Detroit's Delusion

I don't believe that a bailout is the answer. The market should decide the fate of these firms, as it has since Ford came out with the Model T. Yes, it will be painful for a LOT of people and businesses, but it is absolutely necessary to enable the firms to properly re-structure themselves to compete today.

I would suggest that while we are hearing all of this "the sky is falling -- gimmee money" bombast from the managers -- they are talking behind closed doors between themselves and politicians about their desire to go through the bankruptcy and rid themselves of UAW contracts that put them at a cost disadvantage before a single bolt is installed. Because of that, costs are cut elsewhere to make the cars competitive, and that is usually in quality, materials, etc.

Finally, the American public is accountable for the failure of these firms as well. Why? Because for years the American public demanded bigger SUV's and trucks. And the U.S. automakers delivered them -- profitably. Despite the handwriting on the wall, we (you, me, them) ignored the crying need to design and build more efficient cars, because they would not have sold. The problem at its core is that it takes years to design, develop and build new car platforms, and the U.S. manufacturers have had to try and do it from a position in a hole that they, with our help, dug.

Here is a thought. Instead of giving the big three a handout, why not give american tax payers a check for 20,000 USD redeemable at their local GM, Ford, or Chrysler dealerships. You could only hand out 1.7 Million checks which could be done on a lottery based system using the social security numbers of those who paid taxes last year. 1.7 Million winners get 20,000 USD check each towards the purchase of a new GM, Ford, or Chrysler car!

Granted the American Auto industry has problems both in management and labor, but the bailout of what is part of this countries remaining industrial infrastructure makes more sense than bailing out the banks.
The Bank bailout does little to nothing for Main Street, it just keeps the banks afloat until they can find a way to profit from all the homes they have foreclosed on and they will in due course.
Had the 700 billion been put in reinvigorating industry or in some cases reinventing it, it would have had a tremendous positive impact on the entire country including the banks.
I can see putting conditions on a bailout, but to lose one of America???s last industries will only push the downward spiral this country is in too accelerate.

Here is a thought. Instead of giving the big three a handout, why not give american tax payers a check for 20,000 USD redeemable at their local GM, Ford, or Chrysler dealerships. You could only hand out 1.7 Million checks which could be done on a lottery based system using the social security numbers of those who paid taxes last year. 1.7 Million winners get 20,000 USD check each towards the purchase of a new GM, Ford, or Chrysler car!

Sure why not its only 33 billion more than it took Obomber to buy his way in. The big three have more jobs going for them than every out of job Democrat that he is hiring.

If my business fails, would the feds bail me out. They are a business like anything else and if they fail, then they fail. Why should taxpayers be forced to save them and get nothing in return but more debt?

Americans cars are still junk when compared to the rest of the world.

As a consumer I could care less where something is made ??? my one and only decision is to base price versus quality/utility of the product. I just don???t see American cars ever getting competitive and expect the top 3 car makers to go out of business. Why on earth would I want to buy a car from one of them?

Washington will simply see how much cash the car companies can stick down their pants and if it???s enough they will give them some of our money. The result will be the same ??? American car manufacturing is toast.

Time to retrain the $70 an hour factory workers to $10 an hour hamburger flippers.

The bailout only outs off the inevitable. The big three & the UAW have feasted now its time to pay the piper. No amount of money will save the big three & the UAW.

This article is right on the money. The CEOs of the big 3 and Gettelfinger are in a major state of denial. Their Detroit insularity assisted by the Michigan congressional delegation has them living in world of false dreams. Toyota and Honda lost over 30% in the showroom in November, but they are teetering on bankruptcy and their stock is not near worthless. This goes to show everyone that the big 3 are basically whistling past the graveyard, hoping things will improve whearas in reality they've driven the American auto industry into the grave. Let the weak ones go bankrupt, get rid of this "closed minded" management and leadership that still believes the sun will shine one day after they get their 34 billion dollar handout. Nope, not gonna happen, because the Toyotas and the Hondas and Nissans of the world will still be there and they are in much strong marketing and financial positions. Competitiveness and marketable products are hollow words for these leaders of the Detroit Big 3. Let them fall.

I think there are four groups here.
I hate unions and American cars.
No bailout/use bankruptcy to drastically reorganize the failing companies - Let all 3 fail if they can't make it on their own.
No bailout/use bankruptcy to drastically reorganize the failing companies. Don't let all of them fail. Help them later if needed.
Bailout - Try to save all 3 now.

When we lost our home in 1984 no one bailed us out we had to walk away after having paid 15 years into that mortgage. I could not get a bail out why should they get one. They have lived too high on the hog for too long. There cars suck they don't last and they are too pricy. I would by foreign cars before I bought american. They make them cheap and sell them high. Let them go into bankrupcy we had to. Let them suffer like everyone in America does. I say no bail out not with my dimes.

We lost our home in 1984, no one bailed us out, we had to walk away. They need to start stepping. They have lived too high on the hog for too long. No bail out. There cars are not that good anyway. I would buy a foreign car before I buy American. I cannot believe the greed of these people.

Let the Law of Business rule for these "high-functioning idiots"...go bankrupt and rebuild from that point! These CEOs are the equivalent of heroin addicts, "Hey man, I need more money and then I'll be able to clean up my life." NO! You need to clean up your business FIRST, and then we'll talk money! Oh...and CEOs...working for a dollar doesn't impress me at all! You need to be unemployed! Lose the mistresses, the country clubs, the yachts, the houses in the Hamptons, etc. Lose your "addiction" to money! NO BAILOUT!

If I go out and make a lot of bad investment decisions with the money that I make, find myself suddenly staring at foreclosure, and can't live as exquisite a life as I've been used to, I can't go to the government for a bailout. Why should they? NO BAILOUT ON MY DIME!!! Early in the twentieth century, corporate greed drove us to need union protection. Unions have evolved into a tremendous liability with the ultimate sacrifice being paid by the consumer, ie, lower standards of quality while driving the cost of the product up. Just look at the Japanes car manufacturer's business models and you'll see you don't need a union to be happily employed, well paid, and secure. At the same time, the American manufacturer can concentrate on refining quality - PLEASE! Oh yeah, and how about a reality check for the average American auto worker? Guess what? You have been outclassed by your friends and neighbors who are assembling a car for Toyota, or Honda, or Nissan and they don't have unions. Do we see the connection yet?
In the meantime, you got yourself into this mess, you get yourself out. And by the way, I'll continue to drive my Toyota - which I am certain is not going to prematurely fail on me - to work. Where I don't have, nor need a union.
Don't get me wrong guys. I am a patriot who absolutely adores his country and would die for it. I am a third generation soldier (veteran now), and am still serving my country. But I am ashamed at what corporate greed and American laziness have done to the automotive industry. Good luck. You are on your own.

If these companies sink, a lot of people lose their jobs, and that would be terrible.
But if 34 billion goes to these companies, and they still sink 6 months later (which, given managerial
incompetence and the soup they're already in, seems likely) -- all those jobs will just be protected
for 6 months.
Supposing you allowed these companies, or even demanded of these companies, that they sack
300,000 workers immediately.
The working capital needs that they are crying about go down drastically, buying them more time.
Give the 34 billion to the 300,000 who got sacked (and who otherwise might have lost their jobs
soon and not got a dime)
I don't know whether I did the math right, but thats about 100,000 dollars per worker.
That's a better way to spend the money, surely?