Outrage over government backing GM, Chrysler warranties on clarkhoward.com

It's now been almost one year ago to the day that Clark made some comments about Chrysler that provoked heated response.

In short, the consumer champ questioned the company's viability (while expecting them to go bankrupt) and predicted that their warranties would be worthless back in April 2008.

This is one of those cases when Clark wishes he had egg on his face…but Chrysler is a basket case and so is GM. Now we have an unpleasant journey ahead of us that is a perversion of capitalism.

Consider this: The federal government is now in charge of Chrysler, and they fired the CEO of GM! In addition, the government has gone into the extended auto warranty business!! The president of the United States is now guaranteeing new GM and Chrysler cars and their warranties. Wow.

Recently, Clark has been asked how he can support the Wall Street bailout and be opposed to a bailout for the auto industry. Sounds like a split personality, no?

As he's said before, the very fabric of capitalism itself requires a functioning capital sector. But it's a whole different game when you're being asked to take care of an industrial organization that didn't manage itself well.

Capitalism allows you to file for bankruptcy, reorganize in Chapter 11 and try to make a go of it again. That's how the system should work.

But if you can't reorganize, you go bust.

If GM and Chrysler were allowed to meet their natural end and become extinct, it would not threaten the continued availability of cars in the United States. We are buying 9 million cars a year. Yet we have factories that can make 18 million vehicles annually. You do the math.

What others are saying

Loosing jobs
If we cannot(will not) find a new job we will NOT work and be poor. Changing jobs is not fun but is profitable.
By David @ 07/04/09 10:34:27 AMreport abuse
allowing US automakers to go under.
You havent done enough homework. Going under would end our health insurance and cut our income in half. We are too old to find jobs and too young to draw social security.You n eed to look closer about the guarinty program as far as what small part of our retirement they guarantee. %
By T Bentley @ 04/03/09 01:24:12 PMreport abuse
NO GOVERNMENT BAILOUTS
LET’S FACE IT WE ARE ALL ALWAYS LOOKING FOR BARGENS. THE MAJORITY THINGS WE BUY TODAY ARE MADE SOMEWERE ELSE. WHY? TO ALLOW U.S. MANUFACTURES TO SURVIVE, THIS IS DUE TO THE MASSEVE CORPORATE TAXES THE OUR GOVERNMENT INMPOSES ON THEM. WHATS THERE INCENTIVE THEY EITHER HAVE NO CHOOSE OUTSOURCING OR RAISE THE COST OF THERE PRODUCTS. WHICH ONE DO YOU PREFER? ON THE OTHER HAND, WITH SOME MEGA COPORATIONS ‘AUTO’ IT’S GREED, MAINLY CAUSED BY LABOR UNIONS AND OVER PAIR EXECUTIVES. THEY DON’T DESERVE ANY GOVERNMENT BAIL OUTS, ESPECIALLY WITHOUT THEM OFFERING BIG CONCESSIONS IN RETURN.
GOVERNMENT NEED TO STEPASIDE AND LET COMPETIVENESS TAKE EEFFCET. ISN’T THAT THE WAY THE U.S. AIRLINE INDUSTRY OPERATES? FOR THE PAST 35 YEARS IT HAS… AFTER DEREGULATION BACK IN THE LATE ’70s... “The Airline Deregulation Act (Pub.L. 95-504) is a United States federal law signed into law on October 24, 1978. The main purpose of the act was to remove government control over fares, routes and market entry (of new airlines) from commercial aviation. This allowed passengers to be exposed to market forces in the airline industry”... WHO BENEFITED FROM THIS ACT? SURLY NOT THE MAJOR AIRLINE OR IT’S EMPLOYEES. THEY BOTH SUFFERD WITH ROUTE CUTS, LAYOFFS AND PAY DEECREASE, AND OF CORSE COMPLETE AIRLINE COLLAPS. OH! BY THE WAY THE UNONS DID OK AS ALWAYS. THER WAS NEVER A THOUGHT OF A GOVERNMENT BAILIOUT FOR THEM; THEY JUST HAD TO BITE THE BULLETT. IT WAS SURVIVAL OF THE FITTEST OR CREATIVNESS.
I KNOW AFTER 42 YEARS IN THE INDUSTRY AND TWO MAJOR AILRINES OF ONE WHICH FOLDED, I STILL NEED TO WORK TO SECURE A MENIAL PENSION OF WHICH OUR PRESENT GOVERNMENT WANTS TO ELIMINTAE DUE ITI IS UNFAIL TO THOES WHO HAVE NO PENSINON OPERTUNITYES. AS A PRESENT EMPLOYEE OF DELTA AIRLINE KNOW IT BEST. WE WENT INTO CHAPTER 11 AND SURVIVED SO CAN EVERYONE ELSE. LET COMPETIVENESS TAEK IT’S COURSE AND HAVE GOVERMNT STAY OUT. THEY RAN OUR SOCIAL SECURITY SYSTEM INTO THE GROUUND
ONE LAST NOTE, TELL MR. OBAMS TO TAKE HIS HEAD OUR OF THE SAND A.K.A. HIS TELEPROMPTER AND STAY THE HELL OUT OF THE COPORATE WORLDS BUSINESS AND START ACTING RESPOSSIBILITY…. STOP GIVING AWAY MY HEARD EARNED MONEY…
By Dennis @ 04/02/09 10:04:57 AMreport abuse
Muso and Obama?
Oh my word, is it a full moon tonight? If not, it must be half price drinks night down at the American Legion. I laughed and laughed. Nice. Only in Georgia.
By Addie @ 04/02/09 01:12:41 AMreport abuse
American auto manufacturing
The companies throughout the late 70's and 80's owned the market. Anyone buying foreign were thought of as unpatriotic. The american cars quality degraded to the point of unacceptable. The big three were very indignant and cavalier in their attitude towards persons having minor or major problems with the product. Mean while Honda, Toyota were making good cars and striving to achieve a great quality car. If you were getting your but kicked by other manufacturers year after year it should have set off a warning that possibly you should try harder. Loyal to a product goes away after the product fails and you have no support from the manufacturer. If your some one who has owned one these cars I'm sure your now driving Honda, Toyota, ect. ect.. Feel sorry for the workers. The best line I heard from a veteran who was nearly ashamed of owning a Toyota, but had issues with american manufacturers said "The last time I was this close to a Japanese machine it was firing at me"
By Kevin @ 04/01/09 05:27:44 PMreport abuse
Wake Up!
Hey "mjd", we will use our tax dollars to help support America's industry. You sure didn't support our country when your bought your foreign car. That money went to another country to help increase our trade deficit. I don't understand people wanting to allow the last American auto manufacturing companies to go out of business. Is China going to build our tanks and airplanes for the next war? Are you naive to think we will never go to war again? Will China and Japan make everything for us. Do you think someone will go ahead and start another U.S. auto company tomorrow after all of them disappear? Our industry is what made this country a superpower. I don't believe this country can be sustained with just services.

