*laughs so she doesn’t cry*
Yeah, I know the feeling.
It would be funny if it wasn’t terribly true.
While I don’t much like it either, I’d rather give them a bridge loan than dump 3 million more unemployed people onto an already over-saturated market. Not to mention the business repercussions from their demise.
Well…yes and no. I’m of two minds about that.
Presumably, if the Big Three fail, people will still need cars, so in the long term, a lot of those workers will simply be picked up as the other carmakers (like Toyota and Honda, who already make a large number of cars over here) hire them to expand and fill the gap.
On the other hand, yeah, short term, a lot of folks would find life sucking. And not for any reason of their own; the problems with the Big Three, and the shitty cars they produce, aren’t the fault of the rank and file workers at all. They’re the fault of failures and mistakes by upper management, who will doubtless be well taken care of even if the companies go out of business.
I almost totally agree with this. The problem is, that a natural demise of a company isn’t what’s happening here. A natural demise would be direct cause and effect. You make shitty cars, we won’t buy them, you die… a,b & c.
What we’re experiencing now is that the cause is due to “out of control” government non-regulated housing and banking oversight that was bleeping not paid attention to. Where bankers were lending all sorts of money to people who couldn’t afford them and loans were flipped upside down and tehre was just really cruddy management of the flow of money in this country. The majority of which went directly into the pockets of overpaid head honchos. (and yes, that includes the big 3). People of knowledge were warning the government for years this was coming.
So, on one level, I have no problem with the big 3 dying off – but this is an unnatural death. During a normal economic swing, workers would normally be assumed by other car companies or other businesses, right now, there is no place for these men to go. And with jobs already scarce as they are, this will ultimately only put more stress on an overburdened system.
All of which scares the snot out of me. 🙁
“Government non-regulated housing and banking oversight [sic]”?
Or possibly too much government oversight? The reason Fannie Mae and Freddie Mac were making sub-prime mortgage loans was because the HUD mandated them to back in 1991 (in the Lame Duck days of another Bush… hmmm…). The control over the FM’s was half-assed, though; they were told to provide loans for under-privileged persons, but weren’t (originally) backed up for when those loans default. So, without a source of gov’t backup, they sent it on down the chain, and banks bout the sub-prime loans.
Also, in any capitalist system, there’s booms and busts (in many other forms too; then, they’re just called ‘before and after the coup’). You have to take the bad with the good, or else everything gets propped up with bad legal language, money that doesn’t exist getting spent 3-times-over, and stop-gap measures that are just temporary fixes, like a bailout.
Counterpoint; not sure of the validity of their claims.
Also, I can’t find who sponsors the Center for Automotive Research, the group that put out those figures, but chances are pretty good it’s not the ‘Americans for Foreign Cars Association’.
Those are good articles, but I don’t think they look far enough. They concentrate specifically on the factory employees and some suppliers. I don’t think they bring in numbers from the dealerships across the country, the suppliers of the dealerships (office supplies, etc), the suppliers of the corporate headquarters and the restaurants that do the majority of their business during the lunchtime rushes from the plants – there’s a domino effect of that many jobs at one time being lost from one sector of an economy.
Right now, we’re in a slump. Definitely. And people are just squeaking by. Last months unemployment numbers were 500,000+ across the nation, over many sectors. While the article on CAR was interesting, I do think it was possibly incomplete?
But that’s my .02 coppers.
well, it’s bail them out — to the tune of less than 10% of what the financial industry got, and no one asked the CEO of AIG how he got to DC — or watch the economy free-fall.
We can’t let that many jobs disappear. I want there to be something left of the country for my son.
This is a valid point, I just wanted to comment on the irony of a modernist, liberal interpretation of the constitution combined with an icon from the Constitution party, no?
note: If it’s not a Constitution party icon, I’m going to look retarded. XD
well, it appears to have disappeared for the moment (stupid LJ), but it’s an ACLU sticker in that icon.
Damn! Irony DEFEAT!
…aaaah, I can see ACLU (now that I know what it says) in the link on the bottom.
you can see it?
I can’t. Hmmm. I cleared my cache. Perhaps I should restart my browser…
You’re not the first person to think that it was a Constitution Party thing, tho. Maybe I should get something a bit more obviously ACLU. 😀
Yeah, I have the same bumper sticker on my car. They sent it to us for free when we signed a petition for being a voter who votes on issues based on what’s constitutional, not necessarily what’s in line with our party.
