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Public: Maybe Auto Bankrupcy Not a Bad Thing

Potential bankruptcy of one of the major U.S. automakers would roil Detroit, but few Americans think it would clearly hurt the auto industry or necessarily be a bad thing for the country's economy, according to a new Washington Post-ABC News poll.

Only about one in five of those polled (21 percent) said it would be a "bad thing" for the automakers if one or more of the big three filed for bankruptcy protection, as twice as many (43 percent) said that would prove to be a "good thing" in the long run; about a third (31 percent) said such a move would not make much difference either way.

More broadly, Americans are split about evenly on whether the economy would benefit (30 percent) or suffer (27 percent) if GM, Ford or Chrysler sought shelter under bankruptcy laws. About four in 10 (38 percent) said the economy would not likely move either way as a result.

In terms of the impact on consumers, most, 65 percent, said they would be no more or less apt to buy a car from company that declared bankruptcy while it reorganized its business structure.

Whatever happens this week, it will yield political challenges for President Obama, whose lowest approval rating in the new poll came for his handling of the situation with U.S. automakers. Overall, 41 percent said they approve of how Obama has dealt with the situation so far; 53 percent said they disapprove. Disapproval peaks at 67 percent among Republicans, but sizable percentages of independents (61 percent) and Democrats (36 percent) also rate the president negatively on this front.

On the potential implications of bankruptcy protection, partisan differences were muted compared with the big divide on the president's handling of the issue: About four in 10 Democrats (37 percent) and Republicans (43 percent) said bankruptcy protection for one or more automakers would be a good thing for the industry, and about four in 10 across party lines said bankruptcy in Detroit would not have a large effect on the economy.

Full Post-ABC poll data here.

Q. Imagine if one or more of the big U.S. automakers filed for protection under bankruptcy laws while it reorganized its business structure. Do you think that would be a good thing or a bad thing for ... in the long run, or would it not make much difference either way?

The auto industry

[Chart]

The U.S. economy

[Chart]

By Jon Cohen  |  April 27, 2009; 12:00 PM ET
Categories:  Post Polls  
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Comments

Lost in the Washington Post analysis is that reorganization and bankruptcy means the demolition of pensions and retirement, medical benefits, and other benefits that workers broke their backs to earn while executives gambled enormously with bad loans, failed to strive for products to compete with Japanese automakers, and, gave themselves enormous, "industry standard" payouts which will provide them with the retirement and benefits about to disappear in smoke for hundreds of thousands of automakers.

Per usual, the Post considers that a sideshow.

Posted by: optimist3 | April 27, 2009 1:48 PM | Report abuse

My first job in 1959 was to tabulate a survey. Alot has to do with the questions asked. This one seems to try to find out the mood of people on the subject. One should be warned the mood changes over time. The public was all in favor of the Iraq war and you can see how that worked out. Come back two years from now with a new survey and compare the results to this one. That should be interesting.

Posted by: artg | April 27, 2009 2:41 PM | Report abuse

Bankruptcy has never and will never be a good because it NEVER BENEFITS THE EMPLOYEES. The company get avoid and escape paying any and all of its employee benefits, or if they are lucky enough (but seldom) they may get a very, very reduced package as they are sent out of the door packing after years of company loyalty and bargaining in good faith, only to be thrown out with the bath water. These companies then get to reorganize under another company name and open up for business again with a clean debt, liability and wage structure for its new employees, but they get to carry on the same business as before, i.e., a great example are the pilots that were fired under Reagon and then business as usual without a huge employee benefit liability to any of the airlines. This scenario will certainly be a disaster for all of those auto workers, who have bargained in good faith for years only to now have this government (supported by the same financial institutions that our tax dollars and those same workers tax dollars bailed and continue to bailout) force these auto companies into bankruptcy so that these same financial institutions can and will reap enormous financial benefits at the expense of thousands of hardworking people across this country. It is a vey sick and sad state of affairs when we continue to allow these financial institutions to dictate all of our financial policies strictly for their benefit and NEVER THAT OF THE MAJORITY OF THE HARDWORKING AMERICANS IN THIS COUNTRY, BUT HERE IS ANOTHER SAD EXAMPLE. Bankruptcy is not and does not benefit anyone but creditors under the current bankruptcy law.

Posted by: hotezzy | April 27, 2009 4:29 PM | Report abuse

Sure - change the name to "Government Motors". Once the congressional sub-committees complete the desighn of the new 2010 mini-electric 2- eater car - which should be about 2015 - all our problems should be solved!
The car will cost about $50K but the workers will have 30 hour weeks, full medical and 100% retirement after four years, barbershops and post offices in every factory (just like the congressmen).
Anyone making over $250K will have to pay $150K for the car!

Posted by: thornegp | April 27, 2009 5:12 PM | Report abuse

It is a sad day in America when the autoworkers in this country who created the middle class continue to take such a bashing.
For over 100 years they paid thousands of dollars into the tax base of this country to fund social security,wefare,student loans, etc
Henry Ford paid wages that allowed his employees to be able to afford the very autos they were building. Then with the help of the unions wages were paid to allow the employees to buy autos,homes, and even take vacations.
Now the middle class is fading away for the younger generation.10 dollar an hour jobs will not be enough to buy an auto or a home.
God bless the auto retirees who did the back breaking 100 degree factory jobs. If you were lucky to retire as most got cancer and died right after they retired may you keep your pensions and your health care that you so deserve.
Most forgot that the tanks you built helped us win World War 2. When 911 hit G.M. lowered interest rates to 0 percent to help the economy from going into a recession. The autoworkers in Flint Michigan built and donated several CHEVY pickup trucks to help at ground zero.
Alot of Americans are not only jealous of your contributions to this great nation but are also ignorant to the effects of this economy if bankruptcy occurs.

Posted by: littlebit13 | April 27, 2009 5:41 PM | Report abuse

Most Americans could care less if the Big Three fails, there invested with jealousy over the wages and benefits of these workers. Then you have the citizens who make more money but are afraid some one might catch up with them in income. Good old American hypocrisy. That's why I don't go along with this poll, people just looking for blood. There going to get plenty of blood, enjoy.

Posted by: shipfreakbo214 | April 27, 2009 7:10 PM | Report abuse

I'm not quite sure why the start of the article was "Behind the Numbers." This article doesn't tell us anything useful. Did they ask the respondants about their knowledge of bankruptcy laws and its effects?

In addition to effecting employees, bankruptcies in the auto industry would have a snowball effect. In addition to the auto companies, any and all companies that supply products, inventory, or services to them will suffer substantial losses. Many more jobs will be lost and more communities affected.

Yet, I can't think of any other legitimate way to pare down the company to profitability. Considering the government's record at efficiency and cost cutting, I don't think a government takeover is a reasonable suggestion. A pre-prepared bankruptcy would be the best option, but with the number of creditors involved, the company will never get an agreement from its creditors without dragging through the bankruptcy for a while, making a lot of money for all the attorneys involved.

Posted by: speedy_theturtle | April 27, 2009 8:17 PM | Report abuse

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