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Americans Torn Over Bailout for Big 3 Car Makers

dailyfueleconomytip.com — After spending years building up an infrastructure that produced profitable trucks and SUVs, GM, Ford and Chrysler are seeking funding to help convert these facilities into plants which make smaller, fuel efficient vehicles. Should the Big 3 be forced to do this on their own dime, or are they (using the new catch phrase) too big to fail?

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  • DangerCollie, on 09/15/2008, -3/+75I'm not torn. The big 3 auto makers fought tooth and claw against fleet mileage standards which would have compelled them to produce more fuel efficient vehicles.

    GM tanked the Volt. I bet they could have had a five year waiting list on those, but instead terminated the lease program and scrapped the cars.

    Now they want bailout loans. I think not. I'd rather put the loans toward companies producing electric cars, or converting cars to run on compressed natural gas and other alternative fuels. Make those loans preferentially available in areas that already have big 3 production facilities. Provide assistance for former employees to form their own companies and take over some of the abandoned production facilities. The market will ultimately pick the winners.

    If gas prices drop...and they will...the big 3 will scrap all the new fuel efficient product lines and go right back to making gas hogs. We're not going to progress as long as we keep bailing out the organizations that got us into these messes in the first place.
    • Hawker400, on 09/15/2008, -0/+3I think you make good points, but what makes you so certain gas prices will drop? Are they going to drop a significant amount - falling below $3?
    • fedorafandango, on 09/15/2008, -0/+6GM didn't scrap the Volt.

      http://online.wsj.com/article/SB122143673862434189 ...
    • Minarchian, on 09/15/2008, -0/+10At no time should government be giving away or lending tax money to Corporations....Social engineering shouldn't be done by a Country that's supposed to be a Republic.

      If you believe in freedom you'll know it's immoral to steal from Peter to pay Paul.
      • Hawker400, on 09/15/2008, -1/+2In that case, aren't all progressive taxes (like our current income tax system) anti-freedom? After all, those who make the most pay the most, and in turn their tax dollars go towards low income, social welfare programs.
    • Sidzilla, on 09/15/2008, -1/+10It's easy to point at the auto makers, but the government is just as much to blame. Ford is introducing a 65 mpg car in Europe that they can't import to the U.S. due to tariffs and regulations the government has in place. Even when they try they have to go around a mountain of bureaucracy.
    • rebrad, on 09/15/2008, -0/+7I disagree. If a bailout is nothing more that more regulation and control of an industry by a corrupt and technically ignorant Congress then let the Big 3's death be swift and humane. The British tried this back in the late 60s early 70s and their meddling only insured the death of the British Auto Industry. If Congress really wants to help the American Auto Industry get the hell out of their way and let them live or die by logical and rational decision making, not the slipping of cash from some dubious interest group to Congressional bank accounts.
    • bury, on 09/15/2008, -0/+5You mean the EV1, not the Volt, right?

      See: http://en.wikipedia.org/wiki/Ev1
      • BoonTobias, on 09/15/2008, -2/+1it's you!
        no matter where i go, what i say, you're always there!!!!!!!!
    • doctechnical, on 09/15/2008, -0/+2DangerCollie: You brought up a very good point, the government (made up of a bunch of lawyers who have little if any experience in creating a product or service, or running a business, or meeting a payroll) told Motown how to build cars they way THEY wanted. And Motown did. If Congress is going to call the tune, I say it's time to pay the piper. Except instead of bailing them out, lift the CAFE standards and other onerous regulations, and let the Free Market (what a concept!) decide what they should make. If there's a significant market for roller-skate bodies powered by 200cc engines, Detroit will build'em. If people want minivans and SUVs (and gosh, it looks like they do, based on how many are on the road), they'll build those.

