Big 3 bailout?

[BarbaraGordon]

Originally Posted by Mormon Red Death

Yeah... because if GM goes under so do the auto suppliers like delphi, american axle etc... I'm not a proponent of bail outs. I am however pragmatic. 2 million unemployeed with a large share being in Michigan is something american taxpayers are going to pay for whether they like it or not.

But why prop up an unsustainable industry. Why not just transform the industry into something self-sustained?

[Mormon Red Death]

Originally Posted by TripletDaddy

performance and reliability have definitely improved with American cars, but have they truly caught up with the Japanese? I know you can drive an Accord for 150K miles without batting an eyelash. Can you do the same with an American counterpart? I honestly don't know.

I bought my Saturn off the dealer floor for 14k in April of 02. I've put a 100k miles on it in the 6+ years and have replaced the tires once and the brake pads. Barring an accident I plan on getting 250-300k out of it. I get ~30mpg. If I wanted to sell it would fetch 5-6k

The comparable Accord cost 2k more.

Side note... A guy in my ward just sold his 1992 saturn for $1000

[Mormon Red Death]

Originally Posted by BarbaraGordon

But why prop up an unsustainable industry. Why not just transform the industry into something self-sustained?

Hey that would be great. They need something different in Michigan. IMO Michigan has tons of fresh water. They should sell some it to the southwest.

[BarbaraGordon]

Originally Posted by Mormon Red Death

Hey that would be great. They need something different in Michigan. IMO Michigan has tons of fresh water. They should sell some it to the southwest.

That's a start.

This is one area in which I thought Romney was head and shoulders above the other candidates. He had some great proposals for Michigan.

[Tex]

Originally Posted by Mormon Red Death

Yeah... because if GM goes under so do the auto suppliers like delphi, american axle etc... I'm not a proponent of bail outs. I am however pragmatic. 2 million unemployeed with a large share being in Michigan is something american taxpayers are going to pay for whether they like it or not.

I'm not saying it will be pain-free, I just think your estimate of 2 million unemployed is a little high. Even in bankruptcy, GM isn't going to cease to exist or even stop making cars. Someone's going to take over those assets and make it work.

Michigan has been in recession for sometime, which is why it's curious that those folks keep electing Democrats. Granholm is one of the bigger political mistakes that state has made.

[Mormon Red Death]

Originally Posted by Tex

I'm not saying it will be pain-free, I just think your estimate of 2 million unemployed is a little high. Even in bankruptcy, GM isn't going to cease to exist or even stop making cars. Someone's going to take over those assets and make it work.

Michigan has been in recession for sometime, which is why it's curious that those folks keep electing Democrats. Granholm is one of the bigger political mistakes that state has made.

I think someone coming in to take over those assets says..."Screw building cars in michigan Lets build them in brazil, china and india. We pay 1/8 the costs and no unions" Now the big three have been going towards this model for a long time but a bankruptcy just ushers the move faster.

[Mormon Red Death]

Originally Posted by Tex

I'm not saying it will be pain-free, I just think your estimate of 2 million unemployed is a little high. Even in bankruptcy, GM isn't going to cease to exist or even stop making cars. Someone's going to take over those assets and make it work.

Michigan has been in recession for sometime, which is why it's curious that those folks keep electing Democrats. Granholm is one of the bigger political mistakes that state has made.

Agreed... Granholm is a terrible govenor and I was really surprised to see her beat Dick Devos who's strong suit was the economy. It shows how tough it is to beat an incumbent.

[Venkman]

Originally Posted by Tex

I'm not saying it will be pain-free, I just think your estimate of 2 million unemployed is a little high. Even in bankruptcy, GM isn't going to cease to exist or even stop making cars. Someone's going to take over those assets and make it work.

Michigan has been in recession for sometime, which is why it's curious that those folks keep electing Democrats. Granholm is one of the bigger political mistakes that state has made.

Bankruptcy may be the ultimate result, but I don't think it needs to come to that - yet. BK for a huge manufacturing company is a huge risk, because who wants to spend 25k with a company that may not exist? There will be a huge loss of market share and they may not be able to pull out of it.

My contention is that GM and Ford have finally started to do things right and they're clawing their way back - and then THIS happens. I believe that if they can get through this downturn they may be able to succeed and bankruptcy won't be necessary.

[Venkman]

Originally Posted by BarbaraGordon

But why prop up an unsustainable industry. Why not just transform the industry into something self-sustained?

I don't believe it's unsustainable. Yes, fundamental changes need to take place - legacy costs are out of control, union pay is too high. These need to be addressed, and they have to some degree, but those changes won't take effect for another year. GM does need to downsize, but I just don't buy the argument that a U.S. auto industry is unsustainable, not for a second.

[Venkman]

Originally Posted by TripletDaddy

It is interesting to read the shift on both boards.

A month or two ago, maybe more, lots of people clamoring to simply "let the market work it out."

Now that it is evident that this thing is a cluster-f of epic proportions, people are finally coming around to realizing that which some of us already knew....that there are times when government intervention is absolutely the right thing to do and that bailing out idiots, despite their stupid behavior, is in the best interest of society.

Get your checkbooks out friends. You are now paying for my house, my car, and my gas.

Gasp. socialism!

Maybe I'm a hypocrite, because I opposed the wall street bailout but support some sort of auto bailout. I see a difference in that wall street caused the mess and now we're bailing them out? Plus, regardless of how many banks go out of business, we're in no danger of losing our insurance, banking, financial services industries. However, we are losing our manufacturing base and we may lose our auto industry. Huge difference IMO.

However, your point is taken. I generally believe in free markets, but it's not my overriding ideology above all else. What I AM for is an strong independent America full of a free prosperous people. I believe manufacturing and the auto industry are cruicial to maintain our prosperity and freedoms and we're losing it gradually.

Here's where I break with the traditional conservative / Wall Street Journal view. They view America is a market, not a country. Losing your auto industry? Losing your manufacturing? No big deal. Our government has hamstrung industry through high taxes and regulation. Our industry is competing against foreign competition with much lower costs and with governments that support their industries. Yet when our auto industy falters, it's all their fault. Government tax, labor, and trade policy has nothing to do with it. Right.

Yes, I reject the cradle to grave welfare state and the many redistributionist policies. But I do believe that our government has the obligation to give it's industries a level playing field in the global marketplace, and they've done NOTHING in that regard. Should we go the protectionist route? I'm not sure. But protectionism dominated our trade policy until the mid-20th century and it grew this country into the greatest economic power in the world. "Free Trade" has resulted in the loss of our manufacturing base and a loss of real wages in the last 30-40 years. I'm simply no longer willing to buy all of Adam Smith hook line and sinker.

How bout a little economic patriotism? Let's give our auto brethren a little help out of the hole. One we all dug.