# Other Industry Collapses? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [December 12, 2008, 11:59pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959 "2008-12-12T23:59:21Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [December 13, 2008, 11:37pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/21 "2008-12-13T23:37:04Z")
> [@Tuckerfan](#): > > More than just the pockets will change. Do you honestly think that a foreign car maker will want a plant in Michigan? Sure, they’ll have a large pool of experienced autoworkers to draw from, but they’ll be _union_ autoworkers in a state with union _friendly_ laws. It’ll be much easier to continue to open plants in states whcih are heavily **non** -union, like they’re doing now. So even if they _do_ decide to build more plants here, there’s likely to be a much larger shift away from places like Michigan. You don’t suppose Michigan could respond by, oh I don’t know… CHANGING the laws? Maybe be a little more business friendly? They’ve got a lot of empty commercial real-estate in Detroit - how about declaring a tax holiday on it, exempting employers who move into the city from union rules, and in general changing their economic climate so that they are attractive to business? In a global economy (or even a large national one), you don’t have the luxury of laying excessive burden on local business in the interest of what you believe is economic ‘fairness’. You’ll simply run off all your corporations. That is what happened to Michigan. It’s a very expensive place to do business, so business doesn’t get done there any more. Rather than bailing out such foolhardiness, they needs to change. I remember when I was doing the trade-show rounds with my company - at the time, the trade show business was abandoning New York and New Jersey with lightning speed, and setting up in places like Atlanta. Why? Because the unions priced themselves out of the business. I remember working the numbers on a trade show I was going to attend - the stupid union rules that forbade me from carrying my own equipment into the show made it almost twice as expensive to attend that show than others. So I set up my display at other shows. There were also horror stories about kickbacks and shakedown operations - you had to grease the right palms, or your $5,000 computer might ‘accidentally’ fall off the truck and be damaged. It got so bad in the 1990’s that the Javits Center closed down for large parts of the year because they couldn’t attract any shows. There were stories of tradeshow exhibitors being intimidated and hassled for things like plugging their own lamp into a socket - the job of an electrician at $50 per plug. You can set up whatever onerous rules you like, and demand as high a salary as you want, but Detroit is now learning what happens when you can’t force people to pay it. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [December 14, 2008, 12:38am UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/22 "2008-12-14T00:38:03Z")
> [@Tuckerfan](#): > > Ah, yes, the poor, overburdened American upper class, how do they manage to keep buying their mansions, luxury cars, and private jets when the evil government just bleeds them dry. There’s no way you can consider ME upper class. I don’t have a mansion, but a modest house with one functional bathroom. My newest car is 30 years old. The only jet I own is the shower in my bath, when the water pressure is high enough to not be a trickle. But I pay a helofalot of taxes, and I don’t get to say where that money goes. Am I overburdened? I sure think so. Making ends meet is my highest priority, and yes, the government (not just federal) is bleeding me dry. > [@Tuckerfan](#): > > Funny, the Bush Administration has had no problem hiring folks like Blackwater to police places like post-Katrina NOLA. They also have more private contractors running around in Iraq than they do soldiers. So at least a couple of those things can be outsourced. You could outsource the courts too, but like has been shown with outsourcing police and military forces, that’s a Really Bad IdeaTM. No way you can twist my statements into support for George Bush, either I or II. No way I support USA taxpayers policing other countries. No way I support private industry gobbling at the pig trough of tax dollars to reconstruct Iraq or any other pet Bush foreign project. No way the USA courts, empowered to support the US Constitution, can be bastardized to adjudicate some other political or legal system. No way at all. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 14, 2008, 7:18pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/23 "2008-12-14T19:18:58Z")
