Are the automakers "too big to fail"? Should the federal government include carmakers in its ever-expanding umbrella of financial aid? Proponents say that if the Big Three fail it could set off a chain reaction eliminating up to 3 million jobs and depriving government of more than $150 billion in tax revenue.
I think if automakers had responded more quickly to what consumers want in vehicles -- better gas mileage, alternative fuel sources and more hybrids -- that these industries might not be in the shape they're in today.
Americans like to support American companies -- if those companies provide a quality, desirable product. That hasn't been the case in the auto industry, which is why U.S. consumers have helped make Honda and Toyota so successful.
How should the government react now that U.S. automakers are in such dire straits? Is it a valid point that expanding the bailout to the auto industry will invite other industries to plead for government aid?
And finally, how big a role have what N.Y. Times columnist Thomas L. Friedman calls "overly generous labor contracts" played in getting the auto industry to the point it's now at?
how about giving the people that $700 billion with certain stipulations of course?
we'll be able to pay down our mortgages which will help the banks. we'll be able to invest some of that money into wall street.
and guess what we can do with the left over money? we can buy new cars!!
Well they say that the big three being union shops adds about $1-1.5k to every car sold. I dunno about that. To begin with every car purchase, no matter who sells it, is a negotiation. Added to the fact that $1-1.5k added to $25k-30k+ over the life of an auto loan is close to unnoticeable I think that this argument, that the unions are mainly responsible for the downfall of the US auto industry, doesn't hold much water.
Being a capitalist economy, we should not be surprised that the big three are having a hard time and are ready to fail. I am seeing a repeat of the 70's here. Foreign automakers are being more responsive to the need for better fuel economy and the public wants of a greener product. US automakers, while having some alternatives in hybrids and such, seem mainly interested in keeping the status quo when it comes to fuel economy while just adding gadgets to give their cars the "Oooh" factor. The "Oooh" factor just isn't doing the trick. Any company that isn't responsive to the needs/wants of it's customers should fail.
However, if the auto industry fails we could be throwing hundreds of thousands to millions of people out of work. That's frightening. Throw that many people out of work and many may never work again. You just can't "assist and retrain" your way out of that one. The economy is already in a shambles. That would probably cause a depression 1930's style.
What do we do? I don't know the answer to this one. I won't even pretend to think I do.
Put the windshields back to an angle to keep banging the heads on the door frame, getting in and out the car, they would not need a bailout.
Those human-friendly cars would sell like hot cakes to the baby boomers and their elders.
How about all the milions of small businesses that go under each year? Do they get a hand out from the government? NOOO!
Automakers, banks and all busnesses must learn that the will lose if they make poor decisions in making loans to people that cant pay them or if they don't provide the consumer with things that meet their needs. We cant bail them out everytime. They eventually have to learn a lesson.
Jeff Hannan - You nailed it! I feel the same dilemna; however, I am inclined to let them go out of business and let the chips fall.
The U.S. has gone through 5 depressions in which the common man lost everything. This one will be no different. What I find interesting though is that this time, as with the 1930s, the reason for the collapse is pure greed. We can not pick and choose who we save; we should have never started in the first place.
Interesting website for a quicky review of the depressions:
http://www.sjsu.edu/faculty/watkins/depressions.htm
What next...the airlines,retailers,municipalities? Where will "We the People" draw the line...blackjack losers in Vegas?I'm starting to wonder why I've been paying my bills on time all these years.
Disclaimer: MOI does not drive or ever owned a vehicle.
Having said that, allow MOI to tell what most fail to miss. Making 'good' vehicles in the USA has become a bit of a joke, how else to explain 'foreign' doing better in sales than 'domestic', they cost buckets of cash, use massive amount of petrol to run, and do not seem to hold up well. Folks have given up owning one from the big US auto makers.
The caterwaul to save GM is getting louder.
The smart money, and there is much of that, is betting that it would be best in the long run for GM to go under. Not many are lining up to support the effort to 'bail' GM out. Folks will lose jobs, and the crash of GM will hurt the economy, that is a given.
At some point, there has to be some who will not make it through this hard economic time, and the federal government can ill afford to play "Santa" to all of the companies that want to be saved.
Kim is spot on.......'greed' is what has caused this meltdown and there are many to place that label on.
Am I the only one of those 40.000 beehive readers who would like the windshield less overhead and the door frames less aggressive to head and shoulders. The claimed increased wind resistance (or whatever) of those overhead windshields is totally irrelevant at top US speed limits. We drove our 1977 GM Cadillac for 25 years. The windshield did not stop us from speeding on the freeway. And if all the plastic stuff inside the car would not have crumbled, we still would be driving that luxury work horse. Mr. De Frees is correct; if American Automobiles would have remained to be top quality, they still would sell. Furthermore, I don't like to lay flat on my back to clean the windshield on the inside. P.S. I don't like those big Sherman tank-like vehicles (whatever they are called). I wish they would still make the Checker cab. Yeah! thats how old I am, and I know paired-up comfort and utility when I see it; or rather not see anymore. Happy driving to you all!
