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Boehner criticizes proposed auto bailout

November 14, 2008 by  

Arguments continue about the various bailoutsExtending aid to struggling automobile manufacturers is not fair to taxpayers and does not make fiscal sense, House Republican Leader John Boehner has said.

He was responding to a plan by Democratic lawmakers which would put aside $25 billion from the Treasury Department’s bank rescue plan to be targeted at the troubled auto industry.

Boehner questioned the wisdom of giving billions of dollars to companies without addressing underlying problems in the sector.

"Spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy," he said.

Boehner called for carmakers to prove they have "a credible plan" for how to improve their situation, as well as asking Democrats to make a statement to taxpayers about how any bailout money would be recouped from these firms.

Earlier this week, Bloomberg reported that President-elect Barack Obama is supporting $50 billion in aid to the automotive industry.

Obama reportedly fears that without these funds, General Motors could be forced to file for bankruptcy by early next year, leading to substantial job losses.
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  • http://www.personalliberty.com Florida Girl

    It is truly sad to think of the amount of American workers that will be effected should the Big 3 go bankrupt.  But I can’t understand the rationale used to determine that $25 Billion will do anything to help the US automakers current situation.  At a quarterly cash burn rate of $7.5 Billion a piece, $25 billion will prolong the agony just over 1 quarter from the time they’d have gone belly-up without it.  Is that really the best use of taxpayer money?   I don’t think so.

  • Bob Livingston

    A bailout won’t help a bit.  Unless you change the fundamentals of why the big 3 are losing buckets of money, it will only prolong the agony.  Bailouts are treating the symptoms… not the disease.  Sound familiar? — Bob.

  • NJ Girl

    This bailout is for the unions not the workers.  The auto union has destroyed the American automobile companies.  They cannot compete in a world market because of the unions.  They have to restructure and renegotiate with the unions or get rid of them all together.  They might have to merge and become smaller.  I think they can do this. Why would the Democratic lawmakers want to bail them out?  Could it be the unions threw plenty of money their way in elections?

  • herb

    if not for the auto union there wouldn’t be decent living wages or retirement packages for  auto workers & other laborers, besides salaried workers got more money benifits
    than union personel. miss managment & ceo greed cause most problems in business
    failures. bailouts are only going to work if we get rid of top managment the ones who created the problem in the first place if they get bailout they will just screw up again.

  • Gene

    If I were a part of a conspiracy to destroy the United States.  And,  after studying why America won WWll?   I would have a major plan to attack its industry.   But How?   Labor unions.   Not saying its a conspiracy.  But,  that’s how I would have done it.  Look what they have done!   Every car that comes off the line at GM loses money before its sold.  Every car that comes off the line of Honda makes a profit.  The bailout would only keep the host alive so the leeches could keep sucking the life out of it.  Because of how the contract is written, the only way the major car companies can boot out the unions is bankruptcy.   They must be praying for bankruptcy.  For they must die before finding life.  The Big Three needs to die and be resurrected to new life.  That way,  they can be truly competitive again.

  • Walter

    Te cumulative solution would be to provide near term liquidity so that the dealers (who are facing delays in cash due from the manufacturer) and the suppliers can keep working.

    The second stage would be a prepackaged Chapter 11 that took enough from everyone that the companies can be competitive with those car assemblers who operate with less work rules, lower labor and retirement costs. This keeps in place the work accomplished in fuel efficiency, safety and other features in the pipeline.

    Of course if the Democrats deliver on card check for organizers call off all bets. In the short run muscle beats brains.

  • ken mulvaney

    unions should be outlaw to send any monies to the goverment in any way.

  • Paul Trood

    Guy’s you think you have it bad? In Australia we basically have 2 domestic car manufactures. Holden (GM), and Ford. To protect these companies from having to compete we have a massive luxury car tax. Eg. Mercedes 63 AMG in the U.S. around $63,000. Comparably optioned in Australia around $170,000 AUS or $111,000 US. We are being had, to look after car manufactures that compared to most European imports produce sub standard vehicles but are affordable to the masses because of no tariffs. In my view these cars also contribute the road death statistics.
    My main point is that even with these protections the local guys are always crying poor and asking for government assistance, which on occasion has been forthcoming. This has fixed nothing. BEWARE !

  • DMN

    Unless the average American can buy or get financed to buy their new product, it doesn’t matter what they continue to produce because it can’t be bought in quantities to be profitable for the company.  Help the average person to buy their product and the companies will be fine

  • http://PersonalLibertyDigest Connie

    Why don’t the Big Three car companies cut their salaries of “millions” and sell their private jets?

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