Saturday, November 22, 2008

automakers need bailout and restructure

G.M. Pins Hopes on a Plug-In Car, 2 Years Off

DETROIT — The Chevrolet Volt, a plug-in hybrid, will not arrive in showrooms until late 2010. But it is already straining under the weight of an entire company.
Executives at General Motors, the largest and apparently the most imperiled of the three American car companies, are using the Volt as the centerpiece of their case to a skeptical Congress that their business plan for a turnaround is strong, and that a federal bailout would be a good investment in G.M.’s future

Congress should force both labor and management to come together and offer a plan that would make the Detroit car industry viable in a free market. This will certainly involve shedding worker benefits that aren't standard in the industry anymore, as well as restructuring executive perks and compensation. In addition, they must think about the future in different terms. This may mean forcing new managment because some people's perspective is just too old fashioned to prosper in a modern world. The Congress should demand real change or let the companies fail. They then can help a new industry rise up through bankruptcy or some other process.

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