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318 Comments
- metapop, on 11/18/2008, -2/+118the free market has to define success in the marketplace, otherwise we will just establish a handicapped industry, incapable of competing with the world market.
also: i always liked mr. rogers. i'm glad he's back. - inactive, on 11/18/2008, -19/+131Stop the bailouts, stop the socialism, stop the regulation. Move toward laissez-faire, or our crisis will worsen. Let the losers lose!
- Number23, on 11/18/2008, -11/+109Toyota employees more workers in the America then GM.
GM had DECADES to get their act together, instead they thought the could sell 6000lbs Suburbans forever.
***** them. - CrazedLeper, on 11/18/2008, -10/+74If Detroit automakers don't know how to make and sell cars then they shouldn't be in the car business. Problem solved.
- inactive, on 11/18/2008, -6/+61George Will is one of the few reasonable mainstream media conservatives left. At least 100x better than Bill Kristol.
- inactive, on 11/18/2008, -2/+45The real question: when will the bailouts stop?
In order: Banks, automotive industry, pharmaceutical industry, farming industry, and oil companies.
Do any of these companies have anything in common...like let's say-lobbyist.
We're getting hosed. - sheeplescareme, on 11/18/2008, -4/+45congress can pass all the laws they like and spend trillions in taxpayers money, but the markets cannot be forced. the only way to save the big three is to allow the markets to work. by trying to help them by inflating the currency, we are merely prolonging the inevitable at a great cost to ourselves. if they fail, it is not due to deregulation or lack of public funds, it is simply that their time ran out or they were mismanaged. either way, it is the nature of the beast.
- nosecohn, on 11/19/2008, -5/+43Welcome to America, where we love capitalism... except when we don't.
If the market is supposed to reward success and clear out the dead wood, why should we hinder progress with a Detroit bailout? So they can keep making bad cars? There are plenty of companies employing American workers to manufacture cars in the US, and they're turning a profit too. It's just that they have names like BMW, Honda, Hyundai, Mazda, Mercedes, Mitsubishi, Nissan and Subaru.
Bankruptcy is the time-tested mechanism by which companies who have made by poor strategic decisions get protection from their creditors (and bad labor contracts) and time to reorganize. Detroit should take advantage of that. If the Treasury wants to provide loan guarantees so that bankruptcy doesn't mean extinction, that's probably OK during this time of super-tight credit. But bankruptcy is survivable, and most companies come out better for it. - faithhealer, on 11/18/2008, -0/+30They know how to make and sell them, they just don't know how to make a profit doing it, which is a rather important aspect of running a business.
- twinklyJesus, on 11/19/2008, -8/+38They were selling them. That's not the problem. Toyota has employees it pays reasonable wages with retirements that are comparable to most other jobs. GM, Ford and Chrysler have UNION wages (through the roof) with retirement packages and perks that are bankrupting them. The Japanese are not union shops and don't have the overhead.
Union automakers use union made parts which are more expensive, union made tools which cost more with union labor which is costing at least double per hour from what the Japanese pay.
If there were no market for SUV's Detroit wouldn't sell them. No one forces the consumer to buy big, they do because they want big. Therefore, Detroit builds big. FYI, that's how supply and demand works in a capitalist system. - drlha, on 11/19/2008, -0/+27Bill Kristol has one of the world's most punchable faces.
- lensman00, on 11/19/2008, -4/+27If you could go back to the turn of the 20th century and bail out the carriage trade, would you?
The world is changing. Technology moves ahead and each new generation brings its own tastes and methods. One of capitalism's strengths is an ability to shift toward new ideas while putting the old to rest. Let's focus on retraining and R&D seed money to create tomorrow's labor force and businesses rather than mourning over the bones of once-great industries of the past. - humperdinck, on 11/19/2008, -4/+23Agree with stopping bailouts. Disagree with stopping regulation. A little preventative medicine and maybe we wouldn't have gotten so diseased in the first place.
- habbofresh, on 11/18/2008, -5/+23in part, but not exclusively.
- Genghis1, on 11/19/2008, -0/+17Japanese Auto execs are ENGINEERS.
