White House readies rescue for U.S. auto industry
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0
adaydream
george bush ran his mouth already that he hopes the auto makers fail and go bankrupt. Now he's backtracking because they really might have to declare bankruptsy if the goverment doesn't help. If they declare backruptsy, not only will he have the absolute worst record of any president in American history, but the results could be cataclysmic to US industries.
I'll be glad when the republicans are out of control in the whitehouse and congress. We been screwed enough. < :-)
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GJDailleult
A cynic would say the Senate knew this was coming.
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proxy
I can't remember; I may have been critical of Bush in the past but I believe he has made a wise move here.
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timorborder
And while Rome burned! If and when the big three go bankrupt, there will be a ripple effect throughout the economy. These companies employ so many people and impact so many businesses, such an impact cannot be avoided. So while Rome burns, President Bush and Capitol Hill play party politics. This is a disgrace. I would suggest that everybody take keen note of what happens in the next couple of weeks. If the clowns on both sides of the aisle cannot come to some agreement, just remember pay back at the next election.
0
Sarge
"seeking access to a line of credit"
How about not spending money you don't have? Nah...
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smithinjapan
Geez... wouldn't you know it; I was actually siding with the GOP on this one, and bush steps in to 180 his previous stance and bail out the morons in the UAW. Pathetic. The man was desperate not to be the one to have to do anything, saying 'it's up to congress', etc. and as adaydream pointed out, now that they actually are going to go bankrupt bush is going to have to s%&t or get off the pot. Of course, him doing either amounts to sh%& anyway, like everything else in his presidency.
What a sad sack of a man.
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Betzee
It's hard to know who to be more disgusted with. The auto companies, which have steadfastly refused to alter their business model and embrace the future, namely hybrids, or those who voted against the bail-out on the grounds articulated by Senate Minority Leader, Mitch McConnell, specifically “a government big enough to give us everything we want is a government big enough to take everything we have.”
That's the type of thinking that got us into the worst recession in a generation. GWB knows this is on him, he opposed state government efforts to regulate the mortgage industry. One in ten Americans is now receiving food stamps. The outgoing prez will not want more added to the ranks of the unemployed on his watch and will provide money from the original bail-out package to tide the industry over.
I don't have the inclination to invest the time to reach an informed judgment on the matter given the diverse range of opinions on who bears responsibility for bringing the Big 3 to the brink of bankruptcy. How much would the provision of national health care ease the financial burden on the auto makers, for example? But public money should not be extended without clear benchmarks for the auto industry to roar into a high-mileage future. If they continue turning out gas guzzlers, it keeps us dependent on foreign oil. And when the price goes back up again the same finger pointing over who is responsible for the dearth of drilling on American soil (and water) will consume the public debate. Enough!
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TooFarGone
I have a tough time believing the same 'progressives' who want us all driving little eco-pixie mobiles are as worked up as they say they are, especially the ones from countries that have never even manufactured cars.
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skipthesong
the ripple effect would hurt Mexico more than anything.
"Fewer than half of the parts on some Big Three vehicles are made in the U.S." http://edition.cnn.com/2008/US/12/12/american.cars/index.html
No bail out. The government, either Repub or dem, over the years has spent money recklessly, politicians such as California Dem Daine Fienstein can't even balance their own check books... The government of today should stay the hell out of business because they don't know a damn thing about it.
Bad enough we give them money, they are going to take over health care - yikes, and now they are going to put their hands in the biz. What's next?
0
TooFarGone
Let Detroit build the kind of big ol honkin SUV and pick up trucks Americans like to drive and own.
Start drilling domestically. That alone adds hundreds of thousands of new jobs.
Lower the corporate tax rates in Michigan and Ohio, and then nationwide.
Get an economic wiz like Romney - a son of Michigan - to oversee the restructuring of the industry.
0
Sarge
"We been screwed enough"
You ain't seen nothin' yet, daydreamer.
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skipthesong
You ain't seen nothin' yet, daydreamer."
You are very right. Start moving your money out of the states now!
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Triumvere
WTF.
Has Bush gone insane? Is he determined to stick his finger in the eye of the American public one more time on his way out? The bail-out is massively unpopular with the people, and with Bush's own party. But, if there is one thing we've learned, it's that Bush loves a failure, and is determined to make them as spectacular as possible.
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SuperLib
What you say about hybrids is simply not true. Form and GM trail only Toyota and are ahead of just about everyone else, especially European and Korean car makers.
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adaydream
skipthesong I checked out your link. I've been saying all along that this would end 2 million jobs, but I hadn't even considered the foreign hands effected by not saving the Big 3.
Like it or not, we've sunk $350 Billion on AIG, Lehman Bro, etc and they went belly up because they were riddled with derivitives, which are paper backed by nothing.
Then we have the Big 3 looking for $34 Billion and they actually have a product and not worthless pieces of paper.
The GOP is more than willing to watch all these lives get ruined because they want to get rid of the UAW. They are more than willing to watch all these foreign workers loose their way of life because they hate the UAW.
I'll be glad when Jan 20, 2009 gets here. I hope that it's not too late for the Big 3. < :-)
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skipthesong
The GOP is more than willing to watch all these lives get ruined because they want to get rid of the UAW. They are more than willing to watch all these foreign workers loose their way of life because they hate the UAW."
No, and stop the lying. Forieng companies yes, not foriegn workers....
