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Bye Bye Auto Industry
Posted by PotatoChef • 12/07/08 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: auto, bailout, Car
As The Masked Millionaire I have beenn saying that the bailout the government is thinking about giving the auto makers is pure folly. It will never work. The car companies deserve and should go bankrupt.
No amount of government money is going to prevent the auto industry from collapsing.
I said it and now a nobel prize winner in economics has said it:
"Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."
Facing massive job losses, the White House and congressional Democrats are negotiating a deal to provide about $15 billion in loans to prevent the weakened U.S. auto industry from collapsing"
Are you willing to face reality or do you think throwing money at this problem is going to change anything?
User Comments
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I think it really sucks that the people who lose here will be the people who end up losing their jobs - when it's not even really their faults. The people who make the cars are just following production schedules/quotas/ etc that the company execs have been sending them.
I don't think we should give them any money at all - for a couple of reasons:
1) Everything happened so quickly when they threw a lot of money at the banking industry. No one is tracking what the money is being used for and it isn't solving the problem.
2) If you bail one out, you have to bail them all out. This will continue to happen and we simply cannot just print money to solve the problem
3) They should file Ch. 11 like all the other companies have had to... try to reorganize and go from there.-
@ ceo08 Except for one point I agree with everything you said. The line workers and their union were on a mission for the past 60 years or so to be self absorbed with their money grab. They did not care about anything, anybody, or any future, all they cared about was getting as much money as they possibly could.
Well this is not the sole reason, by any stretch of the imagination, why the auto companies are going bust. But it certainly is a contributing reason.
I can honestly say that in this country people just do not care about anybody or anything except themselves now a days. It goes for everybody. Union workers, white collar workers, everybody.
The union people complain about how much money the execs make. But you can be certain that if the Union figured out a way of getting that money themselves they would. And would have no regard to how it would affect the company. So I don't believe it when they say it is just the execs fault. It is everybody's fault. And the auto industry is just the beginning. The Me generation is about to collapse.
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Hmm, 2.5 million jobs lost enough to cause the military and the economy to crash and burn. We shut down the big three and what happens in Iraq and Afghanistan, they collapse as well. It is not just the civilian sector which the big three supply. It would very quickly end the war in Iraq if the big three collapsed, the United States would no longer be able to fight it.
This is not a handout, this is a loan. The problem with the idea that it is a loan is that it has to have conditions. The conditions were not set with the banks, that is why things are not getting better.
Unions only exist in capitalist and mixed economies, they are part of the capitalist process which is to get as much money for you and yours as possible. This goes for the unions, the management, and the stockholders. They are all going after the almighty dollar. The idea that unions are socialist is ridiculous, they tend to be banned in totalitarian systems like communism and fascism.
Now that the big three are collapsing, I guarantee the union, the stockholders, and the management will be all looking for a handout and they will be working together to get it.-
Where did anyone say anything about communists in this thread?
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I think they should be left to their own devices. No bailout. Military contracts will keep certain divisions afloat, and if the companies can come up with a good business plan, they should be able to attract private investors. They can also license any good technology they have, form strategic partnerships, or reorganize under Chapter 7 and 11 bankruptcy protocols. I agree that if you rescue one, you end up rescuing all, and for all time.-
@aoi yep, and where does it end? Does it ever end?
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I agree they've dug their own holes, but the problem is larger than just them. If/when they go, they take much more than just their own companies with them.
Suppliers, distributors, retail affiliates, and even their main competition will fold with them (the competition will fall as the suppliers, distributors, etc. fold as a ripple effect of the big 3 collapse). Note - I work for a non-unionized competitor - a highly respected one who they (the big 3) have been getting drubbed by for years - yet we realize we're likely done if they go under. Seems counterintuitive, but it's true.
In other words - careful what you wish for. You'd be talking about millions of unemployed. And not all of them with any guilt for the errors of the big 3 and their union allies.
I'm no fan of any bailout - but this one takes the whole nation with it, or at least the last vestige of a production economy we have with it. That's why these clowns were so arrogant when they first went to Washington looking for a bailout.
I say if they want govt. funds - we make 'em dance for our amusement - and by that I mean we give them a list of demands that must be met to receive a single penny. What specifically those demands would be is more than I'm going to go into here. -
I agree with you completely and I really don't think the auto industry should get a bailout. The collapse of the industry definately isn't new and surprising. Economists have seen this coming for at least 10-15 years and the "big 3" have done absolutely nothing about it. Now they are scrambling. It's their own dumb fault. They deserve everything they get.
I think the biggest concern with the industry right now, is that in this already tense economic climate, the collapse of the industry may not be as easy to overcome as it would be in good economic conditions. Credit is tight there isn't a lot of investment in new businesses and established companies are laying off. The workers that get displaced by the car manufacturers closing their doors will not likely find another job anytime soon. All those jobless people will be an incredible strain on an already comprimised system.
I think what congress is trying to do is delay the inevitable. The industry will fail unless major sweeping changes are made (which is why I favor bankruptcy and restructuring). I think that Congress if anything is just trying to keep them afloat long enough in the hopes that our economy will bounce back and be able to handle the tremendous job loss. I completely disagree with their sentiment, but can see where they are coming from. -
They have made too much damage already. Let them die!!! -
Everybody is making good points. I think there is enough blame to go around. I also think there is no easy answer. But bankruptcy and restructering seems to make the most sense to me.
Throwing money down a dark hole will never fill the dark hole up.
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