Automotive Bailout? are they friggin' kidding?

[Mxr20]

There's no reason to complicate this issue so much.

GM is not profitable - but we have the option of propping them up with taxes, or inflation. With either, we still end up supporting X number of unproductive workers at the expense of productive workers.. those who get taxed, those who will see a rise in prices, those companies that will be squeezed even tighter.

The end result is simply +1,000,000 for GM, and -1,000,000 jobs for the rest of the economy. It may be spread out, but the effect is the same.

The crisis was created by printing money, and the moral hazard brought on by the "insurance" the federal government provides favored industry. We don't need more of what created this mess.

[L6Sguy]

ummmm they aren't exactly doing awesome right now either. Car sales in the US are down overall, not just GM.

 

 

are you proposing that GM is as smart a company as Honda or Toyota? because short-term gains aside, it may be smarter to not work for the lead paint eaters.

[L6Sguy]

Unfortunately it's the bed we will all end up sleeping in.

 

 

and supporting them with tax $ is a clear way out of a {censored}-filled bed?

[gschmittling]

Why does everyone think this is a bailout? It's a loan that will be payed back with interest. We just gave 700 billion to the richest in the world, but we can't loan 4% of that to help save manufacturing? 3 years ago everyone had big cars, the bigger the better. Once gas doubled, everyone was dieing for a hybrid car, but there was no market for them before hand. You can't expect the industry to just do a complete 180 in their designs within 1-2 years. It's not just the big 3, the car industry all over the world is shot because no one can get credit to buy cars.

[L6Sguy]

ummm I am not so much talking about right now, as i am about the basic total failure of the world economy as we know it. if this happens money will be worthless... our children may not make it either. If we see the whole world slide off an economic cliff in the next year or so, that $25billion will look like a sweet deal in retrospect. There are plenty of things for GM that is simply out of their hands... the credit market is a good example. normally if GM had a shortfall they could get a loan from a bank, but the banks are all going under.

 

 

if it was a way to inject $ into a system that could be depended upopn for anything, thatd be one thing. but this bailout is, in essence, giving $ to liars, cheats and half-wits to continue pissing away as they have for decades.

 

 

lotta houses of cards crashing/starting to crash. tough {censored}. this is the pendulum swinging the other way, and throwing billions at it will make the short term marginally better and long term miserable. lets get the misery over with now.

[L6Sguy]

haha, wow. You arm chair analysts are going to be chewing your words and stale bread if your "burn baby burn" bull{censored} comes true. A lot of you are basically advocating the suffering of millions of Americans because you're bitter that tax dollars might go towards our country instead of building military bases in Iraq. clue: our economy can't really handle this many job losses. We can't pay the unemployment claims. We can't handle the uninsured health issues. Do you guys realize how much {censored}ING TAX REVENUE a corporation like GM pays and how much their employees pay? Do you realize how much tax revenue comes from the suppliers, the dealers, and their employees? Do you realize how much tax revenue is generated by the goods and services their employees purchase? Do you realize how much juice they put into our economy? Do you even realize how much tax revenue comes from the sale of the cars? Do you have any idea how LITTLE the spending to keep from losing all this tax revenue is compared to what we dump into defense contractors yearly?

 

 

 

 

 

perhaps GM should get into methamphetamine manufacture, financing, and distribution? or crack? what'd go into that plan could be not a single {censored}-hair stupider than their business plans/activities for the last 30+yrs.

 

 

 

 

 

 

E.v.1.

[L6Sguy]

......3 years ago everyone had big cars, the bigger the better......

 

 

only in adverts, not in real life.

 

 

 

 

Once gas doubled, everyone was dieing for a hybrid car, but there was no market for them before hand. You can't expect the industry to just do a complete 180 in their designs within 1-2 years. It's not just the big 3, the car industry all over the world is shot because no one can get credit to buy cars.

 

 

conveniently forgetting that for 20+yrs Rabbits/Golfs exceeded 50mpg, and many people bought them. {censored} hybrid, howabout just smart, or logical? GM had 30yrs to create a 60mpg diesel vehicle, they delivered the escalade, plain and simple.

 

 

 

 

how many lobbying $ are being spent chasing that bailout, instead of training somebody how to run a business whose existence isnt based around tax-payer bailout?

[RoboPimp]

what's the difference between bailing out a crappy auto company or crappy banks?

 

I say take all the bailout money and invest in solar and wind power

[RoboPimp]

PS the "50 MPG VW" is kind of a stretch, they get around 40 highway

[Terminus]

Haven't read the whole thread, but my 0.02$
I understand the decision, the car industry is a huge empoyer in the US, no politicial would ever wan't to be remembered as the one responsible for such enormous unemployment. However, the american car industry should has made a lot of mistakes and probably should suffer the consequences. It also seems a bit strange that even though the united states are the poster child for free trade the government still intervenes and affects the market instead of just letting supply and demand having its way.

