Why the big three bailout is a BAD idea

[houdini]

I own a business....Can I get a bailout if I mismanage and drive it to the ground?

NO BAILOUT - NO WAY.

Originally Posted by houdini

I own a business....Can I get a bailout if I mismanage and drive it to the ground?

NO BAILOUT - NO WAY.

Same but it's tempting to try.

Dear Unkie Sam, so I've been boozed up in Costa rica for past 7 months, um can I get a few mil

it was a marketing error and i swear if it wasn't for the failing econ it would have worked.

A bail out as it sits is one big money pit if they dont restructure then to heck with them if the UAW is unwilling well get rid of them.

[AD720]

What is important to keep in mind, IMO, is that this a problem with further reaching impact than just the assebley line employees of Ford or GM. The tire manufactures, seat belts, air filters, nuts and bolts, salesmen, rental fleet companies...the list goes on and on. All of those companies and their employees would be effected by even one of the major automobile manufactures going under.

I want to be clear that I am not in favor of a "blank check" for the big three. There has to be some kind of restructuring.

I read that the average per/hour pay for a Ford employee is something like $70. And the average per/hour pay for a Toyota employee is something like $35. And I would be so bold as to say that many people would say that Toyota makes a superior vehicle. It seems pretty short sighted that people are not willing to give up a slice of the bread to be able to keep the rest of the loaf.

What it comes down to, to drastically over simplify things, is whether "we" (the royal we) bail out the auto industry now by restructuring the companies and turning them into something that is financially viable and continues to employ thousands of American workers or let the companies go under and put those thousands of workers out of work. And I would have to imagine that a large majority of those workers would need support from the government, in the form of unemployment or welfare or whatever.

The end result is going to be the same, money out of the goverment till. But one path to that is constructive. One is not.

All the "they F**Ked up" talk is totally accurate. Bad decisions were made that impacted the company. But that is done and no amount of finger pointing is going to solve the problem. The only thing to do is look forward and figure out a fix.

My , not that anyone asked.

Originally Posted by AD720

What is important to keep in mind, IMO, is that this a problem with further reaching impact than just the assebley line employees of Ford or GM. The tire manufactures, seat belts, air filters, nuts and bolts, salesmen, rental fleet companies...the list goes on and on. All of those companies and their employees would be effected by even one of the major automobile manufactures going under.

.

True a lot of people will lose there jobs, companies wont make the money they use too. But the others Toyota, Honda, etc based here in the US. will now have to produce more which creates more jobs, still need tires, nuts, bolt, parts more sales people the list goes on.

The big three need to decide what is more important to them staying in business or restructure like lower wages better cars. Thats all

[stitch]

Originally Posted by Drazzil

When things finally get bad enough to where people finally realize that they and their families are on the street, homeless, jobless, peniless, sick and in debt they will ask "How did I get here?" Americans will realize what has happened over the last thirty years and they will be ANGRY, they will have nothing left and if they want to survive they will have but one imperitive, and one choice. To revolt.

It's Far past Damn time for this ... But I don't think enough Americans have the will or the Backbone for it ... Let us hope.

Originally Posted by stitch

It's Far past Damn time for this ... But I don't think enough Americans have the will or the Backbone for it ... Let us hope.

Revolution!!!!!

[Genetic Defect]

and how many billions were used to bail out freddie and fannie

[BigFrank]

When the big three go bankrupt and end up being purchased by foreign companies, people will sing a different tune.

[Genetic Defect]

Originally Posted by BigFrank

When the big three go bankrupt and end up being purchased by foreign companies, people will sing a different tune.

I couldn't carry a tune in a bucket

[Genetic Defect]

and the circle continued

[macpappy]

Bottom line. The problem has always been greed and a battle between factions for the division of profits. The top tier management of the "big 3" all believed that the companies owed them multi-million dollars a year for being in charge. The union leaders have high paying jobs and power because they believe the workers owe it to them for all they do. The union employee believe he should be paid more and given more to compensate him for the all the work he does to help the company turn a profit.

So what happens?

The employee tells the union (years ago), the company is making all these profits and we get none of them. The union says, "Go on strike. We'll force the Big 3 to pay you more and give you more. Just keep me in power and by the way, give me a cut of what you make because you owe it to me and I can use that money to buy influence. The Big 3, recognizing that without workers they have no product to sell says, "Ok. We agree to your demands." And to keep from decreasing their profits, they make cuts in production that reduces quality while raising the cost of the final product to cover the increase in wages and benefits to the employees.

For years it worked like this (IMHO) and the leaders of the Big 3 stayed in power by saying, "Look at the good job we're doing. Our profits are still good." (Like I said, this was years ago.)

Since the company is making all these profits and only the top people are making millions of dollars, the employees decide they need paid more. The unions want to stay in power so they tell the members, we'll get you more money. The business leaders give into union demands and raise prices and decrease quality. The foreign auto industry applauds the moves as they increase the sell of their better quality and often less expensive vehicles.

Bottom line? There is this big wheel and it keeps on turning and turning. But this big wheel has slammed into a freaking mountain and it's being shattered. And all the big heavy pieces are falling on and crushing the rest of the peons in the country.

Now. My oversimplified vision of the banking problems. Politicians forced them to make home loans to people with low incomes who 10 years ago wouldn't have been able to get a loan. The politicians did this to "buy" the votes of the constituents. "Look what I did for you and all the poor people. Vote for me and I will make sure that you get more and we'll make those rich people (anyone making more than you) pay for it."

What happens when they can't make the payments on a $175,000 home on a just above minimum wage salary? They default on the loan. The lender starts losing money and make more loans to temporarily increase their cash flow. Then the new loan recipients can't make their payments.

Another circle. Same results.