GM Govt. Bailout?

[CKaelin]

What do you guys think?


http://community.nytimes.com/article/comments/2008/11/13/business/economy/13bankruptcy.html?s=1&pg=5&partner=permalink&exprod=permalink

[tk-421]

I believe the US needs the auto industry too badly to "let them fail". They will get a bailout just like (apparently) everyone else these days.

[SailDesign]

I think if we keep bailing them out, they will keep producing cars that the American public don't want.
For those who still want to argue that we DO want these vehicles, I ask them to explain why GM is giong broke if their cars are so great..... It ain't rocket science!

[Phaeton]

I have no love for American cars. On the other hand I don't want 1 out of every 10 people in this country to lose their jobs.
The guys building the cars, dealerships, parts stores, foundries etc, all will be out of work if we allow gm to fail.

[SailDesign]

I have no love for American cars. On the other hand I don't want 1 out of every 10 people in this country to lose their jobs.
The guys building the cars, dealerships, parts stores, foundries etc, all will be out of work if we alloy gm to fail.

I agree there, but still feel that there must be something in the bailout that stops them from carrying on the stupidity of building cars people, on the whole. don't seem to want. :iono:

[ChinoCharles]

A bailout for the US automakers would have to be focused on retooling the industry, not just getting them by on the bills so they can make 40 more demandless cars next year. We need to get Ford making some Civics.

[SailDesign]

A bailout for the US automakers would have to be focused on retooling the industry, not just getting them by on the bills so they can make 40 more demandless cars next year. We need to get Ford making some Civics.

Yup! What he said! :thumbsup:

[TLyttle]

Let the upper echelons of management at GM bail themselves out: they can sell their houses, stock options, etc and dump the funds back into the company; they stole the money anyway. There should only be one layer of managers above the factory floor, period, and their hands should be as dirty as those of the workers...

Gandhi said, in part, wealth without work and business without morality will destroy us. The US has already started to move on the "politics without principle" part of that quote.

[mikenacarato]

i hope by us auto market your not referring to gm medium/heavy duty...thats one of our biggest markets. gm medium duty is massive in the usa....as far as cars are concerned...i dont care for them too much.

[Bob_VT]

Let them sell off the useless factories for scrap and re-build for something useful

A comment was made on Public Radio that we are bailing out the people that caused the problems.......

Institute the gas guzzler tax on SUV's

[b1ah]

they will be rewarded for thier backward thinking, it'll happen

[PaidTimeOff]

A comment was made on Public Radio that we are bailing out the people that caused the problems.......

Institute the gas guzzler tax on SUV's

+1

SUVs should be taxed more or buyers should be forced to prove that they in fact do need an SUV (+5 family members living in the home, or need an SUV for business). Almost no family needs a vehicle that big. My sister, who's married and has one child with another on the way, bought a Saturn Aura SUV because "she needed it". Forget that. My parents had both me and my sister and we never had anything bigger than a Toyota Corolla. In fact, I distinctly remember when I was around the age of five, my parents drove us around in an old 2-door Tercel hatchback. It's a waste of fuel and a ridiculous waste of resources.

[PetersRedYaris]

I sincerley hope they do not get bailed out. I can't believe the way failure is rewarded these days. I would love to see Toyota buy them out...

[PaidTimeOff]

I sincerley hope they do not get bailed out. I can't believe the way failure is rewarded these days. I would love to see Toyota buy them out...

Toyota, though in FAR better shape than the big three is suffering as well. I read an article that stated they have almost no debt, but the auto industry as a whole is pretty much screwed right now. Toyota also made a few mistakes of their own including introducing a brand new large truck in order to fill a void in their vehicle lineup right before gas prices skyrocketed and their old-school practice of refusing to lay off permanent workers, which looks great PR-wise for the company and is great for their employees, but could cost the company big time in the long-run if this economic situation doesn't improve soon.

[ChinoCharles]

No, see, I don't think you guys understand. You can't just completely disenfranchise 1 million + American workers, many of which came out of high school and directed their lives towards one industry. Those million people (who pay taxes too, by the way) are innocent victims of a much smaller contingent at the top.

The question is how do you provide help to the industry and ensure that this won't happen again. There has to be oversight, but to what extent? Yes, this is the government dipping hands into the private sector. Yes, it is mildly socialist... but the alternative would put some towns to bed and throw millions of people into an already bleak job market. Don't forget those workers have families... they'll suffer, too.

I think what you'll see is a bailout and then a phased retooling of the industry to make it more compact and specialized. I wouldn't be surprised if a lot of the offshoot makes (Saturn, Mercury, etc.) are discontinued and more focus put into the major brands that own them. A section of the bailout will probably be earmarked for R&D, and these companies are going to be expected to be turning out a much more viable product IE: no more Dodge Challengers and other absolutely moronic business moves. Lets see some innovation. Where is the damn petroleum-free vehicle?!

[PaidTimeOff]

Bailout would be fine with the proper oversight and regulation by the government in these companies especially now that the government has financial stakes in them. All the guys at the top of the chain should be held accountable for what happened to the companies and should be immediately fired without any benefits, severance, etc. Their sole responsibility is making decisions for the company in order to prevent exactly what's happening to them now. Why should anyone ever be rewarded for doing their job completely wrong?

I would prefer to see these companies sink with the captains that navigated them into the shallow reef, but there's no way that the workers on the lower levels of the companies should be put out of jobs for decisions they had no hand in making. Solution: Bail out the company, fire every single executive simply for the fact that they drove the company into the ground, hire new workers to take their place, and regulate and oversee up the butthole with a requirement of centering R&D on alternative-fuel technologies as chinocharles suggested.

[Nigal]

If a company is unable to run it's business so that they offer a marketable product then they should be allowed to fail. It will only strengthen the rest of the industry in the long run. Bail outs do nothing but prolong the suffering. Look at AIG. They are already coming back to the trough for seconds.

Can anyone honestly say that it is right and proper for a company to assume all profits yet we, the tax payers, assume all risk? No.

[SailDesign]

Where is the damn petroleum-free vehicle?!

