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Thread: Detroit bailout

  1. #1
    Senior Member Kollin's Avatar
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    Default Detroit bailout

    I was thinking this morning...I know I really shouldn't do that :crazy:

    the big 3 are going before congress with their hat in hand and the other out asking for billions of dollars. The other companies like Toyota and others are doing ok, right?

    So why not have one or more of the others buy them out???? I mean that's pure capitalism right there...
    AKA: Choss

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  2. #2
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by Kollin View Post
    So why not have one or more of the others buy them out???? I mean that's pure capitalism right there...
    Because one of the major problems with the Big 3 is the labor agreements they have. No company wants to assume them, and it also reduces the ability of the big 3 to become competitive. If they let them go bankrupt, those labor costs (pensions, etc) are passed to the government.

    There is no easy way to get out of the situation.

  3. #3
    Habitual Fi LineStepper JocktheMotie's Avatar
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    I find the demonizing of the Big 3 to be very funny. The reason the Big 3 couldn't get out of the terrible labor agreements and properly globalize its business in order to compete on a global market is because of the government. Obviously the executives did not do a good job adapting and I'm not saying the government is completely to blame, but I still find it funny. The only thing you can really do now is just nationalize the businesses. Which sucks for the taxpayers.



  4. #4
    Senior Member Kollin's Avatar
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    Quote Originally Posted by ptgatsby View Post
    Because one of the major problems with the Big 3 is the labor agreements they have. No company wants to assume them, and it also reduces the ability of the big 3 to become competitive. If they let them go bankrupt, those labor costs (pensions, etc) are passed to the government.

    There is no easy way to get out of the situation.
    Well, unfortunately, something's(or someone) gotta give here...

    Desperate times call for desperate measures here...they may have to give up some of those agreements to stay in business...
    AKA: Choss

    It's not theoretically possible

    Interesting novel thoughts proliferate

    Incessently needing to ponder

    I never think practically

    It's never too precise

    Insane nerds throwing parties

    I'm not the problem

    I'm not that popular

  5. #5
    Habitual Fi LineStepper JocktheMotie's Avatar
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    Quote Originally Posted by Kollin View Post
    ...they may have to give up some of those agreements to stay in business...
    They've been trying to do that for years.



  6. #6
    Senior Member Kollin's Avatar
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    Quote Originally Posted by JocktheMotie View Post
    I find the demonizing of the Big 3 to be very funny. The reason the Big 3 couldn't get out of the terrible labor agreements and properly globalize its business in order to compete on a global market is because of the government. Obviously the executives did not do a good job adapting and I'm not saying the government is completely to blame, but I still find it funny. The only thing you can really do now is just nationalize the businesses. Which sucks for the taxpayers.
    Yep!! I wonder when they unionized if they actually saw this coming. My guess is probably not.
    AKA: Choss

    It's not theoretically possible

    Interesting novel thoughts proliferate

    Incessently needing to ponder

    I never think practically

    It's never too precise

    Insane nerds throwing parties

    I'm not the problem

    I'm not that popular

  7. #7
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by JocktheMotie View Post
    They've been trying to do that for years.
    They've actually been pretty successful - huge increases in efficiency and so forth.

    But this downturn illustrated the bigger issue. In order to stay afloat, they took on higher risk concepts - narrower market, etc. And, those markets were American, as in "light trucks and SUVs". And when the dice came up snake-eyes, their risk hit the tail end and... poof. If gas prices hadn't ratcheted up, they might of been able to become lean enough to survive.

    Government has a lot of blame, for sure. It's a democrat -> union -> block vote in spades.

    As far as breaking the agreements, it doesn't work that way. One way or another, those pensions will get paid. And it'll be the people paying for it.

    I don't support these bailouts. The way I see it is that they will either find a way, or not, and if not, the pensions will become public debt and new American companies can start up, hopefully not making the same mistakes.

    Don't look forward to the economic ripples though. That'll be ugly, unless overall car sales pick up.

  8. #8
    Arcesso pulli gingerios! Eldanen's Avatar
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    Why should we make more cars when people have no money to buy them? It's stupid. I've always thought that we had too many cars as it is. I mean, you see everyone on the road in a car of course, and then you see the lots at the dealership. And they're FULL of cars. Overload.

  9. #9
    Senior Member Hirsch63's Avatar
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    Auto workers build cars. That is it. They do not do market research, development or make decisions about the products the consumer wants or gets. The simply build them as directed. They benefit from being productive and responsible. Should they get as much as they can? Go work in the factory for a few weeks and see what you think.

