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A dreadful outcome for Detroit

December 12, 2008

Detroit Free Press

“I dread looking at Wall Street,” U.S. Sen. Harry Reid said late Thursday night as he announced that the Senate could not reach agreement on a rescue plan for the auto industry.

That may be nothing compared to the dread with which everyone in Michigan will be looking at each other today.

Do General Motors and Chrysler have a Plan B? Can Ford really hang on, particularly if one or both of the others go into bankruptcy?

Michigan knows the pain of hard times in the auto industry: the related businesses that go under, the stores and restaurants that die, the crushing load on the state budget, the families who abandon their homes and leave the state. It is incredible that anyone, even senators from Southern states that are home to the assembly lines of foreign car producers, could want to watch these hard times turn so much harder for so many people because of a domestic auto industry implosion.

The final sticking point apparently was when — not whether — UAW workers would have the same wages for as the foreign automakers pay. That will seem like an incredibly minor dispute in the face of an industry collapse, and — in many people’s eyes — an anchor to hang around organized labor for the rest of recorded history.

Perhaps it won’t come to that. Treasury Secretary Henry Paulson could still devise a plan to extract short-term auto industry loans from the $700 billion bailout bill designed for the financial businesses. There may be other options that have not yet been proposed to tide the industry over until a new administration arrives. The Detroit companies may be able to limp along.

But none of that will temper the fear rising today in Detroit, throughout Michigan and in the many other areas where the domestic auto industry is the economic mainstay.

The Senate rejection appears rooted in the extraordinary assumptions that Congress can by legislation act as a bankruptcy judge or design the perfect car — so sexy, emission-free and cheap that every American will want one. Yet the final bill negotiated by the White House was, in fact, very much a form of bankruptcy lite. It would have caused plenty of pain here, if that was what Detroit’s opponents were really seeking.

Job loss numbers have grown substantially since the automakers first went to Washington looking for help. But far worse apparently is to come.

“Don’t 2.5 million people … deserve three months?” Michigan’s Sen. Debbie Stabenow asked Thursday night in a last-minute plea for a vote.

Tragically, the answer was no.

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One comment

  1. Let them burn!!! Is it the tax payers fault The big three can’t effectively manage their companies in a down market? Who didn’t see this thing coming? I say it again let them burn!! Most cars purchased in usa are made in the us, The numbers sold won’t change who cares what Companies name is on the trunk as long as it’s made by Americans!!! Those who stand to lose are the only onlys who will benefit from the bailout



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