Why lending the big three matters

[nadinbrzezinski]

Quite simple... 14 million jobs

Why language matters?

Well when you call this a bailout of course most muricans will be against it... bumper thinking here. Now 'splaining how this affects them is not something that even folks in the media understand... why none has even tried to 'splain to you why this matters

By the way, if this fails... every person in DC even remotely associated with it, is responsible for the horrible effects in the US and WORLD economy

There is a bright side though... we will kiss NAFTA good bye, mark my words...

[nadinbrzezinski]

1. And I guess this matters to none round here, except a few of us

wonky, we do care, kind of people

Now I return you to Britney

[tkmorris]

3. That's a bit harsh don't you think?

There could be any number of reasons your OP isn't getting responses. It cannot be that no one cares about the topic because countless threads on the issue have gone platinum over the last few weeks. Perhaps people feel there's nothing new to say?

In any case I think your OP is far too simplistic. Very few people would say those 18 million jobs don't matter, but you would get a lot of disagreement that a bailout (and that is precisely what it is) does anything at all to save them. I could go on but hopefully you get the idea. Perhaps flesh out your argument a bit?

[nadinbrzezinski]

5. No it is not harsh... reality is that labor (and those who support labor)

are beaten around by the "centrists" and that many Americans don't care what happens outside of their region... see Katrina.

After all 25 years of anitlabor propaganda is bearing fruit... but so is the deep national divisions

[spindrifter]

2. I almost go berserk when I hear

people claiming that the auto industry must be punished for its bad decisions. We cannot afford to lose this important sector of our dwindling manufacturing base and its related jobs. Why are people so short sighted as to want to exact punishment, when it is simply cutting off their noses to spite their faces, as my mom would say? We need to encourage the big three to make a success of their businesses--which means controlling some of their decisions--which Congress can do.

[stillcool]

4. It seems to me like the auto industry...

is holding the government hostage. If they go bankrupt, what is it to them? They write off a lot of their debt, let all the workers go, and re-hire them under more favorable conditions. It's a win/win no matter how I look at it for the auto-makers. I wonder how much money they made off defense contracts? It's so typical for these corporate welfare queens to run a company into the ground, stuffing their pockets all the way. It's like fraud and embezzlement are no longer crimes, unless your an Enron, but even then how many of those guys went down?

[nadinbrzezinski]

6. You think that they will sell cars under their brands made in the US

by labor if they go bankrupt?

Good one

[stillcool]

7. Why wouldn't they?

What is the alternative? ..and wouldn't they be in a much better position to re-tool their industry, having unloaded all that debt, and gotten rid of all those pesky labor costs?

[nadinbrzezinski]

10. Pesky labor costs are the same as Honda... due to all the concessions from labor

Not that most people understand this... free clue, they are not getting paid 80 bucks an hour...

And if they go under it includes closing their doors for evah... you see in the current conditions a reorganization (which requires credit) will lead to chapter seven... that is why

more than one analyst who's looked into this has come to this conclusion. They declare bankruptcy they will be insolvent and going out of business very soon, think Mervins right now.

So if they close their doors... well no more GM cars built in north america, or the world for that matter, for example

And the consequences of that are HUGE... at multiple levels

[stillcool]

11. I guess I have a hard time understanding this.....

Mervins is one thing, but a global entity of the likes of GM, has got to have assets that rival nations. I can certainly understand their letting some of their holdings go, like Halliburton did with Dresser, but with or without the brand name, I just don't see how they could be forced in any legal way to walk away from all the pies their fingers are in. Perhaps my lack of knowledge, and my penchant to distrust how things appear on the surface, leads to my confusion.

[nadinbrzezinski]

12. It is confusing. But even Krugman is for loaning them the money

not that they are the best managed companies around, nobody claims that. And in fact, it is not a bail out, it is a loan... language matters.