[Orwell]

I'm not going to say a whole lot on this matter but if you lived in Michigan and realized how much everything is inter-connected in this state then you might have another point-of-view.

Rough estimates are saying that if one of the auto companies go out of business the other two would quickly follow thus allowing roughly 2 million people to be unemployed and the quick death of Michigan.

Now granted, I will admit that the executive bonuses and UAW contracts/pensions have caused a lot of the problems but both Honda and Toyota will find themseles in the same boat further on down the line when they have been in business as long as Ford, Chrysler, and GM.

[RoboPimp]

i owned/drove an '87 iirc for a few yrs, it consistently got 54mpg highway. not a stretch. and its the diesel only, i dunno what the reg. unleaded models get.

 

 

hmm, you must drive downhill everywhere you go

[L6Sguy]

hmm, you must drive downhill everywhere you go

 

 

not using air conditioning can make big difference, as can knowing how to drive, as opposed to getting from point A to B.

 

 

estimates reflect the effects of Faster Speeds & Acceleration Air Conditioner Use Colder Outside Temperatures The actual mileage you get will still vary based on your driving habits, traffic conditions, and other factors. ___________________________________________________________ Quick acceleration and heavy braking can reduce fuel economy by up to 33 percent on the highway and 5 percent around town. New EPA tests account for faster acceleration rates, but vigorous driving can still lower MPG. Running electrical accessories (e.g., air conditioner) decreases fuel economy. Operating the air conditioner on "Max" can reduce MPG by roughly 5-25% compared to not using it.

 

[RoboPimp]

not using air conditioning can make big difference,

 

 

driving with your windows down and no AC uses just as much gas

[gschmittling]

only in adverts, not in real life. conveniently forgetting that for 20+yrs Rabbits/Golfs exceeded 50mpg, and many people bought them. {censored} hybrid, howabout just smart , or logical ? GM had 30yrs to create a 60mpg diesel vehicle, they delivered the escalade, plain and simple . how many lobbying $ are being spent chasing that bailout, instead of training somebody how to run a business whose existence isnt based around tax-payer bailout?

 

 

But they weren't selling... I remember driving down the street and thinking to myself why these soccer moms need big SUV's to drive their kids to school and go shopping. Companies go where the market takes them, and the market was for bigger less fuel efficient cars because gas was cheap. Even look at how the mid sized SUV's like the Explorer kept getting bigger and bigger, people wanted them that way. Toyota and Nissan brought out Titan's and Tundra's. They were selling. Now it seems stupid that they didn't create more fuel efficient cars, but hindsight 20/20. You can't blame them for the sudden change in the market. Such a dramatic shift takes time, they've done great progress all considering, but it takes time.

 

I don't see why we can give 700 billion to the banking industries who royally {censored}ed everyone, but can't give a 25 billion loan to the only manufactering we have left in the United States.

[L6Sguy]

Now granted, I will admit that the executive bonuses and UAW contracts/pensions have caused a lot of the problems but both Honda and Toyota will find themseles in the same boat further on down the line when they have been in business as long as Ford, Chrysler, and GM.

 

 

 

do you think Honda will have exerted anywheres near the money in stifling tech advancement and lobbying in their sole self interests' after as many years?

[spoonie g]

 

Toyota pays its US workers about $25-30 dollars less an hour than GM, has a fraction of the number of dealerships GM has, and is relatively financially sound. Hmmm. Maybe it's just a coincidence. Or Toyota made a pact with the devil.

 

 

I think you were hearing the amount spent by the manufacturer with benefits and such in which GM's is ridiculous ($80, I believe? compared to around $30 average for japanese automakers?). The unions are crippling the U.S. automakers. If they have to spend that much on labor, there will be cuts made elsewhere and that is in parts, quality control, etc. My uncle is a parts designer for automobiles and he told me the parts they use for japanese and german cars are of a much higher standard than american. For example for one particular part, the U.S. will use a plastic gasket whereas the japanese or germans will use something of much higher quality. When you do that kind of cost-cutting on up to 500 parts, it makes a hell of a difference in the end. Unions had their place at one point but now the worker gets their pay no matter what they do, no matter how well they do their job. There is no incentive for improvement.

[L6Sguy]

driving with your windows down and no AC uses just as much gas

 

 

interesting how, in this discussion, the values are exactly the same. funny, that.

