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Bailout? * USA - Fannie Mae, yes; Big Three, no
Fewer workers, less influence
Washington,DC,USA -The Detroit News, by Gordon Trowbridge -17 July 2008: -- Washington is rushing to rescue two embattled mortgage giants -- proclaiming them too big to fail -- but Michigan's threatened automakers and autoworkers should not expect similar treatment... Like President Bush, Republican presidential candidate John McCain rules out federal aid to keep the Detroit carmakers solvent. But he supports the Bush administration's plan to put billions of taxpayer dollars behind mortgage companies Fannie Mae and Freddie Mac. Democrat Barack Obama has largely avoided the question... Still, the Big Three's problems could be as much political as financial... Norman Lichtenstein, a labor historian at the University of California-Santa Barbara, called the late 1970s "the Indian summer" of the United Auto Workers. Today, with far fewer members and reduced political clout, its ability to pressure lawmakers for aid is far less... In 1979, the Big Three automakers employed about 1 million American workers; today it's about one-fourth of that number. GM, the biggest American automaker, now has about 108,000 U.S. workers -- about as many as Chrysler, the smallest, had at the time of its bailout... But that diminished economic stature still leaves a big footprint, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor. And policymakers, he said, shouldn't ignore it... "Al three companies could be insolvent within 12 months," said McAlinden, who blames oil prices and the credit crunch now engulfing the mortgage companies, as well as carmaker management decisions, for the Big Three's fate... "We don't know why we're the whipping boy," he said, "while somebody else is ruining the economy."...
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posted by Unknown @ 10:23 AM
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