I'm curious, what do you guys think of the automakers' request for a $25 Billion Bailout?
$25 billion Automaker Bailout
- Thread starter Joeychgo
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LsUnV2
Dedicated LVC Member
i think its crap because if my business tanks i doubt they will bail me out. plus i heard about a 400,000 dollar party they had to celebrate getting bailed out or something. wow that much money for a party when your already in debt
toomanyfumes
Well-Known LVC Member
I think the party was for AIG, the insurance group. I work for an automotive supplier, and if the big three go under, there's gonna be a lot of people out of work and a lot of towns, support businesses, etc. hurting. They can give 700 Billion for banks but not a fraction for car companies.
I do understand people's concern, though. Where is the money going, is it just postponing the inevitible. Will they be bankrupt anyway in six months, or looking for another bailout.
I do understand people's concern, though. Where is the money going, is it just postponing the inevitible. Will they be bankrupt anyway in six months, or looking for another bailout.
It is treating the symptom and not the problem; bad business practices, excessive government regulation (EPA) and labor interests (UAW). If those aren't treated, then a bailout is only prolonging the inevitable, and the hurt in the economy caused by the failing of the big three will be even bigger and harder hitting.
Against it. And that's wasn't an easy decision.
There are a lot of arguments for it, and they make sense. But ultimately, they are wrong.
Ultimately, we don't live in a vacuum, if a company fails here, despite a high demand, the demand doesn't go away. There's as much opportunity in failure as possible misery.
Ford and GM are capable of building a good product.
I don't know how it would apply, but reorganizing under bankruptcy is necessary.
The bailout stinks to me of a Democrat way of paying off the UAW with my tax money. It doesn't solve any problem and it only buys a few extra months for a company like GM.
There are a lot of arguments for it, and they make sense. But ultimately, they are wrong.
Ultimately, we don't live in a vacuum, if a company fails here, despite a high demand, the demand doesn't go away. There's as much opportunity in failure as possible misery.
Ford and GM are capable of building a good product.
I don't know how it would apply, but reorganizing under bankruptcy is necessary.
The bailout stinks to me of a Democrat way of paying off the UAW with my tax money. It doesn't solve any problem and it only buys a few extra months for a company like GM.
what makes you think that this one $25,000,000,000-$50,000,000,000 payment (ontop of the over $25,000,000,000 payment from the EPA) is going to turn things around? If the companies are hemorrhaging money, how does just giving them more money stop it?
Big Three Bailout? Not So Fast
SAN FRANCISCO, Nov. 12, 2008
Declan McCullagh.
http://www.cbsnews.com/stories/2008/11/12/politics/otherpeoplesmoney/printable4595068.shtml
One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work.
A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.
To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader's Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time.
During those six years, Toyota surpassed GM as the world's largest car manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan developed the GT-R, a technological marvel with a 0 to 60 time of 3.2 seconds and a lower sticker price than the Corvette ZR1. Honda kept its focus on smaller cars such as the Civic and Accord, and saw its sales continue to increase this summer while GM, Ford, and Chrysler have slid.
The United Auto Workers union and Detroit executives concocted the Jobs Bank idea in the early 1980s. Now these same economic whizzes are lobbying for handouts in the form of your tax dollars. UAW President Ron Gettelfinger said in a statement last week that the Feds must "provide liquidity to auto manufacturers so they can get through the difficulties caused by an across-the-board decline in auto sales."
Not quite. Detroit's problems aren't caused by a one-time slump. They can't be fixed by another infusion of cash. One cause is that union labor and legacy costs are too high and make the so-called Big Three companies uncompetitive. Another is that their profitability is tied to large, heavy trucks and SUVs that Americans no longer want to buy, at least in such large numbers.
That's just common sense. Unfortunately, such a virtue is in short supply in Washington, D.C., where politicians are scurrying to find excuses for a handout.
President Bush has made plenty of missteps, as I wrote about last week, but at least seems somewhat skeptical this time. Democrats, on the other hand, are eager to loot taxpayers -- and reward unions and domestic automakers which made choices that benefited them handsomely in the short term, at the expense of long term competitiveness.
President-elect Barack Obama apparently agrees, saying at his first news conference that he supports "additional policy options to help the auto industry adjust" and "weather the financial crisis."
