Representatives sound off on auto bailout

Campbell says industry needs to ‘take a haircut,’ while Rohrabacher says the company should suffer consequences.

December 11, 2008|By Michael Alexander

As the debate over a $14-billion auto industry bailout moved from the House of Representatives to the Senate, where the bill died Thursday night, local members of Congress had to watch the vote from the sidelines. But that doesn’t mean they lack opinions on the subject.

Neither Reps. Dana Rohrabacher nor John Campbell voted on the bill, each for different reasons.

Campbell said he had abstained from voting on the package because of his 25 years in the auto industry and because the tenant on property Campbell owns is a subsidiary of GM, and he would not directly comment on the bill. But he offered his take on the companies’ troubles.

American automakers are stuck in a mentality where they care more about selling the most cars than making a profit, Campbell said. Bailout or no bailout, he said they are going to have to shrink — painfully.


“Some of the lenders are going to have to take a haircut,” he said. “The unions are going to have to take a haircut. Their dealer body is going to shrink. Some of the dealers have to close.”

That sounds ugly, he said. But it’s a lot better than total collapse.

“They need to make money with less volume,” he said. “People are going to have to lose their jobs… But if you lose 100,000 jobs and save a million, you’re still ahead.”

Rohrabacher, aides said, was out of the country on House Foreign Affairs Committee business, and couldn’t return in time for the vote. But he sent back sharp criticism of the package, saying the government needed to let the Big Three suffer the consequences of their own actions.

“There are many small businesses going bankrupt in our country that have made fewer bad business decisions than our big auto manufacturers and no one is bailing them out,” Rohrabacher said in a statement released to the media. “Again, if something is too big to fail, it’s too big.”

Unions and U.S. car companies shouldn’t be saved from their own mistakes, he said.

“The automobile manufacturers and unions have made poor decisions that have prevented them from being internationally competitive; therefore, I do not think they deserve special treatment,” he said. “They are responsible for the consequences of their own actions in a tough economy, not the American taxpayer.”

Weak car sales, fewer even than the number of old cars being scrapped, are hurting the whole economy, Campbell said. Any future financial stimulus package is going to have to face that along with the housing collapse, he said.

“You have to encourage the purchase of homes and cars,” he said. “Those two things are dragging everything else in the economy down. I think if you do that, we find a bottom in this whole economy and we start to recover everywhere. If we stay at this 10 million [new cars sold a year] car market for another 18 months, you can even talk about Honda going into bankruptcy.”

MICHAEL ALEXANDER may be reached at (714) 966-4618 or at

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