U.S. Auto Industry bailout

[allonons]

Sens. Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers because a bailout would only postpone the industry’s demise.

“Companies fail everyday and others take their place. I think this is a road we should not go down,” said Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee. “They’re not building the right products,” he said. “They’ve got good workers but I don’t believe they’ve got good management. They don’t innovate. They’re a dinosaur in a sense.”





It's funny they never said that about the oil companies or the banks and insurance industry?

They just want to get rid of the union votes that were cast against them in this past election lol.

[SnuggleySoft]

Haha!

What's ironic is that its the Republicans fault that they are "dinosaurs." Bill Clinton raised the required mpg for cars, and then it was reversed under Bush. However, by that time, Japan had heard that it was going higher so they built more efficient cars. So now they have much better products than we do.

Republicans, (besides some like Schwarzenegger(*sp)), never raised standards so our cars are no longer competitive except for the few hybrids we have, but you have to wait forever to get one. They said that raising the standards would hurt the car companies, (what prophets!). Those dumb asses need to stop taking money from oil companies.

Suggestion: ExxonMobil bails out GM.

[stoffi]

GM is outdated and inefficient. Let others do their job, let them die.

[Uncle]

wow cool. i don't know if u guys are americans, but if u are- congrats :) good to see some straight thinking guys on the other side of the atlantic :)
i'm not completely sure how things are with the car industry here in europe, but from the looks of oil reserves and polution i'd guess u should take japan's or our way if u want to be world wide competative. actually i think that ford for example produce cars specialized for the european market, observing our regulations. i guess that's a step in the right direction
as for the bailout, these companies are not banks and governments shouldn't bail them. if they want to survive, they should addapt. snugle's idea is good though :) oil and car industries go hand in hand

[Utopia4life]

1/10 people in a certain state have jobs tied to the industry... if things collapse that state is gonna be seriously facked up.

I agree amercian car industry could use a make over.

I also think its odd they saved the speculators, that lost millions and banks that accepted the way the bubble was made. (I can see how common folk with normal amounts of cash that didnt do anything wrong shouldnt suffer just because their bank was doing something silly, but that too is odd. So other industrys just turn the key when things go bad... banks get payed when they go under.)

[Utopia4life]

Uncle one of the reason our cars are smaller and more effecient is because our gas prices in european countries are like x3 of what they pay in the us.

Amercians would revolt against the goverment if they had to go from their prices to ours in 1 swoop because of some new way to pay green taxes on gas/oil ect.

But yes.. most european cars take milage alot more serious than amercian models. We dont drive SUVs and Humvee's that go like 2km/L, over here and we dont overcompensate for security needs because fear of bigger vehicals on the roads.

[bandit]

Haha!

What's ironic is that its the Republicans fault that they are "dinosaurs." Bill Clinton raised the required mpg for cars, and then it was reversed under Bush. However, by that time, Japan had heard that it was going higher so they built more efficient cars. So now they have much better products than we do.

Republicans, (besides some like Schwarzenegger(*sp)), never raised standards so our cars are no longer competitive except for the few hybrids we have, but you have to wait forever to get one. They said that raising the standards would hurt the car companies, (what prophets!). Those dumb asses need to stop taking money from oil companies.

Suggestion: ExxonMobil bails out GM.

WOW...so...the government, as opposed to the marketplace, should make decisions about what people drive? That may be the most Marxist load of crap I have read on these forums in a while!

Here are the contributing factors as I see it: (my opinion as a consumer and taxpayer in the US)

- The big 3 have fallen behind in quality. This is probably the single greatest contributor. Toyota, Honda and Nissan have offered better warranties for more than a decade, on top of which, you need the warranty less.

- The unions and the managers of yesterday where all incredibly short-sighted money grubbers. They sold out the future some 20 years ago. Now they are gone and our current crop of union thugs and managers are scrambling to make ends meet in an impossible scenario.

- Michigan has taxed resident corporations to the point where they must go overseas to produce a product at a proffit, to say nothing of the federal taxes on corporations. Michigans localized recession has been in full swing for a decade. Yet the morons keep electing the same type of people, whom keep enforcing/enacting the same silly union friendly, tax happy legislation.

I have been a die-hard Ford lover for 30 years. I now own 1 '93 F150, a Nissan Titan, and a Nissan Altima. I have had the Ford since it was new and have gotten my money out of it, but I cannot bring myself to purchase another. The price is way too high for the product. Perhaps if Joe Schitt union wasnt pulling in 70 bucks an hour in pay and benefits, their products would be priced a litte more competitively.

Now I see people on these forums supporting the theory that MY government should put a gun to MY head (If you dont believe taxes are seized at the point of a gun, dont pay them for a couple of years. Some friendly IRS agents will come for a visit and demonstrate my point.), seize MY hard earned meager restitution, benevolently hand MY money to someone making 3 times MY wage whom is too stupid to make their own enterprise proffitable.

You would have to be crazy to support such balderdash.

[ksisco]

I think it is absolutely fact that there is a quality difference between american cars and japanese or european cars. I'm pretty sure that this could be backed up mathematically/statistically based on expected life and miles out of vehicles.

Blaming the state of affairs of today in the US automotive industry on any number of factors, however I believe is nothing but a matter of opinion. Certainly there are a number of contributors and many things can be blamed. But how much effect did each factor have, and how do you know?