> [@Sam\_Stone](#): > > You don’t suppose Michigan could respond by, oh I don’t know… CHANGING the laws? Maybe be a little more business friendly? They’ve got a lot of empty commercial real-estate in Detroit - how about declaring a tax holiday on it, exempting employers who move into the city from union rules, and in general changing their economic climate so that they are attractive to business? Changing the laws is one thing, changing those governed by them is quite another. I have no love for unions, and I think their cause would be better served by organizing labor in other countries, rather than by obsessing about it here. Change the laws all you want, but it will take at least a generation or more before folks in Michigan will lose their love of unions, even if those plants close. And the economic drag on the nation caused by the rampant unemployment in that region will hinder the growth of the US the entire time. > [@](#): > > In a global economy (or even a large national one), you don’t have the luxury of laying excessive burden on local business in the interest of what you believe is economic ‘fairness’. You’ll simply run off all your corporations. That is what happened to Michigan. It’s a very expensive place to do business, so business doesn’t get done there any more. Rather than bailing out such foolhardiness, they needs to change. Bailout or no, things _will_ change. It is merely a question of how. Killing one or more of the Big Three during the current economic downturn will make things worse, not better. > [@](#): > > I remember when I was doing the trade-show rounds with my company - at the time, the trade show business was abandoning New York and New Jersey with lightning speed, and setting up in places like Atlanta. Why? Because the unions priced themselves out of the business. I remember working the numbers on a trade show I was going to attend - the stupid union rules that forbade me from carrying my own equipment into the show made it almost twice as expensive to attend that show than others. So I set up my display at other shows. There were also horror stories about kickbacks and shakedown operations - you had to grease the right palms, or your $5,000 computer might ‘accidentally’ fall off the truck and be damaged. Big deal. Because of their large size, status, and cultural events, New York and New Jersey will always be able to command a premium in things like the trade show circuit. I’m sure as more and more conventions moved into places like Atlanta, the prices in _those_ places rose as well. Laws of supply and demand affect everything sooner or later. > [@](#): > > It got so bad in the 1990’s that the Javits Center closed down for large parts of the year because they couldn’t attract any shows. There were stories of tradeshow exhibitors being intimidated and hassled for things like plugging their own lamp into a socket - the job of an electrician at $50 per plug. You don’t think similar things happen in **non** -union areas? I’ve got a buddy who spent several decades in the beer distribution business in the Nashville area (which is strongly **anti** -union, BTW), he’s related stories to me of having to pay graft and kickbacks for things as simple as plugging in a neon sign, because somebody in the local codes office, or some other busybody, wanted a little extra money. > [@](#): > > You can set up whatever onerous rules you like, and demand as high a salary as you want, but Detroit is now learning what happens when you can’t force people to pay it. Detroit is **not** the only automotive center that is suffering, however. Car makers in Europe (and not just the US owned puppets) are asking for financial help from their governments, and Chinese government is throwing money at their domestic automakers. Even the Japanese are said to be considering the idea. Economists are saying that the US financial problems are only _now_ starting to seriously ripple through the global economy, what happens when the rest of the world starts feeling the full effects? The foreclosure rate for folks **without** subprime mortgages is starting to climb in the US, which is a bigger threat to our economy than the subprime losses are. If a building is on fire with people trapped inside, the firemen don’t stand around outside because they’re concerned that the building isn’t up to codes. They rush in, fight the fire and get the people out. Once the fire’s been extinguished and the people are saved, **then** they look at what caused the fire and who to punish for what happened. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 14, 2008, 7:33pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/24 "2008-12-14T19:33:01Z")
> [@Musicat](#): > > There’s no way you can consider ME upper class. I don’t have a mansion, but a modest house with one functional bathroom. My newest car is 30 years old. The only jet I own is the shower in my bath, when the water pressure is high enough to not be a trickle. But I pay a helofalot of taxes, and I don’t get to say where that money goes. Am I overburdened? I sure think so. Making ends meet is my highest priority, and yes, the government (not just federal) is bleeding me dry. Good thing you don’t live in Europe, then. Where taxes **and** wages are higher. > [@](#): > > No way you can twist my statements into support for George Bush, either I or II. No way I support USA taxpayers policing other countries. No way I support private industry gobbling at the pig trough of tax dollars to reconstruct Iraq or any other pet Bush foreign project. No way the USA courts, empowered to support