The big U.S. automakers are desperate to stay in business. While Toyota and Honda have seen similar sharp losses in the form of 30 to 40 percent drops in vehicle sales, the U.S. automakers -- GM, Ford, and Chrysler -- have been hit the hardest. Their executives realize the need to restructure and have announced large changes, including cutting their own salaries and compensation to $1/year. GM and Ford are also selling their private jets, a source of much criticism.
All three automakers are looking for money from the government to stay in business. In fact, GM says that it will run out of money before the end of the year, so the bailout money is needed right now.
One major obstacle to a bailout plan passing Congress is public antipathy to an automaker bailout. A recent CNN/Opinion Research Corp. survey indicates 61 percent opposed the bailout, while only 36 percent support it. CNN Polling Director Keating Holland says one key reason is because people don't believe an automotive bailout would help them. According to Holland, "Only 15 percent say that they would be immediately affected if the auto companies went bankrupt. Seven in 10 say that a bailout would be unfair to American taxpayers."
The public opinion marks a shift since November, when over half of those polled supported an auto bailout plan. In total 70 percent of Republicans oppose the bailout, with 62 percent of independents and 55 percent of Democrats also opposed. Many of those surveyed cite the automotive CEOs use of private jets as a major reason they changed their mind.
Aides to Senate Majority Leader Harry Reid are already saying that he doesn't think he has the votes needed to pass a bailout. However, GM and the other two automakers are going their best to convince Congress to save the industry from collapse.
quote: Free market made them build big SUVs and big trucks... guess what... those are the same cars now killing their bottom line. Not CAFE standards.
quote: The government represents consumers, acting as a proxy for their demands,
quote: American car companies pushed these things down the public's throat so they could make two and three times the profit margins
quote: The real issue is the same issue Nader fought against in the 60s. The car industry is willing to build and sell a car that puts people at risk to make more money. Case and point, Sports Utility Vehicles. These behemoths are not only an inefficient blight on our nation's energy resources but a huge risk to everyone else on the road, either by making it impossible to see around their height or their inherent dangers from increased weight, causing more road/tire wear, maintenance issues rarely brought up to consumers and more deadly car crashes.
quote: American car companies pushed these things down the public's throat so they could make two and three times the profit margins.
quote: In New Jersey, the supermarket faced criticism by the United Food and Commercial Workers for not being unionized. About 4 percent of Wegmans employees are in a labor union, according to a union estimate.But Wegmans has long countered that it puts employees first, a claim that may have contributed to Wegmans' position at No. 2 on Fortune Magazine's list of 100 Best Companies to Work For.
quote: Normally I'm the first guy to say if a company can't turn a profit that's their problem. But in the case of the American auto industry, a lot of the overhead they have to carry was put there by the government and unions. Not their own business decisions. If the US government let the auto industry build cars that people wanted instead of what they decided was best for us (yes, I'm talking to you Ralph Nader) they might not be in this mess.
quote: What also about the retiree's of GM who hold GM bonds, along with other people who hold these bonds. Hint: They aren't very wealthy.
quote: Let the market sort it out. Maybe if one fails fast enough, the increase in demand at the others will help them get through this.
quote: Failure is not an option here.
quote: Yet they will most likely find a way to fail again anyway. Face it, they don't know how to run a business anywhere except into the dirt.
quote: Unlike GM, Toyota, Honda, Nissan, etc, don't pay their laid off employees to twiddle their fingers either.
quote: You are right, I did not look at the plan they submitted to Congress.
quote: People aren't buying GM vehicles now, their sales have been dropping steadily, the credit crisis made the matter worse certainly.
quote: As far as the warranty issue goes, there are plenty of places where you'll be able to take your GM vehicle for repair work.
quote: Because there are GM vehicles on the road, there is a market for their parts and products. They'll be fine.
quote: Chapter 11 is the right move for GM. My tax dollars should not go to prop up flawed business tactics.
quote: But would you as a supplier now accept net 90 terms from a company that does not have a legal obligation to pay in that 90 day term.
quote: IT'S NOT A BAILOUT!!
quote: IT'S NOT A BAILOUT!! I'm getting very tired of everyone calling this a bailout. Wall Street got a bailout. Hundreds of billions just handed over with no oversight, no terms of repayment. The auto companies are asking for a LOAN that will be repaid with interest, just like Chrysler did in the 1980's. And the amount of money requested is less than 5% of the money Wall Street received. Why does everyone have their panties in a bunch over this? Ksherman you have the right attitude at least. Word.