Should the US bailout the big three automakers?

[cobra bill]

The way I see it they were in bed with the oil companies, let them bail them out!

[Jerry Clayton]

Every body has been in the tent with the oil folks----being a farm boy I think we should take some of them out behind the barn for a talk---

For years (since the PCV was introduced) the auto makers have only made engines that met the Gov. tail pipe smell test----nothing has been done about milage-----oh sure, gas guzzler tax, kind of like alcohol and tobacco tax---

If this country was seriously concerned about energy-----we would turn off some lights at night in hardware stores, malls and car lots, we would time the traffic lights on our streets and roads(milage while setting still?) work a four day work week of 10 hour days(since some places would start 2 hr early and some go 2 hr later, it would spread out the traffic rush hour and wouldn't be as bad) and either on Mondays or Fridays would be even less)

[speed220mph]

Everyone has reservations about the government, any government, getting involved in anything because they can screw it up royaly. Once the government has control and there are problems, they are the first to place the blame elsewhere. For example, anyone who flys knows the expression, "I'm from the FAA and I'm here to HELP you". It's all down hill from there. That said, check out what Peter DeLorenzo of Autoextremist has to say:

"Detroit. In the last week I have done several live and taped radio interviews across the country and with the BBC in London, a spirited interview with Diane Tucker appearing in The Huffington Post entitled, “Journalist to GOP: You're 100 Percent Wrong About U.S. Automakers,” and I have several national and international TV appearances slated for the next few days too. The subject? The looming implosion of Detroit, of course. People want to know the who, what, when, where, why of this whole thing, and they want to know about the cost, both in terms of taxpayer money needed and the real cost to the economy if the Detroit automakers don’t receive these bridge loans.

The din out there in the media right now is so anti-Detroit, anti-“bailout” that I welcome the opportunity to present the other side of the debate, even if it appears with each passing day that Detroit is running out of time and unable to break through the negative media clutter that envelopes the industry at every turn. And after that death march of a hearing before the Senate Banking Committee yesterday, I’m even more pessimistic.

When Alan Mulally, Rick Wagoner, Bob Nardelli and Ron Gettelfinger sat down in front of the microphones, I knew it wasn’t going to be good, especially when Peter Morici – the relentlessly self-promoting economics professor from the University of Maryland – sat down next to them (more on him in “On The Table” this week – ed). Which Senator was responsible for inviting him is anyone’s guess, but it was clear that this was a setup from the get go.

We then had to watch as each of these U.S. Senators spewed their particular brand of inaccuracies and flat-out misconceptions about the automobile industry in their opening statements. A very few were actually worth listening to – and I mean like two - while most of the others were so blatantly self-serving and out of touch with reality that it was painful to watch. And then some acted like they were just hatched yesterday and were so resolute in their lack of awareness about what was going on and why they had to be there in the first place that it was simply appalling .

I can’t help but think that when enlightened Americans watched these people in action – the people who were actually elected by us to be in office – that they recoiled in horror at the absolutely stunning lack of knowledge, awareness, sense of place, sense of well, anything that was displayed by these Senators yesterday. Is this really the best we can do? I certainly hope not.

At any rate, the message in that hearing room was clear: Detroit put itself in the shape it finds itself in by building bad, low-tech cars that nobody wants. That they were regurgitating the now-obligatory woeful misperception of Detroit that has spread across the country - a Detroit that hasn’t existed for the better part of a decade, by the way - was obvious. The fact that these Senators weren’t aware of the kind of ultra-competitive products that these companies have out now was predictable. And the fact that they weren’t aware of the kind of leading edge technological development that Detroit is actively engaged in was predictable too.

Being clueless in Washington isn’t all that uncommon, unfortunately, but when misconceptions, half-truths and flat-out lies get hoisted up the flagpole as Fact, then it’s no wonder that the leaders of these Detroit car companies were on the defensive and unable to score points with the judges.