the US Constitution, can be bastardized to adjudicate some other political or legal system. > > No way at all. Who said I was trying to claim you were supportive of Bush’s policies? I was merely pointing out that your statement of us not being able to privatize the police and the military was _wrong._ One would hope that people have seen the error of such efforts, but I am _not_ optimistic. Too many people are clinging to the idealized libertarian society (which is as utterly impossible to have as is an idealized socialist/communist one) for me to think that. Small government is an _excellent_ idea, and in many ways doable, but we can **never** trim the government down to the size it was when this nation demands it. The simple fact that the size of the country today (both in terms of land and population) is so much greater, as opposed to what it was in 1789, prohibit this. As do technological and economic concerns. What this nation _should_ do, and is **not** , is toss aside strict ideology and look at what we can do to ensure that the government is providing the best foundation for growth of this nation. Until that day comes (and it isn’t even on the horizon at this moment), we will _never_ achieve the greatness of which we are capable. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [December 14, 2008, 7:58pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/25 "2008-12-14T19:58:19Z")
> [@Justin\_Bailey](#): > > How many thousands of news websites that are profitable are there out there? If huge, established newspapers can’t compete with college kids in their basements, I’m not sure how much sympathy I should have for them. Where the heck do those college kids in their basements get the actual news on their websites? Most of the times, if you follow the links, it leads back to a newspaper’s web site in the end. Without the newspapers, who will do the actual reporting? Ed ---
**Author:** ![jali](https://avatars.discourse-cdn.com/v4/letter/j/ecae2f/32.png) [@jali](https://boards.straightdope.com/u/jali)\ **Post date:** [December 14, 2008, 7:59pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/26 "2008-12-14T19:59:54Z")
Should we bail out industries like, for example, VCR manufacturers, when the product is no longer sought after? A new product is on the market: The DVD player. Let’s say that the VCR production line has a very strong union. The union refuses any type of concession despite the fact that VCRs are no longer selling and the company may go out of business without changing it’s business model. Would it make sense to bail out VCR makers and allow them to continue making their product? If we don’t, the tape manufacturers would suffer, the tape distributors would suffer, all the industries that manufacture components for the VCR would suffer. The VCR repair shops would close down. We’d be punishing thousands for the poor business sense of a few on top. But the public doesn’t want VCRs any more. We bail out the makers and there are thousands of VCRs manufactured that no one wants to buy. Am I wrong in comparing the American auto product to the VCR? I’ve done an informal poll of folks I know - not one would buy a Ford or GM product even if there is a bail out. I’m not unsympathetic to those who will lose their jobs if there’s no bail out, but I feel as though it’s just putting off the inevitable unless the product changes drastically. I see the big 3 as I see VCR makers. Am I totally off base? ---
**Author:** ![Justin\_Bailey](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/justin_bailey/32/8792_2.png) [@Justin\_Bailey](https://boards.straightdope.com/u/Justin_Bailey)\ **Post date:** [December 14, 2008, 8:20pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/27 "2008-12-14T20:20:48Z")
> [@suranyi](#): > > Where the heck do those college kids in their basements get the actual news on their websites? Most of the times, if you follow the links, it leads back to a newspaper’s web site in the end. Without the newspapers, who will do the actual reporting? Press releases. This is especially true of the “fandom news sites” (TV, movies, music, DVDs, video games, science fiction, comic books, etc) that are started by the college crowd. Getting the news requires little more than the ability to hit refresh on the press release database pages. For real news (like the economy or government or other serious topics), sites like CNN will never go away. Trust me, the news industry would move along just fine without newspapers. ---
**Author:** ![Bosda\_Di\_Chi\_of\_Tricor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bosda_di_chi_of_tricor/32/16845_2.png) [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)\ **Post date:** [December 14, 2008, 10:00pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/28 "2008-12-14T22:00:39Z")
Tennessee is getting a Volkswagen factory, in Chattanooga. Very good news for that community. ---
