Nov 13, 2008 7:44 pm US/Eastern
Legislators Draft Ways To Help Auto Industry
BALTIMORE (WJZ) ―
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Car dealers here in Maryland could potentially benefit from any money that goes to the big three automakers.
Joe Raedle/Getty Images
Car dealers here in Maryland are following the changes in the bailout plan closely.
Mike Hellgren reports they could potentially benefit from any money that goes to the big three automakers.
It's a painful time for the auto industry across Maryland and across the nation.
With tight credit and economic uncertainty, the local dealers are split on whether there should be a bailout.
The economic crisis has hit local car dealerships hard, and the auto industry as a whole is bleeding cash, particularly the American manufacturers: Ford, Chrysler and GM. Their sales are all down double digits.
"This is not a vacuum, this is not just one company, this is a domino effect. Where one company goes down, you're going to see the industry go down as well ," said Rebeca Lindland, auto analyst.
But should a chunk of the $700 billion the government is using to bailout Wall Street go to the auto industry?
"More jobs in the country would be a good thing. Keeping American auto makers afloat, I don't think we can afford not to," said Josh Drieband, VP NW Honda/BMW.
Len Stoler told
WJZ, "Ultimately the manufacturers need to be made more competitive."
He says bad executive compensation packages and unfeasible union contracts can't be allowed if there is a bailout.
It wouldn't be the first handout. Thirty years ago, taxpayers bailed out Chrysler with a billion and a half dollar loan, paid back in four years. This time critics say bad management should not be rewarded.
"If American taxpayers are forced to subsidize auto producers, can we at least get to pick the good ones," said economist Dan Ikenson.
Maryland Senator Barbara Mikulski unveiled a separate plan to give tax breaks to people buying cars to stimulate sales.
"'Cause that's what creates jobs. It's not all about a gimmick. They have to build them, service them, sell them," said Mikulski.
Some legislators are drafting a bill for a $25 million emergency loan. In exchange, the taxpayers would get a stake in the now troubled American auto industry.
The big three automakers have already cut about 30 to 40 percent of their workforce in the past three years, and Maryland has lost 500 jobs because of dealership closings.
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