Bailing out the Autos, Really?

Reading the tea leaves of the current political landscape indicates that a bailout of the auto industry, on the heels of the bailout for the financial sector, is imminent. This is in addition to 25 billion that congress has already approved for the big three automakers. Really? The current financial crisis being felt around the world has precipitated a number of questions we should all ponder.
We’ve all discussed ad nausea the tired and circular debates about the role of government in a capitalistic society. We all live and try to prosper in this economy without worrying about the academic discourse about the, “will of the free market” and the “evils of government intervention.” Those debates are well-documented in textbooks and I may partake in them at some point. This is not that time however, not when we’re sliding down a recession slope with no level ground in sight.
The more pertinent question is this: Is this bailout going to allow these automakers to raise themselves from the abyss and begin to compete on a worldwide scale with their Japanese counterparts that have left them in the dust over the past two decades? On this question, there has been no consensus answer. Some have said no, others have said maybe, and eternal optimists have said it’s a good possibility. To properly answer this question, we need to dig a little deeper. The automakers need to give us good answers to the following questions:
· Why have you allowed Japan to corner the market on fuel-efficiency in automobiles when any blind man could have seen decades ago that that was the only sustainable path in your industry?
· Why do you continue to operate like a dinosaur and not emulate the Japanese operating techniques to become more flexible, nimble and efficient?
· How do you plan to turn things around to compete on a global scale?
· Show me a detailed, well-thought out plan for the use of the funds. What is the timetable to bring you back to profitability? Is this plan realistic?
Unless these questions can be answered satisfactorily (and I doubt they can), I’d be very reluctant to bail the automakers out. It is terrible that this would likely lead to hundreds of thousands, and maybe millions, of people out of work, but the bailout just does not make sense. All the evidence indicates that these funds would simply delay the inevitable failure of these institutions. The bailout would be worth the cost if it turned the industry around and made it competitive again. It is not worth it if all it is going to do is keep the industry on life support for a few more months.