Auto Bailout

[lfantwister]

http://www.reuters.com/article/innovationNews/idUSTRE4BI34F20081219

I think this is a shitty idea and rewards companies for incompetence; they should have just sold the plant to Toyota or Honda or something and maybe the workers would get screwed but now the entire country is getting screwed.

Your opinions?

[Murdererer]

cars go roooom rooooooom

[Foehammer]

That is ****ing stupid.
He's setting dangerous precedents, and is being generally retarded.

[Mr. Ron]

Let them sink.


"Hey, we're going to force you to pay us for things you didn't want to pay for in the first place!".

[siva_chair]

Of course they should be allowed to fail. It would free up the assets so that more responsible and efficient companies can buy them up.

Not to mention: Where in the hell are they getting all this bailout money?

Oh yeah I forgot they are just going to print it out of thin air....

[Foehammer]

THE MORE MONEY WE PRINT
THE RICHER WE ARE

It's genius!

[Mr. Ron]

Of course they should be allowed to fail. It would free up the assets so that more responsible and efficient companies can buy them up.

Not to mention: Where in the hell are they getting all this bailout money?

Oh yeah I forgot they are just going to print it out of thin air....
Completely agree.

[mph4ever]

could be a worthwhile investment, america does not need its auto industry to fail

[lfantwister]

a little late..

[mph4ever]

a little late..

given current economic climate it could be perfectly timed, and maybe timed too. no one is buying cars so the others are going to feel the same pain. things won't move on until government enables it, they might just give the auto industry time to catch up

[lfantwister]

they ahven't been caught up for years. Plus the bailout includes provisions for congressional oversight, whcih will really stagnate growth and innovation

[Det_Nosnip]

Although I agree that, on principal, the companies should be allowed to fail, the economic impacts of such a failure would be catastrophic in today's economy.

[siva_chair]

Although I agree that, on principal, the companies should be allowed to fail, the economic impacts of such a failure would be catastrophic in today's economy.

No what will be catastrophic are the moral hazards that will be created by bailing these companies out.

[IbanezArtist]

I love my GM cars, screw Chrysler, as long as GM and maybe Ford survive I'll be happy

[kitsch]

i think its stupid. it basically means that companies can do whatever they want and the government is a saftey net

[Super Batman]

Government should keep a lofty distance between controlling/giving money to the market.

[Joe]

You guys forget that there's a bigger problem here. Between the three companies, what percentage of the workers do you think is to blame for this problem?

My bet is less than 1%.

What we need is more reliable people on the company boards. People have been asking these companies to make better cars and they haven't been doing it - so people buy foreign cars. Now it's finally hitting them hard. It's not a simple debate - because I wanted them to fail too, but you have to remember the hundreds of thousands people whose jobs will vanish if they fail.

The CEOs really need to work for a dollar.

[lfantwister]

hundreds of thousands people whose jobs will vanish if they fail.

unless they were reemployed by a competitor's company that bought the plant...

[siva_chair]

unless they were reemployed by a competitor's company that bought the plant...

Well yeah but that would require them to make less than twice the average college professor....we can't have that now can we!

[iliketoplaydrums10111]

2 major bailouts
2 wars

has money become obsolete or somthing?

[pooble]

i bet a penny with my friend that if they didnt get the bailout, they would not go bankrupt by the end of December, as they were claiming.

now we can never know.

**** the cars

[Blandorson]

unless they were reemployed by a competitor's company that bought the plant...

unless that company decided to do hire newer workers at reduced cost, or make some other sort of significant change with the plant.

[siva_chair]

unless that company decided to do hire newer workers at reduced cost, or make some other sort of significant change with the plant.

If the auto workers out of a job aren't willing to take a pay cut to gain meaningful employment that is their own problem.