First of all, let's get down to business. When you are uncompetitive, you either change or you go bust. Shame on the UAW, with all the money they have in their coffers do you think they are going to let go some of their cash? I doubt as history has shown, the big wigs of the unions have made lots of cash while the workers made nothing while picketing and losing money and god forbid the they wanted to go back to work; what's the word - scab?
The US government has no right to rescue industries every time they fail..
Like it or not, we've sunk $350 Billion on AIG, Lehman Bro, etc and they went belly up because they were riddled with derivitives, which are paper backed by nothing." and the politicians who pushed for that bail out should be shot on sight.
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skipthesong
Get rid of that union, and maybe I'll back a bail out.
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adaydream
Excuse the hell out of me for my mispelling. So you're now the English monitor?
My posting is my opinion. Not a lie. Are you in the habit of calling your debaters liars? I guess your post is based on some substantiated evidence? Or is it also conjecture on your part? < :-)
Moderator: Readers, please keep the discussion civil.
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skipthesong
Look, the Hill is touting this as "American" industry. Well, the US was once #1 in steel, its all gone. We were once #1 in manufacturing, its all gone. WE were once #1 in shipbuilding - its all gone.
suck it up, face reality and move on.. time is being wasted. If I were an Auto worker, I'd be moving south right now and begging for a job.
0
smithinjapan
adaydream: Sadly, I didn't get a chance to see the post you are talking about (unless it's way back when) nor a chance to belittle the person who made it. I have no doubt it was one of the few remaining bush supporters on here who makes more mistakes than he/she would care to have highlighted, so they've no right to ridicule you for a few typos. Some posters on here make such unbelievable errors (and not intentionally) that it actually becomes impossible to discern what they want to say from what they've said.
Anyway, as to the article, I'm curious as to why bush insists on slamming the door on his way out. He's made enough of an a$$ of himself as the worst president in US history, and will already be remembered as such, so why go on to add yet one more disaster to the mix?
The funniest part about this whole thing is the posters who come on here and poke fun at Democrats and liberals saying, "See what the democrats get you? Heaps of spending with no restraint" etc., using the GOP position to back themselves up, but STILL defend bush, who is against the GOP's decision. Utterly baffling, it is.
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adaydream
Taka313 stop it. I'm dieing here. Not spending...money.. we ain't got OMG < :-)
0
Betzee
This is extracted from an article published on 15 October 2003:
As recently as this summer [2003], during the Big Three's annual assassination of higher mileage standards proposed in Congress, industry shills argued that the proposed increase for cars -- 40 mpg by the year2015 -- would be impossible to meet. The technology would be far too expensive; the weight reductions needed would create flimsy death traps; consumers simply would not accept the anemic performance such high mileage requirements would impose.
Moreover, the automakers argued, requiring such increases would tie up capital, intellectual and otherwise, that Detroit needs to develop fuel-cell technology. The Bush administration and the Big Three are touting the Freedom CAR initiative -- a program to bring hydrogen fuel-cell vehicles to market, which received $1.2 billion in the Energy Department's budget for 2003 -- as a visionary alternative to the dreary incrementalism of federal mileage standards.
Have faith, America, and take another toke off your asthma inhaler. On some as-yet-unspecified date, on the golden horizon of the hydrogen economy, Detroit will deliver the ideal car, clean and powerful, trailing only clouds of noblesse oblige.
Forgive me if I'm skeptical. The most optimistic estimates put the mass marketing of fuel cells more than a decade away. It makes zero sense to give Detroit a pass on improving emissions and fuel economy now for some promised land of milk and money in the future.
Well, the Prius (pronounced PREE-us) gets 60 mpg -- the highest fuel mileage of any mass-production car sold in the United States -- and Toyota did it without subsidies from the federal government and much less posturing than the Big Three's promising to save the world when they get around to it.
What boggles my mind is the wasted business opportunity. Consumers want high-mileage cars. In Los Angeles, the entertainment industry's pretty young things are lining up for the Prius. The first generation of the Prius sold a modest 5,600 units in the United States in 2000. (According to wiki: That sales pace has accelerated in early 2008, with 66,100 vehicles sold in North America in the first four months, a rate that would result in nearly 200,000 sales if continued through the entire year.)
But fully a third of GM's research budget goes toward the far-fetched future of fuel cells. As a matter of policy, the company regards hybrid powertrains as merely an interim solution. The company may yet be rewarded in the marketplace. As a matter of energy policy, Congress should not allow attainable gains to be held hostage to tomorrow.
'Nuff said.
0
Betzee
Really? Honda is launching a new, low-cost hybrid car in early 2009 in an effort to cut the lead of Toyota in the green car race.
Prius has become synonymous with hybrid vehicle which puts other manufacturers at a disadvantage. It's like when Xerox dominated photocopying, people would say "I want this xeroxed" when Xerox was a company which made photocopiers rather than the process of duplicating a document itself as the verb "xeroxed" implied.
0
sailwind
Two interesting articles on what Congress has been doing on the taxpayers dime as far as another nice little perk.
We pay for their car leases, isn't that nice. And the cars they like to tool around in ain't exactly eco-friendly.
