Bailout For American Car Companies

[Queenz]

Vote

[SMeeD]

Ya know, I would hate for all of those people to lose their jobs but I would like them to go the way of Oldsmobile and AMC.

[Waco]

No, but those poll choices are retarded.

[Kash]

You could have provided simple yes, no, not sure options and then let us provide more detail in our posts. As waco said, these options are otherwise pretty stupid.

[DLS2008]

I agree that the choices are dumb. But I think they should only be bailed out if they are forced to make major changes to get the money. I mean, an unskilled factory worker making $40 an hour? what the heck!?!?!?!? C'mon people, get it straight. Their healthcare is better than my mom's who works for a . hospital for crying outloud!!! Closing plants and laying off workers doesn't save money since the workers still get full pay!!! Are they dumb?!?!?!? Your plant closes and you don't work anymore, but still get full pay!?!?! Why am I going to college for Computer Engineering again???

[mrsinister]

Foreign cars FTMFW!! boooo down with American Automotive's

 

?

 

[personancog]

i would hate to see all those people/robots lose their jobs, but i think there needs to be alot of very extreme changes enforced in the way they are run.

 

 

that said regardless of weather or not they die and go away.... ill still buy a toyota over any American car [ except the camero( an i only like the old camero's)]

[slick2500]

Screw bailing out Wallstreet, and all the huge corporations how about a bail out for all the American people, especially the unemployed.

[kingdingeling]

Look at the giant heap of crap GM represents.... 'nuf said! I mean, 3 brands with the exact same cars just under different names....

[Kash]

I've had this auto bailout discussion at another forum I frequent. Here's my take:

 

Ford says CEO will work for $1 to get gov't loans

 

The article quotes the CEO of Ford admitting himself that his company may not even need the bailout, it's simply backup money in case anything happens in the next year or so. GM and Chrysler are definitely more in need of the bailout. So I can see how giving Ford money may not be a bad idea, because if they don't end up using it, they'll just give it back to the government (while collecting a good amount of interest, but that's besides the point).

 

Ford's CEO has also stated the many cuts they'll be making, in both operations and labor, along with several plans to innovate and move the country back toward profitability. Regardless of whether or not Ford gets bailout money, the company is still going to shut down 606 dealerships and sever contracts with 750 suppliers. So giving them a bailout doesn't exactly save the little guy. Now of course it's not exactly the same for Chrysler and GM, where a larger number of dealerships will shut down and suppliers will be hung out to dry. So there's a case for providing those companies with bailout money. While there will be some government imposed changes, there's nothing the government can do that will achieve the same type of self-induced change Ford is proposing, bailout or not. As the article from BusinessWeek, linked below, states, bailing out GM and Chrysler will be "a life support solution, not a cure."

 

The Case Against a Bailout

 

I've been doing some searching and I haven't found anything where the CEOs of Chrysler and GM promise to make the type of changes Ford proposed of their own volition. All I keep hearing is that the government is going to force these companies to change, but government control into the intricacies of a business never works out well. I wouldn't be surprised if Ford goes ahead and does spectacularly well while GM and Chrysler get stuck begging for another bailout in a year's time because the government was unable to force the companies to change. True, effective change comes from within.

[d3bruts1d]

No, but those poll choices are retarded.

You could have provided simple yes, no, not sure options and then let us provide more detail in our posts. As waco said, these options are otherwise pretty stupid.

+1

 

 

 

 

If I mismanage my finances, would the government do anything to bail me out?? No. In fact, over the last several years, they made it more difficult for people to file bankruptcy.

 

I don't think the auto industry, the unions, wall street, or anyone else needs a bailout. If they crap up, they need to suffer just like anyone else. And well, they've all done nothing but crap up for years, and now it has come back to bite them in the ..

[robAP]

NAFTA was signed. Thats the first part to this puzzle.

 

some of the conditions of NAFTA created this whole problem, and when the economy tanked, it magnified it.

