So we've been thinking about a potential Detroit bailout for a little while now—trying to figure out how we feel about it. It's really a double-edged sword—a danged if ya do, danged if ya don't kind of thing. We're not big fans of government intervention in a capitalistic free-market economic system. And the U.S. Government itself has not exactly been a beacon of good fiscal stewardship over the past few dozen years. Have you taken a look at the astronomical U.S. national debt lately? (Hint: it's well over 10 trillion dollars, friends. Yes, that's a 10 followed by 12 zeros.) After the Federal Government already stepped in and mopped-up the banking industry mess (to the tune of $700 billion) with money it (read we, the tax paying public) doesn't even have, we can’t help but wonder how the Feds can even think of spending more. But at the same time, how can the government, in all good conscience, let these behemoths of business fail?
Bankruptcy?
Allowing any of the struggling manufacturers to fall into bankruptcy is a risky proposition for the already struggling economy of the United States. Restructuring under Chapter 11 bankruptcy may work, but with its focus on improving the bottom line, that would seem to thwart any investment in technology and quality improvement that the Big Three so desperately need to compete with the "Midas Touch" Japanese manufacturers. Getting "back on their feet" financially won't help much if they are years behind in advanced technology … how long would it be until they're back in the same we-can't-sell-our-cars boat?
On the other hand, a complete shutdown under Chapter 7 bankruptcy is even scarier. The ripple affect of a GM (or a Ford or a Chrysler) shuttering is frightful. It wouldn't stop at the loss of hundreds of thousands of car building jobs. Quite likely, thousands of jobs at parts suppliers (from manufacturers to distributors) would be at risk. Dealerships would cease to exist without their brand to sell, and the mechanics, parts department personnel and sales force would be without work. Entire communities that have been built around the auto industry could conceivably become ghost towns. These extrapolations could go on ad nauseam, but the picture is pretty bleak, even if the drilled-down effects aren't so far reaching or severe.
Late ... But Too Late?
Though the Big Three were slow to step-up to the plan-for-future-fuels plate, they have indeed done so in the last few years and a lot of progressive alternative fuel and hybrid technology is either in place or under development by these companies. Chrysler has its two-mode hybrid and clean diesel drivetrains and has recently begun serious exploration of all-electric vehicles. Ford has clean diesels as well as the Escape Hybrid and Mariner Hybrid (an Escape plug-in hybrid is still under wraps), with an advanced hybrid Fusion and Milan set for 2009 introduction. GM has brought to market a full line of hybrids from Chevrolet, Cadillac, GMC and Saturn, as well as a clean diesel truck line. For the past year or so, they've had 100 hydrogen fuel cell powered Chevy Equinox crossovers out on the streets in public test fleets. And of course the public is well aware of all the fanfare surrounding the Volt, Chevy's promising flex-fuel/electric car.
Good Ideas Just Can't be Left to Perish
It's all of this hard earned technology and development, all of the great now or very-soon-will-be vehicles that would be (for all intents and purposes) lost if any or all of these companies just “up and went out of business.” Yes, other aggressive and progressive car companies (Toyota, Honda, Mercedes-Benz) would carry-on and keep the alternative drivetrains coming—they would continue developing the new technologies that will power our future cars. But can you just imagine driving down the road, a road in Evanston, Illinois, or Norman, Oklahoma, or Victorville, California, and not passing by a single other car that has an American nameplate fastened on the front fender? We can't.
There is no easy answer. But lots of smart, proud American people (supposedly our leaders) need to put their heads together and do what's right (not just what's politically or ideologically correct) for the country and its people. A government loan, doled out in measured amounts, and with conditions on how the money can be spent (on innovation and improvement--not fat executive bonuses) AND ETCHED IN STONE repayment terms is a good basis for getting the ship righted. Now the ball's in your court, ladies and gentlemen of Congress.