Don't hold your breath, Charles. I don't want to see 1 million workers on the street any more than you do, but the company as it is today cannot be allowed to keep building trash at the taxpayers' expense..

[Phaeton]

Just imagine the hit to the economy, if all those people lost their jobs.

[Nigal]

I'm not happy about GM going under but did anyone not see it coming? For the last 10 years working at a GM plant has been as secure as working at a 78 rpm record factory.

And another question that needs to be asked: Why spend all this cash on a load/bail out to save Mexican and Canadian jobs?

[eco]

If the American companys fail here,Toyota and others will seriously open up shop in USA,thats how you get the jobs back.

[churp]

Chapter 11 is the only way to make them change their ways....there has been little change in the big 3 since the 1st gas crisis in the 70's. They have lived off of the public that has bought their product, for whatever reason, even though other markets have provided superior alternatives....if they would have even come close to the foreign markets in cost/reliability/etc. they would be on top, but they didn't even try. If they recieve a bailout, why would they try now???

[talnlnky]

Sure... bail them out.... under the condition that they will import that tata nano (or whatever its called) and buy the rights to sell those Air cars when they go into production in like 2011.

if we bail them out... they better have something worth while.

If the public pays... there should at least be some benefit for the public. "saving jobs" just doesn't cut it.

[PetersRedYaris]

If a company is unable to run it's business so that they offer a marketable product then they should be allowed to fail. It will only strengthen the rest of the industry in the long run. Bail outs do nothing but prolong the suffering. Look at AIG. They are already coming back to the trough for seconds.

Can anyone honestly say that it is right and proper for a company to assume all profits yet we, the tax payers, assume all risk? No.

Nigal- one of the smartest Yarisworldians around... :clap:

[TLyttle]

I have no interest in seeing a major recession (depression?) either, but the Big Three has been building buggy whips for awhile now, and demanding that people buy them. Every once in awhile I run across some happy guy that says, "I buy cars made in America, right or wrong, I don't care that your Toy car is getting 50mpg, I am supporting my country!" And then I really don't know whether to laugh or cry.

For 50 years I have never considered fuel cost to be a consideration: I was getting 40mpg out of my vehicles long before it became stylish. I took the abuse about "when are you gonna buy a REAL car" etc, yet I had more fun than most in my vehicles. If I thought Toyota would build a convertible Yaris, I would be on the buyers list immediately. But the thought of buying a Pontiac just flips my stomach, the closest to what I am used to. I am still lusting after a Miata, even better...

[tk-421]

Chances Dwindle on Bailout Plan for Automakers

http://graphics8.nytimes.com/images/2008/11/14/business/14auto01-190.jpg
The prospects of a government rescue for the foundering American automakers dwindled Thursday as Democratic Congressional leaders conceded that they would face potentially insurmountable Republican opposition during a lame-duck session next week.http://www.nytimes.com/2008/11/14/business/14auto.html

[Nigal]

Nigal- one of the smartest Yarisworldians around... :clap:

I wouldn't go that far. How about best looking in stead?

[Woody_Woodchuck]

Chapter 11. Even with a bailout jobs will be lost. One bailout is not going to be enough, they will be back for more.

Giving them money for having a company that has not been business smart is ridiculous. It really does not give them any immediate incentive to turn the company around to make it financially stable. A bailout will only buy them time before this happens again, it is short term solution. And, how much money is it really going to take, 25 Billion is nowhere near enough to get that large of an operation turned around. I understand that the auto industry fingers are into everything and many, many people are affected. But, no matter how much cash they receive, they are going to have to cut jobs, production costs and scale back on everything to make it. Let’s get the ball rolling now instead of putting this off for a few years at taxpayer’s expense.

Bankruptcy will force them to re-think their business plan and they will be dealing with their money, not mine. True, I will be paying unemployment and many other costs associated with layoffs but in the long run it is the right way to proceed.

[BailOut]

As soon as I saw this thread I started formulating a post in my head but I quickly found that ChinoCharles took the words right out of my mouth. :smile:

[CKaelin]

Looks like Bush has agreed to a $25 Billion Loan. I hope it's worth it!
:iono:

[Altitude]

Fuck em. I don't want workers out on the streets either, but maybe that's what it will take to piss enough people off to ensure this kind of crap doesn't happen anymore.

Anytime someone complains about corporate corruption and greed the opposition rails on about market capitalism and how it is the only viable economic model. Well, live by the sword die by the sword I say. Let the market fail. It's the only way things will ever change.

[CKaelin]

Op-Ed Columnist

Bailout to Nowhere

By DAVID BROOKS
Published: November 14, 2008


http://www.nytimes.com/2008/11/14/opinion/14brooks.html?partner=permalink&exprod=permalink

[Shroomster]

I see only one solution to this:

http://www.amscotfinancial.com/financial/graphics/_ok.jpg

go ahead Gm, Ford, Chrysler, get a short term loan from amscot and maybe a few of their free money orders to pay the workers in canada and mexico.....

[TLyttle]

What's with the Canada/Mexico thing? Canada runs the most efficient plants in the system, are we going to be blamed for the crap that the Big Three designed? Geez, we're sorry.......

Having owned a number of US-built cars and trucks: crude on crude, always to big, always too fuel INefficient, always ready to fall apart at the slightest provocation. I have also owned Volvos and Toyotas: won't light the tires, but reliable to a fault. There is not ANY US-built vehicle that I would trade for my old 245 Volvo.

Let 'em sink.

[Shroomster]

What's with the Canada/Mexico thing? Canada runs the most efficient plants in the system, are we going to be blamed for the crap that the Big Three designed? Geez, we're sorry.......

Let 'em sink.

if that was referring to me I was actually saying to pay the workers, they're the ones doing the actual suffering and work....

[TLyttle]

Agreed, pay the workers, but NOT Management, they are clearly not doing their jobs. I really can't explain why our plants work better than the US ones, apparently they just do.

