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Detroit Bailout? Barney Frank Vs. Richard Shelby

November 17, 2008 RSS Feed Print

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Sen. Richard Shelby, the Alabama Republican who serves as the ranking member of the Senate Banking Committee, and House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, appeared on CBS’s “Face the Nation” this weekend to discuss the possibility of bailing out Detroit’s automakers.

“I think this is a road we should not go down,” Sen. Shelby said.

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Tags:: Barney Frank,; Henry Paulson,; Wall Street,; car manufacturers

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First, the people running the auto companies are not the same management that has got them into this mess. This mess was created well over 20 years ago and the US auto makers have not gotten out from under their bloated cost structure created by the UAW. Perhaps management should have taken on the union some time ago and risked being put out of business then, but the problem is now coming to a head with the recent credit crisis.
Second, if the Big 3 could make money on small cars, they would build them. It's not because they don't want to make fuel efficient cars, but if your labor costs don't allow you to make money on them, you are not going to invest a lot of money in small cars, except to meet required fuel economy standards, are you?
Concessions were made by the UAW last year, but they are not enough! By GM's calculations, GM's labor costs are still almost double Toyota's. The innovation capability is there -- the Ford Fusion hybrid gets 6 mpg better than the Camry hybrid. Break up the union and you will see profits and more innovation from the Big 3!

Alan of MI 1:09AM November 28, 2008

Thats what america needs. A republican hack that has the US bogged down in 2 wars, run up trillions in debt and run the economy off the rails trading business acumen with CEO's from the Big Three. All we need now is advice from GW Bush and we have the makings a great sitcom.

ken of MI 2:35PM November 19, 2008

Barney Frank has no clue. In fact, I don't know any Democrat is showing any wisdom and courage facing the greatest crisis in recent history.
There is no doubt that the Big Three automakers are blackmailing the American tax payer. Neither the management, nor the union is taking any responsibility for the failure of their business. Bailout will not solve their root cause of the problem.
Richard Shelby is right. He said that the government should not bailout the auto industry if there is no fundamental change in the business; and he had not seen any significant change happening.
On the other hand, Barney Frank made really idiotic arguments. He said that the government should loan money to the automakers, but the 800-pound gorilla will push all other loans aside, so in the event of liquidation, the government will be the first to be paid.
What was he thinking??? Do you think if there will be any bank that will be willing to lend money to the automakers? God forbids if liquidation really happens, the government will be paid but the banks will be holding the bag.....sounds like another bank bailout is in order! And guess who will be the real loser at the end?
Oh please. Barney Frank does not get it. Put Richard Shelby in charge. He understands how to play this high stake poker game.

Jason Chen of CO 6:35PM November 18, 2008

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