Why we should help the auto industry: A clear explainer
By John Amato Monday Nov 17, 2008 9:00amWith the economy in tatters and a very bad holiday season upon us for retailers, how can we actually let the auto industry go out of business? Yes, many people will come with their hands out now after the bailout, but we really have to look at it as pragmatically as we can. Let's keep the knee-jerk reactions to the downtrodden Conservatives who would rather see millions of more jobs lost. Sure, they dug themselves into a ditch, but it's too important to just reject it out of hand.
Jonathan Cohn writes a very good piece on the situation:
That's why many analysts and scholars believe GM would likely end up in Chapter 7 bankruptcy, which would entail total liquidation. The company would close its doors, immediately throwing more than 100,000 people out of work. And, according to experts, the damage would spread quickly. Automobile parts suppliers in the United States rely disproportionately on GM's business to stay afloat. If GM shut down, many if not all of the suppliers would soon follow. Without parts, Chrysler, Ford, and eventually foreign-owned factories in the United States would have to cease operations. From Toledo to Tuscaloosa, the nation's assembly lines could go silent, sending a chill through their local economies as the idled workers stopped spending money. Restaurants, gas stations, hospitals, and then cities, counties, and states -- all of them would feel pressure on their bottom lines.
A study just published by the Michigan-based Center for Automotive Research (CAR) predicted that three million people would lose their jobs in the first year after such a Big Three meltdown, swelling the ranks of the unemployed by nearly one-third nationally and leading to hundreds of billions of dollars in lost income. The Midwest would feel the effects disproportionately, but the effect would reach into every community with a parts supplier or factory -- and, to a lesser extent, into every town and city with a dealership. In short, virtually every community in the country would be touched. ... Read on.
Read the whole piece and let me know what you think. It's times like these that good government needs to step up.
Krugman writes that Obama should not be afraid to spend:
The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
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because the republicans don't want to, so it must be a good idea.
Cause those fuckers are on a roll....to Hell.
I wonder about the Republican opposition to this. If the auto industry goes down in flames Obama is going to have a pretty tough first term.
What's good for GM is Good for the Army
Here's another way of looking at the problem Einstein.
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We already bailed out banks, insurance companies and financial holding companies.
I just got my renewal rates for my health insurance and for the second time in 6 years they went up over 70 percent. Who's going to bailout me. For the first time in 25 years I will be without health insurance because I can no longer pay for it.
This is not a knee jerk or conservative reaction as John said and I felt that was pretty insulting. This is fact for me and many others. To hell with GM. I'm suffering too.
You have a point, gump, but the solution cannot be simply to let GM go down. Precisely because allowing that to happen would hurt so many like you. And like all of us.
And that's the ultimate lesson I hope (though I can't say I'm holding my breath) that we learn. We should not be bailing out these companies or their idiot executives who ran them into the ground. We should be bailing out the workers, and bailing out our nation.
If we the people have to pay to keep these companies going, then we the people should reap the benefits. We the people should own these companies, and direct their next moves.
As in, you wanna keep operating on tax dollars? Stop making your gas guzzling, too-big-for-the-lanes SUVs, and start making fuel-efficient and alternative energy-based cars. You can't do that by, say, 2011, no more money for the company, and all profits thus far, go to the workers and the people at large.
And if a bailout does bring in money, then the country gets to help balance its budget, and spend on health care for everyone, and protecting the environment.
And it doesn't go back into private hands until it's intelligent to make such a move.
Yeah, yeah, call me a socialist. Please. We're dealing with massive market failures, abetted by corrupt government and idiotic private decisions. It's time to put a halt to it in a meaningful way, one from which the country will benefit.
If there is a bailout of GM, it better come with some serious strings regarding fuel economy, operations, and car design. In order for GM to survive, they need to change their business model and change their target market. Anything less is just more the same and will lead to another chance at bankruptcy in 2 years. If the government is the bank, they must demand their priorities first and foremost (like any "good" bank does with business loans)
These companies have no one to blame but themselves for their situation.
I'm waiting for an explanation how these companies will stay in business after they devour the bailout cash. Doesn't look like they have much of a plan for profit any time soon.
This is so completely true.
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And fire the fuckers who insisted on selling the gas guzzlers and not focusing on sensible vehicles...
My dad and I were talkin about this yesterday...the big three should narrow their focus...on small cars, small trucks, eliminating the lines of cars that are different in nameplate only...
and striving to make their commercial trucks as fuel efficient as possible...
We are shoveling bailout money to the greedy and irresponsible.
I'm all for giving them the money as long as the government seizes all assets and property and appoints an entirely new leadership. We cannot reward these companies for failing to develop environmentally friendly vehicles. I'm sorry about the workers that will lose their jobs but I do believe Obama will begin to create new jobs that aren't beholden to the old special interests.
The financial bailout was a huge mistake and we can't keep going down that same path.
End the wars in Iraq and Afghanistan and begin building a new America not based on the interests of the top 1% of the population. If you want to call it socialism that's fine too...
Why should we give health insurance and 401k assistance to auto industry workers when I NEED HEALTH INSURANCE AND MY 401k PROTECTED TOO!!!
It is a rule of thumb that if you want to sell more product, you lower the price. If you can't lower the price and still maintain profitability, then you must cut costs. It's about time that we realize that we pay management far too much. The CEOs make tens if not hundreds of millions per year. And there is no reason for us to subsidize such nonsense. Either GM cuts the pay of their managers and executives, or they go under. And before you argue that they'll cut the pay of their hourly workers, so what?!? Who says they deserve that much per hour? Who?!? If they can't compete, then let them fail. Stop throwing good money after bad.
someone could give me a clear explanation of the downside to massive deficit spending. Does the rubber hit the road at any point or is it all just funny money and there will be no negative consequences as long as the rest of the world is willing to play along? Seriously!?!
Just like you and your credit cards (assuming you have any), you can borrow like mad as long as you can make your monthly payments. Once you fail to meet your monthly debt payments, stuff starts going downhill.
