Two-Way Street
An Auto Bailout ... Good, Bad or Ugly?
Allen Wastler
Published 9:55 AM ET Wed, 19 Nov 2008 Updated 1:44 PM ET Thu, 5 Aug 2010 CNBC.com
The news is all about an auto bailout today. And the debate is getting pretty heated.
One the one hand, we have arguments that the auto industry is central to the U.S. economy as a whole. If the Big 3 go down, they take a lot of other related industries down with them. And those dominoes will keep falling.
On the other are concerns that the auto makers, if given taxpayer money, won't use it wisely and will just need more in the future. The auto industry needs major restructuring, critics charge, and that won't happen unless the industry is shocked into action. Bankruptcy provides such a shock.
As always, we're interested in what our readers think. Should the auto makers get a bailout? Without it, will the entire economy tank? And, near and dear to our audience's heart, what happens to the market?
They should be given every chance to be saved. Each has it's own situation, so it is unfortunate that they are being lumped together. — Mark
It's ironic that the big LA Auto Show starts this week. I wonder how many people will be inspired by pretty spoke models touting the virtues of car companies on the verge of going belly up? It may be more like going to a museum to see dinosaurs. — Kelly
Let them go into bankruptcy it will make them better in the long run. — David
Let them figure it out on their own. Maybe the UAW will see the light and realize that greedy under-educated, under-motivated, over-paid workers are a root cause of this mess. — Susan
We need to bail them out if we want our economy to get better. And they are asking for a loan and that means money repaid with interest. Whats so hard about that? — Jan
Watching the hearings today and all I hear is excuses from the big 3 as to why they are in financial turmoil. Everything has a root, this one is greed and lack of accountability...Throwing money at a dead horse is a no win deal. — Juan
I work in an assembly plant. Unless you work in an assembly plant then I dont want to hear anything about us being overpayed. — Jimmy
I think that it is imperative to help our American auto industry while they are trying to survive the very worst financial crisis in more than 50 years. — CJ
A "bailout" is not the solution. It only re-inforces bad behaviour...Only a chapter 11 bankrupcy will fix the problem. — Angel
No bailout for the big three! Come on, how do you expect them to keep flooding the American highways with clunky big 15mpg trucks and SUVs? — Tim
I thought this was capitalism! Let the economy take its course, it was designed to do so. — Leighton
How can we allow Bernake and Paulson to hand out $700 billion to their banker buddies, but we can't LOAN $25 billion to the Big 3? — Jeff
As much I want the BIG 3 to learn there lesson on poor management by having to go into bankruptcy I feel we should help them out...There are a lot of people's jobs at stake here. What if you were in the same situation? — Nicholas
I would rather see the money spent retraining those affected to be able to get a job in a growing sector not prop up a dying one. — Richard
In rough times help should be given. We are not just bailing out the housing and auto industry—we are bailing our own selves out also. — Alfie
Absolutely no bailout for decades of incompetence. The people working in the industry need to be unemployed for a few years so they can realize how disgusting it is it that they demand 80% higher total compensation than their Japanese counterparts for producing inferior goods. — Marie-Hélène
Nobody is subsidizing my job. I don't want to subsidize anyone else's job with my tax money. — Dan
It is time to show the big 3 "tough love." Bankrupcy may be the only way for them to wake up and get their acts together. We cannot continue to reward poor manangent. — Richard
This circus by the Big 3 is creating such public disgust that sales will fall off a cliff. They are arrogant and demanding. — Paul
The big 3 should be allowed to go bancrupt. They had plenty of chances to make cars that are efficient and economical. They decided instead to bend to the union demands. Who is going to bail out MAIN STREET? — Aurora
I am really furious, for more than 3 decades since the 70s oil crisis, the auto industry has not heeded the lesson. Let the market decide, where do you draw the line? — Al
Let the auto industry go under. No one saved the steel industry that I, my brother, my father and my grandfather worked in, 25 years ago and somehow the country survived. This is supposed to be a world economy so the BIG 3 should work it out on their own. — Jerry
This is a bailout of the U.S. not just the automotive industry. Failure of the big three will crush America. Wake up people! — Jeff
The Big 3 need to go into bankruptcy so they can break their fatal contracts with the UAW. There is no way for them to be sustainable while they are forced to pay their workers too much. — Tyler
Japanese companies are going to get loans... Why can't America stand behind their own with loans?? A loan is not a bailout!! — Ed
I work for a major automotive supplier and I would really like to keep my job. Those of you who say let the big three fail, well you obviously are not in the industry directly or indirectly. If any one of them go under, me and three million others are goin under with them. — Jay
