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Auto Makers Emergency Bailout; Chrysler, GM, and Ford
Topic Started: Dec 11 2008, 06:26 AM (164 Views)
ParrrrTay
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...just a girl in the world.
Minister
In the news...
The House passed a $14 billion rescue package for the auto makers, but the emergency bailout is still in jeopardy from Republicans who were setting out roadblocks in the Senate.
http://www.cbsnews.com/stories/2008/12/10/...tr=HOME_4659844

I'm still uncertain on how I feel about all of this. On one hand it's like tossing a pebble in the pond, the ripple effect could be devastating. All the suppliers that depend on them (fabric, steel, plastic, etc.) could end up folding and that freaks me out.
Yet on the other hand I feel all of them stuck their heads in the sand and don't deserve our tax money to correct their stupidity.

What do all you wonderful people in NS Canada think?
The Pubs of Parkplace
Delegate, Canada

Long you live and high you fly
And smiles you'll give and tears you'll cry
And all you touch and all you see
Is all your life will ever be
~P.FLOYD


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Pez201
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Over here in little ol' rural Australia, the BIGGEST symbol of the world economy would be the U.S. auto companies, due to their size and how they're in the public eye (i.e. people who drive Fords for life, and so on).

So to see them cap in hand asking for money is... odd. But I don't know enough about the situation to say more than that, really.
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Kyleslavia
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I'm personally afraid that other companies from different industries will try to line up on Capitol Hill and try to get a bailout of their own.
Come and visit Kylesburg City, please clicky!
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New Eunomia
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That the suits in charge don't deserve tax payer's money to correct their stupidity, is something I am definitely in agreement with.

The argument can also be made though, that auto-related industries that rely on the big three, don't deserve to sink along with them.

I'm a fan of unfettered markets, but I'm also sensitive to the results they produce. When smaller companies struggle, the solution is for bigger companies to buy them up, or to simply go out of business for producing products nobody wants. No fuss, no muss.

But when giant sized corporations like GM go down, only a government has the size to step in. I think a reasonable solution would be one that limits the overall harm - bailing out the company, while installing new management so that their irresponsibility isn't rewarded. That doesn't seem to be on the agenda. Their resignation should have been article one, on whatever bill is being passed.

Another problem is that this solution, as part of a larger ongoing bailout strategy, further entangles the US treasury into foreign debt. Mostly to the Chinese. By financing their public debt, this of course means that China's role as a stakeholder in the US economy increases, in the same way that the US did during Europe's post-WWII reconstruction.
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Niongor
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I have a few hang ups on this.

Firstly, I have a horrible feeling that the auto industries will take the tax payers money and make the same stupid mistakes they've been making for the last 25 years.

Secondly, is this bailout going to simply prolong the inevitable? Rover in the UK, not the biggest car company in the world, but in exactly the same circumstances as the big 3, got a bailout from the British government only to collapse 2 years later.

Lastly, if the automakers get a bailout, who else is going to want one?
"There is no next time: it's now or never!"

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North Star State
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I think its good the executives agreed to work for $1 a year, but I don't think they will. They're gonna muck it up and in two years time they'll be back asking for money only this time Congress will say no way and 5 million Americans will lose their jobs.
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jDELIGHT
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Those bastards. None of them has the balls to actually make their businesses profitable and competitive in a world market. The entire current situation is built on the premise that they can't do their jobs.

They know they have us in a corner.

The banks already showed us what would happen if we give this bunch money. My feeling is very strongly NO. Even Lee Iacocca, who actually DID pay back his loan in the early 80s agrees.



(sorry michigan, but these are the people who put you where you are, and the industry has to shift or die anyway).

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ParrrrTay
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First of all I see most of you called it a bailout. It's actually a loan, although a loan that can never be paid back is a bailout as far as I'm concerned. A bailout is exactly what I think it would be if the same management is allowed to exist. I feel the restructuring replacement of upper management should be a major condition if this loan does pass.

Ford is actually holding it's own and would only request a loan if the economy takes a deeper downward spiral. I do however believe if this happens to Ford it would only be a 'loan' as they already have been moving forward with the times (not afraid to change to compete) which would more than likely enable them to pay the loan back.

So why is GM and Chrysler so bad off?
One word...MANAGEMENT! I get the feeling that they thought 'It always worked in the past and it will always work in the future'. Fear of change is slowly killing them.

I completely blame the people running the companies. I have a stinking feeling that this money (if loaned) will just allow them the comfort of making the same mistakes, while expecting different results, and will collapse in the end. (bailout failure)

And JD it's not just Michigan, if Chrysler and GM fail, then suppliers from everywhere (California, Mexico, etc.) will more than likely go belly up. Which would also be the fault of the suppliers management. Why would anyone put all their eggs in one basket? So maybe the do deserve to sink with them. :shrug:
The Pubs of Parkplace
Delegate, Canada

Long you live and high you fly
And smiles you'll give and tears you'll cry
And all you touch and all you see
Is all your life will ever be
~P.FLOYD


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ParrrrTay
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Quote:
 
A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

The proposal failed in a 52-35 procedural vote. t needed 60 votes to move forward.

