What would the effects be if the auto companies didn't get bailouts?

[Knightskye]

I know GM has a propaganda campaign, but what would the effects be if they didn't get bailed out by the taxpayer?

And after answering that, are you for or against the auto bailout?

 

[moostraks]

I can speak from what I see locally to the Lordstown plant and it would,imho, be a catastrophic hit to an already depressed area. Ohio's unemployment fund is already destitute. Finding long term employment in this area is a difficult,slow process. The housing sector would be hit (again). I would imagine you would have plenty of credit card default,loan defaults. The businesses that depend on these folks to purchase their products would feel the hit as the spendable income disappears (this being not just industry related but theaters, restaurants,hobby shops, etc...) Many here are hanging by a thread anyways. So the effect is a snowballed destruction of the economy.

What I don't understand is this is why the banksters threatened the absolute need for the tarp funds. My anger is the banks got the money, saved their hides or purchased up the competition, and then let other industrys fail. So our tax dollars did not prevent the catstrophy the promised to avert and now we can guarantee we will be funding a huge array of social service programs as well as having given money away to the criminals who created this disaster.

I was adamently against the bailout for the banks being aware of what it meant to all industrys. Since they stole the money from us, I think they should be forced to use it in the manner requested. Now we are going to get bit twice as the areas hit will not be able to absorb the loss of this industrial base.

My opinion this is being done to globally level the wealth. It is done to disband unions and villify them for being the cause of the industry's destruction. That way the little people accept whatever morsels are thrown at them without question. Grateful to have the opportunity to serve those with the money who call the tune.

Furthermore the poorer you are the less educated you will be (on average) and the more you will depend on the government provided services. (such as public education). It costs money to educate outside the public sector, even if it is just in lost wages. It costs money to purchase material to educate with items not offered in the public realm (such as the public library). Using the game of chess as an analogy, economic oppression in our society is check mate on homeschoolers who serve as the greatest hope we have to maintain freedom in our society because the government does not decide how the curriculum is taught.

 

[FindLiberty]

I'd notice more Avalon and Lexus cars filling in the gaps in traffic and more happy drivers.

 

[acptulsa]

I can speak from what I see locally to the Lordstown plant and it would,imho, be a catastrophic hit to an already depressed area.

Absolutely. In the end, that plant might just get reopened by a business that can make products and make money, and has enough sense to invest whatever fifty million it comes across in product not lobbying, but in the interim it will be rough.

Very rough. And worst on the people who deserve it least.

What I don't understand is this is why the banksters threatened the absolute need for the tarp funds. My anger is the banks got the money, saved their hides or purchased up the competition, and then let other industrys fail. So our tax dollars did not prevent the catstrophy the promised to avert and now we can guarantee we will be funding a huge array of social service programs as well as having given money away to the criminals who created this disaster.

I was adamently against the bailout for the banks being aware of what it meant to all industrys. Since they stole the money from us, I think they should be forced to use it in the manner requested. Now we are going to get bit twice as the areas hit will not be able to absorb the loss of this industrial base.

I wholeheartedly agree--excepting only that I think the money (which should never have been given to them) should be taken away and used to pay off the national debt.

My opinion this is being done to globally level the wealth. It is done to disband unions and villify them for being the cause of the industry's destruction. That way the little people accept whatever morsels are thrown at them without question. Grateful to have the opportunity to serve those with the money who call the tune.

Yes, but don't confuse the white collar Dilbertian clowns in suits who drove the Big Three into the ground with the victims. Being great-grandsons of Henry Ford does not automatically make you qualified to run $#!+, but being a great-grandson of Henry Ford certainly does mean you won't suffer along with your employees when you screw everything up. Kinda like Dubya's feeling no pain over the economy, the war or anything else he screwed up.

 

[moostraks]

Absolutely. In the end, that plant might just get reopened by a business that can make products and make money, and has enough sense to invest whatever fifty million it comes across in product not lobbying, but in the interim it will be rough.

Very rough. And worst on the people who deserve it least.



I wholeheartedly agree--excepting only that I think the money (which should never have been given to them) should be taken away and used to pay off the national debt.