Proof of that was on display yesterday when the senators in that hearing room kept talking about restructuring, as if it was a new-fangled idea that these Detroit CEOs weren’t aware of. And they had to be reminded over and over again that Detroit has been restructuring and revamping since 2000, that Detroit hasn’t been operating in a vacuum, that Detroit does build competitive and class-leading products, that Detroit has pioneered new technologies, that Detroit is a viable, relevant, strategic industry that’s part of the crucial fabric of America’s manufacturing base, that the worst financial crisis in seven decades has wreaked havoc on their ability to do business, and on, and on, and on.

Back when things were booming for the domestic automobile industry, the importance of lobbying in Washington and having a consistent and focused image strategy that presented these companies’ positions and outlined their contributions to the American economy wasn’t a top priority. Now that it is, and the Detroit Three are playing catchup - while taking body blows and backed up against the ropes - the Old Detroit is still slamming the New Detroit to the ground.

The Perception Gap that exists out there for the Detroit automakers isn’t narrowing, it’s actually growing wider. Because when Americans get what minimal news they’re willing to digest – and only because it’s pre-packaged in carefully doled-out sound bites – then the Old Detroit will perennially overshadow the New Detroit, hands down.

Detroit may get help from Washington, but left to their own devices - and timetables - it’s looking like the politicians will come up with something that’s too little and too late to actually make a difference.

And that’s a giant bowl of Not Good.

Thanks for listening."


Rants - Autoextremist.com ~ the bare-knuckled, unvarnished, high octane truth

[rbray]

What would Ronald Reagan do?

[speed220mph]

rbray: As for what Ronald Regean would do, I suspect he wouldn't have allowed us to get in this fix in the first place. But we are where we are. Pretty soon a taxer and spender will have control of the reigns, like they're not in control of the legislative side. My guess is what was done to the mortgage and banking sectors of the U.S. economy will also be done to the auto industry. As a result, the backbone of our industrial sector and economy will be gone. As DeLorenzo said, "And that’s a giant bowl of Not Good."

[Jamo]

Hmmm.... DeLorenzo

[Tony Radford]

I personally didn't see anything more than the snippets that were played on various new shows like ABC and Fox and to that design, I'm sure, it looked like those representatives of their respective companies came a bit unprepared to present a case that was commensurate with the looming "life or death" that would result by their securing or not securing the congressional cash infusion. I'm just a bug on the butthole of a bug compared to those guys and any time I've had to present a significant request to my management (particularly if it's unpopular), I've been sure to draft a presentation that blatently displays any relevant points necessary to rationalize the outcome I was looking for. The point that these "top end" executives were crushed by politicians who were mired in misconceptions doesn't fly for me if all they did was show up in a jet with a tin cup. Doesn't look like the big three are getting their money's worth from their high-paid leaders.

[Snakebit]

Why do we keep electing the same polititions and expecting change? Isn't that the deffination of insanity? Doing the same thing over and over and expecting different results? The next election everyone should find out who is in office and vote them out of office. "Get rid of incombant polititions" GRIP. This would send one hell of a message to Washington and to your state government that we are sick and tired of putting up with all this crap!

[jhv48]

Originally Posted by Snakebit

Why do we keep electing the same polititions and expecting change? Isn't that the deffination of insanity? Doing the same thing over and over and expecting different results? The next election everyone should find out who is in office and vote them out of office. "Get rid of incombant polititions" GRIP. This would send one hell of a message to Washington and to your state government that we are sick and tired of putting up with all this crap!

You're two weeks too late.

[ng8264723]

Like I said. Not doing the operations saves money. Canada knows. 100 people, $400,000 a piece. Canada saved $40,000,000. And those people would likely not be productive after the operation anyways. Canada knows what it's doing.

You are an ass!!!!!!!!!!!!!!!!!!
Try saying that to a 9 year old child who needs a transplant. Carrol Shelby has a heart transplant. He seems to be productive. What a thing to say. When it's your loved one what would you do? Sorry too expensive your going to die. Also Canada hasn't taken that view. Please don't talk about things you haven't a clue about
ER DOC

[brobehr]

seems alittle odd the oil companies want no part of helping out with their 14 billion in profits. Probably saw the union fat and wanted no part in that roadapple...
unions had their place in the turn of the century, however they have completely lost touch with reality.
bailout no- moderate interest loan maybe
brobehr

[Anthony]

Back to the subject.

