Bailout the Automobile Industry ?
- Thread starter TheMasterOfOrion
- Start date
Oh I understand your question now (though I would disagree with that last sentence; running a lending business well does require a strong sense of profit motive or you lose money and lend to interests that should not be lent to).
Governments don't like to directly lend, as a rule. They prefer to borrow (think government bonds, securities, etc) because they need more money than the have.
Also, it's politically dangerous for governments to lend - if the government owns the mortgage on your house and you get repossessed, you get angry directly with the government. And that means lost votes.
But at times of crisis, governments do lend - central banks are lenders of last resort and that is what they're there for.
Fundamentally it's a question of what you see as government's role. Clearly, you do not object to a very planned, statist view of the economy, so having the government as a lender does not raise concerns for you. For me, it would raise concerns of inefficiency, waste of public funds, a stifling of private enterprise, and increased control & intrusion of the state into personal lives.
More basically, I'd argue that the role of government is to buffer the effect of the economy on the private sector (I side with Keynes on this), then they need to be able to be on the "wrong" side of the economic cycle (ie to be able to borrow heavily during recession despite having collapsing revenues) and if they run lending operations themselves, that makes this more of a conflict of interest and harder to do.
It boils down to whether you think they will be hurt worse by the correction or by government measures to prevent the correction. I would say that at least the correction will definitely work and will work quicker without too much government interference.
Use government spending to cushion the impact of collapse on the people, not intervene in collapse itself, would be my suggestion.
finally somebody in the industry admits to acting like a scumbag
I know the decision ain't easy, a bailout is another failout and the fair capitalist in me says less socialism and the fair capitalist in me feels at least one of these big three must go under. The union bonuses need to go!
However all of us here must acknowledge now is a dangerous economic time, the Big Three isn't just about Detroit and if all Three were to suddenly go under you would see unemployment numbers skyrocket in the States maybe even on par with numbers during the Depression
They just need to shed the stranglehold of the unions. An act of congress or whatever else may be needed to abolish the union contracts. Then these automakers need to make the kinds of cars people will buy and not just those the liberals want them to make.
Ya, I'm just pissed at all this stuff.
The 'union contracts' aren't what's killing them, for one. It's health care and retirees, since they're all old companies with more retirees than the Asian companies. For the last decade the news has been that health care costs were skyrocketing and that the car companies weren't going to be able to cope with it, and here we are today in a major recession and credit crunch.
And the sad thing, if they'd started making those cars 'liberals' wanted them to make, they wouldn't be in this mess in the first place. Instead they made trucks and SUVs short sighted people wanted to buy because they were more profitable than small efficient vehicles. and when gas jumped and no one would touch them, they were left with lots full of black metal albatrosses and ever idling plants.
GM needs to sever a major portion of it's nameplates just to stay afloat, but that will cost a lot to do. They also need to drop a lot of the white collar workers they have.
Chrysler, I dunno, I doubt they'll last the year sadly.
Last edited:
Hence, it is the union contracts that are killing them. All of those illustrious benefits are negotiated into the compensation package. Also, the 95% pay while being laid off is in the contract as well. The Jobs Bank is the #1 killer.
And the unions refused to yield on who would cover their health care costs.
For the unpteenth time, they SOLD CARS PEOPLE WANTED. I challenge you to find one person who bought an SUV under duress. When a company has a product that sells so well that additional shifts have to be added to keep up with demand, that means they have a hot product.
BS, BS, and more BS. People didn't start shying away from those large vehicles until gas hit $3/gal. GM converted it's now-defunct Oklahoma City plant from mid-size cars to SUVs in order to keep up with demand as gas was approaching $2/gal. THE CONSUMERS DICTATE WHAT A COMPANY PRODUCES
No one knows what any of these companies have to do in order to survive unless we wait.