      Stop telling people what to drive, stop telling manufacturers what to manufacture.
  • DeathJux, on 09/15/2008, -5/+43***** 'em.
  • dreams800, on 09/15/2008, -3/+50Let them go under. The argument that these companies are a matter of national interest holds little weight. These outfits are tied to the old way of manufacturing cars. If they disappear, perhaps someone else will step in with a new technology for getting us from point a to b. How about some cars that run on natural gas? Or solar? This will never come from these companies.
    • ascguy, on 09/15/2008, -1/+4Right, but how long would it take to get these other cars up and running? I think the argument here is the Big 3 already have the infrastructure set up to mass produce cars, so if they are able to update their plants, they could easily make smaller more fuel efficient cars, or other alternative energy cars.

      Part of the reason why our middle class is in such bad shape is because manufacturing jobs are leaving the country. If we can get these plants up and running and bring more blue collar jobs back into America (lost mostly due to NAFTA) then maybe we can right the ship.

      That being said, we are dangerously close to crossing the line into socialism, if we haven't done so already.
  • restonwebdev, on 09/15/2008, -2/+20I feel the same as dreams but unfortunately we're talking about a lot of job losses in areas already affected by higher-than-average unemployment. A lot of middle class families have been built on the big three automakers, although I believe most of that to be due to unions.
  • restonwebdev, on 09/15/2008, -1/+16Who says the Volt is canned?
  • Striker101, on 09/15/2008, -2/+18oh, what the hell, they're gonna bail 'em out anyway. that will just give the collapse another boost so MAYBE we'll get it over with, after the next dark age. if somehow we can instill some morality of liberty in the brainwashed.
    • Pitofdoom, on 09/15/2008, -1/+4The wait is getting quite tiresome, get it over with already !
      Or is PHD boy just trying to one again prove how smart he is ?
  • Truzseeker, on 09/15/2008, -2/+15Yes, all of this wonderful technology, and no one to buy it because we are quickly headed into a recession. This is nothing but a distraction from the real issues, and I should have buried this story as propaganda.
  • Homerr, on 09/15/2008, -2/+17Why I'm not likely to buy an American car, I'm planning on buying something about $28k or less.
    1. gas mileage (where's my 65mpg diesel?)
    2. styling (subjective, but nothing out there that is American that grabs me)
    3. cheap interior (my 1995 Honda Civic has a nicer interior than many sub $30k American cars)
    4. handling (ever watch Top Gear?)
    5. I'm sick of them whining that they can't do better than 28mpg and lobbying to stop any thought of raising it.

    I'd love to buy American but I won't buy a POS.
    • HOTM, on 09/15/2008, -1/+1Nissan Sentra!

      Not a 65mpg diesel though.
    • larissa13, on 09/16/2008, -0/+1Scion (Toyota) TC~not bad for the price!
    • brightlight4, on 09/21/2008, -0/+1HOW about ELIMINATING FUEL for a start? CLEAN energy cars and there are some good efficient models about waiting to be put on the factory floor.
  • Y0tsuya, on 09/15/2008, -1/+22They had their chance to invest when they were making money hand over fist with the SUVs. Since they didn't, they deserve to go under. I don't mind buying foreign cars.
  • Pitofdoom, on 09/15/2008, -2/+4Just think, if you were a big 3 rebel or maverick being squashed day after day,
    now "the man" goes groveling to gov. boy begging for money...