**Author:** ![Harriet\_the\_Spry](https://avatars.discourse-cdn.com/v4/letter/h/e56c9b/32.png) [@Harriet\_the\_Spry](https://boards.straightdope.com/u/Harriet_the_Spry)\ **Post date:** [December 14, 2008, 10:26pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/29 "2008-12-14T22:26:47Z")
> [@Justin\_Bailey](#): > > Press releases. … Getting the news requires little more than the ability to hit refresh on the press release database pages. What gets me is the extent to which newspapers and TV news rely on press releases. Every time you turn around there’s some press-release-driven story on plastic surgery or similar drivel. We need the press to keep an eye on business and government, but I don’t feel confident we have a workable model to get that paid for as dead-tree newspapers go into decline. ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [December 15, 2008, 5:00am UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/30 "2008-12-15T05:00:15Z")
> [@Musicat](#): > > Maybe they will, since as you pointed out, there is a large pool of autoworkers there. It would be pretty stupid of unions not to adjust if that’s what it takes to provide their members with jobs. OTOH, do you honestly think that those workers will stay in Michigan just to bitch about it if there are jobs to be had elsewhere?At what price? Would you give 50% of your income to assure that? 20%? 10%? And what assurance would you have, in this nuclear age, that the first strike of a nuclear madman wouldn’t wipe out all that industry that you preserved at such a cost? > > That same argument can be made for ANY industry. What if a war came and we didn’t have milk or cheese produced locally? Or bread? So we subsidize dairies and bakeries. How about the garment workers who might have to produce uniforms for our troops? There are very few industries that can escape that kind of slippery slope logic once you get started.And China is the only country in the world that makes munitions? Do you know how many countries and companies would be lining up to sell us arms if we needed them? You’d need an army to keep the line jumpers straight. It’s a highly profitable business worldwide.Very good point. Things were allowed to change and adjust with minimal government handouts or help. And from what I hear, the US steel industry is OK now, at no cost to the taxpayers. Imagine what it would be like if steels had been bailed out by the government? We’d still have obsolete plants turning out unwanted products at a cost that wasn’t competitive. To sell worldwide, we’d have to keep subsidizing.My heart goes out to them. If you personally contribute to their help fund, I applaud you. But if you want to pass a law that forces _me_ to contribute, that’s a different thing entirely. Perhaps I want to pass a law that forces you to contribute to _my_ favorite charity, which, obviously, is more important than yours. And that’s the crux of the matter: should help for those who need it be mandatory or voluntary? Oh for God’s sake. The Chinese reference was rhetorical. I thought that was obvious. The point was that we don’t want to have to depend on someone else for our war needs. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [December 15, 2008, 5:19am UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/31 "2008-12-15T05:19:47Z")
> [@davidm](#): > > The point was that we don’t want to have to depend on someone else for our war needs. And I’ll say again, how much of your salary or wealth do you wish to contribute towards propping up obsolete industries in the off chance that we might need them to start a war? How much is it worth to you? ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [December 15, 2008, 2:24pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/32 "2008-12-15T14:24:39Z")
> [@ralph124c](#): > > How about the newspapers? The Chicago TRIBUNE has filed for banyruptcy, the NYTIMES is morgtgaging its NYC headquarters, the BOSTON GLOBE is almost bankrupt and a score of other papers are in very bad shape. > I give print newspapers 3-5 years at most-the interner will finish them. Everyone says that, but it just won’t happen. If nothing else, TV stations and Internet sites need newspapers to get their stories. And the Internet is piss-poor at covering local news. ---
**Author:** ![elmwood](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/elmwood/32/3060_2.png) [@elmwood](https://boards.straightdope.com/u/elmwood)\ **Post date:** [December 15, 2008, 2:54pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/33 "2008-12-15T14:54:39Z")
> [@jali](#): > > I see the big 3 as I see VCR makers. Am I totally off base? Yes. VCRs are mostly obsolete. Cars aren’t. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [December 15, 2008, 3:46pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/34 "2008-12-15T15:46:08Z")
> [@Justin\_Bailey](#): > > Press releases. This is especially true of the “fandom news sites” (TV, movies, music, DVDs, video games, science fiction, comic books, etc) that are started by the college crowd. Getting the news requires little more than the ability to hit refresh on the press release database pages. > > For real news (like the economy or government or other serious topics), sites like CNN will never go away. > > Trust me, the news industry would move along just fine without newspapers. CNN doesn’t cover local news. Press releases are (obviously) biased. I don’t want my “real” news sources reduced to just a handful of national sites. Just at the moment the local school district is in an absolute crisis over funding, and the ONLY source of news on this issue is the local newspaper. Ed ---