It is also quite apparent that Canada is going to take a really big hit if the Big Three tank, and a very large area is going to be in bad shape. I still say these guys were looking for jobs when they found the ones they have now, and they can find another one. What bothers me is that it is possible that the pension plans will be raped by Management to pay for their gold parachutes.

Canada had its own auto industry for many years until the companies were bought out- or forced out- by the US. I see no reason why it can't be resurrected, other than the bureaucracies have made it as difficult as possible for a Canadian manufacturer to survive; something to do with GM et al supplying Deputy Ministers with new cars etc......

The news yesterday reported that the GM plants in China are making big profits; can you see where this is going?

[GeneW]

In 1921 there was a recession. The Gross Domestic Product dropped 17 percent. Unemployment reached ten percent. The recession was not "dealt with" by President Harding. It ended in under one year. It sucked to be sure. The "Roaring Twenties" followed this recession. Good times followed for about six years.


In 1929 a recession began. President Hoover tried to keep wages high by encouraging business to raise them. He also tried to keep prices high. He encouraged the Federal Reserve to loosen up credit. Hoover was not a "do nothing" President, he just didn't do quite enough to suit some folks.

By 1932 unemployment reached 25 percent. President Roosevelt created the New Deal. Wage and price controls. Public Works projects. Bad banks were seized. A new agency, the SEC, was created to protect the stock market. It's first Director, Joseph Kennedy, was one of the guys who helped create the crash of 1929. When asked why he picked Joe Kennedy FDR said, "It takes a thief to catch a thief".

Unemployment didn't fall below double digits until 1941. We had to go down to War to end the Great Depression. When guys were being conscripted into the Armed Forces the Doctors noticed that they had evidence of malnutrition.

Some "New Deal", huh?

Moral of the Story - helping failing businesses helps failures. Helping failing businesses also keeps people working in those businesses instead of working elsewhere. Raising taxes and shoveling the money off to failing businesses takes money out of everyone else's mouths.

Letting failing business continue hurts everyone. GM screwed up in so many ways that it must fail. A newer leaner GM will build good cars at good prices.


I voted "no" even though my employer is already seeing the effects of GM's slowdown. I could end up on the street because of a failure of US business. I'm already warming up the getaway car. My skills can be used elsewhere.

Gene

[jclo3313]

Let them Fail!

[GeneW]

The news yesterday reported that the GM plants in China are making big profits; can you see where this is going?

GM allegedly makes profit EVERYWHERE but in North America. China has not been a good deal for GM. China limits repatriation of profit and manages tightly what sort of cars you can make.

China is also going the way of Japan. They are creating a massive public works project program. They will suffer horribly in the coming global recession with this Keynesian non-sense.

As for GM North America - no surprise. They have Wharton/Harvard School grads running the show. It's massive group think upstairs. No wonder they cannot innovate with everyone thinking the same way!

I've had two friends who worked for GM R&D. The political piss contests and assorted group think keep them firmly "down". One friend piped up about safety at a meeting. He was pushed into a Window Office for TWO YEARS and then finally offered $70,000 to "go away". Imagine putting a staff PhD on the payroll for two years doing nothing and then offering them the equivalent of a year's salary to buzz off.

The other suggested an "off the shelf" motor solution for Saturn. They wanted to use an exotic electric motor for the wipers. He suggested a tiny change in mounting brackets that would let them use a standard solution.

During the meeting some kid, and I mean kid, shot it down. "That's not appropriate" His Lordship said. His Lordship did not examine the drawings, did not look at the figures, he just pronounced his Sentence.

Another Researcher created a special membrane switch for car horns that interfaced perfectly with air bags. Since he was "just a Technician" nobody paid attention to his idea. So he sold it to Chrysler. Later GM had to buy back the idea from Chrysler!


GM also has the UAW, which has created an intolerable situation. Union Content rules. Job Banks - where employees are paid to loaf.

Then we have this Guaranteed Benefit Pension non-sense. I could not imagine trying to run a business that carries six to seven retirees on the books at eighty percent of their wages and one hundred percent of their benefits for every person on the lines. Imagine carrying one hundred people on your books but only about twenty work?

GM spends more on medical services than they do on R&D. Their Viagra bill was over ten million US dollars in 2005! Must be a lot of older Execs and Line Workers who want to get down!

Toyota doesn't do this, you get a lump sum payment on retirement. Japan has a socialist health system. In their north American operations that are not unionized Toyota probably has a competitive health plan, not the obscene bloated system of GM.

Toyota's management doesn't interfere with car development. The task is given to a team with one highly experienced engineer running the project. They are given license to create, using all previous experience with successes and failures. The Team Leader is responsible for the car and based upon their track record can deliver the goods.

In contrast GM's R&D is a awful.

Something had to give with all of this non-sense. While I grew up Chevy Chevy has not grown up. They're still in the 1950s. Time for them to adapt or die.

Gene

[GeneW]

Canada had its own auto industry for many years until the companies were bought out- or forced out- by the US. I see no reason why it can't be resurrected, other than the bureaucracies have made it as difficult as possible for a Canadian manufacturer to survive; something to do with GM et al supplying Deputy Ministers with new cars etc......

Please..... you make it sound like the US invaded Canada.

It's not our fault that Canadians elected to concentrate power into the hands of "Deputy Ministers", who then proceeded to beat down your domestic industry. If you'd been more laissez faire up there your Auto industries could have remained strong and competed globally.

Heck, maybe we Americans would be making Canadian cars or parts for same instead of Vice Versa.


As far as "resurrecting", you cannot look back. You don't resurrect anything, you create new opportunities. If you all want to make your own cars that's cool, except of course how do you keep all of those greedy grasping Politicians out of the way?

Alberta's Governor wants to levy his own tax on oil derived from tar sands. Just because, as Dillinger said, "I rob banks because that's where the money is". A car making plant is an incredible source of tax revenue for a greedy politician.

We have the same problem down here. Too many greedy grasping fingers want to poke into someone else's pies. They get elected every so often so they figure they have the public behind them. If the public knew how these birds interfere in their livelihoods I don't think they'd be so popular.

Gene

[stuffy]

Please..... you make it sound like the US invaded Canada.

