With the economic downturn in the US auto industry, it is evident that all the auto companies are suffering great losses. The Congress has also demanded a better chalked out plan from the companies saying that they will be granted aid only if they have a well defined plan. Is the Govt. attitude towards the auto industry acceptable?
Here are my thoughts on bailing out more companies, if the investors would not have started the housing market frenzie and the corruption of the banks, loan officers, mortgage companies etc. were not in cahoots as we should not blame the entire market on subprime borrowers as they banks definitely knew what they were doing. There would not be so many foreclosures which ends up leading to bad credit scores and the car companies would have been able to sell cars. When many had lost homes, those same people were denied loans for vehicles as they were supposedly a credit-risk. I bet that a majority were not credit risks at all they were just screwed by their bank especially if they have re-financed or had balloon payments. The answer to the question is NO , we have bailed out enough and what does our economy still have to show for it? Why are our car companies running around in lear jets, instead of flying economy?
Here is what should have happened 700 trillion is an abundance of money, if they would have sent every household a check with stipulations attached, you have to pay your mortgage, your vehicle, your taxes etc. guaranteed the foreclosures would have stabilized, cars would not have been repossessed and job loss would not have climbed. Thus big companies wouldn't have been knocking on the door for money we do not have. However due to the Country that we are God forbid that our Country give back to the people they took from. It isn't a complicated task if only corporations would not worry about filling their pockets and their CEO's were not worried about their bonuses and investors didn't want to make a quick buck we wouldn't have been in such a mess.
Oh yes AEvans, I do agree with you that if only corporations would not worry about filling their pockets and their CEO's were not worried about their bonuses and investors didn't want to make a quick buck, we wouldn't have been in such a mess. It's merely because of these people, the auto industry is moving towards massive economic downturn.
I tend to tink that the government should not give the car companies a handout, that is , a blank check with no pre-conditions. I think that the Obama administration did the right thing in asking the car companies for some kind of plan as far as how they are going to make their companies better. Otherwise it will be a case of throwing good money after bad money. What I am saying is that the companies just might end up using the tax payers money just to prop themselves up. Once all the money has been spent to keep them afloat, they just might end up in the same dire situation that they are in now. If the car companies are dying anyway, why subsidize them in the short term when the hand writing in regard to their death is already on the wall. If all that money going to do is merely postpone the inevitable, then I am of the opinion that the tax payer's money could be better spent somewhere else.
Unfortunately, the gov will eventually give the auto companies money! I say unfortunately because it would be much better for the auto companies and the taxpayers for them to go bankrupt. At least in bankruptcy they can renegotiate their contracts particularly with the UAW! Currently that contract is over 1 inch thick and includes all kinds of work rules that hamper the flexibility of the companies to run their business. For example, there is a clause that allows laid off workers to sit in a work room doing nothing for up to 2 years while collecting 90% of their pay! Should the taxpayers be expected to pay for that? Another problem with an auto bailout is the inclusion of Chrysler, which is now privately owned! Should the government bail out a privately owned company essentially enriching a few owners with taxpayer money? If they do what about the millions of other privately held corporations, should they too be rewarded? Where is the upside for the taxpayer? Why should we support businesses that have been poorly managed without getting something in return? Unfortunately for the auto companies, the strings that come attached to any bail out money might be too much to insure their survival and the taxpayers might be stuck with a handful of worthless stock.
No, the Gov't should let the AUTO UNIONS die. They are dead weight on the necks of the auto industry..
Obama's new plan to save the economy will fix the auto industry
So, not to worry
Mark, That is someone's blog do you honestly believe many of us will listen to that ridiculous garbage!! It is nonsense.
Yeah. Otherwise known as a joke. I always forget you Christians don't have a sense of humor......
And who's blog is it?
I thought it was pretty funny. Nice job mark.
Thanks Ralph. Some people just can't take a joke. Even though there is a big grain of truth to it.
It is perhaps worse in the UK - The current government has now committed £33,000 per citizen to fixing the "credit crisis." And the only cars made in the UK are made by foreign owned companies. I would like to bet Land Rover Jaguar will be British-owned once again before the year is out.......
We are in for a rough ride - it will take at least two years for the low pound to generate any sort of manufacturing base again. Which is, I assume what they are trying to do. I am beginning to think none of these politicians actually understand what the issue is - or how to deal with it. I see so many contradictory "fixes."
Pretty sure printing more money and persuading us all to go even further into debt to buy a new car is not going to help.
Interesting points, but the industrial impact and satellite businesses dependent on automaker facilities would ravage the economy. The bankruptcy issue sounds positive, at first, for it would help restructure union deals and pensions; but the effects on existing resale values for market products, investment, and warranties would be crushing.
