Auto Bailout Will Have Local Effects

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Story Published: Nov 18, 2008 at 5:39 PM PST

By Steve Wellman

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Call it a slow motion car crash. Major auto manufacturers are so far in the red they say they won't survive without a big cash boost from Washington. Democrats and Republicans are split on forking over the bucks.

"We're seeing a potential meltdown in the auto industry," says Democrat Senator Harry Reid of Nevada.

Republican Senator Arlen Specter of Pennsylvania says "I'm prepared to consider that but only if there's an understanding of what are the facts."

Meanwhile here in Yakima, prominent auto dealer Bob Hall says he and other dealers are being asked to get involved. "Our leadership at the National Auto Dealers level have made strong appeals for dealers and their employees to call their congressman," Hall says.

Hall explains that up until now he hasn't done that. But he's keeping a close eye on the proceedings.
"We'd just like to see a little more clarification before we make that move."

Lawmakers have a very thorny issue to deal with. Letting General Motors go bankrupt could have a ripple effect that could go across the entire country and certainly be felt here in Yakima, Washington.

Bob Hall adds, "It'll have a very dramatic effect on local city and county government because they depend on our generation of a large amount of sales tax revenue."

Add to that potential jobs lost at all levels of the car biz: from parts to service to sales. Still, some experts believe bankruptcy wouldn't shut down carmakers, just give them new leadership and lower costs.

"Bankruptcy as a system requires that management justify itself."

From Detroit to Washington to Yakima, the stakes are high.

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