For the past week the US auto industry has been asking Washington for twenty five billion dollars to bail them out. The key issue here is that private business is asking the federal government for a grant to allow it to continue operating. Now, it seems, weighing in one’s opinion on this matter is a popular move. Economists, politicians and journalists have been writing and commenting about how the to save Detroit. Here is a brief summary of some of the more known opinions. (Note: many of these are heavily paraphrased):

Harry Reid (house majority leader)

Get your shit together Detroit then we sign the check.

Nancy Pelosi

You need a plan for us to give you money.

UAW (United Auto Workers)

Please give us money, PLEASE!

Mitt Romney

Let Detroit go bankrupt. That’ll teach em.

Arnold Schwarzenegger

Get off your butts and work harder.

George Will

Why bail out big three when GM’s volt buyers will receive $7500 in tax benefits. Let the free market decide.

Oprah Winfrey

Everyone gets a free car.

Joe Biden

I am a friend of the union worker!

The Economist Magazine

Bail them out, or not, who cares. Europe doesn’t need it as badly but they’ll get some too.

Sen. Christopher Dodd

Use some of the $700 billion bailout to Auto Industry (but I do not believe it will pass the house during current session of Congress)

President-elect Barack Obama

We should promote a sustainable auto industry, but not with a blank check.

RECAP:

So there you have it, ten opinions on one of the most important economic problems of our time. Is the whole situation clear now? Have these experts explained to you why the industry is in terrible shape? Lets consider that currently the Ford Motor Company (NYSE: F) is trading for about $1.30 per share. In May of this year Ford was trading for $8.11 per share. Six months of terrible fuel prices, bad marketing, market share slipping 7% over fifteen years (currently at 17%), and bad planning have left Ford a shadow of its former self.

This last quarter credit earnings for the Ford Motor company were about $95 million, compared to the third quarter in 2007 when Ford earned $334 million.

General Motors merged its interest in Hughes electronics with the Raytheon Company (the world’s largest producer of guided missiles) in 1997. One would assume that having some involvement in a weapons producer that charges $130,000 per weapon would help. General motors stock is currently selling for about $3.00 per share. This price is down from its twelve month high at $28.98 per share. The decline in the value of these stocks is impressive. This was not a quick and immediate downturn but rather a gradual decline of value over the last twelve months. Instead of taking time to reform their business model about six months ago when oil was at its most expensive and maybe beginning to restructure they waited until now to ask for a handout from Washington.

Ford, Chrysler and Ford are also asking for an additional 6.5 billion from Ottawa (roughly 5.05 billion USD), an additional 40 billion Euros from the EU in soft loans (below market interest rates loans) and one billion Euros from the German government. That would be a total of 72.5 billion dollars in funding given to the auto industry.

On the Chrysler homepage I found a message saying that “it is not a bailout to keep us from failing it is a loan to help us succeed.” Chrysler employs roughly 132,000 people. GM has 266,000 employees and Ford has 87,000. If this was a loan that would mean that at some point these companies would need to pay back the federal government. Also, that would mean the government could dictate salary caps, work procedures and business models. Is this a bad thing? At this stage does it matter since the auto industry is one of the few sectors in the US economy which can deliver manufactured goods for export. That means revenue and jobs.

When Ford was founded 105 years ago, the primary business model used was paying employees a salary where they could afford the very vehicles they manufactured. This created a massive domestic market and Ford was then capable of selling vehicles to the masses. They had nearly one hundred percent of the market. Now they are struggling to stay afloat. Just a thought. I’ll let smarter people come up with a solution to this.

Note: I am aware that there are eleven opinions listed. I don’t count Oprah as an expert. I just thought it was funny. It ruins a joke when you have to explain it. Thanks a lot editor. Your gonna need a bail out for your jugular after my foot has hit it.

Editor’s note: just you try it, buddy.