Should the government bail-out include domestic automakers?
- Thread starter tibbsonaphone
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Eliot Ness
Active member
There is not an easy answer. Do I want to reward the CEO’s who have made millions with a bail-out? Of course not. On the other hand I can’t imagine what would happen to the U.S. if the big 3 go under; I seriously think the economy will implode. The ripple effects would devastate thousands of families and countless small companies and manufacturers.
The car industry is part of America and I can’t imagine this country without them. I sure don’t have all the answers but I don’t think we can let them fail. A bail-out will require guidelines, limitations, and change, but to just turn our backs on the American auto industry is the same as turning our backs on thousands of working Americans, and I’m not prepared to do anything like that.
The car industry is part of America and I can’t imagine this country without them. I sure don’t have all the answers but I don’t think we can let them fail. A bail-out will require guidelines, limitations, and change, but to just turn our backs on the American auto industry is the same as turning our backs on thousands of working Americans, and I’m not prepared to do anything like that.
imported_RedlineIRL
New member
Why not? They bailed out wall street who are the ones who put the economy in the situation that it's in. Look what AIG decided to do with some of it's money. I'm sure that GM and the other US automakers are a more wothy cause. Or they could just be ingorant, do nothing and let them fail. It'll just put hundreds of thousand of American's out of a job and put the economy in a much worse position that it already is.
Setec Astronomy
Well-known member
Eliot Ness said:
I guess the part of this that really scares me is that CitiGroup is laying off about 50,000 employees out of about 350,000. Earlier in this thread I stated that GM has about 70,000 employees...even if I'm comparing GM's US employment to CitiGroup's global employment, that means that Citi has maybe 3 times as many employees as GM? And they make NOTHING.
At least GM could take their excess capacity and make something...windmills, solar panels, electric cars, nuclear reactors...what tangible goods can those 50,000 Citi employees help our economy with? I don't know how making things became so devalued in this country.
Eliot Ness said:
No one wants to reward the ones that screwed things up. And you're right - I think the economy will seriously implode. Thanks for being another voice of reason on this subject.
I wish that Alabama Senator Shelby saw that. I know he wants to protect the transplant auto business in his state, but he is seriously mistaken if he thinks they'll escape the fallout from a GM bankruptcy. I had a chance to check out the list of suppliers in his state. I identified four that I know for a fact are disproportionately dependent on GM, and as such, would be in trouble in a GM Chapter 11 filing, plus one that would take a serious, if not fatal, hit. The Mercedes plant is particularly vulnerable.
Delphi is still in Chapter 11, and hasn't been able to get the financing to exit bankruptcy. They sold off their interiors division as a new company, called Inteva Products. Delphi is still so dependent on GM business, they're expected to collapse completely in a GM C11. Inteva is still do dependent on GM, they could be pushed into Chapter 11.
The two companies combined run a Cockpit Assembly Plant, that supplies 100% of the Mercedes plants interiors. Get the picture, **** Shelby? No Mercedes assembly until the bankruptcy courts and lawyers find a new buyer for that cockpit assembly plant - good freaking luck in this frozen credit business climate. Anyone got a spare $100 million laying around to buy an interiors plants and a plastics plant in Alabama?
And that's just Shelby's state of Alabama. Anyone want to ask Toyota what they think of a GM bankruptcy? Nissan? Honda? THe rest of their suppliers?
RedlineIRL said:
Another voice of reason. Thanks. And the hundreds of thousands of unemployed American's is just the GM employees. Both the Center for Automotive Research and Case Western University estimate around 2 million people when you count the suppliers, dealers, and all the businesses dependent on them. And if it affects Ford, even for temporary shut downs, figure another 3 million "temporary" layoffs that could go six months or longer.
imported_RedlineIRL
New member
Len_A said:
I can honestly see that when every other industry comes into this. I wish that the rest of America can look at the big picture and see how it affects everyone in one way or another.
That's why I support the assistance of the US auto industry and have already made calls to the congress members in my state urging them to do so. I hope everyone else who is concerned with the future of many Americans does the same.:usa
salty
Active member
This is from an e-mail someone sent me. Probably some truth in it.
-Ford & Toyota
> A Japanese company ( Toyota ) and an American company (Ford Motors)
> decided to have a canoe race on the Missouri River. Both teams
> practiced long and hard to reach their peak performance before the
> race.
>
> On the big day, the Japanese won by a mile.
