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As someone who has worked for the Chrysler Corporation and was raised in an Atlanta household by a father who was a unionized GM plant worker in the late 1960s -- earning approximately $3.50 an hour plus great benefits, at a time when most other skilled and non-skilled black workers were earning between $1.50 to $2.50 per hour without benefits -- here’s my perspective about this bailout plan.
 
Like the housing market, the auto industry is also a driving force for our economy, no pun intended. The auto industry touches almost every facet of the economy. For instance, if we allow GM to go under, using President Reagan's popular "trickle down" economic theory, which never worked for poor folks or most in the black community, let's ask ourselves a few questions to see how this will affect the ailing economy. How many GM employees will be out of a job? How many suppliers of GM parts will be out of business? How many transport and rail companies, who are responsible for delivering GM's new vehicles to the dealers, would be out of business? How many dealerships and their employees will be out of business? How many lending institutions responsible for providing loans will be out of business? How many ad agencies and their employees will be out of a job? Where will customers find genuine GM parts to repair their vehicles?

In fact, owners of GM's vehicles will find that they are further upside down - owing more on the vehicle than what its actually worth at the time of trade - in case they attempt to trade a vehicle in for a non-GM brand (On average, most new vehicles depreciate by 20 percent once they’re driven off of a dealer’s lot.). Does the government really want to provide unemployment assistance for the number of individuals that will be out of work? Is that really a smart move? How much tax revenue would the economy lose from a failed auto industry? Furthermore, how many charities, Little League games, award shows and the like will survive without the assistance or support of the auto industry? Finally, how many more homes will go into foreclosure from the lost jobs?

To address the aforementioned questions, the Center for Automotive Research released a report last week detailing the impact the three Detroit-based automakers could have on the economy if we allow them to go under. Overall, the U.S. economy would lose close to 3 million direct and indirect jobs in the first year. Added to that, the U.S. government would lose at least $156.4 billion in taxes over the first three years. Is this really worth forgoing the investment of a bailout plan of around $25 billion or $50 billion, if needed?

Now, this isn't the first time the troubled auto industry has asked for a helping hand. In the 1970s, when Chrysler was nearing bankruptcy, the government provided a sizable loan to Lee Iaccoca, former chairman and CEO of Chrysler. With the government's assistance, Iaccoca saved the company from bankruptcy, saved numerous jobs and repaid the borrowed loan ahead of the agreed upon term. So what's wrong with providing a loan to a company that actually repays their debt ahead of schedule? Just think: If the U.S. wouldn't have rescued Chrysler, we wouldn't have had the minivan, the infamous K-car, or the cool-looking 300C, .....

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