Can we really afford to lose the engineering and manufacturing base
My first take on this was to say, "Let them go under". However, years back both Chrysler and my old employer Lockheed both had asked for and received gov't backed loans, emerged healthy and repaid the loans with the interest owed. That said, I think it would be a terrible loss of engineering and manufacturing capability within the USA.
Remember, by letting them go under, their research and development component dies with them. This cuts deep into America's ability to stay even with the rest of the world. Heck, most of our manufacturing is gone already. Let the BIG 3 go under and all their suppliers will fall as well.
Compare this scenario to the oil situation. When there is no domestic competition what will the foreign companies charge for their products? Also, remember if the BIG 3 go under a good portion of your dollars go outside the US just like the oil dollars adding to the deficit. Dollars made and spent in the US get "plowed" into the US economy many times both providing tax revenue and other jobs within the US.
OK, I also realize that the BIG 3 appear "asleep at wheel" as well but think about it, we're at fault as well. Haven't we been the ones buying the big SUVs and inefficient vehicles all along with the "they're bigger, we're safer" mentality? Hell yeah, we're our own worst emeny by doing this.
These companies can't just throw a switch and be building another product line tomorrow. Compounding problem is that the engineering and procurement lead times preclude a quick changeover from one type of vehicle to another. Large capital goods manufacturing, (auto, aircraft, etc. ), require significant up front effort to design, test, submit for bids the many components that go into their products. The sub-contractors must also gear up for the required production. How long do you think it would take you to design and build a plastic molding die or aluminum forging die, much less test the product and document the process? How many different tier levels does this process involve? Each level adds more lead time.
Pick up some of the auto magazines a scan the first few pages of each. You'll see that each of the BIG 3 have a number of new efficient models set to release both in 2009 and beyond. I think we can pull out of this and keep the US auto industry alive as well.
Here's a scenario you can relate to. Let's assume you have a two income family and just lost one of the incomes and now can not afford to stay in your house. You got two choices, let the house go into forclosure or attempt to down size. The foreclosure route loses any equity and kills your hopes to own another. Downsizing sounds good but unless you can sell the existing home, (unlikely), it won't happen. Hmmm, sounds like a gov't loan would help you out. You'll probably get a good rate and even be able to pay it back as the economy recovers.
And yes, I know the BIG 3 need to restructure management and re-negotiate the union contracts. After all it is a "global economy". The gov't loans should require both.
Anyway, I'll get off my soap box now, hoping that each person reads this and gains just a bit more understanding of what could be the long term effect of "Just letting the BIG 3 go under".
Bill
Attention: TDR Forum Junkies 
. When you spend your life working for someone who makes a huge financial killing on the skills of YOUR hands, you would hope that the company who has benefited from those years of loyal dedication would have the minimal decency and ethics to honor your mutual Contractural agreement. Price a vehicle model that is built in Mexico and in the USA. There is no price difference, given the lower wages and NO benefits in Mexico! Where is the equity there? YEP! They gotta fix the problem, but it aint the Unions! If You design something that fetches whatever the market will bare and you hire me to build it and we contract together for my skills and agree to pay me whatever the market will bare for my part, I expect you to follow through. Very Simple, Very Easy! GregH
