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Automotive News & Views Cash for Clunkers - Good or Bad Idea?
4110 messages, Last post on Nov 23, 2009 at 11:42 AM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
For questions about how the program works or to discuss program details, please visit our discussion titled, "Cash for Clunkers - Does it Work for You?"
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Replying to: kdhspyder (Jun 26, 2009 5:29 pm) Your forgetting lost potential earnings. Since these scum sucking companies make no profits, they pay no taxes, and hence make no earnings. If they were real competent companies, they'd make a profit, and pay taxes. We'd of been better off letting these leeches on society die off than keeping them on life support. It's not good for the US as a whole, because you are looking at the little picture. The big picture is the future, and this sets a terrible precedent. The key to success in US business is now to be as incompetent and reckless as possible, so that you are so bad that the government has to bail you out to survive. What a terrible way to bend the rules for the incompetent and reckless. |
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Replying to: andres3 (Jul 09, 2009 9:44 am) If they fold, the jobs may go off-shore and the US will lose those potential tax revenues.
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Replying to: steve_ (Jul 09, 2009 9:49 am) If this was 2006-07, I would tend to agree that bailing out GM and Chrysler makes no sense. But since it's 2009, the economy officially sucks (no you will not find this term in any economic book), unemployment continues to rise, foreclosures are still at record high which means banks (and the global market) are still on shaky ground....and the Mets are below .500. I forgot we have two wars going on in the Middle East; a lunatic in N. Korea; Ahminjined and his Pips are beating up their own people; and we all expected this to get better by summer...just like on TV and in the movies. So instead of everyone complaining, what suggestions does everyone have for helping the auto industry? i hear people complaining all day on the 24 hour news stations but I have yet to hear any other good solutions. |
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Replying to: maryh3 (Jul 09, 2009 8:48 am) 1. Bailouts to try to ensure the survival of the B2 and their suppliers and downstream operations. 2. The C4C program which is intended to give a 10% boost equally toward all segments of the auto industry from steel suppliers to aftermarket small businesses. As far as morality goes it is others saying we should bail out the Big 3 as a morality issue. Since when is bailing out with government money a "good business decision". Letting them go bankrupt is the better business decision. In the first question it is good business not to put hundreds of thousands of workers out of work if there is a reasonable expectation or even hope of the B2 recovering as smaller leaner companies. This isn't just the direct UAW workers but its also the workers at the suppliers to each of the B2 then the downstream workers at railroads and distribution points and dealerships. IF the plug had been pulled back in December every Chrysler and GM store in NA would have had to close. Every company that supplied these companies would have taken a massive hit. As it turns out there is now an uproar in Congress about a 20% reduction. Imagine if it was a 100% reduction. It was you who first claimed "morality" because getting rid of bigger gas guzzlers in favor of more efficient was "better" in the long run. I simply countered your arguement. The C4C program was designed by the auto industry but it will directly benefit every part of that industry with a 10% boost in business and tax revenues. It will partly pay for itself. Then as icing it will also save the nation $6-$12 Billion in the cost of money not spent on fuel. I don't attribute any morality or goodness to this benefit. It's just good business for the nation as a whole to spend less for fuel. We get to keep more of our money here rather than send it to Big Oil and help support producers who hate our way of life.
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Replying to: andres3 (Jul 09, 2009 9:44 am) What lost potential earnings are you talking about and how does this relate to the subject at hand? Yes the B2 were horribly run companies and lost money hand over fist for 10 years because they made bad decisions. So? They were private and that cost us nothing unless you were a shareholder. They didn't live off society in any way while they were losing all that money. OK now they are wards of the state, temporarily. If they go public soon as planned and all or most of our money is recovered in the IPO then the investments were brilliant pieces of statemenship. Hundreds of thousands of jobs and business will have been saved. Pull the plug you say. Next time there's a fire in your neighborhood...'Use pails'. Your rant about the big picture and precedents is noted but actually you are missing the big picture. Small business and small banks are being closed and liquidated every day and every week. These have little effect on the economy individually. So there's no precedent at work here. Now as regards the huge banks and huge industrial companies...that's dicier. There is a serious question about how large does a company have to be and how significant does it have to be before it must be saved? Bush/Paulson answered the question regarding the banking industry. Obama/Geithner answered the question regarding the industrial sector. More control does need to be foreseen so that we don't end up in this situation again. But then the 'free marketers' will begin screaming 'GET GOVERNMENT OUT OF BUSINESS AND BANKING'. However I've said it here many times....government and business are one-in-the-same. They aren't just related. They are a single entity. One can't survive without the other.
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Replying to: ldisler (Jul 07, 2009 9:31 am)
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Replying to: roland3 (Jul 09, 2009 11:25 am) The Cash for Clunkers - Does it Work for You? discussion is focusing more on the nuts and bolts as to how the program works. There's less politics in that one. |
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GM to exit from bankruptcy today... Immediately it is 'worth' $15-$25 Billion. Hmmmm that sounds like a running headstart on an IPO for next year. Let's see if the value will be increased by next year when the planned IPO is to take place. http://dealbook.blogs.nytimes.com/2009/07/09/gm-to-close-sale-of-assets-on-frida- - y/?hp
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Replying to: kdhspyder (Jul 09, 2009 11:00 am) Why is it that bankruptcy for the Big 3 is such an evil word for some? TONS of corporations have gone under -- any reason the Big 3 get special privileges? If the Big 2 went under Ford would get more business, not sure why the government should show favoritism. If they can't compete, they need to go. When they go under people will still need cars. A clever entrepeneur will buy up the GM and Chrysler factories and assets at fire sale prices and the creditors will get some of that. Then that clever entrepeneur will start his own car company. But they will have to compete - not just be propped up by the government. They really will have to produce good cars, clever ideas, their factory workers will have to "survive" on realistic non-Union wages, and their CEO's won't be able to pay themselves ridiculous salaries and wages. Their engineers and designers will have to be clever, capable and good. The infrastructure will still supply no matter who makes the cars. If Honda makes cars and buys up GM's assets then the suppliers will supply to Honda instead of GM. The UAW will simply have to disappear but their former workers will now work for Honda at more competitive wages. Bankruptcy gets rid of the dead weight. It exists for a reason. No special privileges for the auto corporations is a better business decision.
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Replying to: maryh3 (Jul 09, 2009 1:33 pm) There is no single black and white, right and wrong standard here. Everything is gray. Simply put the banks and the B2 were too big to fail given the current condition of the economy. As dtownfb noted previously the situation might have been entirely different in 2006 when the economy was booming. Everything is gray. In different circumstances probably Chrysler would have been allowed to be liquidated and Ford and the rest would have benefitted. But saving jobs now in this depression is most important. I agree that BK is the right tool to get rid of the dead weight....just not right now. Everything is gray. It appears that this will all work out for the good as both companies have exited BK court as planned with very good structures and GM at least has a good product lineup available to it. Chrysler is very ??? IMO. We'll see more in the next 18 months but at least both companies have a decent chance of survival. If they can do so then this is good for the nation.....and I compete against both.
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