Should we allow the U.S. automakers to go bankrupt?
I am disturbed by the bail out plan of the automobile industry under consideration. In the past, Washington had supported and granted billions of dollars to the auto industry. Today, there is little hope in the near future for the auto industry to recover. Car manufacturers from both China and India will only exacerbate the problem as those country ramps up their capabilities, making a crowded and competitive markets space worse. With all likelihood, the automakers will be back for another handout in a few years.
There is no seriousness or commitment by the automakers to change. They had approached Washington the first time without any real plan to turn things around. Obama had said he was disappointed at the automakers for approaching Washington without a turnaround plan. This is their second time back and now they come back with a cocktail napkin plan, but it is doubtful that any of the those plans will ever be put into action.
The automakers had many chances to improve and set a course for the future. Environmentalist in the United States had pushed for greener cars for years, but the auto industry had resisted and sabotaged their efforts. U.S. automakers problems are their own product. If U.S. automakers had accepted the environmentalist challenge and led the charge, the Japanese green autos would not the better selling green autos. They have no one to blame but themselves.
Some people argue that we are compelled to save the auto industry, regardless of how distasteful. If we don’t act to save the auto industry, massive layoffs will result and that will only worsen the unemployment and the economic recession. Some also argue that we’ve bailed out banks, why should’t automakers be bailed out as well. I believe the key difference is whether the automakers in their current form are sustainable. For bank bailout, we don’t expect the banks to come back year after year for more money. However, everyone believes that this will be likely case for the automakers. If the automakers are unsustainable then layoffs are inevitable and rise in unemployment are inevitable. We’re simply prolonging the agony.
For national security reasons, it is unwise to allow all of the automakers to go bankrupt. However, we should let the field shrink and support the strongest left standing. It should be noted that by allowing the antiquated automaker to pass; it is possible that a new, better suited companies may rise to take their place. For instance, Tesla motors (www.teslamotors.com) which makes green autos may have better opportunity to enter the market. In effect, we may be damaging the long-term health of the U.S. auto industry by further supporting the Big 3 automakers by preventing more innovative young upstart companies from taking their place.
Please join me by writing a paragraph to your congressman telling them that you do not support the auto bailout. Please click on the link below and choose your state to send an electronic message. It doesn’t matter if you old enough to vote or if you’re not an active voter. It is an IMPORTANT issue and you should let Washington know how you feel!! Thank you.
Click here:
http://www.senate.gov/general/contact_information/senators_cfm.cfm
Also, let me know if you agree or disagree with my remarks.