Jack Bordonaro

Ms. Caruso
UWRT 1103
1 March 2016
Planes, Trains, and Automobiles Bailouts
Working on and reading about cars has been a passion of mine since I realized that
cars can drive faster than I could run or faster than I could ride a bike . With me now being a
car owner, enthusiast, and business major I wanted to look at how the automotive industry
has been changed over the years specifically in regards to the multi-billion-dollar bailout of
General Motors and Chrysler Auto Group in 2008 and up until the present . I had no clue the
industry was so complex and I was totally unaware of how much of a business sense you
need to operate in it effectively. First off, reading the arguments and the sides taken over
whether or not to bail out two major companies, General Motors and Chrysler, was beyond
me. On paper, Obama gave these companies way too much money because these companies
were too far gone in the sense that they could not be recovered . We spent forty-nine billion
dollars to bail out car manufacturers with a twenty-eight-billion-dollar market cap . In other
words, we spent forty-nine billion to save companies worth twenty-eight billion (The
Unpopular Successful Auto Bailout). Then there were the people deciding upon the bailout
who looked at the three million workers that would have been put on the unemployment list
and passed the bill. I cannot say that I blame them for not firing that amount of unsuspecting
people. Before reading these articles, I was dead set that the government made a mistake in
bailing out the big three American auto makers, but now I understand that the cost of finding

three million new jobs would be worse than bailing out the companies. That many currently
employed people working for an average hourly wage of $15.34 per hour would easily
outweigh forty-nine billion dollars in the long run (Assembly Line Worker) . It is a wonder
that the bailout worked, but General Motors and Chrysler are nowhere close to being in the
clear when it comes to their friends on capital hill.
Salaries and budget totals are not the only things that are incorporated into running a
major automotive detail (Why are Automakers Recalling so Many Cars) . The new problem
that is being faced between the automotive industry and US government that I discovered
from The Chicago Tribune was that even after this financial debt had been somehow paid off,
General Motors and Chrysler are still negatively digging themselves, and maybe in the future
us as consumers, into a deeper hole. Just in 2014 alone, General Motors had 13.9 million
vehicles recalled due to a faulty ignition switch that would allow the driver to turn the car off
with their knee, because the key fob was too large, while driving and caused many fatal
accidents (Wallace). An easily avoidable mishap if corrected early on. Many companies other
than General Motors are also being discovered now for not following strict government
guidelines that ensure our safety as car buyers and the environment. These companies are
now paying for their mistakes twice or three times over which is helping no one .
Volkswagen has had to recall a vast amount of their vehicles due to their PCM computer
module running illegal codes that do not abide by the standard US emissions guidelines
(Ahle). In other words, the cars were running too dirty for the environmental standards set in
place by the EPA for every car manufacturer. Another example of carelessness and laziness
from a major company many trust and depend on. The horrible thing is that our automotive

economy might be flourishing right now and helping our overall economy recuperate if
vehicles were built the right way in the first place . According to Ward Auto Magazine, each
recall, depending on the severity, can cost automotive firms to withdraw millions and even
billions of dollars (Pope). I know what you are thinking, recalls are mandatory to maintain
the publics safety and I agree, but what if I told you that the CEO of Fiat Chrysler Auto
Group, Sergio Marchionne, has another theory or even plan about the near future for recalls,
If effectively this frequency of recalls becomes a norm, if everybody starts doing this, then I
think you will see this cost being shifted to the consumer, it will transfer itself over onto the
selling price of the vehicle (Pope). I can say now that no matter what side of the political
spectrum you are on, you will be disappointed and maybe even a little bit infuriated that
these automotive powerhouses may be prompting a recall tax on the next car you buy. No
one wants to be told that they are paying more than what they are already spending just to
cover the company in case something was not put together correctly. That problem is all on
the company and in no way should be added to the already high prices of cars.
Clearly there is no easy solution sitting in front of us that can solve all debt affiliated
with the automotive world and fix every car that has had a malfunction no matter how minor
a problem it may be. We want our cars to be safe and sufficient without a what if lurking
over our head or in this case, in our sunroof. Toyota alone has killed 89 people in the past
year due to their unintended acceleration engine recall and these big shots high up in the
industry are now saying that they are going to charge the consumer so that something like
this will not happen again (Ahle). I understand the extra precaution they have for safety, but
to charge the people that very well may be affected by these mishaps is cruel. These

companies need to get their acts together because they are pointing the finger at the wrong
people. I had so much respect for General Motors and within them, Chevrolet, for becoming
so inventive in the past few years and adding so many new features and body styles
comparable to some German made vehicles, but now I see that they did not wholly do their
jobs and cut corners. Without this synthesis paper and inquiry path I would still be nave
enough to think General Motors and Fiat Chrysler were genuine and misunderstood by
republicans opposing the bailout.

Works Cited
Ahle, Steven. "How Much Did the GM Bailout Really Cost?" DC Clothesline. 2015. Web. 29
Feb. 2016.

"Assembly Line Worker, Automotive Salary (United States) United States Home Change
Country Don't See What You Are Looking for?" Assembly Line Worker, Automotive
Salary. 2016. Web. 29 Feb. 2016.
Pope, Byron. "GM Recall Crisis Creates Ripple Effect on Industry." GM Recall Crisis Creates
Ripple Effect on Industry. 1 July 2014. Web. 29 Feb. 2016.

"The Price of the GM Recalls: Advice for Mary Barra Knowledge at Wharton."
Knowledge, Wharton The Price of the GM Recalls Advice for Mary Barra Comments.
Web. 29 Feb. 2016.
"The Unpopular, Successful Auto Bailout." The American Prospect. 2014. Web. 27 Feb.
2016.
Wallace, Gregory. "Auto Bailout Still Largely Unpopular." CNNMoney. Cable News
Network, 2016. Web. 29 Feb. 2016.
"Why Are Automakers Recalling so Many Cars?" Chicagotribune.com. 13 Jan. 2016. Web.
29 Feb. 2016.