Give me the money, I'll spend it wastefully like a drunken sailor and then everyone gets their share.

Who doesn't love a good free loader?

Charge a tarriff on tax on all foreign cars. Give revenue generated by tax to auto industry - 2 fold - more American cars will be sold. Cost will be more even. Give the tax dollar back to the auto industry.

Very good and accurate commentary, Robert. And, it pains me to have to say this, but far above the quality of coverage on the auto industry in the rest of the stories on NPR lately.

After the treatment by the press and Congress, most of it insulting, and incorrect, then the bailout of Citi, I'm sure the auto company CEO's are ready to bite a tree. Add to that, the actual complicity of the government, the financial sector friends that Paulson bales out, and auto buying public in the failure of the Big Three and I'm sure that they are furious and shellshocked. There is plenty of blame to go around.

First, I will correct a misconception of former Sec. of Labor Robert Reich presented in the comments. He was not in favor of, nor did he support the deregulation legislation that M Garcia says he did. In fact, trying to find any support of deregulation of the financial industry in Mr Reich's background would be difficult.

Second, I will add that I am no fan of the way GM has run their business for a long time. As an industrial designer, I have been very critical of their design practices in the past. They have made too many different parts to do the same thing, rather than perfect one or two parts and standardize them. They have taken small engine and small car development seriously at times, then dropped the ball on good projects. I'm sure everyone can make a list of up and coming cars that they just let drop...

They virtually dismantled the EV1 program, even destroying (most of) the cars, and selling the NiMh battery technology to Chevron, who has buried it. Looking at an EV1 brochure will tell you why though. The dealer network was terrified of the low maintenance the EV1 required. If this type of car became popular, service departments would lose business.
And they have slowed the introduction of the Volt under the guise of having to have an unproven lithium ion battery when a NiMh battery pack would easily power the car for the purpose they have intended. I have doubts that they actually intend on producing a "plug in" (IE series) hybrid. I fail to understand why they are having so much trouble with it. After all, GM has made diesel locomotives for many years using somewhat similar systems.

Having said that, it would be inappropriate to say that GM's problems are totally self inflicted. In fact, most of not only GM's but also the other domestic auto manufacturers problems are market driven.

It is really hard to say that they were not giving us the cars that many Americans wanted. For that matter, still want. Even in October, the best selling car in the US was not a Camry, Corolla, Civic or Accord. It was the Ford F150 pickup.It outsold the Toyota Camry in October 43,324 to 30,556. And throughout the year, despite dwindling profits and sales of all manufacturers, the Ford F150 has been a top seller.

And while most GM plants shutter during the holidays, the Arlington, Texas plant will be running full blast, with overtime. And what do they produce, full size SUV's.

In fact, while the Big Three have succeeded in making their plants so efficient that several of the fastest stamping, engine, transmission manufacturing and assembly plant are producing cars faster than their Japanese competitors. It is ironic that all the most efficient GM plants are the ones that will be closing over the extended holidays. And why, because the people that are going into buy a GM car are not buying many GM cars, they are still buying GM trucks, that is SUV's.

This is understandable. After all, the Big Three produced some pretty low quality products for most of the '80's - '90's. And the Japanese manufacturers (and now Hyundai) spent 20 years or more building trust in American car buyers. It will take a few more years of success, at least in the cars made, to bring significant buyers back from the Japanese brands. In the last ten years, the reliability and quality of American cars has risen to the point that they match the Japanese. The quality of American rear wheel drive vehicles did much better over the years, and people continued to trust them for those.

Very low fuel prices, dropping through the 1990's, encouraged all makers to produce heavier cars and trucks. The SUV market was bred from cheap gas. The market was so strong that Honda felt no need to produce Honda Civics that get 55 mpg anymore. They just didn't sell enough of them. The size of smaller models has grown to the point that a Toyota Corolla cannot be called a small car anymore. It even grew again for the new model, and that was after fuel prices started to rise. The Corolla is more roomy than mid-size cars of the '60's to '70's. Then even Honda started to produce SUV's. And Toyota, and Nissan produce several models that are at least as inefficient as the largest models from the domestics. In order to stay in the US market, they found that they had to compete with the Big Three on large cars and primarily, SUV's, and pickups.

But most people in the market for a pickup or SUV would still chose a Ford F150 or a Chevy Tahoe over a Toyota Tundra or a Nissan Armada. Sales of cars, particularly the most efficient models, were down at most companies until the gas prices started to rise.

