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Needless to say Honda and Toyota aren't US companies.
Its going to be far easier to fix the US auto makers (who's primarily problem is not the cars they make) than to try to build a new US auto industry. Honda and Toyota aren't going to move all production to the US.... the issue is not only domestic production but also have something to you know....trade with the rest of the world.
The GOVERNMENT wouldn't be the ones letting the automakers fail. They did it to themselves by producing an uncompetitive product.
And no, contrary to your previous comment, I don't believe that the US has a "particular need" for such a company; one that can't hold its own in the market, one that won't adapt to the wants and needs of the marketplace (p.s. the marketplace is where a company SHOULD be getting its money from, not the government).
Honda and Toyota here in the US did much better and have a better model. Honda and Toyota can take over and become "The Big Two" and would probably make a better go of it.
Your "Big Two" get tax breaks from the states in which they run their operations.
If the Big 3 also got tax breaks, they would have a lot more cash in hand and wouldnt need a LOAN.
During WW2 the Detroit 3 started making planes, tanks, etc.
What if we have a war against Japan?
Will your "Big Two" help fight against their own country?
Its truly odd that there is such hostility toward the auto bailout despite being relatively small where as 100's times this amount is being used to bailout idiotic financial institutions.
If you're going to block such things, block it all. Let the system collapse, of course those in congress are wealthy and if the established system collapsed so would their wealth....
I am FOR the bailout, just to get that out in the open. I believe that we should all help eachother. HOWEVER, I believe that there is hostility for many reasons... here is mine.
My husband works very,very hard (as do millions of others I am aware), he went to college,grad school and makes a decent living. We are average middle class people. I too work,went to college,etc..
The thing that irritates us is that the UAW in particular, wants to continually believe that their employees are far better apparently than the rest of us and deserve to be making $70,$80,$90K for some jobs that people didn't need to go to school to do. That is not the associates fault,it is the UAW.
How can they continue to pay the wages they pay,continue to pay OT to associates and there are those on other threads who say they don't pay OT anymore, they do. They pay ALOT of people to work ALOT of OT,even now. Now when one of the main suppliers to GM is in bankruptcy, they are still forking out the big wages to people,to sit around sometimes and do absolutely nothing and to make 90% of their income doing it!
This is what angers us, my husband's company has completely cut out OT for their employees because of the lagging economy,they are cutting costs where they can,while others who just want the govt.to bail them out, keep working those OT hours,bringing in extra cash for the holidays,while others are struggling to make it.
Doesn't seem fair that we as a country should be bailing out people who want have their cake and eat it too.
The quality of the cars is an entirely different reason as well... that will be left for another day....
Humo, I agree. I find this fascinating and distinctly bizarre. What's $15 billion for the auto industry amount to? Not much compared to the lists of zeros on the financial industry bailout numbers.
$15 billion is only the start, the first payment. When all said and done it will be well over $100 billion.
Most of the people that are against the auto baliout were also against the bank bailout.
The "obvious" of the OP's topic is common knowledge. The real "obvious" that politicians, the auto industry, and the union aren't saying is this - you have to bust the unions. Until the automotive industry gets it's labor costs in line it will never be profitable. Until you stop paying line workers $70 an hour (with benefits) you cannot compete. You just can't run a business where your labor costs are 50% higher than the industry average. You can't.
I might, just might have agreed with you if they had a good business model.
But they don't..Honda and Toyota here in the US did much better and have a better model. Honda and Toyota can take over and become "The Big Two" and would probably make a better go of it. I would rather loan money to companies that change with the times instead of trying to maintain the status quo at all costs and then turn to the government for a handout when they can't.
I agree that the Big 3 have made some colassal mistakes and took too much for granted when they only concentrated on the truck and SUV market, but they have made some huge strides to improve. The main reason they are in this dire situation is because of the credit crisis.
Look at studies by J.D. Power, Habour Consulting, and Auto Pacifica and you'll see the the Big 3 are on par with Honda and Toyota for quality and production.
Futhermore, Honda and Toyota are foreign companies. The money they make in the U.S. doesn't stay in the U.S.
Not all three of the Big 3 American auto makers are hurting. Ford actually did tons of cutbacks in the last year or so and has increasingly increased operating efficiencies, moving towards consumer demands, and right-sizing their operations. Ford benefits from CEO's turn to road less traveled - USATODAY.com
I'm actually glad to hear that Ford isn't doing as poorly and has some excess cash to ride through a short storm. I hope they will be here in the next year or so because I'm still seriously considering getting a Ford focus. I feel that the American automakers actually has come quite a ways in quality and workmanship in the last few years but perception has been the sales killer. Perhaps with the humbling of America, more people will come down from their lofty perches and forgo the BMWs, Audis, Mercedes, and see that American value Automotive are both a sociological and economical choice.