You see, under the NAFTA agreement, profits made overseas get taxed once the monies return to US shores. That tax rate is just a little too high, so what happens is that these automakers foreign divisions have billions tied up OFFSHORE after years and years of profits overseas. If they ever tap into that money, they loose hundreds of millions in taxes, just to bring that money home. So now you have the US-based parts of these companies just getting along only alright, and then the economy tanks. that alright becomes "holy crap were loosing our shirts" because now everyone stops buying and making their cars last longer.

 

So lets take Ford as an example. Ford-US is broke and struggling. Ford-EU is quite profitable. The parent ownership company owns both but the money cant be moved between the companies without loosing a significant part of it, and that's money that can be used by Ford-EU to remain profitable and inventive and progressive. Same thing with GM. GM worldwide has money, but GM us cant use that money unless it gets a huge tax chunk taken out. worldwide, they badly need it so its worse for them.

 

So partly the manufacturers make substandard regular cars for the masses. THIS IS TRUE. I have not ridden in a more "flexible flier" than a new at the time Pontiac Sunfire. (admittadly this was just a few years ago) just going around the corners you can hear the plastic dashboard panels creaking against each other as the car flexes and the panels rub. pathetic. The most reliable American vehicle I ever had was a 1997 chevy S-10. actually not a bad vehicle. The plastic radio adjustment knobs cracked and fell off before the power-train warranty ran out. too bad it didn't extend to the cheap plastic crap used elsewhere. Doing general maintenance involved removing 3 layers of things that don't break to replace the thing that does break, usually in awkward angles of body position to get to it. My wife's Ford Focus (2001 model) is a Ford of Europe product! and my experience? EASIEST freakin car i ever worked on. Plug-N-Play best describes it. side mirror replacement in that car took me 8 minutes. In the s-10? 1.5 hours because i had to remove multiple parts of the door first, including the whole inside panel! Focus? just a nice neat cap pops off, 1 bolt, a connector, done....because it's a foreign car in essence. designed to work in Europe. built with a different mindset. I sold my S-10. It only had 74k miles. We bought a Toyota RAV-4 because it does NOT BREAK. it stays together. it Lasts. If gM build a decent vehicle that could match the RAV-4, I would have bought it. I do not trust GM and its maintenance. and i especially do not trust its engineering.

 

Look at the 70's. What happened when fuel prices spiked and the economy was dropping? the Foreign cars began to kick out butt, and the American cars really took a big huge dive in quality. someone took their new car to GM and set it on fire out front the gates of the HQ building back then. thats how pissed everyone was. Oh my whats happening now? economy, fuel prices, oh no the US guys are broke and the foreign car makers are kicking our butt again? gee....no wonder....chrysler is trying to sell its brand with explosions and trucks jumping through fire. cause thats what i want in my daily driver truck. something that can survive explosions jumping through fire. (when the heck am i going to find that while driving to the job-site? never, unless I work at an explosion and jump-ramp factory) yep. i prize that attribute more than the cabin plastic bits falling off in 5 years. plastic cracking. seat foam collapsing. CD players skipping 3 years after purchase. I drove a 79 volvo until it was 21. amazing vehicle. not a single american sedan can last that long and be in as good a shape as that car was....And I beat the living Snot out of it. Literally. we're talking rally-racing type of abuse. and that was a 79 product that only weighed 2900 lbs. American manufacturers can only build their vehicles out of Bull-poop for so long before it all decomposes and gets eaten by flies. If i was to put money on a US manufacturer, i would pick Ford. I am most likely going to buy a Fiesta when it arrives here in the future. because its a european car built to THAT standard. not the donut mushy american standard that we have been given as the only option and become accustomed to.

 

So my vote cant be made up above. It's a combination of manufacturer and government idiocy making the problem. $700b given to banks wont solve the problems, but $700b given to infrastructure projects will.

Edited December 5, 2008 by robAP