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Auto industry needs to be revamped to produce next generation cars
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One key to Barack Obama’s plan for reducing oil consumption is the production of fuel efficient cars. This means cars that get 60 to 150 or more miles per gallon of gasoline. This can be done with plug-in electric hybrids. But is Detroit able to design and build these cars in large numbers?
The debate is on in Washington on whether and how to help the auto industry. Right now they are on the path to bankruptcy. I actually think that most people want to help our auto industry. The best way to accomplish that is the question. Here are some quotes from lawmakers that reflect the current political debate:
From Senator Richard Shelby (senior Republican on Banking Committee): "I don't think they (automakers) have immediate plans to change their model, which is a model of failure”. “I believe their best option would be some type of Chapter 11 bankruptcy". "These leaders have been failures and they need to go."
Representative Barney Frank (Democrat from Massachusetts) pointed out that choosing the bankruptcy option would likely mean abrogation of labor contracts. "We already have too much union busting,"
The leaders of the auto industry insist that bankruptcy is not an option. Serious reorganization is painful, but that is the way we are headed. The U.S. auto industry is not going to just disappear, but it could be smaller and look very different a few months from now.
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