No bail out that supports big unions __ What are the govenrmet wages in this country vis a vis Japan????

Ioppose non-conditional govt.bailouts. Wages must be slashed.

Until the unions understand they are being payed far too much in relationship to the rest of the world,we will never be able to afford their demands and we just have to STOP bailing out union shops.They are partly to blame for the mess we are in now as their demands never stop.

It’s seems obvious that bailing out the auto makers without requiring them to change the policies that got them into trouble in the first place, is just postponing the problem to a later date. A government (taxpayer) bailout should hinge upon the industry making changes that will prevent this from occuring again, if they don’t comply, let them fail and let the free market system sort it out.

The Big 3 MUST present a credible business plan giving eveidence of survival/success before any $$ s given to them .How they do that should involve all the players involved , including all the people that work there .
IF ANY $$ IS GRANTED , it must be secured , so that any failure would allow us to be first at the “trustee office “.I also believe that some form of reward should be possible , through shares , if the company is successful , because without this help , failure seems certain .

We have known for years that the negotiations of labor contracts, especially with regard to the auto industry, have long since overcome the days of ‘worker exploitation’. Their benefits packages (much like those our politicians have) are out of line in comparison to many industries, and cause them to be uncompetitive. [Political pensions are bordering on ludicrous].
That said, at this stage it is hard to just say the companies should fold and the workers become unemployed. The Union leaders should ask their membership to allow them to get together with management to come up with a restructuring package where all share the pain for future gain (i.e. keep their jobs and companies). Airlines have had to do this in the past.
Only then, as a tax payer, might I be more willing to assist in sharing the pain.
I find the bank bailouts equally distasteful. Accountability and leadership in financial circles (among others) seems to have all but disappeared.

Absolutely no business bailouts until the industry/company requesting funds can present a solid business plan showing profitability on a going forward basis. Being in business is not easy -difficult decisions have to be made every day. I don’t think the big 3 auto makers have had management making tough decisions for a very long time- it shows.

Yes, the big three have to deal with the Unions - more importantly, they need to create a product that the market wants to buy and they need to be best-in-class leaders rather than followers.

It is not the Unions that are the big problem - it is the past concessions to pay ongoing retirement benefits that is draining the coffers. And…..if I saw an exciting and gas conserving vehicle that I really, really liked I would be buying it. But Ford, GM and Chrysler make ugly, boring products.

Why is the entire fleet not using energy saving systems? Why only a few vehhicles? Why can’t these companies be leaders rather than followers?

I agree that the current model the car companies are operating with….due to a large measure by union demands…have priced them out of the market.

I also agree that government bailouts should not apply to companies whose model is doomed for failure.

The auto companies need to downsize until they start generating profits. If this means bankruptcy protection…so be it. At least through the chapter ll process (US) they may be able to unload some of the ridiculous costly social programs they have been foreced to acceptover the years.

I do sympathize with the auto manufacturers. They have been caught up in a Catch-22 situation for some time. However, to ask for a hand out now is to put themselves into the mentality of the unions that control their workers. No body wins then.

This is an excellent point. Why are taxpayers being asked to bail out 3 out of over 7 major auto producers given that some of the other producers also have production facilities in Canada? Especially when the pay structures of the big 3 aren’t competitive due excessive Union demands!

Taxpayers money should only be applied for assistance if those production facilities (& their unionized workers) agree to wage structures that are in line with their competitors. Otherwise consumers are getting hit twice - with higher taxes and higher car prices. THIS WOULD BE AN EXCELLENT CAMPAIGN FOR THE NCC!

Taxpayer dollars shoud not be used to bail out mismanaged companies and overpaid union workers

the free enterprise system depends on failure, poor managment with failed operation models must be allowed to fail rewarding those with better business models.The big three auto companys have been on the skids for 15 years and have not taken the actions required to save themselves so goodbye ,very sad but nessesary.

The call for proposed restructuring is good and so is the reconsideration of the extreme hight wages. However, the total restructuring to meet future needs for automobiles should deal with all levels of staffing and production. Clearly we need to know what Canadians are getting for what should be a long term investment and not just a present bailout. Should muncipalities and government be looking at forward purchasing of economy cars for their existing needs in federal, provincial and muncipal government.

