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Thread: Auto industry: to bail or not to bail

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    Default Auto industry: to bail or not to bail

    I've gotta admit, this is one where I see strong arguments on both sides. On the one hand, what would the gov't be saying by essentially rewarding bad management?

    On the other, letting the big 3 wither would likely end up costing our economy much more than any bailout package they put together. There are so many jobs both in & outside of the industry that rely on those companies; it's hard to imagine the pain that their collapse would cause.

    I say bail.

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    It would be one thing if they were basically sound companies who had just reacted poorly to events beyond their control. Instead we are propping up mediocrity and just plain failure. In essence, we are throwing good money after bad.

    The capacity for failure has not diminished because somebody suggests more energy efficient vehicles. The foundational basis for these companies is flawed and not compatible with the current market.
    Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but rather we have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.
    - -- Aristotle

    Believe nothing on the faith of traditions, even though they have been held in honor for many generations and in diverse places. Do not believe a thing because many people speak of it. Do not believe on the faith of the sages of the past. Do not believe what you yourself have imagined, persuading yourself that a God inspires you. Believe nothing on the sole authority of your masters and priests. After examination, believe what you yourself have tested and found to be reasonable, and conform your conduct thereto.
    - -- The Buddha

    It is the mark of an educated mind to be able to entertain a thought without accepting it.
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    Im against bailout on this one. Its inevitable bankruptcy and a waste of money. Break them apart into smaller companies let the good product survive.
    Q: Senator Obama, would you take the same pledge? No tax increases on people under $250,000?

    OBAMA: I not only have pledged not to raise their taxes, I've been the first candidate in this race to specifically say I would cut their taxes.

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    Quote Originally Posted by Damocles View Post
    It would be one thing if they were basically sound companies who had just reacted poorly to events beyond their control. Instead we are propping up mediocrity and just plain failure. In essence, we are throwing good money after bad.
    Yeah, I hear that. Are they just destined to fail, then?

    Even if they are, I'd probably still say bail, if only as a temporary measure. As a country, we really have to get through this next year or so: slow the downward spiral, and start to reverse the trends. Having the auto industry just tank without assistance right at this juncture could be devastating and have some serious long-term consequences as far as recovery is concerned.

    It's probably still more cost-effective to prop them up now, even if it's just for the short-term...

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    Quote Originally Posted by Damocles View Post
    It would be one thing if they were basically sound companies who had just reacted poorly to events beyond their control. Instead we are propping up mediocrity and just plain failure. In essence, we are throwing good money after bad.
    I read that Obama sees a revitalized auto industry as one of the keys to a revitalized american economy. The auto industry would have to green-up so to speak in exchange. Stop making the same old gas-guzzlers that no body wants, and start competing in the global market.

    If that is how they work it, then I am for it. We already make nothing in this country, when is this shit going to stop? I think it's important for the United States to make stuff. Otherwise we're just the servant class in the global economy and that's a long term bad decision. Though it might sound good short term.

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    Quote Originally Posted by Darla View Post
    I read that Obama sees a revitalized auto industry as one of the keys to a revitalized american economy. The auto industry would have to green-up so to speak in exchange. Stop making the same old gas-guzzlers that no body wants, and start competing in the global market.

    If that is how they work it, then I am for it. We already make nothing in this country, when is this shit going to stop? I think it's important for the United States to make stuff. Otherwise we're just the servant class in the global economy and that's a long term bad decision. Though it might sound good short term.
    The foundational basis for failure is still there. Retooling and forcing them to make a different product notwithstanding.

    I understand that it is fundamental to his plans to have new technology, but to use the failed businesses of the past to create such technology isn't the best of his ideas. We already know they are full of failure and incapable of adapting, this won't change because the government pushes strict control of a private business. We aren't Spain of the 1930s, we can learn from the past.
    Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but rather we have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.
    - -- Aristotle

    Believe nothing on the faith of traditions, even though they have been held in honor for many generations and in diverse places. Do not believe a thing because many people speak of it. Do not believe on the faith of the sages of the past. Do not believe what you yourself have imagined, persuading yourself that a God inspires you. Believe nothing on the sole authority of your masters and priests. After examination, believe what you yourself have tested and found to be reasonable, and conform your conduct thereto.
    - -- The Buddha

    It is the mark of an educated mind to be able to entertain a thought without accepting it.
    - -- Aristotle

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    Quote Originally Posted by Damocles View Post
    The foundational basis for failure is still there. Retooling and forcing them to make a different product notwithstanding.

    I understand that it is fundamental to his plans to have new technology, but to use the failed businesses of the past to create such technology isn't the best of his ideas. We already know they are full of failure and incapable of adapting, this won't change because the government pushes strict control of a private business. We aren't Spain of the 1930s, we can learn from the past.
    well, i was very much leaning towards supporting this after reading what obama said, but now that you have come out against it...it's definite!

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    Quote Originally Posted by Onceler View Post
    Yeah, I hear that. Are they just destined to fail, then?