American auto execs are bean counters.
This is the reason America fails. - humperdinck, on 11/19/2008, -3/+19"Industry must be motivated to regulate itself. "
You mean like the financial industry did? You can't trust these people to do what's right for the longevity of a company. It's not like the olden days, where people start in the mailroom and retire as upper management at the same company their entire lives.
Executives come and go, making the fastest, largest buck possible before moving on to the sink the next ship. - geoffg, on 11/19/2008, -8/+24I'm guessing no one here will point out that the unions are a HUGE part of why the US auto industry is a joke. Foreign competitors with plants in the US pay on average $40 an hour while the US plants pay $70. Bankruptcy will crush the auto unions and solve the problem once and for all (with unfortunate but necessary pain in the short term). Anything else will just continue the spiral of mediocrity that is the US auto industry.
- bigtallmofo, on 11/19/2008, -2/+18Excuse my rant, but I hate you ***** that know full well that bankruptcy does not equal the end of a company yet to fulfill some hidden agenda you have you pretend like it is. Chapter 11 bankrupcty is specifically designed for this situation. Airlines have been in Chapter 11 bankruptcy multiple times, yet people still had no trouble buying airline tickets a year or more in advance while they were in bankruptcy. Why? Because everyone knows that a company that is in Chapter 11 bankruptcy will come out stronger than ever as they shirk off decades of unsustainable deals.
The UAW and management is trying to convince everyone that bankruptcy = end of the world because the only losers in a bankruptcy are the union bosses and company management. They typically get fired. - PhillyMJS, on 11/19/2008, -1/+16"Well, sales are down about 40%..."
...and the sickening thing is that GM was apparently caught off-guard by this: "You mean consumer tastes can CHANGE????" - 3tcp, on 11/18/2008, -0/+14Bankruptcy does not mean dissolving the company, it means protection while they restructure the company. Most major airlines have declared bankruptcy since 9/11 but they have not gone out of business.
- 3tcp, on 11/18/2008, -9/+23The big 3 need to be allowed to go bankrupt in order for them to be allowed to renegotiate bloated union contracts and buy out their obligations to many of their employees. The amount of the long term debt from these contracts means the severance will be large enough to offer a comfortable retirement. Meanwhile they can renegotiate terms with younger workers, layoff some and retrain others to be able to fill jobs that are more in demand. There is a shortage of mechanics and car maintenance/repair people in this country and someone who has been good, hard worker on the assembly line for the last 10 years would be an ideal candidate for them to pay for them to spend the money to get them enough of an education that they can then work at a dealership repairing cars.
- inactive, on 11/19/2008, -2/+16It's like putting a band-aid on an infected wound, or a gangrenous limb and expecting it to get better. It's time to cut our losses.
- EatingPaste, on 11/18/2008, -11/+25I think it has more to do with our unions...
- chmcarro, on 11/19/2008, -1/+14Bill Kristol is a neoconservative, which taints true conservatism.
- RudeTurnip, on 11/19/2008, -3/+16During the Depression, people left their homes and migrated.
- 3tcp, on 11/18/2008, -3/+1510% Not even close.
When the automotive industry goes bankrupt that doesn't mean that it has died. Bankruptcy will allow them to protect their assets and rengotiate the terms of their contracts and debt obligations while restructuring the company into a leaner, more flexible and more sustainable business. As it is, they cannot compete with foreign car companies who manufacture their vehicles in the US. - algaeturd, on 11/19/2008, -6/+17The automotive industry ***** itself. They lobbied harder than anyone for laws to protect them and their business practices and it backfired...plain and simple. It was a situation where the greedy got greedier and now they're using 'the workers' to justify their need. The automobile industry doesn't give a ***** about their workers. They want huge profits for CEOs, they want to squash hybrid and alternative fuel technology and they want everyone to buy old technology gas-guzzling ***** mobiles. They had DECADES to prepare for this but chose not to, opting instead to try to change the rules by manipulating government.
