The Troubles in Detroit

Warren Buffett has called the financial crisis an “economic Pearl Harbor”. It is serious and most citizens do not have a full grasp of what caused this financial meltdown or what is being done to pull the economy out of this downspin. The public may be more aware of the rescue effort if there were greater oversight and more transparency.

What is known is that financial institutions like the American International Group (AIG) and Bear Stearns will be rescued. The question remains about what will happen to Detroit and the American automobile manufacturers. Does the auto industry receive the same financial backing?

According to the September data reports, almost nine out of every hundred people seeking employment cannot find work in Michigan. That was the September data; the October 2008 figures could be worse. Hundreds of thousands of people are employed in the auto industry. More people are employed in automobile related industries. The collapse of the car manufacturers would have reverberations throughout the economy.

Even now, automotive dealerships are closing throughout the nation. People are wondering if they will have work and be able to pay the rent or mortgage. Buying a car or truck is just not in the plans. It is affording fuel on an everyday basis, let alone a big ticket item like a new vehicle, that is the focus. It is understandable that the auto industry is trouble. Certainly mistakes were made but the same could be said for the financial sector. There seems to be an infusion of capital for those companies. But what about the auto industry?

Some say that it is time for the auto industry to fail. In a few years it would reinvent itself. The thousands and thousands of people impacted do not have the luxury of time. Those same criteria were not the standards whereby the financial sector was rescued. Why should the auto industry be treated differently? And what happens to the people?

Catherine Forsythe