Should the government bail-out include domestic automakers?

[Lenny]

Interesting video. Thanks for sharing.



(I too wear New Balance, LOVE those shoes!!! :laugh: )





***I just went to Ford.com and noticed some very interesting new media there.



Check it out.



The Ford Story: A different route - Ford on the credit crunch, recession and more fuel efficient vehicles | Ford Vehicles

I have a rough idea where that neighborhood is - nothing more than forty year old homes, most of them under 1700 square feet, nothing fancy. Certainly not a neighbor with high incomes.



Ford has a far better turn around plan than GM or Chrysler, but a GM or Chrysler Chapter 11 filing would hurt Ford as well, since all three share 90% of the same suppliers. In fact, a GM bankruptcy would disrupt Toyota's North American production as well as Mercedes, but the opponents of the loans are too uninformed and too prejudiced against Detroit to see the whole auto industry for what it is.

 

[FlowRate]

This article may shed some light on the matter. I'm very much a fan of Austrian economics... (the economics that work)



Why Should a Failing Automaker Receive a Bailout? by Wilton D. Alston

 

[Lenny]

I don't mean to pick on you LenA, as I know from reading elsewhere, you have a personal stake in this situation. But, this statement is more than a bit melodramatic and a check that you can't cash.



As for my opinion on the situation, Chrysler has been to the well once there should be nothing for them now. If you can't learn from past mistakes there is no reason to believe that things will be any different down the road. If that means they go under, so be it. Unlike you, I don't see this to be the end of the world. If GM is to receive any help, serious concessions must be made on their part.

I had to go back a ways in this thread to find this, and answer it back. Not answer it back with my own words, but the words of the CEO of the third largest auto parts supplier in the United States.

THE AUTO INDUSTRY BAILOUT



JCI exec: Detroit 3 bankruptcy would 'implode' supply chain



David Barkholz

Automotive News

December 4, 2008 - 1:34 pm ET



A bankruptcy of even one of the Detroit 3 would cause an already distressed supply base "to implode," Johnson Controls Inc. President Keith Wandell told Congress today.



Testifying in a Senate Banking Committee hearing on a $34 billion automaker bailout request, Wandell said a Detroit 3 failure would cause a cascade of failures among suppliers, particularly smaller female- and ethnic minority-owned companies.



Johnson Controls makes seating, batteries and interior parts.



Wandell said Toyota, Nissan, Honda, Mercedes and all carmakers manufacturing in the United States "are deeply concerned about the viability of the U.S. supply base."



A bankruptcy of one carmaker, he said, would likely cause parts interruptions at all the others.



Wandell said the interdependency of the supply base was driven home during the bankruptcy and eventual liquidation this year of Plastech Engineered Products Inc., formerly the largest minority-owned auto supplier in the world.



He said if Johnson Controls and others hadn't stepped in and bought Plastech's assets, as many as 52 vehicle assembly plants would have risked parts interruptions.



And Plastech, with sales of about $1.4 billion in 2007, was small compared with the supplier chaos that would occur with a Detroit 3 bankruptcy, Wandell predicted.



In a bankruptcy, months of receivables for parts already delivered would be tied up in court and be uncollectible, he said.



Johnson Controls, of Milwaukee, makes seating, batteries and interior parts and ranks No. 7 on the Automotive News list of the top 100 global suppliers with global sales to automakers of $18.50 billion in fiscal 2007.

What, he's a bit melodramatic, too?

 

[FlowRate]

The thing is, markets and businesses need to "implode" to maintain a healthy economy...

 

[Lenny]

The thing is, markets and businesses need to "implode" to maintain a healthy economy...

Bullsh*t. Spoken like someone who doesn't understand, in the slightest, the depth of the problem. Auto manufacturing is 20% of all manufacturing, and is 10% of all economic activity, and that doesn't count the effect auto and auto parts retailing has on the service sector of the economy. A depression, or even a deep recession is counter productive to a healthy economy.

 

[Mr. Clean]

LenA, as with all of your "sources" I must say they are all so.........unbiased.