Even the Toyota Prius did not sell well in the US until 2005. Yet more were sold in the US just in 2007 than in 2000-2006. And these figures were with a tax incentive up to $2000. Fortunately, Japan had a domestic car market that wanted fuel efficient cars due to high gas prices.

Therein lies a problem. All the other industrialized countries that manufacture autos have had much higher fuel prices than we have. Their home markets all support efficient cars. Ours hasn't. In addition, the Japanese market is not friendly to any foreign car sales. Gee, you might even say that the free market is limited for our domestic manufacturers in many foreign markets. Consequently, Ford and GM produce cars specialized to the European market in Europe. As much as I would like to have seen a European Ford Escort, or Focus in the US, it was unlikely due to projected sales volume and different regulations. It also would not have been a US made car. Ford brought the European Fiesta to the US during the second gas crisis. This was a nimble, quick (for the time) and fun little car that would remind one of a Mini in performance and handling. Sales were poor in the US.

As consumers, most of us have given the manufacturers little reason to give us the cars we now complain they wouldn't give us. In reality, the only reason the Japanese, Korean, and European makes have those cars in their line is because they sell OK here, but they sell well in their home markets. And they rarely bring their smallest cars into our market.

But another misconception is that our domestic manufacturers either don't make anything but 11 mpg gas guzzling behemoths. And don't make hybrids. Despite the fact that GM, Ford and Chrysler make many fuel efficient car and trucks, I've seen and heard the people say that it had to be made by X Japanese manufacturer. Oh brother, it is as if many writers and commentators either don't drive, live in a cave, would never dream of even looking at a domestic car, or have not even watched TV in two years.

As far as hybrids go, Ford has Ford Escape Hybrid that gets an impressive 34 mpg, beating anything in its class. While the chassis was designed by Mazda, Ford designed and manufactures the drivetrain. Ford is coming out with the Fusion Hybrid, taking the drivetrain design much further by being powerful enough to provide a top speed of 47 mph, using the battery/ electric motor alone. It is projected at 39-40 mpg, but I suspect this car will be capable of far better than that an efficient driver.

Then there is the very sophisticated that is first going into the biggest GM SUV's. This revolutionary two mode hybrid allows a Tahoe hybrid to get at least 20 mpg on both the City/Highway EPA cycle. The Chrysler hybrids, when they appear, will be two mode hybrids using this same system. This system, using two electric motors in the transmission, was a joint venture between GM, BMW, and the former Daimler/Chrysler. None of these companies had an advanced hybrid system, and wanted to develop a more impressive and more efficient system than the Prius. It is completely unrelated to any other designs.

All these US hybrids use NiMh batteries, drivetrains, and electronics manufactured and designed in the US.

In gas engined domestic cars that compete favorably against foreign makes there is the Pontiac G3 (27, 34 mpg), Chevrolet Aveo (27, 34 mpg) Pontiac G5 and Chevrolet Cobalt (25, 37 mpg), Ford Focus (24, 35 mpg), Saturn Astra (24, 32 mpg), Pontiac G6, Saturn Aura, and Chevrolet Malibu (22, 33 mpg), and Chevrolet HHR (22, 32 mpg).

All of these cars get better mileage than a four cylinder Toyota Camry (21, 31 mpg), and the Cobalt and Ford Focus get about the same mileage as the Toyota Corolla (26, 35 mpg). The Chevrolet Impala is also the second most efficiently produced car in North America, rolling off the lines in only 15.18 hours. (The most efficiently produced car in the US is now the Jeep Wrangler at only a little over 13 hours build time.)

Manufacturing at the Big Three's plants has changed dramatically over the past ten years.

In overall efficiency, Chrysler and Toyota now tie in production speed. The total time they take on average to produce a car, including all stamping, engine, transmission and assembly operations is a tie at 30.37 hours. Honda, GM, Nissan, and Ford are all close behind at less than 3.5 hours difference.

And labor and compensation rates have narrowed considerably. In fact, contrary to out of date arguments by people like Mitt Romney, the gap on labor cost to build a US car at GM is fairly low and will be dropping even more in 2009-2010.

The highest current GM labor and benefit packages today cost $69 an hour. This includes wages of current workers at $29.78 an hour. this cost will drop to $62 an hour in 2010 with a shift of pension benefits to an UAW trust fund. These costs include providing health care to 432,000 GM retirees.

