November 6, 2008
Should the United States nationalize or bail out GM, Ford and Chrysler?
Millions and millions of jobs are on the line.
These companies were run by monkeys who ran them straight into the ground. They built crap products that couldnt' compete, they overpaid their union employees, and they didn't go after green fuel-efficient cars and trucks until it was too late.
And all three thought the HELOC money would never dry up. And then it did.
So, now what should we do with them? Give 'em more loans? Nationalize them? Let them die?
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44 comments:
If we don't start letting the poorly managed die, the country will.
no bailouts! unlike Japan, American car companies pushed gas guzzlers on consumers ... too bad.
Bail me out !
I think it's irrelevant whether GM should be nationalized or not, because it's not about GM's technical ability, but its financial liability.
So the simpliest solution is to eliminate GM's liabilities and continue "as if nothing happened".
Or simplier said:
If the problem is "shortage of getting lots of green painted paper" - the solution is "print more green painted paper"
Good question. Although they're all evil corporations, at least the car companies make something, which is more then can be said for investment and commercial bankers, who just received one of the biggest bailouts in history.
I say take the some of the money from the bailout, and loan it to the car guys on the condition they build a car free town in each state.
I am usually against bailouts, but letting the auto industry die will cost about 2.5 million jobs total. Many of thaose are the last manufacturing jobs this country has. Nationalize them and fire EVERYBODY in middle and upper managment for gross incompetence.
Start building reliable and fuel efficient cars. Can we do that or are the only 2 countries that can build decent cars Japan and Germany?
"no bailouts! unlike Japan, American car companies pushed gas guzzlers on consumers ... too bad."
Incorrect !! They responded to OVERWHELMING consumer demand of Tahoes , Suburbans , Envoys and the like. GM responded to that. THEY DID NOT PUSH ANYTHING ON THE CONSUMER !! All of a sudden , Wall Street speculators drove the freakin price of oil up to 148 a barrel . That hurt. They have obligations that are killing them. They can and WILL turn around , this time heavily invested as the leader in GRENN.
America does know ho w to design and manufacture fuel efficient cars. They're called Toyotas.
Toyota Motor Engineering & Manufacturing North America (TEMA) is an automobile manufacturing and research and development company owned by Toyota Motor Company. It is the result of a merger of Toyota Motor Manufacturing North America (TMMNA) and Toyota Technical Center, U.S.A. (TTC) in April 2006.
Toyota Motor Manufacturing North America opened in 1996 and oversaw all Toyota manufacturing concerns in North America. The company employed 1,055 with an annual payroll of $113.1 million. It is headquarted in Erlanger, Kentucky.
Toyota Technical Center, U.S.A. (TTC) opened in June 1977, and is located in Ann Arbor, Michigan. TTC employes 728 employees in four states. The company is engaged in engineering design and research and development.
The non performing US automakers should be left to die. Anything else is welfare. You are paying people to manufacture a product that no one wants to buy. How about let them get laid off and let the capital that is no longer tied up in non useful manufacturing move over to useful manufacturing jobs.
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We need to bail out at least one if not two of the automakers.....say GM and F.
We can't allow these US heavy manufacturing entities go by the wayside; they are of strategic importance.
Keep in mind that if we needed to mobilize and reinvigorate our manufacturing capacity of heavy goods on American soil for a war or embargo or something these would be the companies who could retool and provide strategic materiel.
I would bet my money that the Gubmint won't let F and GM fail.
They are in the process of retooling and will make little gas sippin' hybrids for Americans; all footed with the taxpayers dime.
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US Government should run a contest: In one year, whoever can produce a passenger car that gets 100 miles per gallon and meets a host of other criteria gets a grant of 50 billion dollars to build production plants.
Any vehicle larger than a Honda Civic will have a hefty tax added to the yearly registration and be limited to 45 mph on all highways.
Then if Americans still want their BIG DUMB 'OLE TRUCKS they can pay dearly for them.
"That hurt. They have obligations that are killing them. They can and WILL turn around , this time heavily invested as the leader in GRENN."
