Detroit Bailout

Discussion in 'Off Topic' started by vegaspaddy, Nov 18, 2008.

  1. vegaspaddy

    vegaspaddy Member

    :argue: MAN IT SUCKS....

    You have the 3 biggest car companies in this country going under and they want to use taxpayers money too bail them out...

    Personally let them go down, BUT that in itself would have huge consequences on so many people involved with these guys... what the **** happened...

    Its sad these guys (the CEOs at least :nono:) should get whats coming to them, how can you expect to keep building gas guzzlers and survive in this day and age, you have to keep up with the markets... people don't want to own a 2 ton truck to grocery shop anymore.

    I turn on the TV and sure enough theres the DODGE 1500 of FORD F150 OR HUMMER!!!!

    Ahh, am glad am not the one who has to sort out this mess!!:surrender:

    Just in case your wondering, i have a dodge grand caravan, a mazda pickup (ford ranger in disguise) and a Hyundai....but i love my bikes the most hee..heee....:clap:
     

  2. This is what I don't get. We bail them out. They make more fuel efficient cars?
    WE STILL CANNOT AFFORD TO BUY IT.
    Sales don't go up.
    They get bonus checks.

    How about the government makes it extremely AFFORDABLE for us to purchase fuel efficient cars thru incentives even cutting the price of a car by a third and the government compensating the big three for each car sold they may still come out ahead.
    Then sales would BOOM,our economy would flourish,we all win.
     
  3. Happy Valley

    Happy Valley Active Member

    How about we give the $25 billion to Honda or Toyota and let them run the companies.

    The big 3 claims they're going down anyway and we get good, fuel efficient cars and keep jobs.
     
  4. bluegoatwoods

    bluegoatwoods Well-Known Member

    It's a lot like many of our troubles (mortgages are another example): how do we protect the innocent parties without protecting the guilty ones? Or do we punish the guilty, knowing that the innocent will suffer right along with them?

    Difficult questions.

    (I have my own notion of the answer, but since that would be getting political I'll just keep my mouth shut.)
     
  5. arceeguy

    arceeguy Active Member


    This is a common misconception. Detroit has been making competent small/mid-size cars for quite a while now. Unfortunately, people have the perception that the Asian manufacturers are better and that's where they spend their money. Add to that the huge legacy costs from costly union labor, and that spells disaster. The current economic situation is just accelerating their eventual fate. I say let them go Chapter 11, reorganize, and come back better than ever. With the advent of OSHA and federal labor laws, labor unions have become obsolete and have ruined manufacturing here in America IMO. Nothing good can come when you automatically make labor and management mortal enemies. (more class warfare)

    Even Asian manufacturers are guilty of building 2 ton trucks (aka SUV's) for soccer moms. Toyota makes the gas guzzling Sequoia and Tundra (and Lexus variants), Nissan Titan, Honda Ridgeline (although not a real pickup, it does get lousy mileage), etc. The lure of high profit trucks and SUV's was too much for Japanese to resist.
     
  6. kerf

    kerf Guest

    Washington has NO MONEY. Everything they give away will come from us, not "us" the taxpayer but "us" the consumer. All taxes are just a pass through that winds up embedded in the cost of goods and services. The cash register is where all government funding comes from and we all pay for it. Anything the government gives you is something they already took from you.

    If the "Big Three" file Chapter 11, it doesn't mean they go away, their debt is restructured and they will emerge as healthy companies. If they get bailed out they will still be dysfunctional entities and the will be right back where they are now. None of this discussion matters anyway, if Congress doesn't do it in the lame duck secession it will happen in the new Congress.

    "Spreading the wealth" may not mean what you think, beware, beware.
     
  7. bluegoatwoods

    bluegoatwoods Well-Known Member

    One thing that comes to mind is that labor and management are mortal enemies under all reasonably conceivable circumstances. Not just under 20th century American labor union type circumstances.

    Communism actually did try to address this issue. And the mere fact that the Soviets and the Chinese screwed it all up doesn't prove it's a bad idea.

    (Not long ago I accused arceeguy of pouring gasoline on an argument. I might have just done the same thing.
    Sorry about that. I'm just feeling a bit mischievous.)
     
    Last edited: Nov 19, 2008
  8. RATRODER

    RATRODER Guest

    Be careful, don't turn this POLITICAL!
     
