Yes it does.
I was just reading that the commercial real estate is the next big burst. They have shorter contracts they depend largely on Xmas sales to pay bubbles. They will pop in January. We have so far to go and we have not taken the first step.
I’m of the opinion that we need to clean house while we have the chance. If the big three can’t turn a profit making cars in the US, then maybe we don’t need a national auto industry. It does nobody any good propping up industry just because we feel like we ought to have it.
But I seriously don’t understand why all of these people figure that we’ll suddenly lose 3 million jobs all of a sudden. People will still need cars, people driving American cars are still going to need parts and get them repaired. The infrastructure will still be there so someone will buy it for the right price. Do you honestly think that foreign automakers could even possibly think of replacing the amount of cars produced by GM? Of course not. If someone can take GM’s assets and make cars with fewer people, then that’s what should be done.
I wish I could remember where I read this but I remember someone floating the idea that GM would be somehow put into some kind of situation that is somewhat like Bankruptcy but would be quicker and offer some of the benefits without the long legal process. That wouldn’t be a bad idea at all.
What do you think, gonzomax? That the whole organization will disappear off the face of the earth? There is too much investment for someone to not fire up the lines and start making cars. And hopefully they can figure out how to do it a little better.
You’re assuming it’ll change anything. If it doesn’t, that’s just money down the drain and a few people who are employed a few months longer. Give me a reason why this will do us any good in the long term, and I’ll support it. Right now, we have no idea what will happen to that money if they get it, and it takes more than a larger bank balance to fix issues like they are facing.
Industries have issues and/or fail all the time, though often on smaller scales than this. It sucks, no question. But society adjusts. We’ll adjust to this.
One in ten jobs are tied to the auto industry, you close down the automakers and the economy is going to take a big hit. Who’s going to want to spend the billion plus dollars to start a car company in that kind of environment? Not to mention, if the plants are taken over by the Japanese, much of the profits from those operations will go to Japan and the tax revenues will benefit the Japanese government more than it will the US government.
Yes, but getting the American public to realize that the car companies are not in bankruptcy, would be the hard part.
In good economic times, there would be an interest in getting the plants going, but these are not good economic times by any stretch of the imagination.
Times do not look promising either. I can just see a big hole where auto companies once were. I am not convinced that any auto company is a sure thing right now. But I am absolutely sure their bankruptcy would hurt the whole country quite severely.
It is very difficult to get financing now. The banks just eat the money we give them. Wait til the Xmas sales come out. Credit is expensive and harder to get. Car buying is tough to do.
Is it better to get some revenue from profitable, foreign-owned factories, or to leave them American-owned and requiring a subsidy from the government?
Do you want a foreign owned company having as much sway with the US government as the Big Three have had? Additionally, Japanese car companies (as well as German), tend to source many of their parts from the mother country (you know, to help keep employment there high), so we’re open to issues of supply chain disruptions. (Strikes, actions by a foreign government that has taken a dislike to us for no reason other than political expediency, Somali pirates, etc.)
Not to mention that America is poised to become an “also-ran” in terms of automotive sales in a decade or so (assuming the global economy comes back) as sales of cars in China and India will surpass that of the US. This isn’t merely a question of keeping the Big Three going, its a question of which nation is going to have the greatest global influence in the world in the coming decades.
The sheer number of Chinese and Indians dictates that when those nations see a slight increase in the earning power of their populations, their economies will come to dominate the global stage. Now, I really don’t care if the Indians become a super power, they’re a democracy and have an interest in things like human rights, the Chinese, OTOH, are not and do not. Presently, the Chinese are graduating more engineers than the US, not really surprising, since they have over 3 times the population of the US, but ours are better educated and better trained. If we want the world to pay attention us, for any reason other than the fact that we’ve got nuclear weapons, then we must have a viable domestic auto industry (along with a number of other industries, some of which we’ve allowed to leave the US).
Granted, simply cutting Ford, GM and Chrysler a check isn’t going to create that, but letting them die and having the Japanese take over isn’t either.
On the subject of Wall St. vs Detroit, there seems to be a bias among the whores of Congress against people who actually produce something and toward the leeches who shuffle paper–bankers, brokers, and their associated pettifoggers.
Detroit has to submit a detailed business plan while Citibank simply says “I’m broke. Gimme 10 times what Detroit wants, but don’t ask where it’s going. And if the public asks, say it’s going to help homeowners. And if the public asks for specifics as to how or when we’re going to trickle down to the homeowner, tell them that they’re too stupid to understand and that we,the experts, should not be questioned.”
There are new products in the pipeline at all 3 automakers. They need a bridge loan to get them past this recession.
Anecdotes about 35 year-old Pintos and Vegas have no place here. Detroit is attempting to atone for past sins. Give them a fighting chance.
How well have we adjusted to the offshoring of our manufacturing so far? Manufacturing is the base of the middle class. Those jobs are being sent off for cheaper labor costs. Our economy is going into the crapper and offshoring is one of the big reasons. Foreclosures are growing rapidly. The condition is serious and I see the car companies going down as a terrible event that will hurt us badly. Something has to stop the downhill spiral. We do not need this to happen at this time.
