Dems want automakers to show bailout spending plan (CNN)
by BenthamiteNovember 20th, 2008 at 2:05 PM
Filed under: News Story Commentary
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Should we bailout automakers? Tough question. For one, most domestic cars just don't drive or last as well as foreign ones. This is just the truth. I have an American rental at the moment that at 20K miles is about to implode, not to mention drives like a tank. Secondly, if we truly believe in a free enterprising economy, then why would we bail them out if they suck and can't cut it in the first place? Let's allow the market to evolve. Here's the paradox of bailouts, in a squashed sense: On one hand, people demand less regulation, and it always amazes me when 1) proponents of deregulation are middle class, 2) would not benefit an ounce from companies finding ways to increase profit, 3) are the most likely to get burned by the cause they are advocating based on principle (e.g., Enron, lending crisis, and, of course, the auto bailout). It's not a matter of job security, as I'll explain below. These workers just need to work for better companies. On the other hand, we end up providing bailouts on the promise of increased regulation and accountability. Is it just me, or does this seem like a manipulative strategy benefiting big business higher-ups, as these individuals fly their private planes to congress? Back to the auto question, if foreign cars are better, period, then why don't we just screw the bail out and provide tax incentives for companies, like Toyota, to create more jobs in the U.S.? This would mean more jobs that workers can be proud of, more cars with excellent reliability and residual values, and less crappy autos (we'll let the independent service centers worry about adapting their business models for post-junk-auto survival). If we do bail the pitiful 3 out, we'll be further in debt, thickening higher-ups pockets (i.e., paying their bills which are past due), and left dealing with more crappy cars on crowded sales lots. See the references for this article. |
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Even the members of Obama’s auto task force don’t drive cars from the “Big 3”
Auto team drives imports
OK, so now what... Are we going to use $21.6 BILLION to FORCE consumer demand?! If no one wants the cars, then quit making them, geez.
GM says it could need up to $30 billion in federal loans, while Chrysler asks for $9 billion. Both say bankruptcy will cost taxpayers more; also announce job cuts. (CNN.com)
Let's just pull the plug, quickly! This situation is turning into the most ridiculous thing ever---undoubtedly something future generations will refer to as a mistake! Let's have these cars leave while there's still hope for fond memories, not to mention future value as collectible items.
Good points, Julita. That was brazen arrogance on my part, since nothing is really black and white, especially concerning the credibility of autos. I really think that even a particular model is never manufactured that same, like jeans, where the printed size isn't always reliable.
But I do see the deal as a negative, as many GOP officials are now publicly stating. Bailouts are temporary fixes, as we're being told, and it's just unfortunate that tax payers bear the cost.
Back home, the american made car is a luxury. They are known to outlast the owner. Even in salt water conditions if it is treated like a baby it will last. We take away the american car what else is there. Remember that incident with lead in toys? Out of ten items in my home: 9 made in china, 1 made in india. Nothing of america. I like american made things even if it were just clothes. I feel it's time America take back that culture and let it become a household name again. Now, everyone's entitled to their own opinions and this sure is my opinion. julita
Round two on the auto bailout.
My commentary to excerpts from the referenced article:
Big Three want more money in bailout
(CNN.com)
As part of its plan, Ford announced that the salary of Ford CEO Alan Mulally would be cut to $1 a year if Ford (F, Fortune 500) actually borrowed money from the government.
General Motors (GM, Fortune 500) said that CEO Rick Wagoner also will accept a $1 salary. Chrysler LLC CEO Robert Nardelli is already being paid only $1 a year, according to the Chrysler plan.
Does this mean they won't resign immediately following the bailout?
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In an effort to cut costs, GM also suggested that two of its brands - Pontiac and Saturn - could essentially be dropped.
Again, I ask, why doesn't GM just get dropped?
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This is part of an urgent request for federal funding to create 'a new GM' - a lean and fully competitive company.
I think this part was meant to be a joke.
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Ford and GM also announced plans to get rid of corporate jets.
Is this where we are supposed to feel sorry for them?
I agree with most of this. First, what a PR Nightmare! No one told the big 3 NOT to fly to DC in private jets! Yikes!!! \
The begining of the end for American cars started in the late 60's early 70's. This is when American car companies realized if they made a car that broke down more Americans would have to buy new cars. (bad business plan) The problem now is that if these Big 3 fail millions of jobs will be lost. Even Pat Buchanan says you need to bail them out! Why? If the government does nothing and they fail everyone will blame the government for not stepping in. Yes, the car companies have made poor decisions but it's not their fault the economy is in the tank. That is large part the governemnts fault for too little regulation. So what do you do? I say that the government should give the bailout but only with these guidelines: 1)The CEO's step down 2)They "Go Green" 3)Since we will be using tax dollars to bail them out anyone who buys a new car from the "BIG GREEN 3" will get a major tax benefit.
No one likes the idea of bailing them out...and if we weren't already in such a bad place with the economy I suppose you could let them fail. But the way it looks right now, the government does not have the luxury of allowing the market to evolve when millions of Americans jobs are on the line.
It is a CHAIN OF BAILOUTS. Thanks Marc
References
Visit (http://www.cnn.com)
Toyota assembly and parts plants
Visit (http://www.toyoland.com)
A debate on why American cars suck
Visit (http://www.topix.com)
The best thing for GM is going to be Chapter 11. It will allow them to rid themselves of the UAW monkey, and streamline their business. Some numbers I have heard were that 60% of the cost of a GM vehicle goes towards salaries and legacy. The better run Honda, Toyota, etc. have labor costs around 30% of their vehicles.
The rest goes to the dealers, suppliers, raw material costs, overhead to run the plants, etc.
Figure that one out.
-Todd