Roody

GM said they might have to suspend operations very soon. Chrysler and Ford aren't far behind in the race to business failure. The lame duck Democrats in Congress say they'll push through a bailout plan to save the Big Three. President Bush (yeah, we still have W) would probably veto such a bill.

I have mixed feelings about a bailout, but I do live in a GM company town. We can't even imagine the devastation that a bankruptcy would bring to Lansing and Michigan.

What do you all think? Should we rescue domestic automakers? If there is a bailout, what form should it take? What will happen if there is no federal rescue of the Big 3?

What will these events mean to you personally? What will it mean to the carfree movement?

EvilPhish

I don't know about the carfree movement (unfortunately I've had to accept that in certain parts of the US it's simply not feasible) but I'm against the bailout.

If they're destined for failure, then they need to fail. That's how evolution happens. It would be a shame, and I feel for any who would be negatively affected by it, but to artificially prop up a flawed system with taxpayer dollars would be negligent.

Hobartlemagne 

So- since people don't have the money to buy cars, the govt is going to take our money
from us, give it to the car companies, and not give us a car.

The people are the big losers in this scenario.

cerewa

Toyota is doing fine and builds lots of cars in the USA. GM/Ford/Chrysler shouldn't be insulated from whatever mistakes they may have made, they should compete with the likes of Toyota or go out of business trying.

If any kind of bailout is needed, I think it's for the individual people with meager incomes who don't have enough money to pay their bills, rather than the large corporations that can't pay their bills.

Wanderer

Let 'em go to Chapter 11, and then figure out what to do.

More likely to get union concessions (and lots will be needed) to keep them in business.

Only do it as a loan, no free money.

ndbiker

The UAW has a lot at stake in this. Most of the "non-domestic" auto makers in the United States are not unionized. If GM, Ford, Chrysler go under they go under the UAW is essentially defunct. I would be surprised if our new democrat government will allow that.

uke

The ability of Americans to continually rail against socialism designed to better the lives of people while falling over themselves in support of socialism designed to better the margins of corporations will never cease to amaze me. I guess it really speaks to how many folks have been thoroughly brainwashed by the media.

patc

With so many auto plants in Ontario shutting down or scaling back, this is a hot news topic here as well. I am firmly against any bailouts of auto companies.

First the obvious - it is against the best interests of society to use government funding for a product which is unsustainable, a drain on resources, and a cause of pollution. Would anyone support governments bailing out the fast food industry? Tobacco industry?

Secondly I see no reason for governments to bail out private industry, unless that industry is (1) unique and (2) provides an essential service. In this case we have other car makers out there, consumers won't be greatly harmed if one or two makers drop off the planet.

There is a much better role of government, and that is helping the actual people who are left unemployed, as well as the areas losing jobs. Re-training programs, grants to move to other cities, extended EI benefits for those seeking a career change (EI = Employment Insurance), etc. Meanwhile the former auto plants can be used to manufacture something else - with municipal, provincial, and federal governments offering incentives (e.g. tax breaks) for new owners to buy and convert the plants.

Corporate bailouts are often motivated by people (understandably but selfishly) wanting to extend their employment a few more months or years, and by corporations pressuring the governments. We can't afford that anymore.

Tabor

I support bailing out any entity that has become too big to fail. However, I think it should look like this:

1. Bail out entity that is too big to fail.
2. Wait for economy to stabilize.
3. Break up entity into smaller entities that are not too big to fail.

Editz

Playing Devil's Advocate here...why would bailing out individuals who got in over their heads be different than bailing out GM? Don't these people need to figure out how to live within their means or otherwise improve their lives so that they can earn more?

I really don't know what the solution's going to be, but I think we're all in for a major realignment of our collective expectations as to how we can live our lives.

wheel

Sounds so P&R to me/

bikinpolitico

Yes we should but only with conditions like building fuel efficient cars, stop shipping jobs overseas, etc. If they aren't willing to contribute to the greater good, then let them sink.

Platy

Throw in water rights to Lake Michigan and I think you've got a deal.

bicyclridr4life

Too many jobs at stake, both direct GM and all the thousands of companies that are suppliers to let GM/Ford/Chrysler fail. A loan guarantee of some type is required, along with union concessions to prevent a complete shut down of the economy. We are talking TENS of MILLIONS of jobs in all job markets (including Agriculture) / manufacturing sectors if the "Big Three" shut down. And for what it is worth, GM sold MORE vehicles than Toyota last quarter. Not even Toyota or Honda are immune from the present economy.

patc

So you prop them up. What do we do in the next years and decades, as oil prices rise to new highs, government budgets sink to new lows, and the immediate environmental damage (e.g air pollution) is even more evident? Sounds like sticking a band-aid on an infected appendix to me.

EvilPhish

I'm pretty ignorant in relation to the auto industry (my interests lie in two wheels of all types) but didn't the government issue some standards to that effect recently? Like, prior to the return of the Hemi and all that crap?