Unbelievable.
http://firstread.msnbc.msn.com/default.aspx?full=1
http://articles.latimes.com/2008/may/01/nation/na-cars1
0
SuperLib
Betzee why not just take 5 minutes and find a list of hybrids offered on the market today and check out the companies who produce them instead of cherry picking articles that compare the entire US auto industry to one company: Toyota. If you do spend that 5 minutes of time I think you'll learn a lot about the industry. If you don't spend that 5 minutes of time then I think it's pretty obvious your main goal is to spread propaganda and little else.
'Nuff said.
0
JoeBigs
There are two reasons why the GOP is willing to let the big three die . One is that the GOP has a hatred of the Unions. The GOP's hatred so so strong that they are willing to see these old companies die and harm the nation just to have their way
The next reason is the Southern GOP Senators have a vested interest in seeing that the big three are ruined. It all has to do with foreign auto factories in their home states. If the big three are gone then their states will become the main auto producers in the United States.
Sad sad sad how much Republicans truly hate the United States America. They would rather let the country suffer rather than help it.
I wait for the next elections so I can see the GOP lose more of their strength for their anti-American ways. These guys need to go they need to be replaced for their treasonous ways!
I find it funny how the GOP is trying to protect foreign companies rather than American companies! They wrap themselves in the flag while all along trying to destroy the country.
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Betzee
That's what I read (and anything worth discussing knowledgeably takes more than an investment of five minutes to research):
Will the Big 3 ever top the Prius? (11 December 2008):
The poster child of fuel economy
I'm an advocate for the Chevy Volt. The Volt and, more important, the E Flex Drive powering the Volt, demonstrate that GM is preparing for the future.
Unfortunately, however, 100,000 Volts per year is still many years away. In fact, even though the 3rd generation of the Toyota Prius is set to launch next year, Toyota will probably be rolling out the 4th generation Prius by the time GM is ready to start producing 100,000 Volts per year. By then the Hybrid Synergy Drive powering the Prius will be vastly different than today's version.
Which will be better? Which will be more cost-effective?
On the other hand, Chrysler....well, I don't even know what to say about Chrysler.
Fortunately, Ford's new hybrid powertrain represents some hope, and early Fusion hybrid reports indicate that Ford has a hit on its hands, maybe. With plans to only produce 25,000 Fusion hybrids next year, it's hard not to be a bit concerned. Likewise, why didn't Ford roll out its new hybrid powertrain in a unique, hybrid-only vehicle? Thus, I cannot help but wonder if Ford's new hybrid powertrain is cost-effective, for instance. Still, Ford is a wild card.
http://www.hybridcarblog.com/
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Betzee
This is part of a larger fight over unions yet to come.
All of them have been offered tax breaks from the states to set up shop there, not exactly the paragon of free market capitalism the Senators are touting. And all of them are assemblers, not manufacturers. Big Diff.
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Betzee
I don't know whether to have pity or contempt for someone who can't visualize data in a bar graph:
The on-sale date for the Honda Insight is April 22—Earth Day—and the automaker is projecting global annual sales of 200,000, half of which are for the North American market. But Honda is known for erring on the conservative side, and given that it will go head-to-head with the Toyota Prius, which has sold almost 120,000 in the first eight months of this year in the U.S. alone, we would not be surprised to see Honda exceed these modest forecasts.
0
timorborder
If the level of debate on this thread is anything to go by, then the US car industry is dead! Pass me some nails to slam into the coffin. Seriously, rather than playing politics for a few cheap points, all elements of the political spectrum have to imagine what the collapse this manufacturing base might actually mean. It ain't that good.
The right wing of the political spectrum need to realize that this is not the time to go union hunting. The left wing (and particularly the unions) also have to get off their mind altering drugs and realize that the industry as it stands is on its last legs. GM is apparently going to run out of dosh by the end of the year. Chrysler is also going down the tubes. My questions to the various parties are as follows:
The Unions - Is it better to make a decent wage than no wage, I hear Detroit is rather cold in winter when you cannot paying the heating bills? You have to understand that having your collective snout up the companies' nether regions is sucking those companies dry. Stop seeing employment at these companies as one endless gravy train and grow a brain, work with management rather than against it. If your pig-headness continues you will all be living under freeway overpasses.
The Politicans - What a bunch of blowhards - both right and left. This disaster is another to happen on GWs watch, what an absolute a-hole. Be responsible and do something about this mess. Don't look for cheap political points at a time like this, people's livelihoods are at stake. Also if you believe that the auto industry needs to be efficient, start by getting out of those gas guzzlers and drive something more suitable. It is called leadership, exercise it or resign - that means all of you.
Management - There's the door. Don't forget to close it on your way out.
0
smithinjapan
Yet more disaster to happen on bush's watch. Not only does the guy cause the recent economic distaster and claim 'life is joyous' in an interview, but he then goes on to continue, one last time, to make life hell for a lot of people. Good job, GWB... and I do sincerely hope the door hits you in the back of your head on the way out.
0
SuperLib
Sorry Betzee but until you wean off your addiction to comparing the entire US auto industry to the Toyota Prius you're never going to be able to compare the US industry as a whole to other countries as a whole. Didn't you realize something was up when all of the articles you posted talked about one car only? I've yet to see any of your articles mention BWM, Mercedes, Audi, Volkswagon, Kia, Hynudai, Mazda, Isuzu, Jaguar, etc. If you want to see how the US competes with other countries as a whole you're going to have to open up the analysis to actually include other countries and not just one car from one company from one country. You've narrowed the race to the Prius vs. the US while ignoring the rest of worldwide auto industry....so instead of being second in the world behind Japan the US is suddenly "last" compared to the Prius.
