With GM facing massive financial problems there is an increasing talk of a US goverment bailout to the auto industry. The argument is that the auto industry is so important to the US economy that having one of the big US auto makers fail would wreck a big portion of the economy
My father works for a GM offshoot so I have a clear stake in having the company survive and keep operating as before. On the other hand even if GM is bailed out, it might still be forced to shut down its Canadian operations so my dad's job might be gone either way.
The US auto industry has been dying for a long time and there's no sign of a turnaround. Quarter after quarter of loss is but proof that a bankruptcy is imminent and that this has little to do with the credit crunch. I don't believe the United States government should intervene with an industry that has no signs of recovery. When bailing out banks there is an expectancy that they will eventually recover to a certain degree. The same cannot be said for the Detroit Three. The problem is partially their product, but as Ford has proven after its improvement in reliability, the mere mention of an "American" car associates with obsolescence. It's unlikely the current brands will be able to reform with such burdens.
Something like one in sixteen Americans are in some way employed by the auto industry, either directly or indirectly, so letting it fail would lead to recession along the lines of the great Depression. On the other hand this along with the bank bailouts is leading to serious questions of the role of government.
I think that GM has a history of being one of the worst run corporations in the US. They mishandled the union, thought that there would never be competition, and pushed large vehicles. All of their decisions have come back to bite them in the ass, and they deserve a lot of what is happening to them.
That being said, they are still one of the most important US companies, and them falling would ruin us.
The city in which I live used to be a huge auto parts manufacturing center, with Guide, Delco Remey and GM all having major factories here at one time. I belive that in the 70's and 80's there were somewhere between 30,000 and 50,000 people working in one of those factories. Just last year the final company, Guide, closed shop and left town, leaving close to 5,000 people out of a job. My city is dying, and yet I would not bring those factories back if I could.
The industry is dying, there is a shift in America from industrial based manufacturing to a service and technologically based economy. They dug their own grave, letting people with little to no education past high school work for good wages and full benifits. They built cars that were inefficient and could not compete with foreign manufactureres. We cannot afford to pump money into a dying industry. What we should be doing is investing in creating new jobs in successful industries and educating our youth who, as cliche as this sounds, are the future of our country.
Given that America is supposed to follow the tenets of capitalism one would think that the failing companies should be left to fend for themselves. They always have the (costly) choice of um... reinvesting in another industry or something (it may sound ridiculous I guess but it seems logical from a business standpoint to me). I think it would be interesting to actually see real capitalism work (I don't know that it would, but I think that it could). I know that it will hurt our (America's) economy if these companies were to fail, however I don't think bailing them out will help anything in the long term.
I think that GM has a history of being one of the worst run corporations in the US. They mishandled the union, thought that there would never be competition, and pushed large vehicles. All of their decisions have come back to bite them in the ass, and they deserve a lot of what is happening to them.
That being said, they are still one of the most important US companies, and them falling would ruin us.
Agreed in full. In particular about GM as a corporation. They honestly deserve what's happening to them if we view the auto industry in a 'survival of the fittest' light. They put themselves where they are and in an ideal world, they'd get themselves out by improving their business practices or go under for being rather incompetent. Sadly, this is not an ideal world and the death of GM would be disastrous. Not just for the American economy, but also that of other countries. I know that Canada has a great stake in this as hundreds of thousands of our people are reliant on the American auto industry.
Obviously this is a massive issue and one where none of the solutions are particularly desirable. Either the US government interferes and raises significant questions or it does nothing and the economy (indeed, even the global economy to an extent) takes another hit.
I should probably mention that in the late 70s the U.S. did bail out Chrysler with a half billion dollar loan which Chrysler paid back. Chrysler was having problems at the time because it had focused on large gas guzzling vehicles during a fuel shortage and because their product quality was nonexistant. So glad they learned from history.
One thing to remember is that not only american car companies make car's in the US. If I recall correctly, Toyota is able to build cars in the US at a profit. Why bail out companies whose business models lose money. Those whose business models make money can pick up the slack. Also well run divisions that have been making consitent profits are good investments and will be rapidly brought up in the event of a bankrupcy and kept running if the company scales back.
In addition, if a company like GM goes bankrupt their factories and other capital goods still exist and will likely be bought by a company that is either a better run car company, or will use their methods to be profitable. If we pay for badly run car companies, we'll get badly run car companies.
