Should The Big 3 Be Rescued?

The current state of the economy has left the US automotive industry in dire straits and the Big 3 have been crying out for help from the U.S. government to the tune 25 billion of American taxpayers' dollars. Eric Reguly from Globe and Mail [via Paultan.org] argues that GM, Ford & Chrysler should be left to crumble and then rebuilt on their own efforts.

In his article, Eric points out that the root of their problems stemmed from general laziness and mismanagement from the automakers, hence the reason they should not receive any funding aids at all. He also points out that they have already been exploiting the U.S. government for decades through CAFE - the Corporate Average Fuel Economy standard. In exploiting the CAFE, the Big 3 have been able to use the CAFE loopholes to sell massive cars at extravagant prices without having to be accountable or responsible, in a manner that other European and Japanese manufacturers without federal help had to achieve by creating essentially better cars in terms of quality & fuel economy, amongst others.

Now that petrol prices have risen substantially and sales figures of these gas-guzzlers have plummeted in favour of better cars by their competitors, the Big 3 are once again going back to the government for rescue, which is something they already expect. However, since automakers around the globe are also facing similar issues, would it mean that every manufacturer should receive some from of financial aid or subsidy from their respective governments?

I definitely agree with Eric when he says that the Big 3 have fallen into this pit due to their own actions. I strongly agree that the Big 3 are lazy and as a result they should have to overcome this situation on their own. How much longer can GM continue to pull the wool over their customers' eyes by introducing "new and improved" models which are actually just rebadged models to begin with, i.e. the Chevrolet Lacetti made famous by Top Gear UK in the Star In A Reasonably Priced Car segment is in fact a rebadged Korean Daewoo model. Similarly, the most recent Pontiac GTO model is in fact just a rebadged Australian Holden.

The respective CEOs from GM, Ford and Chrysler will be meeting with Congress again tomorrow with to elaborate on the plans they submitted detailing how each manufacturer will be using their cut of the financial aid, alongside the president of the United Auto Workers (UAW) Ron Gettelfinger. The UAW is also planning to contribute by possibly eliminating the Jobs Bank, which is a highly controversial program that allows laid off workers to receive up to 95% of their basic salary. Once again, this only seems to demonstrate the level of laziness that the American auto industry in shrouded in.

We can now only wait to see how Wagoner, Mullaly & Nardelli will present their detailed plans to Congress. Rest assured though, that after the personal jet fiasco of last time, all 3 CEOs will be driving to D.C. this time around.

Have a look at the plans submitted by GM, Ford & Chrysler and have your say in the comments.

[Source: Globe and Mail, Automotive News, Paultan.org, Autoblog, press releases]