Open discussion. What do you think? Welfare for Ford and GM?
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33,
Especially since more of your Honda was built in the US compared to a Ford.
No bailout. On the other hand, subsidizing factory overhauls is okay as long as it comes with stipulations.
The government should not be handing out cash, but I don’t have a problem if it helps pay for daunting projects that will benefit the economy in the long run.
Screw them. Let them get their groceries the same place I do. Sucking government moneys now that my savings have been transfered to the last big republican theft of not only our tax dollars but our IRA’s.
#31, Perhaps you are correct. I just know that while every other welder in the area was making $X, my dad was making $X*2. GM wouldn’t have paid that salary if not for the union. Was it a two-way street? Certainly. Could he have gotten on that street without the union? Possibly. As I said, I have mixed feelings – perhaps misplaced but still mixed.
#32, It’s hard to make a rational economic decision when its about the votes.
It’s very easy. While over 90% of the voters did NOT want the bailout, they voted for it anyway. It think we may see a large turnover in reps and sens this year.
37,
In ‘Merica, losers are only there because they are lazy. There is no concept that things just don’t work out. Too many bullshit stories about honest folk coming from nothing to running have of a state.
As someone who actually lives in the area, and has seen the drama unfold, let me clarify a few things here.
The unions have had nothing to do with the failing of the automakers here. The failure comes from a lack of two things.
-Lack of understanding of modern engineering.
-Lack of understanding in how consumer focus shifts.
The Big 3 don’t understand how to make smaller, cheaper, more fuel efficient cars.
#36 LibertyLover said
“It’s very easy. While over 90% of the voters did NOT want the bailout, they voted for it anyway. It think we may see a large turnover in reps and sens this year.”
Oh I doubt it. The stupid people are going to come out this election just like they do every election and vote. We get fucked either way.
Stock up on guns and supplies now.
Give them a loan and make them pay it back like Chrysler did. Imagine what would happen to all the retirees in the event of a bankruptcy . . . We’d end up supporting THEM and they don’t provide jobs. Besides . . . the cars they are producing now are as good a the imports . . . They just have a generation of bad product reputation to erase.
No.
If these were oil companies falling on hard times, we’d have unanimous agreement against a bailout. What’s the difference here?
#2 agreed..
But BACKING a group of ignorant RICH, and paying them, THEIR OWN SALARIES, isnt going to lower the price of cars.
The money would only goto SALARIES for those on top and wouldnt help ANYONE..
If you want a BAILOUT, then Bail the citizens…GIVE EACH $2000-5000 to MOVE to another area with WORK..Pay then to GET OUT and find work..
ok, before i comment, full disclosure: i work for GM making trucks. Be that as it may, i hope to add some clarity to this discussion. First, from what i understand, the money that GM is wanting is in the form of a loan, a government backed loan. Basically its a loan that GM will pay back but at an interest rate far lower than what GM can get in the open market. GM market rates are almost at consumer credit card levels, so if GM/automakers can get money at 4% or so, that would save the companies millions, if not billions. Next, as for the “F*** the unions” argument, remember this: all contracts that the union comes up with ARE ALSO AGREED TO BY THE MANAGEMENT OF THE COMPANY. Many people fail to remember that. The union doesn’t walk in and say ‘we are taking this and thats it’. There is negotiations on both sides and it is agreed and voted on by both sides of the corporation, union AND management. Unions are not a perfect beast by any stretch of the imagination, but think of the unions of a checks-and-balance for a large company. I’m not saying this to whine, but believe me, if there wasn’t a union, no one would ever want to work in an auto plant. Thirdly, remember also, it wasn’t only the Big 3 that took big gambles on trucks and SUV’s. Toyota made a huge investment in san antonio texas and Princeton, IN on trucks. And both of those plants are now idle due to lack of sales and Princeton is being retooled for smaller SUV’s. Toyota is able to do this since the do have a big pile of cash to work with and GM doesn’t. However, legacy costs for retirees that GM has had is a huge burden. Toyota would have the same problem had they been around for 100 years as the world leader in auto manufacturing. It is only recently that Toyota has grown to the size that it is, so the legacy costs that GM incurs is not built in to Toyota…..yet. As for the big 3 don’t know how to make smaller cars, well, we have been doing it for years now and nobody wanted them when gas was 99cents a gallon. I remember some dealers throwing in a cobalt with the purchase of an escalade/suburban just to get them off the lot. Auto plants aren’t Ipod plants. It takes months, sometimes years to retool a plant for a major change as truck to car or vice versa. If you can only see the complexity at an auto plant you would understand. I do agree that our management team at GM has not made the best of decisions over the past few years. But this GM/chrysler merger will make or break the company. Time will tell which way it goes. It will possible crush the economy of a state (Michigan) with job losses into the 100,000’s or so. But it is the nature of the beast of our economy. This bailout will help the autos, but it could be much worse if they both go bankrupt. Hope this helps, and let the slammin’ begin….heheheh
As the banks are now thumbing their nose at us and not using the bailout to stimulate anything but their bonuses…
WHY wouldn the auto coprs be any different?