In addition to that, there is also the fact that more and more money chasing the same or fewer goods and services will lead to price inflation. By injecting so much money into the system as we have been doing, we are driving prices up.
it's not a monthly payment we have to make, it's a mountain of mature t-bills held by the Chinese and others. As long as they never want to cash them in, we'll be just fine.
TBills have maturity dates. It's silly to suggest that the Chinese are not cashing those in at date of maturity. They may take the proceeds and immediately buy more TBills, but they're not holding them past their maturity date. That would be completely stupid, and the Chinese are not stupid.
Now if the Chinese have been re-investing in more TBills as they become mature, and then decide that they'll start taking cash instead, we're in trouble. But then again, nobody holds cash -- it depreciates too fast, especially in a hyperinflationary period such as now. If they take the cash, and decide to spend it, they will have to spend it in the USA on US goods and services. That would help with the unemployment crisis we have now as well.
Now if you're China, you have to be asking yourself whether it makes sense to buy TBills. Sure, they have a modicum of interest gain associated with them. But if treasury bills are giving 6% interest in an environment where cash is depreciating in value by 10%, it doesn't make sense to hold treasury bills. They lose effective buying power, even though technically they're gaining interest.
The sooner one realizes that, the easier it gets to deal with reality.
The problem with credit based economic engines is that, for the most part, there is always a "void" between the credited money and the "real" money. Basically, bankers make money out of thin air (literally) and the rest of us have to produce "real" money to back up that thin air.
The problem is that sometimes you produce so much hot air, that it becomes impossible to patch the void up. And thus, we are in the current situation.
Alas, it is a testament to the sheer stupidity of the economist and MBA classes. It had been patent for a while that was more "credit money" than total "real wealth" in the world. And we are talking at least 1 order of magnitude difference.
Such shortsighted, greedy and just plain idiotic people should not be in charge of a 7/11 much less the international economy.
It is time to evolve. We have the technology to feed our masses, fight illnesses, and provide shelter to people. Which were the main contributions of capitalism. Having those bases covered, it is time for people to move from credit based systems, into something that enables the evolution of the human race. I know it sounds cuckoo, but we should be focusing on looking towards the next human challenge (space exploration, scientific and cultural achievements, etc) and that challenge should not be how to keep the rich from living off our backs.
Exactly...
Rosepierre is right, but I would go further. Everyone (that means everyone) in upper management must go with only the bus fair to get home in their pockets. Second, the deal must be this: not a single car comes off your lines until it uses no gasoline. We'll have viable electric cars in 14 weeks. Plain and simple. If we use this moment as chance for a major game changer, then it is worth it. We can break the bond between the auto and oil industries and rewrite our transport situation. Anything less, and I include hybrids in the "less" category, is good money after bad.
to just let them go belly up first? When they liquidate, government and or private enterprise could pick up those assets much more cheaply to start making electric cars.
but we can be pretty sure that any private entities picking up the surviving assets would throw away the old business models. And that would sure be a good thing.
these would have to be some serious investors/private enterprises. even at liquidated prices on equipment, the cost to set up large production would be astronomical. The majority of cost coming from designing the new vehicles. if this was a probably possibility before the filing, i bet GM would fight tooth and nail for every piece of IP they have.
i bet if GM liquidated, the capital will be swolled up by other big manufacturers, like toyota, who would open a plant in detroit on their terms (i.e. no unions).
That would be capitalism, and we can't have that sort of thing in America!!!
I say let the Republicans decide, then let the big 3 fail, when the shit hits the fan, Obama can nationalize the Oil companies ala' the Shock Doctrine, plus we can lay the blame at all the "no bailout" Republicans. 2 birds with 1 stone. The big 3 failed why should we bail them out? They made SUV's for years because it used eisting lines, had a huge markup and was greedy and lazy, they did it, free market baby! Fuck 'em all and let chapter 7 or 11 sort 'em out.
After the Crash of Capitalism - Nationalize.
It's the next step in the evolution of economies.
that thanks to the Bush Crime Family and their enablers and various consiglierri the auto makers would end up with cleaner break bankruptcies than those available to the line workers who will lose their jobs and everything else in time. The little guys will still be paying some of the debt for the rest of their lives. The regime should undue those credit industry written bankruptcy rules ASAP.
Have the Fed order the Banks, that we've secured 700billion for to loan the carmakers the money they need.
I can't believe that after coughing up 700B for the banks to ease the credit crunch the govt should have to bail out anyone! Obviously the 700B represents the biggest theft job ever.
our track record as Americans states that we don't act until something catastrophic happens. That said, no one - and I mean no one - will do a thing about this but fret and wring their hands until the absolute worst happens.
I'm sorry, but I think they should collapse - in the long run it will be better for this country and the world. Sure, the short term will suck but these jokers have been living in the short term world for the last 50 years. All a bailout would do is perpetuate the status quo and squelch any potential for real change.
I am not an expert but it seems to me that if you instituted tariffs across the board on all manufactured products to match the wadges paid in the United States. If you put about 250 billion into public works projects across the country administered by city and county governments. If you start taxing the CEOs at about 65% over about 2 million per year. If you raise the minimum wadge to about $12 per hour with that amount going up automaticlly every year based on the COLA. If you institute Medicare for all based on about 65% of the cost of private medical insurance. If you were to increase the gas mileage standards to what is technology is capable today. I think the car manufacutres would be fine in a short time.
GM Must Re-Make the Mass Transit System it Murdered
Thanks, MountainMan23.
When the lower- or middle-class worker asks for relief, it's called socialist marxist welfare handouts. We're supposed to make smart decisons about our money, invest, and grow rich like the big boys.
When the corrupt corporate leaders who rode their own ship into the toilet are faced with bankruptcy, we don't hear about how they should have made smart decisions, or how they shouldn't expect a handout, we're supposed to save their asses Or Else 250,000 Americans will be out of a job.
But let's not have more 'no strings attached' horseshit. First step in the bailout is that all auto corporation executives, from the CEO to the last member on the board, forfeit all bonuses for 2008 and until the business has been restored to solvency with a sensible business plan. Almost putting a quarter of a million people out of work is not 'leadership,' and does not merit reward, period.