Meanwhile, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are drafting legislation that would direct a $25 billion torrent of cash from the U.S. Treasury to bank accounts in Detroit; Pelosi said on Tuesday that a vote could happen in a lame-duck session next week. (See a related video from CBS News.)
The better solution is a simple one: Allow automakers to declare bankruptcy.
Contrary to popular belief, that will not mean the end of a company such as GM, which has indicated it may run out of cash by the end of this year. Under Chapter 11, a bankruptcy judge will weigh the different interests of GM's creditors, labor unions, shareholders, and so on, and the resulting company will emerge leaner and stronger. Many current customers of United Airlines, Texaco, Global Crossing, and Pacific Gas and Electric probably don't even know that those companies once filed for Chapter 11.
Chapter 11 also would let a judge alter gold-plated union contracts and benefits that have hamstrung the Big Three and crippled their ability to compete against Japanese and European car makers. Toyota, Honda, and other non-Big Three manufacturers that employ over 100,000 Americans, mostly in right-to-work states, have shown that they can make money building cars in the United States. The best way to keep U.S. auto workers employed in the future -- tens of thousands already have lost their jobs -- is to make it profitable to keep them on the payroll.
One explanation for Washington's haste is that while bankruptcy would alter union contracts, a bailout probably won't. The labor movement spent, according to Financial Week, a whopping $385 million to elect Obama and other Democrats last week. Nobody writes such large checks without expecting something: now it's payback time.
It's true, as bailout proponents argue, that GM employs about 263,000 people. But corporations including AT&T and IBM employ more, and by that line of argument, WalMart (2.1 million full-time employees) would always be far too big to fail. The Feds have already been profligate in doling out cash; a GM bailout would invite a long line of supplicants, with the most politically-connected companies muscling their way to the front of the queue.
If you don't like this use of your tax dollars, now's the time to phone your elected representatives. You can find contact information for your House of Representatives member on their Web site, and the Senate has a similar list. My e-mail address is below -- please let me know what you hear.Declan McCullagh is the chief political correspondent for CNET. He previously was Wired's Washington bureau chief and a reporter for Time.com and Time magazine in Washington, D.C. He has taught journalism, public policy, and First Amendment law. He is an occasional programmer, avid analog and digital photographer, and lives in the San Francisco Bay area. His e-mail address is declan.mccullagh@cnet.com
SAN FRANCISCO, Nov. 12, 2008
Declan McCullagh.
http://www.cbsnews.com/stories/2008/11/12/politics/otherpeoplesmoney/printable4595068.shtml
One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work.
A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.
To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader's Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time.
During those six years, Toyota surpassed GM as the world's largest car manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan developed the GT-R, a technological marvel with a 0 to 60 time of 3.2 seconds and a lower sticker price than the Corvette ZR1. Honda kept its focus on smaller cars such as the Civic and Accord, and saw its sales continue to increase this summer while GM, Ford, and Chrysler have slid.
The United Auto Workers union and Detroit executives concocted the Jobs Bank idea in the early 1980s. Now these same economic whizzes are lobbying for handouts in the form of your tax dollars. UAW President Ron Gettelfinger said in a statement last week that the Feds must "provide liquidity to auto manufacturers so they can get through the difficulties caused by an across-the-board decline in auto sales."
Not quite. Detroit's problems aren't caused by a one-time slump. They can't be fixed by another infusion of cash. One cause is that union labor and legacy costs are too high and make the so-called Big Three companies uncompetitive. Another is that their profitability is tied to large, heavy trucks and SUVs that Americans no longer want to buy, at least in such large numbers.
That's just common sense. Unfortunately, such a virtue is in short supply in Washington, D.C., where politicians are scurrying to find excuses for a handout.
President Bush has made plenty of missteps, as I wrote about last week, but at least seems somewhat skeptical this time. Democrats, on the other hand, are eager to loot taxpayers -- and reward unions and domestic automakers which made choices that benefited them handsomely in the short term, at the expense of long term competitiveness.
President-elect Barack Obama apparently agrees, saying at his first news conference that he supports "additional policy options to help the auto industry adjust" and "weather the financial crisis."