It's not our fault that Canadians elected to concentrate power into the hands of "Deputy Ministers", who then proceeded to beat down your domestic industry. If you'd been more laissez faire up there your Auto industries could have remained strong and competed globally.

Heck, maybe we Americans would be making Canadian cars or parts for same instead of Vice Versa.


As far as "resurrecting", you cannot look back. You don't resurrect anything, you create new opportunities. If you all want to make your own cars that's cool, except of course how do you keep all of those greedy grasping Politicians out of the way?

Alberta's Governor wants to levy his own tax on oil derived from tar sands. Just because, as Dillinger said, "I rob banks because that's where the money is". A car making plant is an incredible source of tax revenue for a greedy politician.

We have the same problem down here. Too many greedy grasping fingers want to poke into someone else's pies. They get elected every so often so they figure they have the public behind them. If the public knew how these birds interfere in their livelihoods I don't think they'd be so popular.

Gene

fyi, alberta has a premier, not a governor. are you talking about alberta's desire to increase the royalties paid by the oil companies to the province?

canada never had many domestic auto manufacturers, our auto industry was always tied in with the u.s. auto industry, at least the past 60 years or more anyway.
and before free trade we had the auto pact which guaranteed canadian jobs relative to how many cars canadians purchased from the big 3.

not sure what our governments have done to stymie the canadian auto industry,
the u.s. auto manufaturers have recieved the corporate welfare handouts from the ontario government as well (in an effort to save jobs apparently), so i guess we've been helping to prop up these incompetent foreign companies in our own small way.

[GeneW]

Anytime someone complains about corporate corruption and greed the opposition rails on about market capitalism and how it is the only viable economic model.

Market Capitalism? Do you think that GM practiced market capitalism when it buried Preston Tucker? How about when it's begging for bailouts now? How many "Defense" contracts did GM get over the years? Is that Market capitalism too?

GM isn't a capitalist institution. It's been working as an extension of the Government since the 1930s if not earlier. Why else is anyone even seriously considering a "bail out"?

The reason GM is getting the snot pounded out of it by Toyota is because Toyota is giving better value for the money. That's capitalism at work.

Greed is limited by market restraints in capitalist nations. In socialist or social democracies greed is limited by the sufferance of the masses to repression.

Greedy politicians in the EU who want to regulate everything that isn't nailed down or pensioners and loafers who idle while "guest workers" do the dirty work. The guest workers don't go home and in a generation or two are beating citizens (who get arrested for fighting back) and establishing "no go" zones where the nation's laws don't work because the police are pushed out.

For a purer example of how greed works in Socialist countries check out in the USSR when Brezhnev had a fleet of cars while some of his rural subjects walked around barefoot or Mao Tze Dung had his bodyguards "recruit" poor girls to have sex with him so he could "live forever" per the tenets of the Yellow Emperor. Today in North Korea where the "Dear Leader" flies in hookers from Sweden while rural North Koreans trade human meat in market places. Castro and his many "retreats" while Cuban kids suffer from blindness because of nutritional deficiencies.

The Yaris was shaped by market place demands. That's your capitalism at work for you.

Gene

[floydisrock]

I couldn't care less about any big business.
They can all fail.

[GeneW]

fyi, alberta has a premier, not a governor. are you talking about alberta's desire to increase the royalties paid by the oil companies to the province?


The semantics of your response indicate that the people of Alberta want more for their oil and that the Premier (thanks for the correction) is just speaking on behalf of the people - and not his own interests and benefactors as a politician. I've personally long since ceased indulging the fiction that politicians represent me, but for many a vote is an investment in the System.

The oil doesn't belong to Alberta nor to the people. The oil belongs to whoever gets it out of the ground, before that time it's just useless muck sitting beneath someone's land.

Raise the price of doing business high enough, or hobble a business with useless feel good regulation and the business doesn't get done like it has been today. Sometimes it doesn't get done at all. One can vote, shout or stage protests but the books gotta balance. Often it's not greed by simple necessity, you cannot run forever at a loss.

I am willing to bet that Tar Sand operations will be grossly curtailed in Alberta in any case because of low world market prices. Raising the taxes (or royalties) just makes it a little bit tougher to keep the operations going.

not sure what our governments have done to stymie the canadian auto industry

Probably nothing in particular. The US hasn't had a new automobile company of any big size since American Motors, which was dismembered as part of the Chrysler bailout in the 1980s. It's really really hard to build big companies in the US and probably in Canada too. Once the concern reaches a certain size politics enter into the picture. This has been ongoing in the US since the 1920s.

One exception in the US was Micosoft, which gained its size in part because of a partnership with IBM.

Interestingly enough, Canada did have a nice tractor concern going, Cockshutt. They were bought out by Minneapolis Moline decades ago. MM was bought out and buried by White in the 1970s in part because their Guaranteed Benefit Pension was too tempting a target. Later White was bought out and buried by AGCO, which I think does not have any domestic models.

Gene

[stuffy]

i know that your opinions are framed around your libertairian beliefs, some i share and some i don't.

i think it's perfectly logical for a government to charge royalties for the resources extracted from the land.
it's just the price of doing business as far as i'm concerned and i disagree with the notion that resources have no owner.
the tar sands are more subject to the market prices as you've mentioned than royalties anyway.
royalties and jobs from oil have made alberta (and by alberta i mean it's citizens) one of the richest regions in n america and even with a lower oil price and slowdown in worldwide economy, they havent' been affected nearly to the same degree that manufacturing-dependent ontario has been.
the alberta government has cut cheques for every citizen of alberta because of the huge government surpluses so just about all boats have been floated in alberta thanks to the resources in that province.

[GeneW]

i know that your opinions are framed around your libertairian beliefs, some i share and some i don't.

i think it's perfectly logical for a government to charge royalties for the resources extracted from the land. it's just the price of doing business as far as i'm concerned and i disagree with the notion that resources have no owner. the tar sands are more subject to the market prices as you've mentioned than royalties anyway.

