They are seriously talking about this?!

How bout this...the govt needs to make an agreement stating that the American people will pay (again) to bailout the dumbfucks, but only after every new passenger vehicle has at least a 30mpg rating.

This is getting ridiculous.

Discuss!

11/7/2008 1:31:58 PM

auto industry bail out with a $150 million investment into alternative energy (a drop in the bucket).

11/7/2008 1:35:46 PM

i read a nice article on cnn about how they should let the autos follow the airlines couple years back.....bankrupcy and then mergers to become more efficient. i dunno if same reason will work for autos but again its better than bailouts

11/7/2008 1:36:39 PM

^I support this. Let them crash and burn. Merge, regroup, and figure their shit out.

11/7/2008 1:39:07 PM

Let them crash and burn.

11/7/2008 1:45:54 PM

^This I also support.

11/7/2008 1:46:29 PM

yes let the auto industry crash and burn.....considering that about 17% of the US poplulation is employed by the auto industry.

11/7/2008 1:46:32 PM

Not my fault they made a dumb career move


SOCIAL MOTHER EFFING DARWINISM!!



[Edited on November 7, 2008 at 1:49 PM. Reason : .]

11/7/2008 1:48:58 PM

As the current global economic crisis stabilizes, these companies do have the ability to recover and continue their role to the future of US manufacturing. The alternative would have a devastating impact on the US economy and further diminish the US's competitive standing.

The three American car companies generate 5 million American jobs. No other American industry generates more employment, annual economic output, exports and retail business.

And they are looking for 50 billion, still a shitload of money though

11/7/2008 1:54:14 PM

Quote :

"How bout this...the govt needs to make an agreement stating that the American people will pay (again) to bailout the dumbfucks, but only after every new passenger vehicle has at least a 30mpg rating."

Yes, lets impose restrictive requirements only on US automakers at a time when gas prices are free-falling.

BRILLIANT!

Talk about setting them up for future failure...

11/7/2008 2:03:29 PM

Oh, my bad, the price of gas is the only factor

11/7/2008 2:27:59 PM

^ and you want the price of cars to sky rocket because of the tolerances that have to be observed during manufacturing to achieve that 30 mpg

11/7/2008 2:38:37 PM

yeah i read 3 million direct jobs will get affected if GM alone goes down and similar number of jobs in ancillary industry.

there will be pain as it was in the case of airlines bankrupcy but look at them now, they are affected by gas prices and economy but they are holding strong (well lets say they are holding on).

Another reason why i feel bankrupcy might actually be a good thing for GM is the unions....in 80s when GM was making lots of monies they gave away too much bargaining power to the workers (med insurance and afer retirement benefits) and now they are paying the price with constant wars with unions. Once it goes down, they might be in a better shape to bargain with workers hopefully minus the unions.

11/7/2008 2:39:59 PM

Quote :

"The three American car companies generate 5 million American jobs. No other American industry generates more employment, annual economic output, exports and retail business. And they are looking for 50 billion, still a shitload of money though"

This makes the assumption that

a) Companies going bankrupt means the jobs magically disappear.

and

b) That a few companies going under will eliminate an industry overnight.

The REALITY is, if Ford/GM/Chrysler goes bankrupt, they will be BOUGHT by other companies, and the vast majority of the workers will never even have a day off. And it will take YEARS for a bankruptcy and liquidation to actually process through.

11/7/2008 2:41:29 PM

Quote :

"Yes, lets impose restrictive requirements only on US automakers at a time when gas prices are free-falling. BRILLIANT! Talk about setting them up for future failure..."

Something has to be done to shelter the US economy from $150+ oil again. You are aware that this is really what pushed the first card out of the house of cards that was the housing bubble, right? We can impose the requirement on ALL automakers wanting to do business here if we really had to go this route.