Clark, I do believe the CEO's of All the banks and insurance companies that failed and received tax payer money should be asked to resign as well. They didn't do their jobs any better than the auto companies did theirs.
By Blake @ 04/01/09 02:16:40 PMreport abuse
It's a bi-partisan screw up
I can't believe so many people want to blame obama when gwb started the socialization of America. Who was it that started the bailouts? If the republicans hadn't abandoned their base, they would not have allowed this to happen. Sure clinton put the laws into place, but anybody paying attention saw the train wreck coming, and the republicans did nothing to divert it.
By drew @ 04/01/09 12:19:39 PMreport abuse
death spiral
gm,chrysler and ford are all in a death spiral that can only end in bankruptcy. the only reason ford is not on the government dole is that they got $20+ billion of guaranteed cash lined up last summer when the ford family hocked their entire stake to guarantee it. all three companies are losing money hand over fist.

who to blame? in two words..unions and management. both were greedy, unyielding to eminent change in the competition and incompetent. the union leadership is not interested in their members, but only in meddling in politics. management was only interested in short term results so they caved to union demands rather than stand up to them. after all, how would any sane owner agree to 30 and out full retirement? 50 year old employees retiring with full pension and lifetime medical? what a joke. How about the jobs bank? another knee slapper. and i could go on and on.

but the bottom line is that chrysler is going to probably either go entirely out of business unless they find someone stupid enough to buy them. ford and gm need to file chapter 11, reorganize and dump all thier silly union agreements including the pension obligations and start over fresh.
By brian @ 04/01/09 12:09:07 PMreport abuse
You guys crack me up!
Comparing Obama to Mussolini? Blaming the auto mess on the UAW? Way to jump on the scapegoat bandwagon! Sure, the UAW wasn't helping matters any, but the leadership of US auto companies has been severely lacking. The Wall St mentality has them thinking in 3 month blocks instead of strategically. Whatever did happen to that electric car...? You know, back in the 90's? You can't have such short-term thinking in an industry where the product is the second most expensive thing most people will ever buy (houses being the first).

