The top executives of General Motors, Ford, and Chrysler appeared before the Senate Tuesday to plead for a $25 billion lifeline, and they make their case before the House Wednesday. The Big Three automakers say that without a federal “bridge loan,” they could go bankrupt, killing 3 million jobs and hobbling the nation’s economy. GM said it is on track to run out of cash by the end of the year. (AP in Yahoo! Finance)
What the commentators said
“Few companies more deserve failure” than GM, said Michael Gerson in The Washington Post (free subscription required), but no president is going to allow the U.S. auto industry to fail, especially in today’s “fragile economy.” Some argue that bankruptcy might save the Big Three, but let’s get real—“who would buy a car and warranty” from a bankrupt automaker?
That’s why a “managed bankruptcy” makes sense, said Mitt Romney in The New York Times, where the government guarantees the warranties of Detroit automakers. But the Big Three need major restructuring—new management, new technologies, lower labor costs—not a handout. If lawmakers bail them out, “kiss the American automotive industry goodbye.”
In arguing against a bailout, our “critics simply ignore the substantial changes that U.S. auto companies have already made,” said GM Chairman Rick Waggoner in The Wall Street Journal. We have slashed labor and management costs, invested “billions in fuel-efficient vehicles,” and made our cars as reliable as Japanese imports. We’re on the right track, but we—and our beneficiaries in all 50 states—need “short-term government support” for long-term benefits.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- How our botched understanding of 'science' ruins everything
- 43 TV shows to watch in 2014
- 6 things the happiest families all have in common
- 10 things you need to know today: September 19, 2014
- 6 super-helpful iOS8 tricks you probably don't know about
- How Scotland's independence movement lost the vote and still won everything
- Why so many Christians won't back down on gay marriage
- This is what happens when Republicans actually enact their radical agenda
- How our names shape our identity
Subscribe to the Week