The Fear in Detroit – from Guest Blogger Denise

The Core Belief

 

Like MacCarthur, I have returned.  Thank you for your patience as I have delved into the world of computer repair.  (By the way, if anyone has a link to a computer geek dictionary, please forward it to me care of the Zola System.  When the tech started talking about the issues my laptop had, I swear to Buddha he was speaking Magyar.)

As the CEO’s of the Big 3 go to Congress to beg for bailout money and talk show pundits give the rest of the country their smarmy advice as to how to fix the American auto industry, the actual people who’s lives depend on this segment of the economy are waiting, fearful of what will happen next.  No matter what the government does or does not do, the country is littered with auto workers or those tied to GM, Chrysler and Ford, who wonder how they are going to pay the bills and feed the kids.

Today’s post is a guest blog from Denise in Detroit is a stark reminder of the people who have their lives invested in the out come of the Auto Bailout.  Enjoy!

The perfect storm has hit Detroit.  Gas prices driven up by speculators and traders (there’s really is no problem with supply as we can see now as gas prices are half of what they were last year) and the credit crunch have brought the giant industry to its knees.  Do the autos deserve some of the blame, certainly. But is this country better off without a domestic auto industry?  I think not.

 

Congress just gave the financial industry 700 billion dollars to shore up its mistakes.  Banks lent money to people who couldn’t pay it back.  Remember the ads?  Interest only mortgages, zero down payments, no credit check, etc.  When I got the mortgage for the house I live in today, the lender said I could be approved for $200,000 more than I was asking for.  I was appalled.  If I had taken out that kind of mortgage, I would have had to eat peanut butter and jelly for the rest of my life.  Burger King would be too expensive.  What were they thinking?  They bundled all those sub prime loans and sold investors mortgage backed securities.  When the loans starting tanking, the securities weren’t worth the paper they were printed on.  Investor confidence is shaky and the market has tanked.  You know the story because your 401K is worth 30% less than it was a year ago and so is your home.

 

Now the autos are asking Congress for a 25 billion dollar loan to shore up their companies and Congress is balking.  Some in Congress object to “throwing good money after bad”. Don’t they remember they just gave the financial industry 700 billion dollars to shore up their mistakes?  So why does the financial industry deserve $700 billion dollars in free taxpayer money while the Detroit autos can’t get a measly 25 billion dollar loan?  I can’t figure out.  The financial crisis hasn’t just impacted Detroit; it has impacted the entire auto industry.  Even Toyota’s sales were down 25% last month. 

 

One in ten jobs in this country is connected to the domestic auto industry.    The Detroit autos buy huge amounts of steel, plastics, electronics, leather, rubber, copy paper, office furniture, telephone service, computers, software, printers, electricity, natural gas, tool and die products, pens, white boards, advertising, medical services, insurance, cleaning products, and even toilet paper. They pay huge property tax bills.  Do we really want take the chance of letting the Detroit autos go bankrupt?  Is your job impacted? How will your life change?

 

The Detroit autos have made their fair share of mistakes.  But today, they make quality cars and trucks.  Really.  More hybrids are in the pipeline now along with plug-in hybrids such as the Chevy Volt.  Relying on SUV and truck sales was a mistake but the Detroit autos are turning the corner to cleaner, more fuel efficient cars that are the future promise of the industry.  Next time you are shopping for a vehicle, take a look what the Detroit autos have to offer.  I am not whining at you to buy American, just that you give them a look. 

 

And if you have time, call your congress person and let he or she know that the autos are worth saving.  If Detroit goes down, I am afraid the impact will be much worse than the so called experts expect.