Representatives sound off on the auto bailout

As the debate over a $14-billion auto industry bailout moved from the House of Representatives to its failed fate in the Senate, local members of Congress had to watch the vote from the sidelines. But that didn’t mean they lacked opinions on the subject.

Neither Reps. Dana Rohrabacher nor John Campbell voted on the bill, each for very 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 he owns is a subsidiary of GM, and 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, saying the government needed to let the Big 3 suffer the consequences of their 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 news release. “Again, if something is too big to fail, it’s too big.

“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 per 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 michael.alexander@latimes.com.