As I see it,any bailout by government of a for-profit firm is an admission that the firm has not succeeded in its basic goal - that of convincing consumers that they should buy its product or service and to do so profitably. The capital for the bailout must inevitably come from firms which have succeeded.Unless I’m mistaken,this means capital is directed away from successful firms to less successful ones.Will our economy thrive in such an environment?

Buzz Hargrove threatened us with strikes - as usually we gave in and now look at us!
Let em eat crow!

So, where does it end? There are no bailouts for all of the forestry workers whose jobs have been eliminated over the past couple of years. Business is business. Some make it and some don’t. Government can’t bail out everyone, so they shouldn’t bailout anyone. Nothing wrong with creating an environment to assist companies during times such as we have, but, to get involved in pumping money into businesses is not something I would support. The Federal Government should quit subsidizing companies altogether. It’s not their place in my view.

If any of us, personally, found ourselves in financial difficulties, the first thing I’m sure common sense would dictate, is to cut back on spending, tighten our belts and work hard until such time as we were stable again. Why does this logic escape big business and government? Any financial advisor will tell you not to spend more than you earn. This is grade 3 arithmetic. Have we lost our senses?

I agree with the sentiment of most of the other comments, that the government should let big business fend for themselves, unless there is a guaranteed pay back scheme with interest.
Just because they are big employers they get a lot of attention and in fairness there is a lot of impact but they should have the wherewithall to keep in touch with reality, it is not like this just happened, they were in a weakened state and the economy just drove the nail home.
It is curious that 80% of Canadian employers are smaller (mostly non-union) and they get no attention when they have difficulties, they adapt and work throught it.
It is also curious that Toyota is not crying for handouts, but then they are not sucked dry by the CAW with all the work stopages, high cost and poor production.
The Governments of Canada and Ontario need to represent all citizens equally (for a change) and not just the ones who cry or line their campaign pockets

Much has been written regarding the need for federal support to the domestic automotive industry, and much has been written against such support. Little that we have seen considers both the consequences of not providing such support and the circumstances under which it is appropriate to provide that support.

As critics of a bailout have pointed out, General Motors, Ford or Chrysler have numerous challenges that need to be overcome, including labor and benefit costs, over capacity in their dealership network due to state franchise laws and product line-up issues. Moreover, there are obvious moral hazard and tax payer recovery concerns associated with just providing new funding into the existing capital structures of the Big 3.

However, this is not the airline industry and time is short. Obvious arguments against a simple Chapter 11 filing include the difficulty and complexity of arranging DIP financing in the current environment (although perhaps the Government could provide financing here) and the very real impact such an event would have on sales as consumers will be extremely hesitant to purchase vehicles from a OEM under insolvency protection - this in an environment where volumes are already at historically low levels.

The most poorly understood aspect of any filing would be the supplier grid lock and the rolling wave of bankruptcies that would likely result. The supply base is already in varying degrees of distress due to continued cost pressure from all their customers (both the Big 3 and the New Domestics) and overcapacity. Needed consolidation has not taken place due to enterprise valuations that often approximate liquidation values combined with the difficulties and expenses in moving programs from one supplier (or one plant) to another.

In any case, an OEM insolvency (whether a Chapter 7 liquidation or a Chapter 11 marred by drastically reduced sales) will result in a complete meltdown across the entire industry as tier 1 suppliers with significant exposure to a OEM that has filed for protection would experience a potentially crippling loss in sales and/or accounts receivable, tipping them into insolvency as well. As these tier 1 suppliers typically supply most or all of the domestic auto industry (and in some cases other industries as well) they would reach out to their solvent customers for support while attempting to garner liquidity through their lenders and tier 2 suppliers. I believe the quantum of this activity would be so great and so sudden that the relevant stakeholders would neither have the human or financial capital to respond adequately, creating a series of rolling bankruptcies across the first and second tiers of the supply base and potentially dragging other OEMs down as well, or at a minimum, ceasing a large portion of domestic auto production for weeks if not months.

In other words, once it goes down, it may not easily get back up which would be especially painful for the country, not only for the human and employment impact, but for the efforts underway to move the country towards the development and use of more fuel efficient and alternate fuel technology vehicles.

Finally, Labor has made some significant concessions to the Big 3, the benefits of such will begin to be significantly felt in 2010. Whether these concessions are sufficient or not may be open to debate, but a simple bankruptcy filing may not provide a real world solution to labor cost issues if labor does not simply acquiesce to Management’s demands as was seen in the Delphi bankruptcy. Moreover, additional concessions may be provided on an expedited basis without a bankruptcy.