Meanwhile, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are drafting legislation that would direct a $25 billion torrent of cash from the U.S. Treasury to bank accounts in Detroit; Pelosi said on Tuesday that a vote could happen in a lame-duck session next week. (See a related video from CBS News.)
The better solution is a simple one: Allow automakers to declare bankruptcy.
Contrary to popular belief, that will not mean the end of a company such as GM, which has indicated it may run out of cash by the end of this year. Under Chapter 11, a bankruptcy judge will weigh the different interests of GM's creditors, labor unions, shareholders, and so on, and the resulting company will emerge leaner and stronger. Many current customers of United Airlines, Texaco, Global Crossing, and Pacific Gas and Electric probably don't even know that those companies once filed for Chapter 11.
Chapter 11 also would let a judge alter gold-plated union contracts and benefits that have hamstrung the Big Three and crippled their ability to compete against Japanese and European car makers. Toyota, Honda, and other non-Big Three manufacturers that employ over 100,000 Americans, mostly in right-to-work states, have shown that they can make money building cars in the United States. The best way to keep U.S. auto workers employed in the future -- tens of thousands already have lost their jobs -- is to make it profitable to keep them on the payroll.
One explanation for Washington's haste is that while bankruptcy would alter union contracts, a bailout probably won't. The labor movement spent, according to Financial Week, a whopping $385 million to elect Obama and other Democrats last week. Nobody writes such large checks without expecting something: now it's payback time.
It's true, as bailout proponents argue, that GM employs about 263,000 people. But corporations including AT&T and IBM employ more, and by that line of argument, WalMart (2.1 million full-time employees) would always be far too big to fail. The Feds have already been profligate in doling out cash; a GM bailout would invite a long line of supplicants, with the most politically-connected companies muscling their way to the front of the queue.
If you don't like this use of your tax dollars, now's the time to phone your elected representatives. You can find contact information for your House of Representatives member on their Web site, and the Senate has a similar list. My e-mail address is below -- please let me know what you hear.Declan McCullagh is the chief political correspondent for CNET. He previously was Wired's Washington bureau chief and a reporter for Time.com and Time magazine in Washington, D.C. He has taught journalism, public policy, and First Amendment law. He is an occasional programmer, avid analog and digital photographer, and lives in the San Francisco Bay area. His e-mail address is declan.mccullagh@cnet.com
Lincoln Luebbe
Dedicated LVC Member
I personally don't want to debate this, but I'm against it. I do (being that I work in Dayton and that city and the surrounding areas were pretty much ran off on GM and it's suppliers) see the effects of the industry failing. But, is it right for GM to ask the government for the money to buy Chrysler? Really?Should they have given it to them? They would have basically been paying GM to take out one of it's competitors! The market changed about 4-5 years ago. It is not like everything was fine unitl a couple of months ago and boom- the automakers went completely downhill...
All this time GM and Chrysler have had their rear-wheel drive platforms and big powerful available V8's (CTS, Escalade, Charger, 300, and trucks) praised by the automotive publications and enthusiasts while Ford had been dogged because of lack of horsepower and front-wheel drive platforms.
Now according to most of the material I have read lately Ford has the best chance of surviving of the big three. This is because Ford sold off brands it could and put that money in reserves to fast-track more relavant vehicles to the marketplace. Right now Ford is the only one of the big three that is fast-tracking it's plans and not scrapping them.
The answer is not the government paying the big three money to temporarily help with losses. It is a tariff charged on every single Honda, Toyota, Kia, Hyundia, Nissan, Acura, Lexus and Infiniti (and any other foreigner I missed) like those countries do to us. Quite heavily I might add, I read acouple of years ago that a CTS cost around 70000.00 in China. A Navigator was over 90000.00. A CTS is a 35000.00 car, so they charge about 100% more for it!!
If you went to China do you think people are buying our cars left and right? No.
I think people would be buying american if we played the same way other countries did.
Don't you?
All this time GM and Chrysler have had their rear-wheel drive platforms and big powerful available V8's (CTS, Escalade, Charger, 300, and trucks) praised by the automotive publications and enthusiasts while Ford had been dogged because of lack of horsepower and front-wheel drive platforms.