According to Toyota, hourly wages run $30 per hour. Estimates on total compensation run from $48 to $53 per hour. However, Toyota's labor cost will continue to go up as they have workers retire in the US. Since the newest GM plants are actually more efficient than the newest Toyota plants, the labor cost difference per car is generally around $300-400 per car currently. The older SUV plants, such as the Arlington plant take longer, but produce a more expensive, more profitable ( in normal times) vehicle. At worst, there may be $900 difference at these plants, but that is at the old labor rates, and before the UAW takes over pension plan for retirees.

But new employees at GM are receiving a rather low $14 per hour. At Ford, this new UAW contract pays only $13 per hour. And there are no benefits. This does not sound like a path to good labor relations. But it will leave the Big Three more than competitive. Unfortunately, this will also result in workers that could never afford to buy any of the cars they make. Long ago, Henry Ford found this was bad for labor relations. This race for the bottom would be bad for employees, and really should be unnecessary. Western European and Japanese auto workers make more than US auto workers and are now about the same efficiency.

Not even Hyundai paid assembly line workers that little when they opened their plant in the US. They initially paid $15.50 an hour, but have reportedly raised wages to $22 an hour, plus benefits. However, workers in Korea make $22 an hour, plus benefits, and a bonus every year equal to 3 months wages. Oh, and Hyundai workers in Korea get full retirement at 59 year old!

Frankly, Hyundai gets a better deal in the US, than in Korea. And so far, probably due to those rising wages, there have been no strikes. Hyundai in Korea has a lot of problems with strikes.

On top of that, Hyundai's take 35.1 hours to assemble, longer than any of the Big Three, yet Hyundai still makes a profit.

So maybe blaming the assembly labor is unfair.

As far as producing the wrong product goes, considerable portions of the American car buying public wanted the SUV's and trucks that the US automakers specialized in. While their problems are somewhat self-inflicted, most of their problems relate the the fact that the US has the lowest gas prices of the western countries that produce cars. Every other country used high gas taxes to promote conservation, and pay for infrastructure. In the 1990's, when gas taxes could have been raised to keep regular gasoline at about $2 a gallon, the free traders would have not allowed that. If they had been raised, then the recent gas shock would not have been so traumatic, since the gas taxes could have been slowly reduced, then allowed gasoline to stay at $3 a gallon during this drop, somewhat evening out the bumps. It may have also reduced the desirability of very large SUV's and given US automakers an ability to develop more efficient vehicles.

CAFE standards should have also been raised to keep in line with world standards. That would have given an even playing field in regulation for all automakers. Then maybe the US makers would have been producing more cars similar to European or Japanese cars.

Between that $4 gas and the financial crisis, all auto companies are hurting.

Even Toyota's sales are projected to be down over 20% this year.

As far as Chapter 11 goes, the argument has been that it works OK for airlines. Auto manufacturers are not airlines. Buyers of cars have to be confident that the manufacturer is going to be around many years later for warranty work, service and parts. All an airline passenger has to worry about is whether the ticket will be good, and will the blasted plane stay in the air. Auto companies have longer term concerns. Bankruptcy doesn't inspire confidence.

GM going bankrupt would wipe out millions of jobs in the US, not to mention around the world. GM and Ford both produce cars in many countries.

In addition, they actually are producing many good products, with many more on the way, though perception is lagging due to the constant battering they take, seemingly from people who either don't drive, or who have little knowledge of cars, or car repair.

Scott Kilgore

The bank bail out is something we are trying to fix due to the deregulation which Mr.Reich was part of! Also the regulation that makes it impossible now for a citizen to declare bankrupcy on his credit cards. Yes! we need to bail out the fools in Detroit that have use the dumb consumer for years. Next year..
It never comes. We have been promised more fuel efficient cars for years, what do we get suburbans with gas dicount coupons. Same goes for Ford, they manufacture great efficient cars in europe why not in the US? because they have been in the pocket of the oil co. and their interest in Mazda, suzuki.. well. Now they are going to show how much they need these by promoting a drive to washington. In Cadillac limos? or Hummers? 11 mpg
let them fly it is cheaper and saves natural resource. Then fire them for lack of management and foresight. Of course without their prenegotiated gold parachute.
Save the jobs but place people who know how to manage a company vs their state and pay then no more than 5 times the hourly worker and all bonuses are based on earning 5yrs downstream.