The Answer to Detroit's Problem is Multiple Choice

This is government! What does logic have to do with it? The real answer is #3--an unlimited amount of our money down the drain, in installments. Always just "a few billions more and we will get there". I wonder how many will join me in never again buying a vehicle from a company that extorts my tax money from me. I am kind of assuming (without any justification) that we won't also bail out foreign manufacturers so that I have something left to buy.

There may be another answer if there is time. Part of the problem with GM and Chrysler is that they have a very limited view of themselves. They only build various flavors of buggy whips, if you will. If I digress for a moment: Boeing, for example, is thought of primarily in terms of commercial aircraft, but in reality that is only one of the many things they do and have done in the past. Did you know Boeing once built boats, potato farmed, and managed the strategic petroleum reserve? Boeings primary expertise is not what you think. It is "Large Scale Systems Integration". Quite a lot can fit under that umbrella. GM and Chrysler need to expand their minds and think about what other areas of core expertise they have that they are not currently exploiting. They may surprise themselves and everyone else. Alan Mullaly is.

Good points Brian. Of course, there was very little mention during any of the congressional hearings of the real causes of the current problem: the credit crunch brought on by unwise lending practices that were absolutely ENCOURAGED by government and quasi-government agencies. Also not heard were any offers to ease the regulatory burdens on any of these companies that could help them in the short run. Just the opposite. They still have to meet stiff safety and emissions standards that keep some neat European models off our streets. They still have to meet DIFFERENT emissions standards at the whims of state Air Resources Boards when a national standard, even if tougher, makes it much more economical to meet. They still have to react to 50 different states' franchising laws, meaning closing, say Saturn or Chrysler would eat up tons of valuable cash. I'm not absolving the Detroit 3 of all wrong doing. Agreeing to silly benefits packages like the Jobs Banks and SUB because you didn't want to take a strike was bad long term planning. Not pouring some of that SUV driven profit into decent small cars when you had the chance also wasn't a smart play. I LOVE the ZR1 Corvette, the Shelby GT 500 and the new Challenger....but shouldn't we have put that money into an earlier Cruze, a sturdier Focus and a Caliber that is more than an also ran? I grudgingly support the bailout, only because it was Government that put them into this current pickle, and it appears only Government can get them out. I am just so, so worried about what is happening to my country.

I think there is a 6th choice. Since you mention that these companies spend more money than they earn, and thus "lose" AND although you did not mention it, but several GM brands and a Ford brand are for sale, it seems to the 6th answer is: spin off these unwanted brands by creating new companies out of them. It seems to me there is no reason not to have ie, Hummer, SAAB, Saturn, and Volvo, as small independent companies. This logic dates back to the beginning of Saturn, which was formed on the idea that a small nimble (independently operated) car company could respond to market forces faster than a leviathan like GM. The fact that Saturn never lived up to that ideal is not the fault of Saturn, but the fault of GM, which did not follow through on the concept. As for the other brands mentioned, they were all purchased intact. To spin these company's off in its simplest iteration is a matter of issueing shares to current GM share holders, and making these companies independent (yes I know there is more to it, but it is worth doing). GM can sit in front of Congress for a million years and say our plan to streamline our organization includes selling divisions, but thats an empty statement because with out a buyer already in place, there is no guarantee of ever finding a buyer. But if the company is spun off as its own entity, with current GM shareholders as the owners, then other company's could consider becoming partial/controlling owners, without having to buy the whole company. Considering the GM stock sells for less than 5 dollars a share, imagine how inexpensive it would be to buy a controlling interest in SAAB. With this plan the Swedish government, which has recently said it cannot afford to buy SAAB from GM could easily buy enough shares to have a controlling interest. I think this 6th idea is really something that the US Congress should be asking GM (and Ford and Chrysler) to consider, especially if, at the same time, the US Congress, which is not know for its expertise in auto manufacturing is considering forcing a GM/Chrysler merger.

I like a modified #1 and #3 the best. The US Treasury just needs to order enough non-oil based cars from the big 3 so that they can cover expenses. I calculate that less than $200B should cover next years purchase of 10M vehicles($20,000 each). Then, the GOV can lease these for $18B/year(each at $150/month). Oil consumption will reduce by 150M Barrels of oil/year or $6B/year at $40/barrel. Repeated every year for 20 years, the US will no longer need to import oil for our cars and reduce imports by more than $120B/year at $40/barrel. We just need to make sure the cars will last 11 years to break even and re-cycle them when they wear out. Big ideas require big money.

