The U.S. Government Should Allow the Big Three Automakers to Go Bankrupt

With many thanks to Con for continuing this fascinating debate, I should like to reply as follows: 1. I have accepted my Pro's arguments that the unions have made the "Big 3" uncompetitive and I understand that the commitments the companies have made to their employees is partly the reason why they have been obliged to go cap in hand to the Government for a bailout. That said, the writing is now on the wall. The union members must accept that their employers must cut their cloth according to their means and accept a pay freeze and reduced benefits. The alternative would be to force their employers into bankruptcy. The unions and their members may be powerful, but they are not stupid. A proud car worker does not want to find himself queuing up with a behind a pack of spotty teenagers in a line for a McJob. For this reason, I believe the unions should and will work with the management to avoid the companies being taken into administration, even though Chapter 11 may still provide a way forward for the businesses. Many articles have been written about the wider effect the closure of a major employer has on the local community. Here is a recent one that deals with the subject in hand: http://www.cnn.com... It stands to reason that if a significant percentage of the population of a town is thrown onto the scrap heap when a major plant closes, they will no longer have as much cash to spend and there will be knock-on effects for local service sector businesses. Pro's point about nameplates being a financial asset in Chapters 11 and 13 is accepted and I would envisage that most would survive bankruptcy procedure. My assertion was, however, that future vehicles would be produced by foreign owners; possibly in the US, possibly abroad. Either way, it would be a severe knock to national pride and although that has no monetary value, it is still worth something to patriotic Americans. 2 The legacy costs of a buyout at this stage do mean that even if the firms were sold for a dollar each, they would still make financially unattractive investments. That is true. That is why any public bailout should, as I have said, be conditional of root and branch reform of the companies' operations, with particular regard to employee benefits and the closure of outdated product lines. Future success will only come about by developing vehicles relevant to changing market demands. My opponent did not directly address points 3 and 4 so please take them as read. 5. My opponent and I both agree that agricultural subsidies are a mistake. Whilst it is true that America will not run out of cars if the "Big 3" automakers go to the wall, this was not the crux of my argument. The message I was hoping to convey was that to allow them to go bust would have a severe detrimental effect on the local and national economy, together with a loss of American self-esteem. 6. Transition is a useful tool, there is no doubt about that. It is especially important when a large employer closes a plant. However, prevention is better than cure and preserving skilled jobs is both cheaper and more desirable than subsidising new employers to take on workers in low-skilled, poorly-paid roles. It is for that reason that I have termed car manufacturing as a "key industry". Whilst I agree that private investment should be accepted from any source, no matter from America or abroad, I maintain that the profits should boost the American economy and the main operations be based in the US to benefit American workers. In conclusion, although bankruptcy need not be the end of the road for the "Big 3", thanks to the unique way America provides a parachute for failed corporations, it should be avoided at all costs. This is because the power is wrested away from the industry experts into the hands of administrators that know as much (or as little) about making cars as they do about selling insurance policies or growing GM crops. For the sake of the economy and American pride I urge the USFG to invest in one of the country's most important industrial assets and ask the voters to vote Con in support of this proposal. Thank you.