That's eventually where all of these discussions go. They start with facts, and then pretty soon opinion creeps into it and we wind up with people from both sides pointing fingers and assigning blame. Bor-ing!

My second point:
Bandit... it isn't YOUR government. It's OUR government. Sometimes you will find yourself in the minority and will have to live with what the majority wants. That's the way it is designed. It you don't like it, become more active in your government. Call your Senators and Representative.

And you already have had the scenario you just described happen during the Financial and Insurance bail outs. Furthermore, there are relatively no restrictions put on what can be done with that money, and it is already being used for purposes other than what was originally proposed.


I don't support the idea of bailouts... as it contradicts the theory of our entire economic theory: survival of the fittest. Bailout to me is the same as debt socialism. Bailout means privatize the profits, socialize the losses.

But I think it is just plain silly to support a bailout of financial and insurance companies but not of other companies. What is the essential difference?

Personally, I think that America has become too much credit dependent. Not only will people go out and buy things they can't afford on credit, but businesses are depending on credit just to pay their employees from week to week! Now, don't get me wrong, I understand that to run a business you must incur *some* debt. Just like when you buy a house you incur some debt. But I don't think that it's a great idea to incur *more* debt just to pay your mortgage and then hope that you can make enough money down the road to cover both expenses. This, to me, is essentially what borrowing money to pay employees is doing as well.

Well, eventually we reached a tipping point. The lending stream is much like lake with several rivers running out of it. The rivers are "borrowing" water from the lake and then returning it downstream. Well, we reached the point where there are too many rivers that don't even get back around to refill the lake, and as a result the lake dried up!!

I think we need a serious recession to put people back into a save first mindset. It's ok to incur a little bit of debt, but we a lot of us got wayyy over our heads. Personally I didn't, and it would stink to have to suffer the consequences of other peoples actions... but I think in the end it would be better for us all.

[VT2]

Say what you will about american wheels - nothing will ever detract from their sheer awesomeness and manliness.

Except maybe the cost to drive them.

[SnuggleySoft]

I'm sorry to blow your mind bandit, but we live in a mixed economy. That's why we have regulations, and things like minimum wage...

[bandit]

I'm sorry to blow your mind bandit, but we live in a mixed economy. That's why we have regulations, and things like minimum wage...

Of course....minimum wage....the crutch for the stupid and teenagers. If you cannot negotiate a reasonable wage for yourself, then you should suffer the consequences of your lack of skill.

So many socialists....

[Kontric]

At entry level there is no wage negotiation. Every single corporation would ream base line employees just because they can if there were no minimum wage requirements. It's all about making money at the end of the day, and if they can get away with paying you 20 cents an hour, you're getting 20 cents an hour and you better be damn happy about it, cuz price chopper starts at 8 cents an hour.

[SnuggleySoft]

Wow, Bandit. I gotta say it takes an awful amount of thick-headedness to believe in the outdated form of laissez-fair capitalism you spew. Any economist worth his weight is some form of Keynesian. Classical economists lost their rights when the Great Depression hit. Find a new source besides the Cato Institute and Rush Limbaugh.

[Takeshi_02]

Rush is hardly the best example for classical economics, nor is he Austrian.. but I digress. I would argue that those same economists that are "worth their weight" contribute to the endless cycle of bubbles growing and popping due to the government interfering in the marketplace. I'm well aware of the fact that we live in a mixed economy, but there is a tipping point that we shouldn't cross on principle, if for no other reason than that.

Minimum Wage - Fine. (not happy about it, but fine)
Social Security - Fine. (legal ponzi scheme, but fine.. until round about 2017 anyway..)
Bailouts for anyone who signs up for the government dole - Not okay? Please? Maybe?

If one or all of the big three file for bankruptcy they will be able to renegotiate contracts for both current and past workers for wages and pensions and hopefully re-emerge as a more profitable company. This might happen by way of merger or acquisition, or might even result in one of them flat out failing. But even then, it's not the end of the world. Oldsmobile went under a few years back, and there is still a market for the brand both for parts and the actual car itself. Giving tax dollars to a company simply to keep it afloat doesn't change the fact that in its current incarnation it is not viable in the marketplace.

As for the Great Depression reference.. the New Deal didn't get us out of it, it just made it worse. In 1938 after 7 years of the New Deal unemployment was still around 20%. If you look at some of the editorials from the time period.. well lets just say the policy positions were not always revered as most people tend to do now. An interesting study came out of UCLA awhile back that you might be interested in reading and had some startling parallels to our current economic woes.

Just for fun though, let's look at 2 things that came from the New Deal, or the time period anyway.. Fanny Mae, and compulsory unionism which started with the UAW in 1935. Fanny Mae is, as we all know by now, a black hole for tax dollars.. and well the UAW.. is the UAW. Their demands on the industry took their toll.. but they are far from the only, or even main culprit of the current auto mess.

Ultimately, I like almost everyone else blame the CEO's of the big 3, though probably for a different reason. I blame them, because they refuse to make tough choices and do what is necessary for their company to become profitable, instead deciding it easier to go to Washington and beg for money from the tax payer's proxy, namely Congress, like common beggars. Mixed economy or not, capitalism should be the foundation of America, if not that, then what?

[nfidel2k]

Democracy.