But guess what...the customers will decide how this industry does and that's why Americans are buying smaller, more fuel efficient, newer technology cars. And will continue to despite how the auto industry tries to manipulate laws and regulations. - Rndm_Tngnt, on 11/19/2008, -3/+14"If there were no market for SUV's Detroit wouldn't sell them."
Well, sales are down about 40%... - tmonsta1, on 11/18/2008, -14/+24"redistributing wealth from the successful to the failed, an implausible formula for prosperity"
what, like the banking system...
this ***** just wants the big 3 to go belly up to bust unions... nothing more
I guess he didn't get the message, that the middle class is a little pissed - 3tcp, on 11/18/2008, -0/+10I disagree, but for the sake of argument let's assume you are correct. If this were true then the time to discuss a bailout would be after they had done everything they could to survive on their own. It would be after they change the way their company runs to maximize the long-term viability of their company. Until then the government would just be supporting failure.
It is a fact that this industry is NOT on the verge of total collapse. It is on the verge of bankruptcy due to a business model & structure that is unsustainable and cannot compete with foreign competition. We should not be bailing out a company that is doomed to failure until it has begun implementing a plan that shows that they will be able to survive on their own without long term government assistance. We should not give them $50 billion dollars today unless we have good faith that they will not need another $50 billion in 5 years and that the government will be able to get that $50 billion back over the next few decades. - Rndm_Tngnt, on 11/19/2008, -0/+10Capitalism on the way up. Socialism on the way down.
- habbofresh, on 11/18/2008, -3/+12did you know that across the catalog, $1500 for every GM car went to retirees?
- tonto69, on 11/19/2008, -2/+11Should we bail out the porn industry next?
- DarkStar3333, on 11/19/2008, -4/+13Because Michigan is a fantastic land of opportunity right now correct?
In order for them to be competative they have to get rid of the increasingly heavy UAW shackles around there neck. The unions are not interested in providing any sort of concessions so why should anyone loan them money so they can limp onwards only to require even more money down the line.
Cumulativly the "Big 3" are hemoraging close to 10 billion dollars a quarter from a business model they are unable to change. Compare the pay scales of identical jobs between automotive to any other manufacturing industry and you will see why this is a good idea. If the going rate for Job A is $15hr then paying someone $35 is ludicrious.
90% of all manufacturing jobs are not skilled labour and should not be paid as such. Bankrupcy would allow the autos to enter the 21st century and revamp the fundamentals of how they produce vehicles. - Carl306, on 11/19/2008, -3/+12I hope I'm not the only one who's blood pressure rose while reading this article. These corporations are making me sick to my stomach, as are some of the people who are proponents of all these corporate bailouts. I had an interesting conversation with a classmate in one of my finance classes the other day. We were talking before class and she mentioned how she wasn't thrilled about Obama and hadn't voted for him because she felt he was a socialist and wasn't a fan of that type of ideology. When class started our professor asked about the bank bailouts and whether or not the auto industry deserved a bailout, and low and behold, she claimed the banks needed the bailout and that Detroit should receive one as well to prevent the industry from going under. Irony at its finest. All I could do was an epic facepalm in her direction.
- jbmcb, on 11/19/2008, -1/+9To put it in perspective:
Gross Revenue (Factors into GDP of the entire country)
GM - $181 Billion
Ford - $172 Billion
Chrysler - Figure around $60 Billion (they don't release figures, at last count it was $67B)
= $413 Billion
HP - $113 Billion
IBM - $99 Billion
Dell - $61 Billion
Microsoft - $60 Billion
Intel - $38 Billion
Apple - $32 Billion
AMD - $6 Billion
nVidia - $6 Billion
= $415 Billion
So, if the big three go under, imagine the economic impact of HP, IBM, Dell, Microsoft, Intel, Apple, AMD, and nVidia all going out of business at the same time. That doesn't include all the suppliers that will tank as well, and there will be a lot of those. Figure another couple of hundred billion on top of the $413, evaporating.
Think the dot-com collapse was nasty? That was NOTHING. - diggduggjoe, on 11/19/2008, -3/+11You do not understand. GM, Ford and Chrysler need Chapter 11, desperately. It is the only way to fix them. They must change their business models and that can only happen under CH11. This is a case of being cruel to be kind. Detroit will not be destroyed, but will rise like a phoenix!