>
> The Americans, very discouraged and depressed, decided to
> investigate the reason for the crushing defeat. A management team
> made up of senior management was formed to investigate and
> recommend appropriate action.
>
> Their conclusion was the Japanese had 8 people rowing and 1 person
> steering, while the American team had 7 people steering and 2
> people rowing.
>
> Feeling a deeper study was in order; American management hired a
> consulting company and paid them a large amount of money for a
> second opinion.
>
> They advised, of course, that too many people were steering the
> boat, while not enough people were rowing.
>
> Not sure of how to utilize that information, but wanting to
> prevent another loss to the Japanese, the rowing team's management
> structure was totally reorganized to 4 steering supervisors, 2 area
> steering superintendents and 1 assistant superintendent steering
> manager.
>
> They also implemented a new performance system that would give the
> 2 people rowing the boat greater incentive to work harder. It was
> called the 'Rowing Team Quality First Program,' with meetings,
> dinners and free pens for the rowers. There was discussion of
> getting new paddles, canoes and other equipment, extra vacation
> days for practices and bonuses. The pension program was trimmed to
> 'equal the competition' and some of the resultant savings were
> channeled into morale boosting programs and teamwork posters.
> The next year the Japanese won by two miles.
>
> Humiliated, the American management laid-off one rower, halted
> development of a new canoe, sold all the paddles, and canceled all
> capital investments for new equipment. The money saved was
> distributed to the Senior Executives as bonuses.
>
> The next year, try as he might, the lone designated rower was
> unable to even finish the race (having no paddles,) so he was laid
> off for unacceptable performance, all canoe equipment was sold and
> the next year's racing team was out-sourced to India.
>
> Sadly, the End.
>
> Here's something else to think about: Ford has spent the last
> thirty years moving all its factories out of the US, claiming they
> can't make money paying American wages.
>
> TOYOTA has spent the last thirty years building more than a dozen
> plants inside the US. The last quarter's results:
>
> TOYOTA makes 4 billion in profits while Ford racked up 9 billion in
> losses.
>
> Ford folks are still scratching their heads, and collecting bonuses.
>
> IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY.
-Ford & Toyota
> A Japanese company ( Toyota ) and an American company (Ford Motors)
> decided to have a canoe race on the Missouri River. Both teams
> practiced long and hard to reach their peak performance before the
> race.
>
> On the big day, the Japanese won by a mile.
>
> The Americans, very discouraged and depressed, decided to
> investigate the reason for the crushing defeat. A management team
> made up of senior management was formed to investigate and
> recommend appropriate action.
>
> Their conclusion was the Japanese had 8 people rowing and 1 person
> steering, while the American team had 7 people steering and 2
> people rowing.
>
> Feeling a deeper study was in order; American management hired a
> consulting company and paid them a large amount of money for a
> second opinion.
>
> They advised, of course, that too many people were steering the
> boat, while not enough people were rowing.
>
> Not sure of how to utilize that information, but wanting to
> prevent another loss to the Japanese, the rowing team's management
> structure was totally reorganized to 4 steering supervisors, 2 area
> steering superintendents and 1 assistant superintendent steering
> manager.
>
> They also implemented a new performance system that would give the
> 2 people rowing the boat greater incentive to work harder. It was
> called the 'Rowing Team Quality First Program,' with meetings,
> dinners and free pens for the rowers. There was discussion of
> getting new paddles, canoes and other equipment, extra vacation
> days for practices and bonuses. The pension program was trimmed to
> 'equal the competition' and some of the resultant savings were
> channeled into morale boosting programs and teamwork posters.
> The next year the Japanese won by two miles.
>
> Humiliated, the American management laid-off one rower, halted
> development of a new canoe, sold all the paddles, and canceled all
> capital investments for new equipment. The money saved was
> distributed to the Senior Executives as bonuses.
>
> The next year, try as he might, the lone designated rower was
> unable to even finish the race (having no paddles,) so he was laid
> off for unacceptable performance, all canoe equipment was sold and
> the next year's racing team was out-sourced to India.
>
> Sadly, the End.
>
> Here's something else to think about: Ford has spent the last
> thirty years moving all its factories out of the US, claiming they
> can't make money paying American wages.
>
> TOYOTA has spent the last thirty years building more than a dozen
> plants inside the US. The last quarter's results:
>
> TOYOTA makes 4 billion in profits while Ford racked up 9 billion in
> losses.
