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Two Items in the National News

A couple of news items caught my eye in the past few days…one is more of speculation, rather than hard news, but it is intriguing nevertheless:

1. Speculation that Earl Blumenauer (D-OR) might be chosen by President-elect Barack Obama to be the Secretary of Transportation. If you’re not familiar with Sen. Blumenauer, you should look him up — a dedicated proponent of bicycling, rail, walking and other non-automobile transportation modes. The speculation is quite thrilling…and I think Sen. Blumenauer would be a fantastic choice.
via Cycleicious (with links to other tidbits).

There’s even some further speculation that Congressman Jim Oberstar (D-MN), chairman of the Transportation and Infrastructure Committee and a long-time champion of the bicycle, could also be in the running. Either one is perfectly fine for me!

2. “Democratic leaders in Congress urged the Bush administration on Saturday to consider using the $700 billion bailout for the financial system to aid distressed American automakers, in a prelude to what may become urgent negotiations over additional economic stimulus measures.” This is being reported in The New York Times. This push is backed by a letter signed by House Speaker Nancy Pelosi (D-CA) and Senate majority leader Harry Reid (D-NV).

REALLY?!? This is the best you can come up with, elected officials? I mean, I feel terrible that a bunch of autoworkers could lose their jobs, but it seems to me (and I freely admit that I am quite biased on this issue) that pouring money into the automotive industry is the LAST thing we should be doing right now. What do the rest of you think?

15 Comments

  1. Bill

    Well, the automotive industry stretches far futher than just the employees of the Big 3. There are alot of jobs that (currently) depend on the auto industry.

    But what if we came up with another product for the assembly line and parts providers to manufacture? Something like bike and train parts. Something like solar power plant components.

    There are FAR better things we could spend $700 billion of borrowed money on, projects to boost us towards true energy independence using a carbon-free energy infrastructure, projects to boost our health and reduce our enviromental impact.

    While we are making progress, it’s a shame that we’ll be paying for a lifetime to provide a short-term fix for a few risky bets.

    That being said, we must have industry to support the economy and we must have banks to loan money to industry to make paycheck payments. I’m just certain that there are better ways to stabilize/boost the economy than what we’ve just done.

  2. Ghost Rider

    That’s an idea — retool the assembly lines and start cranking out solar panels, wind turbine parts and other renewable energy products!

    Excellent points, Bill — there are a LOT of people (magazine publishers, PR and advertising folks and myriad autoworkers, parts manufacturers and literally dozens of other work sectors) who depend on the automotive industry for their lifeblood. Perhaps many of them, too, could be channeled into something better for us all than the all-powerful automobile?

  3. Rapps

    Ouch…Chrysler- no Daimler Chrysler- no Cerebrus Daimler Chrysler (Chrysler LLC) household here. Pretty personal for us 🙁
    If any help is given these things should be included:
    All upper management pay no more than 10-40% higher than the workers (or some realistic arrangement) All over paid CEO’s either leave or work with a 2 year no wage/pay agreement (or some version of). Employees wages frozen and in order to save jobs can be reduced. Health insurance remains 100%.
    A creation of a department that is devoted to small cars, hybrid and all electric with some kind of outside monitoring. That all cars will be from this new line (electric/hybrid) by a set date. That it’s a loan more than a handout (the money). When Chrysler was helped before the government got back all of it’s money plus interest. I don’t see Daimler (owns 20% still) or Cerebrus caring at all about Chrysler and the future. In fact it could be tied to Cerebrus in such a way that they have to pay it back if they cut and run as they are trying to do. Oh and no bonuses for management none at all. No wonder companies are in trouble when the CEOs take so much money they bankrupt them.

  4. JeffS

    Personally, I strongly believe that we need to allow the automakers to fail. Poor management, and the union parasite have left them with nowhere to go but down.

    We as a country need to get off the fence. We do a half-assed job of regulation, but refuse to allow the free market to function.

  5. enrique@pineda.org

    Yes, the bigger issue here is that the Congress is providing bailout at all. Now that the banking industry is getting theirs, it’s no surprise the automakers want theirs too.

    I’m very concerned, as I believe my monthly take-home could be reduced by as much as a few hundred dollars once the full $700 billion gets charged back to the tax payers.

  6. Ghost Rider

    Although I dread the loss of jobs and the ripple effect such job losses will have on the rest of the economy, I fully and wholeheartedly agree that if companies can’t make it on their own, they shouldn’t be propped up by taxpayer money. After all, it’s not OUR fault those companies (banks, investment firms, automakers, airlines, etc.) were poorly-managed and made some spurious investment choices, now, is it?

    I don’t like the idea of paying for someone else’s mismanagement. And I think a lot of other citizens feel much the same way…

  7. Jon Karak

    WTF indeed.

    I understand that the American auto industry is centered on a swing-state, but I think it is the height of electoral myopia that the Federal government is willing to subsidize incompetence in private industry. It should be noted however, that it is wrong to say that the entire industry is suffering: look at Toyota. Will the Fed offer them a low-interest loan too?