Accordingly I believe that government funding bridge to 2010 will allow the OEMs to achieve stability when both volumes and viability should improve.

These issues are complex, but I believe the potential costs of misplaying this crisis by the government could be extremely severe, and accordingly, believe providing liquidity on an expedited basis to the industry is vital. Additional stakeholder concessions may be required and appropriate as a condition of tax payer money, but these can be negotiated once a framework to provide medium-term stability is put into place.

Steven Braithwaite

GREETINGS!

Personally, I would close the non-competetive automotive industry down, and give the “bailout money” to the auto workers as a monthly stipend until the monies are exhausted. It would be a most dramatic act anticipating the realistic tragic end of the automotive industry - and bring our citizens from their fantasies to their senses.

Large business, like large government, is doomed to failure, since neither one can respond in a timely manner to changes in the economy, or the public demand. For some, unknown, reason, business, like government, seems to have bought into to the myth that “bigger is better”, but it always turns out the same. Both become unresponsive to needs, and wants, and both end up costing more money than they can support with income. To expect the taxpayer to bail out inefficiency, is ludicrous, at best. Let them fail. perhaps a new, more responsive, automotive industry will emerge, and, perhaps (faint hope clause), the unions will come to realize, that they are major contributors to the problems, and they will be smarter, next time. Perhaps it is the unions, and the board of directors, who should be bailing out the automotive industry, not the tax payer.

Of course, the governments have had their fingers in the pie, for a long time, demanding very expensive (crash) testing, and encouraging the unions in their (mostly) unreasonable demands. This has led to the unreasonably high pay scales, as well as unsustainable retirement packages. The governments have the same problems, although they don’t have the overhead of having to do crash testing. Some would say that crash testing is essential, for the safety of the consumer. Not true. All that does, is make the consumer complacent, since they expect that a vehicle will be safe in a crash, so they drive like maniacs, and wonder why they are severely injured when they crash. Without that complacency, they might actually THINK about what they are buying, and some of the junk would not be purchased in the first place. They might even THINK, when they are driving, since it is possible that the vehicle might not protect them if they do something wrong.

JH - I AM a financial advisor, and advise my clients to always save so that they do not spend more than they earn. Less debt usually equals more peace of mind.

As an auto enthusiast, business person, consumer, resident of Ontario/Canada/North America, it is incredible seeing how regularly each of the “Big 3″ have managed to dig themselves deep holes. In the past, they have been able to get themselves out of them. The world’s determined focus on only the next quarter, let alone year and forget about longer term planning has compounded the Big 3’s abilities to be short-sighted.

As consumers, we all consciously make decisions every single day to purchase goods and services that deliver us what we perceive as good value for our (hard-earned and taxed) money. We buy what we feel is the “best” for us at that time. For decades now, when it comes to cars and trucks, consumers have increasingly been choosing from other than the Big 3. It started with cars and even in this downturn, continues, with trucks.

Ford and GM unquestionably make some of the world’s best, and in some countries, market-leading vehicles. For some reason, we just do not get them for North America. I do not refer to just small, fuel-efficient cars. “People (North Americans) don’t want…(these cars)” - implying that they know what we want. So why have Honda, Toyota et al been stealing market share for 30+ years? They built good products that people wanted to buy, at a reasonable price, that turned out to have better overall longer term quality (those short term quality surveys are worth the paper they’re printed on).

As a businessman or investor, I would not put out one cent to a business with their hand out for my money unless I was confident in their business plan and that I would get a positive return on my money. The Big 3’s business models have proven to be unsustainable.

The automobile industry may be one of, if not the, largest manufacturing sector in the US/Canada/North America, but the (bailout) buck has to stop somewhere. The stops start with the taxpayer saying “NO MORE!”, lest the lineup at the trough get any longer.

“No more!”

Why bail out private corporations that have made billions in the past , however , their greed has caused the manufacture of products that are basic junk that doesn,t sell. Unions are greedy too and have as much blame as the automakers for their dilema. I bought a Dodge car in 2004 and kept it for only 64,000 km as I couldn’t afford the repairs. I paid 20,000 for it and sold it for 6,000 in summer of 2008. I bought a 1992 Camry with 200,000 km for 3,000 and it is running very well.
Our Big Three auto makers are insulting our inteligence with the crap they are trying to sell us. If they can’t build a good car then get out of the business. Don’t use the people’s money to support private business. If my business goes broke nobody will help me or even care!
Thank you.