I am ok with a loan to the auto industry. I am not ok with the govt. owning a stake in the big 3... thats a joke and not what america is about. TY Nancy Pelosi...
A large-sum government loan to Chrysler worked out very well for both parties at the end of the 1970s, and I don't see why the same thing can't work again today. It'd probably take longer for the US to make money on the deal, but I'm sure it'd happen.
That said, I honestly think the economic hit would do good things for our future - perhaps enough to make it worth it.
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My anecdotal evidence disagrees with yours! EXPLAIN THAT!
After seeing what the financial bailout failed to do, you want to do the same thing for auto companies?
Absolutely not. The ONLY justification for a bailout is that the company provides Americans with jobs, and that a bailout would ensure the future of those jobs. Of course, considering how much outsourcing that goes on it doesn't even do that.
American auto companies have been astoundingly shortsighted in the recent years, investing in gas-guzzlers when the trends towards hybrid technology are absolutely clear. They deserve to fail. The workers did nothing to deserve this, but the government cannot prop up failing businesses for the sake of the workers. Bottom Line: The bailout will not make American auto competitive. Not by a long shot.
If you don't suffer the consequences of your mistakes you don't learn to correct them. American companies need to learn a lesson.
To use a Magic metaphor, the bailout is like using lifegain. It doesn't change the board position and only stalls the inevitable
Before any bailout, the Big 3 need to demonstrate that there is something in their deck that they might draw soon that will change the board position. Otherwise, they should just scoop. Congress should instead focus on sideboarding options for the next game rather than prolonging this losing effort.
If ethanol's going to be Jesus returned as a fuel, GM should just start focusing on fruity hybrids to attract the iPod crowd, who are used to replacing things with new models quickly, and that might at least slow their fall into the abyss.
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You guys do realize for US jobs the car companies are responsible for over 100x (more internationally, although not many more - and mostly in Canada for those) the jobs that would have been effected directly by Fannie and Friends with a requested investment of 28x less.
There's some places where the ONLY serious jobs in a town are auto related where if the factory goes the town will die a lingering death.
Not to mention this is more of a need and potential gain of absolutes - not abstracts like with the financial markets.
You guys do realize for US jobs the car companies are responsible for over 100x (more internationally, although not many more - and mostly in Canada for those) the jobs that would have been effected directly by Fannie and Friends with a requested investment of 28x less.
There's some places where the ONLY serious jobs in a town are auto related where if the factory goes the town will die a lingering death.
Not to mention this is more of a need and potential gain of absolutes - not abstracts like with the financial markets.
This.
This is what scares me the most. Initially I was against the idea of an auto industry bailout, but once you understand that if one of the three big dogs goes down, so go 2 million jobs. 2 million. Jesus, it would literally kill many towns, and with the job market as poor as it is now we would be hard pressed to deal with millions more unemployed people.
$25 Billion to bail out the auto industry is what I am hearing, and as long as regulations are attached to force them into making more fuel efficient/green vehicles rather than gas hogs, it will be worth it. But this is bad, very very bad.
The fact that the auto industry bailout deals with absolutes is most of the problem.
There is no threat of widespread, multiple-industry failures should the auto industry fail. Not true with financial markets.
It's all bad, but the very real situation of having so many millions unemployed I think is a far more real and palpable problem than a shaky financial system. It's like getting shot in the head and shot in the gut - both can kill you, but one will do it a hell of a lot faster than the other.
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The fact that the auto industry bailout deals with absolutes is most of the problem.
There is no threat of widespread, multiple-industry failures should the auto industry fail. Not true with financial markets.
So the careers of hundreds of thousands (if not millions - that 2 mil number Elric quoted sounds high from what I recall but too lazy to double check it ATM) getting flushed definitely unless we inject $25b is less harrowing than $700b (which actually was nudged closer to $1t) to potentially save 0-X careers where X is a completely unknown theoretical number?
Including in many cases where some people would have NO backup career available in their town leading to them being required to move to find a new career - but wait home loans are a pain in the ass to get now - making it difficult to move.
Do you really want to resign a large swathe of the "heartland" to become a welfare state? Because that's what would happen with no new business to replace it.
