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I'm sure you've read the heasdlines.  The U.S. auto-makers want their turn at a federal bailout.  They apparently have only a few months worth of cash on hand.  They can't sell their cars - or if they could, people can't get financing to buy them.  They bet all their money on gas-guzzling SUVs, spending untold lobbying $$$ to fight tougher fuel emissions laws and gas taxes, and this is where is brought them:  to the brink of ruin.  The ripples to the global economy from the failure of a US auto maker, they say, will make the failure of Lehman look like a splash in the pond.

So what if, for the sake of argument, we let them fail?  What if, instead of throwing more good money after bad, we focused on creating a safety net for auto industry workers?

What if the federal government offered extended (indefinite?) unemployment benefits for laid off auto workers, coupled with launching a massive re-training, education and relocation grant program.  In exchange for agreeing to spend a year doing community work (building roads, bridges, etc.), workers could obtain these grants.  Or they could be awarded based on need.  Or on merit.  I'm not talking about freebies but something that you have to earn in some sense, and includes some element of giving back.  

If the program were successful, it could be broadened to other industries or sectors of the economy.

Think about how much more this would accomplish in terms of increasing human capital, compared to handing the auto companies $x billion, which auto execs skim off the top and then hand off to their creditors, who skim off the top and hand off to their creditors, etc. with cents on the dollars trickling down the auto workers.

Just a thought...

Originally posted to 924birdhouse on Mon Oct 27, 2008 at 02:55 PM PDT.

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Comment Preferences

  •  Another thought. (4+ / 0-)

    If Ford and GM go under, who's going to fund the present pension and healthcare obligations? We're talking about orders of magnitudes more money than the government is proposing to loan the automakers.

    •  The Auto industry gets what it deserves (2+ / 0-)
      Recommended by:
      Odysseus, View From The Hill

      Detroit has lobbied against CAFE for years, marketed (and still markets) SUVs and other gas ungry vehicles.  They have avoided the needed R&D at least in teh US to produce modern fuel efficient vehicles, and after all that they want the rest of us to dig them out of their own mire.

      Ford makes a car that does 65 mpg, it is sold through out Europe, they wont sell it in the US, why?

      Ford, GM, and chrysler all move production and Jobs to Canada, Mexico, Brazil, Argentinea, and accross the world, but they want the US tax payer to bail them out, Ford makes a car in India that is retaield for $6k but wont sell it in the US, why?

      I have little sympathy for teh auto industry they have consistently shot them selves in the foot. When the CEO of GM sais they are not an automotive manufactuer they are a finance company that happens to finance cars you know there is some thing wrong.

      Toyota have been eating Detroits lunch for years and the "Big Three" are too moribund to keep up.

      there is only one reality, republicans just forget at times

      by Bloke on Mon Oct 27, 2008 at 03:40:06 PM PDT

      [ Parent ]

      •  Because (0+ / 0-)

        Ford makes a car that does 65 mpg, it is sold through out Europe, they wont sell it in the US, why?

        The flippin US government says a car made to European safety standards is unsafe for our roads. If the bloody car is safe for autobahn speeds in Germany, how can it not be safe enough for us?

        "The most virtuous hearts have a touch of hell's own fire in them" Tennyson

        by Void Indigo on Mon Oct 27, 2008 at 04:19:07 PM PDT

        [ Parent ]

        •  Not Safety (0+ / 0-)

          Ford make cars that meet safety standards world wide, Focus, Escort, Edge are all world cars.  They could meet the standards if they had to.  BMW did it with teh Mini, VW did it with the beetle.

          there is only one reality, republicans just forget at times

          by Bloke on Mon Oct 27, 2008 at 04:41:18 PM PDT

          [ Parent ]

    •  Sometimes you lose what you've invested (0+ / 0-)

      I've lost hundreds of thousands in the stock market - no one bailed me out of my losses.
      I've lost my job and I have no healthcare - no one is paying my mortgage or utilities. Sometime you just lose. There is no guarantee in life. These workers have bet their careers and their pensions on their unions and these companies and just like the steel workers, sometimes it doesn't last forever. Reality sucks but that's life - sorry.

  •  Unlikely and unpractical (3+ / 0-)
    Recommended by:
    oldjohnbrown, ticket punch, chrome327

    We need a strong auto-industry to help our middle-class families.  You can't retrain workers to do nonexistent jobs.  Are all these families supposed to leave their communities to do some sort of service?  No, we need to force the industry to do what should be done.  We need universal healthcare, so companies can compete against other countries lower healthcare costs, etc.,etc.

    just another liberal, anti-American, cutnrun combat veteran

    by Uncle Irish on Mon Oct 27, 2008 at 03:02:19 PM PDT

  •  GM used to build railroad locomotives, (3+ / 0-)
    Recommended by:
    oldjohnbrown, NoMoreLies, chrome327

    but the Electro-Motive Division was an early castoff, in 2005, in GM's fight for survival.

    As God is my witness, I thought turkeys could fly.

    by ticket punch on Mon Oct 27, 2008 at 03:09:06 PM PDT

    •  stupidest decision they could have made (0+ / 0-)

      now that railroad rolling stock has been stretched to the limits, and nearly all passenger and freight rail companies and agencies are looking to expand capacity.

