Personally, I’m buying an American car this month — either a Nissan or a Toyota. They are made in America, well made too, and none of my money will be going to the corrupt UAW.

We have a domestic auto industry. It’s in the Southeast. It’s BMW, Toyota, and Honda. If we need tanks, they can build them.

And they won’t suck.

As for the UAW, it’s a government sponsored labor monopoly with a government granted license to intimidate and bully companies and workers in order to extort money from them. I have no sympathy for unions that run closed shops. That’s a government problem though and needs to be fixed by government. Even with C11 protection, if the car makers try to keep operating in Michigan they will still be under the thumb of the union monopoly. Hello Kentucky, Tennessee, Alabama, Mississippi and Texas.

Bailing out the auto industry with conditions attached for downsizing, union pensions an wages, and energy efficient cars is the anwer. One to three more million Americans out of work will make the economy much worse. Also, the national security issues of not have a domestic auto industry manufacturing base, could have disasterous consequences in the future.

The reason they are repeating that mantra is because they are looking for a ride on the free money train in DC rather than losing their jobs and wiping out most of their own assets, along with the rest of their common stockholders. Chapter 11 isn’t a great option from the point of view of an insider. But it is the best choice for the future of these companies.

That all said, if we are going to take some of the money that has already been flushed down the toilet ($850 bln bailout, $25bln in “fuel efficiency” loans) and divert it to the automakers to keep them afloat, I have a hard time objecting too strenuously to that. That money is already gone. The question is how to waste it in a way that will do the least harm. Wasting it on loans to the automakers is probably less harmful than wasting it buying bad mortgages.

Anyway, the breathing room will help GM through the cash crunch but will need to be followed by serious restructuring. This includes either the UAW’s death or a substantial, eternal power reduction; no more $100K janitors, fully paid unemployment and gratuitous retiree benefits including killing the VEBA Trust. What they have currently offered as “serious” concessions would be half measures in any other industry parlance. In total compensation and legacy costs they are the ball and chain of our entire industry. Any program that does not rid us of their overbearing expense is doomed and displays Detroit is not serious about paradigm changing long term visions. Conversely if they actually make these changes, when they are back to issuing stock- count me in. It’s day or night; they choose.

Overall, I have no doubt they are in serious trouble as an industry and their failure would have serious economic consequences, especially in the Midwest. That said I look at Ford as a prime example of a company having the sagacious nature and foresight to understand what needs to be done for survival. Darwinism, survival of the fittest, free market capitalism and all that; call it what you want, I prefer their efforts. This otherwise reflexive and seemingly opportunistic feeding at the trough from others is not the way to build long term, economically feasible industry.

This country has grown akin to pushing problems down the road with short term tactical fixes. It is time for someone to stand up, bite the bullet and pursue a strategy that is honestly painful in the short term, but strategically focuses on regrowing a financially sound and fundamentally strong industry. That will not be done if a Democrat Congress and their acolytes have any stake in this game.

Most suppliers support each of the Big Three, so there is particular at this point in time, more of a cooperative we are in the same boat perspective then a competitive perspective.

Ford has publicly stated that it will NOT file for bankruptcy in 2009, but fears that a GM bankruptcy would destroy many Tier II/III Ford suppliers and that Ford is against a GM bankruptcy.

If these ‘pro-bailout people’ were so concerned about keeping the american car industry, they would buy american cars.

I live in the Detroit area, and I haven’t seen any indication that Ford is somehow playing a two-faced game—Ford wants the bailout money too.

Smartest move by a domestic automaker in the past 5 years—and it had nothing to do with cars

Watch the video of Ford’s latest plant in rural Brazil
http://www.ritholtz.com/blog/2008/11/fords-most-advanced-assembly-plant-operates-in-rural-brazil/

See how it’s supposed to be done.

Multiply my decision by millions of people, and there you have it.

As for whether or not we should be propping them up? Well, we need a certain amount of manufacturing capacity domestically if we end up having to build thousands of planes, tanks, ships like we did in WW2, and I support keeping that around, because it should be a lot faster to retool a car plant to make tanks than it will be to build a line from scratch.

But apart from that base capacity? Let them fold.