I have mixed feelings regarding the purposed bailout of the U.S. big three auto companies. I worked at an automotive supplier for over 18 years and I understand how wide an impact bankruptcy and layoffs could be.
It will extend well beyond those who directly work for one of the auto-manufacturers.
If the big three declare bankruptcy tier-one suppliers will either not get paid or will be paid late or only partially for parts already sold. These tier-one suppliers may have to close their doors, declare bankruptcy themselves or began layoffs as a result of the sudden lack of cash-flow, even if only temporarily. Then there are the tier-two suppliers that provide parts and materials to tier-one suppliers.
These tier two suppliers will be faced with the decisions…closing down, bankruptcy or layoffs. Lucky suppliers will have enough Japanese or European transplant business to see them through but with current car sales being already down twenty to thirty percent the negative impact will still be great.
And so it goes…
On the other hand, I detest granting taxpayer money to companies that show no signs of accepting their onus of the situation they find themselves in. Executives continue collecting huge salaries and enjoying perks while Unions continue to suck the life blood out of the very companies they purpose we save with billions of dollars.
Where’s the sincerity? Where’s the remorse for destroying what at one time was the pride of U.S. manufacturing? Who’s responsible?
Pouring our money into sick and failing companies, no matter how large, without first curing their illnesses (and mismanagement) can only prolong the inevitable.
It does seem Wall Street and the Banking Industry received special treatment. I dare say if it was still pre-election we’d be witnessing a different tack by Congress in its approach to the automotive industry and the large number of industry voters who could be affected.
As they say, timing is everything!