Why saving the domestic auto makers matters to Elk Grove

Let me start with a full disclosure; I was born in Detroit and my father was a 40-year veteran of the Ford Motor Company. Everybody in...

Let me start with a full disclosure; I was born in Detroit and my father was a 40-year veteran of the Ford Motor Company. Everybody in my immediate family has at one time or another worked or currently works in the domestic auto industry. All of my extended family when they were in Michigan either worked for one of the Big Three or a supplier.

Over the last few weeks the question of whether or not the domestic auto makers should be bailed-out by the taxpayer has been a topic of national discussion. It is a question I have been grappling with for some time now.

One of the primary arguments against a bail-out is that any business should succeed or fail on its own merit. The domestic auto industry has a long and illustrious career when it comes to failure in making cars and if is their ultimate fate, so be it.

Some of these cars were just bad looking - think of the Edsel. Others were unsafe - the Corvair and Pinto come to mind. Some were ugly like the Pacer or Gremlin and some were just outright junk like the Plymouth Volare or Chevy Chevette. No conversation is complete without talking about SUV’s.

The management of the Big Three have made some colossal errors. They shouldn’t be bailed out on this principle alone.

Or should they? Let’s take a look in our own backyard.

Elk Grove’s connection with the Big Three is most obvious in the Elk Grove Auto Mall. While many people were not in favor of auto mall when it was in the planning stage, it is now part of Elk Grove and the sales taxes it generates are quite relevant to the city.

This is the bed that has been made for us, so we better sleep in it the best way we can.

In the last several months we have seen the Ford and Saturn dealerships close shop; the Chrysler store is just selling used cars now. The loss of the dealerships will impact revenues for the city, not to mention the people who lost jobs.

If the Big Three were to go Chapter 11 as some business pundits suggest they should, consumers would likely turn their backs on the domestic producers for a variety of rational reasons and all three would probably disappear within ten years.

For the Elk Grove auto mall, it could spell the end of the Maita Chevy, Elk Grove Jeep and Elk Grove Pontiac Buick GMC.

With a soft economy and uncertain prospects for attracting other dealers based on our demographics, the Elk Grove Auto Mall could become a virtual ghost town, an eye sore of sorts. With it, it could take down a large swath of Elk Grove.

Can you say Florin Road car dealership?

So while we are far away from Detroit, what happens with the Big Three bail-out could be a determining factor in Elk Grove’s future.

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Bob Felts, former candidate for EG City Council said...

The absolutely necessary bailout of the auto industry is something most people just don't seem to grasp. A universal initial reaction seems to be, "Let 'em go bankrupt like everyone else." Well, they're not like everyone else. Hundreds of thousands, if not millions, of workers depend on these car manufacturers in one way or another. It's not just the people who build the cars; it's the small suppliers, the tire makers, the auto sales dealerships, the insurance people, the financial backers & loan makers--the thousands upon thousands of people who indirectly receive a paycheck because GM, Ford and Chrysler are in business. I read years ago that 6 of every 10 people in this country depend on the US auto industry for a living, and I believe it.

I remember when the government helped Chrsler years back and it paid off well. Now we are at a place where, through some of their fault and some external faults brought on by the national economic disaster, they all need help. It's the wise thing to do, for in contrast to the financial sector the government has been busily bailing out, the automakers actually produce a product--and their current products are pretty damned good now compared to years ago.

So before anyone sounds off about bankruptcy for our Big Three, think twice. A family member, a friend, a neighbor or a stranger will be affected. What we don't need is thousands of people appling for unemployment and looking for jobs they'll never find.

Believe me, for this is the truth.

Bob Felts

Anonymous said...

You are crazy! The auto makers should just fail. They made their money when everyone was taking equity out of their homes and buying huge Cadillac SUV. When you are driving in Elk Grove and see a younger mom driving a $80K car you have to wonder how they got it. The car dealers should have planned for the fall just as the RE Professionals and Banks. This was all a fabricated bubble and the values of the homes were not there. It was monopoly money! We cannot keep bailing corporate america out. Let me ask you a question. If you open a business and it goes out to you get a million dollars???? Answer is NO youget NOTHING!

Back in the day when the government hleped Chrysler those were different times. We are in a time nobody has ever seen before. The govenment needs to back off and let thechips fall were they do!

I have been laid off of 7 jobs in the banking and financial industry. I do not feel sorry for anyone getting laid off. I had to reinvent myself and everyone else can. Look at the 50,0000 coming out of the CitiGroup Layoff!

Maybe you need to be laid off!

Pu that in your pipe and smoke it!

Elk Grove News said...

I agree with you to a point. The whole recent economic expansion was based on inflated real estate.

Your point about young soccer mom's driving around in $60,000 SUV's is right on the money, excuse the pun.

Should we have done the $700 billion financial industry bail-out, AIG bail-out, etc?

Just wondering if they too should have been left to die.

Bob Felts, former candidate for EG City Council said...

What a wonderful post, ANONYMOUS! Such objectiveness, such knowledge, such insight--and such a switch in topic! I can understand why you've been laid off 7 jobs in the banking and finance industry.

This proposed $25 billion is a loan, not a gift or a bailout like the bank money that was just given away.

Sign your name if you're so certain of yourself, and you're unashamed of your senseless rhetoric and misspellings.


Anonymous said...

Saul Landau at Counterpunch has an interesting take on the car industry events:

"If Congress thinks bailing out the undeserving car manufacturing tycoons will help restore economic equilibrium," Landau writes, "then they might also fund experiments designed to make pigs fly."


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