Dvorak Poll: Should We Bailout The Car Companies?

Published on December 11th, 2008

Posted by Uncle Dave in economy

Should We Bailout The Auto Companies?

Yes — Save them
No — Let’em rot

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Passage of the bailout by Congress doesn’t look good.

68 users responded in " Dvorak Poll: Should We Bailout The Car Companies? "

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# 1 Mac Guy said, on December 11th, 2008 at 6:04 am

Save ‘em, but fire all the execs and tax their golden parachutes at 100%.

# 2 Aaron said, on December 11th, 2008 at 6:14 am

Let them compete for the money! All three should come up with a plan, the best plan wins,then the spoils of the other two should go to the winner. If we do bail,why do we need to bail out three companies?

# 3 Thermo said, on December 11th, 2008 at 6:24 am

@ Mac Guy
Stay in school – you need they education. The problem is not the executive pay. The problem is the union. The car companies can not compete with the union benefits they have to pay. They are profitable in all their other plants except for the ones in North America where they are strangled by the unions. The foreign car companies are profitable in the US because they don’t have they UAW weighing them down. Giving them the money is just a waste because it doesn’t fix the problem and they will either go out of business or come back for more money in 6 months.

# 4 morram said, on December 11th, 2008 at 6:25 am

Buy a Toyota

# 5 Ah_Yea said, on December 11th, 2008 at 6:30 am

#3 Thermo got it right.

The reason for the automakers to declare bankruptcy is to unload the union, thereby making the car companies competitive.

The reason to bail out the automakers is to buy votes from union members.

In this competitive world, hard as it sounds, our standard of living is going down the toilet because we have to compete against the living wages of workers in India and China.

# 6 morram said, on December 11th, 2008 at 6:30 am

Show you’re support, buy a Toyota.

Our car companies have shown us what they’re all about, spending billions on themselves and zip zagging across the pond buying and selling other countries car companies for profits while in the mean time selling us on the same old horsepower you can out muscle the other guy story while completely ignoring the state of the country and energy.
If the US auto industry crashes there’s alway the bus.

# 7 LibertyLover said, on December 11th, 2008 at 6:46 am

American car companies have to pay around $70/hr for their help. All other car companies doing business in the US pay around $35/hr.

Bailing them out will not solve this problem. The UAW needs to be busted up. Anytime a union controls an entire industry, it is a monopoly of the labor force. They should be told to break down into local unions or face the RICO act.

# 8 Paddy-O said, on December 11th, 2008 at 6:50 am

# 7 LibertyLover said, “American car companies have to pay around $70/hr for their help. All other car companies doing business in the US pay around $35/hr.”

I think Dick Morris said it best. Paraphrase: “This isn’t a bailout of the auto companies, it’s a bailout of the unions.”

# 9 Mark Derail said, on December 11th, 2008 at 6:57 am

Think of the PC – Personal Computer.
Why has it been so successful.

Dell or HP assemble, they don’t make hard drives. Or RAM, etc.

Same thing must happen in the auto industry. I remember my first car, a Chevrolet GEO Metro, that had a motor from Suzuki.

So you keep the assembling local, but auto assemblers buy parts from different suppliers.

This will have price variations based on quality, just like a PC, the faster computer can be either cheap or expensive.

Imagine having Mitsubishi, renowned for motors, specializing in just that. Ford, is able to make great car bodies. Toyota has the better transmission, etc.

If the Big 3 die, smaller, specialized companies will spring up, making a healthy market. Just like PC’s, when IBM dominated, and finally pulled out, from making a PC from start to finish all in-house.

# 10 Named said, on December 11th, 2008 at 7:12 am

7, 8,

That $70 dollar figure is what we can call an ambiguity. It’s not perfectly accurate but it’s politically effective.
http://mediamatters.org/items/200811220004

Non-union Americans hate unions as much as uninsured Americans hate universal health care… A LOT!

The Big Three made cars Americans wanted… SUV’s. Then, when Americans couldn’t afford them or the gas anymore, the Big Three had nothing left in the tank, so to speak. You guys did it to yourself and now the self-loathing is coming out in spades. Sadly, even if the Big Three made awesome small cars, I doubt Americans would want them. You guys either all have small penises or think small cars are plastered with vaginas that will make you look like a pussy.