**Author:** ![slaphead](https://avatars.discourse-cdn.com/v4/letter/s/e9bcb4/32.png) [@slaphead](https://boards.straightdope.com/u/slaphead)\ **Post date:** [December 15, 2008, 3:51pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/35 "2008-12-15T15:51:31Z")
> [@elmwood](#): > > Yes. VCRs are mostly obsolete. Cars aren’t. Steel is a far better analogy. Global steel consumption continues to rise - but the legacy producers in the US and Europe died on their arse decades ago. Why? Because they didn’t invest in cost-reducing technology and they didn’t invest in supplying the kind of steels their customers wanted. Instead they kept on armies of low-tech workers making high-cost steel in uneconomic places. Pretty much the same story with coal. GM/Chrysler look to be turning into the British Leyland of the 21st Century. Bummer. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [December 15, 2008, 3:57pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/36 "2008-12-15T15:57:07Z")
> [@The\_Tao\_s\_Revenge](#): > > The problem here is I also was forced to contribute to bailing out waill street to the tune of 700 billion dollars. Yet when the major industry here needs a little help we’re told screw you by the same two faced politicians that supported the 700 billion dollar bail out. Do you think that’s fair? I submit that the 700 billion dollars is rapidly becoming the new Godwin’s Law. In this case it’s pretty obvious to infer that the person Tao is replying to was _not_ in favor of the banking bailout, so why bring that up? (Unless they are and misspoke.) ---
**Author:** ![jali](https://avatars.discourse-cdn.com/v4/letter/j/ecae2f/32.png) [@jali](https://boards.straightdope.com/u/jali)\ **Post date:** [December 15, 2008, 4:07pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/37 "2008-12-15T16:07:33Z")
> [@elmwood](#): > > Yes. VCRs are mostly obsolete. Cars aren’t. from:[Motor Trade Insider - Car buying Guide](http://www.motor-trade-insider.com/index.php/2008/12/november-2008-new-car-sales-figures/) \*The new car sales figures for November 2008 are in. Judge for yourself the current state of the motor industry in this country… New car registrations fell 36.8% in November to 100,333 units. Year-to-date volume is down 10.7% to 2,023,104 units. Diesel market share achieved record high of 47.0% in November. Private market particularly weak in November, down 45.1%.\* If the production lines continue with business as usual, there will be a glut of new cars manufactured with no one to buy them. I feel that many of the cars manufactured by the big 3 “are mostly obsolete”. ---
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [December 15, 2008, 5:14pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/38 "2008-12-15T17:14:00Z")
The buggy whip and horse carriage industrial complex collapsed when the automobile started to become popular and nobody did anything to save them. Actually I believe some of the horse coach manufacturers began to make automobiles although I’m not sure many were very successful at it. I think there is a lot of hyperbole here. GM has been around of 100 years and after 5 months of bad sales they are ready to throw in the towel? That doesn’t make any sense. Economic downturns happen all the time and large companies have to be prepared for them. If they can’t borrow the money they need to have enough cash to survive. What has GM been spending their billions of dollars a year on? Certainly not developing world class cars and trucks to compete with the Japanese and Germans. BTW I dont’ see Toyota, Honda or Mercedes asking for a bailout… do you? It’s strange how Ford, which as I understand it also makes cars and trucks, isn’t on the verge of bankruptcy like GM and Ford. Is the economic downturn not impacting Ford? No, Ford is just in a better financial situation to weather the storm than the others. If everyone who is worried about GM going under just went out a purchased a GM car then they wouldn’t be talking about bankruptcy. I find is ironic that all of the Prius owning folks are so concerned about GM and Chrysler going out of business… ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 15, 2008, 6:13pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/39 "2008-12-15T18:13:07Z")
