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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
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Replying to: kernick (Nov 20, 2008 12:45 pm)
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Replying to: berri (Nov 20, 2008 1:35 pm) Many may be old, but as Dave just posted, who worked for GM they are very modernized with robotics. The workers are only UAW while working for one of the Big3. If GM sells me, or I buy at auction an auto factory, I can hire who I want. You appear to assume that bankruptcy is inevitable and GM will not be able to pay back the loan. Why won't anyone loan them the money then, such that they're begging to the government? Let's look at the opinion here - http://www.marketwatch.com/news/story/Lame-ducks-lurch-toward-a/story.aspx?guid=- - %7BB42C8F84%2D5FF8%2D4F25%2DA0E2%2D8964F117878E%7D "But the bailout doesn't even remotely solve the long-term issues facing Detroit. Taxpayers and investors can still rightfully wonder what these companies are going to look like when the money runs out. Will they have achieved in a few months the turnaround their executives claim they have been pushing through for the past two years? Anyone willing to bet on that outcome is probably more prayerful than realistic." GM failure will have an economic impact on lost jobs, govt pension guarantees, etc. The Wall Street Journal thinks many others will pickup the business lost by Detroit. http://online.wsj.com/article/SB122714059184542693.html?mod=mktw Please explain to me why Wall Street's AIG is more important than GM to the economy? I don't believe AIG should have been bailed out, and I feel the same way about the Big3. The government should not play favorites. There are too many lobbyists in DC to believe intervention in the economic market can be fair. Do you think it looks fair if Chrysler which is owned by Cerberus, who's CEO is former VP Dan Quayle gets billions of $'s? Maybe then Cerberus can funnel mucho $ back to Quayle's friends in DC to get elected? That is why typically the US government does not loan $ to businesses, and allows banks to. This argument that because A got $, then B should, and we should is what could break this country financially.  We have to stop promoting this drunken-sailor routine. Because we have wasted $ in the past, is not an excuse to say let's wate some more. It needs to STOP.
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Replying to: mikefm58 (Nov 20, 2008 8:16 am) The silver lining in a 11 year low in the S&P is a little less depreciation comes with the colonization? |
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Replying to: kernick (Nov 20, 2008 2:08 pm)
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Replying to: berri (Nov 20, 2008 1:35 pm) Because when large companies get themselves in hot water, they need to borrow money to get themselves out. AIG if it failed had the ability to bring down the entire banking system (because of its unique positioning with regard to the "toxic" mortgages), which would then mean that companies across the whole spectrum of industries would be unable to borrow to get out of hot water, causing a cascading effect into deep recession. AIG was essentially attached to the banks at the hip, and the banking industry (being the industry everyone depends on when things go wrong in the economy) couldn't be allowed to collapse. GM if it fails does NOT have the ability to bring down the banking system, just as no manufacturing concern does. NPR is announcing that the Congress has told the automakers "no for now", and asked them to return in December with a detailed turnaround plan. I wonder if Ford will be at that second meeting? |
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Replying to: nippononly (Nov 20, 2008 3:29 pm) Ford will have to be at those hearings because it can't let the others get a financial advantage over them. I think Mullaley is doing a decent job, but he had to make some big bets on products and consumers are fickle. Ford still has plenty of risk. |
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Replying to: nippononly (Nov 20, 2008 3:29 pm) By not giving this bridge loan we as a country are playing with fire. These are not normal times and we need to take drastic measures as a country to sure up our industries or else we may look back on how we used to be a superpower. We have been losing the economic war for decades to countries that do not respect our free trade principals and have been using them to bring our country to it's knees. As a people we need to wake up and start leveling the playing field before it is too late. We also need to stop chasing the lowest price. American business cannot compete with Korean, Chinese, Indian labor rates nor do we want to. We need to stop being cheap and suport our own. If the playing field were level these countries would not be able to dump on our markets with their child labor and inhuman working conditions and their manipulated currencies to keep their prices low. This survival of the fittest crap is pie in the sky idealism. Toyota is the fittest because they have been the beneficiary of corporate welfare by their govervenment and have a home