Renewable energy will likely provide great avenues for those regions in the future - unfortunately that's still many years away. (be it ethanol, wind, solar or water based alternative energy they're a preferable region for all the options on the radar except nuclear - which I'm pretty sure would be better on the edges of our map [pretty sure they're best cooled by salt water])
So the careers of hundreds of thousands (if not millions - that 2 mil number Elric quoted sounds high from what I recall but too lazy to double check it ATM)
Those were the numbers reported on the Today show yesterday, 14 November. If one of the big three automakers goes belly-up, there would be an estimated 2 million lost jobs. Where they got the information from is unknown to me, but the auto industry is a massive employer collectively speaking, and I wouldn't be amazed if those numbers were even close to accurate. Even on the "low end" of 100-200,000 lost jobs, it would still be catastrophic.
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The main thing is im ok with the govt. giving loans to help those business. they do the same with small business startups and theres no reason they shouldnt be able to do it with this. But it should be a loan not a stock buy in like the BS they are doing in the banking industry... WHEN THE HELL DID THE US GET IN THE BUSINESS OF BEING IN BUSINESS? They cant even run the govt. correctly much less a SLEW of businesses.
I'm more curious on what the market for new cars is. After all, why would you spend $30,000 on a hybrid when you could spend $14,000 on a compact car.
Either way I don't see a bailout actually saving the company, but rather stalling the company's downfall to see if conditions improve. At least the union was forced to take pay cuts. That helped. Either way, the union at GM has now lost all power.
If the automobile bailout fails, we can go back to manufacturing our own things and stop being so dependent on China. The only real sacrifice would be the health care benefits of millions of workers, but, of course, these benefits were never deserved for their skill levels. All we have to do is reduce minimum wage, stop illegal immigration, and wait.
After seeing what the financial bailout failed to do, you want to do the same thing for auto companies?
We can't measure the effectiveness of bailout. The economy might have been even more catastrophic without it.
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WHEN THE HELL DID THE US GET IN THE BUSINESS OF BEING IN BUSINESS? They cant even run the govt. correctly much less a SLEW of businesses.
The reason for this is because the companies can't run themselves. If the government had set harsher regulations, this crisis may have been averted. With the bailout, buying stock is a good justification for government intervention. We're not punishing the responsible financial institutions and giving them the freedom to operater on their own while we're pressuring irresponsible corporations to clean themselves up.
The reason for this is because the companies can't run themselves. If the government had set harsher regulations, this crisis may have been averted. With the bailout, buying stock is a good justification for government intervention. We're not punishing the responsible financial institutions and giving them the freedom to operater on their own while we're pressuring irresponsible corporations to clean themselves up.
Sorry to much a capitalist to buy that. If we are going to loan them money lets do it. If we are going to become a socialist state under Nancy pelosies control lets do it. W/e we are doing we need to figure out what kind of economy we are.
My father works for a GM offshoot so I have a clear stake in having the company survive and keep operating as before. On the other hand even if GM is bailed out, it might still be forced to shut down its Canadian operations so my dad's job might be gone either way.
What are your thoughts and opinions on this?
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That being said, they are still one of the most important US companies, and them falling would ruin us.
The industry is dying, there is a shift in America from industrial based manufacturing to a service and technologically based economy. They dug their own grave, letting people with little to no education past high school work for good wages and full benifits. They built cars that were inefficient and could not compete with foreign manufactureres. We cannot afford to pump money into a dying industry. What we should be doing is investing in creating new jobs in successful industries and educating our youth who, as cliche as this sounds, are the future of our country.
Doesn't look good anyway you slice it.
Agreed in full. In particular about GM as a corporation. They honestly deserve what's happening to them if we view the auto industry in a 'survival of the fittest' light. They put themselves where they are and in an ideal world, they'd get themselves out by improving their business practices or go under for being rather incompetent. Sadly, this is not an ideal world and the death of GM would be disastrous. Not just for the American economy, but also that of other countries. I know that Canada has a great stake in this as hundreds of thousands of our people are reliant on the American auto industry.
Obviously this is a massive issue and one where none of the solutions are particularly desirable. Either the US government interferes and raises significant questions or it does nothing and the economy (indeed, even the global economy to an extent) takes another hit.
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In addition, if a company like GM goes bankrupt their factories and other capital goods still exist and will likely be bought by a company that is either a better run car company, or will use their methods to be profitable. If we pay for badly run car companies, we'll get badly run car companies.
Yes i am the same guy who trades/sells on MOTL AND Wizards of the Coast and i trade on POJO.
That said, I honestly think the economic hit would do good things for our future - perhaps enough to make it worth it.
Absolutely not. The ONLY justification for a bailout is that the company provides Americans with jobs, and that a bailout would ensure the future of those jobs. Of course, considering how much outsourcing that goes on it doesn't even do that.
