There seem to be some obvious pro's and con's to the bailout:

PRO's

Being one of the largest manufacturing industries in the US, the collapse of these companies would mean massive job losses, which for those towns built around these factories, could destroy whole communities. A bailout would protect people in the these regions.

The US Govt. has historically propped up the auto industry, ensuring that it maintains a competitive edge on the worldwide market.  An industry crisis of this magnitude in the current finacial criss would cripple any economy in a state of recession - not something the US Govt wants to see.

 

CON"S

Each of the 'Big 3' could have prevented their own demise with effective planning and management. Research and development into the production of more fuel efficient vehicles would have increased their competitiveness. A bail out would effectively be rewarding bad business practice. The US Govt would also be delaying the restructuring of this inefficient industry.

I am a firm believer that a financial crisis is a great test for industries - if a company faces collapse, maybe their is a reason for it. It signals to me that the industry is operating ineffectively and a bailout will only be adding to the the problem, not solving it.

 

There is no doubt that the collapse of the US auto industry would reek massive economic devastation. I can't help wondering though, if the longterm benefits of allowing these companies to crumble would make room for a new wave of automotive innovation, potentially stimulating the development of more fuel efficient vehicles and allowing for the industry to be more competitive on the world stage.

In reality though, US politician wants to be responsible for the short term economic anarchy for these speculative future benefits. It is for that reason, that the Govt bailout is likely to be deemed necessary besides the obvious negative consequences.

 

Yes. US government should bail the three auto giants out BUT only after dismissing the top management and booking them under crminal law.

 

Why?

The governemnt should bail the company out becsaue this is the right thing to do as many families get their livlihood due to these biggies. If the company will go bust, many employees will be jobless, and it will affect their life more than the lives of top management

 

Top management should be booker under criminal offence because they are directly responsible for the condition of these companies. They made greedy decision and took the company down.

Should top management hold responsible for their wron action?

Yes. they should. after all its people money that they have been pocketing all these years. All the property (movable and immovable) of top management should be confiscated untill the train concludes.

And the money the top management has earned due to trading shares of their own company in last 3 years should be seized from these people and reinvested in the companies the govrement is bailing out.

An analyst should be employed to put a present day value of the sahres they traded in past so that the right amount is taken from the top management. The role of middle managemetn should also be examined, and if found guilty they should go through the same.