the consumers who were force-fed certain vehicle product. But, it's the U.S. taxpayers who would foot the bill of this massive bailout plan of the automotive industry. Now does this sound fair? I'll let you be the judge.

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