Now according to most of the material I have read lately Ford has the best chance of surviving of the big three. This is because Ford sold off brands it could and put that money in reserves to fast-track more relavant vehicles to the marketplace. Right now Ford is the only one of the big three that is fast-tracking it's plans and not scrapping them.
The answer is not the government paying the big three money to temporarily help with losses. It is a tariff charged on every single Honda, Toyota, Kia, Hyundia, Nissan, Acura, Lexus and Infiniti (and any other foreigner I missed) like those countries do to us. Quite heavily I might add, I read acouple of years ago that a CTS cost around 70000.00 in China. A Navigator was over 90000.00. A CTS is a 35000.00 car, so they charge about 100% more for it!!
If you went to China do you think people are buying our cars left and right? No.
I think people would be buying american if we played the same way other countries did.
Don't you?
Tariffs aren't the answer.
Just build a better product and price it competitively in this country.
Protectionist policies often have a horrific backlash. Furthermore, they enable the industry to continue putting out an inferior product free from direct competition.
Tariffs applied surgically to open markets, and not close ours, are different, but protectionist policies do not work and ultimately hurt everyone.
Just build a better product and price it competitively in this country.
Protectionist policies often have a horrific backlash. Furthermore, they enable the industry to continue putting out an inferior product free from direct competition.
Tariffs applied surgically to open markets, and not close ours, are different, but protectionist policies do not work and ultimately hurt everyone.
Proud to be UAW
To quote an earliert post.
"It is a tariff charged on every single Honda, Toyota, Kia, Hyundia, Nissan, Acura, Lexus and Infiniti (and any other foreigner I missed) like those countries do to us. Quite heavily I might add, I read acouple of years ago that a CTS cost around 70000.00 in China. A Navigator was over 90000.00. A CTS is a 35000.00 car, so they charge about 100% more for it!!
If you went to China do you think people are buying our cars left and right? No.
I think people would be buying american if we played the same way other countries did."
What we need is Fair Trade not Free Trade. The UAW has already cut wages and bennifits with their new contracts from $28.00 an hour to $14.00 and the health ins has been taken off the books and given to the UAW to handle with the VEBA program.
So don't start putting all the blame on the people who are fitting for a fair wage for a fair days work. If it wasn't for the unions there would be no middle class. Do you think that a person working at a hamburger joint would be making $7.50 an hour if the guy on the line was making that same rate?
Every time that auto worker got a raise in pay so did his boss and his bosses boss and so on.
As for the "jobs bank" that program was put into place not to let people get paid for doing nothing. It was put there to force the company to get it's act together to create better products that the public would want to buy.
The union never dreamed the company would actually put employees into this program.Thus designing a better product and keep people "WORKING".
But gues what? The company found out this program could actually work to there benifit, by becoimg a tax wright off instead of investing in future development.
Trust me nobody wants to sit around all day and do nothing, it's alot easier to be busy working and being productive then to sit on your hands all day and go home feeling like you have not accomplishied a thing.
The UAW brothers and sisters are a proud work force. Don't let the stories of the few bad apples destroy the group as a whole.
To quote an earliert post.
"It is a tariff charged on every single Honda, Toyota, Kia, Hyundia, Nissan, Acura, Lexus and Infiniti (and any other foreigner I missed) like those countries do to us. Quite heavily I might add, I read acouple of years ago that a CTS cost around 70000.00 in China. A Navigator was over 90000.00. A CTS is a 35000.00 car, so they charge about 100% more for it!!
If you went to China do you think people are buying our cars left and right? No.
I think people would be buying american if we played the same way other countries did."
What we need is Fair Trade not Free Trade. The UAW has already cut wages and bennifits with their new contracts from $28.00 an hour to $14.00 and the health ins has been taken off the books and given to the UAW to handle with the VEBA program.
So don't start putting all the blame on the people who are fitting for a fair wage for a fair days work. If it wasn't for the unions there would be no middle class. Do you think that a person working at a hamburger joint would be making $7.50 an hour if the guy on the line was making that same rate?
Every time that auto worker got a raise in pay so did his boss and his bosses boss and so on.
As for the "jobs bank" that program was put into place not to let people get paid for doing nothing. It was put there to force the company to get it's act together to create better products that the public would want to buy.
The union never dreamed the company would actually put employees into this program.Thus designing a better product and keep people "WORKING".
