Do you support a government bailout of Detroit?

Do you support a US government bailout of GM, Chrysler, and Ford?

  • Yes, with no conditions attached. The economy is at stake.
  • Bailout the automakers with conditions that require MPG cars
  • Bailout Detroit with conditions requiring MPG cars & govt stake.
  • No, let them go bankrupt. It will be better for the industry.
  • No, provide generous unemploy comp to the terminated instead.
  • No, a bailout will be a blow to responsible capitalist principles.

0 voters

Just want to conduct a poll on whether you support a government bailout of domestic automakers.

Do you think it is a good idea? A major factor why GM, Chrysler, and Ford are short on money is the costs related to union pay and benefits. Toyota and Honda do not have union-negotiated contracts to the extent the Big Three has.

If the government bails them out, our taxpayer money could be used to pay these huge union pay.

Opponents say the Big Three’s current dilemma is a result of their own doing. The Big Three automakers repeatedly lobbied against raising fuel economy standards. When Toyota released the Prius, GM’s president dismissed it as a public relations gimmick. The Big Three continued to emphasize SUVs and pickup trucks even when the Prius was gaining popularity.

Supporters say that the economy will be devastated if the Big Three are allowed to fail. Hundreds of thousands of jobs will be lost.

No!
Fuck 'em!

I admit I’m a democrat, and I keep seeing headlines stating that Obama and Congressional democrats want to bail out detroit, and republicans don’t, but I haven’t even bothered reading those articles, and I don’t give a damn if my position is inconsistent with “the democrats’ position”.

The Big Three have been so stubbornly, steadfastly, immensely stupid for so long, that I voted for your last choice. It violates capitalist principles to bail them out, or however you phrased it.

Dammit, how many hundreds of billions of dollars do hard-working taxpayers have to shell out to bail out massive corporations that ignored reality, took massive gambles and lost? How many decades must our children and their children pay for such corporate stupidity. Moreover, will a bailout truly help the economy? And will those idiots ever truly learn? I doubt it. I doubt it.

Sorry for all the workers and sorry for all those who rely on the salaries and pensions of the workers and sorry for all of Detroit, which will implode a thousand times worse than it has already imploded over the past few decades, but screw the Big Three. Mind boggling stupidity and incompetence should not be handsomely rewarded.

I’m sure one of these days I’ll get around to reading the news articles on the subject, to get a better grasp for the nuances, but right now I don’t have a stomach for the details. The answer seems abundantly clear.

My initial reaction is similar to MT’s. I don’t like bailing out companies that make bad decisions. I’ll have to look at the details before having a well informed opinion, but I have limited sympathy for the US auto industry due to its butt-ugly, crappy gas guzzlers.

IF the Big Three go under, 1-2 million jobs will be lost nation wide. Thousands of businesses will go under, from parts suppliers to small local business that supply services around the plants. The impact on the economy will be devastating.

I don’t think you can blame the Big 3 for emphasizing SUVs and trucks. They are high profit vehicles and that’s what the American consumer wanted and still wants. They got kicked in the balls twice, from the sky-rocketing fuel prices and then the credit crunch. If it weren’t for the current economic mess, the American public would be right back to buying their SUVs now that fuel prices have come back down.

Being from Detroit, it is hard for me not to be biased. If the American auto industry collapses, most of my friends will be out of work. I have colleagues that are out of work right now since there is little cash available for new models. My own job security is tied to the auto industry. I have enough connections that I always knew I could find work if things dried up here in Taiwan. It is scary knowing that that security blanket may be removed.

That being said, I am not sure that the bailout is going solve their problems. $25 billion is only a band-aid and the auto companies will lose that fairly quickly. I think Chapter 11 restructuring may be the only way that the auto companies will be able to turn this thing around. It will take a long time and the industry will look completely different than it does now. It will be very painful for anyone related to the industry, but they need to learn to compete with the Japanese and European automakers. The UAW may not survive, hell I don’t think all 3 auto companies will survive.

