End of the Line for American Auto Makers? Paul Krugman Thinks So

The new administraion might be well advised not to bother upgradeing roads in Florida - I have been to the Florida Keys - not a lot of room for additional sea level rise down that way!

Bob Williamson
Chair & Founder
Greenhouse Neutral Foundation
Author of ZERO Greenhouse Emissions - The Day the Lights Went Out - Our Future World. www.strategicbookpublishing.com/ZEROGreenhouseEmissions.html

More roads is the last thing we need in the US. How about better mass-transit? I live in the DC area and the leaders of our Metro system are constantly complaining of budget shortfalls, even with record-breaking ridership during the days of $3+ gasoline. My morning commute (away from the city) takes 15 minutes by car and 1 hour by bus. Hmmm, you wonder why I choose to snooze all too often?

Any bridge loans or bailouts should be tied to the resignation of the management of these companies. For decades, the management of these companies spent millions lobbying against higher CAFE standards. Now they act surprised that the public doesn't want their polluting gas guzzlers? Why do they think we were trying to get our elected representatives to force them to build more efficient vehicles.

If it weren't for the jobs of those that have nothing to do with the incompetent management I'd say just let these companies go bankrupt. Let's lay off management and save the workers' jobs this time.

We can't bailout failing companies. At one point only US cars were driven in the US, but as other companies found what Americans wanted to buy, we had better options. If those companies are still in the black but the American ones are in the red, than let the American companies die and let the profitable ones do their business.

The bailout we need should be to help bring down the US automakers. The 2 million or so jobs involved are very concentrated to certain regions and towns. Some towns have thousands of autoworkers and much less in other jobs, so if their factory or company shuts down, most of the town would go belly up, creating a sink hole of poor families foreclosing on homes and being unable to pay for basic amenities. This is far more tragic than whatever happens to the companies - we should be caring for the people is what I am saying.

Reserve $34 billion for severance packages, job hunting, relocation funds, and helping the autoworkers generally find how to live a decent life once their jobs all cave in. If the money is given straight to the companies that worked so hard to make failed products, who's to say that it won't flop and end up collapsing in a few years again, with the same problems and just less willingness to dish out tens of billions again. We can only prop up companies for so long, but we should really be focused on helping the American people, not the CEOs terrible ideas of how to run an enormous company.

Andy, that is very well put.

@ andy

Good point. taking $34b from the public and stuffing it into an auto manufacturer thats doing too little too late.. one thing they can do is drastically cut down their operational size...let non corrupt govt. officials handle the money for the companies. and let the CEO s walk out without their bonuses. too bad if they have to sell their planes and boats, their holiday homes in the Bahamas or whatever.. point is they can stand on their own.. it's the guys on the floor who need the severance package and the relocation program.

put responsible and trust worthy people who won't get corrupt in charge of the bail out money. get them to watch it's movement. like if ford and GM get cracking and shut down their SUV divisions COMPLETELY, focusing EVERYTHING on Hybrids / electrics/ FC vehicles onto the roads ASAP, then maybe.....

yeah, but thats the problem isn't it... shit doesn't go down that way.... *sigh* trustworthy people, non corrupt people in power, and tech gurus, don't grow on trees... they would if we stopped f**king around I suppose. simplify the legal, policy making, vetting processes. red tape is not the problem. it's the jack offs holding the red tape that make crossing it sometimes such a pain and hindrance...

hah... that won't happen any time soon. thats asking humans to stop being us and be like an ant colony- everybody working for the common good of the race...

@ Jeremy

I agree with the CAFE reference; however, the removal of executives is a short term diversion from a true resolution to the deeply rooted problem. This of course is what I gather was being referenced to in the last paragraph. Granted, they are in the public eye with their positions; however, even with a replacement, the bad business practices would continue with a new recruit as the business policies for the most part continue.

Sacrifices are going to need to be made by everyone, in and outside of the companies with true leadership and innovation standing out.

I'm all for better cleaner cars, but I'd rather have a National rail service on par with the Japanese.

I agree with the last post. One of my favorite things about living in the UK is the public transit ... and it is not that great (compared to how it used to be and what is available in several other European countries). In some ways, I am not looking forward to going home and having to drive to get from point A to point B. Why can't I get a train that does not take FOREVER to get from Washington DC to Durham NC (or even Charlotte)?

If you want the tech geniuses or the new management skills, why don't we put a lot of that money into education and training programs?

Don't bail out the automakers ... or at least don't bail them completely. (After the AIG fiasco, we don't know what could happen is such a large company goes belly-up ... then again, it has happened in the UK and they recovered.)

These new roads better have bike lanes.

Krugman actually didn't say that the US auto industry would disappear. He corrects the misrepresentation on his blog: http://krugman.blogs.nytimes.com/2008/12/08/me-misreported/

"What I actually said was that the concentration of the industry around Detroit would disappear."

Krugman was misquoted:

http://krugman.blogs.nytimes.com/2008/12/08/me-misreported/

I'm a Michigander worried about the Big 3. I didn't work for them, but my neighbors on both sides and across the street from me did. My brother and his son both worked for related industries and got downsized. I've always owned American made cars, most of them GM. While I agree the upper management of the Big 3 are paid WAY TOO MUCH, we the American people are also guilty of their woes: those of us who bought Hondas, Toyotas etc. have injured our great American companies to point they may die. BUY AMERICAN

http://krugman.blogs.nytimes.com/2008/12/08/me-misreported/

"I gather that there’s a report on the wires quoting me as saying that the US auto industry would disappear. What I actually said was that the concentration of the industry around Detroit would disappear."

Use the bail-out money to convert factories and workers to other equipment\skills.

Let the oil industry bail out the auto companies if they need them so bad.

Why not compare apples to apples. Your not mad about the big 3 CEO wages, your mad about ALL CEO wages. They get paid no more or less then other CEO's in simmilar sized companies. Your not mad that they have not been making small cars, your mad that you are not buying small cars. I hear the Ford Fiesta gets great gas milage (65 was it?). You think that its not the business of government to give americian auto companies credit to survive the down turn but its OK for states to give foregin auto companies millions in land and tax brakes for them to locate here. You think its OK that other countries tax imported cars but we shouldnt do the same. The government thinks its OK to give a bank cash so they can feel better and allow them to shut down companies because they determine its not worth their risk anymore and stop leningthose companies money but to give credit to a company directly is out of the question.

Think about it....