Regarding Bailouts of the Auto Makers

I am not sure whether it is a good idea, or a bad one, to bail out the Big Three. It is a complex decision full of uncertainties and unintended consequences whichever decision be made. But my own industry - the one you love to hate - the oil and gas industry has certainly been through its own tough times and our pleadings for mercy fell on mostly deaf ears.

I graduated college in 1982, about the beginning of the end of that boom cycle. Oil price was around $40 per barrel when I entered grad school and was being projected by some to be on its way to $100. I was fortunate getting out when I did, as crude oil prices began sliding along with analysts projection of pricing, and received multiple job offers and didn't have companies renege their offerings. The price of crude oil fell for a few more years until the big layoffs began on the mid 1980's.

Question is, who was crying for the Big Oil's to get bailed out? No one cared, the price of a gallon of gasoline was good for all...all but the oil and gas producers anyway.

In Houston, Texas alone during the 1980's 212,000 jobs ere lost, of which 113,000 were directly tied to the oil and gas extraction business. I have seen numbers as high as 450,000 for total oil jobs lost during the 1980's...not to mention the fall outs in the communities where these jobs existed, the property values, the tax roll numbers, banking...

How did all of this work out in the end? Well, companies did layoff workforce. But the survivors adapted and got stronger. Companies consolidated, innovated and made better business decisions. Out of this downturn came a better industry, one with better technologies to use the budgets they had, and to get more productivity from smaller staffing through technological innovations. And, from support staff up through management and on out into rig hands the industry still compensates its employees well.

So, I don't know if letting the Big Three automakers fail is a good thing or a bad thing ultimately, but they could potentially come out better and more modernized by allowing nature to take its course. And in the end have a competitive industry with highly compensated employees making products that are best in the world.