“Are the workers expected to somehow miraculously relocate in today's housing and credit market?”

I have relocated ten times. Lifetime employment with one employer is obsolete, especially in one (1) location. I know of auto workers who relocated from Detroit to the Southeast or to Midwestern auto plants, as well as relocating within their own company as a condition of remaining employed. Nobody has a “right” [sic] to a job (forever) where one wants to stay.

My rejoinder to your response is simply to point out that that was then, this is now. Please note where I added emphasis to my previous statement.

I have relocated ten times. Lifetime employment with one employer is obsolete, especially in one (1) location. I know of auto workers who relocated from Detroit to the Southeast or to Midwestern auto plants, as well as relocating within their own company as a condition of remaining employed. Nobody has a “right” [sic] to a job (forever) where one wants to stay.

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“How about a much smaller bailout design to refocus efforts on more eco freindly cars and gaurentee warranties to consumers?”

Warranty support until the aftermarket industry picks up the slack, probably okay. (Many of us buy used and often aren't concerned about warranties.) No to any kind of government-interventionist design decisions. That is the perogative of management, even Detroit's. Political objectives (and feel-good games) have no place in business. Moreover, Detroit has a gun to its head, loaded, cocked, with pressure on the trigger. Now is hardly the time to impose all kinds of political constraints and problems on any business in such a condition!

“there is a retrenching by all people. I believe that the idea that a 'credit crunch' 'is a large reason for poor economic numbers is almost completely a myth “

Yes, retrenching, which may have only begun and may be much more broad and deep soon.

Much of this “credit crunch” stuff bothers me, too. I think of too many people living on credit, primarily, even with all their routine personal expenses. (Here in Detroit, I still see widespread use of the credit card by people for ordinary expenses, and of course no letup to driving large vehicles and driving aggressively and continuing to use excess fuel than would be the case if people were concerned about reducing their expenditures. Detroit denial???)

“If we need to be capable of wartime production.”

This has been a concern of some, and I even wondered aloud earlier this year if one kind of redirection of redundant manufacturing capability might not be military production. (It's better than doing something cynical with the withering Rust Belt industrial zones such as to make them into the other states' landfill areas and external prison sites, for example.)

To answer your specific concern: Some have noted that the more-modern industrial plants in the USA (”transplant” sites) could be put to this use since they are in US territory and would be subject to even more direct federal intervention than is usual, in wartime.

Insofar as the related idea of retention of manufacturing capacity through redirection to military production: Aside from what anyone may think of it (good or bad), military expenditures and their growth are unsustainable, as the Defense Business Board has (been the latest party which has) stated this, bleakly. In addition, there are some projects in particular (which involve manufacturing capacity in military contractors already in use) that are begging for reductions or cancellations similar to what was done with ARH (the Advanced Reconaissance Helicopter) and the Comanche (helicopter) before that, for the Army. I always knew that switching to military was no panacea, but it has uglier prospects than ever (and leaves an ugly impression if you're exposed to some of the worse aspects).

The biggest decline in credit availability both generally and in the auto industry specifically has been the subprime credit risks, but a) they made up a big part of the market so removing that has had a large impact and b) there is a retrenching by all people. I believe that the idea that a “credit crunch” is a large reason for poor economic numbers is almost completely a myth perpetuated by companies and analysts that are trying to convince the government/shareholders that things will rebound quickly if only it goes away. I will have a post that shows hard data that supports that view within the week.

Still I think that it is easier to argue that the jobs most likely will be lost because of aggregate demand issues rather than focusing on details like union jobs and intricacies of supply chains. Basically I think that the plummeting demand is the biggest problem for how to implement a bailout and for the economy as a whole, plus in all honesty so much of the workforce is screwed anyway with having inadequate wages and social safety net that it doesn't factor too much in my calculus. Maybe your mileage differs…course living in Ohio I would see immediate effects from a failure.

As for the Senators, well I assume that they have a similar mentality as some of the congressmen that voted against the bailout because Pelosi said mean things.

Mr. Gettelfinger, who started in the auto industry in 1964 on a Ford assembly line in Louisville, Ky., will need a thick skin at the hearings, said financier Wilbur Ross, who has interests in auto-parts firms dependent on Detroit.

“I think for a lot of the Republican senators, this gives them a chance to give the union payback for the election,” he said.

Emphasis mine. How far would they be willing to go for payback? I have to be honest and say that if in fact there are United States Senators willing to let these workers lose their jobs and go through other major dislocations and suffering for that reason I would be disgusted by them and hope that this would be the last time they would be elected to office.

This is complete BS. How does Toyota fill the void of lost jobs with the Big 3? The foreign manufacturers refuse to move outside of the protective envelope of the South, which despises unions and therefore protects them from the “threat” of the UAW. Are the workers expected to somehow miraculously relocate in today's housing and credit market? How many will still be unemployed? Is there any real appreciation of the complete inadequacy of the safety net our country offers our people? I really doubt it.

How about a much smaller bailout design to refocus efforts on more eco freindly cars and gaurentee warranties to consumers? Then add a bankruptcy for a “reset” of UAW contracts to sane levels / health liability, and management bonuses. In return for the bailout, and a fast track reset of UAW / liabilites, Uncle same gets a fair stake in the auto companies which can be sold off some years later to repay the bailout.

And even “foreign” (in fact, often US-made) “import” cars wear out, eventually, and will need replacing. (That applies to trucks as well, which is why Ford is proceeding with its gutsy but also logical choice to produce and provide its next generation of the F-150 pickup truck. Many businesses and others who need trucks as _trucks_ will want a new truck, eventually, and “downsizing” from a 350 or 250 to a more efficient F-150 is something that Ford could advertize to enjoy additional sales.)

Detroit in particular has _too_much_ capacity (factories and employees) and needs to shrink to meet its actual market share.

Side note: Detroit is, or at least was, doing fine in Europe, and in China, and one of the companies at least is going into Russia. It's North America and the bloated UAW and dealer network and other problems that are wrecking the company and have been long in need of reforms.

People cannot (morally) be required to borrow when they don't wish to, or to spend money when they don't wish to. In particular, it is wrong to insist that people spend, or be angry if they do not spend, when they would rather retire personal debt (and morally, saving is also superior).

Do not be surprised of a deflationary scenario develops, not only due to fall-off of demand but because of economic contraction.

As for the Detroit automakers, which not only do not “define” the “auto industry” in the USA and are failing from poor choices and a model for their labor-business enterprise that is decades obsolete (they learned nothing from Chrysler in the early 1980s), despite push polls and misleading statements from Detroit and its cheerleaders, most people would oppose an unconditional bailout and don't see a problem with Detroit being forced to reorganize and “right-size,” to do what it should have done on its own decades ago.

The best (least morally offensive) and most logical basis for intervention is to provide support as needed after Chapter 11 bankruptcy by the Detroit automakers and consequent reorganization and “rightsizing.”