The oil is useless unless someone takes a risk to extract it, transport it and market it. That risk taking ought to be rewarded and not punished with ever higher taxes (Royalties). If I had my say there would be no Royalties.

However this is the real world. People will demand what they can get from whoever has more. That's how it is. The attitude of "Cost of Doing Business" to me is really the attitude that business exists at the sufferance of the State. "They'll manage". What happens when "they" can no longer manage to pay those Royalties or the marginal cost of the Royalties plus the costs of extraction exceed the income from the oil?


My point is, what happens when the Royalties get so large that one cannot do business?

The Tar Sands have been there a very long time. Extraction of the sands was not practical until recently because of market Will the Premier cut the Royalty rates if the market prices of oil continue to fall?

What of all of the new dependents who take that extra revenue? Will they manage without it too if the Rates fall? Perhaps the Government cannot lower the revenue from the Royalties because someone is now dependent upon it?

I see a lot of this problem where I live. When the Steel Mills were fully operational governments expanded to fully use the tax revenue. The Steel Mills are mostly gone now. Those local governments who grew fat on manufacturing taxes now run speed traps (speed limits are made artificially lower and then police entrap people who "speed" through the area). These governments have also raised property taxes and income taxes and go begging to the State Capital for money.

You have to focus on the long term, not take more money because businesses "are doing so well". So even if we disagree on the idea of Royalties it's still reasonable to set them at levels which do not endanger the businesses.

royalties and jobs from oil have made alberta (and by alberta i mean it's citizens) one of the richest regions in n america and even with a lower oil price and slowdown in worldwide economy, they havent' been affected nearly to the same degree that manufacturing-dependent ontario has been. the alberta government has cut cheques for every citizen of alberta because of the huge government surpluses so just about all boats have been floated in alberta thanks to the resources in that province.

Lots of good paying jobs in the fields. To me that is reward enough for having a business nearby.

As far as "checks" go....Bastiat warned that once citizens of a Democracy can vote themselves money out of the Treasury hard times are not too far behind.

As best evidence let me offer the spectacle of the US Congress "bailing out" big banks and investment firms which followed the lead of US Home Loan agencies by chasing shaky borrowers and then "bundling" loans into "securities". The program to buy the "toxic debt" will no longer be taken, instead banks can just get the money. Welfare for the super rich, which to me is just as wrong as welfare for able bodied folk who would rather loaf than work.

Gene

[Snyprwlf47]

The problem with Ameriauto is the high labor cost. Ford has been trying to keep up with the small fuel efficient car industry but cant because they would lose money due to labor cost!!!

[SailDesign]

The problem with Ameriauto is the high labor cost. Ford has been trying to keep up with the small fuel efficient car industry but cant because they would lose money due to labor cost!!!

I call :bs:
ford Europe has a higher (yup!) labour cost, and they keep up very well with the European and Japanese "small fuel efficient" markets. They just choose not to import the smaller cars and their technology here.... Look at the Ford Focus diesel that just came out - Ford won't import it because "Americans view diesel as a dirty fuel"
:bs:

[Nigal]

What's with the Canada/Mexico thing? Canada runs the most efficient plants in the system, are we going to be blamed for the crap that the Big Three designed? Geez, we're sorry.......

Having owned a number of US-built cars and trucks: crude on crude, always to big, always too fuel INefficient, always ready to fall apart at the slightest provocation. I have also owned Volvos and Toyotas: won't light the tires, but reliable to a fault. There is not ANY US-built vehicle that I would trade for my old 245 Volvo.

Let 'em sink.

My main point was why are/should the U.S. tax payers put up our money to save Canadian and Mexican jobs? GM wants it both ways. They want to be global and cash in on cheaper taxes and labor in other countries but when the shit hits the fan they come running back to our government with their hands out.

[GeneW]

No, see, I don't think you guys understand. You can't just completely disenfranchise 1 million + American workers, many of which came out of high school and directed their lives towards one industry. Those million people (who pay taxes too, by the way) are innocent victims of a much smaller contingent at the top.

Yeah, right..... "disenfranchise". Where's my franchise, Charles?

They earn more than I earn now. They didn't get a college degree or tech school degree like me. They went "into the Mill" as we put it hereabouts.

They didn't "pay their dues" working scut work, then finally getting an entry level job, then working their way up the ladder earning experience.

They didn't, after many years of working, get a decent job, then get another decent job. They didn't eat shit from stupid bosses, instead they got settled into a routine and whenever the Boss got out of line they whined to their Union Steward.

They joined the UAW and got a job in an assembly line. They got a pension, they got great health benefits, and they lived the middle class life. Doing work that was easier than any job I ever worked in my life, excluding perhaps McDonald's.

Certainly their work was safer than my experience in Dialysis, where I was exposed to Hepatitis and AIDS every day, or when I could have been fried or burned in other jobs. What could happen to them? Get burned by the spot welder? Get gagged by the paint booth? Maybe drop a part on their toes? Get squashed by a load improperly slung (I risk that too today)?

Sorry, Charles, my sympathy, and those of people who today work in Wal-Mart, Target and other "service jobs" only goes so far. I for one am sick and tired of Organized Labor and their "You owe me" routine.

They can take their "franchise" and stuff it.

The question is how do you provide help to the industry and ensure that this won't happen again. There has to be oversight, but to what extent? Yes, this is the government dipping hands into the private sector. Yes, it is mildly socialist... but the alternative would put some towns to bed and throw millions of people into an already bleak job market. Don't forget those workers have families... they'll suffer, too.

Yeah, where was all of this bailout money when I needed it....? I've been laid off seven times in my life. Aside unemployment, which I pay into every paycheck, I never got a dime. Never asked for it either, but never got it offered to me.

I think what you'll see is a bailout and then a phased retooling of the industry to make it more compact and specialized. I wouldn't be surprised if a lot of the offshoot makes (Saturn, Mercury, etc.) are discontinued and more focus put into the major brands that own them. A section of the bailout will probably be earmarked for R&D, and these companies are going to be expected to be turning out a much more viable product IE: no more Dodge Challengers and other absolutely moronic business moves. Lets see some innovation. Where is the damn petroleum-free vehicle?!