Everyone here is arguing over whether or not the government should bail them out with strings attached.

What happened to free marketeers? What happened to individualism amongst even the NCC. I am an adamant supporter of the NCC’s more conservative roots, but when, as stated in the article, you are somewhere on the side of a bailout, I would simply shake my head.

Bailouts are the word for word definition of Socialism. True, naked socialism in the West.

would a bailout not be a subsidy for exports to the advantage of the U.S. consumer?

Not one taxpayer dollar should go to the Big Three until they fire the executives and board members who, despite all market indications to the contrary, continued to build big gas guzzling monstrosities and no hybrids and brought the industry to its knees. AND, equally important, absolutely no bail-out until the unions accept reductions to the ludicrous wage and benefit packages being paid to the auto workers. NO BAIL-OUTS WITHOUT CONCESSIONS and a realistic business plan for recovery.

They also need to dump the CBC - and use the billion $$ for other purposes.

Totally opposed to another bail-out. The big car companies have received bail-out after bail-out.
The Canadian Taxpayers Federation released research showing that the auto industry has already received $ 782-million from taxpayers over just the last five years. That figure does not include hundreds of millions more committed previous to this.

If nothing else it will remind the over paid cry-babies of the CAW that the ride is finally over. Do I feel sorry for them? NO.

They have taken the money and blown it. They should have saved, like any sensible person does. They should not even get UIC. Buzz Hargrove, the game is OVER!

I totally agree with your point.

I agree with those who expressed the opinion that there should be no bail out until a proposal is advanced that will solve the problem and not just postpone the inevitable. The labor costs that the union and management negotiators have built into the cost of automobiles cannot meet the realities of the market place. The quality and design of autos made by the north American “big three” manufactures does not meet the competition.

The domestic automakers wouldn’t be in this situation if they made their cars to last, instead of building them with cheap parts intended to last only a few miles, so the companies could reap benifits from both selling the cars and part failures. Planned obsolence is one of the problems I have had to deal with, in my car. I no sooner replace one part, when another fails, ensuring that I have to spend more money to keep the car running. I am therefore of the opinion that they should change their ways before we as taxpayers bail them out. It is their greed that got them into this situation in the first place.

How about a workable business plan that puts the taxpayer in the driver’s seat for a change. Nowhere in the Constitution does it say that government should be in the lending business. Even the mealy-mouthed socialist wackos of the NDP once decried giving taxpayer money to Corporate Welfare Bums. Now look how they’ve changed their tune. Today Canada’s left wing couldn’t shovel money fast enough to please the greedy unions that have made the Big 3 uncompetitive faced with non-unionized foreign competition. Bailing out the auto industry obscures the fact that they’ve been in trouble for years, long before the present financial crisis. The bailout would also indemnify the unions, who are probably the worst culprits in this whole mess. I say let them fail, for one simple reason: They deserve it.

Surely you err saying that the auto workers make $75 an hour in Canada while so many who do meaningful labor at minimum wage. Is that figure after all benefits are factored in? If not it is no wonder the auto industry is in big trouble.
Government bailouts are contrary to free enterprise. What’s next, government
running industry?

What will it matter what we say. Harper will bow to the pressure and bail these slugs out. I say not a bloody red cent. I, as a taxpayer, have dumped enough cash into those leviathans and it’s time to stop the bleeding. Yes I know that there will be collateral damage to suppliers but this will be temporary as they retool as the new and more efficient makers come in to take the replace of these slugs. Look at Westjet. They have come in, union free, and have become a great success at the expensive of other old, tired and bureaucratic organizations that needed to die. Remember what Joseph Schumpeter said: “Again out of destruction a new spirit of creativity arises.” Creative destruction. It can be a beautiful thing…

No tax monies or any other govenment financing should be given to these businesses or any other. As a former small motel operator I made descisions based on what I could afford. If times were difficult, and there were many, I postponed planned renovation and instead settled for touchups. I did not get any help or support from our financial institutions when financing was needed? I suggest these big boys make do with what they have and tighten their belts. It will pass and all will go well and everyone will be better for it.

