If Washington Let US Vote, Would We Choose To Bailout Detroit?

Absolutely NO. Its blackmail. They say "give us money so we can go deeper in the hole or we we go under and hurt the economy". The answer is to let them all merge into a single U.S. car company, or let them sell all their assets to a foreign manufacturer who will use the otherwise idle factories to produce good cars in North America, or simply nationalize the whole industry and hope this does not lead to rampant socialism. With all the management knowhow that America is famous for, I see no reason why one of these three options is not feasible.

get rid of the UAW, and save the company.
seriously, UAW had its time (and i give full credit to it), but now it is nothing but a cancer.

"If the government wants to spend $25 billion to protect auto workers, it would do better to transfer the money to them directly (perhaps by cutting each worker a check for $10,000) rather than by keeping their unproductive employer in business."

Read the whole article before commenting...

001

exactly how long is that 10g's suppose to last anyway? For most of them it wouldnt pay off their credit cars.

For most of them would be enough to pay 2-3 months mortgage. The question should be, do you want to save the country or the companies? I choose the country, and cleanse from such corrupted companies who destroyed the American product name and pocketed billions of dollars and now they're whining for more and people actually believe them! Unbelievable!!!

Yes, but there should be regulations on how the money can be spent!

You don't realize how many people you are talking about putting out of a job. It is plainly obvious, we are talking around 3 MILLION people between Chrysler, GM, Ford, and all the suppliers who are dependent on them to stay in business. The transplant manufacturers may employ US workers but they don't employ nearly that many NOR are they planning on opening enough jobs to employ them.

You are talking about literally overnight raising the unemployment rate in the US by over 1% (remember it is between 8-9% nationally right now). That is HUGE. Not only that but these are good paying jobs with nice health benefits and retirement options, not something that most jobs offer right now.

When you add in the retirees to the mix the situation becomes even more dire.

Think before you write something so idiotic next time.

your ideas for reemployment sound good. let me ask you one question. where is the money going to come from for these new jobs?
i will say though, you need buyers for cars.
the financial, real estate, and health care expense are all factors in the auto industry problems.

91z4me, it does not matter how many jobs are lost. Ever-increasing automation will eventually shorten the work week to the point where we only have to work a few days per week to achieve the same production levels as having everyone work a full 5 days per week. I'm sure the union mentality is to oppose automation for fear that jobs will be lost in the process. Similarly we have to get out of labor-intensive manufacturing and the use of relatively unskilled labor and get into commercial activities with a high content of intellectual capital and exotic technology.

I love the fact that the F-35 fighter program will cost a trillion dollars which is more than the cost of the Viet Nam and Korean wars combined. The value of technological spinoffs to the private sector will ultimately prove that the F-35 fighter program is a great investment.

Worry about short-term job losses is a waste of time and should not interfere with the achievement of longer-term higher goals. My vision is a fully automated society with practical limits to population growth. The greenies should agree with me as overpopulation makes for an unsustainable planet with excessive pollution and conflicts arising from competition for ever-scarcer resources.

WOW, I am amazed how many people can't see the forest for the trees. I am not talking about losing production from job loss, I am not talking about unions vs non-unions!

I am talking about MILLIONS of men and women losing their jobs instantly! I am talking about tens of millions of families instantly losing their ability to earn a living. Those families won't be able to buy anything more than what is needed to survive because they won't have the money.

That means the economy comes to even more of a halt than it is in now. Money not being spent on consumer goods and services also means less tax dollars for local, state, and federal governments. And with a few million more people out of work you need that tax revenue to pay for the unemployment they will be drawing.

What you guys are failing to realize is that the $25 Billion in no interest LOANS that is being requested by the Big 3 (more so GM than anyone else) would cost the taxpayers and consumers less than paying for the negative effects that the Big 3 collapsing would.

Perhaps people are letting their contempt for these companies products in the 70s and 80s cloud their judgment as for what is best for the country as a whole.

GreenPlease,

FYI I think A123 was purchased outright by GM roughly a year ago.

Also I don't think you could pay GE enough money to open a plant in the states, they are moving plants overseas and operating more outside the US than inside it.