I'll try to give you some information as I understand it. My information may bot be perfect but it at least exposes you to the different areas that should be included in the discussion.
If you look at the hybrid offerings on today's market, they're dominated by the US and Japan. No other country even comes close, period. Could the US have done better? Yep. Could they have done a lot worse and be in the same position as the European and Korean auto makers? Yep. Overall they're better than average but worse than Toyota.
The US dominates the truck market, and people link that to poor fuel economy, then that feeling of poor fuel economy leaks over into the passenger car market. But in reality the US, when compared to similar models from foreign competitors, once again compares favorably in that regard. The comparison being made is apples to oranges and mentally people are making an incorrect assumption without really looking at the numbers.
There is one area where the US needs improvement, and that's the subcompact market. That's their biggest weak spot and an area where the Japanese dominate. The US just doesn't offer anything attractive in this market and it's important not only because it offers cars with good fuel economy but it's also the entry purchase into car buying for a lot of people, so the US has to work hard to win over customers that are already driving models from other countries when they decide to upgrade later in life.
Subcompacts have a lower profit margin and are harder to produce efficiently. The Japanese have the upper hand since their country is already dominated by miniaturization. The US has the upper hand in the truck market and that's where they focused since it was profitable and they have near full market penetration. The US has tried to break into the subcompact marked and failed, the Japanese have tried to break into the truck market and failed. Some countries are just better suited for certain product types.
The US does need to bring more fuel efficient cars to the market through the subcompact line. But that's different than the hybrid market and that's different from other product lines where the US is able to compete. Right now people seem to make the analysis using the Prius vs. the F-150 truck as the example of fuel efficiency between companies and that's just not comparing apples to apples. Compare our trucks to theirs, our sports cars to theirs, our full size sedans to theirs, our hybrids to theirs, etc. And do that globally, not just with Toyota. Using Toyota as your example is as relevant as someone else using Tata only then claiming that the US is the best.
Toyota is the world leader right now because they had the profits to invest in money losing technology and sales which is what hybrids are. They are money losers for companies. Toyota takes profits from the Camry and uses it to subsidize losses from the Prius. Not many companies can afford to do that whether they're American or not. GM came out with the EV1 in the 90s and finally had to pull the plug because they couldn't make it profitable, but it's not like they weren't trying to experiment with the technology.
The auto industry debate is a hot button for a lot of people and emotions start to run wild. If you want to say that the US needs to build more fuel efficient cars then I'd agree....in the subcompact market only. I won't agree if you're talking about hybrids or non-subcompact cars since the US already competes with foreign companies. The Big 3 have a perception problem more than anything else. It's the same with their quality where now companies like Ford are rated equal to or better then Honda, but the average person on the street doesn't know it.
0
YangYong
So... Capitalism as we 'knew' it is gasping for breath. Simply 'buying American' is not going to even go close to solving what is essentially a USA caused catastrophe. What you are watching is a result of greed, unadulterated greed on the part of an economic model that America for decades has said, ‘Watch and Learn’, well, no, because all it lights up the darkness with is ‘Crash and Burn’. Buy American? To what end and more importantly… how? There’s no money, don’t you get that fundamental of this crisis?
...and it is the poor in America and elsewhere that will be the true victims, and it will be VERY ugly. Americans have no savings, they are broke. The crooks who spurred this financial melt-down will take billions in personal wealth with them to their tax havens. US corporations have long since stopped being American. Why all this boo-hoo about great American industry? They have and will happily transfer from New York to Dubai or Mumbai, or Shanghai. The exodus is already under way. And because American insfrastructure is now among the weakest in the OECD, foreign investors will cease operating plants in the US as soon as it is clear that the US market is drying up.
So the empire will die, it will be a slow change, because the merging world cannot afford and will not permit a rapid one. America's main problem is that although it is defeated all the time, it refuses to accept that reality. In the American psyche, winning, at any expense, even the brains of children splattered against the wall, is all that matters. Meantime, Americans will continue strutting and threatening to kick butt in war, in business, in belief, waving their flags. USA! USA! USA! (Fade)
0
apecNetworks
I would advise the Big 3 the same advise I gave Toyota when they were going down the tubes - keep the ball in play the best way you can and to work on a new type of car from the R & D Department. The Big 3 has more internal problems, but it is best to keep the ball in play and got to get the UAW to see they are an important factor in the success of future developments. Toyota took my advise to heart, took a deep breath and came up w/ the Prius. One of the Big 3 may be able to do the same thing, but not all of them.
0
apecNetworks
Correction:
.....would advise the Big 3 the same adviCe I gave Toyota....
The Big 3 haVE more internal problems.......
0
apecNetworks
Another correction:
Toyota took my adviCe to heart...
Corrections are endless.....
0
Loki520
Let them fail. This is a recoverable concern. This "bailoutapalloza" has got to stop. Every freaking industry can claim "catastrophe" if they collapse due to piss poor management. LET THEM COLLAPSE. The economy, and those workers effected, will recover.
And remember.... this bailout did not pass because the UAW refused to allow pay cuts prior to 2011. They wanted to continue with the same pay scale for another TWO YEARS. In other words... they want everyone else to feel the pain of their industries mismanagement except them.
LET THEM FAIL. With Obama creating 2.5 million more jobs, there is sufficient employment for the entire industry.