Make it an interest-free loan instead of a bail-out, and include conditions such as firing the incompetent CEOs and other upper-level management (and replacing them with competent people), protecting the workers’ jobs, and retooling for 21st-century fuel technologies (biodiesel, electric, high fuel efficiency, etc).

I don’t know if this is accurate or not, but if it is then that’s another factor.


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[quote=“JMcNeill”]IF the Big Three go under, 1-2 million jobs will be lost nation wide. Thousands of businesses will go under, from parts suppliers to small local business that supply services around the plants. The impact on the economy will be devastating.

I don’t think you can blame the Big 3 for emphasizing SUVs and trucks. They are high profit vehicles and that’s what the American consumer wanted and still wants. They got kicked in the balls twice, from the sky-rocketing fuel prices and then the credit crunch. If it weren’t for the current economic mess, the American public would be right back to buying their SUVs now that fuel prices have come back down.
[/quote]

But, they did sabotage other forms of transportation, namely,

  1. They torpedoed electric vehicles, by buying up the rights and then shelving it.

  2. They lobbied against fuel efficiency and speed limit standards. In effect, they created the conditions and circumstances around consumer needs. So, this isn’t simply just meeting consumer demand.

As to the extent of jobs and other industries affected, let’s help them, but let’s not put the Big 3 back to where they were, in effect, rewarding their bad business practices.

The union just made a lot of concessions, so I don’t think the above graph is good anymore. And the economy is in such a state that letting the auto industry collapse may be a straw that breaks the backs of the camel jockeys. I’d hate to see this become an excuse for union busting.
See Zapping the Volt in the Nation. So far I’m the only one who voted for the bailout here.

I don’t feel like we can AFFORD more handouts, given the mess Bush has left the budget in.

Now, what exactly is the chance of all three going belly up? Are we talking bankruptcy followed by reorganization and survival, or all three going completely out of business?

Most of what I have read suggests that the costs of letting the industry collapse (and it would be a Chapter 7 liquidation not a Chapter 11, which allows for reorginization) would be far costlier for the government in the form of lost taxes and increased welfare and unemployment payments. We’d also be looking at millions losing their ability to pay mortgages and other loans.

Interestingly, one of the reasons the industry has had to produce the big SUVs is smaller cars are not cost effective because of high union salaries and pensions. Kind of weird. Once economies of scale created a situation where workers and owners got wealthier. Now, it’s all unravelling.

Check this out: finance.google.com/finance?q=NYSE%3AGM

GM’s share price has been in a steady decline for the past ten years, from $90 a share in 1999 to $3.18 a share today.

Ford has declined steadily in the same time period, from $36 down to $1.72.
finance.google.com/finance?q=NYSE%3AGM

Loooooosers. :raspberry: Why didn’t they pull their heads out of their asses 10 years ago?

They’d be better off arranging for a buyout by Toyota and the like rather than bailing them out. The UK car industry has largely recovered from going bust when the government stopped subsidising it largely because Japanese companies who made cars people want to buy replaced British Leyland/Rover who produced rubbish.

thisismoney.co.uk/news/artic … _page_id=2

Why not let them flounder? If they go for cheap enough, a foreign automotive company will purchase them, get decent managers in there, and retool. The union’s can then live by their decree to “only buy American”

Had the credit for Americans not dried up, many probably would have continued to buy those gigantic SUV’s and trucks. They wouldn’t have had the money to pay for gasoline, so they would have put that on credit cards too. Once they were so far underwater they could never surface, they would file for bankruptcy and the system would continue.

The Big 3’s business model needs Americans to continue to spend spend spend. If we bail them out, what’s the cost going to be? How will we know they can do anything effective? The only thing keeping them afloat the last few years were sales on the big SUV’s and trucks. Their compact and mid-sized vehicles are pretty crappy when compared to Toyota, Nissan, Mitsubishi, etc.

Pretend we do actually bail out Detriot. What happens if Americans close their wallets and start living within their means? They don’t go on buying SUV’s on credit, then what happens for Detroit? We have used more funds to bail out the industry, that fails and we set an even worse precedent than now. People will expect the government to bail out their company despite whatever idiotic risks they take. We bailed out the banks to save the entire system, the Big 3 are individuals companies.

