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Ross:  Money Not Only Answer For Autos

Financier Wilbur Ross thinks the American auto industry must be preserved, but he disagrees with the idea that money is the only answer.

"We can only survive if the car industry survives," Ross told CNBC, in a wide-ranging interview. (To listen, watch the attached video.)

In order to survive, however, the beleaguered carmakers must change the way they do business, he said.

"They need to lower their break-even point," he said. "Remember, they weren't really making any money when cars were at 15 and 16 million units. Fifteen million units times $20,000 a car, that's an awful lot of volume."

He also said critics of the rescue plan that failed in the Senate had wrongly interpreted the industry's power structure, giving United Auto Workers union president Ron Gettelfinger far more power than he actually has.

"All labor agreements have to go back to locals for ratification," he explained. "He might have promised that he would try his best, but it's not like a CEO of a company. He cannot impose it on the workers, and I can't believe that the Senators who put down those specific requirements didn't know that he didn't have the power to do it."

Labor, he insisted, must be actively involved in any plan for the future of the industry.

Touching on the scandal involving Bernard Madoff, Ross blames Madoff's marketing skills for the scope of the huge hedge-fund scandal with which he has been charged.

Ross said he was shocked at the $50 billion investment fraud allegedly perpetrated by former Nasdaq chairman.

"I think that the most shocking thing is that so many people, who in the normal course are pretty sophisticated, pretty savvy, got roped in," he said. "He must have been an incredible marketer."