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

[HOLLYWOOD]

Well, take a case like Rubbermaid. There was a very, very well-known American company. They're making all kinds of products, office products, in-and-out trays and garbage cans and all kinds of things in plastics and so forth. And they got into quite a confrontation [with Wal-Mart]. Who's in charge at that point? Was Rubbermaid selling stuff to Wal-Mart, or was Wal-Mart dictating terms of what it wants to buy? ...

... Wal-Mart puts the pressure on these manufacturers to: "Come in here and sell me the same merchandise you sold me last year, but sell it at a reduced cost. And we know you can sell it to us at a reduced cost, because we've been to your factory. We've seen your books. We've seen your cost of product, cost of shipping," so on and so forth, "your wage cost." They look at all that, and they call it "partnership."

So this information technology -- I mean, Wal-Mart makes a big thing about sharing information technology. I guess Retail Link was the software that they had.

Retail Link, that's right.

After Rubbermaid filed bankruptcy, the surviving vendors for Wal-Mart went to the very Rubbermaid plants and bought all the equipment to ship back to their factories in China...

PLEASE WATCH... Running On Empty!

http://www.pbs.org/wgbh/pages/frontline/story/2008/12/should-we-save-gm.html

What we know... It's Obvious that Congress NO LONGER represents the people, oh you may get a morsel thrown here or a very public BS PR bill there, but overall, there's no representation of the people. The Preverse Operations of the Federal and State government on Lies, Theft, and Power need to be halted.

That said, The failure of the big 3, systemic failure of the entire production infrastructure and supporting services infrastructure may be the best thing for the New Revolution.

This dramatic and tragic result may finally light the fires under the butts of the American Sheeple.

"Damn the torpedos...crackout the Pitchforks and torches!"

 

[Michigan11]

That said, The failure of the big 3, systemic failure of the entire production infrastructure and supporting services infrastructure may be the best thing for the New Revolution.

This dramatic and tragic result may finally light the fires under the butts of the American Sheeple.

"Damn the torpedos...crackout the Pitchforks and torches!"

Shut'em down......Full speed Ahead

 

[acptulsa]

Shut'em down......Full speed Ahead

Looks like that's the Senate's answer--at least for the moment. I know times are tough up there right now. Good luck and Godspeed. Hope the bitter medicine leads to a faster recovery for you and yours.

 

[Michigan11]

Looks like that's the Senate's answer--at least for the moment. I know times are tough up there right now. Good luck and Godspeed. Hope the bitter medicine leads to a faster recovery for you and yours.

Thanks, I have been making plans to relocate and restart my biz in another state, possibly Texas, but I'm watching things very close right now.

 

[HOLLYWOOD]

Thanks, I have been making plans to relocate and restart my biz in another state, possibly Texas, but I'm watching things very close right now.

Do extensive research and use contacts and posts...

Find a state with low State taxes for small businesses and well as NO STATE INCOME TAXES!

NO BAILOUTS! NO SOCIALISM! NO COMMUNISM!

The American government: failed capitalism with a debased currency, massive debt, Centralize government, Centralized Banking system, Spying on Americans at Will, #1 Prison State Population, Torture, Empire around the world, attacking countries, forcing weaker nations to indoctrinating policies through numerous means. Dictating what countries citizens may visit... so much law, legislation, and limits on the people. Managing on the state of paranoia everyday!

I think we're more Communist than Fidel Castro's Cuba! Just more polished!

 

[Minuteman2008]

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.

If GM collapses, for example, the fact that they owe so much money to various supplier for parts already manufactured will cause many suppliers to go under, which in turn will cause the still-standing domestic automakers to fail because they can't get parts. It will be a dominoe effect.

Those parts, for the most part, are not going to foreign transplant auto makers. Those companies only use about 35% American made parts, and even less American steel. It is a much higher percentage of parts American made for most of the big three's vehicles manufactured in the US.

I'm not saying a bailout is a good thing necessarily, but they are competing against foreign car makers who are subsidized by their own governments and even our own state governments in many cases. Using free market arguments in this case is kind of disingenuous.

Also, without a domestic auto industry, there is no reason for foreign automakers to continue to build cars here when it is still cheaper to manufacture a car overseas and ship it here. It is the threat of not being allowed access to this large market that they are here in the first place, and without a domestic auto industry there would be no threat. I'm all for more foreign transplants building cars here, but to pretend they support anywhere near the amount of jobs as the American automakers is plain wrong when you consider where their parts and steel actually come from.

The "bloated" wages are all across the industry too. Toyota pays their workers an average of $24 compared to $28 for GM. It is the legacy costs which are the difference.

 

[Number19]

Out of the Box

I don't know enough to fully understand the pricing difference, but one possibility to a revival of the American auto industry would be to change sales from dealerships to direct factory purchase through an Internet strategy.

I recently purchased a new rifle from out of state. The gun was shipped to a local, licensed dealer, who charged me a small fee.

Auto "dealers" could serve the same purpose but would primarily provide the warranty and maintenance for the industry.