I see now that the new "demands" are for $34 billion. A real sign that they had no plan when they first arrrived. Even with the upped ante, not one of them will commit that if they get their wishes that in 6 months they won't be back asking for more (remember Chrysler). I have a real problem handing over taxpayer dollars to a management team who drove the car into the ditch. I have not yet seen anything tangible which would give me confidence that they are capable of 1) driving out of the ditch and 2) keeping it on the road for the long term.



And as I mention Chrysler, which is a privately owned company (Cerberus Capital). Why on earth would the taxpayers be asked (again) to bail them out? Let them go out on their own and either seek another investor or financing from the private sector.



I'm in now way wanting the U.S. auto manufacturing industry to completely disappear, but I think we are all beginning to see that it can't continue in its current bloated form.

 

[Lenny]

LenA, as with all of your "sources" I must say they are all so.........unbiased.



I see now that the new "demands" are for $34 billion. A real sign that they had no plan when they first arrrived. Even with the upped ante, not one of them will commit that if they get their wishes that in 6 months they won't be back asking for more (remember Chrysler). I have a real problem handing over taxpayer dollars to a management team who drove the car into the ditch. I have not yet seen anything tangible which would give me confidence that they are capable of 1) driving out of the ditch and 2) keeping it on the road for the long term.



And as I mention Chrysler, which is a privately owned company (Cerberus Capital). Why on earth would the taxpayers be asked (again) to bail them out? Let them go out on their own and either seek another investor or financing from the private sector.



I'm in now way wanting the U.S. auto manufacturing industry to completely disappear, but I think we are all beginning to see that it can't continue in its current bloated form.

Let them disappear then. Hope you like the idea of, at the very least, a very deep recession. I said the problems will negatively affect even the transplants, and it will. Let's see how you know-it-all keyboard jockey experts like the idea of foreign ownership of a larger percentage of our manufacturing base, with even more imports into the USA.



And to be blunt, the "unbiased" slam is so full of crap, it's not funny. Go try the Wall Street Journal - you find the same report, but JCI's CEO's comments in more detail, with no one from WSJ able to repudiate it. If you weren't completely biased, you'd find out that virtually every major dealer chain, state and national, is in favor of this loan program. That includes the dealers in your part of Texas as well. I challenge you to find a major dealer principle in Texas who is against this.

 

[Mr. Clean]

LenA, to be blunt I've grown weary of your little name calling here and on at least on other forum. I've read ad nauseum posts by you about how "special" you are, and how we "keyboard jockeys" have no business even having an opinion on the matter. Yes you are right and we are wrong. Gee what were we thinking that with our taxpayer money that we should require some accountability. Your posts grow more antagonistic to those of us who disagree. For as you said

I'm right, anyone else who feels the loans is wrong and bankruptcy is the right idea is wrong. Discussion, as far as I'm concerned, is closed.

 

[Lenny]

LenA, to be blunt I've grown weary of your little name calling here and on at least on other forum. I've read ad nauseum posts by you about how "special" you are, and how we "keyboard jockeys" have no business even having an opinion on the matter. Yes you are right and we are wrong. Gee what were we thinking that with our taxpayer money that we should require some accountability. Your posts grow more antagonistic to those of us who disagree. For as you said

Telling me the domestic auto companies should disappear is antagonistic. Let the mods lock the threads if those of us who depend on manufacturing for an income can't voice our opinions. All of you critics crab about your tax money used to give the Detroit automakers a bridge don't take into consideration that those of us who have worked directly for the Detroit 3, or in a supplier or support industry to the Detroit automakers, had a portion of our federal tax dollars sent back to Kentucky, Indiana, Tennessee, Alabama, Mississippi, and Texas, for various federally supported programs that in turn were used to give, not loan, but give huge tax breaks to the transplants to build their manufacturing operations in those states. Detroit's manufacturing base is older, and more often retooled rather than rebuilt, and when it's rebuilt stays general close to the old location, so they have not benefited as much from state and federal subsidized give-aways. How much did Texas give to Toyota for the San Antonio truck assembly plant, and how much did Texas fork over for the adjacent supplier park? Where did those tax dollars come from? Were those of us in the Detroit based industry subsidizing our own competition, and doing it through our own government?