But, 1.5 Trillion to the financial industry is such a mystery, most people were just passive accepting it. In fact, its so cold politically it doesn’t even make 10% of the auto bailout coverage in the MSM. Paulson and Bernacke are SO HAPPY that the focus is on a few bucks to the auto industry. Keeps the looting in full swing.

As for the bailout…
GM – No
Ford – No
Cerebus corporation (Chrysler) – HELL NO

GM and Ford should be broken up. Cerebus should eat their own lunch.

# 11 SparkyOne said, on December 11th, 2008 at 7:18 am

F all three. Let a paleontologist figure out what happened in a couple of eons.

# 12 LibertyLover said, on December 11th, 2008 at 7:22 am

#10, I did not say the workers were getting $70/hr. I said their labor is costing them that.

I know it includes retirees because both of my parents are GM retires.

AFA the financial industry – I haven’t lost sight of the either. Guns and tuna are stockpiled . . .

# 13 RTaylor said, on December 11th, 2008 at 7:31 am

The ripple effect of allowing these companies to die would be devastating, and set back economic recovery many months. They do need new management and serious restructuring. I’m just not sure if a Car Czar is the one to do it. In my opinion government oversight has never been that productive. All car sales are down, and that will continue for a while. Lines needs to be shut down, and inventory cleared, even at considerable losses. Get creative and retool for the recovery with cars people want. The UAW has a fraction of the power it once had. They’re in no position to demand anything, and will have to give many concessions or dissolve because they’ll have no membership.

# 14 Named said, on December 11th, 2008 at 7:37 am

13,

There is tonnes of good equipment in those factories that GM, Ford and Cerebus own. Toyota, Honda, VW, BMW and the rest would love to get their hands on fully developed infrastructure.

As for cars Americans want… SUVs. Hasn’t changed. Won’t change.
http://tinyurl.com/5wrw96 from myfox, SUV sales surge thanks to lowered fuel prices.

And the cycle begins anew.

# 15 Noel said, on December 11th, 2008 at 7:38 am

A lot of people’s jobs depend on these companies. They should be bailed out, but with major tags attached.

# 16 Paddy-O said, on December 11th, 2008 at 7:41 am

# 13 RTaylor said, “The ripple effect of allowing these companies to die would be devastating,”

They wouldn’t die. If they BKed and restructured they’d be better off. The ONLY reason the Dem congress is pushing for a bailout is to protect union benefits. There is no business reason to stop a BK. Congress is just protecting votes.

# 17 Named said, on December 11th, 2008 at 7:48 am

16,

How can they go Chapter 11? That would stop their credit line and finish them off for good.

# 18 Bplus said, on December 11th, 2008 at 7:54 am

It seems that nobody realizes that keeping the big3 around is a matter of national security & PRIDE. (pride is something this country used to have)

#6 can figure out how our troops can hop on a Mitsubishi bus to move around on foreign soil.

#9 obviously has not looked under the hood of a car made after 1978. You think your GM car is all GM? Think again.

# 19 dusanmal said, on December 11th, 2008 at 7:57 am

@#10: “The Big Three made cars Americans wanted… SUV’s.” – complete falsehood. SUV-craze came from: Govt. set higher gas mileage, pollution and safety standards. Carmakers didn’t want to do that so they lobbied in “exemption” for SUV’s. Hence, SUV’s were more profitable to make (cheaper as build standards were lower and by definition larger vehicles have bigger margin). Hence, carmakers promoted SUVs until they come out of their noses. Gullible populace bought the ads and “wanted” SUVs although they didn’t need them for real. Blinded by success of hoodwinking the customers carmakers failed to plan for the future, which inevitably came as economic reality snapped people from their ad-induced dreams … In the while Union milked out insane ponzi-scheme contracts that were doomed to fail no matter how good economy was.

Hence two main culprits, both of which need to pay. Management who failed to plan and tried to scam customers while allowing incredible Union contracts. Unions whose contracts can’t be supported by any viable industry.

I’d give them money under two conditions: complete managements (at least top 100 for each company) leave FIRST (than carmakers get money) and agree to a contract never again to work in auto industry. Unions agree to abandon their all contracts FIRST (now) and sign new one with American People who are saving their jobs (and this contract gives them average pay and benefits workers in functional auto plants [non unionized] have at the moment). Also, top Union management must go FIRST.