0
smithinjapan
SuperLib: "The Big 3 have a perception problem more than anything else. It's the same with their quality where now companies like Ford are rated equal to or better then Honda, but the average person on the street doesn't know it."
The Big 3 have a good deal more problems than perception, but perception is a HUGE part of the game, in which case they're failing any way you slice it. And in no way is the company up to par with or better than Honda... no way. You may say "it's not fair!" and whine and cry when one vehicle is not compared to exactly the same type of vehicle in another company, but your whining aside, that's part of the point: one company is focused more on the fuel efficient cars while the other is focused more on massive gas guzzlers. Some on here have no qualms whatsoever of comparing American SUVs with what they LM calls 'pixiemobiles' when he believes it works in his favour, but then when you talk about fuel efficiency you can't suddenly switch gears and say you have to compare the exact same things.
The Big 3 should fail, and that's all there is to it. They've had plenty of time to become more competitive in ALL markets, but chose to take the easy route and mass produce quick sells at the sake of the companies' future, their competitiveness, and the environment. If that's not the case, why are they begging for bailouts and guaranteeing (in words only) that they'll develop more environmentally friendly cars 'to increase competitiveness' (with Japanese companies)? Seems pretty stupid to promise if they already are that competitive.
0
FromEurope
I agree wikth smithinjapan. In stead of helping the Big 3 just to survive, they should use the rescue money to make a brand new company(which will hire the part of the actual workers in Gig 3) and start from zero. For the future of American Auto industry, it's better than to try to bandage the bleeding companies.
0
Madverts
I don't understand the problem. Nobody told me that not only driving heinously un-economical and un-reliable cars would not only burn the finite resources of planet earth quicker, but would also end up in tears one day if Americans were selfish enough to Blinker La La it right to the bitter end...
I demand cheaper gas and a bigger engine. I'm not driving some imorted crap. My ego, and the school run deserves it...
0
Madverts
On that note, if these companies have to be bailed-out, raise gas taxes to European levels immediately and use the taxes to buffer these ridiculous loans.
American igenuity might return then...
0
Betzee
It's important to appreciate the role of "first-mover advantage." Toyota reaped that with its Prius. It's gonna to be hard for any other company, regardless of nationality, to challenge its dominance of the hybrid market. Though certainly a niche in a much larger industry, hybrid vehicles reflect innovation of an existing product. Detroit, by contrast, has little to show in that regard as Tom Friedman made clear in a recent column:
[S]omeone in the mobility business in Denmark and Tel Aviv is already developing a real-world alternative to Detroit’s business model. I don’t know if this alternative to gasoline-powered cars will work, but I do know that it can be done — and Detroit isn’t doing it. And therefore it will be done, and eventually, I bet, it will be done profitably.
And when it is, our bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay. It will be remembered as pouring billions of dollars into the CD music business on the eve of the birth of the iPod and iTunes. It will be remembered as pouring billions of dollars into a book-store chain on the eve of the birth of Amazon.com and the Kindle. It will be remembered as pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet.
What business model am I talking about? It is Shai Agassi’s electric car network company, called Better Place. Just last week, the company, based in Palo Alto, Calif., announced a partnership with the state of Hawaii to road test its business plan there after already inking similar deals with Israel, Australia, the San Francisco Bay area and, yes, Denmark.
0
UnagiDon
"Big 3"? The need for a bailout seems to imply that's the wrong name for them, unless "Big" refers to accumulated debt.
0
Sarge
Madverts - "raise gas taxes to European levels immediately"
We're not that mad, Madverts.
0
SezWho2
Loki520,
To say that the reason that the bailout did not pass is that the UAW would not accept a pay cut, is like saying that the reason that Julia's face might have been eaten by rats is because Winston did not want his face eaten by rats. A more direct reason that Julia's face might have been eaten would be that Big Brother thought torture was acceptable.
The reason that the bailout did not pass was because the Republicans in the Senate are being ideologues rather than pragmatists. For the size of the industry involved, for the conditions imposed by the House on the use of the funds, by the clear message that this is temporary and the industry must quickly show that it can reform itself--the paltry billions on the table were a good investment. If you want to be outraged by useless waste of billions of dollars, there's always the defense budget--and that's to say nothing of two protracted and miserable wars.
0
Betzee
Sez,
As Andrew Leonard wrote in his salon.com column:
No one asked the rank-and-file employees of Citigroup or AIG or Morgan-Stanley to cut their salaries in exchange for government handouts. Assembly-line workers at G.M. and Chrysler, on the other hand, must tighten their belts.
The economies of Michigan and Ohio are already in the dumpster. Darker times are ahead. And yet, at this critical, perilous juncture, Senate Republicans have decided to pick a fight with the working class. My guess it will be a long, long time before either state ever votes for a Republican for president again.
The question is can Detroit reform itself? Drop the lawsuits against the state of California for its higher emission standards and start innovating. Because if you don't, somebody else will (as is already happening).
0
presto345
Hundreds of thousands of job losses? And, so? What percentage of unemployment does that amount to? Astronomical? Gimme a break. Small west european nations have had to deal with similar situations in the mid 1960s. They did not support losers that will continue with their old 'we-know-it-all' ways. The only gain to be made from bailing out the die-hard-never-learn losers is political. Economically it will still be a disaster.