>
> Ford folks are still scratching their heads, and collecting bonuses.
>
> IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY.
Bunky
Detailing Gnosis
If one has seen the presentation about the Toyota Way that is the guiding principles that are considered a fundamental basis for their success, the first item is that people should take the long term view even if it results in short term financial success. This applies to any decision (top level or bottom level).
This basic concept is contrary to how most American companies operate. They work from quarter to quarter. This is why many companies are in trouble (financial, mfg businesses, etc). Conservatives will complain that the proper incentives are not there but even with low taxes, etc, short term greed jeopardizes long term success.
This basic concept is contrary to how most American companies operate. They work from quarter to quarter. This is why many companies are in trouble (financial, mfg businesses, etc). Conservatives will complain that the proper incentives are not there but even with low taxes, etc, short term greed jeopardizes long term success.
imported_Yal
New member
I'll say it again the company should be allowed to fail into bankruptcy. It will hurt, boy will it ever hurt! But in the long run we will be better off for it. Its time for America to stop thinking in the short run and getting more in debt by doing so. We are just delaying the inevitable. Pay now or pay later. GM and Ford have an opportunity to restructure and shed excess waste. If you fall into the definition of waste then I feel sorry for you but you have to go. The days of the big 3 supporting a whole city full of employees, their retirements and their spouses and relatives, is over. The ship for that America has sailed and if we continue to insist that we can hang on to it...who are we kidding?
Deep Gloss Auto Salon
New member
Simple numbers: "Our model estimated that a complete shutdown of the Big 3 U.S. production would have a major impact on teh U.S. economy in terms of lost wages, reductions in social security receipts, personal income tax paid, and an incres in transfer payments"
"the government stands to lose on the level of $60 billion in the first year alone, and the 3 year total is well over $156 billion"
Hmm, provide a $25 billion BRIDGE LOAN or spend $156 billion.....seems simple to me!!!
Read the full report
http://www.cargroup.org/documents/CARPressReleaseNovember42008.pdf
"the government stands to lose on the level of $60 billion in the first year alone, and the 3 year total is well over $156 billion"
Hmm, provide a $25 billion BRIDGE LOAN or spend $156 billion.....seems simple to me!!!
Read the full report
http://www.cargroup.org/documents/CARPressReleaseNovember42008.pdf
jfelbab
New member
As long as everyone here seems to like to do a bit of reading I'd strongly suggest you take a gander at this document from our GAO.
http://www.gao.gov/financial/citizensguide2008.pdf
This report was prepared before our crisis developed and the crazy Trillion dollar bailout. Folks, we in the US are marching on a course for a total financial system collapse. We are rapidly approaching a point where we will not be able to pay the interest on our debt. Soon, we will all get a good dose of what living in a third world country is like. Simply put, we can't afford these bailouts no matter how bad our economy will suffer in the short term. We were headed for this disaster even before the current financial crisis hit but we still had a chance to do something about it. Spending trillions on an ailing economy with no hope of recovery is just greasing the skids. We will simply hit the wall faster than ever.
You want socialized medicine, Social Security, Medicare, Medicaid, a strong military, jobs, ample and clean energy, economic growth? We can't get there by continuing to spending money we don't have. We are a nation that has fallen in love with the concept of living beyond our means and spending our children's and grandchildren's future to get it.
This is like giving credit cards and whiskey to a teenager. Sooner or later it will catch up to us and it will be a very painful experience.
Time for our elected officials to pay attention and get fiscal responsibility.
http://www.gao.gov/financial/citizensguide2008.pdf
This report was prepared before our crisis developed and the crazy Trillion dollar bailout. Folks, we in the US are marching on a course for a total financial system collapse. We are rapidly approaching a point where we will not be able to pay the interest on our debt. Soon, we will all get a good dose of what living in a third world country is like. Simply put, we can't afford these bailouts no matter how bad our economy will suffer in the short term. We were headed for this disaster even before the current financial crisis hit but we still had a chance to do something about it. Spending trillions on an ailing economy with no hope of recovery is just greasing the skids. We will simply hit the wall faster than ever.
You want socialized medicine, Social Security, Medicare, Medicaid, a strong military, jobs, ample and clean energy, economic growth? We can't get there by continuing to spending money we don't have. We are a nation that has fallen in love with the concept of living beyond our means and spending our children's and grandchildren's future to get it.