I don't understand how anyone could say (with a straight face) that 'they should make a new standard', because haven't we already seen that the government will make damned sure there's a loophole for whoever they want? Sure, 'your vehicle must be xxMPG, unless it's a sportscoupe/hemi/suvblahblahmobile'.

Look at how bad the airline industry has gotten since their bailouts.

artimus

Yes we have.There was/is bail out packages for tobacco farmers.

As far as the 'BIG THREE'; let them burn, and their fat unionized payrolls as well. I think that most people would rather have a well made, fair priced import anyways. If the three won't make them, someone else will.

How does one get in to P&R anyway?

jdmitch

Bingo! Chapter 11 is there for a reason, and this is the reason.

mackerel

No - they have had 30 years to improve their product up to the level of half-way decent, and they have failed miserably. Crappy cars made by apathetic Union workers is not a concept that should be encouraged or rewarded.

keiththesnake

First, Roody, get well soon.

Well, I gotta tell ya, I'm torn. I'm so pissed that people who live well beyond their means get by, when I see those who work hard and live responsibly struggling and falling behind. Folks are really getting pinched. So, why should there be a bailout of a company that has grown fat in the middle?

I really don't think that our local and state economies would go straight down the toilet without a bailout of GM. If GM goes bankrupt, they'll reorganize and everything will work out fine.

zoltani

No, absolutely not. However I fear that backlash will be directed at the government for not bailing them out when the **** hits the fan, and not blaming the failing companies.

They will get a bailout because the politicians are so short-sighted. If they bail them out it might takes years for us to see/feel the repercussions, while if they do not bail them out there will be immediate repercussions. The politician will choose the option that could allow the repercussions to be felt in a different administration.

EnigManiac

In Ontario, the government has a long history of interest-free loans, bail-outs and other investments in the big three and, quite frankly, I resent it. I've already written to our premier demanding he not give them one more cent of my money. These are the companies that bought out countless public transportation systems throughout North America and threw money behind pro-car politicians so they could develop urban sprawl on prime farmland, deny public transportation and bicycle infrastructure and divide neighbourhoods and communities so that people can no longer interact with one another. These companies initiated car-centric culture that pollutes our air, congests our streets, kills thousands per year in auto collisions, forces people into commuting 20, 30, 40 and 50km into work, keeping them away from their families and then convinced them they needed a second car for their wives. These companies have had 100 years of death and destruction and they want me to fund it? I don't think so.

On less of a rhetorical front, I honestly believe when they reduce the number of models to a mere handful each and ensure they are less environmentally damaging (for no car can ever be really 'green'), they will start to recover. The Big 3 need a major retooling from management down through product to manufacturing. After all, cars are needed, just not always.

Roody

Do you folks who are against a bailout believe that our economy can survive the death of Ford, Chrysler aand GM, on top of the trauma in the housing and finance industries? I don't think so.

If you have stock in a 401K, pension or mutual fund, I bet you've already lost money due to devluation of auto stocks. Do you want to lose more?

As I understand it, the crisis in thr auto companies is not totally their fault. Ordinarily, in a recession the companies will borrow money to cover operating losses. (IIRC, they've weathered more than dozen recessions this way--including the Great Depression.) However, this time they can't borrow money because of the credit crunch. So they're burning through their cash reserves to cover operating expenses including payroll and health care. It won't be long before the cash is gone and they'll have to shut down. The employees will be hit, and the billions of dollars in plants and equipment will basically be idle and worthless.

A well designed bailout might avoid much of this pain and waste. The Big 3 build good cars now, and they do have plans for celluosic fuels and plug-in hybrids. I hate to cover their past ineptitude, but I think the alternatives are even worse.

You may know that I recently suffered a serious injury. Like the carmakers, I have a severe cash flow problem. I hsd to tell my landlord that I will have to defer 2 weeks rent payment. He could have me evicted. That would probably be the "fairest" thing to do, and it would teach me the lesson that I should plan better for unforeseeable circumstances. It would also harm my innocent stepson, who depends on me for housing. And it would even harm my landlord himself. He would lose further rent from me and he would have the hassles and expenses of finding another tenant.

Luckily, my landlord did the wise thing and bailed me out. I'll resume rent payments when my disability starts, and repay the missed rent after I returnto work. I vote for something similar for the Big 3,

Newspaperguy

I've been dismayed with the quality of the Big Three over the past few decades. For the most part, they don't build bad vehicles but if I look at Honda and Toyota and others, I can get better quality vehicles which will run more reliably, give improved fuel economy and last longer. If the Big Three could have kept up with their competitors, the automotive industry wouldn't be asking for help now.

mattm

i don't really care either way, personally.

but i do think the big three need a slap in the face to make them realize that SUVs weren't a good business plan. maybe not getting a bailout would be that slap.

as for the union workers, i do hope they find good work if they end up out of a job. maybe they could make wind-mills instead? (e.g. something more positive)