Auto Industry Bailout

After several hundred billions of tax payers dollars are approved for handout to giant insurance and banking corporations, auto industry also want a piece of the pie. Big three auto makers appeared before Congress seeking $25 billion in low-interest loans; instead of leaving Washington with a commitment for the bailout loans, the three headed back to Detroit empty-handed in luxury private jet, rebuffed by lawmakers who were upset that the trio flew to the nation's capital in separate private jets to ask for aid. Lawmakers also criticized the CEOs for appearing without a solid plan and for allowing high labor costs that put them at a disadvantage with their Japanese competitors along with million dollars salary and executive compensation.

Democrats also called on the automakers to show how they would ensure that the government would be reimbursed and share in future profits, eliminate dividends and lavish executive pay packages, meet fuel-efficiency standards, and address their health care and pension obligations if they get the federal help.

GM shares closed Friday at $3.06. They have withered since peaking near $94 in 1999 and 2000. GM is considered by many to be in the worst financial shape of the three automakers. GM, which has slashed jobs and closed plants since early in the decade, has warned that it could run low on cash by the end of the year unless it gets a taxpayer-funded rescue from the government. The company spent $6.9 billion more than it took in during the third quarter and has warned that it could reach the minimum amount of money needed to run the business by year-end.





Without a restructured plan plus some major overhauls in the company executive compensation packages and control on overrun legacy costs; measures which restore its competitive edges like fresh product ideas and designs; improved technology to counter changing market condition, these domestic auto makers are destined to lose more market shares if they continue to produce big ugly gas guzzles with outdated technology that sell at cut throat prices which nobody wants in the face of rising fuel costs, failing to anticipate and meet customers demand and expectation , even with billion of taxpayers dollars bailout probably is not going to save them in the long run from the rising competition of foreign car makers.