NO BAILOUTS—PERIOD!!! Look at our money markets today—IF this continues–I will be BROKE as RSP’s are ‘leaving’ fast!!! Maybe–just maybe –if I whine long and loud enough– I’ll get ‘bailed out’!! Seems to be the ‘in’ thing these days! And I do ‘employ’ a lot of ‘onion’ workers– The guy that prints my pension cheque, the guys that handle it between here and Ottawa–or ‘where-ever’ –GOTTA KEEP THEM WORKING—makes as much sense as a bailout on account of stupidity!! Ron

There should be NO government bailouts!! It these companies can’t stand on their own, then they should go under. Taxpayers should never be on the hook for billions of dollars in bailouts.

There are no doubt many reasons why the car companies of North America are in trouble and both management and labour unions are equally responsible not you and me, the taxpayers, who will eventually pay for any bailout the govt. “selects”. The basic problem is decades old and should have been predicted during negotiations each time they took place.
Our locally built cars carry a price tag for labour costs, pensions, health plans, pay for “not working” etc that no self respecting business can expect to carry and compete sensibly.
Only if the companies and their unions agree to take reesponsible actions to reverse those rediculous penalties should the government even offer to help and if they do not they should be prepared to seek bankruptcy protection and attempt to start over with a clean slate.

I just shake my head when i hear that the guy who drives the cars from the end of the assembly line to the parking lot makes $70,000.00 per year. I’ll do it for $35,000.00. I’m a professional with 7 years of post-secondary education, and I have to work hard to make $70,000.00 after many years in my field. I don’t want tax money subsidizing inefficiency and bloated payrolls.

The automakers should not get an automatic bailout. They should be required to come up with a viable plan that will enable them to be profitable in the future, and to pay back whatever money is provided to them by the taxpayers. Can any one of us, on either a personal or a business basis, expect to be provided with funding by banks or any other source of funds without having plans to pay it back?

It seems to me that that is what has caused this problem in the first place–money being provided without a clear plan for its being repaid.

I do not watch the CBC but I am wondering if they have been grilling Buzz Hargrove about this. I remember hearing him say when they were having one of their many strikes (loose quote) “it is not my job to get along with the auto makers, it is my job to get as much money and concessions for my workers as possible!” Well, way to go Buzz! The Unions have bankrupted the meat packers in the west, the steel mills, the lumber business, fisheries and just about everything else they get into.
Maybe the auto makers need to have the managers of West Jet go in and show them how to run a business.

Possitively no bail out as matters now stand. $75.00 per hour plus is rediculouse. All three of the big fellowos were warned some time ago about their cowardly habit of caving into the greedy union demands which would eventually bring about the present situation. The Noth American media hands are not too clean either in failing to take on both industry and union. No bail out until satisfactory reorganization take place and this should include dismissal of senior executive and certainly no bonus payments.

Greed, greed! Is there no end?

The Company’s leaders, whether top brass or researchers, have been shortsighted (blind), the Union Leaders have been bullies towards the companies, and the employees have been greedy. At the wages they have all been getting, they should have something saved for a rainy day. Let them stew in their own juice for awhile. Then fire those with no vision whether they be CEOs, Union Leaders or emplyees, and start up leaner, able to compete with international trade.

Absolutly no taxpayer cash to bail out the big 3. Buzz Hargrgrove and the UAW has raped the car buying public for 30 years , now it’s time to pay the piper! We have a number of auto manufacturers who can build better quality cars at wages 1/2 of the UAW. Need I say more??????

I hope we get to see the government bail-out the Liberal Party of Canada. I’d hate lose what has become such a delightful amusement. Let’s hope they’re still around when like the proverbial Phoenix, Frank (Canada’s favourite family magazine) rises from its ashes.

I am a union worker myself and do beieve that unions have there place for protection of the workers and reasonable wage incresases according to the constant rise of of inflation. I mean lets admitt, the inflation seems to increase 10-15% and the wage for the average canadian increases 3-5% if they are lucky. When will we come to the point were either inflation dictates the wage and we all get more when we need it or sometimes we take it like a man and give a little back when times are falling. Well give my head a shake, it never goes down for the consumer does it?? Sorry am goin on here and could continue but want to get to the point about the whole “bail out of the Automotive industry.( newcars that is)
So what if we approached the union and said look, nobody has the right to ask for a guarauntee whenit comes to a job so this is what we propose. If you want to stay working at this present time, we need to adjust the wages and as a company the manufactureers will do there part and hand a package or proposal to thee union and we will keep these plants open and everyone working. Keep in mind this will not be a guarauntee but work together to keep everything working and everyone employed?
Keep in mind , the government shouldn’t bail them out, rather they need to take there part and start protecting our north american manufactureres and rais the terriffs on the imported vehicles> What a conscept, oh what about the free trade aggreement? That is a crock, it seems the free trade is manipulated to whom ever or what ever seems covenient for the party’s in power. It isn’t free trade it should be equal trade, isn’t what that was all about? Just a little thing to make you go Hmmmmmmm?