I think there is another choice. Democrats suck up their gut and make the hard decisions which will not be popular. The Big three are too important to let fail. It will be catastrophic to our economy. The hard things that need to be done are as follows. The UWA needs to be broken. They are most of the problem. They will not go voluntarily. Chapter 11 would allow the contracts to get the strangle hold off of Detroit. The government should gurantee the warranties on cars will be continued through the chapter 11 process. Next forget about a paulty 35 Billion. We need to commit to probably over 125 billion. And we can't stop there. They still must be able to sell their cars. The government should give cash credits for down payments and 0 % government car loans. Other countries are doing similar things as far as loans are concerned, and we should also. We all are angry over this whole mess, but if we make a decision based on our emotions we will deeply regret it. Well that is my opinion anyhow.

Brian, thank you for your article. What a simplistic and novel approach to a solution. How many millions of dollars have been spent on the auto crisis already by Congress? Flying on corporate jets by the Big 3 is nothing compared to what the taxpayers are paying to keep Congress in session and pay all "experts" to continue grappling with this touch issue. Good decision making and cmnon sense is not in the equation when the only decision here is how quickly can Congress steal our money and give it to automobile industry? As you pointed out, it is payback time and the democrats as well as the incoming administration must start paying the government's FIRST installment for the trememdous block of votes they bought from the automobile industry. We don't really believe Peolosi, Frank, or Reid care about the taxpayer other than our ability to provide funding for paying back thedemocrats debt to the automobile industry for voting the democrats in office. Let's hope the Republicans are listening this time about spending the taxpayer money. After this bailout of the auto industry, the home building industry is waiting in the wings. Look at all they votes they cast for the democrats. On and on and on it goes. The taxpayer is weary of seeing the government continue the spending - why isn't the government looking at their programs to find the money - duh, it is too easy to steal from the poor (taxpayers) and give to the rich. After taxpayers gets hit time and time again to provide the fiscal support for all of these industries the deomocrats have to subsidize (to purchase votes), when can we expect a bailout? It will be a very Merry Christmas to the BIG 3 and to Congress as they spend our money to get their bailout. It is a Bah Humbug for the taxpayers providing the money. I totally agree with all the others when they say if the bailout goes through, they will boycott the Big 3 foreever. This won't be tough!

The UAW's current workers need to take a 30% reduction in wages and benefits. Their retirees need to take a 15% reduction in pensions and benefits. GM, Ford and Chrysler need to reduce their current salaried employee base by another 20% and then cut the wages of those left by 30%. The Big 3 then need to go forward with another round of plant closures that will mirror an annual sales volume of cars that is closer to 9 million cars versus the current projection of 10.9 million in annual volume. There will be charges againsit the balance sheet for most of this, but its a start. Then the Big 3 need to sit down with their bond holders and do some renegeoiation of their corporate bonds. The cash flow from all of this will give the Big 3 a fighting chance to sustain themselves. Without a massive sacrafice by all parties, nothing else will work.

I guess Mr. Driscoll won't buy a car from an American company that gets a loan from it's government but he is more than willing to buy a foreign car from a foreign company that gets subsidized from it's government.

I am frustrated the media is NOT reporting the full scope of the auto loan/bailout value. In testimony last week it was crystal clear the real number the auto makers are looking for is NOT $25B or $34B its closer to $60B. There are several request with various governmental agencies, some rejected and some pending. Those rejected are tied neatly into their current plan and if the funds do not become available they will be back at the table in 6-9 months. Why aren't you reporting the total request in front of the government? What we see on TV is not news, its a circus concocted by the liberals to appease the American public. The fact is; the automakers will get their loan with strings attached but the American public will never really know the total bailout request due to extremely poor reporting by the media. Eric Hawaii

I will give you the real answer but first, a little background is necessary. In 1982, I bought a new 1982 Honda CRX in California. It was a small two-seater with a 5 speed manual transmission. For the next six years, we drove it for work on the 91 freeway which was and is basically stop and go and on vacations. So what you ask? During that entire time, we averaged over 45 mpg for our stop and go crawling commute and over 60 mpg when we drove on unconjested freeways. This not some, " I know a guy who.." story. This was my car and this is the absolute truth. So why is it that 26 years ago this car was produced and sold but today Detroit proclaims its stunning ability to produce cars that maybe get 34 mpg?? Why did Honda stop making this car?? Why hasn't anyone copied it?? Go on the internet and try to find one for sale - in any condition. So....the answer. Since the engineering exists to produce reliable cars with double the current mpg ratings, FORCE Detroit to make them or they don't get one cent of our money.