Is it the unions' fault? I'm leaning towards no - every time negotiations come up, we hear how increases in COLA, healthcare, benefits - these are all Bad Things, detrimental to the company. Congress needs to examine the books, and I suspect the money isn't being bled out by the unions or union members. (For example, Ford pushed a local dealership in Vallejo, CA to move to a new facility. The added overhead of paying for new digs, plus flagging sales sank that dealership, which had been in the area for decades. That's not because the union guys are getting paid too much.)
I'm sick of the bailouts but if we're going to do it let's do it right. Huge bank with no financial problems are getting money from the banking bailout - Bank of America got $15 Billion. That's bs. Why are we giving money to people that don't need it? Any money to the auto industry needs to be conditioned on raising fuel efficiancy and clean air standards.
People don't want their cars. People have lost faith in them. People can't get auto loans. People are reigning in their spending.
So why waste the money?
I tend to agree with you. It may just be delaying the inevitable.
and before they liquidate all their assets and fire everyone, the guvmint offers them a loan on the condition that they retool everything for extremely efficient cars and trucks?
Is that even legally possible?
Here's one possibility.
"Here's some money. DO it our way."
"No"
"Ok. See ya."
In order for anyone to receive financial aid from the government, the gov't lays out requirements. If I want medical aid from the govt, I must do everything my doctor tells me, take my meds, make my appts, and not make over a certain amt of money or have assets in excess of a certain amt.
If I want housing, food, or education help, in addition to the financial requirements, I must not violate federal drug laws.
In the case of housing, I must open my home annually for inspection.
The automakers don't have some exemption that says "We get bailed out, and it's none of your business what we do with your money."
Uh uh. This is the time we tell then how they are going to follow rules w/o any fucking costly bullshit on their part.
Stick a fork in the old way; it's done.
That's pretty much what the banking industry got. They don't have to tell you anybody they're doing with the money.
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If the auto bailout isn't guaranteed to garner new technologies and eco-friendly vehicles, then what CONgress is doing is assisting in a further swindle of American tax money. I mean, if all the big U.S. automakers want to do with this money is continue to produce SUV's and trucks, then I say let them fail. They knew this transition was on it's way. It is NOT the American taxpayers fault Big Auto in America failed to adjust.
FYI
Financial Crisis Tab Already In The Trillions
"Three-point eight trillion dollars. That's $3,800,000.000.000. More than what was spent on WW II, if adjusted for inflation..."
http://www.cnbc.com/id/27719011
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...with the stipulation that I spend it on an American-made car?
as any other bailout plan I've seen.
That's a good idea. Hold a natinal lottery where 100,000 households each get $20,000 to spend on a new American made car. The auto industry gets the money and unloads some cars and a bunch of people get free (or nearly free) cars.
to take care of the workers instead.
I am sure another better and more fit corporation would spring to fill the void.
Win-win situation, and it allows the US government to not be taken hostage by the corporations who are using their workers' future as blackmail.
Just give it to the poorest households that have a viable income and have paid all their income taxes - in other words, the working poor?
are essentially sound. Everyone else can go fuck themselves. I guess that pretty much sums up the GOP economic plan.
Hey! I got an idea...let's attack another country that didn't cause us harm!
Maybe all those brilliant auto workers that chanted USA! USA! USA! and voted Republican for the last 30 years will pull themselves up by their bootstraps and praise the lord that government was taken off of business' back.
Cavuto was on Imus this morning...here's a fucking brilliant conservative quote..."I think it would be insulting to the workers that would keep their jobs because the government had to take over their companies."
...Or some workers dental benefits..
This is about the survival of the species...
GM needs to Die...
The old Paradigm has to be blown into dust.. or we will carry the mistakes of the past... the virus ... With us.
It is going to be painful ... so is birth.
GM has to die..
This is part of Evolution...
The bottom is a long way down. The sooner we all get there, the sooner the infection can begin to heal.
If any corporation needs governmental help, then it must be nationalized.
Alas, I thought it was the cornerstone of capitalism that unfit corporations were supposed to go the way of the dodo.
Detroit has had what, 40 years to get their act together?
I am mad as hell that we are giving OUR money to the bankers so we can have the "privilege" of borrow it back from THEM at interest. I am not a religious person, but I can now understand why the only people who Jesus got physical with were the bankers.
Where are the free marketers now? Let'em reap what they sow, crap!
I've been a very loyal Chevrolet owner for my whole life (41 years) and it has been out of loyalty to the American made ideology, but each and every GM I've owned has been an unapologetic turd blossom!!
until I bought a Chevy HHR. Wicked good car!
But I like my Mini Cooper S convertible, made by BMW better. ; )
I've never owned a Gm vehicle, and the HHR to me was proof positive of their unoriginality and inflexible mindset.
They totally tried to snag some of the success that the PT Cruiser had...not a car I'd own either...but it was at least, somewhat original...
GM even copied the retro look from Dodges trucks...Ford followed suit a few years later. (yes I'm a Mopar man, sue me!)
but regardless of who copied who...all three need to see the writing on the wall...they must either close their doors for good...or make the painful but VITAL change needed to survive.
fool me twice, shame on me.
Fool me for 41 years, shame on GM
I want them to fail to make way for safer futuristic flying cars, along the lines of the ones Moller Skycar prototyped. Wasn't the future wonderful?
http://www.terrafugia.com/outside.html
the "Free Market"...business wants to work by the law of the jungle...OK...in the jungle it's evolve or die.
The same market forces that destroyed the American Steel Industry are at work again. The Steel Industry died...America survived.
Public money should be used to assist the PUBLIC affected by economic downturns, not to bail out bloated, inefficient businessesm and the unions are not blame for this. No one held a gun to management's head to sign those contracts. Auto industry management signed those deals to protect their own bonuses and jobs, which would have been severly affected by worker strikes. They made the deal with the devil, and now they are paying for it.
The auto industry wants a PUBLIC bailout...ok...I want Waggoner's head on a stick...I want the CEO of Ford's head on a stick. These so called businesses geniuses RUINED these companies. That is how the market works. You lose...you pay. And no golden parachutes, they don't walk away with investors' money and get off scott free for being incompetent.
need to quit arguing about safety improvement, and fuel efficiency for this help.
