The U.S. auto industry is presently focusing in order to get government bailout and analyzing how Government handles the situation to Auto Bailouts Plans requirement for three big automakers General Motors, Ford and Chrysler. However critics of the auto bailouts plan say the real problem is that these companies cost structure is to swell, their management does not work and can not make cars of high quality enough to be a focus for U.S. buyers. So how it would be better by investing money to the same people who could not get it use rightly and how it would solve the problem? Probably not!

It is a matter of fact that these Big Giants of US auto industry will avoid to do necessary cost cutting in case of Government Handout. An average GM employee is getting handsome hourly salary with combined pay and benefits due to strong worker union in company. But this does not limit to ordinary workers, GM CEO is currently making too much while leading the company towards financial crisis.

U.S. taxpayers' money will not change the fact that many foreign auto makers are better than their U.S. counterparts. Kelley Blue Book declared its 10 brands resale value this week, and astonishingly not one of these big three companies was on the list. Bailout funds would help car manufacturers continue to outsource jobs to foreign countries, where costs are lower. US companies, that’s why, have increased ratio of manufacturing and assembly done abroad in the last year especially in Mexico and China.

Three major bankruptcies do not mean that it is the end of the automotive industry in the United States. Foreign automakers that already have plants in US could take the lead and open up new factories. A handsome number of American workers are already employed by these foreign car manufacturers and this number likely to increase as a result of any U.S. automaker disappearance and honestly the crisis situation would benefit by increased production of foreign automakers.

Other industries have survived very well from being bankrupt. Although most major airlines have spent time in bankruptcy, including United, Continental, Delta, Northwest and U.S. Airways and their situation seemed especially terrible after 9 / 11 but the big companies made it through. And to the extent suffered by low-cost competitors like Southwest and JetBlue was higher place, often offering superior service, in addition to lower prices.

Bailing out the auto industry can encourage other sectors to ask for government handouts. Remember that the U.S. Concerned Relief program assets was only designed to help banks, but now the insurance companies and even credit card giant American Express are trying to get into action. And on the same grounds, Home builders, who arguably are tied as the car manufacturers could also lobby for some of the actions.

Finally Auto Bailouts for Auto Industry by US Government is not a solid decision. It is a risky one and having a lot of impacts on a normal US citizen working in auto industry. All in all, such plans will never help auto industry to overcome these situations. Auto Bailouts may be a temporary relief but not complete cure.

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