    Even if they are, I'd probably still say bail, if only as a temporary measure. As a country, we really have to get through this next year or so: slow the downward spiral, and start to reverse the trends. Having the auto industry just tank without assistance right at this juncture could be devastating and have some serious long-term consequences as far as recovery is concerned.

    It's probably still more cost-effective to prop them up now, even if it's just for the short-term...
    Yes, under current management they are destined to fail. They are unbelievably short sighted.

    IF they proceed with a bailout, then the entire management of the big three needs to be fired.... no golden parachutes. Hire a line worker from the Japanese firms and you will end up with better results than allowing the current morons to continue managing the firms.

    Better yet, sell them to Nissan, Honda, Toyota dirt cheap in exchange for keeping some of the jobs in Detroit.
    Quote from Cypress:
    "Scientists don't use "averages". Maybe armchair supertools on message boards ascribe some meaning to "averages" between two random data points. And maybe clueless amatuers "draw a straight line" through two random end data points to define a "trend". Experts don't.

    They use mean annual and five year means in trend analysis. Don't tell me I have to explain the difference to you. "

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    GM stock is at about 3 dollars right now. if there is a major govt bailout, what happens to the stockholders who buy in now? couldn't they lose it all rather than make money?

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    Quote Originally Posted by Darla View Post
    GM stock is at about 3 dollars right now. if there is a major govt bailout, what happens to the stockholders who buy in now? couldn't they lose it all rather than make money?
    If you buy now and there is a bailout it is likely you will make money. If there is none, it is possible to lose all of the money.

    Basically SF and I state the same thing. You cannot continue to allow the people who failed so miserably for so many decades to run the company if you give them our money. If we bail them out, the leadership must be replaced or we are just setting ourselves up for demonstrable failure.
    Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but rather we have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.
    - -- Aristotle

    Believe nothing on the faith of traditions, even though they have been held in honor for many generations and in diverse places. Do not believe a thing because many people speak of it. Do not believe on the faith of the sages of the past. Do not believe what you yourself have imagined, persuading yourself that a God inspires you. Believe nothing on the sole authority of your masters and priests. After examination, believe what you yourself have tested and found to be reasonable, and conform your conduct thereto.
    - -- The Buddha

    It is the mark of an educated mind to be able to entertain a thought without accepting it.
    - -- Aristotle

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    Quote Originally Posted by Damocles View Post
    If you buy now and there is a bailout it is likely you will make money. If there is none, it is possible to lose all of the money.
    yeah i get that part. my question is more complicated - is there a scenerio where the govt takes over the auto makers, like GM, and the taxpayer becomes the stockholder, and the current stockholders get stiffed?

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    Quote Originally Posted by Darla View Post
    yeah i get that part. my question is more complicated - is there a scenerio where the govt takes over the auto makers, like GM, and the taxpayer becomes the stockholder, and the current stockholders get stiffed?
    I don't think they will. However, is the plan to nationalize the industry with no private ownership?

    If the government simply seizes the means of production you would lose your money, but I doubt that is what has been suggested.
    Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but rather we have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.
    - -- Aristotle

    Believe nothing on the faith of traditions, even though they have been held in honor for many generations and in diverse places. Do not believe a thing because many people speak of it. Do not believe on the faith of the sages of the past. Do not believe what you yourself have imagined, persuading yourself that a God inspires you. Believe nothing on the sole authority of your masters and priests. After examination, believe what you yourself have tested and found to be reasonable, and conform your conduct thereto.
    - -- The Buddha

    It is the mark of an educated mind to be able to entertain a thought without accepting it.
    - -- Aristotle

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    Quote Originally Posted by Darla View Post
    I read that Obama sees a revitalized auto industry as one of the keys to a revitalized american economy. The auto industry would have to green-up so to speak in exchange. Stop making the same old gas-guzzlers that no body wants, and start competing in the global market.

    If that is how they work it, then I am for it. We already make nothing in this country, when is this shit going to stop? I think it's important for the United States to make stuff. Otherwise we're just the servant class in the global economy and that's a long term bad decision. Though it might sound good short term.
    convert those plants to solar and wind manufacturing facilities.
    Q: Senator Obama, would you take the same pledge? No tax increases on people under $250,000?

    OBAMA: I not only have pledged not to raise their taxes, I've been the first candidate in this race to specifically say I would cut their taxes.

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    Quote Originally Posted by Damocles View Post
    I don't think they will. However, is the plan to nationalize the industry with no private ownership?

    If the government simply seizes the means of production you would lose your money, but I doubt that is what has been suggested.
    but they have done it, just recently. so it wouldn't be unprecedented. you know, it's not called socialism when bush does it, but you know they did it, right?

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    Quote Originally Posted by Chapdog View Post
    convert those plants to solar and wind manufacturing facilities.
    i don't think these two things are seen as mutually exclusive. rather that we can have a revitalized american auto industry, making cars that people actually want, and invest separately in solar and wind tech.

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