0
Betzee
The Center for Automotive Research said that if Detroit's (former) Big Three -- GM, Ford and Chrysler -- fail, it will mean the loss of 3 million jobs across the entire auto sector in the first year of collapse.
Well, one in ten Americans is already collecting food stamps due to the collapse of other sectors of the economy (like real estate). GWB will support a bridge loan through January 20 at which point it becomes Obama's problem.
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presto345
Still interested in a percentage . . .
This country doesn't know when to prepare for and fight a real war.
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adaydream
So the bottom line is george bush told the automaker, screw you.
You can't get past the fact that george bush said that the automakers needed to fail. An industry that effects millions in the United States and possibly another million in foreign countries. Virtually he was telling Americans, screw you.
Then he has to eat his words when the senate GOP plays union busting and he can't let the Big 3 fail. Too many people are effected, especially after the unemployment rate is already 6.7% and ready to jump to 6.8% with the latest round of job losses.
When the automakers loose the Big 3, get ready.
Then we get to pay unemployment, pensions and health benefits for retirees, job training, increases in crimes, more homes lost to foreclosures, lost taxes and..... The list goes on.
Like we can really sustain this. < :-)
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Betzee
Presto,
Do the math yourself:
Unemployment increased to 6.7 percent in November, after 533,000 people got thrown out of work in just 30 days. During the past 12 months, 2.7 million people lost their jobs. And, finally, what every one of them already knew was officially declared: the country has been in a recession for a year.
It's clear some have little idea how to use descriptive statistics to maximize understanding. Market share tells you all ya need to know; number of players in the market, by contrast, illuminates little.
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Betzee
adaydream,
GWB's interests now diverge from those of the Southern Republicans Senators. The outgoing prez wishes to minimize further job loss on his watch; they, by contrast, see Detroit's woes as an opportunity to expand auto assembly, which translates into jobs, on their turf.
Where the Republicans can be faulted is in their encouraging Detroit to resist innovation. The current administration, backed by Republicans in Congress, supported the auto industry's lawsuits to overturn California's higher emission standards.
I don't understand the mentality of the management in Detroit. Where I worked, in Silicon Valley, there were tens of thousands of small companies led by people such as Shai Agassi who like to solve puzzles. That's what drives innovation. I never heard of anybody thinking blocking change was the route to market dominance. It's a short-lived strategy that is now blowing up in Detroit's face.
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adaydream
The majority of GOP senators who voted against this were southern senators with foreign automakers in their states. They are looking for a way to break the UAW and allow their foreign automakers to take control.
It is in their personal interest, their state's interest and not in the nation's best interest. < :-)
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SuperLib
I don't think I'm going to be able to change the minds of the ignorant masses, but I did give it one hell of a shot. My guess is that the government will step in anyway. In the end there's really no point discussing the matter with people who know little to nothing about the auto industry overall, is there?
Anyway, get your torches ready and sharpen the pitchforks. When the government does step in we'll have to hunt down some witches and offer them to the Gods!
Ta.
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apecNetworks
This is an outrageous statement, but I believe I could save one of the Big 3 if given a free hand - can obtain complete access to the RD Dept., acquire the top 5 auto engineers in the country/world retired or not, able to cherry pick top consultants outside the industry. Luck has a great deal to do w/ this. However, the car itself is not the problem, but rather something else (example:political), and whoever implements a radical change would be subject to "torches and pitchforks" (watch the original movie, "Frankenstein"). Even if someone saves a car company, the monetary compensation would pale to the heat encountered after the change. It's someone's worst nightmare.
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JoeBigs
I was surprised when GW's administration began to talk about undermining the far right's agenda and help the big three. I think that GW may have realized that he may have made some big mistakes and is now trying to do his part.
I for one support GW on this and hope that he will follow through.
Now to SuperLibs attempted baiting, if you believe that someone is ignorant because they wish to save the American auto industry then that is your belief. But I for one would like to see that American owned companies stay in business.
But of course I am not a far right thinker. As we all know the far right and their supporters have been attempting to destroy the middle class for the longest time. This is proven by the amount of good paying U.S. jobs that were lost to outsourcing during the Bush administration.
The dream of the far right is to be able to make 500 dollars on a 5 dollar part and if they only have to pay someone 50 cents an hour all the better. Unions and regulations helped to keep businesses honest and on course. But since the late Clinton and all of the Bush administration deregulated business the U.S. middle class has been quickly disappearing.
What I find hard to understand are all those who are middle class or below who support the far right and their agenda to destroy the middle class.
Why support the group that is taking your jobs away? I will never understand following leadership that would have you begging in the streets for scraps off their table. Slavery to a super class is not my dream. I for one want to make money and advance in the world.
Under the far rights leadership the Middle Class has been left out in the cold. For their attempted destruction of the middle class the far right has lost much of their power.
But the sad thing is they still have support from those they are sending to the poor house.
Sad for those that support them. To die poor for a belief is a stupid way to go.
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Loki520
Name calling, name calling.... oh by the way the funding of the two wars.... so forth and so on...
Know how you can prove people are gonna toe the party line without even thinking about it. When the topic is a bailout of the big 3 and someone then 1) defends the unions, and 2) compares the cost of the bailout to that of either war, much less both.
"Yea.... the industry is failing, but at least Brittney's new album is good" is JUST as relevant a statement.