11/7/2008 2:59:14 PM

I've heard that argument, but I dont think it holds up too well... its kinda like saying "9/11 was the first card that caused the dot com bust". High oil prices may have been 'a' catalyst to start the crash, it was not 'the' cause. Regardless if gas was $2 a gallon, or $4 a gallon, the housing bubble was going to burst regardless.

Dont believe everything (or most) of what you read on theoildrum.com.

11/7/2008 3:11:01 PM

Ah ha. You got me. I do believe they are a bit self important over there about peak oil and how everything comes back to energy, but hasn't that been the story for centuries? The countries with resources win?

I agree that housing would have corrected eventually, but the quick jump in oil prices but a heavy tax on...EVERYTHING. I think if oil would have stayed cheap, we'd have seen the housing bubble run for quite a bit longer, at least up until the huge bulk of ARM resets fully started to hit.

11/7/2008 3:30:19 PM

^The gas bubble hit because of natural disasters, war and speculation all coalescing together at one time. If you've noticed, the price at the pump has died back down in a matter of a few months.

All the rest is bullshit. Oil and energy are not going to destabilize our economy, and they were not the cause, AT ALL, of the current market meltdown worldwide. You can thank the combination of a lazy financial system, an even lazier government, and ignorant buyers for that.

Lower gas prices wouldn't have staved off the mortgage loan collapse at all. Everyone in the industry knew it was going to happen, but of course when you have centralized control, there ain't much you can do about it.

And I love that GM is now saying they HAVE TO HAVE a bailout this year to remain in business, that the economic conditions are the CAUSE of their problems. They haven't posted a profit in FOUR YEARS. Through the highest point in our economy they lost between 2-25billion a year in the US market. Why in the fuck would we bail that out? This is complete horseshit. They need to retool, get bought, get profitable and move on.

The only bailout I can justify is a federal bailout on the pensions, healthcare and other retirement promises that GM made to it's employees. Let the ship sink, but save the crewmen.

11/7/2008 3:40:15 PM

Now, Noen, I do have to disagree about the distabilizing effects of energy costs. While I do believe the run-up in oil prices were very overdone, the run-ups have been one of the biggest reasons we are where we are with the economy, and there are some very serious concerns with potential supply in the short and long term. I am not a true peak oil believer, but I believe the risks of assuming everything is ok are too great, and that we have to hedge our risks greatly.

11/7/2008 3:47:56 PM

Here is the article we are referencing

http://www.theoildrum.com/node/4727

Quote :

"If you've noticed, the price at the pump has died back down in a matter of a few months."

Yes, thanks to demand destruction. Sure, the price of oil was somewhat inflated by speculators, doesn't matter, the high price taxed everyone and for the people on the edge of making payments that shouldn't have been in those homes got pushed over the cliff. Hello housing burst. I'm not saying the cards weren't going to eventually fall, they were. The quick spike in oil just started the process a bit sooner than expected.

[Edited on November 7, 2008 at 3:53 PM. Reason : .]

11/7/2008 3:50:56 PM

Its more than simply demand destruction. There is much less money in the market right now pushing up the market prices. Demand destruction is a big part, however. Currency strength is another very big reason prices have collapsed.

11/7/2008 3:54:50 PM

The price of oil today is damn near entirely based on futures speculation. Which is retarded on hundreds of levels. Have we not learned our lesson yet about the inherent pitfalls of allowing unmitigated speculation of markets?

In the long term, I agree that reliance on oil is going to have huge impacts. This is one of the few areas I think we are going to be OKAY with now. Both presidential candidates, many many congressmen and women, and countless state legislators finally "get it" that the way to energy independence is through making it profitable to find alternative sources.

If anything, the trickling rise in oil costs will fuel the transition away from oil that much faster, which should, in the next decade or two, keep oil speculation fairly well in check. If they don't keep barrel prices low, it will speed the timeline when oil is no longer THE required energy source for the world.

