“Now is the winter of our discontent” — those oft-quoted opening words from Shakespeare’s “Richard III” pretty much sum up the mood of the populace as the gray and gloomy season sets in.
People have lost their homes in the mortgage meltdown, seen retirement savings accounts lose major chunks of value in the nosediving stock market, watched banks and institutions they thought were rock solid go belly up or be put on life support with umpty-billion-dollar transfusions from Uncle Sam that may or may not revive the patients, been pole-axed by record prices at the supermarket (which have shown no signs of declining despite the precipitous drop in oil prices, and one would assume, the transportation costs that were a major factor in the run-up) — and on and on.
It has been just one bad news saga after another, and no end in sight.
Still, the Wally World intercoms were blaring Christmas music when October had barely been ripped from the calendar, though with the dismal financial outlook, this holiday season may see a lot of folks emulating Ebeneezer Scrooge.
Among ailing companies lining up for a share of Treasury Secretary Henry Paulson’s bailout largesse, are the Big Three auto companies, in danger of going down the tubes as sales dry up and they hemorrhage billions in losses.
General Motors, the largest, is reported worst off — it lost a whopping $20 billion January-September and its stock spiraled from a high of $31.07 to $2.75. This, even after GM had jettisoned thousands of employees and enacted sweeping cost-cutting measures.
At one point this month, you could’ve bought a share each of GM, Chrysler, and Ford stock with a $5 bill and got change. Things are just that bad with companies that for decades were the bedrock of the American manufacturing sector that was a key factor in providing jobs that created this country’s middle class. GM says it may have to enter bankruptcy if it doesn’t get a bailout; that, some analysts contend, would be a fatal blow.
Congressional and public opinion about aid to the auto industry are sharply divided.
Those in favor of aid contend it would be economically calamitous for this country if GM, Chrysler, or Ford failed, tossing thousands of employees of the automakers and ancillary supplier companies onto the unemployment rolls.
Let ’em fail, opponents say, averring that the companies are to blame for the mess they’re in — that they have, for too long been poorly managed, building big, mediocre quality, gas-guzzling vehicles, while Toyota, Honda, Hyundai, Kia, and others ate their lunch, cranking out high quality, smaller, less costly, more fuel-efficient cars and trucks.
If Congress does agree to help the automakers, there should be strings attached: the companies should be required to concentrate their efforts on speeding development of more fuel-efficient vehicles, with an emphasis on hybrids and plug-ins that can help reduce this country’s dependence on imported petroleum.
And Congress should set aside a few billion more dollars to provide substantial tax credits to consumers to help buy those vehicles, something it has done only minimally thus far.