Why We Shouldn't Bail Out the Big 3 Auto-makers

The New York Post ^ | November 16, 2008 | Eric Torbenson

[St. Louis Conservative]

That beeping sound you hear this week is the semi-truck being backed up to the Federal Treasury in Washington. After being filled with taxpayer billions, it's on its way to Detroit.

A heaping bailout for the Big Three automakers - currently losing millions every day theyproduce cars no one wants to buy - feels like it's being gift-wrapped for the holidays.But the beeping sound you should be hearing is the heart monitor of the Big Three, slowing downto flatline. General Motors, Chrysler and Ford are such horrific financial wrecks that not even the Jaws of Life - and certainly not a taxpayer bailout - can save them.

MORE: The Future Of Cars

MORE: The Auto Industry: Boom To Bust

"We're funding a day care system for people with extinct skills," says Michael Covel, an entrepreneur, trader and author who is among many to back the simple argument: "let them die."

"We'll be a heck of a lot stronger in the long run if we just take the pain on this right now. They'll burn through it and be back for more. We're turning auto jobs into government-supported jobs and it's a shame." In just under two years, GM has lost $57 billion. The current quarter will provide more huge losses, and even in its regulatory documents the company admits that demand for its products isn't coming back soon. Translation: profits are as likely as trucks that run on rainbows.

[pnh102]

This country will be a better place if GM, Ford and Chrysler went under today. The loss of money for the UAW is the conservative movement’s gain.

[madison10]

It’s the fault of NAFTA and CAFE standards. It’s the UAW asking for the impossible and GM management trying to give it.

IMO, I think the rank and file would give more concessions just to have jobs and retirements,it’s the big-wigs that are stuck on stupid in so many ways and then they start yakking about not giving up any more. *roll eyes*

Maybe the financial woodshed is the only place they will learn anything.

[truthguy]

A heaping bailout for the Big Three automakers - currently losing millions every day theyproduce cars no one wants to buy -

What Garbage. There's lots of American Cars people want to buy. The problem is that the US Auto Makers have tremendous burdens that the foreign manufacturers do not have. An intelligent analysis of the problem would be what readers need so they can understand the situation. If I remember correctly each US car has a legacy cost of about $2300. That's nearly impossible to make up on a small car. So in theory if the US Automakers sold every small car they could make they would still lose money. They did make money on SUV's and Trucks and that's why they built them. It's is simple as that. If the US Auto Industry is to survive and in my opinion it MUST survive then RESTRUCTURE is the name of the game. This article is a piece of trash.

[FastCoyote]

[The loss of money for the UAW is the conservative movement’s gain.]

We may be able to take out two cesspools if we work it right. Not only the UAW in Michigan, but the New York liberals sucking on the obsolete financial markets on Wall Street.

Even if Obama props them all up, they are doomed long term.

[St. Louis Conservative]

Japanese and European carmakers are thriving.

[St. Louis Conservative]

I agree. I think GM and Ford have some very good cars in their lineup - particularly their SUVs. The problem is their cost structure. It’s completely uncompetitive. I don’t have a lot of faith in their executive management either.

[This_far]

“This country will be a better place if GM, Ford and Chrysler went under today.”

Why?

[ex-snook]

From whom shall we import our ships, tanks and planes if a major war is started?

[TRY ONE]

It's not the Big 3 Auto-makers!

It's the DETRIOT Big 3 Auto-makers!

[Fred]

UAW chief urges $25 bln in U.S. auto health care support (Union bailout-payback for $400,000,000)

http://www.freerepublic.com/focus/f-news/2127523/posts

Who's your DADDY Obama??

Youtube The One on Card Check

Why Doesn't Toyota USA Need A Bailout?

http://www.freerepublic.com/focus/bloggers/2130909/posts

[pnh102]

Why?

Because the vast majority of employees for GM, Ford and Chrysler are part of the UAW. The UAW is opposed to conservatism and threw all its weight to get Hussein and other socialists elected. Ergo, the UAW is an enemy of conservatism and its losing hundreds of thousands of dues-paying members is good for conservatism.

Besides, few people actually buy GM, Ford and Chrysler anymore these days, no one is going to miss them if they go under.

[Congressman Billybob]

Nothing can save GM or Ford with their present management and union contracts. But saving GM is not the REAL goal. It is putting money into union hands, and then into Democrat hands.

See "The Pinball Bailout," here and on ChronWatch,com Government aid cannot keep a buggy whip factory open and profitable. And that's what the big two and a half have become.

Congressman Billybob

Latest article, "The Barack Obama - King George Connection"

The Declaration, the Constitution, parts of the Federalist, and America's Owner's Manual, here.

[Sirloin]

Just so I understand you - you want to financially punish people who have a different political philosophy than you? How old are you, 6?

[This_far]

“The loss of money for the UAW is the conservative movement’s gain.”

Again, I ask why, and how?

You presume that all UAW members vote in elections as directed by their union? Across all the varied businesses that recognize the UAW? (there’s lot’s of them in small biz) Should they all be closed too?

Close GM, close Ford, close em all.

then what... unemployment benefits...

Nationalize unemployment.

Yeah, that’ll make the country better.

[St. Louis Conservative]

We’ll produce them right here in the U.S. with non-union labor in right-to-work states.

[pnh102]

Just so I understand you - you want to financially punish people who have a different political philosophy than you?

Yes.

Why should we support companies and people who oppose us? Are we that stupid to think this is a good idea? For years the GOP reached out to its opponents and look what it got them, nothing.

If conservatism is to make a comeback, then it needs to identify its enemies and quit helping them.

[truthguy]

The problem is their cost structure. It’s completely uncompetitive. I don’t have a lot of faith in their executive management either.

Yes on your first point you are correct. IT IS COST STRUCTURE. If the US automakers could get this problem solved they CAN and WILL compete. They are doing well in Europe and Asia and other places as well.
The US automakers have GREAT engineering departments. They can compete with anybody in the world including the great Germans. The Japanese Auto makers are still essentially copy cats. Yes they did come out with the Prius but the Japanese government paid for the R & D cost of this vehicle.
However I don't think the management at the US companies is that bad. In fact I think GM has a great team in place currently. Look the Car companies have been bad shape for about 30 years or so. It would be impossible for all of them to be poorly managed for so long. At least one of the manufacturers would have stumbled onto the right management team at some point. All of the car companies are doing terribly and this is indicative of a systemic problem.
My final point is going to pi** off a lot of people but so be it. People need to buy American. There are excellent American Cars out there today in every category. The quality problems of the 1970's and 1980's have been addressed adequately. It is essential that people in the Car Market at least look at the American Models before buying. I think most of these people will be surprised at the quality. I wish I were in the car market today. There are outstanding values out there. I purchased an American Car in 2003 and it's been running so well that I simply don't need another car right now. I've had absolutely NO PROBLEMS with this vehicle so there's no need to buy a car right now. I'm thinking about buying an American Car even though I don't need one right now. I encourage all readers not to blindly buy a Toyota or Honda without looking at the American brands.

[trtdenver]

I wouldn’t mind that heppening since they vote and continute to a socialist. I’m 36 if you are curious.

[hinckley buzzard]

One problem is the two-dimensional view that we have an either-or choice: "Bail 'em out" or "let 'em die." If China can develop a viable auto industry, the bright boys here at home ought to be able to figure out how to do it too. One thing is for sure, paying 70 dollars an hour compensation for screwing part A into part B isn't a good place to end up.

Some form of reorganization with a minimum of political interference is called for. And yes, no nation today can go without a domestic auto industry and expect to be taken seriously.