How about making a refined product for once? How about making a car that doesn't feel like it's going to fall apart at 80 mph?
Autotech is correct that the consumer gobbled up SUV's. The auto manufacturers invented the SUV to circumvent vehicle mileage requirements. Reagan was happy to let the big three get away with this, postponing the day of reckoning about our dependence on foreign oil.
Let the Big Three go through Chapter 11 reorganization. Shareholders will be wiped out, but the companies will emerge stronger.
GM has got to go.
Kill it off now. Take the enema and let's move on.
Too Big to Die?
I think Too Dumb to survive...
In Detroit alone, there are a lot of smart people who know how to design cars and a lot of people willing to work.
If we re-organized those people with best-in-class management, without all of the union baggage, they could be competitive.
It would be a painful symbol (for this Detroit native especially) to see the Big Three fail. However, if someone like Toyota or Hyundai came into Detroit and employed a bunch of engineers and laborers, it wouldn't matter to me if executives were Koreans, Japanese or otherwise.
The county needs good value, fuel-efficient cars.
Not overpaid US execs unable to manage.
Bankruptcy! But with alloance of the union pension fund to convert unpaid pensions into post-bankrupt equity, along with the most senior of debt that is willing to invest -- and clear out other debt.
The people and factories are there. Now is the time for bankruptcy followed by Union pension conversion (neo-buy out).
Don't let them die but move the headquarters out of Detroit and get new top people. It is a mindset thing. Also they have shown they can't design cars in Detroit. The only good cars that GM has are the Malibu and a couple Saturn cars and they where all designed by Opel (GM's European Brand).
"unlike Japan, American car companies pushed gas guzzlers on consumers."
Nissan Titan
Toyota 4 Runner
Toyota Landcruiser
Toyota Sequoia
Honda Ridgeline.
Douche
It's mostly the result of unfair trade policies with so-called trading "partners," who we improperly view as our "friends," but whom view us as the no more than an enemy.
"derivs said...
If we don't start letting the poorly managed die, the country will.
november 6, 2008 10:37 AM"
Beautiful post, poetry. Thank you!
DIE U PIGS
are you listening Malcolm?
Toyotas profit and growths has stemmed from SUVs and trucks. the Prius is a nice smoekscreen that the sheeple fall for.
GM,F and Chrylser have been poorly run. One problem is the unions. Another problem is of course the unfair trade practices of Japan.
I say we let them go in to Chapter 11 reorganization. If they go in to reorganization, they can break their contracts with the unions, and lose a lot of the legacy baggage that has been saddling their profits for years. Then once they have a concrete plan, AND give the employees a chance at their olds jobs, only NOT under union terms, then you give them a bridge loan to retool and begin again.
At this point, it would be throwing good money out for bad.
Isn't it funny how the same rednecks and religious nuts that are members of the GOP (Kentucky ring a bell) also are the largest consumers and drivers of the big, gas guzzling Ford, GM and Chrysler trucks.
I could not tell you how many Mccain / Palin stickers I saw on the back of lifted monsters, piloted by the stereotype, hat backwards, country music blairing ignorant moron. I am sorry, but these people have been subsidized long enough.
If these hillbillies and religious nuts want to continue sucking down natural resources, polluting the earth and dumbing down America, let them do it fully on their own dime. I am tired of these guys being subsidized by my tax money. They are the OLD WORLD, fuel efficency, sustainability, religous and social tolerance, and higher intelligence are the future.
Let them die with slavery, apartheid, polygamy, the KKK and the rest of the past we would all like to forget.
They fought for years against the safety and health of their own customers, constantly lobbying against pollution and safety regulations. They are still at it. Let them die, too, like so many of their customers' children have. I will never buy a Car from GM or Ford.
Take a look at our fuel efficiency standards compared to Europe and Japan. Take a look at what influenced lower standards if you don't believe American companies have anything to do with kicking themselves in the rear.
http://tinyurl.com/5k49vu
http://tinyurl.com/5cut9e
http://tinyurl.com/6hu275
GM should be broken down into separate brands, it's current management fired. Only then there might be true competition among the brands and something good, in terms of technology, might come out.