But gues what? The company found out this program could actually work to there benifit, by becoimg a tax wright off instead of investing in future development.
Trust me nobody wants to sit around all day and do nothing, it's alot easier to be busy working and being productive then to sit on your hands all day and go home feeling like you have not accomplishied a thing.
The UAW brothers and sisters are a proud work force. Don't let the stories of the few bad apples destroy the group as a whole.
And what does $700 billion to bailout wall street and Banks stink like?
How? You want to explain to me how to do that when it's cheaper to buy the raw material from us, ship it to China, manufacture a product and ship it back here -- then it is to make the product here?
China, as an example, pay their workers next to zero. They have virtually no enviromental concerns and no safety practices to worry about. How do our manufacturers compete with that? Seems to me, China has more then enough money (mostly ours) to deal with some of these issues.
Lets compare something. What is the pension obligation of GM or Ford per car and what is the same obligation for, say, Kia or Hundai?
Do some research and find out.
I will however agree, that the big three need to make changes within their owen companies. No question. Just giving them $25 billion wont fix anything except buy them some time.
fossten
Dedicated LVC Member
Now we are going to bail out American Express. People's dinners are going to be paid for with taxpayer dollars.
Nice going, socialists.
I'm drafting a letter requesting my bailout. 300 pounds of gold bars should do it. (do the math)
Nice going, socialists.
I'm drafting a letter requesting my bailout. 300 pounds of gold bars should do it. (do the math)
Simple...cut costs.
that means changing business practices, cutting EPA regulations and cutting workers benefits (which would necessitate abolishment of the UAW). In the long run, it would make American automakers competitive again.
Agreed.
But, before we decrease our standards, shouldnt we consider increasing the standards we hold others to? After all, they want to do business here...
Lay off the socialists part. It was your Beloved GW and crew who started this with $700 billion for the banks and wall street. Nobody is trying to be socialistic.
BTW, what the hell do you need 3.5 Million for?
You mean fair trade? Never said we shouldn't...but why does that have to come first?
That has a different stink to it. Still stinks, different stink.
Back on topic:
There are million different ways to answer this question, and each answer is directly related to the specific product we are talking about.
Why is it cheaper to ship raw materials to another country around the world, have it assembled, then ship it again around the world, and then put on a truck or train and shipped around the country. That is REALLY expensive. Yet despite this, we do it all the time. That's because the cost of government regulation, high corporate taxes, and nearly a century of union legacy costs are driving up the costs of the domestic product.
And mind you, I didn't say that American cars were too expensive. However, I think that they could be less. Or even better, we could get a better car for our dollar, and the big 3 could stop penny pinching away quality.
Yet, despite your example, countries continue to build manufacturing facilities throughout the United States? Why is that? Because our work force, in the right to work states, are the most productive in the world, and because those transportation costs I just mentioned are so incredibility expensive.
How do we compete with that? By providing a business friendly atmosphere with a skilled work force.
You're not going to bully the Chinese into doing anything. Get that idea out of your head right now, it's not happening.
Other than some silly desire of your to assign homework, you have failed to make a point. Why should I happily pay the legacy costs of a company that spent the last century bent over a barrel by the UAW?
In the meantime, Toyota, Honda, Subaru, BMW, Hyundai and some others are all operating plants in the United States.
It will buy them months... at best. It accomplishes nothing but expanding our debt to the Chinese.
Bankrupcy, reorganization, and if the government wants to help, they need to pass regulation that is favorable to business. They should also consider doing away with some of the burdensome, accelerated EPA regulations.
It should be noted that Ford and GM do very well overseas. The European Fords are held to great acclaim. The European Focus, the Mondeo, the Ka, the S-Max,the Fiesta, ect... these are all considered great cars in the highly finicky European market.
The companies have been run poorly. They need to reorganize, shed their legacy costs, and build their modern plants in RED right to work states and get the hell out of Michigan.
fossten
Dedicated LVC Member
Hey. Dufus. If W acts like a socialist, I call him one. It's called intellectual integrity. You know better than to call him my "Beloved GW." I've been more critical of him than anyone on this forum except for you and your beloved BDS. So go pound sand.
