Auto Bail Out?

[85suited 0]

I would love to hear arguments for and against the bail out....initially I am against it...They need radical changes in the union terms, management & product qualityWhy is almost every other car manufacturer outside of Michigan (US & abroad) doing ok?

[strategy 4]

they work very hard and deserve the subsidy. if govt isn't involved, how can we expect it to survive?

[85suited 0]

they work very hard and deserve the subsidy. if govt isn't involved, how can we expect it to survive?

I sense some sarcasm

[hblask 1]

I want to be at the front of the bailout line. I've worked hard for 25 years, paid probably close to half a million dollars in taxes, and need some help. So if I'm first, then OK for the automakers.

[LongLiveYorke 38]

I want to be at the front of the bailout line. I've worked hard for 25 years, paid probably close to half a million dollars in taxes, and need some help. So if I'm first, then OK for the automakers.

Except if you go broke, America doesn't lose 3 million jobs and an economy. Other than that, I'd be happy to give you some compensation.

[hblask 1]

Except if you go broke, America doesn't lose 3 million jobs and an economy. Other than that, I'd be happy to give you some compensation.

We don't lose 3 million jobs, they just move on to other, more productive uses. It's not like all the US companies will go broke overnight without warning, it'll take years. We get a round of job cuts, then concessions from the unions, then a few more plants close... by then we're probably competitive again and the market has picked up. It's not a big deal.The process of eliminating inefficient and unproductive uses of investment capital is one of the most important processes in an economy. If the government interferes with that, they severely harm us in the long run. Car makers drove carriage makers out of business, but you don't see anyone crying about those job losses. There's a reason for that.

[Nimue1995 1]

Will the last person leaving Michigan please turn out the lights?

[Loismustdie 0]

We don't lose 3 million jobs, they just move on to other, more productive uses. It's not like all the US companies will go broke overnight without warning, it'll take years. We get a round of job cuts, then concessions from the unions, then a few more plants close... by then we're probably competitive again and the market has picked up. It's not a big deal.The process of eliminating inefficient and unproductive uses of investment capital is one of the most important processes in an economy. If the government interferes with that, they severely harm us in the long run. Car makers drove carriage makers out of business, but you don't see anyone crying about those job losses. There's a reason for that.

This.

[CaneBrain 95]

against. American car companies have been run poorly. They should face the consequences.

[LongLiveYorke 38]

We don't lose 3 million jobs, they just move on to other, more productive uses. It's not like all the US companies will go broke overnight without warning, it'll take years. We get a round of job cuts, then concessions from the unions, then a few more plants close... by then we're probably competitive again and the market has picked up. It's not a big deal.The process of eliminating inefficient and unproductive uses of investment capital is one of the most important processes in an economy. If the government interferes with that, they severely harm us in the long run. Car makers drove carriage makers out of business, but you don't see anyone crying about those job losses. There's a reason for that.

This sounds nice and will be true in the long run, but it ignores the very bad and immediate consequences that would come out of GM, Chrysler, and Ford failing more or less all at once. The auto industry is big. It's really big. GM going under would cause the entire city of Detroit to completely fail. It would become a wasteland. It would cripple all of Michigan. Hundreds of small towns all over the country who rely on the employment of factories would be more or less wiped off the map. And 3 million people don't simply "move to more productive jobs" overnight. It's going to take a long, long time to absorb this hit. And by the end of it, we could fall deeper and deeper into debt to China and others. We'd probably lose our status as the last remaining superpower because of the economic downturn it would cause.I understand the libertarian argument that markets take care of themselves. This is true. The problem, of course, is that we live in a global economy. If the markets "take care of themselves," the resulting equilibrium could result in the US falling way down with respect to the rest of the world.Look, I'm for a bailout of the auto industry if smart people who know the industry can agree that a bailout would actually help the companies in the long run. If it can be demonstrated that these companies only need a little boost to get back up on their feet, then I'm willing to give them that boost. If we're only putting band-aids on a gunshot wound and their death is more or less inevitable, then I'm much less enthusiastic.I understand that forest fires are good for the forest. But that doesn't mean that we let an uncontrolled fire threatening to raze the rain forests go unchecked.

[Sal Paradise 57]

for. as long as it comes with the stipulation of the complete dissolution of labor unions.

[Balloon guy 158]

for. as long as it comes with the stipulation of the complete dissolution of labor unions.

I remember hearing that $1600 of the pricetag for every new GM car goes directly to the benefits of retired union auto workers.