    Wouldn't you start crying and laughing yourself ***** less !!!
  • Livewired, on 09/15/2008, -1/+13What would we bail them out with?
    • brightlight4, on 09/21/2008, -0/+1YOUR money Livewired!!! YOUR taxes, YOUR sweat at work, that is what you bail them out with. (If there is anything left after paying out the almost trillion dollars to bail out the others of course).
  • Oxygen, on 09/15/2008, -5/+3Yes, lets let three of the largest companies in the US collapse and eliminate millions of American jobs. That'll sure help our economy.
    • dilpil1, on 09/16/2008, -1/+1Propping economies up works.
    • brightlight4, on 09/21/2008, -0/+1Yeah!!! Let's help the vampires keep sucking blood, after all they will pass a few drops down to us and we can just about survive. Doesn't matter that it is the workers taxes which come from the WORKERS efforts and not from the company bosses who did such a rotten job of forseeing this happen.
  • wynja, on 09/15/2008, -2/+20Too big to fail my left ***** nut. Have any of you been to Michigan lately? ***** the Big 3 automakers. Let them ***** die for abandoning the American worker.
  • JoeRockEHF, on 09/15/2008, -1/+23I say let 'em go to hell. I'm tired of bailing out companies unwilling to change.
    • larissa13, on 09/16/2008, -0/+5Im tired of bailing out companies unwilling to hold their own accountable for poor direction & actions. There should be people headed to prison from Fannie & Freddie. Theyll never see what life it like behind bars~its a government operated business. There are too many greedy companies out there; none of which are worried about the American consumer expect how to get them to part with their hard earned dollars!
  • TheLoneWolf071, on 09/15/2008, -0/+20Look, I know that letting the big companies collapse would be bad for the economy, but it needs to happen. The thing is these companies were smart enough to know how not to go under, and they screw the pooch. It also sends a bad message of "Do what you want to get big, and if you cannot support yourself, we'll bail you out for your reckless behavior".
  • Ebacherville, on 09/15/2008, -0/+20Honda is doing just fine in this economy, NO TAX PAYER DOLLARS FOR BUSINESS, these companies screwed them selfs, let them suffer there own death.. Same goes for banks airlines etc.. let them die a cold hard death.. NO TAX MONEY FOR BAIL OUTS
    • brightlight4, on 09/21/2008, -0/+1They could do what we have done in Spain, hand the companies over to the workers and let them run them and ALL workers share in the benefits, from top to bottom and I bet the workers would make a damn better job of it than the present bosses.
  • AsylumAleikum, on 09/15/2008, -0/+10***** the Big 3, and cluster ***** the UAW.
  • granolajoe, on 09/15/2008, -0/+14I don't think it's fair that these companies ignored the signs of skyrocketing gas prices a few years ago and arrogantly continued to pump out gas-guzzling SUVs and trucks. As others have pointed out, they may just go back to their hog-producing ways as soon as the tide turns to their favor. And as mentioned in the article, future profits will be privatized.

    The only way I can see this working out for the automakers as well as the general public is that these loans come with some strings attached. Perhaps they should meet a quota of fuel-efficient vehicles before being able to produce anything else? What about a restriction that limits them to making fuel-efficient vehicles for a certain number of years?
    • Hawker400, on 09/15/2008, -0/+3back in the 1970s when the government bailed out chrysler, i'm pretty sure they (the government) structured the deal so that they would share in future profits, up to a certain point.

      but, as long as money grows on trees (aka the fed's printing press) we'll keep seeing these bailouts.
    • brightlight4, on 09/21/2008, -0/+1How about the deal being a clean energy vehicle? I have seen some fantastic clean energy vehicle ideas on the net, why can't they produce something like that? And these ideas I have seen are NOT pie in the sky, they run fast and are very very nice cars.
  • thegreenknight, on 09/15/2008, -0/+16I say we have Big Oil bail them out, its their seedy arrangements and shady agreements to keep gas a valuable commodity that screwed them over in the first place. Now that it didn't work out for them they want us to pay for their underhanded dealings?

    Sounds like the America we all know and love.
    • Hawker400, on 09/15/2008, -0/+2Do you honestly think there was some sort of under the table deal?
      • thegreenknight, on 09/16/2008, -0/+0Do you honestly think that two of the largest industries in the country, that just so happen to have a symbiotic relationship with each other, aren't going to take advantage of that relationship?