I'm all for the letting GM et al crumble, just to be clear. Nobody said capitalism was painless. Sure it would wreak some havoc for awhile for them to go bust, but if allowed to work, capitalism would fix things.
By Medical Studnet @ 04/01/09 10:35:26 AMreport abuse
I'd still encourage people NOT to buy GM or Chrysler vehicles. The consumer has the ultimate power to put an end to all of this BS by not doing business with these bad companies. Both of these companies need to file bankruptcy and start over or just go away all together. Who would have thought the day would come when your tax dollars would be stolen to pay for other peoples car repairs?
By mjd @ 04/01/09 09:50:15 AMreport abuse
Taxpayers funding warranty
Now evertime GM or Chrysler produce a bad car, the taxpayers are going to have to pony up. Isn't socialism wonderful. Thanks to Obama and the liberals, we don't have to wait to die to go to heaven. We are already there.
By Buzz G @ 04/01/09 08:38:35 AMreport abuse
The best solution
The first bailout of Chrysler in the 80's, Nixon's wage and price controls, we can go on and on about uncle's intervention in an ailing economy. A slow down-sizing and strutured bankruptcy is the best route for the economy as a whole. On principle, it stinks, but the world markets would simply tank to new lows on the loss of such behemoths.
By Dave 54 @ 04/01/09 07:18:12 AMreport abuse
Bailout
Greed is the problem...Jail time is part of the solution...

No amount of money can save a company that makes products the consumer does not want...A never ending pit...
By Bill @ 04/01/09 06:50:37 AMreport abuse
union hacks
Why didn't Obama force the UAW chief to resign too, since they're the one that force GM and Chrysler into this no-win mess. Rather than shredding their stupid contract, Obama is trying to save his union hacks by saving the companies.
By Joe Mama @ 03/31/09 09:28:58 PMreport abuse
Obama - an evolving story
When I heard about Obama's ultimatum for GM and Chrysler and the "firing" of GM's CEO, I immediately though about a fellow in Ital some 75 years ago. They called him Il Duce, and if you look at his history (wikipedia has a good snapshot), The story of Mussolini and his rise to power is eerily similar to our dear Mr. Obama. Check it out.
By Ken @ 03/31/09 05:55:49 PMreport abuse

Loosing jobs

If we cannot(will not) find a new job we will NOT work and be poor. Changing jobs is not fun but is profitable.

By David @ 07/04/09 10:34:27 AMreport abuse

allowing US automakers to go under.

You havent done enough homework. Going under would end our health insurance and cut our income in half. We are too old to find jobs and too young to draw social security.You n eed to look closer about the guarinty program as far as what small part of our retirement they guarantee. %