To be blunt, and if you want to talk about a fair discussion, answer those questions, please. No, I and everyone who posts in favor of the loans have to hear ad nauseum about how bad Detroit is, how crummy the workers are, and how they shouldn't get any money. While our tax dollars are diverted to incentives for foreign owned manufacturers, who in their home countries enjoy far more government support, than our domestic manufacturers ever have had. Where do you think the initial working capital to improve their products came from? And to ask for a loan is made to sound like a bailout, when it's a loan, and in most cases collateralized - where's AIG or Citi Groups collateral?



And you're weary of my posts and accuse me of being antagonistic? Maybe I'm wrong, but I see multiple signs of a double standard.

 

[Mr. Clean]

Telling me the domestic auto companies should disappear is antagonistic. ....[/QUOTE



[quote name='Mr. Clean']...I'm in now way wanting the U.S. auto manufacturing industry to completely disappear, but I think we are all beginning to see that it can't continue in its current bloated form.

Go figure when and how I made the statement you claim. One thing is certain, you won't drag me down to your level.

 

[Lenny]

[quote name='Len_A']Telling me the domestic auto companies should disappear is antagonistic. ....

I'm in now way wanting the U.S. auto manufacturing industry to completely disappear, but I think we are all beginning to see that it can't continue in its current bloated form.

Go figure when and how I made the statement you claim. One thing is certain, you won't drag me down to your level.[/QUOTE]I think you type "now", when you meant to type "no", and I read the "now way wanting the U.S. auto..." and took it to mean that you WERE in favor of the domestic automakers disappearing.



I think we both got hot under the collar, and for my part, I apologize for interpreting your typo.



Edited, because now I did a typo.....

 

[Lincoln_MKS]

LenA, to be blunt I've grown weary of your little name calling here and on at least on other forum. I've read ad nauseum posts by you about how "special" you are, and how we "keyboard jockeys" have no business even having an opinion on the matter. Yes you are right and we are wrong. Gee what were we thinking that with our taxpayer money that we should require some accountability. Your posts grow more antagonistic to those of us who disagree. For as you said

I've read this whole thread, and you, sir, have been rude and condescending. My God, man! How much worse can you treat another human being? Len's posted that he's been out of work for over a year, and he's a degreed, experienced professional! On top of that, a page or two back, he posts that his wife's paralegal job (another degreed professional) was axed, as a direct result of the Big Three's financial problems, and what do you focus on? You focus on Len's exasperation over people expressing ideas that won't work. Even Bush is now supporting the idea of getting some loan money to the Big Three. Not a word of sympathy over his wife's job loss. His bad situation got worse, and you say nothing. Way to go, man, way to go.



I've seen Len_A post from a position of deep experience within the industry, MotorCity's posts essentially backing him up, also from industry experience, and you respond with contempt. You don't like being referred to as a "keyboard jockey". I get that. Then how about answering a straight question Len asked with a straight answer.



How much money did Texas throw at Toyota, in order to entice Toyota to locate an a truck plant in San Antonio? How much was federal tax dollars? We all pay federal income taxes (presumably we all do) - those men and women in the Detroit based industry - Len asked a valid question. How much of their federal tax dollars were used to subsidize competition to GM and Ford and Chrysler?



Or is that use of public money A-OK 'cause the plant is in your state, and Detroit cars supposedly suck? (because all the "experts" posting on detailing web sites are so-o-o unbiased, and know what's really a great car)



The lack of humanity, regarding the potential loss of so many jobs, and the contemptuous attitudes shown all the people connected to the domestic auto industry, is unbelievable. Our grandparents and great grandparents generations would be ashamed of those posts.

 

[Lincoln_MKS]

I think you type "now", when you meant to type "no", and I read the "now way wanting the U.S. auto..." and took it to mean that you WERE in favor of the domestic automakers disappearing.



I think we both got hot under the collar, and for my part, I apologize for interpreting your typo.



Edited, because now I did a typo.....

You know what - you've been conciliatory enough. Keep fighting the good fight. Best of luck to you. I am certain that you will come out of this situation with few bumps & bruises. Don't kiss any critics posterior.:usa

 

[BigAl3]

just saw this on CNN today...



November: most jobs lost in 34 years at 1.9 million jobs



i have a feeling after december (holiday season), even more jobs will be lost. it seems that things will get worse before they get better...

