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Auto Bailout Passed

Posted by NewBlogger2008 • 12/12/08 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: bailout, big three, chrysler, detroit, ford, gm

Do you agree with the $14 billion bailout for Detroit? Analysts are saying that in reality it will require about $200 billion to actually save the Big Three. What do you think about the latest government bailout? Would you have voted for the bailout? Do you think there is a better way to save the Big Three?

User Comments

12/12/08

clioandme

I take it you missed the bailout's death last night in the Senate?
www.washingtonpost.com/wp-dyn/content/article/2008/12/11/AR2008121101578.ht...

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12/12/08

RuinousRight

I don't like the position the auto makers and associated unions have put themselves in, but I believe that a government loan with certain requirements should be extended. The failure of the big three would put a very large number of people in the unemployment line which are taxes help pay for as well.

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12/12/08

satijournal

Considering it took Congress to force the automakers to come up with a plan for viability, unless the automakers get rid of upper management, they're doomed to fail anyway. Give the bailout money to innovative companies like Tesla Motors instead.

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12/12/08

Anok

I'm at a point with the whole bailout debacles that screams "I don't care anymore!!"

Bailout, no bailout - is it going to actually matter?

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12/12/08

satijournal

Here's a side effect of the "big 3" failing:

As a result, the hypotheticals about the domino effect of the companies’ troubles through the vast network of auto supplier firms — which employ more than twice as many workers as the carmakers — are becoming real.

General Motors and Chrysler, for example, owe their suppliers a total of roughly $10 billion for parts that have been delivered. G.M. has held off paying them for weeks, and Chrysler is paying in small increments. But the cash shortages at G.M. and Chrysler are getting more severe, according to their top executives and other officials.
www.nytimes.com/2008/12/12/business/12rescue-web.html?pagewanted=1&_r=1&hp

And with all the money the government has thrown at the financial industries, still there's no credit available.

[reply]
1. 12/12/08
  
  Anok
  
  What I meant though, wasn't that there wouldn't be a difference if they failed or not, but rather if the bailout would actually help them succeed, or if they would fail with the bailout, anyway.
  
  Like you said, the lending market is all but frozen - what really, what good has any of this done?
2. 12/12/08
  
  satijournal
  
  It hasn't done a bit of good. The gov't should have started making direct loans instead of relying on the charitable nature of the finance companies. They've already spent over 300 billion dollars on the bailout with nothing to show for it.
3. 12/12/08
  
  xmarks
  
  Alternatively, when they spent the 300 billion, it should have been conditional on increased lending.
4. 12/12/08
  
  Anok
  
  I could think of a few other conditions that should have come along with it too...but hey, that's me
12/12/08

xmarks

I am against the bailout. Any of the bailouts. Personally, I would let them fail. My guess is that one or two would fail but removing them from the market may give enough business to the remaining one/two.

Someone will likely buy pieces of these companies without the current management and the historic commitments and the contracts with the union. A smaller but stronger auto business may actually result.

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12/12/08

NewBlogger2008

HAHAHA WOW!!!! I am an idiot.... I meant to write failed!! Haha... wow.......... maybe I should not be writing these so early in the morning... Markstoneman, thank you for pointing out my occasional cluelessness

[reply]
1. 12/12/08
  
  Anok
  
  Go get yourself some coffee
12/12/08

Phoenix1962

They should seek bankruptcy protection and not burden taxpayers with their greedy request.

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12/12/08

RateAutoInsurance

I think it is a waste of tax payers money to delay the inevitable with the big 3. One of the big 3 auto companies actually admitted recently that they have failed their customers and have been lackluster in their products. They actually put out an ad in print and said that. They should fail, be forced to restructure their business(whatever it is that they must do) and try and atleast compete with the japanese automakers. If they can't put out good products that people want at a good price, then maybe they should cut some union fees to bring salaries down to the overseas businesses.

