attgig

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zenbooty

Ugh. I don't want a stinking apology. I want them to stop begging for cash and operate like any reasonable company should in a capitalist system.

They don't need the money. They need to either find a way to survive without it or go bankrupt. The American economy is not reliant upon them, despite what they and their proponents would try and have us believe. Any pain the common people will feel as a result of a GM bankruptcy will pale compared to the pain we will feel long term when we set a precedent of nationalized or subsidized industries.

No one is or should be too big or too important to fail. Let's bite the bullet on this now rather than making an even bigger mess for future generations to have to fix and clean up.

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guiseppewv

Don't hold back; tell us how you really feel.

Maarchk

I love what zenbooty said. I usually lean towards liberal, but when it comes to money, i'm all about capitalism...

If Ford apologized in an add after their Explorer issue with the tires that blew up, I would appreciate that. They messed up, they should have recalled everything, fixed it, and apologized. A one time incident.

Don't apologize for being a crappy company for 20 years. You could have changed course at any time. But to now wish to 'repent' when the end is at hand.. It's such a farce. More accurate is the private jet trip to washington. They assumed that they were too big and important to need to change their ways, and had we handed them the money then, they would not change... There is no point to saving them. Yes you can keep making cars people won't buy. It may be your car sucks or it may be people have no freaking money or credit and can't buy it. Either way, paying to keep the lights on and the cars coming of the assembly line solves NOTHING! The inherent culture of the Big 3 is the problem, and I don't think any amount of money fixes that. You know what does? Making them learn to live in a world where they may not exist in 3 months. Then you won't see private jets, you won't see a union that feels entitled to some ridiculous benefits. And you won't see a giant managerial staff that does nothing but lobby and kiss a little ass to get free money...


If you work in that area or are connect to that field, it's sad, really it is. But if we continue to fund bad companies, then we will just end up with a bunch of state run companies that are even more inefficient.

Edit: Sorry I cussed and didn't realize it, and I went back to edit myself cause that's uncalled for. But i'm impressed the board ***'s my bad language.

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DarkFury

In the end, the "little guys" always suffer due to the actions of the folks in power of those organizations. Yay... more people out of work due to "bad business decisions".

I'm sure that the execs will still live comfortably on the bed of money they kept for themselves while plowing the business into the ground.

BTW, of that "apology" here is the one thing that I do agree with (per our discussions in the other bailout threads...)


I guess those who don't support American Manufacturing have some kind of plan to find new jobs for all those "soon to be out of work" Americans. Are the other foriegn manufacturers of automobiles going to hire all of those people? Who is going to retrain them to do something else? Do we just "leave all of those people for dead"?

That is my main concern/worry about this crisis... People talk about how bad welfare is now, however with the numbers of people that will be out of work if the auto industry in American collapses, then we probably will be seeing "The Great Depression II" in this country. I'd think that we'd want to avoid that at all costs... however alot of folks who aren't "immediately affected" just want capitalism to swoop in and save everyone I suppose?

Dayuuumed if you do... Even more dayuumed if you don't. /sigh

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Daedalus

Agree with you all. Apology rejected.

The mindset behind the bailout isn't sound. "Bail us out or the recession will get worse". Huh? Bail you out with what? Where will that money come from? Keeping X number of people from having to find another job for an extra few months hurts every single taxpayer. There's no free lunch here.

Cheesypuff

yah...where does money come from. ask that questions to the banks...they generate money all the time. you think they're lending your money, but in actuality when you deposit $1 in the banks, they can lend out $9. yah...i don't know either.

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Maarchk

I understand what you are saying. We are about to leave another few thousands ?(how many people are we projecting?) people unemployed. And that is a very bad thing... but keeping the industry alive will only delay that. It would be to me like keeping the video tape industry alive. Yes some people will continue to buy american cars, but right now, not many people will. maybe one day we'll all want a malibu or a covette, but for the next year or two, we will have a very low demand... So why keep the company going?

Will that make a bunch of people jobless. Definitely. It will suck. The people of the midwest and through alignments and suppliers and manufactures, the entire country will face higher unemployment.

But I believe that the correct answer is to perhaps spend (I know, republicans are already booing me) money to create new jobs that create value. I don't feel much value comes from the next escalade. I would feel more value comes from hiring people to build freeways, repair and check bridges, build schools, upgrade police stations... Things that in the long run help make the well being of all people better. How many people can we employ with 1 billion dollars if we pay them 50 k a year to be construction workers, police, and other jobs? Yes they need training, but doesn't every new job?

And the people who feel they should earn more than that, will go hunt for new jobs. I know people are hiring. Maybe not in manufacturing but everyday i see job listings.. I know they are out there. It's just a matter of filling them.

I just feel that this bailout like the other bailout is like putting a band aid on a broken leg instead of sucking it up and going into surgery. Yeah it's worse at first, but if you don't, it's possible you'll have bigger issues down the line.

zenbooty

DF, as long as people want to buy cars, someone will make them. Either the big three will shrink until they can make profit and go from their, new companies will start up that are more efficient, or foreign companies will build new manufacturing capacity here to fill in the vacuum. There may be a net job loss, but its not going to be armageddon.