[JohnXDoe]

i think its fine. if these are "last chance" kind of loans. the method he used (TARP funds) is kind of questionable, but apparently legal

if the auto companies show progress in the coming months, we will see. and even Barack Obama understands they play a pivotal role in the upcoming "green" economy. its good america has auto companies. its important technology. if our automakers can use this opportunity to change their industry, the UAW can get realistic, and the U.S. can start building good cars for a new energy future, that is a good thing

i think this was the plan by Obama, anyway. to help "retool" the industry for a new energy future. even before they came asking for loans. but their immediate dire straights have sort of taken precedent

if this is done right, the big three can restructure without going under, and WE can use this industry to the advantage of the country, i'm all for it

if the automakers continue business as usual and keep making cars no one wants (GM, Chrysler), and the business side can't meet terms with the union side and they come knocking for money, i'm sure they will be turned away. but if solidly moving in a positive direction in productivity, profitability, and new energy technology, i think its an industry well worth saving with loans or funds or w/e

[IbanezArtist]

I want GM cars. GM's new models are actually spectacular, as are SOME of the Fords (excluding that horribly dated Mustang).

Chrysler has an outstanding performance division building up as well, as unreliable as I've found mine to be in comparison to my GMs.

I'm all for whatever means I'll be able to get my Cobalt XFE in 6 months when I trade in my car.

[Joe]

2 major bailouts
2 wars

has money become obsolete or somthing?

Yes.

unless they were reemployed by a competitor's company that bought the plant...

Name some competitors? The auto industry in America in its entirety is hurting. It's not just the American companies.

[StreetlightRock]

It'd be the worst financial decision since the bank bailouts.

[Shady Ultima]

Well, I think America should follow Brazil. Brazil forced all cars to be able to use gasoline, ethanol, and methanol. Therefore, Brazil went from 60% dependance on foreign oil, to less than 10%.

It costs less than $100 to upgrade the cars, but GM/Ford/Chrystler just haven't cared. The bailout is for the workers the way I see it. If one fell, over 10mill would be unemployed in a few months.

[Against Miik!]

Ethanol is a short term solution and in ways worse than gasoline. Ethanol results in an enormous net loss of energy, and it is insane to use ethanol as a fuel when people are starving all over the world. It is equally damaging to the environment, and causes food prices to increase. There are no upsides, besides the fact that it is domestically produced. It's a popular solution because the technology and infrastructure is currently available, but the right solution? I think not.

2 major bailouts
2 wars

has money become obsolete or somthing?

Actually, yeah, it kind of has.

People compare this to the wall street bailout, and its not a good idea to justify one mistake with another mistake.

These companies deserve to fail. In 2007, both GM and Toyota sold the exact same amount of vehicles, like 9.37 million or something. Toyota ended up in the black, way in the black, and GM obviously ended up in the red, way way in the red. I forget the exact profits and losses, but they weren't even close. It's stupid to think that the big 3 will rethink their business models now just because they are on the verge of bankruptcy. This is something that should have been done a long time ago, and now they should have to reap what they have sown.

[Iskandar]

Sown.

[Against Miik!]

whoops yeah wrong usage

[Iskandar]

:):)

[Against Miik!]

http://www.reuters.com/article/ousiv/idUSTRE4BH6NW20081219

And then I see this

[Krabsworth]

2 major bailouts
2 wars

has money become obsolete or somthing?

America got cocky with its power.

[siva_chair]

i think its fine. if these are "last chance" kind of loans. the method he used (TARP funds) is kind of questionable, but apparently legal

if the auto companies show progress in the coming months, we will see. and even Barack Obama understands they play a pivotal role in the upcoming "green" economy. its good america has auto companies. its important technology. if our automakers can use this opportunity to change their industry, the UAW can get realistic, and the U.S. can start building good cars for a new energy future, that is a good thing

i think this was the plan by Obama, anyway. to help "retool" the industry for a new energy future. even before they came asking for loans. but their immediate dire straights have sort of taken precedent

if this is done right, the big three can restructure without going under, and WE can use this industry to the advantage of the country, i'm all for it

if the automakers continue business as usual and keep making cars no one wants (GM, Chrysler), and the business side can't meet terms with the union side and they come knocking for money, i'm sure they will be turned away. but if solidly moving in a positive direction in productivity, profitability, and new energy technology, i think its an industry well worth saving with loans or funds or w/e

Sounds a lot like pissing in the wind and hoping it doesn't come back and hit you in the face, to me.

[JohnXDoe]

thats pretty much what it is. but so much money has been thrown about lately 13b seems a paltry sum considering the HUNDREDS of billions more that has gone out to financial institutions

it sort of puts things in perspective, too. i mean 13b. or 25b or 50b. or even 100b to save the automakers. hypotheticals, yes. but here are just three companies who make up and support an entire industry who can be rescued by a fraction of the amount banks and lenders need. "wall street," as they say these days. and the automakers actually build things that are real and serve a purpose. a physical thing. and they can be kept in business and people kept in jobs by A LOT less then what wall street needs.

it just makes me wonder where the hell all that money is going to. thats a lot of car companies :(

[siva_chair]

Well it is a big deal because it is going to create moral hazards that are going to be devastating. Same with any bailout to anyone.

