Should we have an auto bailout?

BaldEagle · #1 (**permalink**) 11-12-2008, 04:23 PM

Does anyone find anything surprising in this?

Failure of auto industry could set off catastrophe: Financial News - Yahoo! Finance

I'll have to say I was stunned can you guess why?

TechnologyCoordinator · #2 (**permalink**) 11-12-2008, 04:39 PM

I'm not keen on the idea of bailouts, but if even just one of those auto companies colapses we're in a crap-load of trouble in terms of the amount of job losses.

But at the same time, the free market would want one of the companies to colapse, that would leave the other two VERY healthy and the limited demand would be split up among fewer people.

I'm rather anti-union and I feel that the UAW has done a rather large dis-service to itself. The increasing demands of the UAW has made the big three uncompetitive. Many auto-workers are vastly over-paid for what they do and their are tens of thousands of people willing to do the same job for less pay and no golden pension.

**brentpresley** · #3 (**permalink**) 11-12-2008, 04:44 PM

Let em die.

prozac26 · #4 (**permalink**) 11-12-2008, 04:54 PM

No.

They were making terrible cars for so long, now they are suffering. It's their own fault.

No way should they get taxpayer money because they can't make a proper car that people want.

I'm with Brent, let them die. And have companies like Toyota and Honda should get incentives to build more cars here in North America.

**randomizer** · #5 (**permalink**) 11-12-2008, 05:00 PM

Quote:

Originally Posted by prozac26

And have companies like Toyota and Honda should get incentives to build more cars here in North America.

Then you would get some real cars. Toyota FTW.

prozac26 · #6 (**permalink**) 11-12-2008, 05:03 PM

Quote:

Originally Posted by randomizer

Then you would get some real cars. Toyota FTW.

That's the point.

ElMoIsEviL · #7 (**permalink**) 11-12-2008, 05:06 PM

I know it would be disastrous for Ontario's Economy but I say no way. Government should not be bailing out private enterprise.

**MagicLess** · #8 (**permalink**) 11-12-2008, 05:10 PM

I thought we were free market in our society, government funds should go to the people, not entities that make the world worse.

**Sirrobin4ever** · #9 (**permalink**) 11-12-2008, 05:30 PM

I'm going against the grain, here, but I'm saying bail them all out. I know everybody is saying they built crap cars, but really, did they? In MI, at least, a car these days is much more likely to die in a car accident or rust out than die of catastrophic mechanical failure. Ford and GM build rock solid cars, IMO. Then again, when 30% of the workforce in my state is auto workers, I may be a bit (lot) biased.

**Viperabyss** · #10 (**permalink**) 11-12-2008, 05:42 PM

They are going to be bailed out. There are just way too many things at risk if any of them is allowed to collapse. I think we'll see a merger of two companies, and thus consolidates and reduces excessive spending. Think about how many politicians' heads are going to roll because of government's failure to bail out auto-industry.

*Viperabyss opens his wallet, only to find dust bunny jumps out*

**CapnBFG** · #11 (**permalink**) 11-12-2008, 05:44 PM

Quote:

Originally Posted by prozac26

No.

They were making terrible cars for so long, now they are suffering. It's their own fault.

No way should they get taxpayer money because they can't make a proper car that people want.

I'm with Brent, let them die. And have companies like Toyota and Honda should get incentives to build more cars here in North America.

I don't think these statements are accurate, especially the part about not making what people want. They were making exactly what people wanted: trucks and SUVs. If they weren't selling well then they wouldn't have been the focus of development and production. If you remember this headline, it was only this year that the F-150 was finally dethroned as the #1 selling vehicle in America.

I'm not sympathyzing with them or saying they shouldn't have had a backup plan, but it's inaccurate to say they didn't make what people wanted. People's preferences and spending habits just changed drastically this year. Yes there has been a trend towards gas economy for a while now, but the costs of inefficiency didn't become a serious issue for people until recently.

And as for making 'terrible cars,' could you be a bit more specific on that? I can't speak for Chevy or Chrysler, but my family has owned a number of Fords and none of them were terrible. Our '97 Explorer has about 220K miles, and my dad and I were the primary drivers, so those were hard miles

. Our '99 F-150 has been great all around too -- excellent power and reliability, and storage space that was required for all the crap I took with me to college. My dad's '05 Explorer has had issues with some of the electrical nonsense that they put in these days, but nothing serious has gone wrong. Oh, and I can't forget about my '83 Bronco that's still going strong today -- I brought it up here with me when I moved in case we get more snow than my Subaru can handle.

Now, with all that said, no, we shouldn't bail them out.

halbhh · #12 (**permalink**) 11-12-2008, 05:52 PM

I voted no bailout, but I can imagine a kind of alternative that is somewhat of a bailout, but not really. Instead of just handing them free cash for nothing, I could see us taxpayers loaning GM, etc. the cost of taking over their healthcare responsibilities. So for X dollars, a loan from the treasury, GM, Ford, etc., no longer have health care costs, immediately cutting their expenses and allowing them to sell cars cheaper and compete with autos built with little or no healthcare costs from their competition.

After that, it could be sink or swim. With reduced costs, they might be able to attract private investment, if they can come up with convincing plans.

ElMoIsEviL · #13 (**permalink**) 11-12-2008, 06:05 PM

Someone might want to have a look at this (I know it's Rachel Maddow but I'm pretty sure most folks here would agree with her statements in this video).

YouTube - Rachel Maddow Show: Banking Industry Bailout Rip-Off

It's about bailouts and how the government sneeks out extra gifts for the Corporations.

TechnologyCoordinator · #14 (**permalink**) 11-12-2008, 06:26 PM

Quote:

Originally Posted by halbhh

I voted no bailout, but I can imagine a kind of alternative that is somewhat of a bailout, but not really. Instead of just handing them free cash for nothing, I could see us taxpayers loaning GM, etc. the cost of taking over their healthcare responsibilities. So for X dollars, a loan from the treasury, GM, Ford, etc., no longer have health care costs, immediately cutting their expenses and allowing them to sell cars cheaper and compete with autos built with little or no healthcare costs from their competition.

After that, it could be sink or swim. With reduced costs, they might be able to attract private investment, if they can come up with convincing plans.

I believe the automotive bailout is a loan, not free cash. Right now the big three are having MAJOR issues with the credit crunch, they are unable to obtain funds.

**logainofhades** · #15 (**permalink**) 11-12-2008, 06:27 PM

*resists urge to tell off those that said no*
My job is on the line if gm or ford go under.