The Challenger was a good idea. It sold well.

As far as "petroleum free vehicle".... hey, lead the way, my man. Nobody is stopping you from electrifying your Yaris.

Of course there isn't enough electricity generating capacity in the US to completely replace the US fleet. A little simple arithmetic and dimensional analysis will bear that one out fast.

A nice fuel efficient car would do, except that the average American consumer won't buy it. My Yaris is the poorest accelerating vehicle I've ever owned. I have friends who are afraid to ride in it. I have one friend who is too obese to fit in it. I really like my Yaris but I know what the average American likes and that's not it.

Gene

[GeneW]

I call :bs:
ford Europe has a higher (yup!) labour cost, and they keep up very well with the European and Japanese "small fuel efficient" markets.

Ford makes their smaller cars all over the globe. Wouldn't surprise me if the Focus were made in Europe and it would not surprise me if Ford got a subsidy or two for doing it there.

They just choose not to import the smaller cars and their technology here.... Look at the Ford Focus diesel that just came out - Ford won't import it because "Americans view diesel as a dirty fuel"
:bs:

Also because of NOx emissions... some diesels are pretty bad that way.

Also, perhaps, because the Ford Focus diesel lacks the acceleration needed to compete in US markets. Perhaps the real cause is that the American consumer does not want a slow plodding car?

I'd have sprung for a Yaris diesel. No doubt about it.

Gene

[stuffy]

The oil is useless unless someone takes a risk to extract it, transport it and market it. That risk taking ought to be rewarded and not punished with ever higher taxes (Royalties). If I had my say there would be no Royalties.

However this is the real world. People will demand what they can get from whoever has more. That's how it is. The attitude of "Cost of Doing Business" to me is really the attitude that business exists at the sufferance of the State. "They'll manage". What happens when "they" can no longer manage to pay those Royalties or the marginal cost of the Royalties plus the costs of extraction exceed the income from the oil?


My point is, what happens when the Royalties get so large that one cannot do business?

The Tar Sands have been there a very long time. Extraction of the sands was not practical until recently because of market Will the Premier cut the Royalty rates if the market prices of oil continue to fall?

What of all of the new dependents who take that extra revenue? Will they manage without it too if the Rates fall? Perhaps the Government cannot lower the revenue from the Royalties because someone is now dependent upon it?

I see a lot of this problem where I live. When the Steel Mills were fully operational governments expanded to fully use the tax revenue. The Steel Mills are mostly gone now. Those local governments who grew fat on manufacturing taxes now run speed traps (speed limits are made artificially lower and then police entrap people who "speed" through the area). These governments have also raised property taxes and income taxes and go begging to the State Capital for money.

You have to focus on the long term, not take more money because businesses "are doing so well". So even if we disagree on the idea of Royalties it's still reasonable to set them at levels which do not endanger the businesses.



Lots of good paying jobs in the fields. To me that is reward enough for having a business nearby.

As far as "checks" go....Bastiat warned that once citizens of a Democracy can vote themselves money out of the Treasury hard times are not too far behind.

As best evidence let me offer the spectacle of the US Congress "bailing out" big banks and investment firms which followed the lead of US Home Loan agencies by chasing shaky borrowers and then "bundling" loans into "securities". The program to buy the "toxic debt" will no longer be taken, instead banks can just get the money. Welfare for the super rich, which to me is just as wrong as welfare for able bodied folk who would rather loaf than work.

Gene

a company that makes cakes does not get their raw material (let's say flour) for free because it's useless without them to make something edible out of it.
they have to pay for the flour just like an oil company has to pay for the raw material from whoever owns it, which in this case is the people of alberta.


sure, i agree that corporate welfare is wrong,
but the government got themselves into this trouble by deregulating the banking industry.
the only reason why canada's banks are in such good shape compare to those in the u.s. and europe was that our government resisted deregulating the banking sector in the mid 90's.
as far as i'm concerned, industry has proven that they cannot police themselves.

[GeneW]

a company that makes cakes does not get their raw material (let's say flour) for free because it's useless without them to make something edible out of it.

If they raised their own wheat and ground it into flour would they owe the local government money because the wheat grew out of the land? How about the people in the local area, since it's on "their" land?

It's not the much of a difference... raising wheat requires land. So does mining tar sands.

Why does the farmer not pay by the bushel for raising corn or wheat but the oil company pays for mining tar sand? Maybe because there is enough money being made to "justify" the reasoning?


but the government got themselves into this trouble by deregulating the banking industry. the only reason why canada's banks are in such good shape compare to those in the u.s. and europe was that our government resisted deregulating the banking sector in the mid 90's.

as far as i'm concerned, industry has proven that they cannot police themselves.

First of all, it was the US Mortgage industry that got into trouble, not the banks.

The cause of all of this was when two US agencies that loan money for mortgages, Fannie Mae and Freddy Mac, were told to loan money to minorities in order to curb "unfair lending practices". This was done by the Clinton Administration in the 1990s.

For the Reader's digest version go here

http://www.lewrockwell.com/suprynowicz/suprynowicz95.html

The original New York Times Article about the disaster, nine years before it happened, go here...

link (http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F9582 60&sec=&spon=&partner=permalink&exprod=permalink)

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Canada didn't play this shit and hence isn't in the shit today.

For a very long time Fannie Mae and Freddy Mac have also "bundled" securities. Much longer than the current period. Fannie Mae certificates were rock solid investments, before it became fashionable to Social Engineer via the Banks.

The US Mortgage Industry "followed" suit, a safe thing to do. Too bad that a few bad actors really did entice a few dummies to sign on the dotted line, because their over reach and foolishness is going to hurt an industry which has done nothing wrong except blindly follow the two leaders- Freddy Mac and Fannie Mae.

The people who deserve punishment are Bill Clinton, Andrew Cuomo, and both Dems and Reps who watched this train wreck and sat on their hands because they figured that the Housing Market was a "measure of prosperity".

Gene

[jclo3313]

Gene,
What is the third letter in your name?