I’m not entirely sure a bail-out will work, for two reasons.
First, because the money would come from additional Government debt, which is another potential economic disaster looming, and one that could potentially dwarf the effects of the failure of the big automakers.
Second, because according to at least one industry analysis I have read, Chrysler can’t be saved no matter how big a bailout it gets. It has invested so little in manufacturing infrastructure over the last decade, and it has reached a point where it has so little capital available to replace machinery and equipment that is obsolete or worn out, that its demise may be inevitable no matter what it (or the government) does.
I wish there had been this much uproar when we were handing out $700 billion to the investment bankers on Wall Street.
Me too. The Investment Bankers are the ones I see as being responsible for most of the problems with the economy. They shouldn’t have gotten a bail out.
Yeah, the way I see it, a dozen financial companies failing would just like cleaning house. And if we could take all of the “now unemployed” executives who ran those companies and convert them into soylent green, all the better.
LoL Nice – I needed the laugh. 😀
and I wholeheartedly agree with this.
It’s up to $1.5 trillion now the government has quietly announced a second round of bailouts to the tune of an additional $800 billion,a nd it surprises me that that wasn’t all over the news. That amount to, what, four grand, five grand, for every single American citizen? Somehow, I don’t feel like I’m getting my money’s worth.
Not that, y’know, it’s actually my money. The money is coming from government debt, so I’ll get to pay it back with interest!
Yeah, what gives? We need public hearings and a media circlejerk around the requested $25 (now to up to $34 billion) auto industry bailout, but they can throw another three-quarters of a TRILLION dollars at Wall Street without so much as blinking an eye.
Something smells very rotten here.
Amen to that.
I have complicated feelings on this issue. My Grandmother was one of the first women managers at GM as she was the head of the accounting department and she retired from GM. My father worked for GM for longer than I’ve been alive with all kinds of certifications on machine repair (he was hourly and union, though he hates the union because of the politics involved with it). I’ve always gotten the GM discounts on cars, though I only chose to use it to purchase my 2004 Pontiac Aztek (as I generally only like the Pontiac designs or the Saturn designs on GM cars), and received over $10,000 off on that vehicle. It’s been a very good vehicle for me, requiring minimal repairs (actually just maintenance), and gets ok but not great gas mileage (about the same mileage as the RX8 was looking at) as it is on a car frame and not a truck frame.
That being said, GM screwed over my Grandmother and her benefits, as well as screwing over my Father’s retirement and his benefits. He’s now working for Onyx (I think that’s the company name) which is the company that bought the GM plant he worked at.
I was pissed enough at what happened to my family that I told them both that I will never buy another GM vehicle for soooo many reasons. They’re both of the opinion that people should still buy GM vehicles and that GM had to cut their benefits to survive.
I feel like GM would be in a better position if they hadn’t put all their eggs in one basket (i.e, the SUV and Truck market). I also feel they should have actually seen what the market wanted, and produced more cars with better gas mileage, so they could actually acquire more of a market share.
Bleh, I hope some of this is coming across coherently. I’m sick and on dayquil, so if it doesn’t, let me know.
I feel that GM doesn’t deserve a bail out, to be honest. However, I don’t feel that a lot of the banks deserved a bail out either. I just found out that someone’s mother is going to lose her job at Bank of America, because BoA bought Merrill Lynch, and so her job which she’s that for 18 years is going to be replaced bya Merrill Lynch employee, even though BoA was in good shape and got money during the bail out which allowed them to acquire other banks.
My father just retired from GM. He was a millwright formerly working in Buick City in Flint before Buick demolished it. Later transferred to Saginaw for awhile.
I too am of a mixed opinion. GM at least gets a bad rap on quality. Sure, they shipped a lot of absolute crap in the 70s and 80s, but that was 20-30 years ago folks. I got 240k miles out of my ’97 Grand Prix, and I drove that SOB hard. Ask anyone who’s ridden with me. (And yes, I too go with Pontiacs.) My maintenance costs weren’t bad at all considering how hard I drove the vehicle and the fact I had, erm, upgraded a few components, like the supercharger. (Trust me–the sorts of upgrades I go for do not increase the reliability of my cars.)