GreenPlease,

Do you not also realize that EVERY automaker was rushing to either start building SUVs or to produce more over the same period simply because that is what the consumers wanted?

GM simply had some of the best on the market and dominated that segment (that is why they sold so many).

Yep. Bail the idiots out. Their executives are crap, and, by the way, so are their vehicles. But there are too many jobs at stake, not to mention that we need an automotive industry here in the States.

What kind of 'new' automotive industry do you mean? If you look at some of the most revolutionary new technology coming out much of it is from the Big 3 (Ford's new hybrid system, GM's FWD and RWD 2 mode hybrid systems, GM's Volt powertrain).

I think you are buying a little to much of the 'the Big 3 only build gas guzzling SUVs that destroy the planet hype'.

I say let them fail now rather than later which is what I think will happen if we bail them out now. Okay, realistically, we could bail the company out, but get rid of the union, all upper level management and start conducting business like the Japanese plants in the southeast are doing (workers make about $28/hour as opposed to GM workers making $58/hour, there are no unions, and no lifetime healthcare) That may sound harsh, but it is a business.

Ya, the Japanese have a medical program . It is a one way program . You get sick or hurt on the job, you will get fixed up and you are out the door . American workers in a Japanese factory is like a pnuematic air wrench . It gets tossed out and a new one is in it's place . Japan is not going to give an American any money to take care of a medical injury that developed from a repetitive injury . Any future problems that are related to an previous injury are up to you to get public assistance because you won't have a job anyway . ..... Yes My vote goes for the AmericN

1UAW,

What are you doing bringing facts into it this?!

Finally someone who actually reads far enough into things to understand that the 'bailout' is a loan much like Chrysler got in the 70s.

1UAW, of course GM has more cars getting 30mpg or more than any other carmaker, they have more brand names under the GM umbrella than any other carmaker. GMC needs to be dissolved, Buick needs to go, and significantly reduce the Pontiac and Caddy offerings.

I read the ariticle, is this the same Genuis that told the US to stop makeing TV's and VCR's? Nice to read another point of view but to suggest that the US should have stopped selling cars years ago and just bought in to the Japenese is..well..I dont even have words for it.

The other question we and they should be asking is will we manufacture anything in large quantities ever again in the USA.

Our entire system and mentality has been to let someone else do it for nothing.

How can we possibly build it back?

The majority of people here don't even WANT a job or are training for one in our schools.

Any bailout of anything that revolves around manufacturing seems destined to fail to me...but what the heck do I know?

I truly hope I'm wrong and we can have a major turnaround.

001

24E60 The problem with Obama is he is all for entitlement " Share the wealth"

Considering the majority vote for Obama, the U.S. won't let it's auto unions fail. The big problem will be telling them they need to take pay/benefit cuts which everyone knows the UAW will piss and moan over, even though they're overpaid.

Major auto maker like Fiat and VW should just buy out gm, ford and chrysler and all the workers just work for them.

and call them Scab's Are Us

Yep, everyone will buy American cars after the Depression hits, and hits everyone hard. It needs to become a trend before people to really want to embrace it. Kind of how we all gave blood, put the flag bumper stickers on our cars and shopped after 911.

but then again, no one will be able to afford a car by then.

I'll bet the AIG jobs payed more than the GM blue collar jobs.

We shouldn't have bailed out AIG since we obviously can't afford to do so.

Stop just spamming.

If you have something to say just put it together and post it all at once. Also if you are replying to someone else's topic then hit the reply to this comment link before adding your comment.

i have mixed feelings about this.

on the one hand, people forget that Capitalism is basically darwinian: survival of the fittest. there are often SHAKEOUTS when there are too many producers. the weakest companies fail and disappear. the survivors get lean too, and eventually get stronger.

this is AS NATURAL in pure capitlilism, as in the natural world and all the individual niches.

when a horse breaks a leg, out of MERCY, you shoot him. why PROLONG THE AGONY?

life goes on.

we mite study the decline of the british motor industy. the strongest brands did not completely shrivel up and disappear; parent companies may've, but they got 'adopted' by stronger companies and survived.

the weaker players were consolidated into one larger company, which rationalized operations.