There is a political component to this. While the union contracts are a contributing factor, the Republican opposition will cost it Midwestern blue-collar support. Nancy Pelosi has stated her willingness to help the Detroit Three with legacy costs and union matters.
The key will be with business plans.
The other political component is that lots of Southern Republican politicians are very vocally against helping Detroit because they have Toyota and Honda plants down there and they'd be just as happy to have even more of those kinds of plants down there. They have no interest in sharing that industry with the Midwest.
It really bugs me that so many working people love to bash the UAW. It's like shooting your own foot, not once, but over and over again. I mean, sure, let's bust up all the unions and make sure everyone in the U.S. makes $8 an hour and then we'll all be happy. Because clearly, there's no reason on earth for unions to exist.
Where does that attitude come from? Listen, the average starting wage for a UAW worker right now is $15 to $25 an hour--roughly equal to what Toyota and Honda pay. The $77 per hour figure you hear thrown around on the news by puffed up Southern politicians includes ALL the UAW retirees and the cost of their benefits and retirement packages. No guy on the line makes $77 an hour. If Toyota had been making cars in the US for 100 years they'd have those kinds of costs too--In Japan, they don't have to provide insurance or retirement packages, so of course that's more competitive. Once they're here another 20 years, their costs will go up too.
Richard Fuld, the CEO of Lehman Brothers, was making $17,000 an hour when it went belly up. That's not a made-up number, that's what he was actually making, and he even appeared before Congress and defended his right to make that even though he trashed his company and it failed. But bring up the UAW and people go apesh*t over wages. Where was the indignation over Fuld's salary?
You can't buy cars or houses on $8 an hour, even if you work three of those jobs. If Detroit goes down, the effect on this economy will be devastating. The same people who are saying yeah screw the UAW will be crying and screaming about losing their own jobs in six months as a result of this attitude.
Well, WalMart lost a nonunion guy on Black Friday when he got trampled to death for standing too close to the front door. So there's a job that's open.
I tend to think that in the long run, lettting the Auto Industries sort themselves out is the best choice. I also feel this would have been better for the banks. I feel that taking out loans to pay for bad loans is not a good business plan.
Oh and one more thing--I was married to a UAW worker and had three kids in the 1980s. The first two years we were married I made more than he did even though I worked for public TV as a writer at the amazing salary of $8900 a year. The reason for that is that for at least half of the first two years we were married HE WAS LAID OFF. Yes, he got unemployment compensation but still, at the end of the year, I made more. And at that time he'd been working at the same plant for over ten years. Once he got to fifteen, he worked pretty steady, but before that it was catch as catch can. It really frosted me too, because everyone we knew was all like, "Yeah well Ken works for AM General so you guys have it made," and there he was watching TV half of the year and I was the one making the money.
So it isn't all roses, that's all I'm saying.
At least, that's all I'm saying for now.
The automobile industries have earned a lot since many years. Where are all that money? Businesses have ups and downs and the Government has nothing to do with that. Why the tax payers will pay for them?
They have wasted money for a long time.
Taxpayers are already bailing out the financial industry to the tune of trillions of dollars, and we get nothing back for that. In fact, Citi has been sticking it to ordinary people in many ways and owns lots of payday loan businesses under other names. Helping the auto industry will actually help ordinary American workers, so of course everyone is against it.
I don't think the automakers are asking for a bailout out, I think they're asking for some sort of loan. If it's a loan then they should get it. However, they better start building cars that people want to buy.
I think the US auto industry will survive and grow stronger after learning a valuable lesson that they are not as invincible as they think they are.
Unfortunately, I don't believe these old dogs will learn any new tricks. They've become dependent on politics to preserve their profitable but unsustainable business model. It's time to let them go the way of the dinosaur.
We need innovation and foresight, and I think we're going to need an entirely different kind of company for that.
As for the unions, I agree with pgrundy. Unions exist because corporations, especially the big ones, could otherwise treat their employees as poorly as they wished. Unfortunately, we have seen exactly that happen. Large companies rarely have their employees' best interests at heart. Without unions to level the playing field (somewhat, at least), large corporations have a tendency to abuse their power in the labor market.
I agree if you are saying that the automakers are getting a losn....
I don't see anyone helping out for the average taxpayer.....
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by Deforest 7 years ago
I do agree given that Detroit needs an IV, given that 15 million children are living in food insecure households, given that 3.5 million people will experience homelessness in a given year, given that the unemployment rate is 23%.... Your opinion?
by jerryl 12 years ago
What's your opinion, and the reasoning behind it?
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