I am writing this to express my strong opposition to the proposed participation in a US bailout of the auto industry.

In support of this opposition I have included below a very well thought out argument by John Mauldin, a US financial analyst as to why the US govt. should not bail out the big three. Those argument apply to Canada and in addition since a serious reduction in their manufacturing capacity is inevitable it can be guaranteed that Canada will suffer a far larger share. The years of trying to save coal miners jobs in the Maritimes should have taught us something.

Yours truly,

Terry Heinemann

Is GM too Big to Let Fail?
(Let me say at the outset I am truly sorry for those who have lost their jobs or are facing the possibility of a job loss, whether at GM or any other firm. I have been there, as have most people at one time or another.)

I wrote in 2004 that GM was essentially bankrupt. They owed more in pension obligations than it seemed likely they would be able to pay, without major restructuring of the union contracts. I was not alone in such an assessment, although there were not many of us. Now that assessment is common wisdom.

Bloomberg today cites sources that claim a collapse of GM would cost taxpayers $200 billion if the company were forced to liquidate. The projections also called for the loss of “millions” of auto-related jobs. GM, Ford, and Chrysler employ 240,000. They provide healthcare to 2 million, pension benefits to 775,000. Another 5 million jobs are directly related to the three auto companies. GM has 6,000 dealerships which employ 344,000 people. According to a recent study by the Center for Automotive Research (CAR), if the domestic automakers cut output and employment by 50 percent, nearly 2.5 million jobs would be lost and governments would lose $108 billion in revenue over three years. (Edd Snyder at Roadtrip blog)

How did we get to a place where the market cap of GM is a mere $1.8 billion and its stock price has dropped from $87 in early 1999 to $3.10 today? (See chart below.) Where Rod Lache of Deutsche Bank has a “price target” of zero for GM? “Even if GM succeeds in averting a bankruptcy, we believe that the company’s future path is likely to be bankruptcy-like,” Lache wrote.

The litany of reasons is long. At the top of the list are union contracts which mandate high costs and pension plans which cannot be met. Then there is the problem of many years of poorly designed cars, although they are now getting their act together. We can also discuss poor management and bloated costs, like paying multiple thousands of workers who are not actually working. GM is structured for the 50% market share they used to command, whereas now they only have 20%.

Wilbur Ross, a well-known multi-billionaire investor, was on CNBC saying that allowing GM to go bankrupt would throw the country into what sounded like a depression. Of course, he does have an auto parts company which supplies GM; so he, as my Dad would say, does have a dog in that hunt.

Ross said that we as a nation are to blame for GM’s problems (I am not making this up) because we do not have a national industrial policy. The US allowed other automotive companies to build plants in states that had lower labor costs, and that is the reason GM is uncompetitive. GM pays an average of $33 an hour, and those selfish other companies pay a mere $19 plus a host of benefits.

Ross evidently believes that because some states have lower taxes and right to work laws, that it is the responsibility of the taxpayer to give GM a certain type of immortality rather than suggest GM deal with its problems directly. I assume that Ross also sides with the French when they suggest that Ireland should raise taxes so they will not have to compete with Ireland for business. Such thinking is nonsense and is also unconstitutional.

Let’s all acknowledge that having GM go bankrupt would not be a good thing. But it is not the end of the US automotive industry, nor even of GM. Let’s think about what a GM bankruptcy might look like. In a bankruptcy, the debt holders line up to come up with a restructuring plan so that they can maximize the return of their loans or obligations. The shareholders get wiped out, but with GM down over 95%, that has largely been accomplished. That process has happened with airlines, steel companies, and tens of thousand of other companies. It is called creative destruction.

First, let’s understand that the real owners of GM are the pension plans, as I wrote in 2004. They are the entities with the largest obligations and the most to lose. They are the biggest stakeholders in a successful GM. Giving them the responsibility for making a new, leaner, meaner GM with realistic union contracts would be rational; otherwise they would lose most of what they have.

