Capitol Hill Blue Forums Political Issues Finance, the economy & Economics Bailing out the auto industry - yes or no?

Not trying to steer anyone back - mostly just trying to keep alive at least some tenuous connection!

I still say NO! to a US Auto Industry - US Taxpayer bailout for the same reasons I cited pages ago:

• The auto industry fought "cafe standards" in court (raising the fuel mileage of vehicles)
• The auto industry fought California's tougher emmission standards in court

If the auto industry can afford expensive lawyers and lobbyists to fight improvements to air quality, etc, then they can afford to bail themselves out of their own doing.

I don't support bailing out poor choices in life.

...and I certainly don't support "golden parachuettes"!!

I got very similar numbers with my 97 Grand Caravan (in the 'Grand', with the rear seats removed, you can carry 4' x 8' sheets lying flat)... on a hot summer day with the A/C off I got 30.5 mpg; with the A/C on about 27. (mostly empty, just myself and 3 computers). 3.3L flex-fuel engine, very reliable. No longer have it due to I unfortunately failed to yield wrong-of-way.

Thiniking back over the pages...While I disagreed with the bailout personally, I recognized the need to keep the factories operating and the workers employed. Kap pointed out that production was way ahead of demand and faced workforce reductions regardless of any bailout.
Now let's just say that Detroit put on their thinking caps and came up with a product that none of us could live without.
Way back at the beginning of this I brought up the Japanese Kei Trucks. Little mini vehicles that can do a lot of amazing things without burning much fuel. Everyone who needs a full sized vehicle for long trips or hauling or just because they like full sized vehicles also needs one of these parked beside it for commuting and trips to the store. Am I wrong? Is it impossible for America to drive smaller vehicles? Even part of the time?

Mike Whitneyasked some interesting questions in his recent article, "You Ain't Seen Nothing Yet,"such as why won't Paulson support a bail-out for the Big 3 when he's throwing money at his banker buddies with no questions asked? He then provided an answer:
He then asked a logical question: And then answered his own question:


Interesting theory, which will be proven one way or another before too much longer. It's a case of the Financial Economy (Wall Street)vs. the Real Economy (Main Street). I wonder which street will prevail?

Joe

If wall street prevails and Main Street fails then Wall Streets' days are numbered as well. They might kick our asses this time but without an strong Main Street American Economy there is NO Wall Street. Workers everywhere may have to tighten belts and work for less for a time, a few less hours a few dollars less on the hour until hopefully things get settled again.
If GM has gone into the banking business then perhaps it's time they got out of the car manufacturing business.........

Secret deal? I never though it was a secret.
They did this to their component companies, Delphi and Guide Lamp.
Have you watched them guys? They arn't trying too hard to sell anyone on the deal.

IMO they don't realy need us as customers either. China is the customer they are intersted in. They are creating a middle class to buy their product. This economic crisis may have come a little bit earlier than they expected, but their plan will happen.
I worked at Allison Transmission. It was one of the few (maybe last) American union company that was making them a lot of money. They sold it. They wanted all American factories running in the red. Management there would tell us that the future of their products is not in the US. They would show us a slide show of vehicles with their transmissins and the signs in the backgrounds were all foreign. GM didn't sell their Allison plant in Hungery. They will probably import a few cars to the US.

Sometimes you just have to shake your head in wonder at what a writer will suggest in order to scare the reader into believing him.

CARCAM, a non-profit org devoted to promoting training in automotive industries in Alabama, references wage data from the Economic Development Partnership of Alabama:
And that was in 2004! More recent figures, quoted from an article in the trade mag Assembly Lines:
Slave wages? Indoor sharecropping? I scoff in your general direction, Mr. Whitney!

I believe that you're right and I don't understand it. Henry Ford paid his workers a decent salary so that they could afford the car that they were making.
In about 60 years, I suspect.
From what I can understand, it's set up so that there's more money in paper (finance)than manufacturing (value added).

The American consumer is the engine that drive the world's economy. China may be the customer that the international corporations lust after, but China has a stronger manufacturing base than the USA and I doubt that the Chinese will let the Westerners exploit them again.
Through a combination of tax policies and trade "agreements," the US government encouraged US corps to move production out of the country. This didn't happen overnight, but rather began in in the 70's (probably earlier). For example, most US corps were relying on 50's technologies with a lot of patches, while the international corps had state of the art tech. This "degrading" has only accelerated since the 70's. Why could the internationals invest in the latest modern equipment and not the home based US corps? What inane tax policies encouraged CEO's to go off-shore when previously it was in their interest to reinvest in the US, i.e. before the big bonuses and stock options? The US Government even gave tax incentives to move off shore. Why?