Let them hang.
Cursor_
I think that if they want a bail out there should be a quid pro quo; that being a SIGNIFICANT increase in CAFE standards. There is no free lunch … anymore.
Why don’t we buy a bigger boat for the next generation carmakers like Aptera, Zenn, and Tesla, rather than bailing out the dinosaurs? After all, they are sinking due to their own decisions, and so they belong at the bottom of the harbor.
Why not buy a bigger boat for the next generation carmakers like Aptera, Zenn and Tesla, rather than bailing out the dinosaurs? After all, they punched those holes in their boats, they insisted that they couldn’t sink, and so they belong at the bottom of the river.
#47 madtruckman – very good post. I do have a concern with the statement about how hard it is to adjust or retool. The Asian manufacturers seem to retool quickly and seem more adept at recognizing emerging trends. Could this have something to do with the advanced age of the big three. If so then it’s time for an epic change for each aging company. Merge, death, total re-alignment?
I personally think that the US federal government should have bailed out the Chicago Cubs after their playoff collapse this year.
It would have been the right thing to do.
#47 madtruckman:
Oh christ, stop it with the “these companies are too big to fail” BS.
I’m sorry that you work for idiots, really. But if they were too stupid to just copy what the Japanese have been doing for the last thirty years, tough shit. And tough shit that Michigan hasn’t successfully attracted new business to their state because they were too busy trying to save these dinosaurs. Just like they’re doing right now.
And yes, we know it’s a loan, and not a handout. But, why should they get a nice artificially low rate when every other business has to pay market rates for loans? We’re rewarding the *worst* performers.
The government shouldn’t even be in the business of loaning money. We’ve already seen what that gets us.
I live in metro Detroit.
Let ’em die.
#52– it is hard to retool even an advanced/younger plant. there are small retoolings, like adding small features such as heated seats, etc. that are transparent. but as for retooling for a massive change such as going from a truck plant to a small suv plan like princeton is can take months. at our plant when we went from the 800 truck platform (older style trucks) to the 900 trucks, just our body shop had to be doubled in size and a whole separate area was being built to replace the old part while keeping the older part running making trucks. we had over 250 new robots put in, miles of conveyors, wiring, etc… see how complicated this gets? now you take a plant, like say janesville WI, that is over 90 years old and has been retooled god knows how many times over the years and you see the problems with retooling (janesville made the suburbans/yukons and is slated to close on dec 23. merry christmas from GM!). And remember also this, GM and toyota have had a joint venture plant for a long time called NUMMI out in california. ever notice how a vibe and a toyota matrix look similar? its cause they are the same vehicle made at the same plant. so GM has had some of the manufacturing lessons taught them by toyota, but they dont seem to work well. i dunno why….
