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The Auto Bailouts should never have happened. Let me tell you why.
Toyota, Honda, Nissan, Ford and perhaps other automakers would have bailed out GM and Chrysler, all without taxpayer interference. We know they lobbied heavily to get the US government to interfere. If we had held out longer, they all may have chipped in.
Why you ask?
Point#1
All automakers rely on each other's supply chains. Many manufacturers make parts for all of the automakers. With GM and Chrysler gone, I have no doubt that many smaller (comparatively) businesses would have gone out of business.
This would have been disastrous for Toyota, Ford, Nissan, Honda, etc. Without their supply chains, they all would have gone under.
The US government failed miserably at win-win negotiating in the best interest of the American people.
Point #2
The costs are much higher than anticipated, but this should have been expected:
The Auto Bailouts should never have happened. Let me tell you why.
Toyota, Honda, Nissan, Ford and perhaps other automakers would have bailed out GM and Chrysler, all without taxpayer interference. We know they lobbied heavily to get the US government to interfere. If we had held out longer, they all may have chipped in.
Why you ask?
Point#1
All automakers rely on each other's supply chains. Many manufacturers make parts for all of the automakers. With GM and Chrysler gone, I have no doubt that many smaller (comparatively) businesses would have gone out of business.
This would have been disastrous for Toyota, Ford, Nissan, Honda, etc. Without their supply chains, they all would have gone under.
The US government failed miserably at win-win negotiating in the best interest of the American people.
Point #2
The costs are much higher than anticipated, but this should have been expected:
A structured bankruptcy would have been the best solution, but unfortunately, lobbyists had too much sway over the easy money from the taxpayers.
Post your disagreements below.
Business logic fail.
Why would Nissan, Toyota or other automakers bailout GM, Ford or Chrysler? It would be better for them to go under and take their market share.
Also this situation was taking place with the largest credit liquidity crisis in the last 70 years. How many banks which were being bailed out themselves were in a position from 2009 to 2010 to take on the amount of debt needed to finance the type of money it would have needed for another company to buy the assets of the distressed auto company.
While the cost of the bailout would have been more than expected if the big three had gone under the states of Ohio, Michigan, and Indiana would have been devastated as cities, towns and other industries associated with the auto industry would have also been drastically affected. Put the price of the economic impact of loss business revenue, sales real estate tax revenue, housing foreclosures, unemployment insurance, and food stamps up against whatever the bailout cost and then add over 200,000 jobs that the auto industry since the bailout and it changes the cost equation.
Auto industry employment has grown because, under the restructuring, existing contracts with workers were revisited and all the new hires are getting substantially less in salary and benefits than existing workers. This could have been done without any "bailout". The bailout money was a bonus, literally. The real win was in declaring bankruptcy and running roughshod over unionized labor. The Hostess "lockout" is yet another example of how unionized labor is being systematically destroyed. As an investor, of which I suspect most of the city-data conservatives are, these kinds of heavy handed tactics are good business. Labor is the final frontier in the quest for uber profit. An America where all labor serves at the will and pleasure of managment is the Holy Grail of the Fortune 500. History? Did someone say history? What does history tell us about how Americans deal with injustice and unfair practices that crush the spirit and endanger the body? When they go on long enough that is...
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