11/7/2008 4:05:10 PM

Hey, i heard circuit city is doing poorly

perhaps they should ask the government for a bailout

apparently "poor business plan" isn't something you have to take responsibility for anymore

11/7/2008 4:25:13 PM

Quote :

"Something has to be done to shelter the US economy from $150+ oil again. You are aware that this is really what pushed the first card out of the house of cards that was the housing bubble, right? We can impose the requirement on ALL automakers wanting to do business here if we really had to go this route."

Artificially low gas prices were the culprit, not the auto industry. Tax gas at the appropriate level reflecting market externalities, and the automakers will follow suit with more fuel-efficient cars.

11/7/2008 4:32:00 PM

For once, I completely agree with ^this guy.

11/7/2008 4:58:13 PM

Let them burn. The UAW is a huge problem. Hopefully GM, et al will be bought by Nissan, BMW, Toyota, or Honda who will hopefully not deal with them.

11/7/2008 5:09:58 PM

How is the domestic auto industry crashing and burning not a good thing? They should have left the designing and manufacturing of automobiles a long time ago to foreigners who at least know what they're doing.

11/7/2008 5:20:37 PM

^ Do you not realize what will happen to all the unemployment if the auto industry in America completely crashes? How is that a good thing?

11/7/2008 5:24:52 PM

It should be pretty apparent to anyone who has done any car buying in the past 2 decades that you don't buy American if you car about quality or performance. It should be telling that despite massive tariffs and regulation it's just as expensive to buy an American made car as it is to buy an import and the import is almost always the superior vehicle. It's absurd to continue to support an industry like that.

It's the same way with steel, I fully expect you'll see that industry begging for help soon as well.

11/7/2008 5:24:56 PM

I say let'em go down--a foreign company will buy them out and use it as a way to really really get into the American market. About 6 months ago I met with someone who was high up in purchasing for Nissan who hinted that he thought they would buy Chrysler if things got bad for Chrysler.. that was before all of this bailout shit though so who knows.

11/7/2008 5:30:30 PM

Quote :

"It should be pretty apparent to anyone who has done any car buying in the past 2 decades that you don't buy American if you car about quality or performance. "

you must not have ever bought a truck to work out of. The foreign market is extremely limited in that category, and Toyota is way overpriced.

11/7/2008 6:04:00 PM

No foreign auto manufacturer is going to buy into any failed American manu -


look at the failed combo ventures that have already happened


Daimler bought into Chrysler and then bought their way back out because the outlook was so bleak - this was a few years ago, prior to this economic downturn

Ford bought almost half of Mazda and now Mazda is talking about buying their shares back and bailing on the blue oval

GMAC is owned in part by the group that Daimler sold their Chrysler shares to, and GM group as a whole is obviously not doing so hot


Why would any foreign company come in and invest in an american one after they declare bankruptcy? It doesn't make any sense. Foreign automakers are doing well, creating great cars that sell like mad on american soil already - buying up a shitty failed business and trying to fix their problems only bogs them down. It'd be like Obama throwing John McCain some of his electoral votes just because he whipped his ass so bad - it makes no sense and serves no purpose.

11/7/2008 7:18:29 PM

that's a pretty an extremely ignorant point of view

[Edited on November 7, 2008 at 7:32 PM. Reason : asdf]

11/7/2008 7:30:26 PM

TATA bought Land Rover and Jaguar. mayhaps some company might see value in what GM has to offer.

11/7/2008 7:33:05 PM

Get rid of the UAW and they'll be very viable.

11/7/2008 7:39:33 PM

The UAW is why they are going to get a bail out. They should be allowed to go bankrupt, merge, die, etc. But the Democrats couldn't let that happen because of the UAW, so they will inject them with capital so they can struggle along for a few more years, then rinse and repeat.