# 20 Named said, on December 11th, 2008 at 8:14 am

19,

So Americans are brainless automatons that have to obey what they see on TV? Get over it. Americans have ALWAYS LOVED big vehicles. Always. And now that fuel is lower, SUV sales are rising again.

The Big Three didn’t even want seat belts back in the day. When the gov’t implements regulation their first action is to refute it. The Big Three are to the gov’t what the Union is to the Big Three.

And as for the Union bashing comment again… only in the US are unions blamed for the failure of the auto industry. How unimaginative. BMW, VW, Toyota, Honda all have unionized plants. maybe not in the US, but elsewhere. And here is a good little article for you.
http://blog.mises.org/archives/009076.asp
It was a dead heat. General Motors sold 9.37 million vehicles worldwide in 2007 and lost $38.7 billion. Toyota sold 9.37 million vehicles in 2007 and made $17.1 billion.

Must be the unions fault.

As an aside, in most industrial countries, health care is nationalized and therefore that cost can be eliminated by the employer. but, Americans LOVE paying out of pocket for Health care.

# 21 Paddy-O said, on December 11th, 2008 at 8:24 am

# 17 Named said, “How can they go Chapter 11? That would stop their credit line and finish them off for good.”

Like it finished United? It would actually help them get credit faster. Once banks knew they were out from under the crushing debt of future pension/healthcare contract costs, they’d have lots of credit offers.

# 22 Mister Mustard said, on December 11th, 2008 at 8:28 am

#12 – LL

>>I know it includes retirees because both of my
>>parents are GM retires.

So I guess you’ll have no cause to bitch when their pensions and health bennies are yanked, and you end up paying $140,000/yr if they have to go into a nursing home (or $210,000/yr, if they happen to live in Alaska).

Right?

# 23 Named said, on December 11th, 2008 at 8:30 am

21,

Lot’s of credit offers? You’re joking, right? If car sales are down 70% WHY would a bank that just got cold hard cash to invest with as they please give it to Detroit when you can see they cannot move inventory AT ALL!

In fact, BOA just invested in Toll Roads… In Spain. And picked up some choice assets in China. Why would BOA put money in Detroit?

# 24 Grin Reaper said, on December 11th, 2008 at 8:30 am

I thought Ford pulled out of asking for the Bailout.

I thought they decided to tough it out.

# 25 Jack Sofolot said, on December 11th, 2008 at 8:41 am

Ford is in decent shape, for the shape they’re in. Over the last several years they’ve made several retirement offers, downsized a fair amount, did some restructuring, and got a new CEO. I think they sold off some subsidiaries, too.

# 26 Paddy-O said, on December 11th, 2008 at 8:46 am

# 23 Named said, “Lot’s of credit offers? You’re joking, right? If car sales are down 70% ”

Once you restructure (to fit demand of product). Then you will be profitable. Why would you keep facilities & people who aren’t needed due to demand?

Don’t ever run a large business. It’ll fail.

# 27 Named said, on December 11th, 2008 at 8:58 am

26,

I see. Unless Ford or GM or Cerebus goes Chapter 11 they can’t restructure their business according to demand? And they haven’t been able to do such a thing for the past, oh, 15 years? Nice try. Americans wanted SUV’s, Big Three built SUV’s. I believe it was Ford that made the first successful run of them. Once Americans couldn’t afford SUV’s, the Big Three said “BAILOUT” since they had nothing in the pipe that was worth buying. When you look at the price / performance of a 25K car, you have LOTS of choice. And the best ones are foreign branded and probably locally made.

And who says I would maintain unnecessary brands or products? How did you ever extrapolate that? I never understood the multi-brand anyway. At least with, say VW and Audi, the relationship isn’t blatant and allow special branding along rice / luxury. But, what the hell is the difference between a GMC, Chevy, Buick, Pontiac anyway? Is one a “better” car than the other?

Don’t become an analyst. You’ll be wrong.

# 28 LibertyLover said, on December 11th, 2008 at 9:05 am

#22, If you really think $15B is going to save those pensions, you are mistaken. Those pensions are already gone whether they get the bailout or not.