The big 3 MUST be bailed out. If it doesn't happen, the market continues down, your 401K value drops, your pensions drop, this is as dire as it gets. — JoAnn
We can't bailout everyone. There are already others waiting to be next. It's crazy. Where does everyone think this money is going to appear from? — Lisa
We bail out banks that made poor business decisions, the airlines, stupid people who bought a bigger home than they can afford... why not these guys too? What is different? — Jason
If we bail them out where do we draw the line? Are we going to subsidize every failing industry at the expense of the successful ones? — Mark
The CEOs from the Big 3 flew to DC in private jets rather than purchasing an $800 1st class ticket—they don't need anymore of our money! — Paula
Letting them go into chapter 7 bankruptcy will be more expensive for the country than a bailout. We need to make a decision based on cost-effectiveness. — Jack
Money should be given to them with strict conditions on its use. The ripple effect of letting them fail is too great. Haven't we learned our lesson from Lehman Brothers? — Mitch
Auto industry needs to be saved in order to let the economy go on even though it is slow. There are too many whose lives are hanging onto the industry. — Heran
Not one red cent! They will burn right through it and come back for more in a few months. The UAW chokehold has brought this on Detroit. Shame on you! — Katie
Hey, if we're bailing out Wall Street for their poor decisions along with those who bought homes with mortgages they couldn't afford, why not bail out the Big 3? — Keith
If we let the auto industry go under, oh well. It's only the industry that built the middle class and has about 3 million jobs relying on it. Other than that, sure let's let the industry collapse and let us go further into a depression. — Steven
According to every word spoken from the CEOs, they are asking for a loan, not a bailout. A Loan means there is to be repayment, with interest accrued. This could be a moneymaker for the taxpayers. Where's the problem? — Squigman
The union's usefulness is outdated. The failed business models of the big 3 should not continually receive infusion. Bankrupcy is the only option to change the mindset of their platform for success. — Cari
They blew their last 3 chances, the companies and their labor unions. Off with their heads. — Jim
I hope they all fail, then this country will get the picture, The big 3 make good products now, however everyone has lost their love for Detroit. — Wallace
Level the palying field for them to compete, and then it's up to them. — Pete
The auto industry should not receive one cent of tax payers monies! — Jim
30 years ago, nobody bailed out the as the steel industry as it floated overseas and we survived OK. tell me why automobiles are different?? — Cliff
Corporatism is America's downfall. Welcome to history's greatest social experiment, please put a fork in it. — CP
Other poorly run businesses go out of business every day. Why should the big 3 be any different? — Suzy
I Do think we should give them a loan/bailout ONLY if the unions get a 33% Haircut!! The Whole industry is OVERPAID/OVERCOMPENSATED — Bill
Of course the market would sell off, but the economy won't collapse because of the car industry. — Elizabeth
I realize 25 billion is a lot of money, but it does seem trivial compared to the $700 billion. ... I think there do need to be strings attached, but i also think a bailout is critical. — Matt
I think there are too many jobs related to the auto industry to let it fail. — Gerry
I am a current employee of General Motors. I believe the leadership here has the right direction and vision to get through this economic crisis ... Dont lose faith in the US auto industry. We helped shape this country — Leonard
If we bailout Auto industry, that will line up other industries standing in the line for a bailout as well. — SM
Do those people in Congress understand that a bailout is also matter of Nationl Security? — Giacomo
The US should help the automakers only if the unions are put in check. Decrease the payroll by 30%, because it is better to have a job with a smaller paycheck than no check at all. — Chaz
As long as the majority of the people believe there will be a big sell-off based on the Auto Industry shake-up, then it will occur regardless of the reason or validity of the action. — Jim D
The auto industry did not bring us the housing mortgage mess, did not bring us the trade imbalance....they did create the middle class in America, do we want 20% of the middle class to go away. Loan them the money ,let them live until they and we can make the changes needed to change America. — Mick
The "bailout" is a loan, and yes it should be granted. Bankrptcy is not the answer. — Rich
The government should not be expected to invest into a failing company that private money is not willing to invest in. — Vincent
Enough with the bailouts. — Bob
I know a lot of gm workers and as hard as it is to say they deserve bankruptcy. — Chris
Bail them out! Please! I don't even drive a car but you need to keep people in jobs. — Alexander
Let them go into bankruptcy, it is the only long-term viable solution. — David