11/7/2008 8:10:17 PM

^^^^ Riiiiiight


I posted proven examples of where foreign investment (or vice-versa) has ultimately ended in epic failure


so sure, it's an ignorant point of view, rooted in complete and utter fact



let's not even talk about the Nissan-Renault merger in France, which is currently FLOUNDERING because both companies are burning through cash like mad

or the ill-fated Mitsubishi - Chrysler pairup of the early 90s

or the failed joint Toyota - GM pairings of the late 90s/early 00s



I know my shit when it come to this, sonny jim


foreign investment, hell, even COLLABORATION with AMERICAN car companies has ended poorly every single time

TATA only bought Jaguar and Land Rover because - and I hate to say this because it sounds racist and xenophobic - they're Indian, they're new to the global market, and they don't know any better. There's a reason those companies get passed around like a $2 whore, and it's not because of the "prestige" associated with them


Let me illustrate this in the simplest of terms:


LARGE AUTOMAKER + LARGE AUTOMAKER = FAILURE.


Every. single. fucking. time.


UAW and Congress want a bailout for the big three because they KNOW that the other options only prolong the inevitable. I'm not saying it's right, or the bailout is best thing in the world and that it has to happen, but that's how it is.

[Edited on November 7, 2008 at 8:39 PM. Reason : .]

11/7/2008 8:38:24 PM

Quote :

"TATA only bought Jaguar and Land Rover because - and I hate to say this because it sounds racist and xenophobic - they're Indian, they're new to the global market"

lol

11/7/2008 9:32:12 PM

good thing i drive a volvo, har har har.

11/7/2008 10:00:59 PM

how about we do away with the UAW? That might give the auto companies a fighting chance at competing with foreign car makers

11/7/2008 10:20:15 PM

I still drive the same camaro my dad bought me when I was sixteen, honda/toyota peeps I know are on there 4th car by now at the same age of 26 so let that go, people who grew up true americans know how to take care of a vehicle.

Quote :

"It should be pretty apparent to anyone who has done any car buying in the past 2 decades that you don't buy American if you car about quality or performance."

[Edited on November 7, 2008 at 10:44 PM. Reason : bats don't fly backwards]

11/7/2008 10:40:55 PM

Quote :

"foreign investment, hell, even COLLABORATION with AMERICAN car companies has ended poorly every single time LARGE AUTOMAKER + LARGE AUTOMAKER = FAILURE."

This isn't even remotely true. Nearly every automaker in the world now has partial ownership of one or more other manufacturers. Platform sharing and technology sharing is becoming extremely normal and VERY successful for all side. The Ford/Mazda platform share has been one of the best business decisions Ford ever made. Because of it, they reduced costs and the quality of that platform (The FOCUS) has risen dramatically.

And why would anyone buy a bankrupt company? Seriously? How is that even a hard question to ask? Because you can get facilities, employees, and IP for pennies on the dollar. All of your failed examples were of domestic manufacturers investing in foreign counterparts. We are talking about the opposite.

You also completely neglected to mention the following extremely successful mergers:

Volkswagen buying Audi
Porsche buying Volkswagen
Toyota bought Diahatsu
Peugot and Citroen
Nissan and Renault
BMW and Mini, Rolls Royce

Seriously. Let's also not forget the internationally Ford is in great shape. It's their domestic sales that suck balls. Let them sell off their domestic assets to a company who is profitable here, and they can continue to sell in Europe and Asia.

11/7/2008 11:51:00 PM

Dude, Tyler.

VW buying Audi doesnt count because they've shared shit for year, buying out was a formality.

Porsche and VW? Same thing.

Diahatsu was never a large Auto manu
neither was Citroen, mini, or RR.

They were all small-time, highly localized auto makers (some boutique).

This is GM we're talking about here. Not some fucking crackerjack car manufacturer - GM is one of the largest and longest lasting auto manu's in the world.

Ford International IS great - but domestically they suck donkey dick and domestically is what we're talking about. I would bet money that Ford international would take a massive hit if Ford in America went down the tubes.