At the rate that the Fed is printing money, the US dollar is going to need to be bailed out......

[johnnyblaze]

Are these bailouts not contradictory to basic free-market theory?
And is this contradiction the basis of the "moral hazards" you speak of?

Regardless, if I recall correctly, Keynesian theory suggests that when the government's spending increases the short-run effect is a devaluation of the domestic currency and thus, a decrease in net exports. Prices should increase in the long-run (in addition to inflation), but this should be, for the most part, correlate to the increase in money supply.
What if the Chinese stop buying our debt? Im confused.

[Chriblan]

The upper echelon of the auto industry all waited too long to trim the fat, thus resulting in the screwing-over of everyone in the auto industry.

The head dogs are the problem...

[siva_chair]

Are these bailouts not contradictory to basic free-market theory?
And is this contradiction the basis of the "moral hazards" you speak of?

These moral hazards are similar to the housing bubble, where the government's policies create incentives that spur malinvestments. The market will eventually correct through recessions or depressions. In this case, it will only worsen the depression that is heading our way.

Regardless, if I recall correctly, Keynesian theory suggests that when the government's spending increases the short-run effect is a devaluation of the domestic currency and thus, a decrease in net exports. Prices should increase in the long-run (in addition to inflation), but this should be, for the most part, correlate to the increase in money supply.
What if the Chinese stop buying our debt? Im confused.

Why anyone still subscribes to Keynesian theory is beyond me.

Yes, this is going to cause a devaluation in the dollar, an increase in prices of basically all goods, and possibly stagflation/hyperinflation, massive unemployment, etc.

When the Chinese stop buying our debt, we are going to see extremely hard times. All this consumer based consumption culture we have become accustomed to is going to vanish, and most Americans are going to be scratching their heads/getting really pissed off and causing lots of civil unrest.

[siva_chair]

The upper echelon of the auto industry all waited too long to trim the fat, thus resulting in the screwing-over of everyone in the auto industry.

The head dogs are the problem...

No unions were a big problem too. They made far too much and drove the cost of labor on these not so quality cars way up.

*Waits for Danish to come in here and tell me I'm wrong and that Unions are the solution to all this, not the problem*

[johnnyblaze]

My grandfather told me a relevant story about unions today. He worked in the Sudbury nickel mines, which essentially provides the economic basis for the entire region. Whenever the miners would go on strike, the local businesses would jack-up prices in anticipation of a wage increase. This price increase would happen before a settlement was reached. About two weeks ago about 600-700 miners were laid-off as global production is down, and thus nickel is trading at a lower price and is demanded less. Our North American manufacturing sector, whether it be the auto industry or otherwise, is shrinking fast, and like you said, this translates to a whole lot of unemployment.

[Chriblan]

No unions were a big problem too. They made far too much and drove the cost of labor on these not so quality cars way up.

*Waits for Danish to come in here and tell me I'm wrong and that Unions are the solution to all this, not the problem*

I agree, the Unions were a major problems as well.

No doubt about it.

[JohnXDoe]

unions, management...both seemed to conspire to bring the whole thing down. unions it seemed had a right idea back in the day with the threat of automation looming, and management had a good thing going with little foreign competition. heck they were the MIGHTY BIG 3. who's idea of a functional small economical car was a Ford Pinto :/

quality has to come up. and not just reliability, which is just one part of auto making. quality of materials used, NVH levels, modern engine technology and fuel systems. Chrysler bringing back the "Hemi" and GM using old brand names like the Malibu and Impala do not help matters. and selling Opel's as Saturn's

Ford does ok. but when you think about it in the last 30 years and more what do we think of when we think the "Big 3" of mainstream foreign makers. we think Accord, Civic, Camry, Corolla, Maxima, Sentra. those cars were built on and improved over the years. and pushed a bit further up market from time to time making room for new product based on them

now what of the Taurus, Pontiac Grand Am, Grand Prix, Ford Thunderbird, Escort, Chrysler "K" cars, and GM's geo? all cars of the same era, dead and gone. no improvements, no building on a good thing, no buyer loyalty built, but rather lost. that has to change if the Big 3 ever want to compete again

and plz no squeaks, rattles, and shakes. it matters!

