i was originally against it because as a capitalistic economy we should let the market mend itself without outside intervention. however,in light of the economic turmoil and the SIGNIFICANT domino effect that a failed GM(big 3) would have,it may ne the lesser of two evils to infuse some money;some money! actually over 35 billion. however,thats not the only/true reson i am for a bailout which i am usually against. there is no doubt that any money given to the auto industry will have HUGE strings attatched and one of those strings will more than likely be a significant condition: their cars will have to be engineered for maximum fuel efficiency. thy've been talking about this for years but i firmly believe they can make very fuel efficient card that look like normal cars and not a small shoe box. i think we will see regular cars getting 50 MLS r gallon;i mean real miles not best case scenerios which today's cars are based on. lets face it,oil is not going away .
I agree. Some commonsense and competence should make the auto manufacturing industry - which is vital to our economy and national security - vibrant over the next decade.
GM is worth $0.58. Their credit ratings suck. It's like loaning $1 million to a homeless person with a 5th grade education.
I agree that GM doesn't deserve the bailout at all. Corporate executives have been experiencing higher pay while losing market share. Japanese auto executives make about a third of what US auto execs make and the cost of living in japan is the same if not higher. The big three collectively make up 3% of united states GDP. There will be tough times if one of the three fails, but they definitely shouldn't be awarded with a bailout. Awarding them a bailout is essentially rewarding them for being inefficient. If tax dollars are to be used, give it to an efficient vendor, not a vendor that has proven to be a big failure. I feel like if there were to be a bailout, it would be for American sentiment. But then again a large dip in the American sentiment could spark a significant spiral down in the economy. The coin has two sides i guess.
ETers are such short term thinkers. How can the profitable, well run auto companies compete when inefficient shits like GM and F are allowed to exist? They can't. This short-term band-aid is only making the problem worse! GM needs to go bankrupt and restructure. Otherwise decent automakers like TM and HMC will be dragged down since they do not have the backing of the government. Failure is what makes the capitalistic system strong. What we're practicing is blatant communism which is doomed to fail. Too many fucking stupid people on this site to understand this.
exactly and well said. also, where does it stop? the homebuilders are probably next then the states will go hat in hand to the fed gov't; then we basically have a situation where the states can print money too. basically, capital is being allocated terribly and will continue to be as long as we continue along the same path.
Seriously, how many auto companies are really free of government subsidies. For that matter look at the plane manufacturers. Often governments doll out tons of cash to their aerospace and car industries, because if they dont they end up losing out to the competition that also gets subsidized.
I have posted before, elsewhere on ET, on supporting an auto (Big 3) bailout. However bankruptcy was needed as a pre-condition. On-going workers pension fund costs per car will keep all 3 crippled. This needed to be cleared away so that pension costs start anew at rate that is less than or the same as the rate paid by the Jap auto makers in the US. I fear that this 35 billion is going down the drain and more bailout money is going to be needed in due course
Are you serious, TM and HMC doesn't have the backing of a their government? How about a yuan that is kept artificially weak and government health care and pensions. While in principle I don't agree with the loan being granted, I believe a moral hazard has been created with the TARP and the AIG situation. There is also issue of national security, remember GM was the largest producer of tanks in WWII. As far as I'm concerned all cars are poor investment, no other durable good depreciates as rapidly.
Airlines and Health (and/or Life) Insurance companies will be next. The US is quickly converting to a socialist, communist country where the government will own and operate every major industry. England went through this a number of years ago and the system collapsed. The same will happen to the US. This is all just an evolutionary process. Nothing can be done to stop it. We are just witnessing the evolution of mankind.