[Shroomster]

Gene,
What is the third letter in your name?

????

[GeneW]

Gene,
What is the third letter in your name?

You can count. Right?

Gene

[Bob_VT]

I call :bs:
ford Europe has a higher (yup!) labour cost, and they keep up very well with the European and Japanese "small fuel efficient" markets. They just choose not to import the smaller cars and their technology here.... Look at the Ford Focus diesel that just came out - Ford won't import it because "Americans view diesel as a dirty fuel"
:bs:

Ford had a diesel Escort here in the USA (one upon a time!) and it was a failure.....:rolleyes:

[steved]

I would give the bailout money to them only if they used it to make new technology, such as hybrid cars and selling them at the same price of current non-hybrid cars, and push to create all electric cars.

Governments should abolish the Unions. This way non-working paid employees in the job banks can be fired, cut the salaries of the way over paid employees. All the heads and management should get a massive pay cuts, no more bonuses. In other words cut out all the fat.

[SailDesign]

Ford had a diesel Escort here in the USA (one upon a time!) and it was a failure.....:rolleyes:

Waaaay back then, I'm sure it was. No-one cared much abouyt saving fuel over here. And to be honest the US Escort bodies were frikkin' HIDEOUS compared to the UK versions.

[jkuchta]

Anyone who says a diesel car is slow hasen't been in one in the last 5 years. I rented a 307 hatch last time I was in Europe (2004), and didn't know it was a diesel till I had to fill it up. The thing was quick, accelerated really well, had tones of torque, and didn't sound like a diesel. If I could buy a diesel Yaris (or even the focus) I'd have one right now!

[PetersRedYaris]

I call :bs:
ford Europe has a higher (yup!) labour cost, and they keep up very well with the European and Japanese "small fuel efficient" markets. They just choose not to import the smaller cars and their technology here.... Look at the Ford Focus diesel that just came out - Ford won't import it because "Americans view diesel as a dirty fuel"
:bs:

Actually, their main reason is production cost. The diesel engine is built in England where labor costs are very high. They claim if they were to sell the car in the US it would be priced over $25,000 (more than a Prius). And if they built a plant in Mexico to build the engine there (where our Fiesta's will be built) they would have to sell 350,000 engines/year to cover the cost which they claim isn't realistic. I claim BS on that... No wonder Ford is going down with the other big 2, stupid decisions one after the other.

Heres the article- http://articles.moneycentral.msn.com/Investing/Extra/the-65-mpg-car-ford-won't-sell-in-us.aspx

[TLyttle]

Abolish the unions? Sure, go right ahead, put labour back 130 years, back to 14-hour work days (6 1/2 of 'em), your house is owned by the Company, and you buy your meagre groceries at the Company store, hell of a fine idea! Andrew Carnegie lives! He made so much money off the worker he had to put together a corporation to get rid of it. I'm all for that, alright...

If Management was fair, there would be no reason for unions.

BTW, just heard on the news: a long-term employee of GM said that, 25 years ago, there was one supervisor for every 120 workers, now it is one supervisor for every 18 workers. Gee, could that be the problem???

[Bob_VT]

Listened to a talk show on NPR and it was an interview with the UAW President...... according to him .......... GM Ford and Chrysler are all pointing at the UAW for the high prices...... the UAW has the view that they have been saving the economy....... I nearly ran off the road while laughing. The UAW said that the big 3 are "owed" the bailout money!

This..... he said...... they said...... she said ........ is all BS

[SailDesign]

Doesn't really matter WHOSE fault it is (this is called "BlameStorming", IIRC), the thing is that they do not deserve the bailout. Period.

[bobby]

American cars are HORRIBLE. I would be embarrassed to be seen driving one. Ugh! :thumbdown:

[CKaelin]

http://www.nytimes.com/2008/11/18/business/economy/18rescue.html?hp

They're hearing us!

[SailDesign]

Quote of the day from the Senate hearings:

"Survival of the auto companies is imperative for America to remain the global leader in innovation," said Sen. Charles Schumer, D-N.Y. "We should not drop out of the race before we have a chance to compete."

Hah! Where TF has HE been hiding these last 20 years or so? There is no innovation in Detroit at present, and the US auto industry has been "competing" longer than any other country.

[Bob_VT]

American cars are HORRIBLE. I would be embarrassed to be seen driving one. Ugh! :thumbdown:

Remember that when you need a policeman in NYC...... they drive American cars...... the ambulances are American too.......:eyebulge:

[KCALB SIRAY]

American cars are HORRIBLE. I would be embarrassed to be seen driving one. Ugh! :thumbdown:

I'd be embarrassesd to be seen with you in an American city. Hey, I hear Canada is giving people a rebate of $1,000 for owning a Fit and living there... go get it:biggrin:

[Bob_VT]

http://bitsandpieces.us/wp-content/uploads/2008/11/imagescommunity-20chest-thumb.jpg

[Thirty-Nine]

I have nothing against American cars by any means. I KNOW America can build a decent car, but I think old-school thinking and poor management are contributing factors as to the poor choices that the Big Three have made as far as car production goes.

As far as bail out, I'm afraid that not bailing them out will be worse than bailing them out. I lost my job last week, and I was in the auto industry (I worked for a supplier of Ford among other aftermarket parts). If it's bad now, a collapse of the Big Three would (could) be catastrophic.

[TinyGiant]

Free Market Economy.. let them be responsible for their own issues.. start making electric cars cheap and get the consumers rushing to the door to buy new cars.. get creative or get out!

[anonymous user]

I think if we keep bailing them out, they will keep producing cars that the American public don't want.
For those who still want to argue that we DO want these vehicles, I ask them to explain why GM is giong broke if their cars are so great..... It ain't rocket science!
Do you want to know why the automakers are going broke? There are people out there who had their factory close down 5-10+ years ago. They keep getting paid by going in to a building at collecting a check, as long as they stay in this room and read, do whatever for 8 hrs, then go home. It's bullcrap, but it's America's heartland at it's best.

