SOUND OFF: Should We Back A Detroit 3 Bailout Or Just Let Them Go Under?

The state the Big Three are currently in is a result of decades of poor management, crippling union contracts, and lackluster products. Throwing taxpayer money at companies that burned through $7 to $8 billion of cash in Q3 is a waste -- they will just keep coming back for more handouts once they waste this $34 billion. Let them file for Chapter 11, restructure, and emerge as truly competitive companies.

They need to make less crappy cars and drop the unions. Fix those two problems and people might one day respect the American auto industry again.

I vote for Chapter 11, they have to break away from the bad deals they've made in the past and step back into reality.

Agent004,

Crappy cars? Then you mean to say Toyota/Honda/Nissan/VW have crappy cars too, b/c domestis are rated on-par with their foreign competitors, even though they are at a cost dis-advantage.

Go to a dealership and SERIOUSLY look around. Do un-biased testing. Every now and then I do. Aside from being a fun weekend, it help me not not be totally biased. Most people think I am blindly biased, but the truth is, I've NEVER called any car a POS unless it really was. ..... regardless of who made it.

Crappy doesn't just imply bad quality, it also includes the way they drive. Name a single American car that drives better than a 3 Series. Or an Accord.

You drive a new Ford/GM/Chrysler off the lot, and you just lost 25% of its value. Ouch.

i vote for "the bailout", but the Gov should help out with getting unions to cut union pays...

I got a couple of dollars in my pocket. Sure.

Let me see. Oh no! There is a hole in pocket. The money is gone. Sorry. Do you take pennies?

Haven't we covered this enough?

we've discussed this many times before, 009. its getting stupid now and old

Yes, let's move on to something else that the teenagers on this site can understand and comment on. I need a good laugh at work, not higher blood pressure.

It is still relevant and the landscape keeps changing by the hour.

Hell no we shouldn't bail them out. Why don't we throw money at the auto company startups in the US looking to do something truly different like Tesla. Imagine what they could do if they had a few billion.

I can tell from your comment that you have NO idea of what your are really talking about. Have you ever ran an auto company (or any high-tech/industrial company for that matter)? Do you know what EXPERIENCE means? Obviously not. Why is it that Fisker is teaming up with GM for the Karma? Why can't Fisker just make its own gas engine/other parts that it is buying from GM.

It would be stupid NOT to give the Big3 a LOAN (its not a bailout, its a $20billion loan with $14 billion in emergency funding if needed). Why should I, an American, subsidize Asian economies just because the whole world is experiencing hard times? Why should I shun AMERICAN companies right when they show good products, good prices and changes in business agreements.

Ignorant comment, not trying to be an ass, but I can tell those who know what they're talking about from those who don't very quickly.

With close monitoring from the feds of course.

Only if they could take the union contract out and fire the 3 CEOs.

The problem is that cars aren't selling.
Demand needs to be stimulated.
Give every taxpayer a tax credit of up to $10K towards the purchase of a North American produced vehicle (the actual amount proportional to the percentage of the N/A content in the vehicle).
That would also give some benefit to Foreign Auto plants located in N/A even if many of the assembled parts are produced offshore..
That would do more to keep the local plants running than dumping money down a rats nest which has a high burn rate and sits semi-idle and gets people back to work.
And gives a direct benefit to the taxpayer who's on the hook for all these bailouts.

Whatever happens, there needs to be something in this for the taxpayers...an incentive to buy an American car would be the right thing. I dont think the auto companies should get the money free and clear.

Am I the only one who things the Big Three are basically saying to Congress,"Screw you!" when they came back with a $34 billion bailout request instead of a $25 billion request two weeks ago? It is as if they are saying to Congress that they should have been approved two weeks ago. And since Congress made them waste their own time by coming up with a business plan, it will cost the tax payers $10 billion dollars more for the extra two weeks of work and the who thing will be on Congress.

Why didn't the Big Three bring a business plan to Congress two weeks ago when they flew there on their own, separate private jets? I certainly can't go to my bank and request for a business loan without a proposal to how I'm going to pay them back. And I'm quite sure none of us can as well, so what make them so special?