And I don't "need" $3.5 million any more than the banks "needed" $700 billion, apparently. But that shouldn't matter, should it?
Here's another element of this discussion that conservative and centrist Americans need to be aware of.
The collapse of the auto industry and the UAW will provide the Democrat congress the ideal opportunity to thrust socialized medicine on the rest of the country. One of the legacy costs that continue to crush the industry is health care. A lot of the home countries from which the imports originate have a nationalized health care, supposedly saving the company from having to incur that cost.
The auto lobby may likely make a hard push for the bail out and the government to pick up the existing health care and retirement commitments. And from there, they'll possibly lobby for the entire health care tab to be picked up, to make things "fair."
It might not happen, but I've long suspected that the Big Three might make the most powerful push for socialized medicine. 2009 will be the time to do it.
The collapse of the auto industry and the UAW will provide the Democrat congress the ideal opportunity to thrust socialized medicine on the rest of the country. One of the legacy costs that continue to crush the industry is health care. A lot of the home countries from which the imports originate have a nationalized health care, supposedly saving the company from having to incur that cost.
The auto lobby may likely make a hard push for the bail out and the government to pick up the existing health care and retirement commitments. And from there, they'll possibly lobby for the entire health care tab to be picked up, to make things "fair."
It might not happen, but I've long suspected that the Big Three might make the most powerful push for socialized medicine. 2009 will be the time to do it.
taylor414ce2003
Dedicated LVC Member
Its not pretty for the workers but I am against it.We already bailed out Chrysler once before and now they are back for more cash.I think if the big 3 fail new American car companys. could emerge building better cars that the public acutualy want.I think one of GMs biggest problems is they build 6 versions of the same vehicle!!!
brentalan
Dedicated LVC Member
***********************************************
Because they can turn around when the UAW concessions are made in 2011 or was it 2012? That's a huge burden off their backs, their costs will become competitive with the Japanese manf. On top of that, hopefully, the economy will improve and folks will get credit again to buy cars. If the economic situation doesn't improve by 2012 the auto bailout won't matter anyway because everyone will be in a world of hurt.
The alternative (not giving them the bailout money) means a guaranteed loss of LOTS of jobs all of the pensions, health care and unemployment benefits fall in our laps.
Without taking this chance there is NO chance for a quick turnaround, this would assuredly cause a deep recession. 25-50 billion is nothing compared to Iraq and the bank bailout. GM is the largest provider of health care in the U.S. That's a health care burden we do not need on the government dime right now.
ford nut
Local nut case
Thats a good point.
http://www.usatoday.com/money/autos/2005-06-22-gm-healthcare-usat_x.htm
Socialized medicine is on the way
But $25,000,000,000-$75,000,000,000 isn't enough money for all three companies to last another 2 years.
GM lost over $4,000,000,000 last quarter and they anticipate losing $2,300,000,000 a month.
Here's another reality-
that's going to happen anyway. Bail out or no bailout. Recovery or no recovery. When Chrysler was rescued by the federal government in 1979, they had to engage in significant lay offs. No matter what happens now, these companies are going to have to reduce their size and costs.
$50,000,000,000
on top of another $25,000,000,000
And it has virtually no chance of accomplishing anything but delaying the inevitable. How many $50,000,000,000 bail outs do we need to extend to them?
First of all, if they don't get the bail out, they can reorganize under bankruptcy. AFTER they get things in order, only then is it even reasonable to consider a loan.
Furthermore, if they did disappear, that simply means that there's more room in the market for a new company to appear, another investor to buy them, or another company to expand to meet the demand. There might be retooling, but they'll all still need seats, steering wheels, radios,and computer chips- whether it's a Honda made in Ohio, a Toyota made in Texas, or a Chevy made in Canda or a Ford made in Mexico.
But in the end, it comes down to this, everytime things get scary with the economy, everytime there's a dip or a bump, we can not turn to socialist policies and big government solutions. They simply don't work in the long run. "Just do something for the short term" always leads to long term problems. The cure is always worse than the cold in these situations. If we take a 14 month hit, then in 15 months we'll come out of it stronger and healthier. That's how capitalism works. But if we do these horrible government solutions, through good money after bad, prop up failing enterprises simply out of fear, in 15 months, we'll have even more problems...
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