BTW - Today is the anniversary that the last Studebaker rolled off the assembly lines in Indiana in 1963. Why is it that every other company can go Chapter 11, but the car companies are untouchable? This is nothing but fear mongering. Years ago, when the auto workers went on strike, federal mediators were on the scene within hours. When is the last time that happened? It was probably the 1990's. Hell, auto supplier Delphi has been under Chapter 11 for the last few years and they're still open
Thanks Jolly St Picard. Pretty much my thoughts as well.
I couldn't believe it when I heard about the job bank. Talk about a business killing program.
We have successful automakers in the US that don't need unions and listen to what the customers actually want to buy. They don't need a bail out. I don't think these ones really do either.
We sure don't need a car czar and union official (!?!) on a oversight board. What the fuck do unions have to do with running a business except straight into the ground?
I couldn't believe it when I heard about the job bank. Talk about a business killing program.
We have successful automakers in the US that don't need unions and listen to what the customers actually want to buy. They don't need a bail out. I don't think these ones really do either.
We sure don't need a car czar and union official (!?!) on a oversight board. What the fuck do unions have to do with running a business except straight into the ground?
Here is a company that would most likely buy a defunct manufacturing plant.
Who Needs the Big 3? Atlanta Company Plans New Police Car
Who Needs the Big 3? Atlanta Company Plans New Police Car
What's more interesting is that the company I just mentioned is an upstart, which you previous said there weren't in this countryOr cops could start driving Hyundais
It would take YEARS for this company to be able to make enough police vehicles for the demand that police departments put on them... even if the design did fit the demands put on the cars by law enforcement.What's more interesting is that the company I just mentioned is an upstart, which you previous said there weren't in this countryOr cops could start driving Hyundais
It would take YEARS for this company to be able to make enough police vehicles for the demand that police departments put on them... even if the design did fit the demands put on the cars by law enforcement.What's more interesting is that the company I just mentioned is an upstart, which you previous said there weren't in this countryOr cops could start driving Hyundais
BAWHAWHAWHAWHAW!!! You're kidding, right?
The company is designing cars FOR POLICE DEMANDS. Check with your local police department on how much is spent on maintenance of their fleet. When my brother was a Sheriff in Nevada, he used to buy his County police vehicles from the LAPD, because LA mandated that all police vehicles had to be removed from service at 50K miles; otherwise, maintenance would eat up the budget. Hell, the OKC police department passed on the Dodge Charger and stuck with the Crown Vic because the Charger has such little interior room. With all of the crap mounted in a Crown Vic that becomes cramped.
Read the article
It's designed from the ground up for their needs.
I voted for one. I actualy emailed my Congressman requesting they do the bailout of the Autos.
I've owned two GM vehicles and worked on a GM lot, my family has always owned GM or Ford vehcles.
The only problem with them is peoples misconception of them. I think they get another shot.
Anyways, not here to argue anything just answering the poll.
And I didn't support the financial bailout and still don't.
I've owned two GM vehicles and worked on a GM lot, my family has always owned GM or Ford vehcles.
The only problem with them is peoples misconception of them. I think they get another shot.
Anyways, not here to argue anything just answering the poll.
And I didn't support the financial bailout and still don't.
Why on earth should a company with a broken business model and legacy costs be saved with OUR TAX DOLLARS???
Because it is a far better thing to do than the alternative?
No, it's not. The so-called alternatives are pure speculation, conjecture, voodoo and scare-tactics.
Let the chips fall where they may and stop this BS about "saving jobs". GM doesn't have near as many workers in any given factory now that was once there in 1990, and a comparison to 1970 would shock you to death.
As I've asked before: If this is such a good idea, why aren't investors and venture capitalists lined up around the block (and yes, there are people out there with money to invest).
As is the belief that nothing bad will happen. I'm sure it won't be a 10% jump in unemployment as some fear, but it will be high. It's not just the workers at the plants. It's the entire supply chain. Better safe than sorry. Besides depending on how the government does it it could be a really good deal for the future.
