by Wesley Clark

AMERICAS automobile industry is in desperate trouble. Financial instability, the credit squeeze and closed capital markets are hurting domestic automakers, while decades of competition from foreign producers have eroded market share and consumer loyalty. Some economists question the wisdom of Washington intervening to help the Big Three, arguing that the automakers should pay the price for their own mistakes or that the market will correct itself. But we must act: aiding the American automobile industry is not only an economic imperative, but also a national security imperative.

http://economistsview.typepad.com/economistsview/2008/11/whats-good-for.html

Should the Big 3 US automakers be bailed out by taxpayers? The trends seems to be a resounding YES...not for the sake of CEO's and their inept entourage of administrators, but for the sake of the 3 million US workers who are now forced to rely on the possible bailout (handouts). Yet, as has happened (and is happening) in our past, these and other companies that have relied on bailouts, seldom deserve it. A better plan may be this:

Forget the "love" that Americans have for such names as Chevy, Ford trucks, etc. Federal money should instead SUBSIDIZE the purchasing of US automakers' plants and employees by companies that have made better cars (Toyota, Volvo, BMW, etc.)

The stipulation, however, must be that these new owners adhere to 5 mandates:

• 1. Honor all current retirement plans, etc.
• 2. US taxpayers would own shares in the companies commensurate with the amount of billions poured into them.
• 3. Continue manufacturing of auto parts from the purchased US companies, so that current owners of US-made cars have access to parts for the next 10 years .
• 4. Sever ALL ties between these new companies with OIL suppliers......that relationship has led to the gas guzzlers.
• 5. AND, most of all, new cars must meet the innovation standards that rely less and less on combustible engines.

In order to get the bailout, I think the car companies would agree to points 1,2,3 and 5, but you couldn't pry them apart from the oil companies, as the saying goes, with a crowbar.

In GM's case I think....
1 has been taken over by the UAW
2 would be reasonably cheap (1.8 billion compared to 25-50) to buy all the shares.
3 I'm not sure about. You might have to add something about making the cars more able to be fixed by local mechanics for example than only dealers but if it's a 10 year warranty anyway maybe not. Will/Should these cars be user servicable?
4 Is kind of "feel good" but I'm not sure severing the ties would be the only way to improve gas consumption especially if electric or hydrogen is to be developed. If the oil companies get the natural gas market for example would natural gas not be an option?
5 sure, why not.

As far as the national security issue: Are we beyond the era where our manufacturing base can overwhelm an enemy? Would thousands and thousands of planes still be the way to go? Would the switch-over to military needs be compatible with auto manufacture processes?

Cy_, regarding that cozy relationship between auto makers and Oil companies...I believe that for many decades the patent for certain electric batteries to power vehicles, was bought and held under lock-n-key by Exxon-Mobil. If such an acion was not a violation of anti-trust laws, I don't know what would be.

Here's an interesting little sidebar to the auto industry situation. It seems Congressman John Dingell has been used his position as chairman of the House Energy and Commerce Committee to fight like hell for the bail-out of the auto industry. This might not be so surprising since Representative Dinglell represents a district in Michigan. But what does raise eyebrows is that his wife is, and for quite some time, has been a high muckety-muck at General Motors which, by the way, just happens to be seeking a slice of the bail-out pie. The same pie Dingell has been fighting to share with them.

Mrs. Congressman Dingell (a.k.a. Deborah Insley Dingell) is a descendant of the Fisher brothers, one of the pioneering car families of Detroit whose corporation was absorbed by General Motors decades ago. ("Body by Fisher," you know?) This would seem to be a major conflict of interest that should have been widely publicized by now. Probably would have if Dingell been a Republican. But guess what?

(sigh) Sort of like finding out Barney Frank was, literally, in bed with a Fannie Mae executive at the same time Frank was pontificating about how there was nothing financially wrong with Fannie Mae or Freddie Mac and how we shouldn't be concerned.

Then one of the stipulation should be that we get an extra set of keys and I don't mean trunk keys.

Business is business and in a free market all is fair. Even manipulating the freeness to your advantage. I get that, I just don't agree and missed most of the needed classes that would get me in agreement. Good luck.

Say it ain't so, Joe! Good luck.

If Congressman Dingell's wife is a GM executive, of course there's a conflict of interest on any matters dealing with GM.

It may be that Dingell's opinion on the GM bailout would be the same no matter what his family interest in the company is, but for propriety's sake he should sequester himself from this issue, and so should anyone else having a conflict of interest.

I suppose the way to work it would be for Dingell to announce his conflicts and step back from this issue, and withhold his own vote from any matter that comes before the committee concerning GM.

How would you suggest it be handled?

Ray, IF what you say is correct (and I have little doubt that you're not) that is wrong! These types of cozy relationships that are surely ethical conflicts should not go on, and rightfully exposed for what they are....

This BS of ultra partisanship has got to stop...by ALL of us. No more games, our country is facing really serious financial hardships; it's high time to stop the self-interest nonsense.

Oh, I think your idea is fine enough. Let's us all sit back and watch it happen.