Yes, but don't confuse the white collar Dilbertian clowns in suits who drove the Big Three into the ground with the victims. Being great-grandsons of Henry Ford does not automatically make you qualified to run $#!+, but being a great-grandson of Henry Ford certainly does mean you won't suffer along with your employees when you screw everything up. Kinda like Dubya's feeling no pain over the economy, the war or anything else he screwed up.

I don't have any faith in them reinvesting in industry in this country until we are humbled enough to accept third world wages. Since once government agrees to take your money they never forfeit the right to it, I figured they should be made to at least function in the manner they requested.(Hmmm..there's a thought) And as far as the higher ups go, the cuts in pay/employees should be across the board but alas that never really happens.

They cut the third shift completely at the Lordstown plant (announced today) and extended the winter layoff 2 more weeks. Wonder if the foreign complexes are being cut back as substantially?? I would be surprised if they are being hit as hard...

 

[acptulsa]

I don't have any faith in them reinvesting in industry in this country until we are humbled enough to accept third world wages.

I think you have your finger on it.

 

[moostraks]

I think you have your finger on it.

 

[Knightskye]

Added a second question to the main post.

 

[Tarabell952]

I am againt bailouts of any private company. That said, I do think that if the auto companies go under, it would be disastrous, especially for places like Michigan. I think the auto companies have been enormously mismanaged, and I don't think a bailout is going to fix their problems in the long term. After they have blown through our taxpayer dollars, they will have their hand out for more money six months or so down the road. Nevertheless, I do think the auto companies deserve a bailout more than the banks did. They more directly affect Main Street than banks do. Also, a lot of their mess is caused by the high costs of paying all their retired empolyees' retirement and health benefits. So at least they are trying to do the right thing by paying their former employees. Nevertheless, I am against a bailout for them all the same.

 

[Deborah K]

I am againt bailouts of any private company. That said, I do think that if the auto companies go under, it would be disastrous, especially for places like Michigan. I think the auto companies have been enormously mismanaged, and I don't think a bailout is going to fix their problems in the long term. After they have blown through our taxpayer dollars, they will have their hand out for more money six months or so down the road. Nevertheless, I do think the auto companies deserve a bailout more than the banks did. They more directly affect Main Street than banks do. Also, a lot of their mess is caused by the high costs of paying all their retired empolyees' retirement and health benefits. So at least they are trying to do the right thing by paying their former employees. Nevertheless, I am against a bailout for them all the same.

I think if the auto companies were allowed to go under, someone will see an opportunity and buy them out.

 

[acptulsa]

I think if the auto companies were allowed to go under, someone will see an opportunity and buy them out.

And considering the level of incompetence we've seen at their helms, I think that this would benefit the nation considerably--eventually.

As for the banks, if they were using the money we gave them for its stated purpose instead of selling their own stock to the government and using the proceeds to perform takeovers of other, non-socialized banks in an attempt to socialize the whole thing (because the government, as we all know, hates competition), industry would be much more stable.

The Big Three has its own set of problems. Many less entrenched and topheavy companies are in a bind because they had a way of doing business, and between the government and a general psychosis among the clowns in suits the banks just up and decided that their good customers can go hang, they very suddenly and without warning had to change their ways.

We live in a fine world for changing all the rules just as you get used to the way things work. The slip from 'keep cash on hand' to 'borrow to meet payroll, because your competitor is and might get a competitive advantage from using its cash reserves against you' was slow and gradual. The switch back was quick and deadly. Its like they decided to shake it all up and see what profit they could get out of the resulting broken pieces...

 

[werdd]

The company would just go under new management. It would still be called GM FORD and CHRYSLER, but there would be new guys and entrepreneurs trying to turn a profit on their new acquisition.

Companies failing isnt always a bad thing, sometimes you can't reward bad behavior and questionable business practices.

 

[Feenix566]

If the Big Three go under, it'll be the best thing that ever happened to Detroit.

Suppose you're a profitable company with a good product and you're looking to expand your operations. You need employees, but they're hard to find. All of a sudden, the Big Three automakers lay off hundreds of thousands of workers in the Detroit area. These are people who are ready, willing, and able to put in an honest day's work, and they need the money you would be offering them. What's the next step? Obviously, you build a new branch of your company in Detroit and start hiring them!