And from what I have been reading so far on the Big Three proposed plan to Congress this week, the plan doesn't seem viable at all and almost haphazardly put together. The main thing that I see missing from their proposed plan is a contingency plan for dealing with bankruptcy. They don't have one, which to me seems like they are saying to Congress, "I know that there is no way Congress is going to let us go under and a bailout will happen regardless of how much more time you make us waste. You should have granted us the bailout two weeks ago but you didn't, and now it's going to cost you another $10 billion."

Bottom line. Congress should not be wasting money on them. The Big Three should consolidate to the Ultimate One, get rid of all the non profit models (and there are many) and just concentrate on say 15-20 or so models and make them well to be competitive.

Cmon man.

Truth is, the Big3 went to congress a few weeks ago with facts, data and figures. Congress (ignorant criminals) decided that instead of being logical, they'd bitch'n'moan (sorry about my French) about issues from 1985 and about corporate jets (don't get me started.. it costs less to fly private when all factors are considered).

Now when they went to congress, they played along with the dog'n'pony show and look... they'll probably get some sort of loans. Goes to show you... US gov is a bunch of "career politicians" (i.e. bullsh*tters) who have no idea about what is really happening in America.

Yes, congress shouldn't care about AMERICAN industry and by doing so, should happily be subsidizing Japanese & Korean economies. It's OK... people like you would like to see America just be another has-been nation like the UK. Tell me, once we give up our auto industry, what will we have as a wealth generator? We send hundreds of billions to the middle east, hundread of billions to china... and you want to send a few hudred billion more to Japan/Korea!!!!!!!!??????!!!!!!!

Short-sighted at best. Our auto companies are the best effort we have trying to improve the trade balance with foreign nations.

The US govt has started a forest fire. When and where will it be extinguished? You have career politicians making economic and business decisions. The US govt is the largest business in the world and you have guys that make 1/10th the salary of your average CEO and a helluva lot less experience in running a company of any size. The US Govt needs a cleansing. When the Senate Majority Leader, Harry Reid says that the tourists to Washington stink, it's time for a change.

lets beat this topic to death.
Investor27 is on the money. There will be lots of collateral damage from a chapter 11 but these fools didn't even have the decency to have a plan to begin with and the one they have now contain a bunch of generalizations.

Let me bring up a few points here. Why is it that congress gave the banks,the mortgage companies and AIG the loans without a business plan and proper oversight and are having a problem giving the auto companies far less money with a business plan? 2nd-what percentage of people are not buying American cars because they don't like them versus not being able to get a loan? 3rd I've read,heard mucho times about the terrible products the the big 3 have made in the past. So the question is are the current products and future products uncompetative with the Japs,the Koreans and Europeans? Finally a CNN poll states 61% are against the bailout. Question,isn't this feeling carried over from the government bailing out the banks,AIG etc. without proper oversight. Would our primary manufacturing base that we have in this country be reaping the same wrath from so many if congress had not screwed up in the first place. OK-one more question. What happens to those health care and pension benefits if the Big 3 do declare chapter 11? Do they just dissapear and workers are SOL or does the government get stuck with them? If the government does get stuck with them then is that costing the government more or less to pay these in addition to unemployment benefits that will most likely be extended.Just a few little questions. I must say I'm not too happy with congress right now.

My thoughts to your questions:

(1) The financial crisis is completely different than than the automotive crisis. Apples versus oranges. Thus, a financial bailout may or may not be the best answer.

(2) As far as I have read, 99.9% do not buy American because they do not like the vehicles and 0.01% would buy American but can't get a loan. Trust me, if you want a Ford, Chevy, or Chrysler, they will get you a loan.

(3) The Big 3 have spent decades now alienating US consumers in just about every way possible - crappy reliability, poor design, bursting fuel tanks, SUV's that roll-over easily, deceptive leasing terms, etc.

At the same time, competitors have continued to build very nice, efficient, reliable, good looking vehicles.

(4) Yes, the bank bailout was quite unpopular and there the auto companies are getting a lot of the backlash. Not fair, but it is what it is.