Hard to disagree with George Will on this one.

[quote=“George Will”]“Nothing,” said a General Motors spokesman last week, “has changed relative to the GM board’s support for the GM management team during this historically difficult economic period for the U.S. auto industry.” Nothing? Not even the evaporation of almost all shareholder value?
[…]
That is as ludicrous as the mantra that GM is “too big to fail.” It has failed; the question is what to do about that.[/quote]
I’ve no sympathy for the company (management and union reps) who fought regulation and bought politicians to create a bubble in which large, inefficient vehicles could be produced to maximize profit rather than acting in the long-term best interests of all, and competing in an open market.

Paul Krugman doesn’t like it, but is willing to support the automakers with a conditional bailout because given the credit crisis going Chapter 11 isn’t really an option. Meh. I’m all for helping the workers, not interested in helping the companies. Let them go Chapter 7. Or better, organized fire-price sales of two of the three to competitors already building cars in the US.

[quote=“KingZog”]They’d be better off arranging for a buyout by Toyota and the like rather than bailing them out. The UK car industry has largely recovered from going bust when the government stopped subsidising it largely because Japanese companies who made cars people want to buy replaced British Leyland/Rover who produced rubbish.

thisismoney.co.uk/news/artic … _page_id=2[/quote]

American nationalism will never that let happen. Remember when the Japanese started buying in the 80s. But interestingly, there’s always not a lot of spotlight (relative to the Japanese and now Chinese acquisitions or bidding) on the Sauds when they go-a-buying. Must be White House pulling strings.

There will be a bailout. No politician in their right mind is going to be directly responsible for letting 3 million people go unemployed in this economy. That’s the estimate. The US still needs an auto industry, and not one that we need to wait and see what gets built up from the ashes.

You’re right, of course, that there WILL be a bail out. That IS certain for the reason you stated.

That’s why I haven’t even bothered to read the news. It’s a foregone conclusion and I’m pissed off that even more billions and billions of dollars are being thrown into the hole (starting with Shrub’s wars and now with these endless bailouts). When will it stop?

Bail them out, I have GM bonds in my depot.

[quote=“Mother Theresa”]You’re right, of course, that there WILL be a bail out. That IS certain for the reason you stated.

That’s why I haven’t even bothered to read the news. It’s a foregone conclusion and I’m pissed off that even more billions and billions of dollars are being thrown into the hole (starting with Shrub’s wars and now with these endless bailouts). When will it stop?[/quote]

It won’t stop. Everytime a company speculates, gambles or pisses away their capital, they’ll use their last pennies to hire lobbyists to beg for government intervention. They’ll use the same reasons that Detroit is now. They are “indispensable”, they hire Americans, too many people will be affected. The risk will be taken out of the system to try and make it a rigged game. The US will turn into South Korea pre-1997 with the government injecting billions of borrowed dollars (thanks PRC!) into conglomerates until one day the world stops lending to us. Then the meltdown will truly begin.

A billion here, a billion there. It has to be repaid eventually. A billion today will be three or four by the time our grandchildren finish repaying.

[quote=“Jack Burton”][quote=“KingZog”]They’d be better off arranging for a buyout by Toyota and the like rather than bailing them out. The UK car industry has largely recovered from going bust when the government stopped subsidising it largely because Japanese companies who made cars people want to buy replaced British Leyland/Rover who produced rubbish.

thisismoney.co.uk/news/artic … _page_id=2[/quote]

American nationalism will never that let happen. Remember when the Japanese started buying in the 80s. But interestingly, there’s always not a lot of spotlight (relative to the Japanese and now Chinese acquisitions or bidding) on the Sauds when they go-a-buying. Must be White House pulling strings.[/quote]
Well, they enjoy subsidising companies that build cars that are too big and expensive and Tony Soprano soundalike union workers earning way over the average for doing a crap job.