I am so convinced of this I have already started making plans to have my parents move in with me when things get worse.

However, if the bailout fails to go through, I am sure they wouldn’t mind a donation from you as your government failed to help them out.

# 29 Mr. Fusion said, on December 11th, 2008 at 9:08 am

Liberty Lover,

American car companies have to pay around $70/hr for their help. All other car companies doing business in the US pay around $35/hr.

Maybe you could cite the accuracy of this number. I’ve heard it several times before along with bullshit.

Now, let me go back to a cartoon I remember from about 1980 when foreign cars were starting to make inroads.

A supervisor and assembly line worker were having a discussion on the assembly line. The worker was saying,
“Your designs, your marketing, your dealers and service departments, your prototype and testing, your approvals, your methods of production, your production lines, your factories, your parts, your supervision, so tell me again why it is all my fault?”

I live not too far from South Bend, Indiana where Studebaker used to make their cars and trucks. When they closed the South Bend plant in 1964 it devastated the area. The repercussions were felt and reverberated throughout the region for years.

If the “Big Three” go under, the mess will be far worse and spread out across the country. It has been the manufacturing sector that made America great, not the banking industry.

So far $300 BILLION has been given out through the Bail Out Package and the asshole in charge won’t tell us where it went or what conditions are attached. Smaller businesses are still being cut off of credit and forced to close their doors.

If the Big Three fail then we will be in for a MAJOR depression. Not something we can get over with another stimulus package that people will spend at Walmart on Chinese clothes for their kids. Something where even Lawyers and Engineers will be taking government handouts.

# 30 Paddy-O said, on December 11th, 2008 at 9:10 am

# 27 Named said, “I see. Unless Ford or GM or Cerebus goes Chapter 11 they can’t restructure their business according to demand? And they haven’t been able to do such a thing for the past, oh, 15 years?”

Correct. When they lay workers off they still have to pay them. You should study up on all the Union contracts. BK will wipe out ALL these financial commitments. Let me know when you have read all the contracts.

# 31 DCI Gene Hunt said, on December 11th, 2008 at 9:23 am

http://tinyurl.com/5h58ok

# 32 Named said, on December 11th, 2008 at 9:26 am

30,

So, aside from having the only permanent work force in the history of America, they can’t innovate or produce desirable cars because of the unions. Interesting… I see where you are going with this. There is no business plan at the Big Three except for what the Union writes up. I guess we know who should run the company.

As for the contracts, what i’ve gleaned from the GM deal (this is from the UAW site) Job Security for them includes two years protected status. So, that’s not really ad infinitum. Now, I’ve been in a Union and I know how layoffs work. If you get laid off you get salary for a period of time and then that’s it.

# 33 Paddy-O said, on December 11th, 2008 at 9:27 am

Just in:

Auto bailout bill DOA in Senate.

We’ll see after Jan 20.

# 34 jbenson2 said, on December 11th, 2008 at 9:39 am

A more accurate headline question would be:

Should We Bailout The Auto Unions That Are Driving The Car Companies Into Bankruptcy?

# 35 Mr. Fusion said, on December 11th, 2008 at 9:46 am

#35, Cow-Paddy, Ignorant Shit Talking Sociopath and Retired Mall Rent-A-Cop,

This just in,

YOUR EFFEN WRONG.

Again.

Did you also know that your hero in charge of Homeland Security hired illegals to clean his house?

# 36 Mr. Fusion said, on December 11th, 2008 at 9:50 am

#37, Oopps, that should have been YOU’RE.

My bad.

# 37 Paddy-O said, on December 11th, 2008 at 9:51 am

# 37 Mr. Fusion said, “YOUR EFFEN WRONG. ”

LOL, you cited s/g that is 4 hours old. Keep current, will ya?

# 38 mcosmi said, on December 11th, 2008 at 9:51 am

# 3 Thermo said, Unions are the prob.

I can’t agree w/ you more. I can’t help but blame all the liberal idiots who keep electing officials(mostly dems) who pander to these special interests…i.e. unions, so that when they get in office they owe the unions bigtime, and pass any legislations union bigwigs call for.
Who loses out??? the people…thats who. So keep electing Obama’s and this Gov from il(who is obamas good ol boy…you fuckers deserve what you get, but I don’t cause I vote with common sense, and make informed decisions.