market that is protected from imports. Toyota is an awesome company but Ford kicks their arse in most countries where they compete on a level playing field like Europe. Ford is in the best shape. There quality is improving and they are launching a lot of cars over the next 2 years. There spending on cars is going to be up to 2/3 of there product spending come 2010. They have also spent the last several years making difficult operational adjustments that have been costly but necessary. GM has not done this to the same extent as Ford. Let's not forget that Ford was gaining moment with a Q1 profit for 2008 that was derailed by gas prices and now the credit crisis. It blows my mind that anyone would expect the big 3 to present a business plan. They are constantly facing off the wall conditions that noone can anticipate and then critics drag them through the mud. Did anyone see $140 gas? Did anyone see a credit crisis? How can anyone make a viable business plan with external conditions like this. The Big 3 have problems but they did not get into this state by themselves. The U.S. government with their Free Trade policies and inept healthcare policies does not help. Anyone can setup shop with no import penalities, no legacy costs and Government sponsorship (Japanes & U.S. State governments looking for an import plant). The American people also need to accept some blame. We are very fickle and we talk out of both sides of our mouth depending on what is most beneficial to us right now. We have short term memories and goals with no patience or appreciate for long term goals. I do believe in captialism and basic market principals. That it is why I cannot understand why Americans act like SUV/Trucks and large cars were forced on us. They chose these vehicles and voted with there dollars. If they did not value them the Big 3 would not have made them in such volumes if wedid not demand them. Now that the American people have changed there interests as easily as the wind blows they expect the Big 3 to just up and start making small cars. The only reason Europe and Japan have an advantage in average fuel economy is because that is what there governments and people demanded. Americans were drunk on cheap gas and the need to keep up with the joneses while the U.S. gov't was protecting big oil. We must support our own if we are to survive and allow our future generations to iive the American Dream. This is a great country with unbelievable talent and capabilites. There is no way the Big 3 cannot compete in the U.S. when they are successful in every other market around the world that is not protectionist like Japan and Korea. We owe it to the Big 3 and ourselves to stop the madness of destroying our industries because of unfairn policies that handicap U.S. manufacturing. We are putting our fellow Americans out of work. Soon it will be each one of us out on the street. Then who do we blame and ridicule? At least we can say we sure taught the Big 3 a lesson? |
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Let's show the U.S. how much the real economy does depend on the Big 3. On all of your paper money write these words: "This $ made by the Big 3" As it circulates around the nation, every person who touches it will have proof in their hands how they are personally impacted by the US auto industry. Copy this message, and paste it into every forum and comment area of every auto discussion you can find. Canada, Germany and even Romania has said they are willing to help the US automakers. Where is OUR government????
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Replying to: berri (Nov 20, 2008 3:00 pm) GM is a lost cause in its present form. Half or third-sized, with new executive management -- that's a different story. The sooner we can get them to that point the better. Which is why there should be no bailout until Wagoner and his first line goes, and there is a plan to radically downsize, including eliminating all but 2 divisions. That may take BK. |
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Replying to: dodgen (Nov 20, 2008 5:26 pm) Locked up in politics as usual. Bush, like him or not, seemed to offer a reasonable compromise in letting the Detroit 3 tap their currrent $25B in environmental and fuel efficiency subsidy to cover their current liquidity problems. Some in both parties agreed, but then the political machines got into gear. The Dems didn't want to go for it because they need to feed their left and it's push for environment, as well as their loathing of Bush. The Republicans didn't buy in because of their far right beliefs that Adam Smith still defines Capitalism. Each side wants to one up the other. Obama may truly be a centrist hoping to unite government, but he faces a steep uphill battle. Each party seems aligned with their political interests and special interest lobby money. The middle class only counts at election time, otherwise they don't provide the big cash payouts that lobbyists can. We need more politcal parties and some competition in politics. I'm not sure that either party stands for middle class America and its desires any more. Unfortunately, Washington may be more broken than Detroit!
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