NO MORE FREEBIES. You want something for me? Trade then. I can't afford to bail everyone out if it's business as usual.
It's obvious the product is inferior, and current business practices aren't successful. So you need/want the money? Then it's time for big changes.
For starters, my 17 year old Honda Civic is much tighter and nicer than any new comparable US product. And I can't imagine how crappy a 17 yo US compact would be.
I got a 17 y/o Civic too! Runs like a charm and still great fuel efficiency.
1. Because it would only be a temporary fix. Throwing bad money into failing companies (be they banks or manufacturers) that are failing for a specific reason is a bad idea. We should have let the banks that stupidly levered up with risky investments go out of business and let the solvent, responsible banks take them over.
2. Because the car companies can't change their business model. They aren't refusing to build smaller/cheaper hybrid cars because they are stupid. They are doing it because it costs them $3k-$5k more per car to develop than it does for their EU/Asian competitors. So they can only build expensive cars where they will have enough margin to actually make a profit on the cars they build. Giving them money won't change the fact that American workers are paid much more and have much higher benefits than their competitors.
It's always sad when people lose jobs. But government can't save every job or every industry. Manufacturing jobs are in decline every where on the planet. Even in China and India where the US are apparently shipping off all of our jobs, manufacturing jobs are in decline. The entire industry is losing jobs. It's a secular change that is not going to reverse itself no matter how many billions we through at the problem.
Ford and GM will never be competitive until that onerous UAW contract ie renegotiated. The simple fact is that Toyota builds its' Tundra for $43 an hour in wages and benefits. GM builds its Silverado for $73 per hour in wages and benefits.
Let them file chapter 11. The plants will re-open the next day, same workers, no terminal union demands. The UAW can begin barganing for a sustainable contract immediately.
Giving GM billion$ does nothing to insure that they will build more sensible cars. It simply prolongs its' slow death. Pull the plug now, and a new industry will rise from the ashes.
I was wondering where the "let's blame the unions" types were in this thread...
obtain them from your financial advisor.
The really expensive parts of the contract are the healthcare provisions -- if it weren't, it wouldn't be a serious bone of contention in every labour contract I've seen, and in the one I helped negotiate 20 years ago in a different industry.
It's a conservative knee jerk reaction to lay the woes of these companies on the door of the UAW. The UAW did *NOT* design the shittiest cars in the world, they only build them to spec. Spec from THE COMPANY.
compared to the sums needed to stabilize the banking industry but the ultimate costs of failure are just as high. Whatever mistakes the management of the Big Three have made they aren't generally the ones most commonly ascribed to them. They are perfectly capable of making small economical nicely priced cars. They just can't do it profitably in North America. The only reason any small cars are made in North America is that it is required to meet the CAFE standards. The per unit margin required to support the cost structure, and that includes salaries, hourly wages,benefits and incredible pension liabilities makes it impossible to compete in this desirable segment of the market. they could do this in an era of cheap oil buy building high margin gas guzzlers but not now. That is why GM created the Saturn division. Even with a clean slate as regards pensions and with a youthful work force with lower health care costs they still ran into the same wall. The idea that they could survive a Chapter 11 is ridiculous. GM and Ford are international manufacturers and they would lose this status. Even if a reorganization could be achieved it would leave them as small regional manufacturers ultimately doomed to failure. If they want to save themselves it is going to require sacrifices by management and unions but a little governmental help wouldn't hurt.
elsewhere, with more unionization degrees, and are kicking American automakers arse left and right.
Heck, if it hadn't been for Ford's European branch, which has to meet tougher standards than the American branch, the oval marquee would have been gone long ago.
Of course, the fact that the average executive of an American auto firm is 2 to 3 orders of magnitude larger than the average worker, where as international makes they only get 1 order of magnitude pay difference... of course that fact has nothing to do with the current situation.
It must bee safety and environmental status, and those pesky workers trying to make a decent living... the things that force, and other wise competent and genius-like management, to not being able to manage their way out of a wet paper bag. Riiiight?
by tougher standards? Safety? Fuel economy?
EU has tougher safety, emissions, and ergonomic product/production standards. In fact, many US manufacturers can't meet some of the ISO requirements.
The fact that US manufacturers have a hard time competing with EU manufacturers which have plenty of problems of their own regarding profitability, and which in some cases have a minimum of 3 unions (syndicates in their parlance) represented on each factory, showcases the fact that the US auto industry is on its way out.
Unions and standards are not the main reasons to blame by a long shot. There are far more pressing factors: the sheer magnitude of compensation expected by patently incompetent management teams, low investment (nil really) in workforce education/training, lack of a sane health care costs due to privatization of the offer, low (again nil) investment in mechanical research and customer trends, etc. etc. etc.
Both Ford and GM have operations in Europe and meet all those standards. Many of those vehicles can not be imported into North America because they do not meet various standards here. In Europe they are all encountering many of the same problems that we are running into. By the way, if health care was a make or break issue then we wouldn't be in the same hole up here in Canada. It's certainly a factor but the real problem with unions is not so much the wages and benefits at the assembly level but organization and union demarcation. I work with these industries and it is sometimes ridiculous how long it takes to do anything because they need to sort out who will do it. It is no accident that GM's most flexible and economical plant is located in Brazil where many of these issues have been sorted out. Here's a link that may interest you: http://www.autoobserver.com/2008/04/gm-brazil...
Actually, most of the saturn lineup is actually Opel's.
The whole "European autos don't meet US regulations" is a canard. Because for the most part for 1 European auto who can't meet an arbitrary US regulation, there are 10 American-made autos who can't meet ISO regulation (which are internationally-standardized). Also, most of the best sellers from Ford and GM european operations are either too small for American taste or diesel.
Speaking of Canada, it is ironic, since in the past 4 years most new foreign auto-related factories built in North America have been placed in Canada. Most of the Japanese and European outfits cited healthcare and workforce formation as their main reasons to favor Canada vs. the USA. Even when in some cases some states were (like Alabama) were offering fabulous tax breaks and incentives to move to their states.