    The simple fact is that Ford, GM, and Chrysler are doing horribly because they no longer offer what car-buyers want. They spent so much time enjoying the heaping profits of SUV sales that they forgot to consider life after $4.00 per gallon gasoline.

    The added fact that these automakers actively enable legions of scornful and entitled drivers to intimidate the operators of lesser-sized vehicles, makes me pissed enough to break a windshield the next time I’m told to, “get on the sidewalk.” Now our tax dollars are going to save corporate geniuses from their own idiocy? YHGTBSM.

    Live by Wall-Street, die by Wall-Street. I say let the financial markets enforce its own rules of the road.

  8. Ghost Rider

    Can I get an “AMEN” in the house?

  9. Elizabeth

    save american business and help them adapt, but not so sure i support the rest of the bailout spending: http://theragblog.blogspot.com/2008/10/salary-bonuses-constitute-10-of-bailout.html

  10. Abhishek

    Bailing out automakers is just as worse as the other atrocious rumor of bailing out credit card debt. The automakers failed to recognize the un-sustainability of their industry and continued to depend on cheap oil and easy credit for car sales. They should completely and solely reap the bad crops of their short-sighted indecisions.

    As far as the people who already have and will lose their jobs due to this, well, bad luck. I may be in that group pretty soon too, considering my company’s links with the auto industry.

    I gave up my car, changed my lifestyle and got independent. Granted that I am single and did not have may dependents but that does not mean my tax dollar goes to bail out the auto makers who are the suppliers of mass addiction. I dont want a single penny from my tax to go towards it.

  11. Abhishek

    Elizabeth,

    Is this some act of patriotism to save ‘American’ businesses? They messed up. They sat on their obese asses and made more SUVs when they should have leaned out and thought about being more sustainable. I am not saying that they should have forecast the $4 a gallon but giving Peak Oil no thinking at all is just stupid.

    This is what happend when the entire business model is based on fake things: fake money (credit) and fake oil prices. Even the $4 a gallon is artificially subsidized.

    Do you expect them to not repeat something similarly stupid after they have already exhibited their selfish motives by buying out the street cars and ripping them off? Do we want to encourage such industries?

    If you want to save american businesses, save the ones on Main Street. Get people out of suburbia and exurbia and make it easier for them to shop locally.

  12. Iron_Man

    My dad put in 35 years as a Chrysler exec. I’ve seen that company and the industry in general go up and down my whole life. The auto industry in general is suffering from the poor economy, a glut of vehicles (trucks and SUVs) that no one wants, plants still tooled to build those autos, etc. Do not for a second think that this nation can do without them or easily dismiss them though. They represent more than just Ford, Chrysler, and GM. They represent steel producers, computer chip manufacturers, plastics, rubber, yada yada yada. There are so many industries that feed off the auto industry that to allow their demise is to allow the demise of a massive chunk of the manufacturing jobs in this country. Just know what your saying when you say it is all. Retooling is what will happen, but these are big ships that take time to turn around.

  13. Microzen

    I agree that some of these industries should fail. But as they have been set up for to long as too big to fail without taking us down with us.

    Any bailout for the auto industry shouldn’t be used to prop them up at the expense of people’s real transportation needs. However, a bailout could be great for everyone if:

    + the bailout is not allowed to be used for CEO bonuses, stockholder dividends, or other payouts
    + companies are required to cut executive pay to a reasonable multiple of the average employees’ pay instead of the outrageous difference it has become
    + the money should be used solely for the development of clean &/or low-fuel vehicles. If car companies feel they can make a lot of money off of fuel-inefficient light trunks, they can do it on their own dime & R&D. Our tax money should be used to create the cars that people want & Detroit says they can’t afford to develop.

    & I really like the idea of retooling their factories for the mass production of solar panels & other needed infrastructure. In WWII, the USA made much of the auto industry’s production retool for munitions and armored vehicle manufacture. Why can’t we take factories they were going to close & keep it & their labor working this way?

  14. Dan D

    As much as I like the re-tooling idea, I’m afraid most of the proposed end products just won’t work.
    A limited portion of the lines might be re-toolable for producing wind turbines (electric motor/generators winding systems, blades and housings).
    Unfortunately solar requires clean room/chip fab operations, which are very different from the current automotive production lines (and somewhat specialized even compared to automotive fab plants).
    If anyone can come up with suggestions for heavy machinery/metal forming/fiberglass/welding/assembly lines, those would be useful.

  15. burnhamish

    As distasteful as it may be, the automotive industry cannot be allowed to implode, anymore than the financial sector can, because of the ripple effect that will have on the world economy. Unless you want Toyota and Honda to buy up the assets and continue on. People not directly connected to the industry will suffer as well (restaurants, uniform suppliers, entertainment venues, etc.). The failure of the “Big Three” has more to do with their collective lack of foresight, overcompensated executives, and overproduction of now-unwanted trucks and SUVs. Any aid given to the industry should have severe take-it or leave-it restrictions placed on it. I would like to see a few top executives lose their pay for a while in order to retain factory workers, and mandatory dedication of resources toward alternatively-powered transportation solutions.

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