      "Without our playstations, we are a third world nation"-Ani DiFranco

      by NoMoreLies on Mon Oct 27, 2008 at 03:30:05 PM PDT

      [ Parent ]

  •  Here's a better idea. (1+ / 0-)
    Recommended by:
    blueskiesfalling

    Bail them out at a price.  Stricter environmental regulations and mpg standards.

    I don't think it's fair to rescue the auto workers and ignore the millions of other workers around the country who've lost their manufacturing jobs.

    Another proud Clintonista opposing John McCain.

    by psychodrew on Mon Oct 27, 2008 at 03:09:49 PM PDT

    •  Yes, charge interest on bailout loan, (1+ / 0-)
      Recommended by:
      chrome327

      with certain percentages to be forgiven based on performance in these key areas.

      But I think that any and all bailout plans have to be contingent with not only environmental regulations and mpg standards, but honoring pension plans and contractual benefits as well.  Part of that should include enemployment benefits, which is why this suggestion has some merit.  

      In other words, there should be no bailout of auto manufacturers in which automakers do not play a key role.  This is personal to me: my father was forced into a bailout this year because the last plant in Flint North is closing in 2009.  With 40 years he has too little seniority to hold out; at least he's close to retirement age.

      My heart really goes out to those who are in the middle of their careers, and have to pull water from dirt.

      The automaker bailout has the risk of being like the bank bailout: there need to be strong controls which will be a powerful disincentive for execs to mismanage their companies.  Detroit has been a catastrophe since the 1970s, and for most of that time this decline has been preventable.

      "No one gets to be born a butterfly, not even butterflies." - Santa

      by blueskiesfalling on Mon Oct 27, 2008 at 03:18:25 PM PDT

      [ Parent ]

  •  If we have to bail them out (1+ / 0-)
    Recommended by:
    Uncle Irish

    we can bail them out by retooling their factories to build modern cars, paying for the worker retraining necessary to use the new equipment, and putting an incentive structure in place (CAFE, etc.) for the big 3 to actually make the cars people are hungry for now instead of rolling out more hybrid Escalades.

    We can add lines for some of them to mass-produce hybrids now. GM hand-builds them to order these days, which is just sad.

    Maybe the government can restructure their debt and require some reforms in the boardroom and the executive suite as a precondition for aid, too, but after seeing how little the airline bailout did after 9/11 and how little the bank bailout has done now, I'm strongly disinclined to just throw good money after bad.

    The big 3 are in the straits they're in because the arch-conservatives running the companies are ideologically incapable of seeing the world as it is and the financial types are terrified of the risk of pouring the necessary capital into factories to modernize them. Any open-ended monies we give them will not solve the problem. We need to step in and do what they refuse to do.

    This has the side effect of being good for the auto workers as well.

    No laws but Liberty. No king but Conscience.

    by oldjohnbrown on Mon Oct 27, 2008 at 03:17:07 PM PDT

    •  That sounds like the argument for BL 20 years ago (1+ / 0-)
      Recommended by:
      oldjohnbrown

      British Leyland was to big and to important to fail, the national economy relied on it.  Guess what, after a series of disasterous managment actions longbridge has been flattened and the largest car manufacturer in teh UK is now Nissan.

      there is only one reality, republicans just forget at times

      by Bloke on Mon Oct 27, 2008 at 03:42:16 PM PDT

      [ Parent ]

  •  It's in our national interest (2+ / 0-)
    Recommended by:
    skrymir, chrome327

    to have car companies.

    We can't have a situation where the greatest country on earth can't make automobiles.

    We have to find a way to be competitive, and that starts with the cars that don't run on gasoline.

    •  Auto industry once employed 1 in 5 people. (2+ / 0-)

      US car companies are perfectly able to compete with anyone on price and quality on a level playing field. Problem is, there is no level playing field. GM & Ford have a roughly $2500/vehicle pension and healthcare liability that other car makers don't.

      The way to make the US auto industry competitive is to remove that $2500/vehicle burden by passing universal, single-payer healthcare and then buying out the pension liabilities they have for their retirees on defined-benefit plans. This can be done if the will is there in Congress.

      -6.38/-3.79::'A man is incapable of comprehending any argument that interferes with his revenues.' Descartes

      by skrymir on Mon Oct 27, 2008 at 03:34:28 PM PDT

      [ Parent ]

  •  Sorry, bailout already accomplished - $50 billion (0+ / 0-)

    It was in the bigger $700bil bailout bill, at the insistence of Dems. There were few, if any, restrictions on job outsourcing, executive pay, or product development included in the bill. Ostensibly, the funds are supposed to be used to design and manufacture new, fuel efficient vehicles, but my guess is that GM and Ford will use it to prop up their credit subsidiaries(GMAC). But we'll see - they still haven't gotten the money.

    -6.38/-3.79::'A man is incapable of comprehending any argument that interferes with his revenues.' Descartes

    by skrymir on Mon Oct 27, 2008 at 03:28:58 PM PDT

  •  Retrain employees like the steelworkers in PA (1+ / 0-)
    Recommended by:
    Odysseus

    If they have to move they can write that off on their taxes. What about all that money paid to the unions? Let the companies fail. They promised to change after the gas crunch in the 70's and they took money and lied and instead produced gas guzzlers. They killed the electric car. Honda and Toyota make better cars anyway. Those companies that can meet the consumer demand will prosper. NO sympathy for corporate welfare.

  •  In Germany, workers get 60% of their salary (0+ / 0-)

    if they become unemployed. I think we need something like that.

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