Pro/Con – Does Chrysler deserve more help to stay afloat?

Micah Brown/Shawn Heavlin-Martinez


By Micah Brown

Since my childhood, my father had always held steadfast to the “buy domestic” mantra in regards to automobiles. The 1957 Chevrolet station wagon “family car” that my mom drove in the late ‘80s, and the fact that we didn’t own an import until I was well into my teens, further emblazoned my support for American-made vehicles.

But the recent indiscretions of General Motors, and the more recent bankruptcy of Chrysler, have pretty much destroyed all my faith in stateside automakers. (And my dad’s faith too: my mom finally got her way and drives a super-charged Mini Cooper now.)

After all, Chrysler has already racked up more than $4 billion in debt since the first of the year, and that wasn’t enough to save it. There is no excuse for the failure of the American auto industry. We don’t hear about Honda, Toyota, or Volkswagen seeking government bailouts, do we?

That being said, I believe things would be worse if the government was not here to clean up the mess. As a taxpayer, the last thing I want to do is keep floating companies that would be dying without our help, but the liquidation of a company like Chrysler would pose more serious problems for Chrysler’s customers and employees.

Aside from the hundreds of thousands of lost jobs, there are a lot of Chryslers, Dodges, and Jeeps on the road. What would happen to all the car owners with warranties that would become void when Chrysler fails to live up to its end of the deal? Those vehicles would lose virtually all value on the used-car market if their parent company ceased to operate as well.

President Obama personally assured all fearful car owners that the government would make good on any warranty claims that could not be handled by Chrysler. Thankfully, it won’t have to come to that, as a tentative solution has been reached.

The deal Chrysler worked out in bankruptcy court won’t do much damage to taxpayers’ wallets, anyways. Italian automaker Fiat will be assuming a 35 percent stake in the company, while the Canadian and U.S. governments will own a combined 10 percent, and workers unions will own 55 percent of the company.

Nothing motivates one to do a good job more than knowing if his or her employer fails, he loses his ass, right?

The real losers are the debtors who will only receive 30 cents on the dollar of Chrysler’s balance in the settlement.

I have grown weary of bailing everybody else and their mother out in this economic crisis, but in this instance, we are dodging a missile by biting the bullet.


By Shawn Heavlin-Martinez

As a result of poor decisions and poorer vehicle designs, Chrysler has become a losing company. Several months ago, the government saw fit to loan several billion dollars to Chrysler in order to keep them fiscally solvent. Somehow, Chrysler seems to have burned through that support and now plans to file for Chapter 7 bankruptcy. Good for them. Hopefully, Chrysler will be forced to restructure itself and adapt to today’s market, or be forced out of business. The government should not loan any more money to the ailing Chrysler company.

It’s bad enough that the American taxpayer has been forced to prop up financial institutions that crippled themselves through greed, on the sole reason that those institutions are “too big to fail.” While it is true that the current economic crisis would be far worse if the government had not intervened in the case of financial institutions, the same principle cannot be wholly applied to the case of the American auto industries.

It is all well and good to provide government insight and input to any company seeking a way to better itself. But it should not be the responsibility of the American people to give more money to a company that has proven itself to be unreliable.

If Chrysler eventually goes under, it would render hundreds of thousands jobless, not to mention bankrupt many auto-parts suppliers who sell their goods to Chrysler. However, the alternative would be to prop up a bloated company that should have died a long time ago. The government, and the American taxpayer, cannot afford to continue to reward failure. If this restructuring fails and Chrysler ceases to exist, it will be a hard lesson, but ultimately the right one.

Let capitalism run its course. If Chrysler can’t swim to safety even after we threw it a life preserver, then it must sink.

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