If they sold their cool cars here they would probably still be in business.
Think of all the American cars you see abroad but can't get here for whatever reason.
Example...
Cosworth Ford Focus (Formerly the Cosworth Escort)
We gotta start somewhere. Revamp.
Once you stop hearing the expression, "never ending pool of money," it's over for not only the car types, but all of us.
We need big ideas, quick!
Environmental cars in an efficient slimmed down transfiguration of car companies might be a step in the right direction. Insurance would be cheaper and vendors would still have a customer.
Let's start doing something, even if it's wrong.
We need some goddamn leadership right now. Do it. close the market for a week, while Bretton Woods II meets. Let it cool off.
Demand transparency!
It's been crazy, but now it's going to be out of control.
The people in charge need to start having press conferences and start telling everybody what's going on. Actions need to start; preferably the kind of actions that command attention and demonstrate LEADERSHIP.
I don't care if it's Bush or Obama. Frankly, I'd like to see both of them on TV right now saying what, in essence, we already know: We're a stone's throw away from stoneage type sh#@! and here's what we're going to do, i.e., deploy accountants to get to the bottom of this.
No. Doing so is the short term "least pain" path, but it is the WRONG path in the long run.
In not doing so, We force hard pain upon ourselves, moving us to finally admit the root cause of America's financial demise is "Globalism" as currently practiced.
Nationalizing or bailing out GM, F, whomever just prolongs the fantasy that these are merely transient problems.
The problem is much more fundamental than one or two underperform corporations.
President-elect Obama expressed support for an additional $25 billion in loans on the condition that the money would go toward helping the industry build fuel efficient cars. Obama has said he would meet with industry leaders and the UAW quickly to talk about helping automakers, but a meeting has not yet been scheduled.
Let them fail. We cannot afford to have so many resources (people, money, materials) consumed in the production of something we neither need nor really want.
Retrain factory workers as hospital technicians, nurses, care-givers - these are things we actually need and are going to need more of as we all grow older and more infirm.
Or some of these 2.5 million people can go to work in a solar panel factory or bicycle factory or build railroads, subways, public transportation systems.
Seriously, think of all the good things that 2.5M people could make. Now think of what they are spending their talent and energy doing: making mediocre cars.
I own a Mercury Cougar XR-7 with 208,000 Miles. Hardly ever breaks. Good car ! I also have a Ford Ranger that is tough as hell. I had a 1994 Toyota pickup and lost a timing chain in the 22-RE at 97,000 Miles. Major repair. My Ranger has 102,000 Miles. It never even makes a hick up sound !!
Not all US made cars are junk !!!
No, Obama won't let the big American auto companies die. These companies serve as effective breeding grounds for future Democrats thanks to the powerful unions which are also responsible for them being non-competitive. If anything, Obama with the help of Pelosi will find ways to socialize these businesses without the outward appearance of having done so.
yoski said...
I am usually against bailouts, but letting the auto industry die will cost about 2.5 million jobs total. Many of thaose are the last manufacturing jobs this country has. Nationalize them and fire EVERYBODY in middle and upper managment for gross incompetence.
I read today that the latest numbers for auto sales are down 70%. People aren't buying autos. People are tapped out. They don't have the money to buy autos, and most already have 2 or 3 late model cars in the driveway now.
What happened to the concept of supply and demand? Why are we going to give billions of dollars to the auto companies to keep producing automobiles when there is no demand for them? I guess we could also bail out the construction industry to begin building thousands of new car lots to park the new cars that no one is buying?
Sounds like welfare for high paid union workers to me. Why is the only solution to our problems in America MORE CONSUMPTION? We have reached peak consumption.
It is time to slow down, pay the bills from the big 10 year shopping spree and get a hobby. Gardening is nice and you can eat the profits.
Growth through consumption and debt is a dying concept. The quicker the USA understands that the rules have changed, the quicker we can move on to something other than consumption fueled growth.