54– I never said GM was too big to fail. but if you let GM/chrysler fail, there are estimates i saw on CNBC from phil lebeau that stated that approx. 2million jobs, from the assembly jobs down to the dealership jobs would be lost nationwide. no matter what you think about the loans, that would hurt the US economy. and those are good paying jobs, not walmart minimum wage jobs. imagine if 2million customers of whatever product you make are now taken out of the economy, well, its gonna hurt. and why should we get an artifically low rate? well, was GM responsible for the unexpected rise in oil? the spike in oil/gas was only for a short time but was very, very steep. no automaker adjusted properly to it. toyota had the prius out way before the spike happened, and still could not make more to meet demand. even they knew that the spike was probably gonna be short lived, so they didnt flood the market with prius’s. they may start now, but now they will have some competition with GM’s volt and others getting into the electric/hybrid market. speaking of that….whatever happened to the push for ethanol? dont hear much about that anymore….ok, rant over for now…
#51– glad you bring up tesla…think of tesla as twitter. twitter is a great idea, but it cannot scale very well. tesla can make 1, 5, 100 cars. but now that they are asked to make 1000 cars? they are being crushed just to make that many. for comparison, my plant makes 1000-1200 trucks PER DAY!! thats right….thats what you call scaling. tesla has gotten in over their head if they think that they are gonna be a major player in the auto market. now as for their technology, that could be used for cars and scaled up. but not today or tomorrow. maybe in 10 years… maybe. tesla may survive, but not more than a jason calacanis playtoy….
I wish that I too could get bailed out for stupidity , sloth and greed
Onwards SUV soldiers
Short take is they put all their eggs in one basket and were not prepared for a shift in market.
Ideally in capitalism the poorly run company goes under.
What people fail to include is all is not lost when a company goes under.
Plants that are productive, the intelectual property of value, and the skilled employees will resurface. Perhaps bought by investment firms or even competitors. Nontheless, the new units will be unshackled by the drag of the under (none?) performing parts of the company.
Yes its going to hurt and be painful, but in the end likely not as much as a whole than the drag placed by a bailout.
The benefit of a bailout is the potential to spread pain around, but by perpetuating and rewarding inefficent decisions, it likely will cost more … but the costs will be less obvious and buried into our national budget.
Banruptcy will be more efficient at recycling the company than any bailout.
Remember the real losers are not the employees but the investors who likely will see bankruptcy wipe out their equity.
Ah but thats the risk of investing. Buyer beware.
I’m not really persuaded that it’s okay for banks and other powerhouses getting federal funds to spend millions on inappropriate activities because it’s separate from the bailout. Tax money is freeing up their limited funds, so it still comes back on us.
AIG really gets me mad and I’m not alone.
#56:
“was GM responsible for the unexpected rise in oil?”
Dunno, but their gas guzzlers weren’t exactly holding down demand for it, so you tell me.
“whatever happened to the push for ethanol?”
You don’t hear much about ethanol because it’s BS.
“2 million jobs […] would be lost nationwide […] that would hurt the US economy.”
You know what I think hurts the US economy? Propping up firms that can’t compete. You act as if 2 million jobs would just vanish instantly. If domestic auto closed shop, other firms would increase production to supply the missing product.
Wouldn’t you rather have some nice Toyota factories? You know, ones that actually make money?
i dont believe we should bailout the auto industry unless the unions concede to the companies enough to make them profitable. NO BAILOUT WITHOUT CONCESSIONS
I don’t think we need to bailout these companies. If they are viable businesses, they will be able to sell more stocks or get loans or sell some units etc. and raise the money they need.
If they are not viable businesses, we certainly shouldn’t be giving them money.
I find it interesting that people are calling unions useless, but then saying that they drive up the price of a car. If they are useless, then they wouldn’t impact the price of a car. Unions clearly get union workers better pay and benefits.
Sadly unions can’t force companies to fully fund their health and pension plans nor plan and invest for an uncertain future.
I would say no bailout. Spend the billions on unemployment benefits and job training for workers who are laid off.
Good Luck Michigan!
yes, of course.