Those who support the bailout, please explain to me why you think 34 billion dollars is going to turn around the big three? How will it make them suddenly profitable?

If there is any profit to be made by these companies anymore, they can figure it out for themselves, or they can go bankrupt and a buyer who thinks he can do better will be able to purchase it and try and rebuild. If no one can make them profitable, then 34 Billion given to them is just delaying the inevitable, and hurting the taxpayers.

InfiniteNothing

For clarification. I don't think the question is if the cars will be made, the question is where the cars will be made and where the displaced workers will go.

In terms of 34 billion dollars: I think the idea is the same as the banks. Increase liquidity so they can keep running business as usual until the economy ripens up again.

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DarkFury

I guess we'll just have to see what happens then...

I foresee alot of "I told you so's" in the unpredictable future.

zenbooty

http://corner.nationalreview.com/pos...E0N2Y1OGFiNmY=


Simple Questions about the Auto Bailout [Jim Manzi]


I was speaking to an extremely well-informed person yesterday who told me that he thought a GM bankruptcy would inevitably become a fire sale liquidation, create a cascade of bankruptcies of the other Detroit auto companies and suppliers, and therefore kill 2-3 million jobs. He said that he doesn’t like to exaggerate, but that this would be “Armageddon”. I take his concerns seriously, but there is a distribution of possible outcomes in the event of a Big 3 bankruptcy, and no matter how confident anybody manages to sound about it, the outcome is highly uncertain. I also started to think about what this downside would look like.

An industry think tank developed a (much criticized) study that produced this 3 million jobs lost estimate. Note that the vast majority (2.7 million) of these projected 3 million job losses would be indirect job losses (the so-called “supplier effect”) and spinoff job losses (basically, people lose jobs at 7-Elevens formerly patronized by people who had jobs at the Big 3, and then these former 7-Eleven employees shop less at K-Mart, so other people at K-Mart lose their jobs and so on), and so are dependent on econometric models that are, to put it mildly, not 100% validated. Even in this case, note that within three years, these models estimate that about 1.2 million of these indirect and spinoff jobs would be replaced, so that the longer-term job losses would be more like 1.8 million. These projections assume the Big 3 and all international auto manufacturers (because of the collapse of suppliers) literally cease all U.S. operations for a period of time. They also assume that over time only about 20% of the cars that otherwise would have been sold by Detroit manufacturers would be produced by international manufacturers (or, implicitly, by any other buyer of Detroit’s assets) in the U.S., and the rest would presumably be imported forever.

This study doesn’t make crazy assumptions, but it’s surely about as bad as a rational worst-case scenario can get. If this is the worst-case, here are some simple questions:

1. The U.S. civilian labor force is about 150 million people. 3 million jobs is about 2% of this. The current unemployment rate is 6.7%. Adding three million unemployed would spike the unemployment rate to around 8.6%. In the 81–82 recession, unemployment peaked at about 10.8%. So, this would mean getting about halfway between the current unemployment rate and a bad recession. How is this Armageddon?

2. Thought of another way, the U.S. economy shed 533,000 net jobs in November. So, 3 million job losses is the equivalent of 5–6 more months like the one we just had. How is this Armageddon?

3. The money used for this purpose is money that is not used somewhere else. The amount that would ultimately be loaned to the Big 3 is unclear, but most observers believe that when all is said and done, it will be much, much more than the $34 billion that the Big 3 have requested. Let’s assume $100 billion. As a pure thought exercise, how many jobs could we create with an extra $100 billion of venture capital? How much more sustainable would these be than jobs in companies that need to come to Washington to beg for capital?

zenbooty

But that's a horrible comparison. I wasn't really for the bank bailout either, but at least the argument can be made that the banks could use that liquidity to continue offering credit to borrowers of all kinds and colors. If the banks aren't lending, it effects EVERY business and person who needs credit to build.

With the car companies, what end will this liquidity serve? They can keep paying people a little longer while no one buys their cars? They can keep building more cars no one will buy? If lenders in private industry don't see lending the money to the auto industry as a good risk to take, why should the taxpayers (and we're not even being asked to loan it to them, we're being asked to GIVE it to them!) ?

InfiniteNothing

Wiki says it's not a gift. It's 25 million in low interest loans
http://en.wikipedia.org/wiki/Automot...crisis_of_2008
GM is having trouble with liquidity because the banks are having trouble liquidity even with the bailout money. It's just harder than usual in general to get a loan. I see this as temporary and not delaying the inevitable.

I'm not sure if the big 3 failing would be armageddon but certainly a slow deflation would be better than 3 million people all searching for a job at the same time.

I'm not sure Chrystler should get a piece of the pie. I hear Cerberus is rife with cash. I definitely think Ford is worthy. I think their newer lines like the the fusion and the 500 are competitive with the foreign offerings and their reliability is up there with say Hyundai or Mitsubishi