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Big-Three Bailout and National Security

November 18, 2008 - by Donny Shaw

It looks like the votes won’t be there this week for Congress to pass a $25 billion bailout for the Big Three Automakers. But check out this video GM has released explaing what they think would happen if Congress let the companies go under:

Personally, I’m mainly struck by the Klaus Schulze-esque soundtrack. The AP however, looks at the information presented in the video and challenges one of the most compelling parts:

>Desperate for a $25 billion government rescue package, U.S. automakers and their allies in Washington are warning that U.S. national security would be harmed if Detroit goes under and takes its vast chain of parts suppliers along with it. Truth is, that argument is a tough sell.
>General Motors, Ford and Chrysler long ago exited the defense business. Many of their suppliers make the axles, transmissions and engines used on military vehicles, but defense experts see little risk to the armed forces beyond paying higher prices.
>"It’s a stretch, quite frankly," said retired Army Lt. Gen. John Caldwell, chairman of the National Defense Industrial Association’s combat vehicles division. “I think they’re grasping at straws.”
>When the Pentagon needed MRAPs in a hurry, it turned to traditional defense companies like Force Protection in South Carolina, BAE Systems of Sealy, Texas, and General Dynamics Land Systems in Canada. Similarly, the Army and Marine Corps are buying a vehicle to replace the venerable Humvee and awarded contracts to manufacturers with heavy experience building military trucks.
>"The defense sector has become so specialized that much of it is completely separate from the commercial sector," Wood said.
>Detroit’s Big Three was uninterested in a partnership to build the mine-resistant vehicles, which can weigh 20 tons or more and have a unique V-shaped hull to deflect blasts, said Damon Walsh, Force Protection’s executive vice president.
>"It just wasn’t sufficient volume for them," Walsh said.

And here’s a link to retired General Weley Clark’s New York Times op-ed from Monday arguing for the bailout, and saying that what’s good for GM is good for the Army.

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