# 39 Named said, on December 11th, 2008 at 10:17 am

Did my sarcasm metre just blow up?

# 40 Greg Allan said, on December 11th, 2008 at 10:32 am

When Congress bailed out the banks, does anyone remember them drilling the executives on how they got to DC or how much salaries bankers make?

Once again, this is just more labor bashing.

# 41 Named said, on December 11th, 2008 at 10:36 am

Something happened to the order here… My 39 now makes no sense….

“When Congress bailed out the banks, does anyone remember them drilling the executives on how they got to DC or how much salaries bankers make?”

Well, the bankers did a great job. It’s not their fault the market failed to do what it was ordered to do…

# 42 gooddebate said, on December 11th, 2008 at 10:41 am

We need to see Other Peoples Money one more time. The car companies are already dead. Congress is only talking about keeping the blood flowing for a little while longer; this can’t be good.

When anyone says something like we should fire all the execs or do this or that, just remember the guys who will decide who stays and goes and what the criteria for making cars is congress! Yes, that’s right, the 9 percent approval rating guys. Congress is acting like we’ll wake up one day and have no cars; please.

We didn’t kill the car companies, the market did. Here’s a good question, if GM gets it’s hands on 10 billion dollars then how are we going to calculate how much their cars are actually worth? Today we can say how much it takes to produce a car. But when they have money they didn’t earn, how does that work?

# 43 Greg Allan said, on December 11th, 2008 at 11:06 am

>> The car companies are already dead.

I don’t see cars disappearing any time soon — not even the internal combustion engine.

When did it happen that we American concluded that we can manufacture anything decent anymore?

Did conservatives sell us this line of crap in their effort to sell off our manufacturing base to foreigners for their own personal profit?

# 44 ECA said, on December 11th, 2008 at 11:15 am

DELL and HP all went threw the same thing…
MAKING enough product/cars/computer for 5 YEARS worth of product DONT WORK any more.
This is showing that the consumer is getting Alitte smarter..
A CAR should last, AT LEAST 10 years..
A computer should last AT LEAST 5 years..
Spending money, ISNT the answer. ITS THE CONSUMERS/TAX PAYERS MONEY…NOT theirs.
Buying a computer or CAR is a miserable thing.
You have to throw ALL of the OLD one away and buy it ALL again. JUST to stay UP to tech.

# 45 Greg Allan said, on December 11th, 2008 at 11:26 am

General Wesley Clark makes a good argument that saving the US’s manufacturing base (esp transportation) is essential to national security.

http://tinyurl.com/6yxan7

Basically, it comes down to this: if we get in a war with an ally of China, we’ll have to beg them to make us more Humvees (or whatever.)

Worse, of course, is that any sort of conflict is OFF THE TABLE with any country that makes our transportation or other essential tech/food/medicines/etc manufacturing that we absolutely need.

# 46 Greg Allan said, on December 11th, 2008 at 11:33 am

One more point and I’m really done with this discussion:

Why are we only helping the “Big Three”?

Why don’t we send a few hundred million to American car companies that are already making electric cars? For the express purpose of ramping up to mass production and an affordable price?

Tesla Motors comes to mind but there are others.

Lastly, the only real technologcy hurdle is the batteries, right? How about throwing a couple billion at _PURE R&D_ for batteries?

Then, GIVE AWAY the patented technology to American battery manufacturers and SELL it to foreigners?

This kind of indirect subsidy makes much more sense, because it forces the industry to go the direction that is good for America and the world.

# 47 Greg Allan said, on December 11th, 2008 at 11:39 am

OK. OK. One last thing.

Congress needs to MANDATE peak-hours sellback of electricity by consumers so that they can use their electric cars to buy cheap electricity at night and sell it back during peak hours.

This helps consumers pay for their cars and reduces several other energy related issues about capacity and undesirable generation.

# 48 Uncle Jim said, on December 11th, 2008 at 11:58 am

They should go into bankruptcy before getting any help. That way there is a court record of where the money is going and what it’s going for and who it’s going to. With the other bailouts, nobody seems to know where all the money is going.

