Chevy and Chrysler what can be done
 

Do we save or let chips fall where they may.

I think that Chrysler was sunk when they went private and after Daimler gutted them, but GM is a very international and diversified company everywhere else 'cept here in the USA. GM makes some interesting products overseas, but (if I have it correct) the union agreements here do not permit those products to be sold here. I think that GM is foolish to spin-off Opel and Saturn, regardless of sales.

GM must survive in some form...we must have a home-grown vehicle mfr here...perhaps it's GM and Ford.

Let the chips fall!

You know, if the previous administration and the present one would have said NO to ALL the bailouts, this country would end up in a LOT better shape than it will eventually end up being in.......




Indy

How so?

I'm no fan of the bailouts and I at least partially share your pessimism about their end effectiveness.

So let's play "what if?". What if our last two respective regimes would have played hardball with all the businesses who have been given a handout?

What would the end results have been in the long and short term, in your eyes?

Just for starters, how about less taxes as a result of NOT bailing them out for us, for our children, and for our childen's children, etc. Where did all that bailout money come from, and how are we going to pay it back?




Indy

I think if we lost two auto makers at one time, the domino effect would have been huge... could you imagine what things would be like if they along with many massive financial companies were to have fallen around the same time?

A lot of support companies and industries that supply their needs would be hitting the streets and failing too. This place could be looking a lot worse had SOME of the bailouts not have happened... Others could have failed though. They just suqandered the money..

I'm still waiting for the next shoe personally. A country can't be so indebt, and the government hanging onto too much business interest without some sort of big change coming down the road.... I just hope it's not during my time... life hasn't been so bad since the last big changes, next one could be.

I really don't think people who advocate the hands off approach really look at the big picture or have a unrealistic idea of how the economy works today.

On the other hand handing billions to banks with no strings was probably one of the more stupid ideas to come out of Washington when the people we handed it too have no ones interests but their own at heart.

If you think the tax bill for this will be worse than the ramifications of doing nothing, then I suggest you rethink things a bit deeper and consider all aspects of what would occur.

Most of the people I hear saying hands off also denied any problems to begin with.

The U.S. auto industry is small potatoes compared to the U.S. housing industry and nobody bailed anybody out there. Do you know how many companies and privately held businesses have failed, or gone under, because of the collapse of the housing industry? IMHO, if one or the other "had" to fail, I would have definitely picked the auto industry. And don't get me wrong, I'm against any bailouts, my point here was to explain how insignificant the auto industry is compared to some of the "larger picture" industries such as housing.





Indy

Nope, I see the big picture and I also realized there were problems to begin with, although most, if not all of those problems were self-induced, and what better way to correct them than to let tham fail and start all over. Learn the lesson and move on. The main lesson everyone is learning now is, it's okay fail because someone will bail us out? Corporate welfare must end now before the U.S. government owns everything.....





Indy

If you think this nation could survive just the economic impact of letting all these companies fail, then I suggest you really aren't looking at the big picture.

Then again if we let it crash, who ends up on top? The very people who crashed it in the first place, only then they would have total control.

Not my idea of what our forefathers envisioned.

Of course all this partsan BS isn't helping when both sides share equal blame and now stand in the way of getting back on track.

Is this the first time a few large corporations have failed all at once? No. Will it be the last time? No. What usually happens after someone like Chrysler and GM fail? People start buying Fords, Toyota's, Honda's etc. Where are they being built? Right here in the good old U.S.A. Will the surviving companies need to hire more people to keep up with their new demand? More than likely. Will "new" U.S. automakers come into the picture? Probably. Will they be better and more efficient companies to keep up with the other surviving companies? Yes, or they will fail too.

This same scenario has been played out several hundred times since things have been being built and sold for profit. Our ancestors survived it, and we will too, it's all part of the way things work. Sometimes you have to take a step backward to move two ahead.

Stockholder and executive greed, along with corporate complacency, has caused a great deal of turmoil to this great industrial nation of ours, and unless something gets done about it, like the collapsing of a few industrial giants to wake us up, nothing will ever change, and that, IMHO, would be our biggest mistake.





Indy

Guess I missed something.. seems a lot of banks ind insurers that passed out these toxic loans got bailed out... Now had these lenders not been allowed to get into hedge funds, and started tasting a lot of money, maybe they wouldn't have gotten so greedy and started taking so many chances and not passed out so many bad home loans and not needed bailouts...

So, what exactly does any of that have to do with the people who build houses, plumbers, electricians, window makers, insulatation manufacturers, lumber yards, flooring companies, etc., I could name a few more hundred different manufacturers and companies "nation-wide" directly related to the housing market, but what would be the point. NONE of the bank bailout money has been going to the correct entities at all. Like I said, the auto industry "IS" small potatoes in all of this. Where do you think "most" of the 9.8% collecting unemployment right now are coming from? If you guessed directly, or indirectly, from the housing industry, you'd be absolutely correct. So, besides paying each other huge bonuses, what are the banks doing with the bailout money?

To be honest, I believe you and I, and everyone, are really on the same page on this, and something just needs to be done about it.




Indy

The corps that borrowed the money are going to pay it back, with interest.
The money came principally from China.

It would not have been a few and yes it would have been unique. If you start from the premise that you did I would agree with your conclusions. However if you start with a faulty premise even sound logic will leave you with a bad remedy.

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.

Knock on effect
 

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.

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.

The big picture
 

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

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.

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.

Still think GM lost it when they threw out Alfred P. Sloan's business model that had served them so well for 50 years, back in the '80s. They have been waffling around ever since, going from one "flavor-of-the-month" to another ever since. I also don't think the gov't taking over GM & Chrysler is really the answer, either-Name me ONE THING the gov't runs well...But as I've said before, the car companies, their suppliers, the UAW, & the gov't should have set down, & learned how to work WITH each other, rather than kept up the "Screw You, Jack" mentality they still have. The boat's on fire on one end, & there's a big hole in the other end, boys, you'd better try to save it, or we're ALL gonna go down the tubes...

Amtrack
 

Amtrack, classic text book example of the Government running something.

Now maybe it works better near the big population centers in the Northeast, but here in Missouri it's a joke. The tracks run right through the center of town, so I spend a lot of time stuck at a crossing, and see two or three Amtracks each week.

They generally have the engine with three or four cars. Generally, I see maybe two or three heads when I look in the windows.

Now they have a shuttle which runs between KC and St. Louis (which is probably what I see), and about a year ago there was a big contest to give it a name.

Well, since it's a Missouri train, and our state animal is the mule, I thought about suggesting "The Jackass Express". But I didn't, figured it would just make someone mad.

I had some even better names that I won't go into...didn't want a black Crown Vic following me around.

Chas