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12/13/08

Majik

I'm glad the senate said no to the automakers. Granted there are going to be a lot of people out of work but all the lavish spending by CEO's and some of the highest wages in workforce are clearly taking their tolls on the corporations. If they cannot get the UAW/CAW to agree to a cut to their wages, even if it is only 1 or 2 dollars I can see the big wigs in the companies locking the doors until the unions come to an agreement.

[reply]
1. 12/14/08
  
  xmarks
  
  A managed bankrupcy makes more sense. Get rid of a lot of management. Get rid of underperforming brands. Renegotiate with the unions. Look at new production facilities, may not in MI. Start over.
2. 12/14/08
  
  satijournal
  
  That will make a bad economy even worse. I'm against the bailout in theory, but what's better for the country? That said, they'll figure out a way to survive -- even without a bailout.
3. 12/14/08
  
  NewBlogger2008
  
  The government may not even have to come up with a bailout for the Big Three anyway at this point. GM is saying that they will not make it to January which means they will have to file for protection anyway.
4. 12/14/08
  
  xmarks
  
  I would argue that pooring resources into companies that are unable to manage themselves is not best for the country. If they fail, put resources into making sustainable companies/industries.
5. 12/14/08
  
  NewBlogger2008
  
  xmarks- I completely agree with you. I do not want my taxes going to companies that are just going to waste it. That is why I am in favor of letting the Big Three file for chapter 11. The Big Three have become a black hole for tax funding for a variety of reasons and their inability to manage themselves needs to stop now or they are going bankrupt America too.
6. 12/14/08
  
  Majik
  
  It won't just be America that would go bankrupt if the bailout trend keeps going. Canada's economy is suffering from the recession in the US as well and the big three have asked for a total of 6 billion in funds to save all of those jobs. Granted our government bought a lot of mortgages from our banks but our lenders keep trying to get you to lend more instead of freezing credit. If the government were to go ahead with the bail out the big three would be back again asking for more money and we'd be stuck in a never ending cycle just to keep a few big wigs flying around in private jets. Disgusting!
12/19/08

Aoi

I'm glad the bailout died in the Senate and sad that the Bush administration will come up with something of its own. Ford isn't even in immediate trouble, but for some reason doesn't want to see its competitor GM fail. And Chrysler is privately held, but for some reason its holding company wants the gov't to pay instead of taking responsibility.

We need a new slogan: "No, we can't (bailout everyone unconditionally from now until eternity)".

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12/19/08

Anok

The government has decided, instead to go with loans and strict stipulations - include feasible financial standing as early as March.

I think that's better than just a bailout - don't you?

[reply]
1. 12/19/08
  
  satijournal
  
  It will save jobs, but when the CEOs who receive multi-million dollar bonuses need the government to tell them how to run the companies, that's doesn't exactly give you a warm fuzzy that they're going to be any more competitive in the future.
2. 12/19/08
  
  Anok
  
  Well, yeah - from what I understand, they will be receiving substantial paycuts, though.
  
  Serves 'em right
12/19/08

csiunatc

Paycuts?

they should be out on the street, that's the only thing that serves a C-level right when the company has failed.

[reply]
1. 12/19/08
  
  Anok
  
  We agree with that - but I would even go so far as to require paycuts of even the new management coming in.
  
  There is no reason, in my opinion, that CEOs and upper management should be received enormous salaries when the company needs to borrow money to survive.
2. 12/19/08
  
  csiunatc
  
  Absolutely not, the upper eschelon in a company like the big 3 should be compensated on a results basis primarily right now.
  
  If you can find a leader that can take one of those companies and turn it to profitable. He should be well rewarded.
3. 12/19/08
  
  Anok
  
  We agree again? What is the world coming to?!
4. 12/19/08
  
  csiunatc
  
  Reason... lol.. maybe this whole mess will bring about reason..
5. 12/19/08
  
  Anok
  
  Mayhaps, mayhaps.
6. 12/19/08
  
  satijournal
  
  Pay cuts are only symbolic. They receive most of their money from bonuses.