In terms of bailouts, I'm in the camp that the economy needs to have cash pumped into it in order to fill the cavernous void left by the deflating credit bubble. Without some sort of "orderly" deflation, the spiraling down fall Humanoid was describing in another thread could very well happen.
How the government takes on this debt and how it deploys it isn't in my hands. Ideally, I'd like a more equitable deployment, and most deployment geared towards the household sector as the household sector was the one that actually incurred the most increase in debt/leverage during the boom.
Furthermore, it is the household's, or tax payers money anyways. If government, ie, the people, is going to bail out anyone... it should be the people first, businesses second.
I'm ok with an auto loan. But perhaps it should happen after GM can go through a controlled bankruptcy and dislodge itself from the weight of the Unions/Pensions.
Its truly odd that there is such hostility toward the auto bailout despite being relatively small where as 100's times this amount is being used to bailout idiotic financial institutions.
If you're going to block such things, block it all. Let the system collapse, of course those in congress are wealthy and if the established system collapsed so would their wealth....
I didn't want the first bailout. I believe popular opinion was against it, too, which is why it failed on the first go-round.
So because it passed, I should then support the 2nd one?
The GOVERNMENT wouldn't be the ones letting the automakers fail. They did it to themselves by producing an uncompetitive product.
There is nothing uncompetitive about their products, they were selling very well until recently. They just weren't able to deal with oil prices more than doubling in less than a year. That was the first shock. The second was the melt down in the credit markets. This not only effected their ability to get funding to reorganize their operation, it effected people's ability to purchase new cars.
The Japanese automakers don't need to worry as much about the melt down in the US credit markets because they aren't American companies.
So, letting such important companies collapse because they weren't able to deal with two very large shocks in the system is short sighted at best. Letting them collapse is going to be very expensive....and could push the economy into another major depression. Like I said...just remember your ideology when you are in the soup line.
I love how people root for the transplants here in the southern states. Their model is not this epitomy of efficacy, they are just taking advantage of the discount globalization provides them. If the southern states want to push the agenda of eroding workers purchasing power by selling out to the foreign firms then they need to advocate an equitable ground. The only reason transplants are able to write off the cost of doing business is because they have a young work force here in the states at a discount, and their domestic workers back in the island benefit from a welfare state that provides health care and retirement benefits without impacting the firm's cost. In America, the worker is faced with funding their own benefits at the same wal-mart wages as the japanese worker, and guess what, our beloved compatriots here scoff at the idea of taking care of each other, after all utilitarian policies of health care and retirement are barbaric thoughts left to those regressive japanese and germans. We are the worst kind of slaves, we eat our own because we don't have the spine to tackle the system.
The japanese business model is not any different than our own, the difference is that they have the benefit of subrogating their cost on other people (other japanese citizens at home; the southern states and their tax breaks and at-will employment, abroad) while American workers, up until recently, took care of their own when their own compatriots philosophically rejected the idea of doing so, unlike japanese citizens. And mind you, these are the firms who built the tanks, trucks, jeeps and airplanes that defended the ability of people to retain some semblance of what being American (above being a citizen of the aborted economic world we live in) meant.
So don't gloss over the economic facts and blame some unsightly plastic paneling on an American car as the reason why unions are bad and and foreign firms are the mater salvatori incarnate; Americans have lost their sense of allegiance and sold their soul to the electronic-age economic plantation of wage slavery on an ephimerous hope of getting something for nothing with an overpriced college degree that got them nothing and the economy has finally come to collect. The bitterness with which the white collar labor force has sided with their master is the stuff of antebellum. It's time to overhaul the system and if that means taking some from the bankers on the way of eventually dispossessing them of their ability to monopolize our wealth and sweat, then I'm all about sticking up the hell out that paper money TARP contraption and getting our auto industry some cheddar. Screw the banks, screw the southern senators and their ulterior motives while they appease an otherwise indigent population with jobs at a discount while you and I get stuck with the bill (if you can color by numbers and connect the dots like a 4 year old could), and screw the economic system where you incentivize americans to vilify other americans because everybody is trying to afford a freggin mcmansion with two cars and a dog and nobody ends up able to afford it straight up.
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