 

[Holden_C04]

:werd:



BBC NEWS | Business | Jeremy Clarkson on car sales decline

 

[Lenny]

just saw this on CNN today...



November: most jobs lost in 34 years at 1.9 million jobs



i have a feeling after december (holiday season), even more jobs will be lost. it seems that things will get worse before they get better...

It really does look like it's going to get a lot worse. I've never seen things this scary.

 

[Lenny]

You know what - you've been conciliatory enough. Keep fighting the good fight. Best of luck to you. I am certain that you will come out of this situation with few bumps & bruises. Don't kiss any critics posterior.:usa

I'm way past @ss kissing, brother. The potential fallout from the failure of even one of the Big Three is so huge, I don't know why there's an argument regarding it.

 

[BigAl3]

It really does look like it's going to get a lot worse. I've never seen things this scary.

yeah, it's both scary and sad...

 

[Awsomeshine]

It really does look like it's going to get a lot worse. I've never seen things this scary.

Len



Been reading your posts and I am in the same boat as you over in the UK. I am a builder and have had no work now for 4 months, just coming to the end of our savings.



I did however used to waterproof cellars (basements) with a tanking paste that the home owner can do. I'll google this for you and see if it is something you can do.



Steve

 

[Lenny]

LenA, to be blunt I've grown weary of your little name calling here and on at least on other forum. I've read ad nauseum posts by you about how "special" you are, and how we "keyboard jockeys" have no business even having an opinion on the matter. Yes you are right and we are wrong. Gee what were we thinking that with our taxpayer money that we should require some accountability. Your posts grow more antagonistic to those of us who disagree. For as you said

Never said I was "special". Did say I know the auto industry real well, having grown up in it and spent over twenty-five years in it, both as an MRO vendor and an OEM vendor. Absolutely I said that, with a few exceptions, I know it better than any of the people posting and bad mouthing the Detroit automakers. No apologies for that - don't believe any are due. I'm supposed to let people say any inaccurate things they want, repeat them as if they were gospel, when my experience, not my opinion, but my experience says they're wrong? No way. Not a chance in hell, especially when you post back at me:

I don't mean to pick on you LenA, as I know from reading elsewhere, you have a personal stake in this situation. But, this statement is more than a bit melodramatic and a check that you can't cash.

Then when I post an article taken right from yesterday's Senate testimony from the CEO of the country's third largest auto parts maker, reiterating exactly what I said - one Big Three bankruptcy will have ramifications so far reaching, it would negatively affect every auto assembly plant in North America, transplants included, and you get sarcastic with me, over how "unbiased" the source isn't? And I'm antagonistic? Melodramatic? From what area of expertise does this opinion come from?



And I think you meant to type "on at least one other forum", which would be DetailersClub.com. Not apologizing for it. Until this past Monday, my wife worked for Miller Canfield - the biggest law firm in Michigan. Her practice group was all automotive, specifically Chrysler, the smallest of the three Detroit automakers. In the last five or six months, not one attorney she worked with said a bankruptcy, prepackaged or otherwise, was workable. Not one. In fact, they said the opposite - too many vendors, too complicated, and will kill off some vendors. Won't work - will likely result in liquidation because of sales lost because of customers scared off by a bankruptcy. Research from CNW research of Oregon bears that out as well.



Whether it's here, or any other forum, if I see posts that are antagonistic toward the companies that my part of the country has no choice, but to depend on, I'm going to be unapologetically defensive. Like a wounded animal, backed up against a wall.

Gee what were we thinking that with our taxpayer money that we should require some accountability.

I want some accountability too - I want to know why it's OK to take a portion of my federal taxes, since 1982, send them to other states for "economic development", "federal highway improvement programs", "railroad improvements", and then use that money to subsidize my competition? Do I get to have an answer for that, or as long as some portion of the market have something against the Detroit automakers, because of missteps made years ago, it's OK to spend taxpayers money to subsidize the factories of profitable, foreign companies? Companies, by the way, who have cherry picked the market, and only pursued the more profitable retail customer, and shunned not only the daily rental fleet business, which is understandable, but have not made any effort to pursue the law enforcement, municipal, or much of the commercial market. No, just leave that market to the Big Three, and increase the impression that they're only good for fleet business. After all, from a marketing perspective, how aspirational are police cars?