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+--- Thread: Gov't wants to bail out the big three. (/showthread.php?tid=65009)
Gov't wants to bail out the big three. - ajakeski - 10-27-2008
Now Bush wants to bail out GM,Ford and Chrysler. They have been building irresponsible vehicles for years, refusing to build anything efficient, especially Chrysler.
Will the government bail me out after I go broke paying for all these CEO's?
Re: Gov't wants to bail out the big three. - incognegro - 10-27-2008
Stop the foreclosures first. Screw the big 3.
Re: Gov't wants to bail out the big three. - $tevie - 10-27-2008
I would like someone smarter than I am to figure out what would happen if we had taken all this money being used for bailouts and split it up among all the non-incarcerated non-institutionalized adults in this country. Maybe that would have solved most of these problems since folks could pay off their mortgages and credit card debt and -- whoops! I just answered my own question, didn't I?
Re: Gov't wants to bail out the big three. - SteveO - 10-27-2008
That you did. That you did.
Re: Gov't wants to bail out the big three. - rgG - 10-27-2008
While it is fine to say screw big corporations and let them fail, the repercussions of doing so might be far costlier in the long run than helping them out now.
One of the main reasons that the big 3 automakers are in trouble is the high cost of paying pension and health care benefits to retirees which makes it harder for them to compete with foreign makers that do not have these staggering obligations.
From Wikipedia:
In order to improve profits, the Detroit automakers made deals with unions to reduce wages while making pension and health care commitments. GM, for instance, at one time picked up the entire cost of funding health insurance premiums of its employees, their survivors and GM retirees, as the US did not have a universal health care system.[13] With most of these plans chronically underfunded in the late 1990s, the companies have tried to provide retirement packages to older workers, and made agreements with the UAW to transfer pension obligations to an independent trust.[14] Nonetheless, non-unionized Japanese automakers, with their younger American workforces (and far fewer American retirees) will continue to enjoy a cost advantage.[15
http://en.wikipedia.org/wiki/Big_Three_automobile_manufacturers
Re: Gov't wants to bail out the big three. - cbelt3 - 10-27-2008
*ahem*
You must remember that these 'bailouts' are NOT a 'gift'.
The USG is purchasing an equity stake in banks, corporations, etc. With the right of first bite if the organization fails. Remember the Chrysler 'bailout' years ago ? Chrysler paid back every dime.
Also, you mean "Big Two". GM and Chrysler are doing the dance, and it's just a matter of time, IMHO.
Re: Gov't wants to bail out the big three. - Seacrest - 10-27-2008
$tevie wrote:
I would like someone smarter than I am to figure out what would happen if we had taken all this money being used for bailouts and split it up among all the non-incarcerated non-institutionalized adults in this country.
Hyperinflation, probably. In combination with declining asset prices (stocks, real estate), maybe stagflation would be more like it.
Only, because of the global competition for wages, we would get only the price increases, not the wage increases.
We got a little taste of it with gas prices and other commodities during the summer.
There are many components to that, of course, but it's no surprise that the time of the most extreme rises in pump prices coincided with the arrival of those stimulus checks.
Also, by answering your question I am in no way, shape or form insinuating that I am smarter than you. ;-)
I am no fan of these industry bailouts, but I think handing money out to an over-indebted society is, in general, a bad idea. The money just ends up in the same places -- with the debt holders -- only none of the lessons of thrift, responsibility and risk-management are learned as they would be if bad investments are allowed to fail.
Re: Gov't wants to bail out the big three. - Seacrest - 10-27-2008
cbelt3 wrote: Remember the Chrysler 'bailout' years ago ? Chrysler paid back every dime.
But we are now right back at the same precipice with them as we were before. They did NOT learn to be more responsive to the market, or how to better compete with the Japanese. Plus the other two companies have now ingrained the same message: failure will be rewarded as much, if not more so, than success.
It's as if we soothed the burns of a toddler who knocked a pot of boiling water off the stove, but instead of teaching the kid never to knock a pot off the stove, we just put cold water in the pot for him to knock over.
Re: Gov't wants to bail out the big three. - vision63 - 10-27-2008
rgG wrote:
While it is fine to say screw big corporations and let them fail, the repercussions of doing so might be far costlier in the long run than helping them out now.
One of the main reasons that the big 3 automakers are in trouble is the high cost of paying pension and health care benefits to retirees which makes it harder for them to compete with foreign makers that do not have these staggering obligations.
From Wikipedia:
In order to improve profits, the Detroit automakers made deals with unions to reduce wages while making pension and health care commitments. GM, for instance, at one time picked up the entire cost of funding health insurance premiums of its employees, their survivors and GM retirees, as the US did not have a universal health care system.[13] With most of these plans chronically underfunded in the late 1990s, the companies have tried to provide retirement packages to older workers, and made agreements with the UAW to transfer pension obligations to an independent trust.[14] Nonetheless, non-unionized Japanese automakers, with their younger American workforces (and far fewer American retirees) will continue to enjoy a cost advantage.[15
http://en.wikipedia.org/wiki/Big_Three_automobile_manufacturers
Ahem. All of that would be moot if they were selling cars. Not quite moot, but nearly so. The lack of government mileage requirement intervention (successfully bypassed again in the gigantic 2005 Energy Bill) necessary to ensure fuel efficiency was the stake driven into the heart of the Auto Industry. Trent Lott, BushCo and the rest of the GOP, in addition to Auto Workers and the Democrats that support them believed that market forces would resolve that issue. They said that requiring more fuel efficient cars would result in unsafe vehicles and a loss of sales to foreign automakers.
Then in 2006 Trent Lott and congress essentially switched positions which was too little too late.
That was pure manipulation by the Automakers, Congress "and" the Autoworkers. In the meantime, Toyota and Honda can't make enough cars. They need to let "market forces" handle the situation now. How could they even "think" of continuing with SUV's? They were selling and that's all they cared about. They are simply not selling what people want and they won't anytime soon. We should help Toyota buy them out like they allowed Wells Fargo to steal Wachovia and Chase, Washington Mutual. Then the Auto Industry would finally be in capable hands.
Re: Gov't wants to bail out the big three. - Filliam H. Muffman - 10-27-2008
It is their own fault. There was a deal made back in the 1990's where Congress would not force a higher CAFE down their throats in exchange for something like them getting huge tax breaks for research of high mileage and low emission vehicles. Anybody remember the EV1?
Toyota was a little spooked and started their own research that pretty much resulted in the Prius. Part of me thinks the big three wasted their chance and should pay for their many mistakes, but it would mean even more pain for retirees that put in their 40 years of work and were told they could retire with security. Ford sells a car in Europe that gets up to 47 MPG. Where is the US version? You will be able to see the new version in the upcoming Bond film, Quantum of Solace.
Edit: This might sell one or two.
http://jalopnik.com/photogallery/quantumbondka/1003180548
