US Auto industry bailout

Well, I don't like whats happening in our economy today, I think our leader (Bush) is making poor decisions that are going to cause problems in the future, and hinder the growth phase of our economy, when it returns.

The auto industry bailout is a poor idea that should never have been considered by our leaders in the US. The auto companies are in terrible shape because of 1 reason POOR MANAGEMENT. Unfortunately the market (due to this poor economy) is shrinking, this is what happens in recessions, and with a shrinking market you need to shrink your business, this is how the economy works and this is how business management works. If you are having issues shrinking your business to a level that can function in the current economical crises, well then you file chapter 11 in order to restructure your business that will survive in this crises. This is what business is about! You plan for these down cycles and when it is worse then expected, you contract your business to a level that can function.

The worst thing you can do is shoulder the auto industry with America's tax payers money, this is an awful plan. People may lose there jobs, plants may have to close down, union contracts most likely will need to be resolved or restructured. In the end the Risk of a default at a later date, on the tab of the working American citizen is unacceptable, I applaud our senators who let the original bailout bill fall apart. Now hopefully, our spend happy president is smart and leaves the original financial bailout package alone to be used in the manner that is most important... Getting liquidity and cash into the system, to the corporations (banks, financials) that is what it was intended to to do.

Think about things, if you give GM $15 billion to continue their operations currently (which obviously is not working), GM has a running cost of about $2billion dollars(http://www.npr.org/templates/story/story.php?storyId=96844977) a month. With demand for cars globally expected to fall through 2009 and possibly 2010. That means even with a taxpayer bailout of the company they will need more!! So the eventuality is a restructuring of the company. This short term bailout is a shot in the dark, with the unions, and the companies executives supporting hoping for a miracle turnaround, which is unlikely.

I am an American citizen, with a background in investments, and this is a bad investment I don't want our country to make. When you are relying on a miracle to make your investment turn out positive in the short term with no long term benefit apparent your out of your mind. I would rather see the money go to a program for the folks that ARE going to lose there jobs, funding education, secondary schools, unemployment and other programs. This as well does not have a short term return, but it has a more promising long term effect overall.

Here is a great article on why the original bailout failed in the Senate... Thank you senator Coburn (R-TENN) http://www.cnsnews.com/public/content/article.aspx?RsrcID=40775

“As far as the failure of last night, it solely lies on UAW,” Coburn told CNSNews.com. “All we asked was, ‘Just give us a date at which you will have competitive wage rates. We will put it in and that’s what you will have to meet.’ They would not move. They would not renegotiate their contract with GM as far as wage rates.”