Criticism, acceptance of bailout among local drivers

LYNN – “They priced themselves out of the market.” That is the tough analysis of the automobile industry’s problems Dan Carman applies to his dislike of a government bailout plan for the car companies which appears to have passed a major hurdle Tuesday night..The union carpenter and small business owner is not alone in his observation that a multi-billion tax dollar helping hand is going to do little for an industry plagued by bad decision making.Richard Champigny agrees.”If you’re spending $30,000 on something, it’s got to be quality. They should have realized this a long time ago,” he said.Congressional aides and a senior administration official said the White House and congressional Democrats reached an agreement in principle to speed $15 billion in government loans to struggling U.S. automakers.The plan could see a vote as early as today. It creates a government “car czar,” to be named by President George W. Bush, to oversee the bailout billions and an auto industry restructuring. The czar would be in charge of setting guidelines for an industrywide overhaul, with the power to revoke the loans if the automakers fail to do what’s necessary to become viable.The White House was seeking tough consequences, including allowing the car czar to force the companies into bankruptcy if they weren’t doing enough to cut labor costs, restructure their debt and downsize to stay afloat.The measure is not final and could still face obstacles from congressional Republicans, who have not approved it.The proposal would attach an array of conditions to the auto bailout money, including some of the same restrictions imposed on banks as part of the Wall Street rescue. Among them are limits on executive compensation, a prohibition on paying dividends, and requirements that the government share in future profits and taxpayers be repaid before any other shareholders.There also would be rigorous government oversight, with the special inspector general monitoring the Wall Street rescue also keeping tabs on the carmaker bailout. The Senate on Monday confirmed Neil M. Barofsky, a federal prosecutor in New York, to be the special inspector general.The proposal also gives the car czar say-so over any major business decisions by the automakers while they’re taking advantage of federal aid. The companies would have to open their books to the government, including informing the overseer of any transaction of $25 million or more.Also under discussion is a requirement that the carmakers taking federal aid get rid of their corporate jets – which became a potent symbol of the industry’s ineptitude when the Big Three CEOs used them for their initial trips to Washington to plead before Congress for government assistance.Neil Abbott thinks the car companies should be allowed to fail then reorganize their finances and operations through the bankruptcy process.”This is just delaying the inevitable. No one wants it on their watch,” he said.Despite optimism on both sides that Congress and the White House could reach a swift agreement on the rescue package, it was still a tough sell on Capitol Hill. With lawmakers in both parties bitter over the administration’s use of the $700 billion Wall Street bailout, many of them were preparing to hold their noses and vote for yet another federal rescue to avert deeper economic disaster.”While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done,” Senate Majority Leader Harry Reid, D-Nev., said. “This is no blank check or blind hope.”(Associated Press material was used in this report.)