Monday, November 24, 2008

How About Just the 'Big 1'?

There is a lot of talk these days about the "Big 3" automakers; as in Ford, General Motors, and Chrysler. Auto manufacturing is a pillar of the U.S. economy, many say. Yet they are undergoing enormous hardships, and are in danger of collapsing, bringing with them the jobs of their employees, suppliers, and thousands of others.

Their problems first started surfacing early in the summer when gas prices skyrocketed to record highs. Apparently when gasoline tops $4 per gallon, consumers decide that they want fuel efficient cars. But the Big 3 have always been primarily about, well, Big Cars. You know, cars that allow you to easily haul your boat and your family of ten kids (plus the family dog) down the road to the lake. Cars that can single-handedly stop C-130 cargo planes as they're landing on the runway. Cars that can tackle and demolish the roughest terrain nature has to offer... if only we as Americans would take these cars outside the confines of the grocery store parking lot.

And so, as gas prices rose, consumers began purchasing cars from the... shall we call them the "Little 3"?... Honda, Nissan, and Toyota.*

Now the troubles of the Big 3 are compounded with the current credit crunch. What few consumers still want to buy the behemoth offerings of GM, Ford and Chrysler cannot get the financing to do so. With few people buying US cars, the manufacturers are fast running out of money, and aren't expected to last through 2009 (with the possible exception of Ford, which could survive through 2010).

So it seems that the two options before us are to try to prop the Big 3 up with a multi-billion-dollar "bail-out" package, or to let them collapse and go bankrupt. Both options have their proponents. Bailing them out would likely save thousands and thousands of jobs, and would give the manufacturers breathing room to weather the current storm, and begin focusing on more palatable (read: more fuel efficient) automobiles. However, bankruptcy itself isn't the end of the world; often it simply allows companies to reorganize under new management and refocus. All of those manufacturing plants won't suddenly just disappear. Plus, there's no guarantee that a bail-out would solve the Big 3's problems anyway.

I see a third option. Call it a "hybrid" option, if you will. Instead of bailing out the Big 3, let's just bail out the "Big 1". Ford, Chrysler and GM can each draw up their proposals about how they would use their share of the bail-out money. How would they turn the company around? How would they save--and better yet, create--jobs? How would they produce more fuel-efficient, environmentally-friendly cars? Whoever has the best proposal gets their share of the bail-out package.

The other Big 2 would be on their own.

That way, the taxpayers would be putting up less money than if they had bailed out all three manufacturers. The other two could begin bankruptcy procedings. Maybe they'd survive just as well as the Big 1, and in the long term all would be rosy. Maybe they wouldn't, in which case the Big 1 would expand, providing jobs for the former employees and suppliers of the Defunct 2.

Or maybe they'd all crash and burn anyway, in which case we'll only have thrown away a third of the money we're currently planning to throw away.

* And Mazda, Kia, Hyundai, etc... Basically, foreign car manufacturers with a strong focus on fuel efficiency.

2 comments:

Anonymous said...

純推一個..................................................

Anonymous said...

無一事而不學,無一時而不學,無一處而不學。........................................