To bailout… or not

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1. Phantom says:

   November 17, 2008 at 2:24 pm

   Pandora,
   Unfortunately the auto industry has so many tentacles in the domestic manufacturing and finance industries that a full on failure would lead to massive unemployment >10% across the country and would only slicken the already slippery slope of the economy. Now a coordinated restructuring with government supervision and regulation could allow for a relatively smooth transition to spreading the pain to all parties without causing the massive hemmoraghing of employment and domestic manufacturing capabilities. Any bailout can’t be like what just happened with AIG and financial firms or else it will only exacerbate the current problems as it will essentially be flushing billions down the toilet to deal with another day. Think about it as a pond and the auto makers are a stone that takes two hands to lift and throw. You don’t need to throw it very far to see the waves and then ripples that are created from it sinking.

2. nemski says:

   November 17, 2008 at 2:34 pm

   Take a look at this article, http://www.tnr.com/politics/story.html?id=a4893b49-36df-4784-9859-2dfa3a3211bf

   Also, I can’t find the link, but I read that 10% of America’s workforce is somehow related to the automobile industry. Is that a risk we are willing, even able to take?

3. jason330 says:

   November 17, 2008 at 2:38 pm

   No.

   And yet I understand the sentiment that it is sickening think about bailing out executives that have done such a horrible job.

4. a. price says:

   November 17, 2008 at 2:40 pm

   They should be saved. If the big 3 fail, the ones responsible for it… i.e the inept CEOs and all those running these companies who failed to keep making a quality product that people wanted… will be rewarded with golden enemas. The punishment will fall on everyone who looses their job because of it. What SHOULD happen, is these companies be forced to re-tool. They get the money to survive, but they will have to drastically raise fuel efficiency standards. Boone Pickens brings up CNG trucks will reduce emissions and are more fuel friendly. Hybrid, or full electric cars are doable and more affordable than ever to make. In order for the American car companies to be saved, they should be forced to only make these better cars. The market has spoken and people by and large (not all i know) don’t want SUVs anymore.
   I’ve been convinced for a long time now that a massive overhaul of the way we use energy is the way to “fix” everything. Switching all domestic cars to be “green” will create jobs…. get people more money, which will in turn stimulate the economy. It will also reduce our dependence on oil, (if it comes from the Middle east or not.. it all burns the same way and we should be trying to get off of all of it. If you are going to a dangerous part of town to get your drugs, the answer is not “find a dealer in a nicer neighborhood” it is “stop doing drugs”) and it will be friendlier to the environment. This applies to all forms of energy as well. Building wind turbines and solar panels.. all creates jobs, reduces dirty fuel etc.
   But in response to your question.. yes we HAVE to make sure the innocent people here don’t suffer while a few greedy ass-hats get paid. We can how ever use this sh!t sandwich to change the industry that made if for us. hope that helps

5. pandora says:

   November 17, 2008 at 2:44 pm

   I agree with all of the points made here. What I don’t want to do is give the auto industry a blank check.

6. a. price says:

   November 17, 2008 at 2:49 pm

   Yeah. No blank checks. There should be oversight as well. These people clearly dont know how to run a company. If they get through this, and ANY of these curs still have a job,…. I guess I’ll just keep buying Toyotas.

7. cassandra_m says:

   November 17, 2008 at 3:02 pm

   I’m not sure what to think.

   Except that continuing to reward the management that can’t sell cars or make money seems like a fool’s task. You can put up all of the oversight in the world, but isn’t that what these execs should have been doing all along?

   One idea I haven’t heard many folks think about is perhaps putting up some funds that might let the healthier car companies buy up GM or Chrysler. Bu then, I don’t know why they would buy them — it is probably cheaper to just start replicating the offerings not already met.

8. pandora says:

   November 17, 2008 at 3:09 pm

   Now see… this is why I’m confused. There are good points on both sides. Even worse I’m sensing this issue is about to go entirely political.

9. X Stryker says:

   November 17, 2008 at 3:15 pm

   No blanks checks – we need to use this opportunity to prod automakers to meet higher standards of quality and efficiency. If we can get the big 3 to produce and promote the kind of cars we need to stay competitive, everybody wins – the auto industry, union labor, the environment, and consumers.

   And a side note, GM and Ford had been working to clean up their act in the past couple of years. There have been dramatic improvements in the quality and reliability of their compacts, and they are starting to put forth hybrids onto the market. The problem lies with their SUV addiction – an auto bailout MUST NOT be used to increase the market share of SUVs and pickups. The SUV market is a death trap that Detroit needs to wean their way out of. Their advertising budgets are still a problem – they’re still failing to sell the idea of American-made compacts, which only encourages commuters to buy Toyotas and Nissans. I should know.

10. Frieda Beryhill says:

    November 17, 2008 at 3:20 pm

    Get yourself down to the Video place and find th
    “who killed the electric car” and then decide.
    A film you will never forget

11. pandora says:

    November 17, 2008 at 3:24 pm

    Mazda and Honda in this house.

12. cassandra_m says:

    November 17, 2008 at 3:32 pm

    It’s political now, which is why we are having this conversation. And, frankly, the opposition to the bailout seems more towards taking the funds from the TARP. Votes on bailouts involving other funds seem less controversial. From where I sit, there isn’t much difference in the pools of money — both need to be created. So the current fight seems to be more about whether the Treasury gets to say how the TARP gets used or if Congress gets to weigh in.

13. pandora says:

    November 17, 2008 at 3:38 pm

    I guess by political I mean we are about to see several politicians using this issue to make a name for themselves – discussion be damned.

14. Dorian Gray says:

    November 17, 2008 at 3:45 pm

    My vindictive Italian heritage says let ‘em die, but alas I think they need to be saved. I do support the idea that Rick Wagoner should be drawn and quartered though (Mussolini style!)

15. Unstable Isotope says:

    November 17, 2008 at 4:17 pm

    What a. price said! I definitely think any bailout should be punitive – we should have strong CAFE standards, punish the executives and make sure there is a lot of investment in next gen fuel R&D. Josh Marshall also pointed out that this could be a security issue – the auto industry accounts for much of what is left of manufacturing in the U.S. We can’t outsource all of our manufacturing capability!

    So, I’m not pleased or excited about an auto industry bailout I think it is probably necessary. I’m also thinking if we can bail out banks, who are most responsible for the mess we’re in now besides Republicans, then the auto bailout is chumpchange ($25B for GM vs. $700B for the banks) and might have bigger dividends for us.

16. h. says:

    November 17, 2008 at 5:10 pm

    Is there a gaurantee that this bailout will save these dinosaurs, or will they be back in six months for more handouts?

    Let them die. They have been making a product nobody wants for too many years.

    Mercedes and Toyota run profitable plants in this country. Why can’t Chrysler & GM?

17. kavips says:

    November 18, 2008 at 8:21 am

    LOL. I would assume the same conversations would occur if all of you were in a sinking canoe, caused, no doubt, from a Republican inflicted rock.

    The canoe is filling up with water: do you bail or do you say its pointless because there is a hole and more water will come in anyway….?

    If your own lives were on the line, you would probably still argue…. lol.

    Obviously I was having fun with that scenario… But in truth, survival outweighs all other considerations… What will it take for this nation to survive? Having government supported jobs? Or having no jobs…period?

    From that perspective the choice is obvious…

    Now back to the canoe analogy….. Now knowing the ultimate outcome, do we then start bailing early, keeping the water level as low as possible? Or…… do we let it fill up to the top, before we start bailing like mad….perhaps a little too late?

    Just sayin’.