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Save Detroit?

Written by Susan Mannella on .

Tom Waseleski

If you were in Pittsburgh in the 1980s, you had a front-row seat to the collapse of the steel industry. You saw the plant closings, the personal misery, the fast decline of river towns.

It took decades for the Pittsburgh economy to claw its way back -- and even now some communities have not recovered. There was no bailout for the steel industry then, no lifeline thrown to Pittsburgh by Washington.

Given all that, how do you feel about the Big Three automakers seeking billions of dollars in aid from federal taxpayers? Particularly with the rest of the economy on the skids, should the government rescue the auto industry or let nature take its course, as it did with Big Steel 25 years ago?

Tell us what you think about the lead editorial on the topic from today's Post-Gazette:

Save Detroit
Pick your federal rescue, but make it fast

On the same day that Democrats on Capitol Hill were trying to rev up an aid plan to keep the auto industry running, the Bush administration's Treasury secretary urged Congress not to use part of the $700 billion financial bailout for that purpose.

The two sides embody the debate among taxpayers on whether America's Big Three automakers, which are on the brink of disaster, deserve a lifeline from the public. As everyone knows, the industry has been slow to change and in need of modernization. By the same token, the entire U.S. economy is teetering, and the collapse of a major manufacturing sector would only compound the misery.

The argument for a rescue of the car companies, whose top executives went before the Senate Banking Committee yesterday, is that the industry is central to the overall economy. Products like steel, glass, rubber and plastic all go into automaking, an enterprise that, according to one estimate, is responsible for 10 percent of the nation's jobs. The manufacturers claim the industry is on its way to market viability and that it needs only a little time and money to get there. If the federal government is willing to bail out banks and investment houses -- Wall Street high-rollers -- why shouldn't it help the auto industry and its legions of workers on Main Street?

The opposing view is that the sad state of the domestic auto producers is their own fault. Not only did they fail to build fuel-efficient cars that people would want, but they also set up consumers for the gasoline price crisis by encouraging drivers' worst instincts to buy gas guzzlers -- luxury cars, SUVs and off-road vehicles. At the same time, the corporations indulged in mega-salaries for their executives and bloated contracts for the United Auto Workers, a culture that failed to see the train wreck that was coming.

Is it necessary now to help the industry? Is American automaking, like the financial houses, too big to let fail? It probably is.

Even Henry Paulson, the Treasury secretary who doesn't want the automakers to get money from the big financial bailout, told a House panel yesterday "There are other ways" to help them. He, too, expressed concern about the industry's fate: "I think it would be not a good thing, it would be something to be avoided, having one of the auto companies fail, particularly during this period of time."

The loss of countless American jobs would send shock waves around the country and untold communities into financial purgatory. And, just as the world car market prepares to take off with greater demand in China and India, it would be a great pity for U.S. manufacturers to go belly-up.

A tough restructuring and bold modernization under Chapter 11 bankruptcy might be the ticket for the auto companies, but the industry's sinking boat is probably too close to the dam for that. A rapid rescue is necessary from the federal government, with strings attached to ensure fuel-efficient products, reasonable union contracts and a ban on outrageous bonuses.

It doesn't matter if the aid comes from the $700 billion financial bailout or another source. What matters is that Detroit -- and the employers it supports around the country -- stay open for business.

First published on November 19, 2008 at 12:00 am

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