It’s out of control.
“In just eight months, we have made a fundamental change in our financial system and our form of government, without much debate or with, I dare say, no foresight.” Dennis Byrne
http://www.realclearpolitics.com/articles/2008/11/bailout_spending_is_out_of_con.html

Bush Opposes Free Internet Plan
“As the clock ticks down on the lame duck administration, the White House states opposition to the FCC’s plan to condition spectrum auction on winner providing a free tier of broadband service. The White House, wireless carriers and CTIA insist a high bidder, no-strings-attached auction is the most efficient use of the spectrum.”
http://www.eweek.com/c/a/Mobile-and-Wireless/Bush-Opposes-Free-Internet-Plan/

They’re real efficiency experts down in Washington. The FCC plan is solid because more wireless makes the country more competitive. Wall Street sells our jobs and sells them to the lowest bidder and then gets hundreds of billions of dollars in bailout cash from Washington for screwing the country up and down. The big problem with an auto bailout is people aren’t buying as many cars and trucks. They need to sell 15 million and they are looking at selling 11 million. The bailout helps, but you can’t legislate demand and the big three have a demand problem. The bailout lets them keep supplying a market that is killing them financially, so they’ll still lose huge amounts of cash and if job losses continue the demand for new vehicles will just get worse. Repossessions are way up, so there are lots of used cars out there cheap.

“Wells Fargo reports it has also seen an increase in auto loan delinquencies and wrote off $1 billion in auto loans in 2007, an almost 17 percent increase over the $857 million in write-offs in 2006. An even higher write-off rate is expected this year. As with subprime home loans, low interest rates over the past few years made it easy for people to buy cars they ultimately couldn’t afford.”
http://www.bankrate.com/brm/news/auto/20080528_car_repo_rate_soars_a1.asp

The auto bailout will keep the market well supplied with new cars more people can’t afford and credit is tight, so selling them is going to get tougher than ever. A bureaucrat is dead at 30 and buried at 60. The market for hearses could be picking up as Washington continues to pay off bad deals and enable more bad deals.
http://www.luckyfish.com/pages/blarney/hearse.htm

Forget free wireless. We get to pay millions of dollars a year though to keep Bush safe and secure because he’s done so much for the country. We’re rolling in it.

# 49 gooddebate said, on December 11th, 2008 at 12:00 pm

Greg Allan,

–

So, what you’re saying is that you’d like to lose your freedom now to avoid the possibility of losing your freedom later?

If congress dictates the terms of the auto industry we will lose the freedom to choose because congress will tell you what to drive “for the good of the community”. They cannot help themselves, that’s how it will work. They’re even talking about who can work there and how much they can be paid just to get the money in the first place.

The best thing that can happen is bankruptcy where the court appoints someone to figure out how to make the business viable or to liquidate. I wonder if someone would buy GM if it was 30 cents on the dollar? Just a though.

# 50 dcweyh said, on December 11th, 2008 at 12:06 pm

It’s interesting how numbers just get thrown out there. If the Big 3 could reduce cost the hourly cost to $45/hr the cost of a vehicle would only go down $800. The cost of labor is only 10% of the total cost of building a vehicle. But then again most don’t mind spending upwards of $2500 more on equivalent cars from Japanese companies.

Go figure?

# 51 ECA said, on December 11th, 2008 at 12:12 pm

#47, GREG..

What the USA/Gov needs to do, is build a Corp layout and PAYMENTS(business plan), that ALL corps should be run by.

Only reasoning for WHAT IS HAPPENING, is that the CORPS want the GOV to take the business and kill the Unions..

# 52 LibertyLover said, on December 11th, 2008 at 1:51 pm

Here is a good quote:

“Let them fail; let everybody fail! I made my fortune when I had nothing to start with, by myself and my own ideas. Let other people do the same thing. If I lose everything in the collapse of our financial structure, I will start in at the beginning and build it up again.”

Henry Ford, February 11, 1934

# 53 Breetai said, on December 11th, 2008 at 2:06 pm

#52 Nice quote!

BTW for those of you blaming or defeding Unions or Blaming or defending The execs… It’s Both of them. The failures they have created require a team effort.

# 54 eds70 said, on December 11th, 2008 at 2:19 pm

How come when I voted in your poll, it locked up my computer, and I had to re-boot to get back to the internet????