Now, the issue is this: a good portion of the jobs being created by growing companies today are high-tech. That means they require a well-educated work force. The American government education system has shortchanged its students in the area of mathematics, so most factory workers today are ill-equipped for high-tech jobs. The supply of highly-educated workers is severely limited in this country. High tech companies have been lobbying the government for years to expand the number is H-1B visas available to highly educated foreigners to come to America and work.

But like Machiavelli said, an entrepreneur is someone who knows that there is very little difference between an obstacle and an opportunity. The people of Detroit are going to need adult education to fill high-tech jobs. And they're going to be willing to pay for it, too, considering that it's the only available path of career advancement.

I predict that if the government does nothing, we will see a lot of adult schools and high tech companies moving into the Detroit area. The economic boom will be ear-shattering, and twenty years from now the people of Detroit will be celebrating this day.

On the other hand, if the government caves in and bails them out with taxpayer money, then nothng will change. The Big Three will continue to hemorage money, the union overlords will continue to convince everyone that they're the good guys, the American economy will circle the drain, and the high tech companies will simply move their headquarters to India.


I am against the bailout.

 

[WRellim]

Suppose you're a profitable company with a good product and you're looking to expand your operations. You need employees, but they're hard to find. All of a sudden, the Big Three automakers lay off hundreds of thousands of workers in the Detroit area. These are people who are ready, willing, and able to put in an honest day's work, and they need the money you would be offering them. What's the next step? Obviously, you build a new branch of your company in Detroit and start hiring them!

Seriously, have you ever been *IN* a UAW or other "big union" factory???

I have been in MANY over the years, and even in areas of the country with a strong ingrained "work ethic" most such employees do NOT fit the description you gave above. In fact, anyone who accidentally gets into the union and exhibits ANY of the above behaviors is quickly driven OUT of that job (because they would make everyone else look bad).

Sadly, the vast majority of UAW employees, while probably CAPABLE of being hard-working, innovative employees -- are very much "out-of-practice" with those things, because the dysfunctional union/management system they are (still) in does NOT respect or reward that, but rather rewards the opposite. So they have become a large "mob" of whiny, demanding and spoiled children, who do ONLY what is absolutely required of them.

By comparison, I have also been in many well-run non-union factories, and seen what REAL productivity is capable of. (And the difference -- both in attitudes of production employees AND management -- is profound.)

Former "union" workers require substantial "retraining" before they can have any hope of making it in such a different environment; and many have become so set in their ways that they simply are not capable of the effort and "internal change" that it requires.

There was a movie out a few decades back called "Gung Ho!" about a former union plant that was bought and restarted as a "trial experiment" by a Japanese non-union car company -- and while it was a comedy and intentionally exaggerated a LOT of things for comedic effect (and the "solution" is the opposite of what works in reality) -- there was also a LOT of cold, hard truth in the "caricatured portrayal" of American labor demands; and it was much closer to the reality than most would like to admit. (Obviously SOME things have changed in Big 3 factories, but the antagonistic labor/management split -- and total lack of trust exhibited by it -- still remains the primary problem). Managment sucks at the Big 3, but so does "labor."

And I think THAT is the primary reason why you see the foreign car companies building factories everywhere BUT Detroit... it is much easier for them to "start from scratch" elsewhere than it is to try to reform and rework the existing "big labor" areas of the country.

 

[Michigan11]

I know GM has a propaganda campaign, but what would the effects be if they didn't get bailed out by the taxpayer?

And after answering that, are you for or against the auto bailout?

If GM goes, the other two will go with them, along with the suppliers, dealers, the list is endless. An entire idustry that size collapsing, will reach every corner of this country, even the foreign auto companies have stated their suppliers would be in trouble.

That isn't propaganda, it's real, if you don't believe it, then someone should state otherwise, please....

I'm for the bailout if we want a little more time as a country to slowly slide, but I'm against it if people are ready for the Revolution! If that industry shuts down, revolution is inevitible. Does anyone actually disagree?

 

[libertarian4321]

Managment sucks at the Big 3, but so does "labor."

And I think THAT is the primary reason why you see the foreign car companies building factories everywhere BUT Detroit... it is much easier for them to "start from scratch" elsewhere than it is to try to reform and rework the existing "big labor" areas of the country.

