Should the US Government (Taxpayers) Bail Out the Big Three?

[Ron Earp]

Title says it all.

[Ian K]

Bottom line, yes.

The effect the collapse of the Big Three would have on the US Economy and
others is actually far worse than the current banking crisis. All of the parts
suppliers/subsidiary companies would collapse as well, and with Toyota having
significant operations in the US and having some reliance on the same
suppliers/subsidiaries, they will also face a tremendous problem.

I've gone back and forth on this - thinking maybe a reboot of the domestic auto
industry would be a good thing. But, in the end, it boils down to the loss of
jobs overall, and all of the companies affected.

Ian

[Rick Muck- Mark IV]

What amuses me, is politicians blowharding "they made their bed, they made bad decisions, they caused their own problems, etc." regarding the automotive industry BUT these same politicos had NO problem giving the financial industry a "hand" And who created the financial sectors problems? The financial sector!!

What is the difference, pray tell?

[chuck smith]

No. where does it end. You cannot continue to shore up a dying industry that is so heavily in debt. Although the near results would be painful, dumping the problem on our children when they need another bailout is silly. We cannot continue to print money and not expect consequenses. I say bankruptcy and a fundemental labor change is needed for them to become solvent. The UAW has sealed their on fate as usual.

[Ron Earp]

25,000,000,000 ($25B) and 300,000,000 folks (300M), that works out to $83 per capita, all ages included. I'm not sure where Sydney is going to get her $83 share, she was planning on buying some horse back riding lessons with the money she'd earned.

I want to see a lot of union concessions if a deal goes through. I don't have a pension, I don't have health care like those folks do, and don't make a lot more money than many similarly aged line workers despite having significantly more time and money invested in my education. IMHO the unions have severely damaged the US car companies.

[Jay V]

Originally Posted by Ron Earp

I want to see a lot of union concessions if a deal goes through. I don't have a pension, I don't have health care like those folks do, and don't make a lot more money than many similarly aged line workers despite having significantly more time and money invested in my education. IMHO the unions have severely damaged the US car companies.

+1

And politicians telling them how to make autos

[Brian Hamilton]

Very VERY interresting question. I voted "yes" and here's why...

The US is known for the automobile. Bottom line. When you think USA you think cars. If the big 3 automakers are allowed to go bankrupt, the economy will go further down the sewers. I agree that the ones in charge agreed instantly to bail out the financial sector, but are having to think hard on whether or not to bail out a major US industry which employs millions of people. If it were up to me, I'd bail them out INSTEAD of the financial sector. They are the ones who started the mess anyway. But, the fact of the matter is, we're pretty screwed right now. As said in another thread, previous choices made by everyone involved have caused this issue. Many are at fault, no one wants to accept fault, and now many are suffering.

As for the unions, I agree 100% with the above statement. The over-regulation is what will kill anything.

Here's my idea...

Fuel & insurance should be regulated by rules. Not run by the government, but RULES. They shouldn't be regulated to the point of bankruptcy, but they just need some regulations. The insurance field doesn't have any guidelines that I know of. They charge what they want when they want and change whatever they want. If I'm wrong, please fill me in. Fuel prices should be regulated, we've seen how high they shot up when the economy was fine, and now they're back down under $1.90 per gallon ($1.87 where I live). What in the world happened there? It was up to $4.00 a gallon a few months ago. WOW. I thought the fuel companies were only making $1.00 a gallon proffit? What a bunch of BS. Anyway, again I may be ill informed. I welcome any information to better inform myself & others reading.

Anyway, that's all I have.

Very nice poll Ron,

Brian

[Al Wohlstrom]

We just got done bailing out AIG, Fannie Mae, etc., there was massive wrong doing with all 3, AIG went out and had a $400k party. I believe the big 3 are more important for the economy than the prior 3. Yes.

[chuck smith]

I am not giving the financial sector a pass, but at least they have a viable product that should be able to get back on track, and certainly the collapse of that sector did not begin to cause the Auto industries problems, it just sealed the coffin. the US auto industry has been in trouble for a long time, they cannot compete even though foreign companies here play by the same rules, they do it better and cheaper with happier employees. I live in the same city as BMW, and although they are not immune frome the recession, their plant is thriving and yet Obama wants to open it up to the UAW. Stupid, stupid stupid

[theon]

I say give them a loan, then restrict all of the officers salaries of the big 3 to no more than 250K a year including bonuses etc until the loan is paid off. That should fix things up soon.

Theon

[Ian K]

Originally Posted by Ron Earp

25,000,000,000 ($25B) and 300,000,000 folks (300M), that works out to $83 per capita, all ages included. I'm not sure where Sydney is going to get her $83 share, she was planning on buying some horse back riding lessons with the money she'd earned.

I want to see a lot of union concessions if a deal goes through. I don't have a pension, I don't have health care like those folks do, and don't make a lot more money than many similarly aged line workers despite having significantly more time and money invested in my education. IMHO the unions have severely damaged the US car companies.

Actually, the UAW has already made some significant concessions over the past few years.
Newly employed UAW workers earn significantly less, and have less medical and retirement
benefits. Also, GM was on the verge of sloughing off most of their pension with the
UAW's support just to keep things afloat. For all of the UAW's efforts over the past few
years to make things the way they are now, they do acknowledge that they will have to
give up a lot to keep the industry afloat. And, without the Big Three, that's a lot of
unemployed union members.

Ian

[Scott Calabro]

No.

Remember TWA, Eastern, Pan American, Braniff, Business Express and the like?