detroit may have to follow in these tracks, like it or not.

the mixed feelings part: yes, jobs will be lost. but thats happened before in other industries.

uaw folks should be glad they got AS LONG A RUN as they did, with wages FAR in excess of their education and skills compared to factory workers in any other industry!
and while currently shrinking, the pool of BUYERS of new cars won't disappear overnite just because detroit folds its tents. when they end up buying more korean and japanese cars, THOSE plants will have to expand and HIRE more workers.

and as mentioned, there is NO LACK of potential jobs in this country. aside from new bridges and highways and other long neglected infrastructure needing work, there are thousands of potential new jobs in the green industries. the gov't, and ALL taxpayers, would be FAR BETTER OFF investing in these needs, rather than trying to keep a wounded, dying hoss on life support!

Man I wish I could boost you +5. The words you speak were never more true.

If they were bailed out they should include a provision that forced all of the big three executives to take a pay cut and absolutely no bonuses for there failure! It makes me sick to hear that some executives are getting bonuses.

I manufacture product in Asia, so I see the difference between Asian workers and US workers. Many US workers are lazy and feel they are entitled to benefits instead of working for them. Why do you think the airline and auto industry is in such shambles? Compared to the Asia factories I work with, the workers there work their butts off to better their lives. It's not a mystery why the Big 3 are where they are now

again from a Darwinian perspective, the asians and germans are proving to be far more adaptable, and WILL end up among the survivors of this shakeout.

even if a bailout by the gov't keeps detroit afloat (and there is NO guarantee it will), what happens DURING a PROLONGED recession/Depression? and after the NEXT recession? (assuming survival thru this one)


WHY the furriners are more likely to survive and later thrive, using capitalist darwinian metrics:

they have better GENES (workers), stronger BODIES (newer plants), and more SMARTS directing the muscles (better designers and managers).

AND, their companies are NOT AFFLICTED by PARASITES (overdemanding uaw contracts, and way OVERPAID CEOs who get inflated bonuses whether there's profits OR LOSSES!)

Like I said, I know the diff between American and Asian plants. I've been in both.

Even the regular Joe can see the difference if they fly domestics versus European/Asian airlines. European/Asian airline employees fall head over heels to service you, the customer. Domestics? They treat you like animals in a traveling circus. Why? Cuz they know they can't get fired... unions baby!!!

If there is ultimately a bailout there should be some conditions.But I have to say this primarily applies to GM and Chrysler but the conditions are different for each of them.
GM-The following changes must take place.
1)Rick Wagoner resigns
2)GM's most profitable car divisions are most likely
Cheverolet,Cadillac,Buick,and perhaps Saturn. The rest need to be either sold or scrapped. That includes Hummer,GMC,Saab,Pontiac.
3)GM needs to have diesel cars up and running and for sale within 2 yrs with all trucks ONLY available in diesels or hybrid diesels.
Chrysler-Chrysler only makes decent cars in their fullsize range. They need to jointly produce a mid size and small car with another foreign car maker. This needs to happen within 15 months. The Caliber,Avenger,Sebring needs to be scrapped or else completely new high quality interiors and serious suspension mods need to take place until the replacement of these cars come on line.Chrysler needs to offer diesel cars within 12 months as well as hybrids.Further the sebring and Avenger should have a restyling buck all ready to go in order to make the car appealing.
Ford-There is not much to say about them. They seem to be bringing in new cars from Europe(smart move)to sell here.However again diesels and hybrids are vital to come onto the market now.The Crown Vic and Town car have to go. The Mustang needs IRS.
Finally-The Big 3 must make sure that the unions understand that their pay scale is now the same as the average foreign competitors doing business in the US immediately. No exceptions.

Just to correct something. GMC is either the #1 or #2 most profitable divisions in GM, it is #2 or 3 in sales and basically sells rebadged Chevy trucks at inflated prices. They are a profit center. Getting rid of them would be a HUGE mistake.

Likely the profitability/investment order is GMC, Caddy, Buick, Chevrolet.

And to get rid of Pontiac (the #2 volume car division) would be a bad mistake as the volume drop wouldn't make up for the decreased engineering/marketing costs.