Try to comprehend this: you’ve said nothing of substance. Jayn asked for specifics; your reply is…“Something”?! Now, I don’t really expect any change in your posting style or content, so I’m not sure why I’m putting this up here in the first place…but I guess it’s always a possibility.
Your posts are like a poor imitation of Monty Python’s Argument Sketch, except that Monty Python is amusing and, more importantly, self-consciously absurd. It’s been happening for quite some time now; you’ve passed the point where it’s as painful to simply read your posts as it is to respond.
You’ve become the lekatt of the economic crisis.
This hasn’t been true for at least twenty years. The service industry is the base of the middle class.
There are no guarantees that any company will survive long term. Who thought all all those huge banking and investment companies would go down? There are a couple hundred more banks on the watch list.
I think, keeping the auto companies working will be beneficial now. I think letting them fail will hurt short term and obviously long term too. A manufacturing base is an important component of a successful country. It is one of the distinguishing differences between a modern and 3rd world economy.
Auto manufacturing was one of the driving forces for sophisticated computers. Their needs were huge and computers kept improving to try to meet them. Programmers and innovators of all kinds have been working with the auto industry for years. Computer graphics have received a huge push from the big 3 who utilized them for design and development . Auto components have been made of new plastics and other materials to cut weight and add strength. These materials and computers have spilled over to many other industries.
The manufacturing process has been streamlined and in development for many years. It requires engineers and managers of all kinds. It is where the future industries and techniques have been forged. The future competitiveness of America demands we fight to keep these industries.
Dependence on manufacturing is one of the differences between a modern and a 3rd-world economy alright, but not the way you think - propping up no-longer-viable industries because you think it’s in your national interest is what ruins modern economies.
Britain spent decades shoring up its increasingly uncompetitive motor industry, shipyards, steel works and coal pits, mostly because of the unions, and almost ran its economy into the ground.
Britain’s aerospace industry is still around in a heavily contracted form, but there is no longer a British-owned motor industry. British shipbuilding is essentially limited to naval contracting- quite something for an island nation.
Guess what? Britain’s economy is stronger than it’s been for fifty years.
Given that they’ve been affected by the banking crisis much the same as the US has, I doubt it. They’re not hurting as badly as we are, but the government has taken over at least one insolvent bank, and several large chains of stores are either going under or on shaky footing.
Yeah, should have clarified a bit- over the long term (ie., the last ten years) its economy has done very well. The last two months, not so much.
The price to retool a plant from making trucks to fuel efficient cars is apparently $75 million, and it takes 2 years to do. Note that this is using an existing design and not a completely new one. The Big Three make a number of fuel efficient cars in Europe, but they won’t sell them here, for whatever reason. (Yes, I know they claim that this has to do with “crash test regulations,” but that’s a bit of a crock. Side impact beams, for example, are merely pieces of conduit, about 2 inches in diameter, and they add, at most, a couple of pounds of weight to the cars.)
I would not be pushing for the Big Three to swap all their designs over to PHEVs, however. It seems that one of the issues they’re having to deal with on those are building codes.
And if you think the Big Three are sluggish about changes, you’ve not dealt with the guys in charge building codes.
Tuckerfan, you’re preaching what I’m thinking more persuasively than I could arrange the argument. Please carry on.
The EuroFocus is hitting the US next year. I don’t know why they didn’t bring it over last generation… the Mazda3 is a lovely car.
But the EuroFocus will do nicely.
http://www.visteon.com/index.html Heres a primarily Ford supplier. A huge company that will likely go down with the big 3.
What happens to the many tire manufacturers? What about battery companies?
http://www.lear.com/index.jsp What about Lear? Anybody care about their employees?
OEM & Aftermarket Auto Parts | Genuine GM Parts & ACDelco How about Delco?
So how many suffer if the big 3 go down. This is a small part.
Irrespective of the pros and cons of bailing out the Detroit 3, this seems a silly argument to make. Exactly when would be a good time to pull the plug on three of the biggest companies in the USA? In some alternative universe, do you think Bill Clinton stood up to give a state of the union address which included a line like “since the economy is going great guns, the public finances are in decent shape and companies are posting good profits, we’re going to kill all the US carmakers now?”? Or maybe you foresee a strong economic recovery in 2015, rising car sales, and Congress deciding to kiss goodbye to $30-$40 billion in outstanding loans and write off the auto industry instead?
The reality of the situation is that either these companies die in a bad recession, or they just limp along soaking up money in bad times and paying back a little in good times. Short term politics trump long-term logic every time, but if you have a gangrenous limb you eventually either have to heal it, or amputate - you can’t just keep on with painkillers and ointment forever.
If Chrysler had been allowed to die in 1979, would it have hurt the economy at the time more than the bailout cost? Certainly.
Would it have been better for the US economy and the other US carmakers in the 20 years since? Personally I have no idea, but probably other people on this board do.
When knowledgeable people are looking back at today from 2030, with the benefit of hindsight, how will they call it? That’s the real question.