I’m not opposed to helping the Detroit Three. I want to be clear about that.

My fear is that we’re going to just hand over the money, hoping to tide the American companies through the recession. It’s what the U.A.W. is pretty much demanding right now. That’s not going to help anyone. We will still see all the medicare and pension costs anyhow, it’ll just take a few more years to show up. Really, we should probably go ahead and assume those costs anyhow, although scaled back.

As for the union concession, they’re too little, too late. They don’t completely close the gap, and they only take effect through turnover. Moreover, any serious concessions will need to extend to workplace flexibility and modernizing. Ford, for example, has to build its showpiece manufacturing plant in Brazil for fear of the union’s response. And to be fair to the union, management has played ugly, too. Well, if the government is going to get involved, this crap has to stop.

As for the Japanese leaving the U.S., that’s not likely. We’re talking about billions of dollars in investments over decades, as well as hell of a lot of experience in their American employees. I’d want to see more than some unnamed executive leaking in the WSJ.

At any rate, if Toyota leaves, it will hand over a huge advantage in marketing to its other Japanese competitors, along with the Koreans and the Germans. It would also lose a hedge against oil prices driving up shipping rates.

The problem with going to Mexico or other cheaper countries, too, is that you simply don’t have the sort of stable business friendly environment there you do here. In addition to the corruption and endemic theft, there’s a good chance that the next election will see someone like Obrador come to power.

The Japanese and the others have been quite happy with the results they’ve gotten in the U.S. with U.S. workers. They’re not going to kill one of their golden geese, and if we want to save our geese, we’d be better off getting some serious reforms for our money

I’m sure my more affluent brother will object to my bailout, but he has no credibility, because his job was secured by the huge, unsolicited check from the Feds to his bank (which they promptly used to buy another bank).

Although I’m just beginning to cultivate an understanding of conservative principles, I do have some experience with dependence and debt. The two go hand in hand. Asking for help usually puts one in another’s debt. The greater and lengthier is one’s dependence on that help, the greater is the burden of the debt. (Refer to my Discover Card statement.) The corporate executives I work for would gladly take a cash infusion from the Feds to get us through this quarter, even if it meant that my company would be obligated to take orders from the federal government. They would probably do it again next quarter, and so on. Two years from now the decision-makers who “saved my job” by putting my company in the government’s pocket will have moved on with golden parachutes. Will my company be any stronger or my job any more secure? Who knows, but why take any chances today?

Romney’s plan may not be the right one for the American auto industry. Others here have made a good case that it would mean greater government involvement than just writing a check would mean. This isn’t surprising since his past successes in the private and public sectors involved large-scale, coordinated solutions to complex problems. He’s a manager, and he would have the Federal government manage our way out of the economic mess that was created by its previous meddling and neglect (i.e. FNMA/FHFA/CRA, tax breaks for heavy vehicles and ideological trade policy – thank you for your voice PJB).

I am consistently impressed and humbled by the knowledge of both the writers and the posters on this site. (Thank you, Mr Piatak.) That being said, I thought limited federal government was a conservative principle founded on practical historical insights. I’m surprised to hear conservatives on a conservative site dismissing as impractical ideology the principle of limited government and market solutions– aided, of course, by constitutional protection of our nation’s interests against foreign competitors.

Anti-americans sentiment, unless those americans are job creators. They’re a special class now.

‘Letting the auto industry go bankrupt doesn’t mean the auto industry goes away. The Big Three will become leaner and more efficient if only the Government will stay out of it.’

Leaner? It’ll be dead. In normal economic times a company might get bought by a competitor or someone else wanting to enter the market. Right now, no. No one will lend money to someone wishing to keep GM alive.
If government gets out of the way as you say (impossible since they aren’t in anyones way, they’re doing their job) the big three will be leaner. Razor thin actually. Their US footprint will be hard to find. Almost all operations will be moved to Mexico or Canada. Probably Mexico since the government there fits the conservative model perfectly, they’ll do whatever big business says and have little regard at best for it’s citizens.

Under the new UAW contract, which won’t come into effect fully until 2010, the labor differential between the US auto makers and the foreign auto makers operating here will be substantially eliminated. This is a fact largely ignored in the superficial media analysis of this issue, which has largely wallowed in anti-American sentiment instead. In any event, much of that labor cost reflected what are euphemistically called “legacy costs,” meaning Americans whose health care and pensions are being paid by the Big Three. If the Big Three disappear, those legacy costs will be assumed, at least in significant part, by the taxpayers, who will be paying for the health care through Medicare and the pensions through the Pension Benefit Guaranty Corporation. It’s unclear to me why paying taxes to support Medicare and the PBGC is good, but paying taxes to try to keep the Big Three viable, so they can continue paying those benefits themselves, is bad.

As to the foreign automakers who are here, the fact remains that, on average, the Big Three vehicles sold in this country have a domestic content of around 80%, and the imports sold here have a domestic content of around 35%. The Big Three still buy 8o% of the auto parts made in this country, and, unlike their foreign competitors, do the vast bulk of their engineering and research and development here.

Finally, there is reason to doubt how much longer the Japanese will maintain a significant manufacturing presence in this country if their domestic competition vanishes. The major reason foreign car makers have plants in the United States is political, to hedge against the possibility of American protectionism. Once the threat of American protectionism is dead, because the American auto industry is dead, why would foreign car manufactuers keep building plants here, or even keep operating the plants they’ve built? Last summer, the Wall Street Journal quoted an unnamed Toyota executive as saying, “It’s much, much more profitable to produce cars in Japan and ship them all to the U. S. right now, if it wasn’t for the political problems that might cause.” Once there is no possibility of “political problems,” what would restrain Toyota from pulling all its production back to Japan, or shifting it to such low wage countries as Mexico?

Yes, the Wall Street bailout was wrong, and most GOP legislators voted against it–for once doing the right thing, and shame on the leadership. That doesn’t mean we should repeat the same wrong with Detroit. Should we take taxes from people who earn $20/hr to maintain those with $72/hr jobs. Bear in mind that at this moment, some 12,000 workers are sitting around in a U.A.W. “job bank” doing nothing and getting full salary.

Okay, the industry is a national asset, as Mr. Piatak points out. Fine, but that asset is going to shrink in value if we just float a check Detroit’s way. I mean, I don’t see too many Puegot and Renault dealerships around here, and they used to compete in this market. Endless subsidy is no answer.

Too, if Germans feel an obligation to Ford, don’t we have something of an obligation to Honda, Toyota, Nissan and the others who have come here and set up manufacturing in our country? My wife’s car, an Acura, is 75% American. Why should they be punished by having their competitive advantage blunted through subsidies?