A month ago the Bee printed my letter to the editor which clearly stated that the United States has ceased to be a government of the people, by the people, and for the people. The government is bought and paid for by big business which is why the people who need debt relief will never get it and the rich overpaid corporate execs who caused this financial mess will now get their bailouts. A few months down the road, after they have cashed the checks the government gives them, they will be back for more or they will declare bankruptcy leaving the little people, the taxpayers on the hook for trillions of dollars while they watch the sunset in the Grand Caymans where they have stashed their loot. I see more foreclosures on my block every month and more people downtown to whom I deliver sandwiches. Wake up people! The attitude of the ruling class is "let them at cake!"
Ms. Lawson, I drive a Toyota Matrix that has a somewhat upright windshield, has plenty of headroom, will carry cargo all day at 70 miles an hour, and gets 30 mpg in town and 40 on the highway. It's usually the total frontal area, and the extra weight that kills mileage. As for the estimated $80 per hour, wages and benefits, that UAW auto production workers get for building a car, you bet it brings up the cost. Since foreign brands don't cost that much more, we probably get taken on the lack of extra engineering, and quality of materials employed. As for why we don't get more efficient vehicles... until gas went to $3 plus, bigger was better in the US. Why else do you think Toyota, and Nissan started building bigger and bigger trucks, and SUVs. We demanded them or we would take our money to GM, Ford, and Chrysler. It usually takes a couple of years to re-engineer and re-tool, and we've been in crisis for a year...I just dropped out to check that statement. It's not surprising that the DOE doesn't list gasoline prices later than 2005 on their historical stats. What has the US government been doing in the last 3 years without acknowledging this kind of data? Oh that's right, there wasn't a problem with resources before last year.
Oops, the stats go to 2007. I take all that back. Except for the part where we got what we asked for in automobiles. Now, if the wages and guarantees were re-negotiated, maybe we should help the auto companies... and put Steve Jobs in as Auto Czar, so we could have iCars.
Re: Ed Hawke
Thank you for your response. I had a look at the Toyota Matrix. The 2009 has a rather narrow angle windshield too. And it seems to be a small car. I am very leggy and old and I have polymyalgia rheumatica, consequence: I have a hard time moving. But your suggestion took me to other Toyota vehicles to be considered like the "RAV 4" and the "Sienna". Since 2002 we are having a Lincoln Town Car,the engine works like a charm, but believe it or not, the accessories are starting to fail us. They told us that's (unfortunately) typical) for Lincolns. I wished we were made of money, but we are not. Again...thank you.
Isabell...at your age how much longer do you intend to take to the roads in your buggy.My mother who turned 80 this fall says she will give up her liscense when it comes up for renewal in 2009.She's concerned that even though she can pass the test,and with all the alternative forms of transportation available to her,she is not the driver she was and does not want to risk harm to others and considers it a good decision.While not doubting your skills and sharpness...I'm just curious about your mindset on this particular issue and your plans for future excursions into your surroundings.
Brian,
More deaths and accident are attributed in the teen age range not older senior adults. Teens (in general) drive faster and take more risks.
My mother-in-law should have stopped driving when she turned 55; however, my uncle, who is in his 80s is an excellent driver who I would trust my children with. Age means nothing, it is individual skill. Besides, Isabell will still need a car she can get in and out of and ride comfortably in, even when she is not driving.
Kim Tanksley...you are so right. Even if St.Peter himself would drive my car, I still would need a shoehorn to get in and out of a Beetle.
As a matter of fact, I did give up driving prior to my cataract operation, and never bothered to renew my drivers license. So Mr. Brian's life is very safe from me and my car. hahaha!
And back to the topic. Perhaps we should make the Big 3 divest of the other car makes they gobbled up, trying to undermine competition. I am thinking of the Volvo, that had been a very good Swedish automobile. Now it is but a GM. Last time I visited Europe, I saw many huge Volvo trucks on the road. So apparently, Volvo still believes in quality and durability.
I would hate to add thousands and thousands to the already unemployed. My political outlook was based on full-employment being necessary for the economic health and political domestic tranquility of a nation. In fact, my childhood was spent in a country that measured success in "bread units" how many kilo of bread can you buy for one hour of work. But global economy changed everything, and jeopardized every social contract that a government had with her work force. Huxle's "Brave New World" is no longer fiction. I am still counting on the Americans' vitality and will to say...enough is enough.
Isabell - I remember the day we heard Volvo was to be a GM, my husband and I said to each other, "Too bad, they were such good cars." We were going to require our children drive a Volvo as their first car, until they got some experience under their belt. Now we are unsure yet of what they will drive. If that isn't a statement on the perception of US auto industry, I don't know what is.
Now that you are in the US you'll have to measure your success in soy units; bread is considered fattening. Apparently, Americans can't say enough is enough. HA!! O.k. I'll stop now.
ok well you are wrong. america has a problem with that right now. too many americans are saving, instead of spending. now if you got a whole wad of cash, would you spend it all, or save most of it?
most people would save it, which would make the u.s. in a much worse economic crisis than it is now.
Wake up America... If we keep rewarding failure where is the incentive to succeed? We do we not realize the power of our own wallets. I will bet that if the American public agree to stop buying any product until the executives take realistic salaries there will be a change. These Big 3 went on as if they were invincible and didn’t care what the future held. Guess what the future is here and these are the rewards you reap. You sowed it so now reap it. The vacuum will be filled by other makers as well as new jobs for the new demand. LET THEM GO THE WAY OF TUCKER.
Today people are actually looking up for green cars such as hybrid, plug-ins, electric and hydrogen. If the government decides to give any financial aid to Detroit, then that could be a big start.