The auto industry in the US has been suffering great losses in the last couple of years - more than 40,000 jobs in the auto industry have been shed and nobody seems to be buying American models. As a result, the Big Three auto industries asked the federal government last year to intervene (to some degree) and provide emergency loans; the government agreed to help. However, now that GM and Chrysler are asking for a new investment of tax dollars, Obama is not being as lenient.
As a condition for this federal investment, Obama asked both GM and Chysler to come up with plans to restructure their industries and make their models more competitive. However, in his speech (given yesterday; here is the link: http://latimesblogs.latimes.com/washington/2009/03/obama-to-detroi.html), Obama declared that he would not fully accept the plans as they are. He has given GM two additional months to come up with a better restructuring plan, and has given Chrysler one month to make a deal with FIAT. Do you guys think that Obama should have rejected the auto industries' plans, potentially hurting their businesses? And is the time limit for GM and Chrysler adequate (aka is it too short?).
Personally, I feel that Obama did the right thing by rejecting the plans. America's auto industries are really not very competitive compared to other countries'. Nobody wants to buy our cars because they are, plain and simple, gas-guzzlers and not affordable. I really like this quote: "The government is telling GM to be like Toyota" (for a link to the blog where I found it: http://www.usnews.com/articles/opinion/2009/03/30/bloggers-react-to-obamas-plan-for-gm-rick-wagoner-and-afghanistan.html). It really makes sense because Toyota represents everythign that GM and Chrysler need to become in order to survive this economic crisis. American car manufacturers have to come up with better models that use less gas and have better mileage or else suffer the consequences.
3 comments:
All I can say is that watching Obama both criticizing the two U.S. automakers but yet assuring consumers that purchases from them are guaranteed at the same time was weird. A bonus if you trade in old cars for a hybrid? A federal guarantee behind every warranty? Obama has turned into Mr. Goodwrench.
Who knows when or what I'll be doing when I start driving, but I've got a feeling that my first car would be a Toyota. Unless I can get my hands on one of those Tesla things. Hey, there's an idea, how about a government program to help Tesla make their automobiles affordable! After all, they're not flat-out-sucking the way GM and Chrysler are...
I feel that what Obama did was very reasonable. If the government continues to bail out big buisness, it creates less incentive to stay competitive. They can continue their bad buisness practices and the government will bail them out. So by Obama insisting that these automakers become more competitive, he is preventing that from happening. He is fixing the immediate problem while also preventing future crises.
I also think that this was a great move, 2 months seems just right to say "Ok, here's another chance, but I'm not screwing around." Personally I think the government has been way to forgiving with auto companies especially, namely the whole "reduce emissions by blah before blah" (don't really know the exact numbers) but I do know that they've changed a lot. It's really annoying because these guys just come off as lazy.
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