What the auto bailout may really mean

[HappyTexan]

The aftermarket guys are already hurt and many of them laid off. This will not save them..they are gone already cause they are too small to "not fail".

The gov't gives them money and magically we are all going to go out and buy new cars to keep the production lines going ?

They need this money for operating expenses. How much is going to future development and when will that future development be done ? What will they do in the meanwhile since no one will buy cars ?

[floridasandy]

as long as they are throwing money around randomly, maybe they will throw enough money out there so that all americans get one american built car each!
but what is actually happening is this:

The worsening U.S. auto sales slump claimed another 2,000 workers Friday as General Motors Corp. announced layoffs at three more car factories.

The company said it will cut shifts at car factories in Lordstown, Ohio; Orion Township, Mich.; and Oshawa, Ontario, starting in February due to slowing demand for their products.

"It's all market driven, as all of our changes have been of late," Lee said.

[Stephan_K]

Originally Posted by StoneOne

Where did I say that it will happen immediately? I've never said that.

If the government really wants to do something to help these workers, it would be far cheaper to make sure they have places to live and food to eat until a new auto industry emerges than to prop up failed companies.

Bailout out the Big Three will ensure that the wheel will not be reinvented!

Didn't say that you did...

Just pointing out that anyone who thinks a BK with an inevitable liquidation as the outcome and someone else stepping right in and becoming some new kind of successful business is not the way to go as it will take years to happen. The catastrophe that is trying to be avoided will happen anyway if that scenario plays out.

You think it's cheaper to provide housing and food for all affected by a BK auto industry... that scenario is just "out of this universe" as it was put by the economist AND MEMBERS OF CONGRESS yesterday. Your talking trillions of dollars on top of the already trillion spent... not a few billion ! I don't think the tax payer can handle that or even wants too. At least any tax payer that realizes the outcome of an auto BK wants to roll the dice with that one.

And also what nobody is looking at or fails to see, the auto industry supply chain disaster to follow an auto ind. BK WILL AFFECT ALL transplant manufacturers in the US also. Many are overlapping ! Business will NOT go on as usual and transplants won't just pick up the slack so to speak. They will suffer as well. And everything is not all good with them currently also. As stated today most all transplants are asking their respective Gov's for bridge financing to get through this global recession.

Now if the house of cards was not already propped up with the almost trillion allocated for it in the US, I'd say let everyone in the US (hell the world for that matter) file BK and see what comes of it. That is the ultimate fix all !

[sterlinggirl]

Originally Posted by chet everett

They talked about that too. It is money geared toward the "greening of the auto business". Different purpose. They still need that for the electric and alternative/hybrid cars and to get tot he CAFE standards, especially for larger vehicles.

They don't need the money for that. If the US wanted an overnight surge in CAFE standards, all we would need to do is to let the cars we build for the EU market be sold in the US.

The ONLY thing that would convince me to go out and buy a new car today would be the ability to buy a cheap little diesel car that would last 500K miles, and get 70mpg because it wasn't bogged down by emissions garbage and extra safety equipment mandated by our government.

[goodbyehollywood]

So we're gonna bail them out, then go right back to buying Hondas and Toyotas? Not even Americans want American cars, and we'll want them even less after this.

There are startups in CA further along than the Big 3 on electric cars and alternative energy solutions. The Big 3 want to produce what they want to produce, not what Americans want. The only reason the Prius dominates the green market is because GM handed it to them. GM didn't want to change. They don't want to change now, and without strict regulation, they won't.

And notice how they're closing their American plants and shuttling more and more business to their overseas operations? The reality is, these are multinational companies that are diverting their focus overseas, while expecting their handouts to come from America. They're playing the American card, because we're the only country gullible enough to bail them out.

[HappyTexan]

Overseas is still bringing them a profit for right now. Look over 3Q earning reports by companies that are multi-nationals that showed a profit. Most of their profit came from cutting expenses (most likely layoffs or offshoring) and overseas revenue.

But even that can only last so long..this bad boy is global.

[goodbyehollywood]

True, but my point is that their idea of cost-cutting means moving more jobs overseas. So the bailout will not keep jobs here; it will enable them to meet over-generous insurance and pension obligations for retired workers. No company can afford to provide those kinds of benefits anymore and remain profitable. The bailout won't create jobs; it will provide a very happy retirement for union members out of the job force. Is that really the best use of taxpayer dollars?

[TexianPatriot]

mmm centrally planned domestic auto manufacturing. We don't buy their products because they can't compete, but the government will extort you and I to keep the union/corporate greed afloat. Saving jobs? LOL, if you wanted to save some jobs, stop taking so much out of the pockets of working Americans. Anyone else ready to wage war against the state? Seems all the special interests are getting taken care of except the United States taxpayer.

[texdav]

But just because the big three fail does not mean that the auto ales will drop or that jobs will move oevrseas. Totoyta and hondfa have palnts right here ih USA. The fact is that with 52% of the US market the big three can't make a profit;so I don't see that changing. Better to have companies trhat can make a profit hire workers to make those automibiles. I see nothing that makes me believe that the big three will be a safe loan and can make a profit in coming years.They have had since the 70's to produce a better businesss model and have failed in a constistent pattern;downward.If you look GM and the others have consistently spent money overseas rather than export vehicles made here;anyway.