Thread: The Auto Bailout

Originally Posted by Wildtim

No. over here the unions have negotiated a pension and health care plan by which the company pays you a stipend and care plan until you die. In other words joining the company is like joining a socialist system where there is hire date to grave coverage, and like the soviet union this financial model only works during a period of perpetual growth. In times of stagnation the system begins to crumble.

I do find this analogy quite a stretch and in any case ideological arguments are worthless in my book. Nobody is forcing anybody to join a particular company,

Actually the history of the private pension system in US is fairly interesting on its own, but the biggest problem is most certainly not the pensions. It is a fairly big problem to be sure, but according to studies even if these payments were to be taken out the US automakers still lag behind their international competitors and have been doing it for quite some time.

And let's not forget the US debt approaching $10 trillion, the thing about it though is that the 'CEOs' who ran it up were democratically elected by those who are supposed to foot the bill...

No matter what we say it looks like in one way or another the automakers will get a bailout just like the bankers did. Anybody care to speculate on who would be the next to ask?

Maybe I'm just old fashioned, but I think the whole "too big to fail" concept is ludicrous.

If you suck at running a business, you go out of business. Period. Doesn't matter if you have 10 employees or 10 thousand. Where do we draw the line? Lots of companies go out of business every year and the people who work there lose their jobs. It sucks. I get that. But how big does a company have to be before it's not responsible to keep itself running? If a company can't be competitive in a (somewhat) free market, arbitrarily giving them taxpayer money won't make them more competitive.

In my mind, the American auto industry just can't compete. And if you can't cook, stay out of the kitchen.

I didn't hear anything about automakers petitioning the gov't for billions of dollars until the gov't started giving away billions of dollars to failing banks

I don't know why failing companies can't just go straight to the people. Why not get a bunch of TV ads, run the scare tactics, and ask for private donations? Why does Congress have to take it from us? Because they know voters and taxpayers are just as greedy and unethical as they are and it won't work.

If enough customers don't want to support failing companies, how can they stay in business anyway?

Originally Posted by jockeys

Maybe I'm just old fashioned, but I think the whole "too big to fail" concept is ludicrous.

If you suck at running a business, you go out of business. Period. Doesn't matter if you have 10 employees or 10 thousand. Where do we draw the line? Lots of companies go out of business every year and the people who work there lose their jobs. It sucks. I get that. But how big does a company have to be before it's not responsible to keep itself running? If a company can't be competitive in a (somewhat) free market, arbitrarily giving them taxpayer money won't make them more competitive.

In my mind, the American auto industry just can't compete. And if you can't cook, stay out of the kitchen.

I totally agree. This just reeks of all the other problems in this country- if it doesn't work, throw more money at it until it does. The Big 3 have been rolling in the dough long enough to be able to work out their problems. They could have been more competitive, but they weren't.

Someone mentioned the big engine power 60's cars being in higher demand- I disagree. Yes, there is a demand for them, but there would also be a huge demand for a well performing diesel vehicle, just like the ones the Big 3 sell abroad. It's entirely sad that 20 years later, my stock V8 truck (with a throttle body!) performs just as well as the new ones. If you don't have a major breakthrough in engine development in 20 years, you're just withholding technology from the public.

Let 'em burn. They won't burn long, but it'll hopefully be long enough to bring them back down to earth.

This is really interesting. Bill O'Reilly was on NPR (of all places for him to be) this morning talking about what he called the "rich kid" syndrome. His theory was that folks who grew up wealthy tend to think that things just work out because things seemed to for them growing up (due to throwing money at the problem). I am not endorsing that line of thinking, it is just interesting to hear others voice a similar view point without blaming it on a class of people. O'Reilly actually blamed this "syndrome" on why Bush didn't react faster to some of the problems that were cropping up during the war in Iraq.

Originally Posted by Quick Orange

I totally agree. This just reeks of all the other problems in this country- if it doesn't work, throw more money at it until it does. The Big 3 have been rolling in the dough long enough to be able to work out their problems. They could have been more competitive, but they weren't.

On an unrelated note, I was listening to the duties and powers that will come with this "Car Czar" position that is currently trying to be filled on the hill. From what I can tell, it is going to be about the worst job in America, right underneath Assistant Crack Whore. Another case of "Put out this fire with a toothpick and some gas."

-Rob

I don't know about that being a "rich" only thing. Many people in Oklahoma that are solidly middle class believe that many of our woes, including our failing school system, can be solved with more money instead of actually coming up with a solution.

Originally Posted by sicboater

On an unrelated note, I was listening to the duties and powers that will come with this "Car Czar" position that is currently trying to be filled on the hill. From what I can tell, it is going to be about the worst job in America, right underneath Assistant Crack Whore.

Anything to link to where we can check this out? I really can't imagine why. If the position pays anywhere near 100k per year, they can move me to Washington and I'll take that terrible job. Hell, I'll take it for a lot less than that.

Originally Posted by Wildtim

No. over here the unions have negotiated a pension and health care plan by which the company pays you a stipend and care plan until you die. In other words joining the company is like joining a socialist system where there is hire date to grave coverage, and like the soviet union this financial model only works during a period of perpetual growth. In times of stagnation the system begins to crumble.

Another point to consider. None of those CEO's has been on the job for more than three years. Their predecessors were all sacked for poor performance and these guys have all institued huge restructuring plans, that have already begun to have a positive effect.

I think it will be very interesting to see what happens if they are allowed to go bankrupt. I hope you all have plans to deal with a bankrupt state, one with 25% or more unemployment. I can tell you those of us in Michigan, no matter how remote our jobs seem from the auto industry, are already feeling the pinch of the downturn. There isn't a governmental body from the state on down that hasn't already tightened its belt, and that isn't facing worse in the year to come. This state will be bankrupt without the auto companies, and that WILL be without a doubt a problem for the federal government to solve.

By the way the Volt works. the batteries are made in Japan, but the car runs, in fact GM's CEO drove one to DC.

This is happening in NY as well due to the crisis in the financial industry. The state isn't collecting projected revenues and is starting to cut services. They're raising tuition at state colleges, they'll raise other fees and taxes...so we pay one way or another for all this.

Jordan

Originally Posted by Philadelph

Anything to link to where we can check this out? I really can't imagine why. If the position pays anywhere near 100k per year, they can move me to Washington and I'll take that terrible job. Hell, I'll take it for a lot less than that.

Check this out:
Czar would hold sway over bailed-out car companies - Yahoo! News

and this:

http://www.nytimes.com/2008/12/09/bu...%20czar&st=cse

This position is going to have to mediate between Car Companies, Unions, Creditors, Share Holders, and Suppliers.

The problem as I see it is this individual will have to simultaneously bring the UAW to its knees and create equity among all those creditors. As far as the "Czar's" ability to push the car companies into bankruptcy, I envision a political nightmare if said Czar even tries.

You can have the job Alex. No amount of money would put me in that seat.

-Rob

Originally Posted by sicboater

You can have the job Alex. No amount of money would put me in that seat.

Not even for...






One million dollars?