In Retrospect, Was Obama Right To Bailout Detroit?

Invisible don't let you're hate exceed you're common sense.

If it saved American manufacturers and provide employment for Americans then yes. I would rather spend the money here than to flush down the toilet called Iraq.
It is about time someone does something for the American people and not continue this assault on the American families.

Failing enterprises fail for reasons *other* than a lack of tax-payer-funded bailouts. Therefore, bailouts don't fix these problematic enterprises. We've already thrown billions at Chrysler before, and now with the second time, and the others joining in, we still don't see a pattern.

Will we detect the pattern with the next round of bailouts, or will our elected representatives once aging think it's best to take money out of tax-payer's pockets and hand it over to enormous failing enterprises?

And strangely, this happened in a country where its citizens are rabid about the government staying out of free citizens' affairs, and largely against a government-owned health care system. I guess the government being a majority owner of the largest single business in the country is somehow different.

Let's have this discussion again at the next round of bailouts, shall we? :-) See you next recession!

Umm...Didn't Chrysler repay its 1st bailout loans with interest much faster than anyone predicted? Didn't they within 20 years become the most profitable automaker on the planet? Didn't they manage to produce some very popular and critically acclaimed cars before the poorly orchestrated 'merger of equals' with MB?

I am not saying that this was the best option BUT the previous bail out worked VERY well.

91z4me said "...the previous bail out worked VERY well..."

I agree! It worked so well, they got a SECOND bailout!

And so with that knowledge how would you the taxpayer be upset about making money from the loaner who has a proven track record of paying you back more than you loaned out our are you just mad for no reason.

So the new rule of business is that as long as you employ a sufficiently large number of people, you can make an unlimited number of poor business decisions and ignore your customers because the US gov't will be there to prop you back up.

Ford deserves to live. GM and Chrysler deserve to die. So much for capitalism.

There is a reason that advanced economies are services based. The cost of labor in educated societies is so high that fungible large-scale manufacturing is not supportable. There are some manufacturing jobs that can exist in such societies, but they are almost never mass-production and require exceptionally specialized knowledge- these are not fungible. Examples of this type of manufacturing would be satellites or rocket engines. The difficulty with the former type of manufacturing is that because of the labor cost component, for a price the product produced from an advanced society is fundamentally inferior to that of those produced in a less advanced society. This is because a larger amount of money has been spent on the product itself. This ignores thing like transportation costs, but there is generally small in a relative sense.

This is the STRUCTURAL problem that domestic mass-production manufacturers face and no bailout will fix it. It is the absolute and most hebetudinous hubris of politicians to think that political laws trump economic or physical laws. To prop up these companies after the market has already passed judgment on them is supporting a structural inefficiency. Frankly, it would likely better society in the long run to have these jobs go elsewhere. Money has alternative and more efficient uses (I could drone on about deadweight losses if anyone wants).

I disagree. To have most major manufactoring outside the US is a big mistake. It ultimately make us dependent on foreign investment.The US needs to have a solid manufactoring base to survive economically. Further the route cause of the auto industry melt down was the bank meltdown. I'm not exscusing the US auto companies for being poorly managed. However they most likely would have not had to go into a BK situation.The bailout was right in that it saved many jobs. The banks are still not lending the way they should. This is the essential problem. The auto companies will be able to make more money if the banks will be able to approve loans. The sooner this gets back to predepression situation the soone the auto companies can repay the government loans. Bottom line this is a bank issue. They created this and they can resolve this.

"It ultimately make us dependent on foreign investment"

First, I suggest to you that there is a difference between "major" and "mass". The second thing is that the FDI would likely occur in the form of US subsidiaries establishing operations in foreign countries. This does not make us dependent on their foreign investment- it does have an associated political risk however. There are foreign manufacturers that do have automotive manufacturing in this country. This is for two reasons: transporation costs, or the value of the dollar. The rest is not worthy of addressing.

As a final note: I am not suggesting that manufacturing in the United States go away- it is just that there are certain types of it that make very little sense here.

Example please.

CDoke you have some good points but you fail to realize or it my not be known to you that cars made in the US cost less to produce than cars in Japan or Germany becuase they two have workers Unions. The companies of those two countries my not have the same legacy cost that American automakers experince but they have a higher wage and in 2007 Chrysler and GM shifted a lot of thier health care burden to the Unions themselves along with wage freezes spanning from 2003 for senior employess while making any "new hires" starting wages $14 an hour giving American automakers a very competettive labor cost in line with foreign automakers.

the wages aren't what's killing these companies uaw, it's the ridiculous benefit/retirement packages.

Those are both advanced economies and they share the same issue. BMW and Mercedes have outsourced a fair amount of their manufacturing elsewhere. To this country because the exchange rate is favorable for example, but also to many less advanced places such as Ghana, Thailand Turkey and many others. Toyota makes cars in multiple places as well: Vietnam, Venezuela, the Czech Republic etc.

That is an incomplete picture though, for example in the case with BMW even when "made" in Germany they really for the most part mean "assembled" in Germany. This cuts costs on the other side of the total cost equation (materials).

I think it a little to soon to know. Now Mr. Obama got to bring all the American jobs to help with the unemployment Americans get back to work.

Your doomed if you don't, and damned if you do... I think no matter which decision he made he would have been highly criticized for... at least this way, GM gets a second chance to start progressing as a company again...

If pro and con are opposites, wouldn't the opposite of progress be congress?