I have some good friends in SKF and BMW, who did oversee the operations of the American operations. So those are their 2cents, not mine.
is a European standard they would like to make the world standard since it largely favors their industries. And the Europeans are every bit as adept at using regulations as non-tariff barriers as we or the Asians are. If, as you say, they produce such superior economical vehicles why aren't they flooding the market? Surely a few regulatory required modifications aren't holding them back.
ISO an European-only organization, LOL!
This was not about European auto markers flooding the US market, but rather that makers elsewhere have to comply with tougher labor and production standards that the big 3 AND still be profitable. Ergo your original point had little validity.
If it makes you feel better to use a logical fallacy, so be it. But that sort of displays a pattern that hints at the problem: without willing to fully asses where the problems are, American will never be able to find a solution.
health care is a factor in site selection but so are other factors. The jurisdiction where those new plants are being built also has just about the highest post-secondary education enrollment on the planet. Your friends are not entirely wrong about that. Sophisticated plants require highly educated personnel. Did you know that GM plants in Canada hire almost exclusively college grads for assembly plant jobs.
To know that your Health Care was covered.. Period.
Nationalize the airline industry!
Nationalize the auto industry!
Nationalize the financial services industry!
Nationalize water, electricity, phones!
You forgot oil, they should at the very least regulate it now that prices are down again
Looks like the comments in this message are a CLEARER explainer for why we shoud NOT help the auto industry.
Not one message agrees with the original premise.
What say now, Amato?
Diddn't I see That Onion clip on here a few days ago about the American money hole?
That totally nailed it..
Why are you back peddling now?...
Were already in free fall,... Don't try to claw the sides, you will just give us a broken nail...
Fear is the Mind Killer...
Now is the time to fully co-fund Tesla Motors, the ONLY all electric long distance freeway legal car made in America today. (200+ miles per charge, and beats the Ferrari in the quarter mile). Make GM or Ford or Chrysler build these vehicles in conjunction with Tesla in order to bring their prices down and for the big 3 to get their bailout deals.
Big Kiss!
Long Live TESLA!
Anyway? Oh, yeah, GM.
It is only fitting that the Electric car kills it on its rebirth..
The electric car was killed by the incredibly poor economics and performance provided by the technologies then available. Even this superbly designed vehicle is still a rich person's toy. Carbon fiber composites and lithium ion batteries did not then exist. BTW the usual caveat applies on the mileage claims of electric vehicles: they don't apply if you use the headlights , the air conditioning, the radio, the windshield wipers etc. This technology does nothing to address pollution concerns except on a local level unless you can guarantee it is charged from a green source such as hydro electric, nuclear, wind or solar.The Tesla shows whart can be done but it also shows how far we have to go.
The reasons it failed were because it was not ment to succeed... it was window dressing..
The technology was there then.. and it is here now stronger then ever...
There have been enough advances in Photo Voltaic cells in this year alone to meet our energy needs... With Black Silicone and that new Nano coating... our days of whining about battery technology not being enough are over.
Technology is moving at such speeds now that the only limit to the discourse are the idiots that try to slow it down, because they have not yet profited by the tech that was around 10 years ago.
We are here now..
How much energy equivalent to gasoline can you store in a one thousand pound lead acid battery? New improvements in PV cells is encouraging but,as usual the manufacturers are overstating their case and in any case how many acres would you think it would take to recharge an electric car in a reasonable amount of time. I don't really see the connection to the viability of electric cars in any event. The battery question is of critical importance to the viability of the electric car. Don't kid yourself. Without a fast charging,low cost, high energy density battery that doesn't use most of it's energy just moving itself around electric will be just have a very limited application
We need to embrace technology and move forward. It's really the only way to "fix" almost everything that ails us..
except maybe the religious fundies and the bigots..!
The GM electric car of the 90's was actually the perfect commuter car. It had a greater than average charge (in it's second version) and had minimal breakdowns, which is the main reason it was killed. Car companies make their money fixing the crappy cars they make, not selling new ones, and the electric car had so few moving parts that aside from regular brake jobs and windshield wipers, there were almost no problems with maintenance on this car. They in effect made the perfect car. You never broke down, and you never needed replacement parts. That puts the parts suppliers and dealership garages out of business and therefore, GM killed the car...so dead that they literally destroyed every single last vehicle, except for one that is in the Peterson Auto Museum, and even that one had a key component removed by GM so that it would NEVER work again.
And don't act like I would not be directly impacted by this...
Because I would be.
There is a city a few hours away thats plant will be shut down by January... I have friends and family in that city...
In the small town 6 miles away from me they employ roughly 1/3 of the population in one factory alone...
But .. It is going to be ok..
We have to clear out some of this underbrush first..
The Forest will bounce back healthier and greener then ever..
Just wait and see...
Believe it or not John I understand all those arguments. The problem I have with them is that they do NOT take into account that these automaker bailouts will only give money to the major automakers who have stifled alternative technologies for years and who's recent decisions to produce low MPG vehicles when it was obviously a bad move lead to their problems. Who will NOT get any money this way are the wonderful cutting age innovative start-up technology companies driving the alternative energy/transportation industry. Those guys will actually be hurt and set back by this as it will allow the unreliable and unsustanable big-oil backed continued reliance on foreign oil. Excuse the hell out of me but in relation to the issue of energy bailing out the status que while stifling innovation isn't working for me.
Let the oil companies bail out the auto industry with their record profits gained from fucking us little folk up the ass. After all they are partners in crime.
Bail em out...
I still would never purchase one of those POS vehicles..
I would not even take one for free..
Why bail out a company that you acknowledge is worthless? Just to maintain headcount? If that's the case, just shut the company down and have the government cut checks directly to the individuals.
You did catch my drift...
(read my comments above these to find out how I really feel directly)
[Deleted. Abusive. Site Monitor]
[Deleted. Abusive. Site Monitor]
argue facts superbly!
We throw a $700 billion bone to the people who try to make money grow by shaking it from side to side, but tell the one major industry left in America that actually manufactures something in this country to go pound sand because they want $50 billion.