I think this is the time to start asking for “green cars.” I agree, give them the money and let them get back up to speed, however, let them know up front that a change needs to take place in the design of new vehicles. It does not matter if this change is government funded or funded by the company; it still needs to happen. It would be a shame to let an opportunity to start heading in the right direction slip away or to have the same companies only face the same problem later down the road because foreign competition has started working on cars that will run green. Corey Wyoming

You ask a great question but you missed an option: NO BAILOUT! Throwing money at the big 3's problems is: a misdirection of needed capital from other sectors of the economy to a failing sector of the economy (autos). A fire sale and Chapter 11 is the best option, in my eyes.

I would like to hear some creative thinking by these rich “out of touch” CEO’s. For one think, what happens to cars when they are older? They go to a junk yard don’t they? Instead of junking them, how about making cars so that when they reach a certain age, in relatively good shape, these cars can be sent back to Detroit to be refurbished quickly and inexpensively? That means a new paint job, new engine, new seats and carpet. Then just as quick, rolled out as previously owned cars at the fraction of the new cost so people can afford a second family car? Why does every reliable car have to cost 30k or above? Take some of that money and retool a factory just to refurbish older cars to sell as reliable second family cars or for the college students or what ever. Not every family can afford to pay 30k each for 2 or 3 family cars and then send their kids to college.

They need gov't financed chap 11...if the market wants green cars then make them, but don't force to make only green cars. the market want's a mix of cars. Also, GM get rid of brands that are not as productive and then forced to merge with Chrysler?

The airlines didn't beg for a government bailout. Why can't the automakers follow their example and fix their own mess?

Think of the big three as a big ship, and the cars they make is the hull of the ship, each time an american customer switch's to a import car, a hole is created in the ship, americans consumers don't trust the product the big three make, most people who drive imports will never switch to domestics, so the ship is sinking with lots of holes that could never be repaired. (their reputations is ruined). when California came with zero emission cars law, honda and toyota spend millions on hybirds, what did the big three do? they spend millions on lawyers to fight the California law, GM alone spend 200 million dollars, toyota and honda offer's 0.1 financing when they are over stocked with cars, what does GM do, they pay Tiger wood millions of dollars for a 7 second commercial for GM cars. it is how those mangment think. No amount of money will save the big three, their spending is too much, bonuses for managment and corporate, any UAW average is $78.16 an hour, plus health. the best option for them is to down size.

I was a kid during the OPEC oil embargo of the 1970s. It was a very scary time, and I remember being terrified that we would lose our farm. That was 35-odd years ago, and the Big 3 have yet to come up with a car that gets more than 25 mpg? I don't feel too sorry for them. Other companies have to innovate and stay fresh to survive. The Big 3 should be leading the charge, not begging for a bailout.

I am vehemently opposed to bailing out the Auto Industry carte blanch. Unfortunately the Big 3 have placed themselves in the position they are in because the UAW has at every turn demanded more and more over the years. The cash flow drain experienced by the Big 3 bears a direct relationship with the demands the UAW have exerted upon the Big 3. The funding of health care and retirement benefits for one million retired UAW workers is crippling the Auto industry at a dazzling rate and is nothing short of an abysmal cash flow black hole. I can not stress enough how I do not want one penny of my tax dollars to go to any retired auto worker. Not one single penny! I work in the free market enterprise and no one is going to be taxed for my retirement. I won’t have $65,000 per year and full health when the day comes I can no longer work (forget hitting a certain age). It is highly unfortunate that the auto industry is in the position it is in and I know that a multitude of jobs are at stake but I feel it is mandatory that congress not intervene and must let this run it’s course. The shake out will be sever and steep. But another will step up, pick up the pieces and a new opportunity will be created to fill the void. Some one else will make cars in America. It may not be GM, Chrysler or Ford but there will be an Auto Industry. Rest assured he who comes in will not be unionized. There is no longer a place for Unions in the Auto industry if our American Auto Industry is to become competitive in an ever increasing Global Economy. Any monies loaned or given to the Big 3 will not help the problem only prolong the inevitable. The only chance for future vitality in the American Auto Industry and for Global Competitiveness is for the UAW to go by the wayside as an ancient relic.

