Loans likely to include strings
By LARRY RINGLER Tribune ChronicleConcessions and consolidation probably will be two key requirements facing the U.S. auto industry as it tries to secure federal loans to keep it afloat in a sea of red ink, a local labor analyst said Monday.
The question is whether it will be enough to prevent the industry's - and nation's - slide toward what's starting to resemble an economic depression.
John Russo, co-director of Youngstown State University's Center for Working-Class Studies, said the United Auto Workers will be asked to grant more concessions to persuade Congress to OK $25 billion in aid.
In addition, GM will be asked to take over Chrysler the smallest of the Big Three automakers, he said.
Russo said a change in GM's top management, from Chairman Rick Wagoner on down, could be a requirement for government assistance. GM's stock, which gained 17 cents Monday to close at $3.18, is languishing around 60-year lows.
''There are a lot of decisions laid at (Wagoner's) feet - building sport utility vehicles and not building alternative-energy small cars,'' he said. ''All stakeholders are analyzing this question about whether there should be a change in leadership based on the difference of the stock price when he took over and now.''
Russo said he thinks the automakers will get the loans but added, ''The big question is whether the money will do them any good. It depends on whether people have any money to spend on cars.''
The economy's slide raising fears of a depression, he said.
''A year ago, people were in a state of denial that we were even in a recession. Now, people are mentioning the 'D' word,'' he said. ''I hope this, along with an economic stimulus, will get things going, but it's no sure thing.''
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XANADU440
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11-18-08 8:13 PM
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I AGREE NO HAND OUTS,TO A POORLY MANAGED COMPANY
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pahootaman
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11-18-08 10:33 AM
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People should be putting Wagoner to the coals over the plight of GM, and quit blaming the Bush administration. If there's one thing I can give Bush credit for in this past 8 years, it's saying no (this one time) handouts to a poorly managed company.
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