    My family bought our first foreign car around 1973; a Honda Civic. My granfather worked for GM and all our neighbors were involved with domestic automobile production. Too say the least it was not an easy purchase to defend in our area of south-east Michigan. Eventually as we have all witnessed, the market came around.

    Auto company executives, boards, marketers have had more than ample time to consider and respond effectively to market conditions. This is part of the implicit understanding of the hard fought labor agreements; workers build designs to the very best of their ability and management employs the most advanced far thinking design and market considerations thereby insuring mutual prosperity and survival in an increasingly competitive world. The workers and factories have been there producing and providing as agreed. The world has changed and market demands have grown, technologies have advanced, and who are the people who did not (for whatever reason) respond effectively to this? Who was complacent? Well there is some guy sitting on Capitol Hill today who makes 22 million dollars a year at Ford and says that he's okay with that, despite an inexcusable lack of foresight.

    I have, to my shame and anger seen Union members who shirk their responsibility to each other and ultimately the country. In any group of humans you'll have a few bad eggs, and as the union became a big business itself, divorced from it's history and just as monetarily oriented as management it evolved into a sort of arms race to see who could get this biggest piece of the pie. The eyes of each group were not on the ball and the few in each camp who were and protested were shoved aside in the race after easier profit. Regardless, here we are now and the easiest and most readily available people to scapegoat are workers who had the temerity to demand that their labors be recompensed to the greatest extent possible. Management all the time remained above pecuniary motivations, altruistically providing the public with the very best designs and technologies available, thereby insuring the continued success of our industrial infrastructure without reference to what they might gain in the process....yeah, right...

    Reality struck me working as a courier in Michigan during the 1980's. As I drove hundreds of miles around the state delivering electronic supplies and injection molds, I discovered just how far the automotive industry permeates every level and aspect of the economy. Business' exist in places and sizes I had never anticipated that were wholly dependent on the industry. Large colleges also extensively involoved with automotive research likewise had many satellite concerns, great webs of interdependent business that gave me a profound appreciation for the reach of our automotive concerns.

    Do I want them bailed out? Do I want them to be rewarded for their shortsighted,irresponsible and really immoral conduct? No. But it really, really (I must stress) is not just them who deserve it who is gonna get it in the ass. The inter-dependencies are profound and extensive.
    Patriotism is the last refuge to which a scoundrel clings...Steal a little and they throw you in jail, steal a lot and they make you a king

  10. #10
    Senior Member Kollin's Avatar
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    Quote Originally Posted by ptgatsby View Post
    They've actually been pretty successful - huge increases in efficiency and so forth.

    But this downturn illustrated the bigger issue. In order to stay afloat, they took on higher risk concepts - narrower market, etc. And, those markets were American, as in "light trucks and SUVs". And when the dice came up snake-eyes, their risk hit the tail end and... poof. If gas prices hadn't ratcheted up, they might of been able to become lean enough to survive.

    Government has a lot of blame, for sure. It's a democrat -> union -> block vote in spades.

    As far as breaking the agreements, it doesn't work that way. One way or another, those pensions will get paid. And it'll be the people paying for it.

    I don't support these bailouts. The way I see it is that they will either find a way, or not, and if not, the pensions will become public debt and new American companies can start up, hopefully not making the same mistakes.

    Don't look forward to the economic ripples though. That'll be ugly, unless overall car sales pick up.
    I don't support the bailouts either obviously...well, it looks like they probably should have trimmed a lot more fat than they had so to speak...

    Quote Originally Posted by Eldanen View Post
    Why should we make more cars when people have no money to buy them? It's stupid. I've always thought that we had too many cars as it is. I mean, you see everyone on the road in a car of course, and then you see the lots at the dealership. And they're FULL of cars. Overload.
    Yeah, our way of life depends on cars!!! unless you live in an area that has a lot of public transportation which is mainly urban areas you really depend on your car for your livelihood.Then what's public transportation...cars, buses...trains... I depend on mine to get me to work to pay for gas, and rent and everything else I need. I drive 20 miles to get to my job! Of course America's been pretty car happy over the past 100 years!!!
    AKA: Choss

    It's not theoretically possible

    Interesting novel thoughts proliferate

    Incessently needing to ponder

    I never think practically

    It's never too precise

    Insane nerds throwing parties

    I'm not the problem

    I'm not that popular

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