Perfectly reasonable.
Of course GM should have the low interest loans, you want a depression, let GM fail. Those saying let them go bust apparently have no clue about American industry. We have already lost most of our industries, let the auto's fail and we become a third world nation overnight.
American Industry???
Ha.. The Big three were smack dab in the middle of the out sourcing of jobs...
They are dinosaurs .. and they need to lay down and die.
Don't worry..
Their hulking primitive corpses will decompose, and that will fertilize an industry boom.
We have Alternative energy grids to make...
We have Solar Panel factories to get going..
We have Electric vehicles to make...
and on and on and on and on...
Those old GM factories will serve as a good place to start fabricating these NEW green industries..
Make no mistake about it Prole,
Our Future is built on the bones of our Ancestors...
auto manufacturing may have been the lifeblood of the country 50 years ago, but now it's technology, financial, and consulting services. The US is still the hub for all three (though rapidly losing ground in financial)
Methinks you aggrandize
the people on this board have nothing to do with running this country, if they did we would be in a hell of a mess. Most of you have no clue what would happen if GM failed, most of you seem incapable of crossing the street without help. I hope you enjoy your foreign junk, and I hope you can eat that garbage when you end up without a job because of your ignorance. Honestly some of you should change your diapers, because you are full of it.
Listen bud...
You are obviously the kindergartner of humanity here...
Your consciousness is limited, It is you that has no clue what will happen when GM fails.. (it has failed already)
You are afraid...
Fear is the mind killer.... It is the little death that brings total obliteration.
Listen to us...
We are right... We have seen it.
The path of fear is no direction to travel in.
is absolutely, unquestionably better than what the domestic companies produce.
It's a weird common ground that the right and left wing share in common: their xenophobia. I feel no obligation to buy inferior products just because they are manufactured in America.
Everyone I know, including myself, drives a Japanese or European made car.
ya stupid asshole.
If you had your way, we'd all be mindless, bible thumpin, 4wd truck drivin ignoramuses who wouldn't know shit if they had a mouthful.
Take your grossly misinformed opinions and shove them up your clueless ass.
hope I didn't cause any confusion...
I understand why they should bail out distressed automakers but I still think it's time to let it die. Even let it die slowly and transition out of it into something else.
My problem is with the fact that these scum bags spend all their time and energy crushing innovation in the industry and advertising their crappy cars.
Then when the market does it's self "adjusting" and their dinosaur industry starts to go extinct they're at the door with their hands out crying poor and blaming it on everything else.
Yes, the economy is in the toilet thanks the the shrub co. crime family of idiots but does that mean taxpayers are now required to save every failing business?
Like I said I understand why they are probably going to do it anyway but I think they shouldn't. Necessity is the mother of invention. Let the dinosaur car works die and let someone come up with something new. Time to move on folks.
Just because the auto industry has done all it can to stay stuck in the 50's doesn't mean the rest of us have to stay there with them.
That said, I realize they need some kind of subsidy to keep the entire economy from failing... but it feels wrong.
Like rewarding your stupid teenager for fsking the car and coming home drunk.
Here are the 2 conditions we called for on the podcast:
1) Until money is paid back (and it is a loan), executives at the 3 car companies cannot make more than the average line worker's salary. This includes stock options, bonuses, etc. If this is broken, the company must forfeit any money given to them.
2) The company must agree that half of the cars they roll out in 10 years will be hybrid / alternative energy cars. If not, severe financial penalty.
Take it or leave it.
http://www.youtube.com/watch?v=iHufrsP9XMA
I was hoping that the conditions of the loan would include at least one public flogging of management a week.
Are assembled in the US and Canada by UAW members anyway, go look at your Hondas, Mitsubishis, Mazdas and Toyotas...Look at the first number on the VIN, if it's a one or a two...there ya go.
Those companies build cars here. In fact I am pretty sure that Toyota employs more Americans then GM does.. although I am not that up do date on all that information.
This blow back against the big 3 is not against the UAW.. or America..
It is against the big three Dinosaurs, that steer us into a self destructive path, and do everything they can to stifle real progress..
Honestly..
If we moved to a E-Highway system with electric vehicles over the next 10-15 years starting TODAY.. right now..
How long do you think it would take Honda and Toyota to emerge with a vehicle?
vs
How long it would take GM?
Oh wait.. GM would toss a temper tantrum, lobby the heck out of the politicians and stop that progress... Then design the Hummer 4, and use their political connections to enable another $10,000 tax rebate on it..
:-/
Sad thing is.. GM could do it.. and do it well..
They actually did.. The EV1, There was a Hybrid Hummer (v.1) that was actually 10x better then the normal one...
They have how many patents locked away in the basement???
They could enable us to achieve a StarTrek future ...
BUT-
They don't.. because it would piss off their masters in Big Oil.. They are too busy keeping everything static..
Honestly..
That mindset has to go... and we need to move ahead 50 years past where we are today.. by tomorrow at 10am..
"They don't.. because it would piss off their masters in Big Oil.."
You said a derrick full there pal, that is the MAIN reason they build the hulking shit that they build
The big three...big oil, big chemical,big pharma, they're all a bunch of money grubbin bastards who don't give a fuck about you, me, or the planet.
As long as they make their short term profits, they don't give a fuck.
Their funeral pyre will be...
It will be so legendary... in 20,000 years humans will talk about and argue if it was real or not.. They will claim that it was a myth constructed from the locations of stars and told to kids to help them navigate and others will form a religion around it...
And the trade off would be, until we can find that source of self-pepetuating energy, the new masters Big Coal and Big Nuclear.
And just like corn-based biodiesel, the effects on existing markets- in this case the market for powering homes and businesses rather than the market for corn or soy-based foodstuff- would drive electric bills sky high. So until we do a major overhal of the energy infrastucture, it's just a choice of genuflecting in front of Big Coal or Big Nuclear.
...
That is the bridge to the future..
Not coal.. nor Nuclear.. or Oil..
Solar energy...(its all Solar energy anyway)... Geo-thermal... and Biomass..
That is the path.. and denying that is being a flat earther..
