Chevy and Chrysler what can be done

[kretinus]

Indy, I don't think this nation has ever seen the perfect storm we are seeing now, this is entirely different than anything we've faced in the past, even the depression.

If we let this crash, we see millions unemployed, which does nothing but compound the problem, we see the demand for social safety nets explode while revenue implodes, the end result being a nation where the wealth is now held by 1% and the other 99% slaves to those who hold the wealth.

And most the people who would suffer the most aren't likely to be those who share the most blame.

From what I can tell, your solution just causes more problems with no means of addressing them, it essentially tells everyone, tough luck, deal with it whether they had anything to do with it or not.

In todays society, I hope your prepared for a civil war because that will be the result, people have been pushed about as far as they can be pushed.

[Combwork]

The problem with "let them fall" is not the percentage of workers put out of a job, it's the cluster effect. When a major car maker does down, it pulls all it's local specialist suppliers down with it. This has happened (albeight on a smaller scale) in the U.K. You get unemployment black spots where the percentage out of work is way above the national average. I don't know how your country deals with large scale unemployment in a relatively small area, but if it involves paying government money to people on zero income, how does this compare with the amount of cash the government would be using to keep the industry going? At the moment, even with heavy discounting your car manufacturers are producing more cars than they can sell, but if low emmision high mpg really is the future, and you've shut down the people who are tooled up to make them, you're going to be importing the damn things and watching your trade balance go down the pan.

[hillbilly]

I don't see myself buying a new truck for a couple decades as being a pack-rat I collected enough parts to keep my two on the road that long.That is if gas is still avalible for them. By then, I'll be to old to worry about a car anyways.

Trade? Hell, I ran out of places to shop years ago, and really don't buy much since Made In USA is so hard to come by. I also carry two extra gallons of gas with me incase I'm out of town and need gas. That way I don't run out of gas looking for an American ran gas station.

[Charles]

This may be a little off subject, but here goes.

What we have just witnessed is the near collapse of the global financial markets. Our currency is based on debt. When the loans started going bad, the banks were unable to meet their obligations.

So the Treasury and the Fed created trillions of dollars out of thin air to shore up the banks and restore the money supply. Nothing to it, they do it all of the time, just not of this magnitude.

So, happy days are here again. The banks are solvent, there's plenty of money, but why ain't everybody happy.

For one, our crappy fiat dollar is based more on faith than anything. Everyone expected bad times, and closed their pocketbook. They are short on faith. Things start going downhill for there. We also have a consumer based economy, if people don't spend , the economy stops.

Let's not forget inflation. The more of something you have, the less it is worth. We've got plenty of money, but it's going to be worth less and less as time goes along. I don't think the Chinese are very happy about what's going on, they're holding 2 trillion of US debt, when inflation kicks in, they're going to wind up holding the bag.

As far as paying it back, well, there ain't enough tea in China. The only way it can be paid back is through inflation. The hidden tax.

I'm really not doing a very good job of explaining this. Click on the link in my thread The Creature from Jekyll Island. That fellow can explain things so that even I can understand.

Chas

[noonereal]

When Bear Stearns collapsed, the share holders received $2 a share instead of the $30 a share it had traded at the day before. They were shocked and angered. Why?
Because the Fed did not want to reward bad management for bad management. At the same time they knew that allowing them to just fail would lead to world financial collapse. So they did what they though was best given two bad choices.

The same is true of later bailouts. Printing all this money is very bad but doing nothing in the opinion of the decision makers is worse. Two bad choices are all they had. The went with what they thought was the lesser evil.

[OvenMaster]

Originally Posted by kretinus

...the end result being a nation where the wealth is now held by 1% and the other 99% slaves to those who hold the wealth.

Seriously, I get the impression that this is the eventual goal. Conspiracies abound about world governments. Bilderberg Society or CFR, anyone?

Intelligent people acknowledge the blunt fact that we as a nation and most likely a planet are bankrupt. The kitty is empty. The vault is bare. Our debts far outweigh our abilities to ever pay it back. It's not a matter of liquidity, but solvency. And so on.

Now, back to the OP's question. Chevy and Chrysler, what can be done.

Dozens of US carmakers vanished in the Depression. Chevy (GM) and Chrysler need to be drastically downsized to match their respective share of the auto market. Yes, it will hurt. But this isn't the 1960's anymore. They have capacity far in excess of what the market will support. But they need to realize that as taxpayers and forced shareholders, we will not give them a blank check to get them on their feet. The problem is that IMHO we've already given them far too much money.

Poorly run businesses simply do not deserve to continue. Ford saw this coming and started closing plants years ago. GM and Chrysler stuck their heads in the sand and denied reality and kept dreaming of the past, aided and abetted by stockholders who agreed with their unrealistic views. Time to pay the piper.