GM = British Leyland

Britain tried the same bailout with British Leyland in the 1970s and 1980s that Congress is considering with GM. Leyland  folded after losing that money. Ford did buy surviving Jaguar and lost half its investment and sold to Tata. Land Rover went to someone else and is still an iffy company.

But the French and Italian experience wtih Renault and Fiat has been much better. No one is calling all the tax breaks and free infrastructure extended to foreign automakers in the southern US  a bailout or even an inducement. I think the Dems will extend help to GM, the UAW has just sent too much money to the Dems as they lost presidential elections, now that they have won one, I cannot imagine the UAW not insisting on calling in their marker so to speak.

And we have so many social safety nets, the cost of unemployment payments, etc to all those losing their jobs now right down to Mr. Goodwrench in Anywhere Texas is such that i actually favor a loan at this time.

Comments

[Frederico Vogiatzis]

I think they should get a bailout, but only if the company goes a seperate direction. The industry has shifted and they need to go along or come up with some new innovation.

[Mark Lynch]

The ghost of British Leyland is now rattling its chains and the American Government would be well advised to study the painful lessons of Britain’s endless motor industry bailouts which ended up costing billions of pounds but didn’t ultimately save the industry. The big three in the US have been in decline for years; the present recession has brought to a head something that sooner or later was probably going to happen anyway. This is precisely what happened in the UK; the economic turbulence following the oil crises of the early 1970,s caused an already struggling British Leyland to go bankrupt. Nationalisation and Government bailout followed. Presumably we are now going to have an American “Ryder plan” as the US Government attempts to restructure the industry. The problem is that just like British Leyland they (the big 3) are likely to come back again and again asking for more money. Once you start down this route it becomes very difficult to stop and you end up throwing good money after bad and ultimately end up with full nationalisation. The US Auto Workers Union is now also a great obstacle in the way of recovery holding the industry to ransom just as the unions did at Leyland. Until the Auto workers union are prepared to accept similar conditions to that of US car workers in foreign owned plants not one cent of public money should be given. Just like British Leyland in 1975 the US car industry is not all bad and if bankruptcy was to occur it’s likely that many of the good parts would survive. This of course wasn’t allowed to happen in the UK, the result was the bad parts of the business sucked the life and cash out of the good parts resulting ultimately in the end of pretty much all of the industry, albeit that a few bits ended up surviving under foreign ownership. The land of free enterprise has reached a crossroads here; does it follow the road of the free market or that of socialist Britain in the 1970,s?

[Dennis Elam]

while the UAW is already no doubt reminding the Dems of their contributions to the party, Bush has given the next President a way out, eveyrone has to come to the table with concessions. Unlike Leyland at that time, there is nothing wrong with Ford or GM products at this point, Chrysler is without an economy car. It will be interesting to see what Pres Obama does March 31.