In 1982; I had purchased a brand new Chevette; it was a Diesel. A little 1.8 liter engine, 5 speed that got 44 miles per gallon in town and 58 on the highway. My parents owned a Buick 98 that also had a Diesel engine on a standard 350 block; this car as big as it was got 36 mpg. It is not that the Big three CAN'T produce a car to get 100 miles per gallon; they simply refuse to do so. GM USED to be on the cutting edge on the Hybrid technologies; but it was not profitable enough. Anyone remember the EV1? Ford can produce a car that runs on multiple fuel sources. They already do this in their South America plants. So, bring it here. Here is also a 7th or 10th or what ever number this may be; The Big three need income and need it now. With the severe credit crisis now; people are holding onto their cars and fixing them. The push now is for higher mileage cars. Where is some type of "retro" fitting conversion for a multi-fuel car such as propane; natural gas; even an alcohol version; some on even water and or electric hybrid additions to current cars and how many other types of "hybrid" and alternative fuels can be used to power our cars. If GM would convert a plant or two that is already CLOSED into a retro conversion plant or "multiple fuel conversions"; and do some automotive "repair" or "upgrade" current cars; they may find the cash they are looking for. This option would also further reduce our dependence on foreign oil and UP the current effeciency of the current cars on the road. It would also give all these people who own a GM car a reason to do business with them. How many dealers who do auto repair and servicing would benefit from this move as well? Have the GOV finance the conversions as they did in Arizona a few years ago with Tax Credits; or in this case; have the government pay for the conversions. This might be ONE way of getting the consumer to have the "warm fuzzies" over all the bailout; it would be something in THEIR pocket and a direct benefit as well as help the overall security of the country by getting all the cars to have better fuel mileage. Yes, there would have to be some limitations so the person who owns a junk yard did not line up 50 cars or so to be totally repaired. Have a plan such as like they are using for the converter boxes in the TVs; this is government sponsored. Limit 2 cars to convert per household on the government plan; then of course the consumer can always pay for additional cars on their own to be converted. But that would not be the way things are in this environment; the government should pay for all of it... or should we say "us" in the long run.

On second thought; the target cars should be those that get less than 24 MPG first. Like all those SUVs, pickups and large cars that get 20 or less MPG. What is the percentage of fuel that these cars use versus the smaller ones, like Honda and Toyota? Government needs to remove some of the restrictions on cars that they have put into place. Why can the foreign cars in Europe get over 50 miles to the gallon and we don't; is it that they are smarter than we are; hardly... look at the size of the cars. Governement needs to remove all the fuel mixtures they require. This would get more cars to run more efficient.

to Richard Armstong's comment about the CRX. honda was able to achieve those MPG numbers in the HF and later 92-95 generation VX model because they had ~60hp and weighed under 1900lbs. neither would come close to passing modern safety standards. however, more impressive was the 96-00 civic HX coupe. which arguably will pass modern safety standards and hits the 40mpg average mark pretty easily. the bottom line is: the big 3 will fail until they start making cars that people want to buy. PERIOD. where are all the AMAZING cars that Ford makes and sells in europe? like the fusion (no not the horrible USA car), c-ma, s-max, kuga, fiesta?

Everyone should remember that a billion is a thousand million as these numbers are tossed around. General motors could be bought by the government for two billion dollars, and placed in receivership and reorganized.

#7 Make Congress understand what a billion dollars actually is. I have a simple way to make them understand, before they hand out any more bailout money make them sing a billion bottles of beer. A billion bottles of beer on the wall, a billion bottles of beer, you take one down pass it around, NINE-HUNDRED and NINETY-NINE THOUSAND NINE-HUNDRED AND NINETY-NINE bottles of beer on the wall, NINE-HUNDRED and NINETY-NINE THOUSAND NINE-HUNDRED AND NINETY-NINE bottles of beer, you take one down pass it around, NINE-HUNDRED and NINETY-NINE THOUSAND NINE-HUNDRED AND NINETY-EIGHT bottles of beer on the wall..... They wouldn`t be ready to bail anything out for about 45 years.

All I know is that the non-US manufacturers are desperately hoping that the big 3 get handcuffed and choked to death by the current situation and even with the help of the administration. If this happens, we will quickly find out the real costs of losing this resource to the US economy. And, we will find out how much their presence has been keeping the cost of vehicles down. The Toyotas and Hondas have done a good job masquerading as domestic enterprises, but dont forget where they are really based and their determination to dominate.