[hblask 1]

This sounds nice and will be true in the long run, but it ignores the very bad and immediate consequences that would come out of GM, Chrysler, and Ford failing more or less all at once. The auto industry is big. It's really big. GM going under would cause the entire city of Detroit to completely fail. It would become a wasteland. It would cripple all of Michigan. etc

No auto company is going to go out of business overnight, and 3 million people are not going to lose their jobs overnight. It just doesn't work that way. Large, large companies go broke by slowly selling their pieces to agile competitors (with jobs intact, btw), and having round after round of layoffs over many years, giving the economy time to absorb the people who were let go. The "3 million people unemployed overnight" is a scare tactic, one that has never happened in the history of business. Companies adjust to new economic realities. If we try to avoid that adjustment, we end up with the 1984 Ford Escort, one of the worst cars ever built, which leads to future rounds of layoffs and adjustments that are more severe than if we had just taken our medicine.It's best to take our adjustments as they come, instead of trying to pretend they aren't necessary and then having to take them all at once.

[LongLiveYorke 38]

No auto company is going to go out of business overnight, and 3 million people are not going to lose their jobs overnight. It just doesn't work that way. Large, large companies go broke by slowly selling their pieces to agile competitors (with jobs intact, btw), and having round after round of layoffs over many years, giving the economy time to absorb the people who were let go.

Hmmmm. I'll ponder this for a while.

[Balloon guy 158]

Hmmmm. I'll ponder this for a while.

don't ponder too long or you'll be out of work

[Flushgarden 0]

If they can't create a product that can compete with foreign cars then they should go out of business. No breaks for the weak. If they're forced to compete on a level playing field then we get a better product to buy. America has created shitty cars for long enough and now they're paying the price. Those companies deserve it.

[El Guapo 8]

This morning I was listening to a report that allowing the auto makers to go to bankruptcy court will let the judges break down the unions and lower pay and benefits (which if you guys don't know are ridiculously high, assumed $100,000 per retiree per year). They could lower the benefits paid by up to 30%, which would give the auotomakers solvency. They have had bad business models for a while now, but being hamstrung by the unions has not allowed them to make the necessary changes.

[akoff 0]

Totally against the bailout. We bailed out Chrysler in the 80’s and that did squat for us. They end up selling Daimler Benz and the rest is history. Thanks for propping us up Uncle Sam we are outta here. Government doesn’t belong in business. They can’t handle it, should not attempt to do so. If your product sucks or is to expensive…as they say in the airline business. buh buh. We have already tossed billions down the drain in the mortgage bailout and still have more to come in that. We are not France Italy or Japan. Washington should continue what they do best, spending our $$ or stupid bullsh!t. We have that accounted for in our budgets…assuming we have budget but that is a different story!!

[akoff 0]

This morning I was listening to a report that allowing the auto makers to go to bankruptcy court will let the judges break down the unions and lower pay and benefits (which if you guys don't know are ridiculously high, assumed $100,000 per retiree per year). They could lower the benefits paid by up to 30%, which would give the auotomakers solvency. They have had bad business models for a while now, but being hamstrung by the unions has not allowed them to make the necessary changes.

This would just be an added reason to not support the bailout. Bottom line you either compete or go away.If hurts the local economy....tough you will have to look elsewhere for your next job. If you price yourself out of a job (that is the Union MO) well... I guess you should not do that next time.

[BigDMcGee 3,353]

for. as long as it comes with the stipulation of the complete dissolution of labor unions.

Why do you care, you got a union-less coal mine in west virginia you want to get started or something?

[CaneBrain 95]

Why do you care, you got a union-less coal mine in west virginia you want to get started or something?

shhhhh! you'll ruin everything!

[Balloon guy 158]

I hope they don't bail out the auto industry coughunionscough until they first bail out the credit card companies.

[vbnautilus 48]

I think The Onion needs to run a story:Federal government approves $100 trillion bill to bail out federal government

[neretva 0]

If they can't create a product that can compete with foreign cars then they should go out of business. No breaks for the weak. If they're forced to compete on a level playing field then we get a better product to buy. America has created shitty cars for long enough and now they're paying the price. Those companies deserve it.

Correct. Letting the inefficient companies fail is the only moral choice. Bail outs do not bail out, they delay the inevitable, causing more ultimate pain than they cure.The auto companies must be allowed to live or die on their own steam. If Detroit folds, which won't happen, so be it. The sooner the better for all involved.

[Sal Paradise 57]

http://www.time.com/time/business/article/...00.html?cnn=yeskeep in mind the huge supplier base dependent on GM. do they need to be taken into consideration with this?