Big three should be allowed to go broke, and then have the UAW with all of their wisdom and members buy out the assests and run the car making business themselves.

But that still does not get to the root of the problem which is our government. A bunch of self righteous , pompous polititions (lawyers) who think they know everything about everything, who actually created the mess in the first place by screwing around with the economy by playing with interest rates and creating a system encouraging bad loans and no way to hold people accountable for them. The polititions are the real problem, and the reason why the economy in general will always be prone to catastrophies.

[puppster]

I am really surprised by the attitude towards the industry that created the toys that so many on this forum love. The fact remains that the "Big 3" have been building trucks and SUV's to stay profitable. The margins in these vehicles kept us afloat while we were paying wages and legacy cost that the Japanese rivals didn't have to. The truth that so many don't want to believe is that is the "Big 3" stopped building trucks in the volumes that they did for the last decade, Toyota, Nissan and Honda would have. They are guilty of building full size trucks that deliver no better economy than the Americans. They just weren't as successful. Toyota spent Billions to build a new factory in Texas to try and compete, and were affected by the same economic factors as the domestic industry. I beleive the domestic auto industry is to blame for not being tougher when bargining with the UAW in past decades, but the people in charge now, have worked hard to start correcting the damage already done.

[Don]

Regarding the fees as mentioned below, nothing stated on the impact the fees would have on decreasing the sales of new cars.

"........idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers "

USA Today Friday Nov 21:

" Idea to aid carmakers: Fee on sales "
By Chris Woodyard, USA TODAY

" LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.

Instead of government loans to try to bridge General Motors (GM), Ford Motor (F) and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.

Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.

"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."

Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.

He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.

It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.

The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.

Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.

Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers. "

[mdmull]

If Roger Penske actually said he supported that idea, the fumes Have gotten to him. You can not be as successful as he has been & have a brain small enough to think adding a "fee" on each sale would help. Or can we count on BO to allow us a tax credit for the fee. If the politicos can find a way to make us pay for "saving" these companies but think someone else is doing so, they will. You will hear all kinds of new "ideas" and invented phrases in the next few months. Maybe they'll call the auto bailout bill " Saving Apple Pie & the American Way Act"

Pitchforks & torches I say!

[CHANMADD]

The UAW is the major problem......it needs to go away!!! Let the "3" make cars and not be a pension fund. The billions of $ should go to health care and retirement for "US"
The big 3 need to change their model lineup and in a hurry....but they cannot do a U turn overnight! It takes time to change the assembly lines.
GM has many models that they sell in other parts of the world that they could and should sell here.. The large SUV's that we all see being driven by 100 pound girls..are a joke and responsible for more than being gas guzzlers. They are responsible for a lot of the potholes and uneven road surfaces that we see in our roads.
The Europeans drive small cars ...which we should... and not only would our National fuel consumption fall but so would our congested traffic conditions get better, because smaller cars would allow more lanes on existing freeways.
The license fees on vehicles should be based on the weight of the vehicles.
I say no bailout for anyone or any business. AIG has obviously not been run well ( just listen to the idiots that are in charge.Jeez ...How the hell did they get those jobs in the first place!!)

My theory is that the whole world is in a (morphing) stage... we are getting up to speed with life and how the Internet has so dramatically changed the way of doing business.Everything that we "traditionally" know has to change to get up to speed....its a natural progression. If we keep hanging on to stuff and ways of doing things that were founded in the 30's we are going to remain in a tailspin.
Also when I called my credit card company the other day I first spoke with an Indian guy....WTF....That is a job that should be an Amercans!!!! and now they all want a bail out!!! What BS!!
We have to start being selfish with our jobs and our money and stop giving in to the Do-gooders and treehuggers and start looking out for no.1! The U.S.A......our home!!!!
John

[G.R.]

and the sheep keep electing worthless politicians, Dem or Repub, to "represent" them sometimes for decades, Stevens comes to mind...it has been getting worse for the last 40 years...and most of us "boomers" just sat back and were apathetic to what was going on around us, more interested in our self-gratifing lives.

