Consumer Reports statement on emergency aid for U.S. automakers

Consumer Reports magazine today issued the following statement on Congress' proposed emergency aid for U.S. automakers:

"Consumer Reports has concerns about letting domestic automakers fail. The loss of any major auto manufacturer would leave consumers with fewer choices and the industry with less competition and innovation, particularly at a transitional time when the industry is pursuing alternative energy technology. Moreover, the impact of losing a domestic automaker on the U.S. economy and jobs could be severe. In Consumer Reports testing and surveys, we've seen some progress among the  domestic automakers lately, with improved reliability and performance in certain models. But sustained progress is long overdue.  If the government is going to come to the rescue of the automakers, it shouldn't be a bailout without any strings attached. There need to be strict conditions so taxpayers are protected, and the automakers are held accountable to make the necessary changes to become more economically viable and energy efficient."

See how domestic models fared in our 2008 Car Reliability Survey.

Comments

[melville248]

Thank you Consumers Report. Finally a voice of support for our American Automakers. Opposer's think the failure of these companies would not affect them? Lets hope the loans happen and happen quickly!

[bob]

the big three watched their industry footprint shrink for the last 25 years and did NOTHING about it. the UAW has a strangle hold on the big three. the first one to suffocate will increase the footprint of the remaining two and decrease the strangle hold of the UAW, until there is only one left standing (maybe) and the UAW will be begging for mercy. so be it!

[Phil]

* Aid for U.S. manufacturers hurts domestic manufacturing too -- a great portion of "foreign" mfg. actually is done in the U.S.
* Bankruptcy permits U.S. firms to get reorganized and become competitive ... this will happen sooner or later. Blowing $25b of U.S. taxpayer money in the meanwhile only prolongs the problem
* There is plenty of competition in the auto industry without ANY of the U.S. Automakers
* If the U.S. makes a policy of rescuing companies, we encourage irresponsible mgmt. and risk taking. We would also do this only for large companies ... that's unfair to the small companies, who incidentally make up the larges portion of U.S. jobs and where most of the innovation occurs

I'd bet the same bailout schemes were floated when the horse and buggy manufacturers lost share to automobiles. Thank goodness we didn't support outdated technology and management then ... let's not do it now.

[david]

Where the bail out money and your tax dollars could go? Here are some examples.

- $30 million for Chrysler executives
http://www.lease.ca/chrysler-execs-gain-30-million-bonus-nice-026571.php

- GM - CEO Richard Wagoner 2007 compensation $14 million

- Ford- CEO Alan Mulally 2007 compensation $22 million

Chrysler said that it needs to pay $30 million to keep top talent. What talent?

Let me show you some talent and how much it cost.

Toyota Motors- CEO Horoshi Okuda 2007 compensation $0.9 million (est)

[Andrew]

As embarrassing as it is that consumers saw buying fossil fuel gobblers forever into the future, how can an industry dependant on imported fossil fuel to run its products, global warming and all, be surprised by a shift in the market?
Protectionist walls would be no worse than an open checkbook to a business that can't compete.
Don't forget, the 1st $25B already OK'd is tied to R&D and similar expenditures, never high on the list and certainly not when the ship is sinking. I do think the companies should be reimbursed to the extent they swallowed the Hydrogen solution.

[Herbie]

Don't forget - the 'big 3' have many thousands of retiree pensions to pay out. Most Japanese auto makers didn't really become a major force until the 80's. They have yet to hit the expense of a huge retiree expense.
Besides that, the Japanese government has supported their automotive industry as being good for the future.
Remember when Honda was found guilty of 'dumping' motorcycles on the US? Who do you think was supporting selling Honda (and other) motorcycles at a loss to drive competitors out of business?

[Larry]

If you want to save the American Auto industry, let them go into bankruptcy. The trustees will cancel union contracts, cancel executive compensation packages, sell non-essential assets, and the industry will emerge from bankruptcy as a viable force.

If you want to save the UAW and greedy executives, loan them 25 billion to continue on their downward path.

[shopa]

If the auto companies get taxpayer money they should be required to evaluate fuel efficiency ideas invented by taxpayers.

In the past, they generally refused to consider outside ideas.

Please see my website www.safersmallcars.com

[for#24]

letting D3 go into bakruptcy to void labor contracts is absurd. uaw didn't get D3 into this mess. huge downturn in financial market (ability to obtain loans) contributed mightily to this.
the uaw gave concessions in fall '07 contracts. attempted to help with "legacy" costs. workers compensation only accounts for about 5% of cost of D3 vehicle. inefficient manufacturing processes account for much more. D3's idea of teamwork could be attempt to shift blame on "empowered" workers.
allowing escapism via bankruptcy is violation of what little trust exists between D3 & workers.