It seems to me that if the Big 3 car makers in Detroit can't compete and turn a profit, they should either (1) roll over and die or (2) do what they should have done a long time ago: get rid of the unions that saddled them with the obscene retirement plan that is why they are drying up and the reason they can't compete. If they can't or won't do that, they deserve to collapse under the weight of it like any other company.

Good article! Thanks for the link!

Will someone explain to me why the car makers deserve a bailout? I kind of got it with the mortgage lenders, but how are car companies related? Is it because our cars aren't as good as imports?

Sure. First you have to be a BIG corporation who can't manage its affairs or money. Then you have to allow a union to extort you into agreeing to insane health and pension benefits for all your retired workers. Then when you see the economy in trouble and bailouts being passed around, you get in line. You know it's piling on, but you know the government doesn't want another big collapse while it's trying to shore up the economy. Timing is everything.

Only you and me can't get one cause have to pay for the BIG companies who do.

"Is it because our cars aren't as good as imports?" - Karen

No, our cars are as good as Detroit can make them. Their problem lies in not having the money to properly retool. Why? Because they have allowed their union to extort a retirement benefits package that no company can indefinitely support. It isn't just that they pay more per hour to the workers. The real burden is the pension and health plan. It provides not only a fat retirement but a golden health plan for retirees (which number 3 TIMES MORE THAN CURRENT WORKERS!) That adds as obscene cost that is about to bury the companies, more than $30,000 PER YEAR PER CURRENT ACTIVE EMPLOYEE! That means that while Japanese car makers spend around $27/hr on their U.S. workers (including $0 on retired U.S. workers), American car companies spend 3 times that, around $78/hr (including pension and health benefits for retired workers). No wonder they can't compete!!

How will a bailout help? It won't in the long run because the unions won't agree to undo the current "plan" that is the whole problem. It will continue to grow and grow. A bailout is a bandaid. It will keep them alive for a while longer until the current pension/health plan drags them under again.

In essence, taxpayers are being asked to subsidize the golden retirement plan without changing it and without requiring that the union contracts be renegotiated from scratch.

Who benefits? The union, of course, and the retired auto workers, and the current auto workers who want the sweet retirement deal when it is their turn. Taxpayers? We lose again. Another version of mandatory spreading the wealth.

Thanks!! So we are paying the retirement benefits for the retired auto workers? I don't want to do that!! And unless the unions and auto companies agree to do away with that retirement plan, I don't think they should get a bailout or we'll just have to do it again down the road only worse!!

I think the car companies are smart to move off shore so they don't have to deal with the unions. I don't like that they have to, but what choice do they have? They will get us to bail out the retired workers, then lay off the current ones and move to Mexico. What a great system. And people think they are bad for going off shore when they are just trying to survive. It is time to get rid of unions. But if I was an auto worker, I would want that to happen AFTER I got mine.

Interesting banter but if we let the auto industry collapse, we will have too many people without jobs or pensions plus we would all have to drive Japanese cars. That would be worse than everybody having to pony up some $$ to save a whole industry.

What sickens me is that despite nearly 70% of Americans against giving Detroit auto makers a bailout, it isn't whether Congress will give it to them or not, it's when. And the whole charade of hearings telling the heads of these giant but stupid companies to give up their corporate jets and take pay cuts, like that's going to make it all right, makes me gag.

We can argue over where to place the blame for the Detroit Three failing for the next ten years and we still won't be hitting the core issue: should we allow the domestic manufacturing base in this country to disappear?

GM plants built the machines that allowed the "greatest generation" to defeat the Nazi's, and American domestic plants built the machines that helped us out-produce the Soviet Union during the cold war. When the Chinese come knocking on our door (they will) and all of our machinery and goods are being built there, what are we going to do? They could just cut us off. It's the same idea as developing domestic energy. We can't rely entirely on other nation-states.

A very good statement from Kotter. He remembers when we could make things here in America.

Detroit is asking for a HAND, not a HANDOUT. The same can't be said for Wall Street.