I think everyone is missing a pretty big point brought up in a Motor Trend article from Dec.2008: These are LOANS not gifts. The government gave 700 billion cash to the investment companies not too long ago and everyone is throwing up holy hell about loaning 25 billion to an industry that built america into the world power it is today. This makes no sense. As outlined in said article, the cost saving new union contracts and business plans for GM don't start taking effect until 2010, so GM need to hold on till then.
And all you immature posters saying "F@#$ em" need to go talk to your economics teacher and ask what losing 3 million jobs and one of the worlds largest companies would do to a world market. 3 million people don't just find jobs, especially jobs that will allow them to stay at their current living level. All those unemployed people will create a bunch of effects:
1: Housing market will tank further and go into a freefall the likes of which we may never recover from
2: Skilled jobs will begin to pay less. With a glut on the market, employers won't need to pay higher salaries to get the best workers. More people will make less.
3: Taxes will increase, especially with the democratic government. Everyone will be screaming for the government to help them and provide unemployment, benefits, medical, etc. Ironic because they screamed for the government to not help the company that employed them.
4: All of the support companies for the auto industry will begin to collapse. With one of the major players not ordering their products, they will be forced to cut staff or file for bankruptcy themselves creating more lost jobs.
5: Other auto companies will falter or die. Look at what is happening now with our economy. Bad economy means large items like cars don't get replaced. People will just keep the car. Everyone is hurting right now, even mighty toyota. If a major us company dies then there will be even less money, a worse economy, and less car buying. More companies could go out of business furthering this effect in America or starting the dominos in another part of the world.

This isn't just Mom and Pop's Grocery that goes out of business because Safeway has lower produce prices. This is a world company that has major ramifications. Give them the loans to allow them to make it until the new cost saving plans come into play. If these new contracts and cost savings don't help...well....we'll cross that bridge when we get to it.

They must bail em out, if they dont our economy will collapse, the ripple effect would hit every single part of our economy. Incresing unemployment, slowing down productivity... no good

It is the lessor of two evils!
The $700b for the banks that is now being used to buy assets was a waste of my dollars. That could have been given back to us and we all could have given the economy, and said banks, a big boost.

a comment to someone that said GM has more cars that get over 30 mpg. i own 2 cars that i GUARANTEE ave well over 40 on the interstate. I dont have an argument with someone making a decent wage, however, i feel that a person with a masters degree that taught school for over 25 years that has NEVER made any where close to what these people working on the line have been making. Some of these "workers" dont even have an high school diploma. And you want me to help bail these people out. When they quit making HYBRIDS that get 21 MPG and cost over 70,000, MAYBE i'll think about it. why cant FORD bring over some good cars from europe. same for gm, bring some of opel over. start building cars that do not fall apart before 100,000 miles

I can't believe what some of you are saying!!

Do you really think that 25 billion will save the BIG 3? It's gonna cost a helluva lot more than that to save them. They're losing billions "monthly", so where will we be at 6m months from now? It'll be another 25 billion, if not more!!!

And what's with the whole "loan" argument. With the way they run their business, they're is NO WAY the government will be seeing ANY of that money back. They'll owe so much money to everyone, that the government will be luck if it gets a few cents on the dollar. Even if they're first in line to get paid, they'll have to fork over more cash to honor union contracts and health care contracts, etc...

This is a "DEAD END STREET". Some of you need to come to grips wit the inevitable. Swallow a big pill now instead of a huge one later....

Get it over with.

Rather than save the Big 3, give the money to pay unemployment and retraining to the Workers until they can move on.

No Bail Out

Considering the size of the workforce that the Big 3 employ, I hate to say it but we need to provide them the loans to re-structure AS LONG AS some points are adhered to. First of all, cap the pay on all high level executives and no bonuses....period. Secondly, get rid of the unions. They had their use prior to the EEOC, OSHA, and any other government agency that deals with ensuring a safe working environment void of any discrimination. Third, the plants need to run leaner and produce smaller inventories so that they don't have to cash flow so much unsold inventory.
This is a rough time for almost every sector but if we work smart and re-organize with a goal in mind, the Big 3 might make it through to 2010.