Factories need to be closed. Auto sales are down to 11 million cars a year, the lowest since 1982, which was the last major recession. Automotive companies sold cars at such low prices in the last few years that sales went to 16 million a year. But the cars that have been sold will last for a long time. Few people are going to buy a new car when the old one is working fine, especially in a recession and a Muddle Through economy. Further, does GM really need eight automotive lines, some of which have been losing money for years?

A restructured GM with realistic costs could be quite competitive. They have some great cars. I drive one. It is four years old and so good I am likely to drive it for at least another four.

At some point after the restructuring, the pension plans could float the stock on the market and get some real value. If actual pensions need to be adjusted, then so be it. While that is sad for the GM pensioners, is it any sadder than for Delta or United Airlines or steel company pensioners who saw their benefits go down? For the vast majority of Americans, no one guarantees their full retirement. Why should auto trade unions be any different?

Taxpayers in one form or another are going to have to pay something. Unemployment costs, increased contributions to the Pension Benefit Guarantee Corporation, job training, relocation, and other costs will be borne. So, it is in our interest to get involved so as to minimize our costs, as well as help preserve as many jobs as possible.

Sadly, I think it is likely that a Democratic majority next year will quickly pass a bailout that will not solve any of the longer-term problems. Obama evidently wants to appoint an “automotive czar;” and the name being floated is the very liberal Michigan former Representative David Bonior, whose anti-trade and pro-union positions are well known. This is appointing the fox to guard the hen house. It is not a recipe for the restructuring that is needed.

The bailout for GM is a bailout for the trade unions and management (who not coincidentally both made large contributions to the Democratic Party and candidates). US consumers are simply going to buy fewer cars in the future. That is a fact. Spending $50 billion does not address that reality. That $50 billion can be better spent by helping workers who lose their jobs. Without serious reforms a bailout will simply postpone the problem, and there will be a need for more money in a few years. And do we think that the management which got GM into the current mess is the group to bring them out?

And as to the argument that “We bailed out Wall Street, so why not GM?” it doesn’t hold water. What we did and are doing is to try and keep the financial system functioning, so we don’t see the world economy simply shut down. But don’t tell the 125,000 people who have lost jobs on Wall Street that it was a bailout. That number is likely to go to 200,000. No one thinks that a restructured GM would see anywhere close to half that number of job losses.

Do we protect Circuit City? Sun just announced plans to lay off 6,000 workers. Where is their bailout? Citibank announced 10,000 further job cuts today. This is a recession. And sadly that means a lot of jobs are going to be lost. GM workers should have no more right to their jobs than a Sun or Citibank or Circuit City worker.

Now, would I be opposed to a bridge loan to help in the transition? No, because a viable Detroit is good for the country and will cost the taxpayer less in the long run than if we have to pick up their pension benefits. But any money must come with realistic reforms that put in charge new management and a realistic cost structure so GM can compete

I agree there should be NO bailout for the auto industry until Union wages and benefits are brought in line with Japanese and European copanies and until sound workable restructuring proposals are put forward by the three US car companies insuring job security for Canadian blue and white collar workers.

The “Big Three” have been in a death spiral since the 60’s. Incompetent management and union leaders and smart consumers are the reasons. There is now negative equity and huge debt on GM and Ford’s balance sheets. At the end of WW II, these companies were world class corporations.

As WW II ended, Edwards Deming was thrown out of Henry Ford’s office when he introduced the Deming Charter - a new concept in total quality management. Deming laid it on the Japanese and his picture now hangs in Toyota’s Head Office. The Japanese have perfected the manufacture and marketing of autos.

All the money in the world will not fix “Big 3″ structural and attitude paradigms. They are bankrupt and sucking cash at the rate of millions of dollars per day. The request of the Automotive Parts Manufacturing Association (APMA) for a billion dollar bailout is but a symptom of this house of cards. The “Big 3″ have been grinding the APMA members into the dirt for decades.

As a taxpayer, I am vehemently opposed to any government bailout. Bad management should not be rewarded. Why should we have to buy inferior products, pay point of sale taxes and then pay more taxes again caused by a bailout.

Instead, use the bailout money to create infrastructure and green construction jobs and training programs for all the auto workers who will inevitably lose their high paying jobs. Government bailouts will simply prolong the death throes.