(5) Chapter 11 allows a company to re-structure so it can hopefully operate profitably in the future. UAW benefits would likely be re-negotiated during this time rather than eliminated entirely.

Typically, the gov would never take on a private companies' liability like heath care costs. If the companies litterally go bankrupt, then the Unions would have to get in line with all of the other creditors to file for some piece of the remaining equity to pay for future health care benefits. They would likely get 10cents on the dollar at best.

It's NOT the car companies, it's the Union are their demands for more and more money.

The Unions have a problem with money and they need more and more every year.

UAW - RIP

I agree to help them with my tax money but I want a ZR1 as collateral

If that were the deal.... I think everyone would be on board for the Big3 loans....

Kill the Unions. Lazy overpaid workers.

And you know b/c..........??????

Unless you work in the auto-industry or you are a manual laborer (construction worker, farmer, etc) then you have no case.

I have big, negative reservations about the UAW... but I would like to see what you have to say. I also know that most UAW members are hardworking, honest Americans.. unlike most of us who are spoiled "businessmen".

ABSA-FREAKIN-LOOTLY

People that aren’t for the big three loans, don't get it. If we loose them we lose aminimum 3 million jobs. The country would most likely go into several years of depression.

People need to focus on the jobs connected to the auto industry; raw goods, suppliers, dealer network, etc...

The American public has got to bury their prejudice of their own car industry and wake up to the economic reality. If Toyota or Nissan need to be baled out the Japanese government would do it in a heart beat. They don't need you say? Do some research and take a look at how in bed the Japanese government is in bed with their auto industry and that goes for the Europeans too.

WAKE UP AMERICA, if you don’t think this will affect you, you’re wrong.

THANK YOU,

I read though GM's restructuring plan today, it was good at showing projections in different scenarios, and broad plans for the future. Obviously GM can't divulge its every business plan to the competition, so the public can't get everything.

Sadly, it looks as if the US public is too stupid to say yes to a loan. Instead of a 34billion dollar loan, they'd rather have hundreds of billions in lots GDP and tax revenues. Glad to see that idiots like Sen. Shelby (Alabama-R) won't even consider giving the Big3 a loan. Instead, he would rather preach government staying away from socialist tendencies, while offering billions to foreign automakers in Alabama.

Typical politician... no common sense.

Ch11 won't work....so everyone can stop saying it will. GM would collapse... we can see the negative sales impact that the media's lies/myths have already caused... the word "bankruptcy" would decimate the domestic auto industry's sales. To anyone who thinks Ch11 is a good idea... hell, you aren't worth wasting the key-strokes.

I think you're the one who doesn't get it. Taxpayer's money going down the drain every month. Is this what you want? You're basically implying that its ok for taxpayers to bail these three out so the lazy union workers can keep their jobs and lifestyles?

woood..

Where were you with regards to Iraq? How about the Financial industry? How about Bush Admin spending $4 for every $1 it collected? How about the retarded "stimulus" checks for $300 that were absolutely worthless (twice over... money should have gone towards infrastructure projects where it would have had a real effect).

US gov spends 2-3 trillion a year, quit whining about a 20-34 billion dollar LOAN.

But that's the nature of Democracy. It's the spirit of competitiveness...supply and demand. It's pure economics. It's the survival of the fittest. The Big Three should consolidate, or go into bankruptcy and emerge as stronger, more streamline entities.

You just can't go and call all of us who opposed the bailout loonies. And what's worst is that you threatened to take down the entire country if we don't bail you out instead of looking into other viable alternatives like 1) Filling for Chapter 11. 2) Have constructive meetings with the UAW and employees about what they can do, or what opinions they can offer to remedy the current dire situations. 3) Consolidate/Merging with one another into two or even one company.

But you definitely don't try to hold all of us ransom for your poor management and poor business decisions over the past two, three decades that put you where you are today.

THANK YOU,

I read though GM's restructuring plan today, it was good at showing projections in different scenarios, and broad plans for the future. Obviously GM can't divulge its every business plan to the competition, so the public can't get everything.

