President-elect Barack Obama's chief of staff says something should be done to save the auto industry amid low sales and massive layoffs. "Washington needs to look at fast-forwarding the 25 billion dollars that has been provided for retooling the factories for basically a more fuel-efficient auto fleet," Congressman Rahm Emanuel told ABC on Sunday, AFP reported. Good idea. Loan them as much money as they need to get competetive again. Relax CAFE restrictions. Subsidize sales for a period of years if need be. But only do it on condition they break up into smaller, self-sufficient, competing companies. Rather than a single point of failure, build a net that can be repaired when something breaks.
Emanuel said the President-elect has asked his team to consider ways aimed at rescuing the US car industry. "As president-elect Obama has said throughout the campaign and as I think as recently as Friday ... the auto industry is an essential part of our economy and an essential part of our industrial base," he said.
Earlier House speaker Nancy Pelosi and Senate Majority leader Harry Reid also urged congress to allocate a bigger share of the 700 billion dollar US aid plan to the auto sector. Emanuel declined to say whether Obama backed the appeal. "President-elect Obama has repeated that there's one president, one administration at a time and so you don't want to get in front of that," he said, as Obama's transition team prepared to take over from President George W. Bush on January 20.
However, he said, "there are existing authorities within the government today that the administration should tap to help the auto industry."
According to statistics collated by outplacement firm Challenger, Gray & Christmas, the US automotive industry has laid off 94,900 workers in the nine months through September this year. The US auto giants have announced new rounds of job cuts nearly every day over the past weeks. Chrysler recently revealed that 25 percent of its salaried employees would be sacked before the end of the year, and that further restructuring will be seen "in the near future".
Ford Motor Co. also reported heavy financial losses and plans to slash an additional 10 percent from its salaried North American worker costs, citing the impact of a global slowdown that has already gravely weakened the US auto industry.
Experts believe that the layoffs are a mere foretaste of the tens of thousands of job cuts that will accompany a finalized merger involving the major auto companies.