For those defending the union.... what is the ONE condition that the GOP asked for that they didn't get? That's right.. a cut in union wages to that equal of the Toyota workers. The UAW said NOT until 2011, and then the bailout fails. So... following the logical conclusion, the bailout failed because an innocent person was killed in Iraq.
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smithinjapan
SuperLib: "My guess is that the government will step in anyway. In the end there's really no point discussing the matter with people who know little to nothing about the auto industry overall, is there?"
You're right that the government is going to step in regardless of what people think. Bush has already damaged the Republican party to the point of splintering, and destroyed his name. The election is over the Democrats won, so what does he care if he goes out with one more suicidal bang?
As for the rest of your comment, 'There's no point talking about this with people who don't understand' is exactly the type of comment we hear a LOT from people who understand little or nothing on the topic themselves, but assume an air of superiority and say this as 'the last word'. Taro Aso is a shining example, among others. Cheers!
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Betzee
That's my opinion, adaydream. Now there's some evidence foreign auto-makers will scout globally for design talent, but there's a very real possibility the US auto industry the southern Senators are promoting would simply be shop floors where imported components are assembled. That means a whole lot fewer people would earn their livelihood from the auto industry than in the heyday of the Big Three.
The question is, what are we going to get with this bail-out money? In January Mitt Romney declared, "If I'm president of this country, I will roll up my sleeves in the first 100 days I'm in office, and I will personally bring together industry, labor, Congressional and state leaders and together we will develop a plan to rebuild America's automotive leadership."
Such talk reminded more than one person of the future promoted by the British Tory party in the 1970s. Needless to say, it didn't come to pass. Britain's Leyland went under despite a series of generous bail-outs to the ailing auto company. Those promoting this bail-out as a the solution to Detroit's woes need to explain how the outcome will be different. SuperLib kinda glossed over that in his posts.
Those who don't want to bail-out Detroit probably assume laid-off workers can find other work. Not in this economy, however. Regardless, this is my problem with the neoclassically envisioned model of globalization, namely those who lose their livelihoods can pick up and go elsewhere where there's work. It's a lot harder than it sounds. When I was in my 20s I gave up the life I had for the allure of the unknown. A lot of opportunities did materialize and I was in a position to take advantage of them. But I can't imagine doing that now. The sunk costs of life's accumulated decisions weigh you down and limit your mobility.
I guess I would put my money on entrepreneurs coming up with a new vehicle to replace those which run on fossil fuels. (Disclosure: I have in fact done that). This won't solve the problems of lack of opportunity for those with little more than a high school diploma but it will put the US back in the forefront of the innovation game.
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Betzee
Tom Friedman has written some great stuff:
As even General Motors conceded in its apology ad last week: “At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster.” Walk through any college campus today. You don’t see a lot of Buicks.
Over the years, Detroit bosses kept repeating: “We have to make the cars people want.” That’s why they’re in trouble. Their job is to make the cars people don’t know they want but will buy like crazy when they see them. I would have been happy with my Sony Walkman had Apple not invented the iPod. Now I can’t live without my iPod. I didn’t know I wanted it, but Apple did. Same with my Toyota hybrid.
The auto consultant John Casesa once noted that Detroit’s management has gone from visionaries to operators to caretakers. I would say that they have now gone from caretakers to undertakers. If they are ready to bring in some visionaries and totally restructure — inside or outside of bankruptcy — so they can make money selling cars that people will want to buy, then I say help them. I’d hate to see the Detroit auto industry go under. But if all we are doing is prolonging auto undertakers, then we have to let nature take its course.
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SezWho2
Loki520,
What name calling are you talking about? Is it the words ideologues and pragmatists that throw you? The Senate demand that the UAW reduce its compensation package to be on a par with that of non-union labor in foreign-owned plants is entirely adventitious. There is no reason to believe that the industry can reconstruct itself by requiring the auto-workers to give up their contractually bargained compensation.
The Senate demand is outside the scope of the problem whose solution is under consideration here. And what is under consideration is a stop-gap measure which is designed to see if the automakers, stockholders, labor and lending institutions can on their own devise a reconstruction plan which would merit continued government support after the stop-gap measure expired. The Republican Senators were fixed on the notion that union wages are the problem. They were not looking at the bigger picture. If you object to me calling such people ideologues, that's fine. I'm not attached to the word.
I think you can tell when someone is toeing the party line by seeing whether they think that (1) unions are indefensible and (2) budgetary comparisons are suddenly irrelevant. When you mix this with attempts to respond to an argument by attacking statements which were never made nor implied (e.g., "the bailout failed because an innocent person was killed in Iraq") you get a partisan response from the gutter.
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zurcronium
300 billion for citibank, 140 billion for AIG and then for the US auto industry. Nothing. Did the outright failures that are citi and AIG deserve to be bailed out by the repubs?
Its all politics really and has nothing to do with reality. That is the way of the repub senators in the south who want to protect their toyota plants. Simply amazing and yet another reason why the repubs are going down the tubes everywhere except the dipship south.
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Triumvere
People are operating under the assumption that a "bailout" is necessary to save the industry. That's an assumption that needs to be examined. From my point of view, the argument that bankrupcy, and the resulting restructuring, is necessary to save the industry is far more compelling. Lets face facts: Detroit will not reform itself. Either it must be done via bankrupcy, or of via Obama's "car czar" establing direct governmental oversight of the industry. The question is do you trust the gov't to get the job done, or the "natural" process of bankrupcy.