We can blame whoever we want, the unions, the gov't, the Middle East, the banks, immigration, what have you for our current economic problems...

in reality we only have our own selves to blame because most Americans don't pay attention and when it comes time to go to the polls we blindly listen to the "spin" and vote back in Joe Schmuck " 'cuz he's been a politician for so many years he must know what he's doing" ... I admit I'm guilty of it....how about any of you?????....meanwhile ol' Joe's getting "fatter"...ever seen poor or middle class politicians after a few years in office?

And now we cry out in the wilderness of economic doom........

[Dan40]

Random thoughts.

The no longer BIG 3 want 25 Billion. The amounts each asked for total more than 25 Billion, but what's a few xtra Billions to us taxpayers?

An insurance giant got 85 Billion and threw a hellova party. Now they need more.

The financial industry needed 700 BILLION DOLLARS to stay in business. But the approved "EMERGENCY" bailout didn't work, but since the money is approved, lets use it some other way........What way?........Don't know yet.

Seems to me that businesses or industries that need that much money to stay in business ARE ALREADY OUT OF BUSINESS. The patient DIED already, stop the operation.

But the auto industry would cause 3 million to lose their jobs. A SCARE number I think, but we will accept it. Add on another 5 million out of work from the financial sector. 8 million out of work. Mexico might finish building the fence , but on their side of the border.

Lets double that, 16 million. Highest unemployment benefits I could find on the net, $510 a week [Mass.] So we have 16 million unemployed collecting $510 a week. They can collect for 26 weeks [I think] then there is a 13 week extension for a total of 39 weeks [9 months]. Lets double that too.
78 weeks [1.5 YEARS] X 16,000,000. claimants X $510 = <$700,000,000,000.00. [ Less than 700 Billion.] And the companies are gone so they cannot come back and ask for more.
Cheaper to let them go than to save them.


We did get a new oxymoron out of all this: "toxic ASSETS"

Dan

[Tony Radford]

What's the chance that when the dust settles, average citizens will see the ill of their past ways and become more frugal? Back to the WWII generation. Isn't this the first major spanking the baby boomer generation has experienced? I've been on the Dave Ramsey plan for the better part of the year and (assuming I'm still employed) should be debt free by the end of next year. I wish I had started the plan a year earlier so I'd be there already (and still have my roadster). When the mindless / reckless spending by the American consumer subsides (just about there), the retail industry will have to recede. Massive closing of businesses (that grew to facilitate our spending habits) has to shrink, right? As one adopts the philosophy of frugal living, supply and demand will force the inescapable alteration to our commercial landscape. How long does it take for the "system" to re-tool and begin absorbing the masses of unemployed? It all sounds like the end of the world, but it probably isn't. What are the plausable theories? I'm sure no "one" will lead the country to the light. It will just happen like always.

[CobraDan]

Doctors' Opinions of The Financial Bailout Package

The Allergists voted to scratch it.

The Dermatologists advised not to make any rash moves.

The Gastroenterologists had sort of a gut feeling about it.

The Neurologists thought the administration had a lot of nerve.

The Obstetricians felt they were all laboring under a misconception.

The Ophthalmologists considered the idea shortsighted.

The Pathologists yelled, 'Over my dead body!'

while the Pediatricians said, 'Oh, grow up!'

The Psychiatrists thought the whole idea was madness.

The Radiologists could see right through it.

The Surgeons decided to wash their hands of the whole thing.

The Internists thought it was a bitter pill to swallow.

The Plastic Surgeons said, 'This puts a whole new face on the matter.'

The Podiatrists thought it was a step forward,

but the Urologists felt the scheme wouldn't hold water.

The Anesthesiologists thought the whole idea was a gas,

and the Cardiologists didn't have the heart to say no.

In the end, the Proctologists decided the decision was
best left up to the assholes in Washington .