By T Bentley @ 04/03/09 01:24:12 PMreport abuse

NO GOVERNMENT BAILOUTS

LET’S FACE IT WE ARE ALL ALWAYS LOOKING FOR BARGENS. THE MAJORITY THINGS WE BUY TODAY ARE MADE SOMEWERE ELSE. WHY? TO ALLOW U.S. MANUFACTURES TO SURVIVE, THIS IS DUE TO THE MASSEVE CORPORATE TAXES THE OUR GOVERNMENT INMPOSES ON THEM. WHATS THERE INCENTIVE THEY EITHER HAVE NO CHOOSE OUTSOURCING OR RAISE THE COST OF THERE PRODUCTS. WHICH ONE DO YOU PREFER? ON THE OTHER HAND, WITH SOME MEGA COPORATIONS ‘AUTO’ IT’S GREED, MAINLY CAUSED BY LABOR UNIONS AND OVER PAIR EXECUTIVES. THEY DON’T DESERVE ANY GOVERNMENT BAIL OUTS, ESPECIALLY WITHOUT THEM OFFERING BIG CONCESSIONS IN RETURN.
GOVERNMENT NEED TO STEPASIDE AND LET COMPETIVENESS TAKE EEFFCET. ISN’T THAT THE WAY THE U.S. AIRLINE INDUSTRY OPERATES? FOR THE PAST 35 YEARS IT HAS… AFTER DEREGULATION BACK IN THE LATE ’70s... “The Airline Deregulation Act (Pub.L. 95-504) is a United States federal law signed into law on October 24, 1978. The main purpose of the act was to remove government control over fares, routes and market entry (of new airlines) from commercial aviation. This allowed passengers to be exposed to market forces in the airline industry”... WHO BENEFITED FROM THIS ACT? SURLY NOT THE MAJOR AIRLINE OR IT’S EMPLOYEES. THEY BOTH SUFFERD WITH ROUTE CUTS, LAYOFFS AND PAY DEECREASE, AND OF CORSE COMPLETE AIRLINE COLLAPS. OH! BY THE WAY THE UNONS DID OK AS ALWAYS. THER WAS NEVER A THOUGHT OF A GOVERNMENT BAILIOUT FOR THEM; THEY JUST HAD TO BITE THE BULLETT. IT WAS SURVIVAL OF THE FITTEST OR CREATIVNESS.
I KNOW AFTER 42 YEARS IN THE INDUSTRY AND TWO MAJOR AILRINES OF ONE WHICH FOLDED, I STILL NEED TO WORK TO SECURE A MENIAL PENSION OF WHICH OUR PRESENT GOVERNMENT WANTS TO ELIMINTAE DUE ITI IS UNFAIL TO THOES WHO HAVE NO PENSINON OPERTUNITYES. AS A PRESENT EMPLOYEE OF DELTA AIRLINE KNOW IT BEST. WE WENT INTO CHAPTER 11 AND SURVIVED SO CAN EVERYONE ELSE. LET COMPETIVENESS TAEK IT’S COURSE AND HAVE GOVERMNT STAY OUT. THEY RAN OUR SOCIAL SECURITY SYSTEM INTO THE GROUUND
ONE LAST NOTE, TELL MR. OBAMS TO TAKE HIS HEAD OUR OF THE SAND A.K.A. HIS TELEPROMPTER AND STAY THE HELL OUT OF THE COPORATE WORLDS BUSINESS AND START ACTING RESPOSSIBILITY…. STOP GIVING AWAY MY HEARD EARNED MONEY…

By Dennis @ 04/02/09 10:04:57 AMreport abuse

Muso and Obama?

Oh my word, is it a full moon tonight? If not, it must be half price drinks night down at the American Legion. I laughed and laughed. Nice. Only in Georgia.

By Addie @ 04/02/09 01:12:41 AMreport abuse

American auto manufacturing

The companies throughout the late 70's and 80's owned the market. Anyone buying foreign were thought of as unpatriotic. The american cars quality degraded to the point of unacceptable. The big three were very indignant and cavalier in their attitude towards persons having minor or major problems with the product. Mean while Honda, Toyota were making good cars and striving to achieve a great quality car. If you were getting your but kicked by other manufacturers year after year it should have set off a warning that possibly you should try harder. Loyal to a product goes away after the product fails and you have no support from the manufacturer. If your some one who has owned one these cars I'm sure your now driving Honda, Toyota, ect. ect.. Feel sorry for the workers. The best line I heard from a veteran who was nearly ashamed of owning a Toyota, but had issues with american manufacturers said "The last time I was this close to a Japanese machine it was firing at me"

By Kevin @ 04/01/09 05:27:44 PMreport abuse

Wake Up!

Hey "mjd", we will use our tax dollars to help support America's industry. You sure didn't support our country when your bought your foreign car. That money went to another country to help increase our trade deficit. I don't understand people wanting to allow the last American auto manufacturing companies to go out of business. Is China going to build our tanks and airplanes for the next war? Are you naive to think we will never go to war again? Will China and Japan make everything for us. Do you think someone will go ahead and start another U.S. auto company tomorrow after all of them disappear? Our industry is what made this country a superpower. I don't believe this country can be sustained with just services.

Clark, I do believe the CEO's of All the banks and insurance companies that failed and received tax payer money should be asked to resign as well. They didn't do their jobs any better than the auto companies did theirs.

