Should We Bail Out the Car Industry?

by Christine Sine

Is bailing out the automobile industry really the right thing to do?  I know there are thousands if not millions of people whose livelihoods are tied to the industry but are we just setting ourselves up for a worse mess in a few years time?  Here is a thought provoking article by the New York Times foreign affairs columnist and Pulitzer Prize winner, Thomas Friedman

someone in the mobility business in Denmark and Tel Aviv is already developing a real-world alternative to Detroit’s business model. I don’t know if this alternative to gasoline-powered cars will work, but I do know that it can be done — and Detroit isn’t doing it. And therefore it will be done, and eventually, I bet, it will be done profitably. And when it is, our bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay.

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David December 13, 2008 - 4:50 pm

Why not get the government to back hybrid technology, like Toyota did? http://is.gd/bdgG

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Maria December 15, 2008 - 3:06 am

I’m inclined to agree with the quote… until I look at my in-laws, living on a not-overly-generous pension from a GM subsidiary (Dad in law took an early disability retirement 20 plus years ago). Letting the auto companies face the consequences of years of refusing to get on board with new technology, etc. sounds like a good idea until you consider the families who will bear the pain of that decision… No wonder they call economics the dismal science! There are no easy answers, and the way forward will probably demand a lot from more of us than we expect.

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Christine Sine December 15, 2008 - 4:11 pm

Maria,
I agree this is the dilemma. However I do think that there should be a way of bailing out the auto industry so that those who are dependent on it for their livelihood and retirement are not penalized while at the same time developing solutions that move the industry into the future not keep it stuck in the past. I don’t know what those solutions are but if the same old things are being talked about then the industry will never develop long term solutions and the bailout will only work for a short time.

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