American auto companies have been astoundingly shortsighted in the recent years, investing in gas-guzzlers when the trends towards hybrid technology are absolutely clear. They deserve to fail. The workers did nothing to deserve this, but the government cannot prop up failing businesses for the sake of the workers. Bottom Line: The bailout will not make American auto competitive. Not by a long shot.
If you don't suffer the consequences of your mistakes you don't learn to correct them. American companies need to learn a lesson.
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Before any bailout, the Big 3 need to demonstrate that there is something in their deck that they might draw soon that will change the board position. Otherwise, they should just scoop. Congress should instead focus on sideboarding options for the next game rather than prolonging this losing effort.
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There's some places where the ONLY serious jobs in a town are auto related where if the factory goes the town will die a lingering death.
Not to mention this is more of a need and potential gain of absolutes - not abstracts like with the financial markets.
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
The fact that the auto industry bailout deals with absolutes is most of the problem.
There is no threat of widespread, multiple-industry failures should the auto industry fail. Not true with financial markets.
This.
This is what scares me the most. Initially I was against the idea of an auto industry bailout, but once you understand that if one of the three big dogs goes down, so go 2 million jobs. 2 million. Jesus, it would literally kill many towns, and with the job market as poor as it is now we would be hard pressed to deal with millions more unemployed people.
$25 Billion to bail out the auto industry is what I am hearing, and as long as regulations are attached to force them into making more fuel efficient/green vehicles rather than gas hogs, it will be worth it. But this is bad, very very bad.
It's all bad, but the very real situation of having so many millions unemployed I think is a far more real and palpable problem than a shaky financial system. It's like getting shot in the head and shot in the gut - both can kill you, but one will do it a hell of a lot faster than the other.
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So the careers of hundreds of thousands (if not millions - that 2 mil number Elric quoted sounds high from what I recall but too lazy to double check it ATM) getting flushed definitely unless we inject $25b is less harrowing than $700b (which actually was nudged closer to $1t) to potentially save 0-X careers where X is a completely unknown theoretical number?
Including in many cases where some people would have NO backup career available in their town leading to them being required to move to find a new career - but wait home loans are a pain in the ass to get now - making it difficult to move.
Do you really want to resign a large swathe of the "heartland" to become a welfare state? Because that's what would happen with no new business to replace it.
Renewable energy will likely provide great avenues for those regions in the future - unfortunately that's still many years away. (be it ethanol, wind, solar or water based alternative energy they're a preferable region for all the options on the radar except nuclear - which I'm pretty sure would be better on the edges of our map [pretty sure they're best cooled by salt water])
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
Those were the numbers reported on the Today show yesterday, 14 November. If one of the big three automakers goes belly-up, there would be an estimated 2 million lost jobs. Where they got the information from is unknown to me, but the auto industry is a massive employer collectively speaking, and I wouldn't be amazed if those numbers were even close to accurate. Even on the "low end" of 100-200,000 lost jobs, it would still be catastrophic.
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Skullbriar, the Walking Grave (Sac and Grave hijinks)
Azusa, Lost but Seeking (Landfall hijinks)
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Waiting for Innistrad...
Extended
Hah!
Modern
Living End Cascade (RGB)
Legacy
Burn
Vintage
None
Casual
WB Aggro-Control
Green Stompy
Pink Floyd (UWr Wall Control)
Lunch Box (Fatty ramp)
D-Bag (White Control)
Level 13 Task Mage
Yes i am the same guy who trades/sells on MOTL AND Wizards of the Coast and i trade on POJO.
Either way I don't see a bailout actually saving the company, but rather stalling the company's downfall to see if conditions improve. At least the union was forced to take pay cuts. That helped. Either way, the union at GM has now lost all power.
We can't measure the effectiveness of bailout. The economy might have been even more catastrophic without it.
The reason for this is because the companies can't run themselves. If the government had set harsher regulations, this crisis may have been averted. With the bailout, buying stock is a good justification for government intervention. We're not punishing the responsible financial institutions and giving them the freedom to operater on their own while we're pressuring irresponsible corporations to clean themselves up.
Sorry to much a capitalist to buy that. If we are going to loan them money lets do it. If we are going to become a socialist state under Nancy pelosies control lets do it. W/e we are doing we need to figure out what kind of economy we are.
Yes i am the same guy who trades/sells on MOTL AND Wizards of the Coast and i trade on POJO.