No, Obama will never allow the American auto companies to die. These auto companies are effective in creating and maintaining a class of people whose livelihood is dependent on the Democratic party. If anything, Obama and Pelosi will explore ways to socialize them without the outward appearance of having done so.
Lets put the ex-autoworkers into the fields, picking strawberries, cabbage, etc. We can displace the illegals.
Pound for Pennies, pull your head out of your arse.
How many times have you driven down the 5 or 15 in SoCal, or any major metro area and been passed by the Hummers/Escalades/Navigators/etc? I don't recall seeing a large percentage of those vehicles touting GOP stickers and I am willing to bet some may even be Dems. *gasp* Overconsumption is not limited to one class of people nor people of one political party. Can you seriously point your sanctimonius finger at someone driving a truck in the country, and paying for it, and not consider the individuals climbing aboard their private Citations for a weekend in Europe? The energy problems we are facing in this country and around the world have been created and fostered by many people of vastly different backgrounds the world over and not just one specific group as you would like to believe.
And enough of the bailouts! Yes we need the manufacturing base in the US but do we really believe that the Government would seriously be capable of running these companies any more efficiently or intelligently than the private sector? If they need to go into Chapter 11, so be it.
We are China's Little Bitch
We have no option but to let them FAIL.
" Anonymous said...
We need some goddamn leadership right now. Do it. close the market for a week, while Bretton Woods II meets. Let it cool off.
Demand transparency!
It's been crazy, but now it's going to be out of control.
The people in charge need to start having press conferences and start telling everybody what's going on. Actions need to start; preferably the kind of actions that command attention and demonstrate LEADERSHIP.
I don't care if it's Bush or Obama. Frankly, I'd like to see both of them on TV right now saying what, in essence, we already know: We're a stone's throw away from stoneage type sh#@! and here's what we're going to do, i.e., deploy accountants to get to the bottom of this."
November 6, 2008 8:48 PM
Holy Crap Annon... Thank you for this post... This is exactly what we need
I have as much need for an American-made automobile as I do for "The Sharper Image". Everything is just wrong about US autos, engineering, styling, mileage.
I will only buy a German or a Japanese car, have one of each now.
After owning Japanese cars, I decided to give American made a try, out of loyalty mainly. I bought a new 2005 Ford Escape. The transmission went out after 36,000 miles. It's not just about mileage. It's about quality.
I'd like to say, let them go away. However, I wonder if we don't provide some assistance, will there ever be an American car manufacturer that can compete with Japan ?
This Detroit-native and happy South Korean Hyundai owner says, "No Bailouts!"
Giving GM a bailout might save GM jobs, but at the cost of other jobs. The funds used to bailout GM will be taken from something that the market has decided is a better for more consumers.
This concept of secondary effects is brilliantly explained in Henry Hazlett's "Economics in One Lesson" written in 1946. You can read the whole thing online here:
http://jim.com/econ/
I don't have any mercy for GM. They pulled up the street cars in Detroit, they spied and harrassed Ralph Nader, they covered up their safety record, they killed their electric car and played dirty politics against all sorts of CAFE standards. They have had preferential treatment for years.
The argument that they only made SUV's because that is what people wanted is insane and that somehow the taxpayers should pay them while they figure out the market. They used to make cars without fuel injection, without air conditioning and seatbelts, too. No one is bailing out Atari because they didn't see the X-Box coming. No one is bailing out Motorola because they were busy making analog phones when Nokia and the rest of the world went digital.
I'm so tired of people speaking of these corporations like they are a person, part of the community we need to support during their time of need. Trust me, they don't think like that about you. Ask Flint.
I would hire the best engineers to requalify the workforce and few administratives to carry out the recovery plan. Kick out the current management (stripe them from stock options on the way out). Workers would survive without subsidy, management would not benefit anymore, and we could finally drive real value cars not this shit bluff that keeps this whole crook system running. Gas, war, maintenance, auto shops, dealers..
With current technology everyone can charge his car from home and don't see repair shop more than once in 5 years.
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