[L6Sguy]

But they weren't selling... I remember driving down the street and thinking to myself why these soccer moms need big SUV's to drive their kids to school and go shopping. Companies go where the market takes them, and the market was for bigger less fuel efficient cars because gas was cheap. Even look at how the mid sized SUV's like the Explorer kept getting bigger and bigger, people wanted them that way. Toyota and Nissan brought out Titan's and Tundra's. They were selling. Now it seems stupid that they didn't create more fuel efficient cars, but hindsight 20/20. You can't blame them for the sudden change in the market. Such a dramatic shift takes time, they've done great progress all considering, but it takes time. I don't see why we can give 700 billion to the banking industries who royally {censored}ed everyone, but can't give a 25 billion loan to the only manufactering we have left in the United States.

sure, Golfs were hardly the it car, but at the same time, did nobody think that fuel prices may go up, that fuel supplies may diminish in general, that anything?

no eye to the future = bad business, no matter how you slice it.


walking around amsterdam, one is hard pressed to find a car over 8' long. been that way for awhile. the US companies knew of it, and instead went for the most spoiled brat, uber-consumer, ultra energy-wasting, resource-pissing vehicles at almost every turn. now the business, one based on crap, is heading for the {censored}ter. how appropriate.





they'll get their money, and workers will still get the shaft, and the house of cards will keep crumbling, and we'll keep paying, and GM will still pay enormous exec bonuses, and the cars will still suck.

[freeridstylee]

First off the Japanese and German companies are heavily subsidized by their governments (VW is 20% owned by the German govt). A lot of their health care is paid for by the government not by the company, and there are much greater R&D backing by the foreign governments. GM is an HMO that sells cars. So don't get all high and mighty on Toyota when the playing field simply isn't level.

 

Obviously mistakes were made with SUV's and what not (Toyota made them as well). But the fact is people were buying them. If someone comes into a dealership and says I want a truck, is there anyway that you are going to steer them towards a small car? No. Gas prices went up because were had an overly inflated dollar. Now the bubble burst, we have cheap gas again. That was the fault of the financial industry not the auto industry.

 

Now that there's no credit around people can't buy cars (where did the 700 bil go?). Again the financial industry's fault.

 

If gm declares bankruptcy, who's going to take over their pensions. Their retirement health care. That's right the good olde US government. How much is that going to cost? A lot more in the long run then a loan now. GM alone has 250000 retirees.

 

IMO they shouldn't have bailed out the financial sector. But since they did they may as well try and keep some big R&D funding companies in the US. And I feel it'll save the taxpayers $$ in the long run.

[L6Sguy]

prob is a loan now is a loan to an incompetent. that only does so much good. while people wanted SUV's, that didnt by default mean that more efficient engines couldnt have been R&D'd, but instead there was multiscreen video seen as true advance. good, that worked out well.



much as it pains me to side with Robo so wholeheartedly, alt energies could and should be an industry that dwarfs th BF3.

[RoboPimp]

much as it pains me to side with Robo so wholeheartedly, alt energies could and should be an industry that dwarfs th BF3.

it pains you to be right for a change?

[spoonie g]

 

First off the Japanese and German companies are heavily subsidized by their governments (VW is 20% owned by the German govt). A lot of their health care is paid for by the government not by the company, and there are much greater R&D backing by the foreign governments. GM is an HMO that sells cars. So don't get all high and mighty on Toyota when the playing field simply isn't level. Obviously mistakes were made with SUV's and what not (Toyota made them as well). But the fact is people were buying them. If someone comes into a dealership and says I want a truck, is there anyway that you are going to steer them towards a small car? No. Gas prices went up because were had an overly inflated dollar. Now the bubble burst, we have cheap gas again. That was the fault of the financial industry not the auto industry. Now that there's no credit around people can't buy cars (where did the 700 bil go?). Again the financial industry's fault. If gm declares bankruptcy, who's going to take over their pensions. Their retirement health care. That's right the good olde US government. How much is that going to cost? A lot more in the long run then a loan now. GM alone has 250000 retirees. IMO they shouldn't have bailed out the financial sector. But since they did they may as well try and keep some big R&D funding companies in the US. And I feel it'll save the taxpayers $$ in the long run.

 

 

GM spends $1600 per vehicle on healthcare costs of of current and retired U.S. workers while Toyota spends $200. GM just made a stupid deal with the unions without acknowledgment of future health care cost increases. Additionally, GM pays about another $1,000 per vehicle on holiday pay, work rules, plant-shutdown pay and line relief to UAW workers which are expenses that Toyota simply doesn't have.

[L6Sguy]

GM spends $1600 per vehicle on healthcare costs....

 

 

its interesting, as healthcare is likely among the next house of cards to crumble, and rightfully so.

 

 

healthcare = making big pharma rich, the client exists only as a vehicle to deliver monies

[spoonie g]

You want to know what will happen if GM files bankruptcy? They will file Chapter 11, which means reorganization. They will bring in specialists that will look at what is being spent where, contracts with parts suppliers and the unions, etc. They will say this works, this is costing you money, this is causing you to fail, this is working, etc. Therefore, if they file, they will see what isn't working... Hmmmmm.......