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Local dealers react to bailout loan
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There may be some things money – even $17.4 billion – can’t buy.

Local dealerships had mixed views about President Bush’s decision Friday to prop up the crippling American car industries with $17.4 billion in emergency loans to prevent its economic downfall.

Mike Block, general manager at Liberty Chrysler, said he is convinced the car industry has other ways of seeking relief that don’t include soliciting government assistance.

He thought the company could get loans from its owner, Cerberus.

"They have money they can loan Chrysler," Block said. "I don’t think taxpayers should bail out any company."

Block said he was "very proud," of Congress rejecting the bailout last week.

"We already have enough debt for this country as it is," Block said. "We don’t need to add to it."

Mike Reed, general sales manager for NeSmith Chevrolet, thought the federal rescue was needed.

"I’m all in favor a free market economy. I think that’s what makes this country great, but … I don’t think General Motors’ problems are contained to just poor management," Reed said. "I think we’re in an economic program that no one foresaw … It was a perfect storm."

He admitted there were other possible solutions.

"But if you look at the whole issues … what’s happened is there’s been a break in the supply of money," he said, calling the root of the turmoil an oversight on Wall Street’s part.

U.S. Rep. Jack Kingston, R-Savannah, thought the carmakers needed reform.

"I think they’ll recover," Kingston said. "But I think they’ll never survive under their current business model."

He listed executive pay scales as one of the major reasons for the crisis, comparing Chrysler’s $75 per hour and General Motor’s $73 per hour compensation averages to Toyota’s average of $48 per hour.

"They shouldn’t be getting paid when the company’s going down the tube," Kingston said. "You can’t compete at global market paying twice as much as your competitor."

"When you listen to the government folks you would think Toyota can do no wrong," Reed said.

"I think Ford Motor Company, General Motors, Chrysler they’ve got some great products out there, but they can’t compete with the wage scales that they’re paying right now," Kingston said.

Lamar "Bootsy" Barnes, Nesmith sales manager, thought the industry’s money woes show it is not an endless pit.

However, he said if there was no government intervention and the industries folded, then 2-3 million people would have lost their jobs.

"I really feel this is the start and an eye opener, not only for the car people," Barnes said. "We got to be more responsible in our spending."

And, according to Barnes, the industry hopes to save money by rolling out more energy-efficient vehicles using green technology.

"If you keep making the same mistake, you’re going to keep getting the same result," he said. "And that’s insanity."

However, Block said he thinks Chrysler needs to restructure its union contracts in order to prove its viability and the $17.4 billion should not just be a handout.

"I think any time they use taxpayer money, it needs to be paid back to the tax payers," Block said.

Though Block is not familiar with the details yet, he said he is sure the local dealership will not be directly impacted by the bailout.

"We won’t see any money from that," Block said.

Barnes said the same.

"Basically, it’s for GM corporate, but of course, it ricochets down and benefits us and gives customers assurance we’re going to be around and warranty vehicles," Barnes said.

"No one wants to see the Big Three fail, yet at the same time, we’ve had a lot of bailouts this year and the results of them have been a little bit spotty," Kingston said, referring to Delta, United and Texaco.

"GM has been an American fixture for over 100 years so we don’t need to (ignore) them," Barnes said. "They help power our economy and raised many, many families."


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