The albatross around GM’s neck (and probably Ford an Chrysler’s also) seems to be all the promises it made to the unions for long term (e.g. retiree) benefits. These were based on a stable market share and an increasing market. A few things happened: We got to the other side of the baby boom, credible foreign competition showed up, and fuel economy suddenly mattered.
So, you get all the crap the big 3 shipped in the 80s as it tried (slowly, clumsily) to figure out small cars. Want a K car, anyone? They eventually sorted that out, but lost considerable ground in the meantime. And then gas got cheap again and the market decided it didn’t want a small car. Detroit, thinking it was off the hook indefinitely, took its eye off the ball. (Big strategic mistake!)
And, you have both a declining market share and increasing numbers of retirees. Is it any wonder that GM’s total labor cost is roughly 3 times what might be suggested by their employee’s average hourly wage?
Now, part of the problem is that they apparently didn’t do what any financial planner would tell you or I to do: Put away money now while you have it to cover your future retirement. Sure, they put some money in the pension fund (as required by ERISA, I believe), but they apparently didn’t do the same to cover health care costs. I guess they figured continual growth would cover it. It was set up like a Ponzi scheme, not unlike Social Security. (To be fair–if one of them plays the game this way, they all need to to remain competitive in the short run. That’s why we need laws like ERISA, IMHO, to take that capital off the competition table.)
There’s one big difference, though: Social Security doesn’t have to sell you on anything. It’s funded by the FICA tax, and that can be tweaked as necessary. In contrast, GM needs you to buy its cars, which gets harder to do when the market doesn’t grow like it used to and new competitors keep showing up.
I’d like to see this money treated as a loan, with us, the lenders, doing due diligence to ensure our money is put to good use, and that we get a return on investment. I don’t think that’s too much to ask. The numbers I heard last night on Marketplace suggest we’re doing exactly that. So, lets see. If the credit markets were functioning properly, these guys could just go to the market for these loans. The government is acting as a lender of last resort in this case, primarily because nobody’s really lending to anybody these days.
My father and Grandmother worked in Indianapolis.
I would agree that the opinion that their cars suck is on their older vehicles, as some of their newer ones are great. However I think their marketing department has failed to market them well. Hell, the Aztek wasn’t marketed well, and yet it was the perfect car to suit my needs, so I bought it despite how it was marketed. (I had a Dodge Neon before that)
I would agree with you that they should have invested better, handled their money better, and that is one of their biggest downfalls. And that, as you say, it costs more to make a GM car because of what they paid to the retirees and their benefits. Growing up I had GM’s insurance in Indiana and I had a great insurance plan. My generic prescriptions were $3 and name brand were $7 to $10. It’s the best plan I’d ever been on. My current one is $15 for generic and $30 to $50 for name brand, which is a lot more expensive. My birth control, Seasonique (I can only be on certain ones due to problems with my high estrogen levels) for example, is $150 for 3 months with my insurance. I miss having GM’s insurance, though I later realized that GM is really paying for having offered such good benefits.
I think it’s harder to want to buy one of GM’s cars when their lack of fuel efficiency doesn’t appeal to people, their designs don’t appeal to people, etc. I know I personally only like the Pontiak and Saturn lines, like I mentioned, while I know some people like their trucks, but I don’t see their cars as having wide appeal like say, a Toyota Camry or Honda Civic.
It’s interesting that you say that no one is lending, as I had heard that too and I know it’s supposed to be really difficult to get a loan right now. Yet, two of my coworkers were able to purchase houses, which surprised me because I thought that no one was lending. I’m guessing that they’re only lending very carefully maybe?
I do hope that GM is just getting a loan and that they’ll have to pay it back. What happened with the investment bankers still makes me sick 🙁
I feel that GM doesn’t deserve a bail out, to be honest.
No, they don’t, but Ford has made much better decisions (except, maybe, using suppliers that would die if GM goes under), and most of the suppliers have done nothing wrong.
GM itself has failed completely, and that should be reflected to the stockholders that bet on them. I think we need to keep GM going, but all the existing shareholders should be wiped out.