  9. Mountainman

    Mountainman Active Member

    bail out -- is it for the good of our country -- who really knows ???

    after watching the stock market -- slide down -- or should we say -- major fall

    still much hanky panky going on --- AIG's big party bash ect ect ect

    there was almost a world wide failure a couple of weeks back
    about the same time that Iceland (yes the country) went broke

    bail out for the big three at this point -- who cares -- there's much going on

    at least we all can -- ride those things
     
  10. sjackson

    sjackson Member

    This won't be the first time the government has loaned GM money (this year even) and if they do it, it won't be the last either. The problem is, GM makes a lot of military hardware, so the government has a heavily vested interest in their survival. It's just like MCI. MCI failed several times only to be rescued by Washington. Why? Because over 70% of the government's phone infrastructure was maintained by MCI.

    I think they shouldn't do it. Rather than bailing out GM, the government should just buy the factories that produce the military vehicles and hire somebody to run them. Let GM collapse. It will be tough for the workers, but it's not like it hasn't been tough for them already. The auto industry created it's own bubble economy for these workers in the towns that they set up shop in. It's unrealistic and dangerous when one company supports an entire local economy. Look what happened to Flint when the factory shut down. The collapse of GM could destroy entire towns, but to be honest it shouldn't have been like that anyway. And I'm willing to bet that it would be much cheaper than $25 billion to relocate all of these workers to better job markets anyway.
     
  11. arceeguy

    arceeguy Active Member

    This is the mindset that keeps the unions in power.

    Toyota, Honda, and BMW have well paid, happy labor forces without the Union labor bureaucracy and entitlement attitude.



    You know that's impossible, right?

    Fiscal conservatives will want the free market to prevail, and to have the companies sink or swim on their own merits.

    Liberals will want the government to intervene and give them money to keep them going and "save" those jobs.

    The fix is somewhere in-between, where maybe the government can improve the business environment without handing them our money. Their biggest problem is their labor costs, it has been killing them. There is no way they can compete with Honda and Toyota with their non-union shops. If they need to file Chapter 11 to re-negotiate with the unions, or somehow convince their employees to dump the UAW - I would buy a new American car in celebration! (Three of the four cars I own are American, but my newest American car is a 1996)
     
  12. kerf

    kerf Guest

    If the union kills the company, who wins, not the union employees, they're unemployed.
     
  13. arceeguy

    arceeguy Active Member

    Often times the actual union employees have very little to say about the deal, it is the "union officials" that are the ones making the deals. I used to work in two companies that had unionized labor. A lot of the union guys did not like the fact that they were forced to be in the union, and even agreed that some of the union demands were unreasonable. In one case, manufacturing was moved out of the country (to Mexico) and all those jobs were simply lost.

    If Toyota can build cars here with American labor and be price competitive, why can't GM, Chrysler and Ford? UAW, that's why.
     
  14. SimpleSimon

    SimpleSimon Active Member

    Lots of folks blame the big three fort the SUV phenomenom. It is only partly their fault, and really, the smaller part. The real culprit is tax policy. It has been possible to get huge tax incentives to buy an SUV for a long time - incentives not available on other vehicle classes.

    If we want to wean the people of this country from SUV's, it is really pretty straightforward too accomplish - give a tax incentive on any new vehicle purchase, on a sliding scale which increases dramatically with average vehicle mileage . Set the floor at a negative 10% (penalty tax) for each 5 mpg UNDER the targetted mileage, and 1% positive rebate for each 1 mpg over the targetted mileage.

    Recognizing that different vehicle classes exist for legitimate reasons, set the targetted mileage by vehicle class/usage. So, Suzy Stepmom wants an 11 passenger SUV for her 1.2 stepchildren with Joe Trophy Hubby, let them pay a heck of a tax penalty, while Lizzy librarian gets a 70% tax rebate for buying her two-seater diesel/electric hybrid that gets 100 mpg around town.

    In 5 yrs the SUV is essentially extinct. As for the safety issue (safer in bigger vehicle), it is mostly a paper tiger. When it isn't, change the liability laws - if the accident is the SUV drivers fault (as determined in court), then triple damages become automatic. Make the wastrel sob's the ones most desperate to avoid accidents.
     
  15. graucho

    graucho Active Member

    Wasn't Chysler sold out to a german company not to long ago? Great, now were bailing
    out the german owned auto companies also. Give the money to GM and Ford after they
    **** can the CEO's. Bye bye Chysler. Then hire the unemployed Chysler workers into
    the little up and coming alternative/electric/hybrid companies. The birth of a new car generation.
    New 3rd, 4th, 5th party car companies may wake up GM and Ford to gas mileage, effeciency and
    decent enginering.

