Bailing out the auto companies

[james_t]

A plan was floated yesterday to use some of the $700 billion bailout money to help struggling automakers.

http://hosted.ap.org/dynamic/stories/A/AUTO_BAILOUT?SITE=INKEN&SECTION=HOME&TEMPLATE=DEFAULT

My question: While I don't want to see the Big Three go under or shrink drastically, knowing the devastating effect that would have not only on the national economy but this area, what can the government do to make sure they really are saving these companies and not just wasting money to prolong the inevitable?

[matt_s]

The US auto industry is opperrating under a systemically flawed business model. I don't want to see them fail. But, I also think that bailing them out would only prolong the inevitable and not provide the incentive for them to make hard decisions and put into place a better business plan.

It may be necessary for them to go into bankruptcy, restructure, and come out stronger on the other side. Save the money for those affected by the restructuring/bankruptcy. There will be a lot of parts suppliers and vendors hurt in the process. A lot of dealerships will also be hurt as well.

[evilkumquat]

This isn't the first time the auto industry needed a bailout, either.

They were forced to compete with the Japanese in terms of creating vehicles that weren't gas guzzlers back in the 1970's, and yet twenty years later they're making SUVs and Hummers.

I'm not sure they deserve a bailout. Give them money only after every auto executive has been fired and forced to declare bankruptcy first.