I had a thought about the requested $25 billion that the 'BIG 3' are looking for from the U.S. government.

Normally, I probably would be against such a bailout plan because these guys have wasted billions through mismanagement and lack of foresight.

I have an idea where that $25 billion (maybe $50 billion) might be a solution to two problems. There is no doubt that the BIG 3 need more time just to get through this economical disaster we're in and also to successfully come up with an alternative energy vehicle( s) that they/we seem to be hanging our future on.

Why not invest $25 billion in the BIG 3 but only if they are willing to consolidate their efforts together to go full steam ahead to get to the point where they can manufacture an electric vehicle such as the VOLT concept. This would probably mean creating a 'new' company (possibly non-unionized but that is a separate debate) where the three companies would be joint shareholders with the federal gov't being the oversight. It means bringing their development skills, technology thus far and staff of engineers, assembly workers, management together to push this joint project forward. GM, alone, currently has plans to build a new $349 million plant for the Chevy Volt in Michigan and who knows what Ford and Chrysler may have planned for that too.

I would recommend that they initially build or convert one big plant as a joint effort in order to get this electric vehicle kick-started. As some of you may know, the planned VOLT is primarily an electric vehicle but has a small gasoline engine for supplementary battery recharging when those batteries reach a certain level of discharge. It is estimated that the vehicle will have a range of 50 miles before this recharging is necessary and over-all the vehicle should average about 150 miles per gallon.

The vehicles would be sold throughout the existing GM, Ford or Chrysler dealerships and this joint manufacturing effort must be set-up to bring the vehicle volume to the masses and must make a profit for the auto industry.

Look at what the alternatives are: GM, this morning says that if they don't get a bailout, they will likely have to declare bankruptcy by the end of year. They must have million/billions of dollars going from their general operating fund into alternative energy engineering development. That money could be used to keep them afloat until such time as they are making a vehicle that will help put themselves into the black and will also speed up the process of getting North America off their "addiction to oil".

One major drawback of the current 'bail-out' proposal is simply that...............it is perceived as a 'bail-out' to an industry that has paid its workers too much over the years and not been able to compete with the import manufacturers. If the gov't took a different approach and said, we are investing strongly in these companies to solve the energy/environmental problems we have with fossil fuels, it would be perceived differently.

At some point in the future, decisions will have to be made to how the three companies will produce these vehicles independently but the priority now is to make sure that the BIG 3 survive and that we have an alternative energy vehicle available as quickly as possible.

WHAT DO YOU GUYS THINK?

 

One of my biggest issues with this bailout, is that the UAW is unwilling to compromise on its wage position. This is what is sinking the 'Big 3', Toyota pays roughly $47/hour including benefits and the 'Big 3' pay roughly $71/hour including benefits. The UAW is unwilling to compromise and takes the 'why should i?' stance on all issues.

My biggest issue with them taking this stance is that one of the areas that would be sacrificed and reduced would be the retirement plans for some 700,000 already retired auto workers. Understandable, hard working Americans deserve their retirement. However, if the UAW does not compromise and the bailout falls through for the 'Big 3' then, if bankruptcy comes upon the companies, the retirement plans for everyone will be WIPED OUT. That means that instead of reducing their retirement plans to avert an economical disaster of catastrophic proportions, they are going to create an even larger economic disaster.

I think the UAW officials need to take off their blinders and do something for the good of the whole rather than for their own good, for once.


My $.02

 

Zahanma, I completely agree with you; that is why I mentioned in my post that it may be necessary to create a 'non-unionized' company as part of the bail-out solution. With or without the union cooperation, one way or another, a solution needs to be found.

In Canada, the GM pension is way underfunded but by how much, GM refuses to disclose that. That is an aspect of the auto industry financial troubles that many people fail to think about.

Your .02cents worth brings up a very good point.

 

My only issues with a plan like this would be:
Then the government aka: us, are telling a company what to build
or else.
Socialized car manufacturing..........though, on the other hand, if we bail them out with no provisions at all then we are indeed socializing car manufacturing.
Then we (they) would have to convince Joe Farmer down the block (well, at least for me here in Sticksville) that his massive Detroit Chrome Mountain, also known as a truck, isn't something he can easily buy any longer because the Big 3 are being forced to spend the majority of their funds on an alternative fueled vehicle.
Detroit, et al, needs to build vehicles for the times that are before us & that certainly means they better get on the horse of 'alternative' cars but I'm not so sure that mandating it is the way to go.
IMHO.........
It's a good thought, though.

 

I agree with you to a certain point; if the government concedes to THEIR request, then it should be the government that provides the guidelines for the money given/loaned.
It doesn't mean eliminating production of the current vehicles..........there probably will always be a need for a gasoliine/diesel powered truck or sports car but the migration from the common gasoline powered vehicle will be a gradual progression.

The solution, so-called bailout would not be forced on the automakers but hopefully something that they would take hold of and run with to everyone's benefit. I just think that if they put their resources together on this project, instead of competing against each other, they will be much more successful in getting to that goal of surviving the economical disaster they are in and come up with a viable alternative energy vehicle that the market needs.

These days, GM, Ford and Chrysler have enough competition without having to compete against themselves.