Sadly, it looks as if the US public is too stupid to say yes to a loan. Instead of a 34billion dollar loan, they'd rather have hundreds of billions in lots GDP and tax revenues. Glad to see that idiots like Sen. Shelby (Alabama-R) won't even consider giving the Big3 a loan. Instead, he would rather preach government staying away from socialist tendencies, while offering billions to foreign automakers in Alabama.

Typical politician... no common sense.

Ch11 won't work....so everyone can stop saying it will. GM would collapse... we can see the negative sales impact that the media's lies/myths have already caused... the word "bankruptcy" would decimate the domestic auto industry's sales. To anyone who thinks Ch11 is a good idea... hell, you aren't worth wasting the key-strokes.

sorry inverstor27, that wasn't meant for you.

And you talk about the "spirit of competitiveness"? So you're saying that the Japanese/Koreans, with their socialized health care and retirement, their government support of their industry & regualtions against US companies is a fair and level playing field?

I say we impose a $2000tax/vehicle on all vehicles built in Japan / Korea / Germany, until we socialize health care and retirement (which no one wants). Lets really level the playing field.

The big3 will eventually be the big2-- or so most people think (GM & FORD). Just it won't happen overnight, and they need money now to prevent an avoidable disaster.


What a shame...we're going to look back at this in 30 yrs and say "geez, we could have rescued our own auto industry... they were so close to being giants... now we're enslaved to foreign autos, along with oil and everything else". Over $34 billion dollar loan... you've got to be kidding me. The military gets about $750billion a year, oil gets all sorts of tax breaks, in the tens of millions, ciminals on wall st. have essentially paid for congress (so they get what they want) and the auto companies are begging for a loan, which in the long term will be vital to america's prosperity and security.

Does anyone else see something wrong here?

**tens of billions, not tens of millions**

"But that's the nature of Democracy. It's the spirit of competitiveness...supply and demand. It's pure economics"


By democracy you mean the free market that’s great in theory but that’s not the reality of the market place. The American auto companies have been paying for health and retirement benefits that Asian and European automakers don’t. It’s not a level playing field. One example is the hybrid technology that runs the Prius, almost all of the R&D money came from the Japanese government.

The government just spent 300 million bailing out just one bank, and the auto industry is asking for about a tenth of that in loan guarantees, and Citibank was ran much poorer than any of our automakers.

Citibank will bounce back. Its a bank. Can't say the same for the BIG 3.

"...until we socialize health care and retirement...criminals on wall st..."

Should tell you all you need to know about neutered.

enp83,

Most un-intelligent comment on autospies yet. Keep em coming.. I'm getting a good laugh.

Make a dumb insult and have nothing to back it up with..... good going. Maybe soon you can be on MSNBC or CNN interviewing Michael Moore and agreeing with everything he says.

thstone-It is not apples and oranges at all. This current congress voted to bailout a number of banks and AIG without demanding an accountablility from those intitutions.Banks are still tight with credit.Further I take issue with your percentages in the people who can't get credit versus rather buying foreign makes. If that were the case then why is 99% of the entire auto industry more then 25 to 30% down in sales for the month of November. From your perspective that would mean that all of a sudden the worlds population decided that they like ALL cars a lot less.No the truth is that every major car maker is hurting right now primarily due to limited credit availability. True Toyota,Nissan etc. are better positioned financially to weather this storm but no car company can predict a credit freeze and the big 3 should not be blamed for this. The reality is that had there been no credit freeze crunch the big 3 would probably not be asking for a loan at this point. I'm not defending them because they did make a poor product for many yrs. But you have to look at each company differently.
1)Ford-3-yrs ago Bill Ford fired himself and hired Allen Mullally. He turned around Boeing Aircraft.Further he cannot be blamed for the the poor products that Ford made in the past. The good news Ford is coming out with the Euro Focus,Fiesta and C-Max Van for the American market. These cars have all gotten good reviews. The new Taurus has styling based and related to the Ford Mondeo.He got rid of Jaguar,Landrover and Aston Martin and has rebuilt Lincoln.He is comitted to hybrid plug ins.Chrysler-Bob Nardelli may not have the best reputation with Home Depot but he is not responsible for the financial mess Chrysler is in.The reality is that Daimler Benz destroyed Chrysler. They were far better off before Daimler bought them. Nardelli has barely been at the helm a yr and a half.Chrysler has had limited capital to develope new models. Yet Nardelli states that 23 new models by 2010 are in the offing.They have been in the process of trying to turn themselves around when the credit crunch hit. The Sebring and Avenger came out before his watch.Now to GM-Rick Wagoner has been at the helm since 1990. Therefore he should be taking blame for GM's loss of market share. But he is responding to the market with the new GM Volt. GM wants to downsize by getting rid of Hummer,Saab,and Saturn and making Pontiac a specialty brand. The Malibu,the Enclave,and the Cadillac CTS are made well and do compete. This shows that GM can do it. Further if the unions agree to renegotiate further so that the average salary is nearly equal to what Toyota and other foreign makes are paying their employees then I see no reason why congress should not give them a bridge loan with important conditions attatched.