There have been massive advances in Photo voltaic this year.. Huge.. essentially cutting down the number of panels needed by a factor of 10..
We need Solar Panels on every homes roof.. every box store.. factory .. period.. And now because of the advances in them.. We need less then we did before..
We need to make them like we made AOL cd's... And we need to do it not now.. Right fucking now!
---
Corn and Soy are net energy losers.. period.
Their use is stupid and a waste of time and energy.
Hemp is really the only viable Green fuel.. As it needs no fertilizers, pesticides, or herbicides.. is drought resistant.. replenishes the soil.. makes more biomass per acre then any other plant.. and can be grown from arctic circle to antarctic circle... and has more industrial uses then anything else... Anything you can make with Oil.. you can make with hemp.
--
The answer to our energy needs is multi-faceted...
The bastards that control it now .. do not have the answers, at all..
When it comes to solar .. they act like making ONE HUGE solar plant is the answer.. When the very thought of doing that is so stupidly inane..
Seriously.. stupidity is the enemy..
Anybody out there remember the Big Chrysler Bailout? Chrysler was mismanaged all to hell, producing giant dinosaur gas-guzzlers that nobody wanted, so The government stepped in, and bailed their asses out, for the same sorry-ass reasons they are using today. GUESS WHAT! They DIDN'T LEARN, DID THEY? They are still producing shit...Them, GM, Ford...it's the same garbage as before. Let 'em die. The displaced workers will go to Toyota and Hyundai and Honda and other companies that are producing decent cars...the demand for cars will NOT go away, so things will sort themselves out. As far as the fatcat executives who are responsible for the bad management ,
Fuck 'em!
High Five!
BURN
We need a rule where if your company takes such a dive that you need federal money in order to keep afloat and you claim your business is "too big to fail" then fine, we will give your company the money it needs to keep the business running and keep people employed...
...HOWEVER! in exchange I believe that the CEO, CFO and the ENTIRE Board of Directors must serve a mandatory 5 year prison term (with no parole) - you wanna talk checks and balances, these motherfuckers will be watching each other like hawks!
I don't see any American management at all, in the car industry or otherwise. Why bail these fools out, when we would just either allow more Americans to enter management or allow the same ones to continue in their jobs fucking things up?
Americans of a certain generation (hint... baby boomers) are incapable of creating a sound and viable sequel to the Woodstock festival (Woodstock II anyone?) let alone lead schools, corporations, family reunions, or any organized activity beyond whatever happened in "The Big Chill." They produced two presidents to date - Bill "what is is" Clinton and George [expletive removed] Bush.
Let the entire country fail, if only to shake up the next generation to rise to fill the leadership void. .... however, with two thirds of Boston Public School graduates of the year 2000 not finishing a college education yet, perhaps even the youth of this broken nation are not up to managing more than "A B A B Up down up down start select."
But, didn't that trick give you 99 lives in ikari warriors?
btw, the reference is too old for that crop of grads. They're Generation X box.
But I am pretty sure that was Contra..
(I think it was a universal code tho)
;)
Ikari Warriors - A B B A = Infinite Continues
Contra - Up Up Down Down Left Right Left Right B A Start = 30 Lives
They can keep they're PS3 and XBox (expensive eyesores)
Long Live The NES!
If you count Obama, who's also a boomer. The "baby boom" was from 1946-1964, after which birth rates dropped back to pre-boom levels.
Because Republicans WANT the auto industry to file chapter 7 (or 11) because if the companies file bankruptcy, they no longer have to honor union contracts nor do they have to honor pensions or pensioneer healthcare.
Republican's would LOVE to see these companies go under...more for the free market.
No more unions.
No more healthcare needs or the people who worked for those companies for 20, 30 or more years.
More proof positive that goopers are heartless people who are a waste of oxygen.
They see the writing on the wall.. and actually They lost so hard that they are able to place themselves in the right position on this issue..
This is the legacy of their mindset.. and they are doing all they can to paddle away from this sinking bastard as fast as possible..
I wish Dems would wake the fuck up and give these companies a Coup De grave...
***
Oh and ... Economic downturns will just make the Unions stronger...
Its gonna be alright!..
Simple, if the government has to continue providing bailouts, they should keep a stake in the company. Plain and simple buyout instead of bailout.
We heard the scary sales pitch for the financial bailout from the media and C&L jumped. They supported it in their posts. Now look what is going on.
http://www.cnbc.com/id/27719011
Non-retards saw this coming.
So what will happen if we don't bail out auto makers? Will they really go bankrupt? Maybe they will consolidate and some people will be out of work.
But what happens if we do? Will it be another $4-5 trillion into a giant sucking hole?
What happens when the WHOLE COUNTRY GOES BANKRUPT.
Then what, C&L?
I wish C&L would listen to us a bit more...
Our credit rating was just demoted from AAA.
Wait until the baby boomers find out their retirement just went up in smoke. Their hissy fit is going to be legendary, ironically... these are the same group who have fucked up things royally.
Exactly..
The system has been updated... The world has to be restarted for the changes to take effect.
Restart the system now?
[yes] [cancel]
I have mixed feelings about all of this. Of course everything is interconnected and there is the domino effect here. We do need to preserve jobs and do what we can to not make this worse than it already is. On the other hand, GM and other are in this predicament due to mismanagement. You can't tell me that GM hasn't known, for years, that their business is diving to toilet level. And what did they do about it? Hell, they don't even make better cars which is why people aren't buying them. I see plenty of new cars on the road but they aren't American made! If we do get to the point where we offer them some sort of bailout, there should be strict conditions for the help, including a pay back arrangement and new business plans for sustained business.
...and I emailed Obama yesterday. Instead of giving $50 BILLION to the creeps who run the auto industry, and BILLIONS more in addition to the $700 BILLION we've squandered on the financial sector, Obama should implement a new stimulus package for Citizen/Taxpayers as soon as he's in office.
The package should include a $1 MILLION check for every certified American citizen over 18. That would cost the Fed (or whoever is creating the billions out of thin air) less than $300 MILLION, which apparently would be easy for the gov't or whoever to afford.
