Comments on: Uncle Sugar to Bail Out Auto Companies

By: belloscm

belloscm — Mon, 08 Dec 2008 02:36:39 +0000

Still think that a lot of this is kabuki theater masking a "save the UAW" agenda.

Until the fixed labor cost differental that exists between union and non-union auto plants is eliminated (and not by unionizing plants in right-to-work states), the big three are doomed.

As an offset measure, Detroit could increase productivity by a third (increase automation, hire and train a professional workforce), but the UAW will fight to keep that from happening.

It's a shame; I do love my Chevys.

By: Drew

Drew — Sun, 07 Dec 2008 02:04:25 +0000

Kicking the can into the sewer if you ask me. Having started my career in the steel industry, which means in the auto industry as well, I've seen these cats at work.

In Latin: $15 billionus downus toiletus certanus.

Ok, sorry, Julius.

By: odograph

odograph — Sun, 07 Dec 2008 00:27:52 +0000

Kicking the can, that's true. I'm not going to guess the environment in February

By: bob in fla

bob in fla — Sun, 07 Dec 2008 00:02:22 +0000

Of course they are kicking the can down the road. Anything more than this would only be vetoed by Bush; it was just a couple weeks ago he was sayin' No Way to any Detroit bailout. So come February, the new Preside3nt & Congress will end up doing it all again, hopefully with a little clearer idea of how far our economy is tanking. Also, more time to finalize (or not) the rest of the bailout gives them more time to squeeze the most concessions out of the union & companies.

markm, I kinda go along with what you are saying. Detroit hit its peak about 40 years ago & have been downsizing in fits & starts ever since. The labor market & economy was given time to readjust gradually. Imagine what the economic effects would have been if the previous downsizing had occurred all at once. Well, that is the same problem facing us now. Even if GM & Chrysler will eventually fail, no matter what, at least we are buying time to deal with it more effectively.

By: markm

markm — Sat, 06 Dec 2008 23:57:32 +0000

It's not much to be proud of and if it doesn't work out then how do you spin the victory?.

"We supported the auto industry."

(at $15B cheap insurance)

That $15B on the cheap is essentially to get them trough until the next admin takes the wheel. I'm confident there will be a "plan" that will be put in place that will cause some sticker shock. Apparently that jobless report on Friday scared the bijeezus out of some people.

By: just me

just me — Sat, 06 Dec 2008 23:41:11 +0000

I am sick of my tax dollars bailing out companies. It is sad that the big three are struggling, but the government isn't responsible and if we don't stop with this whole "too big to fail lets bail them out" program then who is going to bail out the US government?

It is time to let companies fail-whether they are big or not.

By: odograph

odograph — Sat, 06 Dec 2008 23:40:50 +0000

It's not much to be proud of and if it doesn't work out then how do you spin the victory?.

"We supported the auto industry." (at $15B cheap insurance)

By: markm

markm — Sat, 06 Dec 2008 22:22:45 +0000

You could argue that it's a victory for the Democratic Leadership, who wanted a bailout for the auto companies.

It's not much to be proud of and if it doesn't work out then how do you spin the victory?.

By: odograph

odograph — Sat, 06 Dec 2008 22:20:36 +0000

Anjin, the case was made that AIG's counterparties were more deserving. Not they.

By: Brett

Brett — Sat, 06 Dec 2008 22:12:10 +0000

You could argue that it's a victory for the Democratic Leadership, who wanted a bailout for the auto companies. In three months, they'll be in power with the new Congress, and able to do more - but right now, they're stuck with a less-than-majority Senate.

By: anjin-san

anjin-san — Sat, 06 Dec 2008 22:05:19 +0000

Considering that the Bush admin lost/stole about 15 billion in cash in Iraq, 15 billion to keep the big three in business at a time like this does not seem like such a bad idea. AIG got quite a bit more, are they somehow more deserving?

By: markm

markm — Sat, 06 Dec 2008 21:41:52 +0000

Keep in mind, these companies didn't fail all on their own.

Neither did most of the small businesses which have failed in the last few months, but they're not getting handouts.

Was the money they got not going to them anyhow?. The money was already going to them to piss away on "green" crap. Apparently pre-crisis there were those that thought those three big businesses needed that money for "green" crap...small businesses not so much...but i'm pretty confident if it's possible to bail out individual small businesses the next admin will find a way to do it. Look, were the economy rolling along and these three came up lame i'd say let them fail / file for bankruptcy. As it is, and i'm not alone, were these left to fail under the current economic conditions the results could be the final nail in the economic coffin. So it's either give them a loan and hope it works or they shut the doors as chapter 11 apparently isn't possible (what with money for lending being tight).

By: ew

ew — Sat, 06 Dec 2008 20:40:13 +0000

I'm disappointed to hear that the liberal illuminati allowed that much tax money to be spent on such inefficient companies.

By: ggjr

ggjr — Sat, 06 Dec 2008 20:39:56 +0000

Keep in mind, these companies didn't fail all on their own.

Neither did most of the small businesses which have failed in the last few months, but they're not getting handouts. And its arguable that 15 billion to failing small businesses would keep more people employed than 15 billion to the big three.

By: markm

markm — Sat, 06 Dec 2008 20:08:19 +0000

What will have changed in that time to transform failing companies with little hope of survival into viable ones? Is this just kicking the can down the road and delaying the inevitable?

Well, there will be one hell of a lot less people employed by GM, Ford and Chrysler for one. I'm sure the UAW will make some bigger concessions for another. Much of the "restructuring" and fat cutting has already happened. The UAW contract was redone (needs further tweeking though)but if they should survive into next year they will have competitive compensation with the foreign manufacturers. Keep in mind, these companies didn't fail all on their own. Current economic conditions brought on much of it...hell, if the October "crisis" hadn't have happened I doubt we'd be talking about the big three. Much of what congress says they need to do has been being done or was done over the past few years. That said, if the economy gets worse as predicted and people sit tight with their money, nobody is going to be buying any cars/trucks of any automaker, foreign or domestic. (I see even the foreign automakers are feeling the pinch).