The companies that bring the right product to market at the right time and price deserve success and should not have to compete with government subsidized behemoths. This is the gruesome global auto market reality. After 60 years of slow death, let’s finally get our heads out of the sand.

This industry was in big trouble well before the sub-prime credit crunch. If the U.S. and Canadian governments bail these companies out, who will be next?

Small businesses employ many more people than these auto companies and have a greater impact on the economy. I think we should give them some money first. Also, the truckers and others will need money. Using the guise of fairness, many industries will come out of the woodwork asking for a bailout. Where will it stop!

Yours truly,

Peter Black C.A.

59 Carisbrook Dr

Kitchener Ontario N2K 4C7 519-208-0789

my thinking on government bail outs is the same as yours..I don’t think the incoming Obama gov’t have the will,or desire to tick off all their Union supporters,from this past election,which tells me there will be a bail out while it will appease Obama’s Union pals,will destroy capitalisn and America as we now know it.

Finally. The things that I and all my salaried mid-level automotive co-workers knew in the late 70s are “front page news”. Whaddya know…The Big Three’s senior execs are terribly out of touch with how to run their businesses and generate product lines. CAW workers are living in an idealogical dream world. There isn’t enough of the right product in the market at the right time to make the kind of sales targets required to pay the outrageous costs of labour in these companies. And now the chickens have all finally come home to roost. “Quelle surprise”.

My husband and I (and many of our fellow Kettering grads) saw the handwriting on the wall already in motion in the early 80s when we got the hell out of the industry. As for us, we put our money where our mouths were, and started running our own manafacturing company, our way. The company we bought has been here since 1902, and since we bought it , we have had some VERY scary rides, but we did what we had to; our unionized workers came to the table and helped save their own jobs by foregoing raises (regardless of “inflation” and “cost of living”…we are their employers, paying them a fair wage/benefits based on what they DO, not the state of the economy) and work-sharing until we rode out the tough times. We as owners scrounged and begged the banks for what we needed to bridge tough times (don’t get me started there), and cashed out our own personal nest eggs to keep the place afloat. And really…in the end, we, our employees, and our community are ALL the better for it, because we are still here making product and contributing to our community. Ironically…it has been our policy to refuse any and all automotive-related work unless we are getting paid COD…and we have done that since ‘88, simply because we knew what we could get into. People were dumbfounded at what we turned away in terms of money-in-pocket at the time…but are we ever glad we did that now.

however, having said all that…to just say “too bad, so sad” and let a major sector of this industry fall apart is irresponsible, and in the end this sceanario would overburden our “social safety nets” (SIGH I HATE that terminology) to the point where the bail-outs proposed would be a mere drop in the bucket compared to the financial and sociologal fallout that would result when all the dust had settled in Canada from all the ripple-effect business collapses if the Big Three “go down”…or even any one of them. The comparisons to WestJet and the airline industry apply only in theory. You have to consider the sheer size of this industry before you can say the same thing would happen. Maybe it would…but how many decades of disaster would precede it?

I agree with those who say that we need to see some serious re-tooling of the business plans of these companies, and then support them with a cash injection, as would be fit, ONLY until they are out of immediate danger, and ONLY IF they are implementing the plans proposed. In my opinion, it would be self-serving to the citizens of our country. I say this full well knowing that none of these governments would step up to help me…but if my company goes down, it would mean 37 people would be out of work…not many thousands.It has taken thirty years for the crisis to come to a head…it won’t resolve in two months even with a plan. You cant turn a giant ocean liner around as fast as you can a little speedboat.

The death-knell has been rung…its now up to the big three to either heed it, or ignore it at their peril and die….unfortuantely that would also be to the peril of many others who are NOT responsible for their mismanaged mess. Lets hope a plan can come together, pronto, to turn this thing around. None of us can afford to smugly suggest that it will be someone else’s problem if they go down. it would be everyone’s problem.

No bail for the auto sector .This has been tried before and won’t work.

Why bail out a failing industry. Let them fail and restructure with out the unions. In the 50’s each company had about 6 diferent models. How many have they got now. Cut back to 3 sizes of cars and 2 trucks and 1 SUV and we’d all be better off and save a lot more money to boot and the Gov’t wouldn’t have to help them. Also sell the execuative Jets. They can drive or fly commercial.