Opinion

Another bailout? Should we or should we not?

Daniel Medina

Daniel Medina

Less than 60 days after Congress passed the historic 700 billion dollar bailout package to aid the failing financial sector, the nations’ three largest automakers last week strolled to Washington for their own piece of the pie. The CEOs of GM, Ford, and Chrysler boarded their private jets only to literally beg the Senate to hear their pleas for funding upwards of $25 billion or bankruptcy was inevitable.

After decades of refusing to innovate in new technology for fuel-efficient cars and laying hold to powerful labor unions, the American auto industry’s collapse is long overdue and if Congress grants them this bailout, it will be destroyed indefinitely in the long run.

The argument that has been presented by both these companies and by leading economists is that if these companies are denied the funds and are forced to file bankruptcy, up to 3 million jobs will be lost – possibly devastating the Midwest and the already anemic economy.

Thus, given the evidence on both sides, the question still lingers: Should we or should we not grant them this bailout?

I, personally, feel that a bailout will only delay the inevitable and give Detroit another chance to continue with the status quo – massive burdens placed on them by the labor unions, continued product inferiority and more job losses – all a result of failed management. As I see it, the harsh reality is that regardless of whether or not Detroit receives this bailout or not, jobs will be lost because the automakers are, simply, too broke to sustain the salaries of their employees.

Bankruptcy will force the “Big Three” to restructure themselves in a manner they have not needed to do for 50 years. It will force them to recruit new management, balance their debt sheets, and invest in innovation for “green” technology – the future of the auto industry given the instability in the global petrol market.

Most importantly, it will give them the opportunity to once and for all break away from the labor unions that have controlled them for far too long. I am not saying that the labor unions should be terminated; however, there must be a healthy medium between guaranteeing employees their rights without having to meet hefty unreasonable wage demands. As a result, they could finally reduce the price of their cars, which are currently $2,000 more than any other major competitors, on average.

Congress has granted Detroit until early December to present a more formidable plan proving that the funds would save the industry from disrepair. Nonetheless, with the infamous financial bailout still fresh in the minds of the American people, the Democratic-controlled majority will find it hard to justify another “rescue” package.

The “Big Three” used to be the face of American industrialism because they produced quality cars at low prices and at an unprecedented rate. It is in our national interest to allow them to stay afloat, but we must do so in a responsible manner.

As Mitt Romney, whose father George Romney saved GM in the 1950s from economic collapse, stated in his New York Times op-ed column last week, “Detroit needs a turnaround, not a check.”

November 23, 2008

Reporters

Daniel Medina

Contributing Columnist


ONE COMMENT ON THIS POST To “Another bailout? Should we or should we not?”

Around the Web
  • Miami Herald
  • UM News
  • HurricaneSports

Hurricanes fans, get out your pencils, calendars and a list of your favorite hotels. The Atlantic Co ...

Three former Miami Hurricanes — defensive lineman Chad Thomas, offensive lineman KC McDermott and de ...

In all technicality, the Orange Bowl is a postseason, neutral-site bowl game that includes a top tea ...

When it comes to recruiting, the scariest sentence for Miami Hurricanes fans is this one: Nesta Silv ...

This time, there was no miracle Miami win over Duke. The fifth-ranked Blue Devils rallied from a 13- ...

As artificial Intelligence takes hold, tech visionary David Kenny stresses keeping human values in t ...

UM’s First Black Graduates Project committee visits an iconic D.C. museum for inspiration to create ...

The Beaux Arts Festival of Art debuts at a new site with picture-perfect weather and a panoply of or ...

Dr. Martin Luther King Jr.’s vision for a “Beloved Community” has inspired a number of University of ...

UM launches three cyber security certificate programs to equip professionals for the growing employm ...

The University of Miami released its 2018 football schedule Wednesday, highlighted by a nationally t ...

Notes from Miami's 2018 Football schedule. ...

Freshman jumper Hasani Knight was named ACC Men's Field Performer of the Week. ...

MIami volleyball signee Chloe Brown was named the 2017-18 Gatorade Oregon Volleyball Player of the Y ...

The University of Miami women's basketball team will play the first of two home games in a 31-d ...

TMH Twitter Feed
About TMH

The Miami Hurricane is the student newspaper of the University of Miami in Coral Gables, Fla. The newspaper is edited and produced by undergraduate students at UM and is published weekly in print on Tuesdays during the regular academic year.