Auto bailout: Showdown Should Congress bail out the Big Three? Here's what lawmakers are considering and what's at stake.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: November 17, 2008: 7:54 AM ET
This week, Congress will consider whether to cough up billions of dollars to bail out the troubled companies.
There are loud advocates with strong arguments on both sides.
Proponents of a bailout say that the industry is a victim of the global financial crisis. Wall Street has been bailed out, so why not Detroit?
They say millions of jobs could be lost and more than $100 billion in wages sliced out of an already-fragile U.S. economy.
"It would be a travesty for the irresponsible, reckless behavior of Wall Street to result in the sweeping away of the American automobile industry," said Mike Jackson, CEO of Autonation, the nation's largest auto dealership group. "If indeed it came to bankruptcy, it's going to make what happened with Lehman Brothers and all the consequences of that a nice day."
On the other side are those who feel just as strongly that the automakers' problems are their own doing, born of bad business decisions, uncompetitive labor agreements and vehicles that Americans have decided are second-rate.
They say a bailout will only postpone the inevitable, and that the failure of one or more of the companies is necessary if the economy is to work properly.
"The Big Three's financial straits are not the product of our current economic downturn, but instead are the legacy of the uncompetitive structure of their manufacturing and labor force," said Sen. Richard Shelby, R-Ala., the ranking member of the Senate Banking Committee. "I do not support the use of U.S taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers."
Indeed, opposition to a bailout is widespread. GM and the other Detroit automakers are trying to win support from an American public that has largely turned their back on them. Sales by the U.S. companies account for only 47% of domestic sales this year, according to sales tracker Autodata. http://money.cnn.com/2008/11/17/news/companies/gm_showdown/