Is a bailout just delaying an inevitable bankruptcy? And is bankruptcy -- with its forced restructuring -- the best chance the domestic car companies have?
Sure, they've mostly run themselves into the ground. I mean, you don't see Honda teetering into bankruptcy, do you? They've gorged themselves for years on high-fat SUVs, and now that they're having the inevitable heart attack, should we give them the money for a bypass? Will they even use the money to get healthy, or will they just use it to keep gorging?
On the other hand, the auto industry is the industrial backbone of America. And if it goes under, hundreds, if not thousands of other companies that supply parts and modules to the industry will go under, too. And with them, hundreds of thousands of jobs. Can we afford the kind of crushing transition that will be brought about if it happens all at once? And can we afford to let other countries produce our largest consumer goods for us?
If we DO offer help, what conditions should be placed on the money? Should it be only for products that will benefit the country -- like fuel efficient vehicles? Should it limit executive compensation until the loans are paid back? How can we be sure that it's an investment rather than a bailout...that we're teaching them to fish, rather than just buying them a boatload of Mrs. Paul's Fish Sticks?
We're interested in your thoughts.
Tom and Ray Magliozzi
Click and Clack, the Tappet Brothers
When considered globally, we have a false economy in the USA. We need to let the economy correct itself and if that means we no longer have an auto industry, then so be it! Imports are generally better and more reliable. Maybe we do not need to be in this industry anymore since others do it better.
NO BAILOUT! (A little late as conditional $'s have been provided).
You people are truely pathetic, listen to yourself! Honda this VW that benz this. All vehicles have problems, PERIOD! I have owned 5 Chevy trucks and 2 GMC trucks, I waited my whole life for my dream truck and last year I finally bought my first brand new GMC truck. So while you people bash the american auto industry remember so of us actually live in Detroit, you people are in for a sad reality if our auto industry takes a dump its not just detroit you we be bailing out! Millions of jobs are based around the auto industry. Not just in Detroit. As you buy your foerign cars just remember how much Japan or Germany or China give you in return, for that matter why dont you move over there. As you talk about Japaneese cars, the number one car in Japan is a GM!!! The problems with our country is not the big three its GREED, people want and want but when its time to give god forbid. Your tax dollars cant help a whole slew of your fellow americans (granted the unions should give up the grip) But you dont see a problem with billions spent on wars we dont need to fight. Aid to foerign countries. Multiple use goverment research projects. NASA spends more on shuttle missions than the big three are asking for, think about it....
It appears that the recommendations I made last fall, a forced restructuring with tough conditions attached is the way we are now going.
I suggested that the industry should be given a chance to restructure itself and shed brands and excess capacity. The only difference was that last fall Fiat was not on the scene, and I suggested a posible merger between Chrysler and GM with Chrysler dumping all their car brands and only retaining the Jeeps, minivans and some truck designs. I recomended that GM drop Pontiac, Hummer, GMC, Saturn and cut their dealerships in half as well.
No. Free Market. Should have stopped taking advantage of the workers (THUS CONSUMERS) long ago. Want to bail this country out...quit giving the big bucks to the companies thowing it all out the window and give it the people...you and I. We will then spend thus we will push the economy forward. Giving it to those greedy people who have to have million dollar "retreats" and multi-million dollar offices....while all you and I want to do is put food on the table, live in a decent neighborhood, raise our children in schools that actually teach them and maybe just maybe be heard.
It seems the No Bailouts are leading the Bailouts by quite a margin. The worst thing to do would be for the US goverment to nationalize the industry, like in Britain and France. That would not solve any problems.
The next worst thing would be more money to "tide them over" till when?. At the rate they are burning cash this is equivalent to giving a drunk or addict more money to carry on.
The best thing would be a voluntary restructuring by all three, possibly merge GM and Chrysler, dropping several divisions, such as Pontiac, Hummer, Saturn, and GMC, and all Chrysler brands, except Jeep and Dodge minivans and running a very lean industry.
The alternative is Chapter 11 early next year and forced restructuring with new management, new labor contracts, etc. All alternatives will mean many more plant closures, since there is significant overcapacity, and Japanese companies would be reluctant to buy a US co.'s plant.
Of course, it isn't up to anyone on this board. The likely results will be guaranteed loans that the car companies can use for almost any purpose they choose. If I were king of the forest, I'd use the money to create loans so that more buyers could purchase cars. Hey, maybe the Feds will stipulate that. And don't gimme that "they'll just use it to buy more spa time" stuff. If you believe that, you aren't in touch with what's going on.
And don't gimme that "they'll just use it to buy more spa time" stuff.
Spa time? How about those HUGE CEO salaries? Why are those CEOs making so much money after they have demonstrated incompetence time and time again?
Besides, THE U.S. GOVERNMENT DOESN'T HAVE THE MONEY TO LOAN! They are going to have to borrow it from someone else in order to loan it to the auto industry! How does that make sense? Let Detroit borrow the money directly from the people who are financing our federal deficit.
12/27/2008 9:06:24 PM