[anonymous user]

You know, sometimes it's hard being the worlds top economic powerhouse year in and year out. I mean we bailout all these countries in their times of need.
But when we need it, very few nations can help us, monetarily at least.
Well, when the dollar is worth jack squat, i hope we can still all go on vacation and buy a $10 ice cream cone, or a $10 cup of starbucks coffee.

[GeneW]

Abolish the unions? Sure, go right ahead, put labour back 130 years, back to 14-hour work days (6 1/2 of 'em), your house is owned by the Company, and you buy your meagre groceries at the Company store, hell of a fine idea! Andrew Carnegie lives! He made so much money off the worker he had to put together a corporation to get rid of it. I'm all for that, alright...

Kind of doubt it, especially in western Countries. In the US, at least, Union workers do not necessarily make more money than non-Union workers in the same field. They also don't necessarily enjoy more job security.

Might interest you to know that Carnegie had to import workers from Central and Eastern Europe. Native born Americans refused to work in his mills. Probably because they were unsafe and because of the "turns system", where you showed up for work every twelve hours and if the Foreman liked you he let you work for a turn.


If Management was fair, there would be no reason for unions.

Unions, no doubt, are great bogeymen for the average worker. Each time that my employer was almost organized they ended up giving the Rank 'n File either more vacation days or better wages.

BTW, just heard on the news: a long-term employee of GM said that, 25 years ago, there was one supervisor for every 120 workers, now it is one supervisor for every 18 workers. Gee, could that be the problem???

You know, every business I ever heard of that was in distress hired more bosses. I don't know why - whether they expected a Strike or needed to "motivate" Staff or what it was the number of bosses increased. I saw this at my first job out of school, where the number of bosses were doubled. Six months later they shut down production. I also heard about this at one other manufacturing firm, they hired more "suits" and then a year later folded up.

I've heard a rumor that they're gonna do this where I work now.... uh oh!

The weird part about GM and their boss head count is that a lot of "Supervisory" tasks have been heavily automated out of existence by MIS and ERP systems. Paper pushers, for the most part. My first job out of school wouldn't exist today because your average Secretary with a bit of Visual Basic could have replaced me.

What are they doing there? Probably on the payroll in case of a strike or because of some silly re-organization or maybe because of the Effect I mentioned before.

Another reason, which is kind of sinister, is that GM may be abusing them by using their salary status to milk more hours out of them, while not treating them like Exempt employees. I saw this trick at my first job. The net result was that the "Bosses" got used for Fill In positions and because they were overworked made dumb decisions that gummed up the works.

When things are going to hell that's when you have to think the most and be the most deliberate. Panic will kill you.

Gene

[GeneW]

I have nothing against American cars by any means. I KNOW America can build a decent car, but I think old-school thinking and poor management are contributing factors as to the poor choices that the Big Three have made as far as car production goes.

We always were a bit childish in America. Too trusting, too naive and too self absorbed. Guys like Henry Ford made a mint off of us. So did William Crapo Durant, the founder of GM. Ford once sent agents to go to junk yards and discover parts that were "too good". When he found out that Kingpins (a predecessor of the ball joint) on Ford cars were not wearing out he had them "cheapened up".

In my opinion Detroit started to accelerate down the bad path after the Tax Reform Act of 1986. The interest income deduction for car loans was repealed. For some it now made more seen to lease a car than to buy one.

Management, being opportunistic, decided to re-frame an Automobile from being a physical good to being a service. This encouraged more people to lease rather than purchase. Images of the Lease "experience" was what got advertised rather than this expensive, durable and concrete thing known as an automobile. Blonde girls with big boobs instead of technology and resale value, excitement instead of thrift and you can get a better one tomorrow.

Detroit engineered cars to be tougher for the average Mechanic to work on so that the Dealers would get the Lion's share of service. They first wanted them to be easier to make but they also made them so that mechanics would need special tools to do the work economically. They put easily worn out and broken shit in bizarre places.

Lesees would take the Company's car to the garage for its mandatory service, pay for the car by the mile, and once the term was up they'd lease another newer car. The Company took care of you, for a hefty fee.

If the car was a piece of crap you'd lease a newer one. If it was really bad the Dealer would replace it, sorta.

There was also this idiotic thing called "Planned Obsolescence". The Product was built to slowly disintegrate so that you'd HAVE to buy a new one. This concept is so against the idea of the Customer being in the driver's seat that it's not funny. Ford and his kingpins became the whole damn thing nickel and dimeing you at 200,000 miles so you had to buy another car - or if you leased you never saw this horror show.

The Japanese and Koreans kept to the old model. A car was an expensive purchase. You bought and kept it. So it had to be of good quality and the better the quality the more customer satisfaction that came from it. Japan was selling to the world and most of the world is too poor to buy cheap goods. Japanese were very poor after the war ended and understood how hard it was to earn enough to buy a car. So did the Koreans. When Japanese got rich they remembered the climb up and how it felt to buy good products that honored their hard work.

American manufacturers were selling to Americans, who were wealthy and did not have to be shrewd and careful with their money. We haven't seen hard times since the Great Depression and haven't had a war here since 1865. We've had it very easy and the world is an easy place.

There was no tomorrow, only today and it's all new and shiny.

Tomorrow finally came.

I know that there are other causes and reasons but these are what come to me right now.


As far as bail out, I'm afraid that not bailing them out will be worse than bailing them out. I lost my job last week, and I was in the auto industry (I worked for a supplier of Ford among other aftermarket parts). If it's bad now, a collapse of the Big Three would (could) be catastrophic.

Sorry to hear that you were laid off. Keep busy and don't treat this as a vacation. I did back in the early 1990s and regret doing so to this day.

I was laid off in 2006. I had a new job two months later. I don't live in a wealthy part of the US, I'm over forty and I have a pretty diverse job history. So this was pretty damn quick. Motivation and a desire not to repeat the mistakes of the past where what drove me.

Good luck to you.

Gene

[Thirty-Nine]

Thanks for the kind words, Gene. I am certainly NOT treating this like a vacation. I've loaded up on freelance work, which is great. Although I will say I don't miss getting up at 5:15 am for the time being.