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President Bush has handed two of the Big Three automakers billions of dollars to bail them out of serious financial trouble. General Motors and Chrysler will get more than $17 billion in emergency rescue loans. Ford says it doesn't need any money right now.
"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," Bush said.
In a move that's been weeks in the making, President Bush announced Friday morning the automakers would get some of the money they were after to avoid bankruptcy, but there are stipulations:
- GM and Chrysler have until March 31 to prove they make money
- executive pay and perks are limited
- By the end of next year, the United Auto Workers must lower its pay to be competitive with foreign automakers in the country.
There's no denying auto sales have been slow because of the economy but now, for the first time in a long time, auto dealers say there is good news about their business.
Riverton Chevrolet salesman Brad McClure says, "Hopefully this will get a boost going for us." When he heard General Motors was getting federal money, he started feeling optimistic about the company's future and hopes potential car buyers do too.
He says, "Hopefully, this will get people back feeling good about the economy again and start reinvesting and putting their money back out there."
Jim Hinckley, of Hinckley Chrysler, says not only is this great news for GM and Chrysler, it's also good news for businesses that rely on auto manufacturing. He says, "For all of the suppliers, and there's thousands of them, that build parts for the auto industry. It's great news for everybody."
Although auto dealers say it is nice to finally get some money from the government, they say the most important thing now is for executives to spend it wisely." McClure says, "Somehow there has to be some accountability. You have to have some ideas of what we're going to do before it just gets handed out." Otherwise, auto makers could be right back where they are now in a few years.
The key, McClure says, is to change for the better. He says, "Our boss has a great line: ‘What did you do different today that you didn't do yesterday?' If you keep doing the same thing everyday, nothing is gonna change."
Of course, just because GM and Chrysler are now getting federal money, it doesn't mean dealers are going to start seeing a huge increase in sales. McClure says consumers have to change. This money just buys them time to do that.
E-mail: acabrero@ksl.com