> [@dolphinboy](#): > > The buggy whip and horse carriage industrial complex collapsed when the automobile started to become popular and nobody did anything to save them. Actually I believe some of the horse coach manufacturers began to make automobiles although I’m not sure many were very successful at it. Studebaker springs to mind. Many of the various coachbuilders started out life as building horse coaches and _not_ car coaches. Of course, _most_ of those companies _weren’t_ multi-national corporations, but small, family run businesses, and their unemployed workers could be easily absorbed by the booming automotive industry. Kind of hard to do that now. > [@](#): > > I think there is a lot of hyperbole here. GM has been around of 100 years and after 5 months of bad sales they are ready to throw in the towel? That doesn’t make any sense. Economic downturns happen all the time and large companies have to be prepared for them. If they can’t borrow the money they need to have enough cash to survive. What has GM been spending their billions of dollars a year on? Certainly not developing world class cars and trucks to compete with the Japanese and Germans. BTW I dont’ see Toyota, Honda or Mercedes asking for a bailout… do you? GMs not been all that financially stable for quite some time, now. The current economic crisis might well turn out to be the nail in the coffin for at least one or more of the Big Three. Both the Japanese and German governments are considering stimulous packages which would help their auto industries, so while Toyota, Honda, and Mercedes _aren’t_ asking for direct cash infusions (yet), they’re certainly saying they could use a boost. Bear in mind that the automotive industry _as a whole_ has a problem with overcapacity, and has had so since _before_ the current meltdown. Projections for new automobile sales are currently sitting at almost _half_ what they were a few years ago. That’s a huge loss to try and absorb all at once. > [@](#): > > It’s strange how Ford, which as I understand it also makes cars and trucks, isn’t on the verge of bankruptcy like GM and Ford. Is the economic downturn not impacting Ford? No, Ford is just in a better financial situation to weather the storm than the others. Ford’s currently in better shape than the other Big Three because they managed to secure large loans before this happened (which they needed because it looked like _they_ were going to go under while GM and Chrysler were “fine”). Those loans get called in, or turn out to be not enough, then they’re screwed. > [@](#): > > If everyone who is worried about GM going under just went out a purchased a GM car then they wouldn’t be talking about bankruptcy. I find is ironic that all of the Prius owning folks are so concerned about GM and Chrysler going out of business… Problem is: _People aren’t buying cars!_ Not domestic, not imported. Toyota’s sales have plunged 50% in recent weeks, and the other foreign makers have seen similar drops. The vehicles they are selling are almost all being offered with some kind of financial incentive to get them off the lot, which eats into the profit margins. My mother recently retired from a Honda dealership, and according to her, inventory levels of unsold cars at the dealership were higher than they’d ever been in the thirty years she worked for the place. It looks like, however, US car makers might get a boost from [the electric companies.](http://gas2.org/2008/12/15/utilities-discuss-huge-electric-vehicle-orders/) > [@](#): > > Utilities are among the groups now considering mass orders of electric vehicles from the U.S. automobile manufacturing sector, to help the auto companies make the biggest manufacturing realignment since since WWII. This comment is rather interesting, IMHO. > [@](#): > > Further development to get these to market are endangered by the auto meltdown. In fact, to some extent, we have stopped buying new vehicles precisely _because_ we are waiting for the switch to the post gasoline era vehicles. _(emphasis in original)_ ---
**Author:** ![slaphead](https://avatars.discourse-cdn.com/v4/letter/s/e9bcb4/32.png) [@slaphead](https://boards.straightdope.com/u/slaphead)\ **Post date:** [December 15, 2008, 6:30pm UTC](https://boards.straightdope.com/t/other-industry-collapses/476959/40 "2008-12-15T18:30:50Z")
> [@Tuckerfan](#): > > GMs not been all that financially stable for quite some time, now. The current economic crisis might well turn out to be the nail in the coffin for at least one or more of the Big Three. Both the Japanese and German governments are considering stimulous packages which would help their auto industries, so while Toyota, Honda, and Mercedes _aren’t_ asking for direct cash infusions (yet), they’re certainly saying they could use a boost. Bear in mind that the automotive industry _as a whole_ has a problem with overcapacity, and has had so since _before_ the current meltdown. Projections for new automobile sales are currently sitting at almost _half_ what they were a few years ago. That’s a huge loss to try and absorb all at once. Damn straight. If only a few high-cost, uneconomic, value-destroying producers would go bust. That would clear out the overcapacity and allow those companies who can make decent cars efficiently to earn an economic return. Instead we’re heading for the same state the airlines are in - an entire industry of zombies, lurching from loss to loss to bankruptcy to resturcturing to more losses, with the odd quarter of profitability every now and again. [Previous page](https://boards.straightdope.com/t/other-industry-collapses/476959.md?page=1) [Next page](https://boards.straightdope.com/t/other-industry-collapses/476959.md?page=3)