How would that affect people like my Grandma, who still holds onto her GM stock? She’s not one of the ‘big’ stockholders, and she uses her dividends money to help pay for her medications now that she no longer has good health coverage like she used to with GM.
She’d be wiped out (at least her GM stock). That sucks, but it doesn’t mean it wasn’t a bad investment.
If there are a large number of GM retirees with excessive amounts of GM stock, maybe some special program for them would be appropriate. Still, the responsibility of senior management is supposed to be to advance the interests of stockholders, and they’ve utterly failed at that. The reason a bailout is being considered is the potential job losses, not the investors.
I’d tend to agree that if we choose to use public funds to keep GM going, existing shareholders should be wiped out. I’d also go one step further and say that the executives who have brought the company to this point should go as well.
The impact of the auto industry disasters on the workers in the industry is a knotty problem. The people who would most feel the hurt from the collapse of the auto industry are the people who aren’t responsible for the problems–the workers. It’s not their fault the company executives made stunningly bad choices in an attempt to cling to old and broken ways of doing business. In fact, foreign companies like Honda and Toyota set up plants here in the US in part because the quality of the labor here is so high. Americans can build good cars; it’s just that American executives don’t want them to.
GM has made so many mistakes and bad calls, they could be a textbook of how to screw up in a competitive global market.
I don’t believe they deserve a bailout, and I also don’t believe the banks deserve it either. If I had to choose, I’d rather it go to the carmakers than to the banks, though.
I honestly feel like you’re right.
It just sucks to be witnessing first hand how it can hurt someone.
And I’m extremely bitter over the execs who don’t suffer for their mistakes.
I’m stealing this…
I didn’t think you’d mind…
It’s funny because it’s true (and sad because it’s true)
While this’s accurate to a point one thing people forget in all this is that ALL the foreign automakers are ROUTINELY subsidized by their governments and one of the things that allowed the Japanese automakers to get so far ahead of the US was not only government investment AND state health care that obviated much f the need for benefits but also government intervention in things like steel production that drove down materials cost.
If the US government had taken steps in addressing some of these issues over the last few decades this situation might not be occurring.
I was wondering when this was going to come up.
As much as foreign cars have investments here, I wonder what will happen to the price of those cars if there is no competition here.
…just a thought.
Yep. Makes you wonder.
I suspect very little, honestly. There’s enough competition from elsewhere. The US is a prime market for automakers,a nd the competition not just from the Japanese firms but from their Korean competitors like Hyundai is quite fierce.
The American companies never really competed on price anyway. They bet their companies on high-ticket, high-margin products like SUVs, then were left flailing when the consumers started turning away from them. They were never really serious about the economy and compact markets; “me too” cars like the Ford Focus seem to me to be halfhearted attempts to capture some of the market niches dominated by Toyota, Honda, and Hyundai, rather than serious and vigorous competition.
That’s a good point about foreign cars having their own competition. I hadn’t considered this part.
reposting this, with credit of course. hope you don’t mind. it’s beautiful. in that sad sort of “i can’t believe it’s not better” way (it being society, that is)
I wonder if we can’t use this recession to get rid of or weaken the more monopolist multinationals like Starbucks, Wal-Mart, Tesco and Microsoft? The economic scales are so finely balanced that a number of people suddenly flocking to a competitor could spark a major market change.
One of the commenters Social Security in your entry, which is my line of work in the UK. We’re so busy that we’re being offered overtime every week, and every third call is a builder looking for work.
Hmm. I think not; monopolies tend to be in a good position to weather economic change, usually, simply because they pose a barrier to entry to folks who want to try new things.
And yet, I suspect it’s going to be as effective as the last bailout was.
Just an aside, really – but this can be a really emotional/touchy subject for folks. I appreciate that this can be discussed rationally.
I hope folks realize we’re sort of all in this together.
that is hysterical!!! rofl!!!!!
It’s interesting to note that this is nothing new, and that it started attracting notice back in September, but no one did anything about it >.<
Here, though, it’s saying that, in the past, the government bailed out various and sundry corporations on the condition that the Federal Reserve owned parts of them. While I’m personally against government control (of, well, anything) they made some moderate sums of money off of the loans. No word yet on similarities between previous bailouts and new ones.
All kinds of fun stories, for those interested.
hmmm… yeah.. too true….
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