Yup.

Management at the Big 3 is inept. Frankly, I think they are paralyzed (in part because of the unions).

But the unions are killing the "big 3".

Toyota and Honda and others come to the US and build cars profitably, but they don't pay the bloated wage and benefit packages that the unions demand of GM et al.

Toyota built a plant here in San Antonio a couple of years ago. They were paying VERY good wages, but significantly less than they'd pay union people.

People were falling all over themselves to get those Toyota jobs. They were paid well, but not at absurd levels. They were also expected to PERFORM- not just do the minimum to "get by" as required of union workers.

GM et al can survive, but they have to be free to compete. You can't compete when every decision has to be run by the union.

They need to be able to hire and fire AT WILL and pay MARKET WAGES. Otherwise, the "big 3" will fail- the "bail out" will just delay the inevitable and cost the taxpayers big time (we'll never get that money back).

 

[libertarian4321]

If GM goes, the other two will go with them, along with the suppliers, dealers, the list is endless. An entire idustry that size collapsing, will reach every corner of this country, even the foreign auto companies have stated their suppliers would be in trouble.

That isn't propaganda, it's real, if you don't believe it, then someone should state otherwise, please....

I'm for the bailout if we want a little more time as a country to slowly slide, but I'm against it if people are ready for the Revolution! If that industry shuts down, revolution is inevitible. Does anyone actually disagree?

Yes, I disagree.

If the "american" manufacturers fail, it does NOT mean all the suppliers, dealers, etc will fail. The DEMAND for cars will still be what it is- those cars will be produced by someone- and those cars will use "parts".

The flow of parts will just go from the GM plant in ONTARIO (they employ more Ontarians than Michiganders) to the Honda Plant in Ohio or the Toyota plant in Texas or the BMW plant in KY or the Mercedes plant in GA? or whatever. Many of the Chevy dealers will start selling Honda or Toyota.

I see little hope for GM and the others, but the ONLY chance they have is to go into bankruptcy reorganization where they can break the unreasonable union demands.

Throwing more money at a failed company will only delay the inevitable.

 

[Deborah K]

If GM goes, the other two will go with them, along with the suppliers, dealers, the list is endless. An entire idustry that size collapsing, will reach every corner of this country, even the foreign auto companies have stated their suppliers would be in trouble.

That isn't propaganda, it's real, if you don't believe it, then someone should state otherwise, please....

I'm for the bailout if we want a little more time as a country to slowly slide, but I'm against it if people are ready for the Revolution! If that industry shuts down, revolution is inevitible. Does anyone actually disagree?

I do. As I stated already. If they are allowed to falter, someone, somewhere will see it as an opportunity and buy them out. I mean after all, isn't that what free enterprise is supposed to be about?

 

[Michigan11]

Yes, I disagree.

If the "american" manufacturers fail, it does NOT mean all the suppliers, dealers, etc will fail. The DEMAND for cars will still be what it is- those cars will be produced by someone- and those cars will use "parts".

The flow of parts will just go from the GM plant in ONTARIO (they employ more Ontarians than Michiganders) to the Honda Plant in Ohio or the Toyota plant in Texas or the BMW plant in KY or the Mercedes plant in GA? or whatever. Many of the Chevy dealers will start selling Honda or Toyota.

I see little hope for GM and the others, but the ONLY chance they have is to go into bankruptcy reorganization where they can break the unreasonable union demands.

Throwing more money at a failed company will only delay the inevitable.

I've not said they should get a bailout, or that it would help if they did. Once those companies claim bankruptcy, the doors will shut, and the suppliers/dealers that are all owed money for rebates, parts, etc., will not be able to operate as well.

There are plenty of vacant plants all over the domestic's have closed and no other automaker wants..

Delphi, can't get out of bankruptcy court either.

 

[Michigan11]

I do. As I stated already. If they are allowed to falter, someone, somewhere will see it as an opportunity and buy them out. I mean after all, isn't that what free enterprise is supposed to be about?

Are we in a free market though? I am all for a free market and I am not saying they should get a bailout, but that the effects of those companies all closing down at once will be a disaster.