Local auto businesses worry about industry

November 13, 2008 12:00:00 AM PST
In Washington, senior Democrats say even more people will lose their jobs, unless the government steps in to help the struggling auto makers. They want to give the industry a $25 billion emergency loan, but the auto industry wants even more than $25 billion. Those in the business think, it's a small price for what could happen if the industry fails.

On a Thursday night, slow sales are the reality most car lots in San Jose face. Zero customers mean very little business.

"Everyone's had cut backs," said John Shields, a GM salesperson.

Shields sold a G.M. car, two days ago. He tries to sell seven a month, which is hard to do.

"A lot of people are getting laid off from the car business, steel workers, or something to do with car business. To help the car business continue, I think it'd be huge for the big three if they got a bail out," said Shields.

The auto industry is asking for Washington's help and a piece of the $700 billion bailout pie, which is made up of tax payer dollars.

According to financial advisor Ken Winans, G.M. or the big three are not places to invest money right now.

"I wouldn't touch it right now and in addition to it, it's just a bad industry and the company is doing badly so why would you want to own stock in that?" said Winans, from Winans International Investments.

Former Labor Secretary Robert Reich doesn't think a bail out is the only answer for the auto industry.

"Maybe the best combination is Chapter 11 reorganization with some government help to restructure the industry," Reich, from the UC Goldman School of Public Policy.

This industry is one of the country's biggest employers. That's why Michigan's governor thinks its everyone's responsibility to make sure it doesn't fail.

"It is a ripple effect throughout the industry, if we allow G.M. to declare bankruptcy," said Gov. Jennifer Granholm (D) of Michigan.

The House may vote on a bail out proposal as early as next Thursday.


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