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Local auto dealers welcome proposed bailout deal

Posted December 10, 2008
Updated December 12, 2008

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— Local automotive dealers say they hope the government's tentative rescue of the nation's biggest automakers will spark consumer confidence at a time when sales for dealers are down.

Congress and the White House found common ground Wednesday on how to dole out up to $15 million in low-interest emergency loans for General Motors Corp. and Chrysler LLC. Money could be disbursed within days to the companies, while Ford Motor Co. would be eligible for federal aid.

Auto retailers are hopeful that a decision on Capitol Hill will help boost business.

"It's a trying time for everybody," said Eric Kaplan, who sells for Crossroads Ford in Cary. "I think it's good, because it gives consumers the confidence to come in and buy automobiles and know there is a car company that will take care of them later."

Automotive sales account for 20 percent of all retail sales in North Carolina, and across the state last month, they were 50 percent lower than the state average, according to the North Carolina Automobile Dealers Association.

Bankruptcy would be more unpredictable, says Professor Roy Weintraub, an economics professor at Duke University. He believes the loans will not only help the auto industry but also North Carolina jobs.

"Certainly, lots of jobs in North Carolina rely on the auto industry, from suppliers to tire makers and so on," Weintraub said.

The North Carolina Automobile Dealers Association estimates that about 100,000 employees, families and dependents are tied to the state's 700 dealerships and that another 140,000 work for auto suppliers in the state.

Both GM and Chrysler will have to show Congress a plan to restructure by March 31 – if not, they would have to re-pay the loans in 30 days. Overseeing the rescue would be an industry czar, appointed by President Bush, who would monitor the progress of the auto companies as they cut costs.

Some Republicans, however, think the current plan to give the loans before the companies restructure would be like throwing away money.

"Republicans will not allow taxpayers to subsidize failure," said Senate Minority Leader Mitch McConnell, R-Ky, who said Tuesday he was concerned that Democrats were proposing a package that "fails to require the kind of serious reform that will ensure long-term viability for struggling automobile companies."

Other conservatives threatened to block the bill.

With Republicans balking and many senators absent from the emergency, post-election debate, mustering the 60 votes needed to advance the measure in the Senate was proving tricky.

16 Comments

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  • Dr. Dataclerk Dec 11, 2008

    when I lost my job, or any tears for all of the furniture, textile, and tech. workers in this state who have lost their jobs.
    groovyguru

    Exactly. I do hope things will work for the better for you. :)

  • ncguy Dec 11, 2008

    It really doesn't matter if they gave them 100 Billion- yes it will help the big 3 but people still can't afford to buy a new car- so this will just delay the inevitable and the big 3 will never pay it back.

  • Dr. Dataclerk Dec 11, 2008

    This bail-out should have never happened. Why not help people instead of big wheels like this? I don't believe a car if more important than food on the table and a decent place to live.

  • Gatsby Dec 11, 2008

    I guess the area dealers are smiling...they get you if you happen to stumble into the showroom,they get you in the finance dept,they get you in the service dept & now that the sheeple finally woke up to the lease & under-coating scams and are flat broke ...they want to take our money by force.

    Marx would be so proud of the free markets fall from grace...He would like to Thank B Franks,Dodd,Peloski & the others for their contribution.

  • bngexpress Dec 11, 2008

    how can we be confident in the us car makers when we cannot afford our light bill, these people are out of touch with the real people that are struggling to make ends meet, let the auto industry file chapter 11, restructure,remove the criminal element called the uaw, build good affordable,dependable transportation,at a fare price,and place a higher tax on the parts sent in from over seas.

  • Bob3425 Dec 11, 2008

    Doesn't this just make you want to go out a buy a new car? NOT. I have to admit I buy Toyota truck, I feel their better built, the company stand behind their warranties. I still could get a basic little four cylinder 4X4, with only the basic on it, AC/heater, radio. American dealer want to load down vehicle with extra people really don't need. American Auto is getting bail out for citizen will hopefully buy new cars, so what NC want to do increase the tax on new car sales. When you do buy a new fuel efficent vehicle what happen in NC you paid more tax, why is it that a new vehicle owner should have to pay more tax than some one with an older (less efficent) vehicle. I still have found the better roads for taxes.

  • HangOn Dec 10, 2008

    Let them go bankrupt. Then all employment is renegotiated without UAW. There's plenty of non-union people who want jobs. Forget the UAW. UAW rewards inefficiency and poor quality.
    If bailed out, they should also have to reform how they sell cars instead of burning the taxpayer that floated them. No haggling. Here's a price take it or leave it.

  • alx Dec 10, 2008

    as a taxpayer, if this passes, i will never by an american car again!

  • davidgnews Dec 10, 2008

    While I agree that the UAW has long been a big part of the problem, it still doesn't discount the poor management and planning in the corporate offices.

    If companies treated employees better from the start, you'd never have unions to worry about in the first place. The employee is the only appreciating asset in a company, but always relegated to being a line item on a budget sheet -regardless.

    It's past time that companies put employees first, and ceo, board, and shareholders LAST. This also does not mean assemblers should get $100/hr to bolt on tires, etc. so spare me the bogus arguments.

  • daMoFo Dec 10, 2008

    Makes no sense to bailout a business that is not going to make fundamental changes in how it operates. And unless the UAW is out of the picture, no amount of money will save the big three. Plus, when my business was in trouble, we worked our way out of it. Lots of 15 hour days and sleepless nights. There wasn't any congressman handing me a bucket full of money.

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