[Dimmu Burger]

I agree. I think they didn't innovate like the foreign automakers did. I'm ok with a bailout if they get rid of the people who were in charge of that and put some forward thinking folks into those positions.

[RNR]

There's nothing wrong with union wages and pensions. That's how we show the world that we're better than Asia. I'm personally going to buy a new Malibu in support of the auto industry and all the good they do for us.

[JohnXDoe]

I agree. I think they didn't innovate like the foreign automakers did. I'm ok with a bailout if they get rid of the people who were in charge of that and put some forward thinking folks into those positions.
no they didn't innovate, you are right. they thought they didn't have to because they never took the japanese seriously. remember this is an industry that resisted progress and even safety regulations for their vehicles before competition and government forced their hand

but yes, they fell behind on innovation, design, quality. and in turn fell behind forever. the Ford Escort, for example. why is that not still here? now we have the Focus. which is a European based model. and Ford comes out with the "900" which is largely based on the Volvo S80 but it doesn't sell well. so they rename it Taurus. when everyone knows its not a Taurus! meanwhile the Fusion, which is the true Taurus replacement, is nothing like the old Taurus. which isn't a bad thing. but, it should be like the old one. just like the new accords, camry's, etc are like the old ones in some way. people look at those cars and they think "good cars." same name, same make, same car. these cars actually did evolve and they just keep getting better. american car companies just throw everything out and start "fresh" from the same old parts they've been using. or they "borrow" platforms from foreign subsidiaries

the GM "parts bin" way of building is outdated, too. platform sharing is fine. just make sure its a good platform and try not to put the same steering wheel you have in a Chevy truck in a Caddy :/

"green autos" may be the big 3's last hope

[siva_chair]

There's nothing wrong with union wages and pensions.

Except there is when they drive the price of labor up to the point where these companies cannot compete with the competition. This is the reason they are in trouble.

That's how we show the world that we're better than Asia.

We won't be for long if we stick with that kind of attitude. At least not economically.

I'm personally going to buy a new Malibu in support of the auto industry and all the good they do for us.

I'm happy for you.

[siva_chair]

"green autos" may be the big 3's last hope

Going green won't make a bit of difference if they cannot bring their cost of labor down and are continually more overpriced than their competition.

[McP3000]

the world will go green when it will make them green

[Amit]

what the **** republicans

[Iskandar]

Did you expect any different from them?

[StreetlightRock]

http://i40.tinypic.com/2e3x361.jpg

[IbanezArtist]

Ford are actually nearing the top in reliability, GM's Cobalt XFE has 25% more horsepower than Civic with better milage and a lower pricetag, Chrysler/Dodge just put out the Challenger, a beautiful, powerful, and reasonably efficient vehicle.

The problem with the Big 3 is as follows:
Labor costs
poopty marketing
Bad stigma from piece of **** Honda Civics and Toyota Corollas, especially the heavy roadbumps with wheels released in 09.

[Amit]

lol american cars are complete crap

[Badmoon]

I'm not too smart in terms of replying to any thread that goes on in the Politics, News, etc forum. But there's a good chance that I'm going to have my father, and a great portion of my cousins/uncles/brother lose their jobs if Ford or GM go under. :(

lol american cars are complete crap

well then get the **** out shiva

[McP3000]

what the **** republicans
dude i aint no repub dont be hatin
Did you expect any different from them?
i was just stating a fact, not what i want to happen

[RNR]

We won't be for long if we stick with that kind of attitude. At least not economically.



Holy **** our economic penis won't be as big as theirs. They'll still be culturally and morally bankrupt. Let them have their slave labor, I support companies that have unions and pay pensions.

[siva_chair]

Holy **** our economic penis won't be as big as theirs. They'll still be culturally and morally bankrupt. Let them have their slave labor, I support companies that have unions and pay pensions.

Hey that's fine. Have fun spending twice as much for half the product.

[Amit]

lol unions sux

[Badmoon]

you work in a hospital, don't you?

[Shell]

What does that have to do with automobiles?

[utstarcom]

what the **** republicans