General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

...and the fat lady sings!
The Pubs of Parkplace
Delegate, Canada

Long you live and high you fly
And smiles you'll give and tears you'll cry
And all you touch and all you see
Is all your life will ever be
~P.FLOYD


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Lorelai County
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Well on one hand it doesn’t make sense to support an unprofitable sector. At the other hand it’s not fair to let employees suffer for the incompetence of the higher management. How would we Canadians solve that dilemma? Let’s hear your thoughts… :grandpa:

****

From the U.S. government view and theoretically therefore from public/the common U.S. citizens view it isn't about saving unprofitable companies (or high management seats), it's about saving jobs. If the government is considering to support the economy with $14 billions, it doesn’t have to be necessary the car industry. E.g. they could support middle-/small-sized companies" or startups. (In Switzerland those “KMU” are actually the biggest employer of the economy). The beneficiary of this economic assistance should preferably bring certain requirements with them…

- …operate in a developing market with a high need of new employees for the future.
- …operate competitive in long term regarding the domestic and foreign competitors.
- …preferably generating jobs requiring none or only few retraining of former employees of the dying industry. (If necessary reeducation can be paid by economic assistance)
- …preferably generate jobs in the areas they have been lost.
- …having a competent management and a business strategy able to juggle recession and react flexible to shifts of the market.
- …having an array of products that do not depend on unreliable or non-sustainable resources regarding the short term situation in the U.S. economic area.

I think a good start for planning an economic assistance might be to establish some higher goals:
- Generate jobs for as much people as possible (not necessarily high paid but it should enable a worker to support the average U.S. family without the need of governmental welfare)
- Prevent the loss of jobs of the existing economy (at the current situation of the banking sector other companies might also be in trouble, because they are not able to get new loans or cover old loans in short term)
- Prevent areas from generating slums
- Decentralize the dependency of workplaces on single companies or sectors
- Decentralize the economic (political) power from single companies

Just some thought… What would you do?
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Niongor
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ParrrrTay,Dec 12 2008
12:00 PM
Quote:
 
A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

The proposal failed in a 52-35 procedural vote. t needed 60 votes to move forward.

General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

...and the fat lady sings!

Where the hell were the 13 other senators? :unsure:
"There is no next time: it's now or never!"

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Omnivorous
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Niongor,Dec 12 2008
12:17 PM
ParrrrTay,Dec 12 2008
12:00 PM
Quote:
 
A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

The proposal failed in a 52-35 procedural vote. t needed 60 votes to move forward.

General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

...and the fat lady sings!

Where the hell were the 13 other senators? :unsure:

On their yachts.
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jDELIGHT
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ParrrrTay,Dec 12 2008
12:14 AM
And JD it's not just Michigan, if Chrysler and GM fail, then suppliers from everywhere (California, Mexico, etc.) will more than likely go belly up. Which would also be the fault of the suppliers management. Why would anyone put all their eggs in one basket? So maybe the do deserve to sink with them. :shrug:

Sorry, I was jumping back and forth between two discussions on this issue and got confused!

Yes, Michigan isn't the only place affected, but I always hear people talk about the awful conditions in Michigan because of the auto industry. I know a lot of folks want to blame labor unions and the feds for not propping up the industry (all aspects of it) *more.*

I hear a lot of talk about the auto industry, but not a lot of talk about any other industries in Michigan. Is that all it has for its economic base? Michigan seems to only have one basket.

Move to Canada?

:hug:

A 21-Skwerl Salute for the Dizzy Twirling Hippy Chick!

"Your only true land based hope are aerodynamically correct goats." JT
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ParrrrTay
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jDELIGHT,Dec 12 2008
12:26 PM
Move to Canada?

:hug:

Not sure if that would solve my problem since Michigan is run by a Governor that was born in Canada. :P

If I could afford it I would move my sorry ass right out of Michigan. The whole world moved forward and Michigan kept banking on the auto industry.

Companies based in Michigan
The Pubs of Parkplace
Delegate, Canada

Long you live and high you fly
And smiles you'll give and tears you'll cry
And all you touch and all you see
Is all your life will ever be
~P.FLOYD


Sail on my friend...
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Kyleslavia
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Niongor,Dec 12 2008
08:17 AM
ParrrrTay,Dec 12 2008
12:00 PM
Quote:
 
A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

The proposal failed in a 52-35 procedural vote. t needed 60 votes to move forward.

General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

...and the fat lady sings!

Where the hell were the 13 other senators? :unsure:

They may have abstained.

Anyway, I can't believe that the Republicans rejected the bailout because the UAW refused to make concessions. Excuse me, but the employees of these companies shouldn't be forced to have their wages cut because upper management made poor choices.

On the other hand, denying the automotive industry this bailout hopefully closed the floodgates. I hope this sends a clear message that companies won't be able to just waltz up to Capitol Hill and ask for taxpayer dollars when they find themselves in a bad situation.
Come and visit Kylesburg City, please clicky!
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ParrrrTay
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Population of United States: 301,139,947. They could of gave each one of us a nice sum instead of giving the banks $700,000,000. :D

The Pubs of Parkplace
Delegate, Canada

Long you live and high you fly
And smiles you'll give and tears you'll cry
And all you touch and all you see
Is all your life will ever be
~P.FLOYD


Sail on my friend...
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Omnivorous
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ParrrrTay,Dec 12 2008
09:22 PM
Population of United States: 301,139,947. They could of gave each one of us a nice sum instead of giving the banks $700,000,000. :D

$2.32? :P
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Kyleslavia
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Omnivorous,Dec 12 2008
07:29 PM
ParrrrTay,Dec 12 2008
09:22 PM
Population of United States: 301,139,947.  They could of gave each one of us a nice sum instead of giving the banks $700,000,000.  :D

$2.32? :P

Forgot a few zeros there Shay. :lol:
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Almonaster
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Another option?
You use a mirror to see your face. You use works of art to see your soul. ~ G. B. Shaw

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Almonaster
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Visualising the bailouts.

This is not just the automakers. The bailout figure used here appears to be the total across several bailouts, including the Fannie/Freddie takeover earlier. Other sources have quoted anything between $3 Trillion and $7 Trillion - take your pick!
You use a mirror to see your face. You use works of art to see your soul. ~ G. B. Shaw

Visit Al's FractAl Gallery

I'm in ur detailz likin' ur sinz. :evil:
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