They all went By By.

Funny, we can still fly on an airline too!

Now we have better airlines like Southwest, Jet Blue, Virgin etc.

My .02

S

[Chad]

Originally Posted by iank2112

Actually, the UAW has already made some significant concessions over the past few years.
Newly employed UAW workers earn significantly less, and have less medical and retirement
benefits. Also, GM was on the verge of sloughing off most of their pension with the
UAW's support just to keep things afloat. For all of the UAW's efforts over the past few
years to make things the way they are now, they do acknowledge that they will have to
give up a lot to keep the industry afloat. And, without the Big Three, that's a lot of
unemployed union members.

Ian

Yes, it seems to me that the US auto industries can't do anything without first doing something about the UAW. Bob Lutz seems to have been doing an excellent job at GM with turning out some very nice cars in the past couple of years. We have the new cobalt SS, Camaro, G8, Cruz, etc... The problem doesn't seem to be the cars or the leadership, it's the unions.

Ford has some good cars in Europe, but for some reason hasn't imported them to the US. I could care less about Chrysler.

Another question would be if GM and Ford could survive by filing Chapter 11 instead of receiving a bailout from the Government.

[Ron Earp]

Originally Posted by Conquest351

The insurance field doesn't have any guidelines that I know of. They charge what they want when they want and change whatever they want. If I'm wrong, please fill me in.

They have rules that are set by the state you live in. Our state has a Commissioner of Insurance, an elected official, that presides over this. It is heavily government influenced of course, but the insurance companies in some states have some extremely tight reins.

[domtoni]

Very emotional poll. I voted for the bail out because I believe that the country will be worse off.

But a couple of things have to change:
- the union workers should be made to work like all members of society, to 65 or 66. Fair enough for health care top up to medicare
- they should be paid competitively for their level of education - say $20 / hour with a high school education and the usual overtime
- GM (according to a cousin who retired from Electromotive) is a country club where golf scores have been the most important thing to an advancing career. He also said that most GM management doesn't know what they make, how they make it, what is intended to do etc - that's the second leg to the problem - I agree that Bob Lutz is the only one from GM who should survive
- U.S. consumers should look at buying what's made in the USA rather than a free market approach (Germans and French are oriented this way)
- the free market approach (the Bush and Clinton administrations) should be curbed to favour home production
- give local manufacturers a tax break - my cousin who runs a metal finishing business in Chicagoland notes his corporate tax rate 40%, while if something is imported from China, the business is taxed at 6%

The system is broke, and we need a major overhaul of how it works.

Best
Dom

[Ron Earp]

Originally Posted by domtoni

V
- U.S. consumers should look at buying what's made in the USA rather than a free market approach (Germans and French are oriented this way)

Not sure which is right, but my German friends are extremely "German-centric" in buying goods, as is the entire population of the German-based company I work for.

[Dave Peterman]

I voted yes here is why.

To me the unions are not the real problem. It takes a long time to turn a big ship. The Big Three could not react fast enough to prevent the issues they are having. Congress should of done something when our gas was climbing out of sight. Funny I paid $1.76 a gallon this weekend. After the hurricane near Galveston I paid 5.00 a gallon and we had shortages. Congress did nothing. I guess they could not see the writing on the wall.
The midwest is very dependant on the the big three they have suffered through years of the damage that Nafta caused.
If they are allowed to go under it will be disaster so many people. Iron miners, Limestone miners, great lakes sailors,Tool and die makers, plastic injection molding plants, tire makers, truck drivers the list goes on and on the supporting industries will crumble.
The little town I went to high school in sole means of income is tourism. They depend on the people in lower michigan to come up north for the weekends to snowmobile and camp out. The auto workers have not been coming much in the last couple years and it has hurt the areas economy beyond measure. My family all lives there

[domtoni]

Ron,

The other point I forgot to make:
- The U.S. can build good cars, with quality as good as anyone's in the world.
- For the past 20 years, the U.S. has been too focused on getting cost out of its product. Great idea when the system was loaded with fat.
- But as I have seen in the UK and the USA, no innovation in U.S. product was made (too much "next quarter profit focused"), the product gets old and no one wants to guy it, so you make it cheaper and go down the same route

In fairness, I have been impressed with GM's Cadillac and Corvette product range. The cars appear to be good and competitively priced. Ford's cars are either Volvos or Mazdas. The Chrysler 300 is an old E class.

Based on the above strategy, U.S. car consumers now prefer to buy German, or Lexus.

I guess we can than Roger Smith for the start of this decline of walking away from niche markets.

And he still gets a huge GM pension.

Ciao for now

Dom

[Ian K]

Originally Posted by Scott Calabro

No.

Remember TWA, Eastern, Pan American, Braniff, Business Express and the like?

They all went By By.

Funny, we can still fly on an airline too!

Now we have better airlines like Southwest, Jet Blue, Virgin etc.

My .02

S

Except American, Delta, United and US Air seemed to get free handouts from the
government all of the time to keep them afloat after the aforementioned
airlines went out of business. And yet Amtrak funding gets cut and threatened to
be eliminated completely on a regular basis.

Ian

[Ian K]

BTW, the UAW and GM came to terms in April that cut the wages of approximately
16,000 positions down to $14/hour. That's about 1/6 of GM's factory workforce. The
problem is getting the current guys to retire so the positions can be opened up at
the new wage level. But, if it works out, that should save GM about 1/2 billion
dollars a year.

Again, the UAW is well aware of the problem, and has been working with the Big Three to
help right the ship.

Ian