The government has screwed up everything. The did not let Wall Street fail. They do not want to let the automakers fail. So, the solution is to destroy all the markets and then cry that the free enterprise system doesn't work. Then, we can have the Kenyan Candidate offer up more socialism. - Spuy767, on 11/19/2008, -2/+10The UAW wants to convince everyone that Ch. 11 is the end of the world because it may very well be the end of the UAW. When jobs are not retained on the basis of performance, mediocrity reigns.
- thejokker, on 11/19/2008, -3/+11Canada and Mexico have an automotive manufacturing industry, they just work for foreign companies. Also there are car plants across the south providing manufacturing jobs in this country, making nissans, hondas and kias.
It's not like michigan is the only place to build a car. - dig1x, on 11/19/2008, -4/+12Korea, Japan and Europe all have unions that are stronger -- and their emploees are paid better with more security.
Yet they manage to make and sell cars.
The problem *aint* "the outdated unions". - sumraanym, on 11/19/2008, -3/+10Are you out of your ***** mind! Toyota has just 36,600 US employees compared to 239,000 US employees working at General Motors. But you say, "***** 'em, I'm not effected." Guess again. When you add up the 700,000 retirees still living on the verge of loosing pensions and several hundered thousand more jobs lost at suppliers, and millions of more jobs lost in the ripple effect, were talking a 4% loss to America's GDP, at a time when the country is already in terrible financial shape. You will feel it. If you hate America so much, then continue to follow the rest of the sheep.
- nosecohn, on 11/19/2008, -0/+7The banking industry is international and interconnected. It's not really a question of saving "American" banks, as it is supporting the overall credit markets.
The goal with the bank bailouts was to get credit flowing again, which is important because credit affects nearly every business in America. Unfortunately, it's not working... or at least not yet. Nearly half of the bailout money has already been distributed, but banks still aren't lending. Expect a rash of bankruptcies if that doesn't turn around soon.
Bank failures are less of an issue. Banks themselves get put into FDIC receivership when they fail, and then the assets are often get sold to other banks. That process has worked quite well throughout this crisis, and the FDIC is to be commended for working so efficiently. - inactive, on 11/19/2008, -1/+8we're getting raped.
- inactive, on 11/19/2008, -0/+7Cool. It's not only ME who thinks this. If I could take a swing at one talking head on TV, it would be Kristol.
- AmyVernon, on 11/18/2008, -4/+11Though your comment was completely apropos of nothing, I love the thought of Mr. Rogers as a zombie.
- ninjaturtles1, on 11/19/2008, -4/+11It's never cheaper to prop up companies than to pay the welfare costs..........
From what I understand this market is struggling because these people are over paid anyway, so they should have some cash saved for a rainy day. - acknotSW, on 11/19/2008, -0/+7Right on man!
I'm a senior electrical engineering major in the detroit area. I've had numerous professors who are or were PhD engineers for the big 3. Several of them have mentioned that the big 3's upper management does not contain a single person with any engineering training or experience. The first time I heard that I was floored. - habbofresh, on 11/18/2008, -4/+11Unfortunately I have to agree.
As a bitter resident of Detroit and formerly Flint, MI I think auto execs should suffer for the 'brilliant' labor decisions they've made over the years that allowed the localities slide.
but also, as a bitter resident of Detroit and formerly Flint, MI, I do not want the supporting industries to take the local decline any further.
Automotive is not an exclusive retail tier. it is a KEY INDUSTRY. supporting industries *including oil* will suffer. - muckemuck, on 11/18/2008, -3/+10Either our representatives will show us they're tough and will stand up to the automakers and not bail them out.. or they'll bail out the automakers only if the unions allow for major changes in the US auto industry.. . in return they're going to pass EFCA and make it easier for the unions to move into other industries.
- algaeturd, on 11/19/2008, -6/+13I think Ayn Rand was an overrated, pretentious hack but I agree with your statement.
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