Do The Big Three Really Need & Deserve A ‘Bail-Out?’

Much posturing and whining has been going on over ‘bailing-out’ the “Big Three Auto Makers.” All three have lined up for our tax dollars, as have other industries.

Flying in to D.C. in their Private Corporate Jets prompted outrage from Congressional Democrats, who have no problem using Public Jets for their jaunts all over the world and country on our tax dollars.

To placate Congress, CEO’s arrived for their latest beg session over the road in their cars.

As corporations line up for government handouts, our National Debt is skyrocketing and tax revenues are drying up, do we really need to ‘bail-out’ all three automakers? Should we pump Billions of tax dollars to them?

Much is said about the Carter Administrations loans to Chrysler in the 1970’s as precedent for bailing out the Big Three. But much remains unsaid and unknown by the public in that deal, not the least of which is the government’s forcing Chrysler to totally abandon their research and development on their Turbine Powered Car, which had continued up until the time of that ‘bail-out.’

What isn’t said is that Lee Iacocca still had to approach the Unions and Suppliers for concessions, just as if they had filed for Chapter 11 Bankruptcy. Who can forget Iaccoca standing before the Union asking for concessions and the Union Rep asking,

“If we make these concessions, just what can you guarantee Union Members?”

Iacocca’s answer, “Their jobs!”

Chrysler pulled through then with concessions and by partnering with Japanese Auto maker, Mitsubishi, a partnership that somewhat continues today with the manufacture of their World Engine program, although Chrysler no longer offers Mitsubishi vehicles under the Chrysler name tag.

Now, we seem to have three major American Auto manufacturers begging for government money to remain in business, while the Japanese autos assembled in America seem to be getting by.

CATO Institute has compiled sound bites of Dan Ikenson arguing against any bailouts of the Auto manufacturers below.



We were recently told it is “unpatriotic” to not support Auto Bail-Outs, but is it any less that UAW leaders will not agree to concessions today, as they once did with Chrysler?

We taxpayers are expected to tighten our belts during tough economic times. Why not UAW members too?

Does it escape Union Leaders that if the companies file for Chapter 11 bankruptcy, they lose anyways?

Of course, just as did Lee Iacocca in the 1970’s, restructuring of the Big Three, even if they must combine operations or merge would be the most economical way out of their mess.

Do UAW leaders even admit that their excessive contracts have contributed to the current financial trouble of the big three?

As an Auto Mechanic of 42 years experience, most of it employed at Dealerships, the current one for the past 19 years, I have seen the quality of the cars that are delivered. Engineering has vastly improved but assembly often is lacking. Who assembles the cars?

When we have a warranty complaint, I am paid far less to troubleshoot and repair the vehicle than is the Union Members idly placing parts on it as it travels down the assembly line.

If my dealership faces hard times, no one runs in to bail us out and we end up unemployed, as has happened in the past.

I survived.

Although assembly of our cars is at times lacking, they are not the junk they were made out to be in the 1970’s. Imports, even those assembled in America aren’t that vastly superior. Remember, even their dealers have to employ mechanics and have repair shops.

The cry of American cars not being energy efficient is just as bogus. The imports that have the best mileage are their smallest cars with the smallest engines, something most Americans don’t buy. This is attested by the imports beginning to manufacture larger vehicles and trucks with V-8 engines to capture that market.

That being said, as is shown in the CATO video, we do not really need to bail out the Auto Industry. Chapter 11 bankruptcies are in order here to save them and yes; even mergers are in order.

Sweetheart Union contracts need to be rolled back to more align them with the rest of society.

If for no other reason, the bail out of the Auto Industry must be turned down to stop the Nationalization of the industry, as Democrats desire. If you think it is a mess now, just wait as politicians, who often stumble over themselves and have a history of corruption, begin deciding what can be built and how they will be built.

Current and past government regulations have hurt the industry, adding thousands of dollars to the price of our cars and creating as many problems as they wanted to solve. You just cannot legislate technology.

The time is now to curtail these government bailouts of private companies, if we are to retain a free market. We simply cannot afford to continue throwing money away in hopes of things getting better.

Similar policies turned a Deep Recession into the Great Depression decades ago.

We do not need a repeat of that.