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As General Motors and UAW workers rallied for survival at their Fort Wayne GM plant and Big 3 executives pled for a government bailout, U.S. Sen. Evan Bayh said on Fox News, “I’m actually not in favor of what you would call a bailout. That suggests just giving someone money with no conditions. I think if this is going to work, it has to be structured similarly — in a similar way to efforts in the past, and that is, all the stakeholders — management, shareholders, labor — all coming to the table and letting us know what kind of sacrifices they’re willing to make to make this work in the long run so that the industry is, on a permanent basis, put in a more competitive position. So, that would be the condition that I would have for taking this step — again, not just for the auto industry, but because it would be good for the American economy, and in the long run, for the American taxpayer.” Asked if Chapter 11 bankruptcy wouldn’t allow the same thing, Bayh said, “Well, that is a possibility. But the auto industry may be a little bit different than some other retailers or the airline industry — some others that have gone through bankruptcy organization. The reason for that is that an automobile purchase is so significant for the average family — $20,000, $30,000, $40,000, sometimes even more dollars. And the warranties run over a period of time that — some surveys of consumer sentiment suggest that up to 80 percent of potential car buyers would not buy from a company that was in bankruptcy because they would not be confident that, that company would survive and be there to honor their commitments as a purchaser of a major item, like an automobile. So, you might actually be self defeating by forcing them to go through the bankruptcy process.” Asked how long a $25 billion loan might last, Bayh responded, “Well, only long enough to be successful.” A vote in the Senate could come as early as today. U.S. Sen. Richard Lugar is “skeptical” a bailout would work. Meanwhile, former Massashussetts Gov. Mitt Romney said in a New York Times op-ed today, “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed. Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.” Bayh is shown here at the Allison Transmission plant in Speedway. (HPI Photo by Brian A. Howey)
Tags: Evan Bayh, Mitt Romney, Richard Lugar
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This entry was written by and posted on November 19, 2008 at 9:13 am and filed under HPI Weekly. Bookmark the permalink. Follow any comments here with the RSS feed for this post.
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