By Blake @ 04/01/09 02:16:40 PMreport abuse

It's a bi-partisan screw up

I can't believe so many people want to blame obama when gwb started the socialization of America. Who was it that started the bailouts? If the republicans hadn't abandoned their base, they would not have allowed this to happen. Sure clinton put the laws into place, but anybody paying attention saw the train wreck coming, and the republicans did nothing to divert it.

By drew @ 04/01/09 12:19:39 PMreport abuse

death spiral

gm,chrysler and ford are all in a death spiral that can only end in bankruptcy. the only reason ford is not on the government dole is that they got $20+ billion of guaranteed cash lined up last summer when the ford family hocked their entire stake to guarantee it. all three companies are losing money hand over fist.

who to blame? in two words..unions and management. both were greedy, unyielding to eminent change in the competition and incompetent. the union leadership is not interested in their members, but only in meddling in politics. management was only interested in short term results so they caved to union demands rather than stand up to them. after all, how would any sane owner agree to 30 and out full retirement? 50 year old employees retiring with full pension and lifetime medical? what a joke. How about the jobs bank? another knee slapper. and i could go on and on.

but the bottom line is that chrysler is going to probably either go entirely out of business unless they find someone stupid enough to buy them. ford and gm need to file chapter 11, reorganize and dump all thier silly union agreements including the pension obligations and start over fresh.

By brian @ 04/01/09 12:09:07 PMreport abuse

You guys crack me up!

Comparing Obama to Mussolini? Blaming the auto mess on the UAW? Way to jump on the scapegoat bandwagon! Sure, the UAW wasn't helping matters any, but the leadership of US auto companies has been severely lacking. The Wall St mentality has them thinking in 3 month blocks instead of strategically. Whatever did happen to that electric car...? You know, back in the 90's? You can't have such short-term thinking in an industry where the product is the second most expensive thing most people will ever buy (houses being the first).

I'm all for the letting GM et al crumble, just to be clear. Nobody said capitalism was painless. Sure it would wreak some havoc for awhile for them to go bust, but if allowed to work, capitalism would fix things.

By Medical Studnet @ 04/01/09 10:35:26 AMreport abuse

I'd still encourage people NOT to buy GM or Chrysler vehicles. The consumer has the ultimate power to put an end to all of this BS by not doing business with these bad companies. Both of these companies need to file bankruptcy and start over or just go away all together. Who would have thought the day would come when your tax dollars would be stolen to pay for other peoples car repairs?

By mjd @ 04/01/09 09:50:15 AMreport abuse

Taxpayers funding warranty

Now evertime GM or Chrysler produce a bad car, the taxpayers are going to have to pony up. Isn't socialism wonderful. Thanks to Obama and the liberals, we don't have to wait to die to go to heaven. We are already there.

By Buzz G @ 04/01/09 08:38:35 AMreport abuse

The best solution

The first bailout of Chrysler in the 80's, Nixon's wage and price controls, we can go on and on about uncle's intervention in an ailing economy. A slow down-sizing and strutured bankruptcy is the best route for the economy as a whole. On principle, it stinks, but the world markets would simply tank to new lows on the loss of such behemoths.

By Dave 54 @ 04/01/09 07:18:12 AMreport abuse

Bailout

Greed is the problem...Jail time is part of the solution...

No amount of money can save a company that makes products the consumer does not want...A never ending pit...

By Bill @ 04/01/09 06:50:37 AMreport abuse

union hacks

Why didn't Obama force the UAW chief to resign too, since they're the one that force GM and Chrysler into this no-win mess. Rather than shredding their stupid contract, Obama is trying to save his union hacks by saving the companies.

By Joe Mama @ 03/31/09 09:28:58 PMreport abuse

Obama - an evolving story

When I heard about Obama's ultimatum for GM and Chrysler and the "firing" of GM's CEO, I immediately though about a fellow in Ital some 75 years ago. They called him Il Duce, and if you look at his history (wikipedia has a good snapshot), The story of Mussolini and his rise to power is eerily similar to our dear Mr. Obama. Check it out.

By Ken @ 03/31/09 05:55:49 PMreport abuse

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Mar 31, 2009 -- Outrage over government backing GM, Chrysler warranties

What others are saying