# 55 amodedoma said, on December 11th, 2008 at 3:49 pm

The USA, world’s largest consumer of automobiles can’t keep their own production profitable? Maybe if americans would buy american cars, I have an excellent idea! Instead of bailing out the big 3 the government should offer $2000 rebates to anyone(american) who buys a car from these guys. It’ll be a lot cheaper and more cost effective, and it’ll allow the taxpayer to decide who they want to help by their choice of car obligating these companies to be more competitive. Of course the CEO’s of these inefficient mastadons would rather have a handout, who wouldn’t? I just think it’s a bad idea to set the precedent of bailing out private industries.

# 56 amodedoma said, on December 11th, 2008 at 3:54 pm

Oh, and let’s not forget Ronnie Raygun’s free-market system… Maybe it’s time to dump the idea, and bring back import tarifs. If volkswagon or mazda turned out to be much more expensive…

# 57 Mr Adventure said, on December 11th, 2008 at 8:23 pm

OK, this whole thing is such nonsense! It astounds me that we are wasting so much energy over what amounts to 1/28th of what was approved without so much as a blink of Congress’ eye.

Oh, and I don’t think that a $2000 tax credit would make me want to buy an American car.

# 58 Someone said, on December 11th, 2008 at 9:53 pm

Won’t somebody please think of the children!

# 59 ECA said, on December 11th, 2008 at 10:13 pm

AND
the Auto makers are saying..
IF we QUIT making cars, you will loose the TAXES from the Workers, FROM the Purchasers, from the registrations of NEW cars, from the insurance carriers, from traffic tickets…from property tax, from the Property tax of our EMPLOYEES,…

# 60 brendal said, on December 11th, 2008 at 10:32 pm

My bro had a long career as a design engineer at GM and was laid off 2 years ago, one month after receiving an employee commendation. Nice. Here’s what he has to say:

“In the time that I was at GM, all I ever heard was work harder and things will turn around. I, as well as a lot of other people (non management white collar), busted our tails in doing so only to see our medical insurance go up, our profit sharing reduced or disappear, cost of living adjustments taken away and raises disappear while the executives and UAW’s (the UAW was never asked to sacrifice nor would they) did not.

“Quality of the vehicles is not the issue here. We designed and engineered vehicles to be of the highest quality. However, sacrificing on the part of the executives and the UAW as we had, to get back market share by lowering the price of the vehicles, was out of the question as far as they were concerned. If they had, these companies would have been in line with their competitors in what they pay their workers and executives and could have beaten them in the market place. These two entities refused to do so and now they have to ask for help because of it.

“I understand people’s defense of these companies, but I was not laid off because of my excellent work performance – but because they had to lay people off and my name was picked. Yes, this was what I was told in my exit review. In other words, because I was not someone’s relative or a suck up, I was let go. They always wanted to hear (upper management) that everything is great (the ‘Emperor’s New Clothes’ syndrome) and that the system is not broken, even though they knew it was.

“I was in a meeting one time where they had people from different departments meet to come up with ideas to improve the profitability of the company. At that time, Ford was one year away from releasing the Mustang to the market. I suggested that we needed to bring the Camaro and Firebird back to compete with Ford and that would get market share back for us. I was belittled and told by the person who was running the meeting (who was a director) that we are GM and we are not desperate for market share. That was in 2004 and when I left that meeting, I realized that no matter what I did, the company was going to be in a world of hurt within 10 years and that I could do nothing to change it if this was the way that they treated their people. This meeting was nothing but a dog and pony show.

“Another example is the apology that GM is spewing out about how they are sorry that the lied to the public about the quality of their vehicles and that they will do better in the future. This is the same crap, line for line, that they have put out twice before within the past 15 years when they were in trouble. When I started reading this statement the other day, I was half way through it when I realized that it was the exact statement that they had released through the media to the public twice before. I stopped reading it because I got upset over the fact that this bailout really is a con game on their part.

“The executives of these companies and the UAW today are not the greatest generation like their forefathers, but the greediest generation, and the rest of us are going to have to pay for that greed.

“In fact I wish Congress would of asked people like myself to go before them and weigh in on all of this. They should have forced all of these companies to file for Chapter 11. If they had done so, then the executives and the UAW would have had to really change. What they got is what they wanted and the changes that they will have to make will only be half hearted. And when the spotlight is off of them it will be business as usual.”