The CEO of Johnson controls put it most succintly, not only will we lose the big 3, we will lose the supply chain. The companies that make up the supply are for the most part glorified mom and pop's. They occupy that area of volume up to 500 million. They are already in mirky financial shape with credit hard to find. If thru the inaction of congress one or more of the detroit companies go under, this precarious supply chain will to some large extent collapse. This in it's worst case cause the cessation of all domestict production, to include all of the transplants.
If this seems to over the top, we may get to see the scenario play out over the next few months.

I don't know why this is even being debated. If you can't get past the Big Three's terrible management and cars look at the mathematics of the situation. You can bail them out with a relatively small $34bn now or lose hundreds of billions in lost taxes and revenues.

Something else that's often overlooked in this debate is the fact that if you let them go to the wall you (the US) pretty much lose your entire heavy industry and manufacturing base as suppliers collapse like a set of dominoes.

Not smart when you're in the middle of fighting two wars.

Don't you just LOVE the USofA-holes... 3.97 Trillion Dollar GIFT for the CROOKS on Wall Street (including the Federal Reserve)that got us into this mess...

But a LOAN for Companies that actually MAKES STUFF?

I can hear the "Libertarians" now....
"omg free market rulez don't bail them out let them fail".

Here's the thing...No One is buying ANYTHING..
People are either afraid that they are going to loose their Job or (and Here is the "Kicker") they CAN'T GET FINANCING

What happened to all the money we GAVE the "Bankers" to "Loosen Up" the Credit Markets?

The Depressing Truth is that instead of loaning the money out...they are using the money to purchase other smaller lending institutions...and "Hoarding" the rest for the foreseeable future.

Contractions in the Credit Market are Imploding the Economic System...The "Powers that Be" seem to be waiting for a complete economic breakdown in order to buy up everything for "Pennies on the Dollar"...

Things are going to get MUCH,MUCH WORSE BEFORE THEY GET ANY BETTER..

Think of it as a Massive Exchange of Wealth from the Middle Class to the Uber-Rich.

And in the words of The Prophet George Carlin "..You arn't a member of their Club...They OWN you"

Face it...we arn't human beings anymore...we are "livestock" and they want to "Cull the Heard"

Uh oh, someones been listening to a little too much alex jones prison planet crap lately...

If you have the TRADITIONAL requirements you can get financing. Now if you make $20k/yr, have bad credit, and no down payment for that new BMW you're eying up...then ya you're going to have a problem there.

Man..

You are great. G. Carlin had it right. Keep on preaching the truth!!!

If they go down it the result of their poor management. Why they don't just loan themselves money? If every worker for the big 3 agrees to a pay cut (let's say 10-20%)and /or loan part of their assets to their companies then they will have better chance to survive (lower production cost due to pay cut and more fund available). Yes pay cut. Either everyone makes less or evryone loses jobs. what's the better choice?

All the stupid anti american articles keep referring this and alot of people in this and other forums keep referring this to a BAILOUT!!! It's a LOAN!!! Get it right!!

Yes, a $20billion loan too!! $14 billions from Ford/GM is a backup incase the economy still sucks.