This is like giving credit cards and whiskey to a teenager. Sooner or later it will catch up to us and it will be a very painful experience.
Time for our elected officials to pay attention and get fiscal responsibility.
finalfinish
New member
This is a simple problem to solve. GM and Ford have terrible management. They build a few good cars. They employ ridiculously high priced laborers that use ridiculous unions. This was bound to happen, there is no excuse. There is no absolutely no reason the U.S. Government should be involved whatsoever. This is a free market and economy. We should not give in and support communistic views on this. I say if they have managed to build junk cars and not expand, let them go under. This process happens everyday, and it is called natural selection. Junk like GM and Ford deserve to go under if they can't manage themselves any better. If they do go under it will also open up more room for my new car company (that I won't start til one of the big three goes under) to thrive. In this world and global economy that we live in today, factory workers will never be able to earn 80,000 , 60,000 , or even 40,000 for a sustainable time. It takes 24 hours to be anywhere in the world and just seconds to buy and pay for anything in the world. Globalization is key. Americans are going to have to learn to deal with it. This is the problem with the bailout proposed for automakers. It will lead nowhere, except into the pockets of American factory workers and then it will turn and lead straight out of this country, either through the gas pump straight to Saudi Arabia or through WalMart and straight to China. It pisses me off that most Americans are blind to this phenomenon. I love my country, I really do, but things are changing drastically and will continue to change for the worse for our country unless we all learn to deal with these issues. I just really feel that the majority of America doesn't care, doesn't understand, or just doesn't want to work to put America back on top. I'm going to build an island somewhere and start my own country.
wytstang
I see you.....
Exactly; it's amazing how the Non "Big 3" are doing just fine in the US while the "Big 3" are crippled. Pay cuts need to happen NOW not next week not next month, not next year, like YESTERDAY. If that means they work for $20 an hour do it, and when they are back on there feet increase the pay. I'd take $20 over $0 that's for damn sure.
Bunky
Detailing Gnosis
Some talk about the automakers are some recent development.
Most of us in America have benefited from the overpaid union workers in both salary, benefits, working conditions, etc so I just do not write them off so simply. I am not justifying them but reflecting the importance in the American economy. As the US mfg economy drops, if there are no one earning money except through services off others, there is much less of an economy.
For example, detailers leave solely as a servic of normal job earning people and cannot detail cars if no one can buy a car which means detailers do not make money. It is an inter related cycle that causes the entire economy/country drop in GNP. As you often find, you cannot get to where you want with any given situation. Yes, all want things better in one way or another but just saying let them fail seems like wanting the worst for us.
I would like to see some partial assistance but I do think the unions have to not get paid anymore than other non-unionized competitors including retirees and have execs work for free under contract for next 5 years.
Most of us in America have benefited from the overpaid union workers in both salary, benefits, working conditions, etc so I just do not write them off so simply. I am not justifying them but reflecting the importance in the American economy. As the US mfg economy drops, if there are no one earning money except through services off others, there is much less of an economy.
For example, detailers leave solely as a servic of normal job earning people and cannot detail cars if no one can buy a car which means detailers do not make money. It is an inter related cycle that causes the entire economy/country drop in GNP. As you often find, you cannot get to where you want with any given situation. Yes, all want things better in one way or another but just saying let them fail seems like wanting the worst for us.
I would like to see some partial assistance but I do think the unions have to not get paid anymore than other non-unionized competitors including retirees and have execs work for free under contract for next 5 years.
topnotchtouch
New member
wytstang said:
I don't think I would say that the foreign manufacturer's are doing "just fine"
Detroit Is Tanking, But Toyota's in Trouble, Too | Autopia from Wired.com
These economic issues are by no means confined to the US and without the current economic crisis it is likely that the big 3 could continue to limp along as they have for years. The one possibly good thing about this mess is that it might result in a leaner more efficient US Auto industry if they can get rid of the dead weight. I personally think they should just go ahead and declare bankruptcy and focus on restructuring....
wytstang
I see you.....
They're in a better position then the "Big 3" that's for sure.
topnotchtouch
New member
wytstang said:
That's for certain, they were in a better position beforehand as well
wytstang
I see you.....
Well it might be $25 or it might be $50 billion, it's not clear how much they are going to give yet. Again why are we giving companies help when noting internally is going to change? How are they going to repay this "loan" by producing cars no one wants? They have to retool to compete with Toyo and the like. They don't have the money for that either.