# 61 amodedoma said, on December 12th, 2008 at 2:08 am

#57 the idea was a cash rebate to stimulate sales, but there are other formulas. It won’t do any good to pump these companies up with taxpayer cash if they continue to have such low sales figures. It would only delay the inevitable.

# 62 Paddy-O said, on December 12th, 2008 at 6:32 am

# 35 Mr. Fusion said, This just in, YOUR EFFEN WRONG.”

Mr. CONfusion, if in the future you want to know what’s happening on the Hill, just ask. If I can tell you without violating confidentiality, I will.

Senate Drops Automaker Bailout Bid

# 63 deowll said, on December 12th, 2008 at 8:58 am

Ya got two issues.

Almost nobody in my county makes the kind of money anyone in these companies in making. Expecting us to bail them out so they can keep on living a life style we’ve never had is not going to fly with many of us.

The other thing is this is going to take more than money.

If these guys can’t come up with a business modal that works a 100 trillion dollars isn’t enough to keep them afloat.

# 64 Mister Mustard said, on December 12th, 2008 at 9:27 am

#62 – Paddy-RAMBO

>>if in the future you want to know what’s
>>happening on the Hill, just ask.

Come on, O’Pinocchio. You’ve already been busted on that “I mingle with the shakers and the movers” scam. Totally busted.

Time to move on.

# 65 David Dzidzikashvili said, on December 12th, 2008 at 1:30 pm

The Big 3 should not be bailed out, since they are putting the products on the market that people do not want to buy. Besides the Big 3 will need much more money to sustain themselves and this bailout won’t work, due to the companies short-term and long-term financial obligations that will create further troubles for the automakers in future. They will ask for more bailout next year and the year after….

# 66 Paddy-O said, on December 12th, 2008 at 1:44 pm

# 65 David Dzidzikashvili said, “The Big 3 should not be bailed out,”

Paulson will write them a check.

# 67 soundwash said, on December 12th, 2008 at 4:28 pm

if i may rear my ugly head up after some datamining
on the topic…

any corporation on line for a bailout should shown the door, period.

- as stated by others, bankruptcy gets all the bad/toxic debt off the balance sheets and allows the corp to start w/a clean slate. bailouts just ensure further pain down the line for the taxpayer.

-and since we’re going to be “killed off” from hyperinflation and taxes next year anyway, might as well break out the pain stick early and let them bankrupt/cleanup, deal with the blow to the economy NOW, so we’ll be that much more ahead of the next wave of crashes.

sadly, it looks like the car-bailout is just a little side show for us peons debate over and politicians to gloat/point fingers over. -it’s going to happen, one way or the other.
-otherwise the banks would lose even more, not to mention more loan fraud exposed in the way of car loans made to people that could never afford them.
(who the F is OKaying all these loans??)

-there is a reason the banks (Fed included) are never taken to task in front of congress or the public.

note this snippet from Bloomberg News as reported in August..
–
…”A default by one of the automakers would trigger writedowns and losses in the $1.2 trillion market for collateralized debt obligations that pool derivatives linked to corporate debt… Credit-default swaps on GM and Ford were included in more than 80 percent of CDOs created before they lost their investment-grade debt rankings in 2005, according to data compiled by Standard & Poor’s.”
–

i think this means that those Auto CDO’s are bundled in *the same* toxic securites/derivitives held by the recently bailed out companies like fan-mae as moratge debt..

if you let those trigger, the losses in “fake”/synthetic CDOs will be huge.

-no doubt, it would result in more in-house bank-fraud being exposed, -before it’s time, i’m sure.

imo, all this “political theater” is merely to entertain and distract us while the guts of the illusion take place.

-anyway, the bailout will go through soon enough, esp since we have 2.99 houses of democrats applying major pressure to save their beloved union(s)

-s

# 68 greenskidusautoparts said, on January 8th, 2009 at 7:25 pm

Bailouts never solve anything. It makes problems worse, since businesses doesn’t have to adapt to survive, meaning that in a couple of years time the same situation will arise once more, most likely worse than now. And that isn’t specific for the auto industry, it applies to everything. Yes, a lot of people will lose their jobs, and no they won’t be saved by a bailout. Not in the long term.

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