Let GM go Bankrupt

my thought is this one time we need to support the auto industry and reform it or the domino effect will place us in a position much worse off that we are - realizing these bailouts are with tomorrows earnings we have little choice but to then become a third world economy

This Freedman article is along with my view, including the What to Do part towards the end.
But I'll keep reading pros and cons on the issues here.

http://www.nytimes.com/2008/11/12/opinion/12friedman.html?em

I am looking for a good job maybe i could head it up

It seems that most auto manufacturers in other parts of the country outside of Michagan--you know those that aren't saddled with insane union shop rules and unmanageable benefit packages--are doing just fine. What incentive is there for any business to provide a product that people want to buy and utilize sound business management if they can look to Uncle Sam to bail them out of any jam they get themselves into? Meanwhile the top management and directors rake in the big bucks just the same.

If the government MUST help, it should be on a loan basis and include the condition that the feds be able to order the big dogs to reduce their wages to a maintenance level and otherwise provide oversight of the taxpayer's money until the loan is repaid in full. That would give the management a huge incentive to get things on their feet fast and efficiently.

And the government should get out of the business of dictating to the auto makers what sort of cars they will be allowed to build and let them start making cars that people want to buy again. Instead offer the people incentives to go green and that's what they'll want and that's what the auto makers will make.

I am not too terribly good at economic issues and I sure don't want to get into the republican pet peeve of unions.

From what I understand the problem of just letting GM go bankrupt is that it will not just affect GM since most local dealers are consolidated to the big industries that are having financial trouble. Sort of like the banks, once the big ones go it creates a dominoes effect on all the smaller dealers consolidated to them.

Some local auto dealers urge lawmakers to rescue industry

Most dealerships have cars on their lots because they have taken out loans with the manufacturer allowing them to buy the cars to put on the lots.

If the manufacturer goes bankrupt the dealers can't get loans from the manufacturer to put cars on their lots.



Then we can't forget that if the US auto manufacturers declare bankruptcy the US government (meaning the US taxpayer) is still going to get stuck with a large amount of money owed. When a company can no longer pay pensions, the US government takes over that pension fund and has to make the payments, often at a reduced rate but still it costs us.

I knew it would be more than I could really understand. But it still seems that if the big auto makers go bankrupt, then it would affect dealerships and other smaller auto makers as well; if the article I posted is correct. I really have no idea about any of this. The whole economic system seems to be in a shacky position all around and it is a bit worrisome.

Funny I haven't heard anything about the Honda or Toyota factories in America asking for any sort of a bailout... have I simply missed it somehow or other??

Assuming that we cannot, economically, endure the demise of the Detroit automakers and must bail them out to preserve millions of direct and downstream jobs, shouldn't we be insisting that something be done about the causes of their economic failures so that we're not faced with the very same problem two to three years from now?

If so, the first problem to address is the economic strangle-hold unions have on these automakers.

What is the chance Democrats in Congress will consider such action?

0%

Instead they will attempt to pass The Employee Free Choice Act that hideously misnamed piece of legislation which will do away with a worker's right to a secret ballot election on union representation, and which, aided by intimidation tactics, will ensure that the Southern automakers are unionized and the only healthy car maufactures in this country are brought to the same ruin as The Big Three.

Even George McGovern opposes it.

http://www.youtube.com/watch?v=afjp4Cx-3W0

(PE Obama supports it by the way)

I vote bail 'em out...

had a guy tell me that I trust said you can goto a Ford Dealership and deduct $13,000 (new) off the price of any car and walk away with it.

You mean I can get a Ford Focus with all the options for $7,000? That is way under dealer cost, so I kind of doubt it.

facing BKO you never know but that is what the salesman told him

There are two philosophies in the auto industry

One is soak the consumer, (smoke weed) and every year design newfangled auto parts.

The other philosophy is provide the consumer with something practical, efficient and economical.

GM has to best of my knowledge always had a proven record of being the latter.

The word is 'interchangeability"...

GM has saved the consumers billions of dollars because of that word “interchangeability” where other car companies have blocked most paths to interchangeability of parts.

Every year many unscrupulous companies come out with a new fangled carburetor, alternator, fuel pump, then seal it so it can't be rebuilt and it will only fit that years model, instead of 35 dollars the consumer pays 500 dollars to replace it...

Oh, I don't know. I used to resent those nonrepairable parts. Then I realize that in the 70s, I had spend maybe 14.00 for a fuel pump rebuild kit, plus some labor, which is about the price of a factory rebuilt item today, when a dollar buys quite a few less loaves of bread.

I have repaired many a starter when broken down out on the highway, those brushes were always tricky to seat down in place.

Just about any $30-40,000 large vehicle on the lot, yep. They are advertising that much off.

I saw an ad for buy one full sized Chevy vehicle get an Aveo free if you pay full price on the large vehicle.

We should not be bailing out these companies.

I am upset that Obama supports this as well.

Don't worry about, okay? Everyone else with a hand on the government checkbook has got some kind of scheme that translates to "bailout".

Not that I'm disagreeing with you.