The recipients - us - would likely spend and invest that money right away - the capital would go back into circulation, directly into the economy >>>> instead of into the pockets of CEO, CFR members, and Fed Banks.
I would be willing to amend my plan to make the payouts slightly less, maybe $550k, but no more $300 stimulus checks while the Wall Streeters are stealing Billions!!
There are only 300 American citizens over 18 years of age?
If they are bailed out (and they will be), they must change their entire business model. This includes UAW.
LOL.
This is the market, trying to correct itself. I say let the whole shithouse go up in flames, it's a shit house! Sure, it's going to suck, it already does. Stock up on canned beans is all I can say. My fucking 401K has been eviscerated by Wall Street and the banking industry. That was my retirement money! So I say fuck you to the auto industry, consider yourselves market corrected.
Sure, I'm bitter. You bet your ass I'm bitter
Boy! Did I get your drift!
until now. Since we haven't seen what Obama has done since he has done it in the future, we don't know what kind of boomer he has going to be.
Obama, anyway, seems to hold a post-boomer mentality since he was raised by a very boomer-style "kumbaya white women" (paraphrasing Obama's own words) and he is a more down-to-earth Gen X-er with solid Abe Lincoln politics.
My concern is American management. Again, where is an example of good management of late? GM? Ford? Unless we learn a new management of producing actual products people actually need, we may as well go down now rather than in the future... where we have already done that.
And to the posts above, Mario 1.
I love the fact that C&L readers continue to be independent thinkers and don't just bite into a talking point and regurgitate it endlessly like Dittoheads :) I'm in agreement with the 95% of posters here that we should NOT bail out a crappy company with a crappy product and crappy biz model. Let them fail, the workers will find more jobs in the New New Deal.
The banks get a bailout. The insurance companies get a bailout. Now they want to bailout the auto industry? The same guys who roll out those gas-guzzling monstrosities called Hummers? The same guys who laughed at the idea of making cars that have high MPG?
When do WE get a bailout? We're the ones that put money into these industries. This is the thanks we get? Next thing you know, the oil companies are gonna want a bailout (god I hope they didn't hear me)
A lot of people want to let the big auto biz take the hit.
And part of me say screwem, let them go under.
But when you look at the big picture, we simply cannot allow this to happen. Far to many people will go under as well. Pension funds need to be kept up.
I know we're all sick and tired of Big Biz skating away with golden parachutes and the like. But we need to look at this with a realistic perspective. We can't allow all of those people to be put out of work.
Where are they going to go? What are going to do?
For conversations sake, Let's say a person works for over 15 -20 years on the assembly line. What are they going to do now?
There has to be a deal struck. And it must contain some stipulation that,
1,The tax payers must make a profit on their money loaned.
2, Vehicles must be more energy efficiant.
3, Vehicles must be made with greener technology in mind.
4, Prices of these new vehicles must be reasonable. No price gouging for new technology. Hey, we're loaning them the money.
5, All pensions must be maintained.
6, There needs to be more mass transit also made with green technology. This is the 21st century.
And finally, start developing the next generation of technology, so that we never end up in this situation again..
I understand peoples frustration with they way they've been reluctant to change and step into the future.
But we can't allow so many people to be put out on the street.
Should America bail out the auto industry? Why? So that they continue to manufactured the same crappy vehicules since the 1973 oil embargo? Big sorry ass guzzlers monsters, 8 miles a gallon, anti-traffic accidents? Buy an M1 tank if you really want safety by driving. I read some place that auto workers maked between 50 and 75 dollars an hours. WTF? I refuse to believe that! Are these CEO's that stupid? These people are a joke! They build car for the American public. The macho man in Texas. The pricy lady in California. They don't think of the world as as market for the American car. Whereas, Japan, Germany, Italy, France build cars for the whole world. So, no wonder where we are in this fucking situation.
I travel a lot. I never see a single American car outside America. Everybody buys Japanese. So, what is America doing wrong? Just about everything. Lousy marketing. Lousy products. Overpaid workers.
Ultra over paid CEO's.
Solution: Cut CEO's and workers salaries by 50%. Disect BMW, VW, Volvo, Mercedez Benz. Benchmark them. (Copy them. The Japanese did it after WWII)and build them better. They will come and buy them.
If they can't do that, then let them sink in the bottom of the sea.
Easy said than done. If it really comes to that, we better be ready for some serious sociatal disaster in America. Well, Clinton's fault, you know that.
On the other hand. They never came out with a consumer fuel efficient vehicle, not even after 1973. I have believed that the oil companies and the auto industry are in collusion to fuck the American public and the Government. So, why don't the oil corporations bail out the car industry. After all, no car production, gasoline sales.
Let big oil bail them out.
But it's not the workers fault. So why should they be punished?
This country is right on the edge of a massive financial disaster.
I don't know what you do garcia, but this will most likely affect you too.
I don't see anyway around bailing them out.
The funds have to come from the 800 billion dollar bailout package.
All management need to to go.period.
I would like to see big oil bail them out, but that's like putting a fox in to protect the henhouse.
Believe me, I don't like this one bit. I just can't see a way around it.
You said above that workers should take a pay cut.
That may very well need to be part of the bargaining here.
The unions have provided a decent living wage for those in the auto industry. They provide (among other things) a livable retirement pension for those who make it to retirement.
They also provide health care ins.
Now we're getting into health care.
This is a very complicated issue. With no easy fix.
Do we just sit on the sidelines and let thousands of workers get put out on the street? Or do we try to fix the problem?
I understand your anger and frustration. The big auto biz has fought tooth and nail to stop any pay raises and benefits for these workers. They are nothing more than heartless thugs.
But the ramifications of letting this industry go down will be felt across the country.
I really don't see any way around this.
Does the auto industry deserve a bailout. Absolutely not.
But we don't have much of a choice.
The investment bank captains of the good ship United States don't give a shit about GM. They've decided to abandon ship after deliberately hitting the ice berg. They plan to take the purser's safe and to sabotage the pumps. By the time they cast off in the life boats, the water will be to the top the gunwales. The lower class passengers will neither be able to save the ship nor abandon it themselves.
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