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Betzee
The problem with bankruptcy is that it's the kiss of death as far as future sales go. Now who's gonna buy a car from a firm which has been through bankruptcy? It's too big an item for most consumers to take such a risk given that there are solvent alternatives.
It's very different from buying a plane ticket from an airline which has been through Chapter 11. We're talking about a six-hour ride versus a substantial purchase expected to last at least several years.
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Triumvere
I don't know; It's not like I'm an expert in consumer psycology, but it seems to me if they go through the processes and rebrand themselves as the "new and improved" Big Three, then I think people will buy the cars. It will be an uphill battle, to be sure, but then they are already fighting (and losing) such battle over consumer opinion now. In anycase, the "Big Three" need to get a whole lot smaller than they are currently. The issue with the "bailout" option is that, if the gov't doesn't do enought to force restuctring (management out, concessions from UAW, etc...) then the Big Three really will crash and burn in the not to distant future.
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WilliB
Triumvere:
The only way to get out of the "legacy costs", i.e. the suffocating union contracts is by bankruptcy. No?
LOL! That would be a sight to behold! Obama and Nancy Pelosi micromanaging the auto industry? Maybe a people´s car, designed by committee, in the footsteps of the Yugo, the Trabant, or the Proteus? I´d LOVE to see that.
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Betzee
WilliB,
I looked in vain to see what you advocate as the solution, since you didn't offer one I assume you advocate "do nothing"?
I think Nick Kristof makes good sense:
Think of a bailout as part of the huge planned stimulus package. It’s much cheaper to keep people in their existing jobs than to create new jobs elsewhere.
I lived in Tokyo in the 1990s, as perfectly reasonable arguments for government restraint led to acquiescence in the face of escalating economic disasters. Anyone who lived through Japan’s “lost decade” understands that the risks of inaction are greater than the risks of action.
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Triumvere
WilliB,
That's more or less what I'm thinking; I am fraid the gov't won"t go far enough to challagne the Unions (or the Management for that matter - let's face it, UAW is not he only ball & chain dragging them down.) And, while hybrids and fuel efficiency are good, the major focus needs to be put on making profitable cars, not economically friendly ones. (there's no reason you can't have both, but you need to have your priorities straight if you intend to save the companies.)
Betzee,
What can I say? Chapter 11 is a risk, one that may well blow up in our (America's) face. But I'm not seeing "bailout" as being a safe bet either. Hoe deep do we dig the hole before we finally have to bite the bullet? Or, do you think the car czar can put detroit back on the right track? Personally, I want the Management and the Union Heads out. I don't think Detroit has any real chance at innovation or efficiency until that happens.
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Betzee
Triumvere,
This is what NYT's resident neocon William Kristol has to say to about this situation. (I don't agree with his stance on where the problems with the industry lie but he is right on the money as far as the right's agenda as exemplified by the southern Senators):
[O]n the right, free-market analysts have explained that our regulatory scheme of fuel-efficiency standards is counterproductive. But despite the fact that the government is partly responsible for the Big Three’s problems, the right hasn’t really been stirred to enthusiastically promote a deregulatory agenda to help the auto companies. What excites it is mobilizing to oppose bailouts for unionized workers.
To get out the red Detriot will have to make cars people want to buy. Even though the price of gas has dropped down to levels not seen since the eary part of the decade, my guess is most consumers will be leery of buying gas guzzlers since it could (and will) shoot back up again. A lot of people who'd bought SUVs with borrowed money, sometimes in the form of a five-year loan, were stuck filling up those tanks last spring.
In a capital intensive industry like auto manufacturing, economies of scale are critical to profitibaility. You have to make and sell so many cars before you can turn a profit. This acts as a strong disincentive to get into new lines of vehicles, such as eco-friendly cars. If it will take Chevy years to sell 100,000 Volts, well they are years from profitability. By contrast, Toyota's Prius is already profitable. Those profits can be reinvested to make an even better vehicle.
Toyota is reaping the rewards of first-mover advantage; few people have heard of the Volt which has no performance track record. By contrast, everyone who wants to buy an eco-friendly vehicle knows about the Prius and that's the first vehicle prospective buyers will look at. Detroit has got some work ahead of it, that's for sure. But if we're going to plow public money into it, oversight is essential. That's what the car czar would provide.
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Triumvere
Betzee,
Fuel efficiency is undoubtably a critical part of the innovtion Detroit desperately needs. What I am trying to say is that any steps taken need to be practical first, and ideological second. Kind of like how cutting emissions is important, but you have to be realistic about what you can achieve, otherwise you risk cripppling your economy, and ultimately the abandonment of the targets you set (look what's happened with Kyoto...)
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bdiego
The White House is proving to be a chump just like their Treasurer. It's amazing how fast "We'd never just hand you money" caves into "Here you go!" The White House needs to understand, this isn't your money!
Too many people have their head in a hole thinking $14, $25, or even $50 Billion will result in anything but bankruptcy for GM and Chrysler. They're going to fail, and money on the scale we've discussed isn't going to solve it.
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TooFarGone
"The economic consequences of either a partial or total shutdown of the Detroit Three are stark," said the report.
"Either scenario is sufficient to push Ontario into a deep recession while the nation may barely escape one in the 50-percent reduction scenario."
Likin them apples, zurc and smithinjapan?
http://www.breitbart.com/article.php?id=081216191048.6a9sr3wo&show_article=1
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