Saving auto industry is crucial

Inter Lake editorial

We realize a good chunk of the American public is not sold on the idea of bailing out Detroit's "Big Three" automakers. And certainly, with their phones ringing off the hook, members of Congress realize the same thing.

But the notion of abandoning Ford, General Motors and Chrysler to the winds of a vicious economy is frightening indeed. One has to consider the big picture - on Friday, the Labor Department reported that 533,000 jobs were slashed in November, driving the national unemployment rate to 6.7 percent, its highest in 15 years.

Then consider the Big Three jobs at risk, 66,400 workers at Chrysler, 84,700 at Ford and 104,000 at GM. If any one of those companies folds, there will be a cascading economic effect across the country, all the way to parts suppliers and dealerships right here in the Flathead Valley.

That's why Congress is taking the matter so seriously, even though the word "bailout" has become unpalatable to the public.

Big Three auto executives did themselves no favors when they showed up in Washington, D.C., last month aboard private jets, with seemingly cavalier attitudes on executive compensation while asking lawmakers for a bailout.

This week, they arrived in hybrid cars, with promises of reducing management bonuses and the chief executive of Ford even offering to take $1 in annual salary if his company ends up taking a loan from the government. That type of symbolic window-dressing is nice, but the Big Three needed to offer up substantive plans for change.

And it appeared this week that they were making important steps in that direction, with the nudging of properly stubborn lawmakers who are looking for reform and accountability in the industry. They do not want to throw money at business models that are obviously no longer competitive.

So the CEOs of GM and Chrysler at one point said they would consider a merger, that they would refocus on higher fuel-efficiency vehicles and lower production costs. Even leaders of the United Auto Workers met this week and agreed to some labor concessions.

And there were talks on the potential for a government-run restructuring that would have a similar effect as bankruptcy filings, with massive downsizing and labor adjustments. But there's obviously a lot of heavy lifting still to be done to get the staggering companies back on their feet, and the clock is ticking.

GM reportedly could fold by the end of this month if nothing is done. That is unthinkable. This is an opportunity for the industry to address serious structural flaws, with the help of the government if necessary. Doing nothing is not an option.