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This topic has been thrown around for a while now, and has especially heated up these past couple days. So, my question to you is; Should we condone a bailout of the automotive industry, or should we let them restructure and come out financially healthy and fiscally responsible.
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Perhaps some of you may have heard of El Cid Campeador? He was killed by a stray arrow before a large battle was to commence, so his closest friends propped him up on his horse, so his troops would not know he was dead. If they found out their leader had died, their morale would have been lost along with the battle.
What does a 2nd century man have to do with 2008? Well, the auto industry has requested a set of low interest loans, aka a bailout. These bailouts are intended to prop the company up, to make it seem like they are doing well in order to prevent a morale drop among American consumers. Sound familiar? It might every other month they come back demanding more money.
As with the financial industry bailouts, the Republicans have shown strong opposition to the auto bailout. On the flip side, pro-Union Democrats have strong supported the bailout, however, they do not want the blame to fall on them should it fall through - the same could be said for the $700 billion bailout previously passed.
A lot of attack has been thrown at the South for its outspoken opposition to the bailouts. The Democrats have put out ads and their own attacks against Southern politicians opposing the bill.
One should remember that it was the Democrats laughing in the faces of Southerners when the textile industry was failing. They openly refused to issue a bailout on the grounds that the textile industry should reorganize and emerge better. The industry responded by moving operations to Mexico. But, because the bailout was refused, the South diversified all of its industry, and now the Southeast leads the nation in high tech manufacturing and growth.
Back to the present. As part of the Capitalist economic theory, eventually mature nations will start shedding the manufacturing sector for service industry. The argument was that eventually industry would reach a point that it was no longer economical to produce, therefore more would be put into the service industry. We have seen this trend in Europe, where manufacturing as faded away as general production expenses rise.
In conclusion, should we let the private sector adjust and correct itself, or should we prop the company up and let it take a few more dying breathes?
Last edited by Frankie117; 12-12-2008 at 04:29 PM..
They won't die without the bail out....they will simply be forced to pinpoint what financial changes they have to make in order to remain viable financially competing companies.
Here's the first hint:
Last year, Alan Mulally had a base salary of $2 million and total compensation of $21.7 million. Rick Wagoner received a base salary of $1.6 million and total compensation of $14.4 million and Chrysler on the other hand, does not disclose executive pay, but we can all guess his total compensation last year was somewhere in the neighborhood of $15 million.(Source: » The Big 3 auto CEO’s agreed to cut their salaries to $1 Greenwich Diva: Keeping it REAL in Greenwich, Connecticut)
(Like living on a buck next year would be hard if you made $2 million last year.... )
Those millions, and all the others they have made through the years, will go a long way to pay those workers who they claim to 'really care about'.
Here's the second hint:
Ebay is a great place to auction personal assets.....even jets.
I couldn't agree more about overpaid exec's, but if the Big 3 fail, one out of every ten jobs will be lost. Maybe yours??? Think it won't affect you, think again, one way or the other you will feel it. It also means that the Big 3 are released from all contractual agreements. That means pensions and healthcare benefits too. 2 million UAW retirees hitting the feds for their pensions. If the Big 3 are able to get out of paying pensions so will every other company in America do the same and that may extend to government pensions too. Be careful what you wish for, you just may get it.
If these car companies are forced into chapter 11 selling an American car will become rarer than Bush making a correct decision. They might as well close the doors and put the auction sign out. But so what, who needs those crappy old American products anyway, after all there are all those good, high-paying service jobs to go around. Right...?
let the free market decide, but also let the free market decide concerning the banks and all the mortgages that are being forclosed upon.
You are quite right. This odd fact of the government bailing out banks and mortgage companies, and then deciding to let the automakers rot is just good ole' fashion wool over the eyes. Hey, Americans are pissed that we bailed out the banks and mortgage companies. Let's act like we are against the auto companies too. That ought to create enough of a diversion to take the heat off of us for giving taxpayer money away with no restrictions.
Companies all over the country are dropping pensions from their benefits packages. Big3 will just have to get in line to whine. Their failure to prepare for the future is just evidence that they are not responsible corporations. They can survive the same bankruptcy process as any other company or citizen. This problem is sooo 20th century. Let's go with George Soros.... move on.
Good luck to all of you, including those who mistakenly placed their trust in poor corporate decisions.
The Toyota Republicans (Shelby, Sessions) will never allow the bailout to happen because they want to see unions destroyed.
But more corporate welfare for foreign auto manufacturers who want to set up shop in Alabama? No problem!
Volkswagen, BMW, Mercedes, Nissan - you all get a piece of the American pie, and hey - it's on us - the American taxpayers! Come on in!
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