    I have 2nd cousins who work for Chysler. Making 57.54 per hr with full benifits. And there all
    dumber than a box of rocks. The auto industry/unions better get a clue. The 25 bililon is just
    throw away chump change unless all branches of auto industry change their "thinking" (Or lack of it)
     
  16. KilroyCD

    KilroyCD Active Member

    Daimler divested itself of most of Chrysler last year, and only retains a 19% stake in the automaker. Majority stake in Chrysler was bought by Cerberus Capital Management in August of 2007. As of last month Daimler announced that its stake in Chrysler had a book value of zero dollars after write offs and charges.
     
  17. vegaspaddy

    vegaspaddy Member

    since i have only lived in this country for 7 to 8 years i just wanted too see what everbodys reactions were to this subject...

    just reading the news today even the HILL is at ends with what too do.

    From a foreigners point of view, when i first moved here i couldnt belive the amount of BIG cars , trucks on the road... growing up in rural Ireland the only people who had pick-up trucks were farmers...and the moment they were drove off the lot they were covered from head to toe in cow you now what....

    Now that i have lived here for a while i can see to some extent why people drive larger cars, gas alot cheaper,(although this summer was a real eye opener into what happens when you pay an arm and a leg for gas. (my sister had a minivan but sold it after 6 months as she couldnt afford to fill the tank every couple of days)) people feel safer, last year i seen a hummer H2 in the back seat of a mazda mx5 the really little one.

    40- 50 years ago sure it was ok to build these big guys, gas was dirt cheap, the road infrastructure was probably pretty scary going across state lines, and paying your workers top dollar was the right thing too do, unfortantly it sounds like most of the costs the big 3 have these days are to cover the employees themselves

    All i read about about is how millions will loose their jobs, and it will trickle down, well from what i understand most of the cars parts are not even made in this country, just assembled here. The cars will still be on the road, garages will still be needed to service them, these guys seem to think that if they dont get their money that america will come to a stand still.. Dont think so,
     
  18. graucho

    graucho Active Member

    Thanks Kilroy, you gave me enough info to do some digging.
    http://www.bloomberg.com/apps/news?pid=20601087&sid=a.NioiQj4nnA&refer=home
    http://www.iht.com/articles/2008/09/04/business/04lend.php
    http://minivans.about.com/b/2007/05...erberus-capital-management-for-74-billion.htm
    http://www.cerberuscapital.com/news_press_release_07132007.html
     
    Last edited: Nov 19, 2008
  19. kerf

    kerf Guest

    Think of the "bailouts" as an opiate for capitalism and it would seem we're hooked. Anytime there's talk of stopping the free money (free for them not us) the markets plummet. We must stop and take our withdrawal, painful yes but we're still alive in the end. If left unabated, this addiction will end the way all addictions end, the cemetery.



    One little problem that confronts you
    Got a monkey on your back
    Just one more fix, Lord, might do the trick
    One he!! of a price for you to get your kicks


    Ooh ooh, that smell
    Can't you smell that smell?
    Ooh ooh, that smell
    The smell of death's around you
     
  20. arceeguy

    arceeguy Active Member

    Tax incentive for buying a SUV? This is news to me!
    The majority of soccer moms who drive them simply refuse to drive in a "soccer mom minivan" or "soccer mom station wagon" - so they drive a "soccer mom SUV" instead. It's all about image.

    Detroit sold what the American consumer wanted, Toyota is guilty of the same thing - but they have the cash reserves to ride this out. Even mighty Toyota is idling plants because of the slump in sales. Detroits big 3 were already bleeding to death, and the current economic situation has accelerated the bleeding.

    I am against any plan to tax something to discourage its use, but I agree that an income tax deduction for very fuel efficient cars (40+ mpg) is a good idea to encourage people to drive them. We did find earlier this year that CAFE mandates and tax incentives are not needed for people to buy small cars - All you need is $4/gal gasoline and the free market will shift on its own.





    Recognizing that different vehicle classes exist for legitimate reasons, set the targetted mileage by vehicle class/usage. So, Suzy Stepmom wants an 11 passenger SUV for her 1.2 stepchildren with Joe Trophy Hubby, let them pay a heck of a tax penalty, while Lizzy librarian gets a 70% tax rebate for buying her two-seater diesel/electric hybrid that gets 100 mpg around town.

    In 5 yrs the SUV is essentially extinct. As for the safety issue (safer in bigger vehicle), it is mostly a paper tiger. When it isn't, change the liability laws - if the accident is the SUV drivers fault (as determined in court), then triple damages become automatic. Make the wastrel sob's the ones most desperate to avoid accidents.[/QUOTE]
     
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