And my examples were NOT of domestics investing in foreigns, go back and check. Daimler bought into Chrysler. I don't need a better example than that, it's the perfect case study. Daimler bought in, saw the way Chrysler was being run, and immediately ran for the hills. What makes you think that any other manu would look at the other American shithouses and see anything different?

We are talking about manufacturers who rely on outmoded and outdated technology and are falling behind in their own domestic markets! For god's sake, none of the big 3 has released anything nearly as revolutionary as the japanese big 2 (honda and toyota) in the past 25 years!

When you are getting your britches pulled down in your own market by your competition, you don't have a goddamned thing to offer them when your bankruptcy rolls around.

11/8/2008 1:26:23 AM

you still missed the point.

Buying into an operating business (Daimler into Chrysler) is entirely different than liquidating a bankrupt(ing) business.

Case in point: Microsoft's offer to buyout Yahoo!. The overriding reason for the buyout offer didn't have a damn thing to do with Yahoo!'s (mis)management, products, or market. Microsoft wanted the employees and the IP.

Buying a company != buying their processes, or their products. You can (and often do) buy a company, especially one in or in fear of liquidation, for it's resources (labor, facilities, IP and equipment).

Think of it this way. If GM sold out or was split up amongst other auto makers, two major things would happen. It would be the immediate end of auto-workers unions in the USA, and it would be the end of the american SUV and full-size trucks that have dominated our domestic market.

The problem has never been that GM/Ford/Chrysler couldn't make quality vehicles.

De-unionizing the US auto industry will ONLY happen with a sell-off. And it's pretty much the only way a domestic manufacturer is ever going to be profitable in the US. It also happens to result in much higher worker compensation, benefits and job satisfaction.

11/8/2008 3:39:59 AM

11/8/2008 6:18:14 AM

"It wasn't government's job to spend millions to save buggy whip factories and haberdashers when cars replaced carriages and men stopped wearing hats." -- John McCain

11/8/2008 7:19:25 AM

bail em out. one more stipulation - they gotta switch to the metric system already

11/8/2008 8:35:00 AM

This is such bullshit. I can't believe people fall for this stupid ass logic.


If GM and Ford go bankrupt (which they should) there will be jobs CREATED not lost.


Right now jobs are being lost. They are having to spend billions to get people to accept buyouts so they can shed payroll. The problem is they are paying people 2-3x what they are worth.

When GM re-organizes they can afford to pay people 33-50% of what they are making now. That means MORE jobs not less. Idiots.

11/8/2008 9:49:42 AM

There is no way that the UAW would dissolve, even in the face of the big 3 going under - there are still plenty of Toyota and Honda workers here in the states that are unionized.


And again I make the point: Why does Toyota or Honda give a shit about the big 3's IP when they are whipping their ass in sales on their own turf? Buying a bucket of shit because it might have a poor-quality diamond in it is not a good idea.



And i do agree with letting them go under, just for the record, and I would love it if the UAW went away so we could buy cars for more reasonable prices again, but I dont think either of those things will happen.

[Edited on November 8, 2008 at 10:49 AM. Reason : .]

11/8/2008 10:47:20 AM

Quote :

"There is no way that the UAW would dissolve, even in the face of the big 3 going under - there are still plenty of Toyota and Honda workers here in the states that are unionized. "

It was my understanding that at least for Toyota, almost none of their workers are union. Certainly the most recent news I've been able to find suggests they haven't unionized toyota's US presence
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/25/AR2007052502458.html

Quote :

"And again I make the point: Why does Toyota or Honda give a shit about the big 3's IP when they are whipping their ass in sales on their own turf? Buying a bucket of shit because it might have a poor-quality diamond in it is not a good idea. "

Not so much IP so much as infrastructure and resources. Factories and machines designed for auto work. It's much cheaper to acquire from a bankrupt company than to buy and build new.

11/8/2008 11:21:34 AM