Economic Bailout for the Auto Industry

If GM, Ford, and Chrysler are to survive this economic recession, they need to make a serious decision as to the future of their companies, as well as their workers, and other supporting services that provide parts and other related accessories to the auto industry. 

GM, Ford, and Chrysler also employ a lot of related industries. The Steel industry, Aluminum, sheet metals, plastics, rubber, electrical components, paint industry and glass manufactures, and a whole host of inter-related supporting companies that provide valuable jobs to Americans. 

If these automakers are allowed go under, so do a lot of other hard working folks that are inter-related.  That's one of the reasons why the economy is partially suffering in the real estate and mortgage market. 

Supporting services that were dependant in one form or another on the real estate market, also suffered dramatically, as they were inter-dependant on real estate sales and mortgages that also provided jobs, such as mortgage companies, appraisers, contractors, building material suppliers, escrow, title, and insurance companies, city municipalities, home inspectors, to name a few, but also it affects your local barber, and restaurants, printing companies and a whole host of others, which most people don't understand the complexity of it all.     

What these automakers and Congress need to do is concentrate on, what seems to be everyone's problem, not enough sales to support itself. So what do you do?  You cut expenses.  That's an enviable fact of life. 

 The trade unions have made it virtually difficult to keep these automakers in business. They must realize it may be necessary to make concessions or lose their entire workforce to foreign automakers who can afford to build outside the US and sell here in America.

 Short term loans may pay the bills temporarily, but that can also be a prescription for disaster also.  America needs real solutions to fix the problems.  Stimulus solutions work if they can stimulate growth.  Just giving you a loan to temporary get you over a minor hurdle is not the same as slumping sales, credit problem, recession and poor consumer confidence in the economy.  It's referred as, borrowing from Peter to Pay Paul, eventually, bills will catch up, sooner or later.  Unless you have a workable plan to solve the underlying problem, slumping sales, and consumer confidence, and a lack of credit, will continue to be a plague the industry and eventually will kill the already endangered economy.

Possible solutions to fix the cash flow problem are;

•1.    Reduce the workforce by early buyout for older workers who voluntarily elect to retire, but instead of a golden parachute for cash, trade stock in the company through their 401K in lieu of a golden parachute.  That ultimately would be more than rewarding, especially  with low stock prices and growing future return, as the company grows.  This would reward the retirees for their hard work and sacrifice of an early retirement.

•2     Union Concession may be necessary to allow replacement worker at a reduced wages to start over the next 5 years.  Giving these companies breathing room to survive and grow.                                                                      

 •3     The Federal Government needs to provide a tax credit or deduct the  interest for those buying an American Made vehicle.  This would truly be an incentive to buy American made vehicle, which would help the American workforce, that would truly be a stimulus helping Americans.                    

 4.  Workers who can give management  ideas that can lead to money saving ideas that lead to increase production or real cost savings for the company should be rewarded for their efforts.  Management needs to have workable solutions for the good of their workers and their stock holders. (Employees are stockholders)

5.  Consolidate plants that provide duplicated tasks.

6.  Build a better automobile that prove good value for consumers.

    If the company can't survive, no one survives.  Something to seriously think about.

 Carlos R. Arvizu Sr

theDon1950@aol.com