    • MelvinSchlubman, on 09/16/2008, -0/+2Why would the oil companies care if the cars burning their gas are American or not?
  • StingingNettle, on 09/16/2008, -0/+14Capitalism is suppose to be a judging machine. It does not guarantee success. It is suppose to reward those who make wise decisions and punish those who do not. They deserve NO bail out. They should be punished for not considering that one day fuel costs may actually rise. If they did not choose to hedge against that possible scenario then that is their fault and they deserve to fail. I should not have to pay for them.
    • larissa13, on 09/16/2008, -0/+2Very well said. Youre exactly right but as we move to a socialist society, the government will be expected to bail out every company unable to make wise decisions!
  • pinkpackrat, on 09/16/2008, -0/+16It's called privatizing profit and socializing loss:-)
  • crashbang, on 09/16/2008, -0/+11This country use to have hundreds of auto manufactures.
    http://en.wikipedia.org/wiki/List_of_defunct_Unite ...

    With CAD, the hundreds of out of work auto engineers floating around, rotting warehouse space in every major American city, and everybody and thier brother itching to start the next green auto revolution, I say let them bite it. Boutique auto making could actually bring some real competition back to the US market and get us all those high tech jobs they keep talking about.
  • Digg4This, on 09/16/2008, -0/+11People stop worrying! The government has tons of money, the federal reserve can just print more if we need it.

    Wake up Sheeple!
    • Hawker400, on 09/16/2008, -1/+1Please tell me you're being sarcastic.
    • jperson, on 09/21/2008, -0/+1I've been printing money all morning and I'm STILL worried.
  • GrandmaSheila, on 09/16/2008, -0/+12Socialism exists here solely for the oligarchs and corpocrats. The other 98% of the people get to pull their frayed bootstraps, get a boatload of pious platitudes about "responsibility", and the bill for the bail out. This cosmic scale pillage is of course known as "free market capitalism".
    And the idiots vote to keep them in power every time, because "socialism is evil", except for the corporate swine.
    So, suspecting there's still a few shaved coins left in what is laughingly called the National Treasury, the very companies who did nothing at all to change their 19th century technology, are lining up with their hands out.
    ***** them, and I second thegreenknight's motion: let the oil cartels bail them out, they've making "record profits" as everything else crashes to the ground.
  • Hawker400, on 09/16/2008, -0/+9***** YOU DIGG. Every time an article from this site gets near 300 diggs it gets buried for no apparent reason.
  • JenniferInMO, on 09/21/2008, -0/+7This makes me so mad. Instead of focusing on fuel economy which is what we Americans have wanted since the 70's they pumped up the size of their vehicles and went on a massive marketing war to get us to buy big SUVs. They associated big with rich, powerful, safe and just about everything we desire but don't necessarily want. It makes me just as mad that Americans bought it hook line and sinker. And by the way, the technology is out there to get far more fuel efficiency out of existing vehicles AND to offer us vehicles that are more efficient with biofuels. They don't need R&D money. They need retooling money which is something they should have planned for. Any dope could have told them that. The CEOs who make tens of millions (or more) a year aren't worth a dime if they couldn't anticipate the need to retool and do it over time.
  • Macrophage, on 09/21/2008, -0/+3Anyone know where WE..the Average American..can get some papers to fill out to be BAILED out....just curious..i'd hate to miss out.

    PEACE
    John
    GrassRoots for OBAMA/Biden in 08 and 2012
  • bradhart2, on 09/21/2008, -0/+1While I agree they should have been doing this for themselves long ago, this is another industry we can not let fail. We will likely have to bail them out and it shouldn't come without serious repercussions, but failure to do so will quickly mean an immediate financial crisis for bottom fifty percent of wage earners in this country, followed within a year a total collapse of our economic infrastructure leaving us just a broke ass third world ex-superpower.
  • yellowcakewalk, on 09/21/2008, -0/+4***** 'em. I want my money back from the Great Wall Street Rip Off too.
  • jodimcmullen, on 09/21/2008, -0/+1The car assembly plant in Oklahoma built with nearly a billion in bonds has now been sold to Tinker Air Force base for about 9 cents on the dollar. Gone forever, I can only imagine how terrible it is in Michigan and Ohio.
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