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Inglis: Detroit auto industry needs cultural transformation

Automakers’ bailout proposal does not go far enough

(December 5, 2008)

U.S. Rep. Bob Inglis said Friday the Detroit auto industry needs a cultural transformation to be viable into the future and not just tinkering to get taxpayer bailout funds.

Inglis said the recent automakers’ rescue proposal includes union concessions, but he could not support it.  

“The kinds of changes needed to save the Detroit auto industry are transformational, not incremental. This crisis calls for all the players to see it in their best interest to remake themselves into a wholly different industry and shed legacy costs and thinking,” Inglis said. “A prepackaged bankruptcy option may be the only way to cleanly break from the past.”

Inglis said he also has a difficult time with the government spending $25 billion for a single industry.

“The auto industry is vital to America, but so was a robust textile industry,” Inglis said. “I am glad to see the domestic automakers begin to address archaic union work rules and unsustainable salary and benefit packages, but I am concerned that ultimately the same culture will return after the government check clears.”            

Contrasting it with a bailout of a single industry, Inglis said the $700 billion financial market rescue was an effort to prevent a systemic collapse of the banking system on which the entire country relies. In the Great Depression the government was slow to act, and the Federal Reserve Board kept a tight money policy. Many economists believe that those two mistakes made the Depression worse than it might have been.            

“We pray that the quick and unprecedented actions by the federal government in the financial market will keep this downturn from becoming catastrophic,” he said.