Right now the common stock for GM is worth Three billion... that's it

Now if you added factories and the rest yeah probably small nation... but none of it is liquid... and given the current economic conditions they can't sale some brands... hell, they have been trying to unload SAAB and HUMMER for a while now... SAAB befuddles me, since it is a solid brand... now Hummer, they were idiots to even start it... we back to bad management

Now some of the brands they own that they have bought from other countries, may be nationalized by their home countries... and to be fair we should do that... and the fact that Michael Moore can say this in the talking box gives me hope that we will see the other side without a full blown depression.

[stillcool]

13. oh...I agree with the bailout thing...

only because it is the best thing for our economy. I guess I don't see them going under, as much as I see us going under. We manufacture so little in this country, and we can't afford to lose what little we have. Just eliminating their debt would have serious consequences for lots of manufacturers. So I guess what I'm saying is that their claiming bankruptcy would be disastrous for us, but not so much for them.

[nadinbrzezinski]

14. They would go away as companies...

And that is the point... I know it is hard to comprehend that GM, Ford and Chrysler might just go poof.

As to what this crisis will bring... one of the casualties, whether they survive or not, is globalization as we practice it right now

The days of "free trade agreements" are coming to a screeching halt, as well as the American dominance in the World Economy

I foresee the rebuilding of the economy... and quite likely tariffs coming back for at least some things

[JDPriestly]

8. It only matters if the management of the Big 3 makes cars they

can sell and that people can afford, and that is a nearly impossible task considering the culture at the Big Three, the current economy and the attitude of the public toward the cars of the Big 3.

Here in California, new car buyers want low mileage, environmentally friendly cars at low prices. The Big Three can't compete very well in this market.

[nadinbrzezinski]

9. I will never claim they are well managed companies

and in fact the loan MUST include strict conditions on what they should be producing... as well as other conditions.

My next vehicle, I'd love it if it was something like my civil hybrid, since I do live in California... we even looked at the Escape... and I was underimpressec by the dealerships... we knew more than they did when we started looking.

That said... if we let them fail even honda will be in trouble and your high MPG vehicles popular in Cali will be in trouble as well... see the secondary and tertiary businesses tied to the big three for the reason why. And no JD... most folks in the teevee don't get this either... this chain that could lead to 14 million unemployed in short order... and then all the screaming at whether this is a depression or not will not mater. Guess what? The GNP reduction alone will FIT the technical definition.

[JDPriestly]

19. I agree with the bail-out, but believe it should be conditioned

on not only a new business plan but new management, possibly management in the German style that includes a certain amount of employee input. I think that this whole matter must be worsening the already difficult morale at not just the major auto companies but the companies that supply them. We need to get a different approach to management. The hierarchical approach has proved flawed.

The Bush administration demonstrated in its own management style just how too much top-down management hinders the flow of creativity, the exchange of ideas that makes for a dynamic enterprise. I'm not talking about management by committee necessarily. I'm talking about management that is really open to communication from all directions, customers, employees, both white- and bluecollar and government regulators. We need openness in management.

The current management in much of our economy is arrogant, believing in its superior judgment and disregarding the value of the experience and ideas of nonmanagement, overly protective of its assumed status and perks and too focused on short-term profits and personal gain.

The boards of directors of most of our big companies need to include representatives of the employees at least with regard to the making of policies that affect employees. That is the way that German law requires their large corporations to function. Germany has a history of good labor relations. I don't know whether labor relations are as peaceful in Germany at this time as they were maybe ten or twelve years ago, but Germany still provides a great example for us.

[taught_me_patience]

15. Please cite your source for 14 million jobs

without citing a report created by the automakers.

[nadinbrzezinski]

16. Krugman mentioned that in one of the many interviews he's done

that is the worst case scenario and it includes workers not only from the big three, but secondary and tertiary companies that supply them

Big three alone is 2.5 to 3 million

[taught_me_patience]

17. Funny... GM only has 300k employees.

14MM is a bullshit number that includes primary, secondary, tertiary, and some other "factor". Also, the potential for chapter 7 for all the big three and suppliers is 100% impossible.

[nadinbrzezinski]

18. Well this also includes the mickey ds up the street

the local bar, the restaurant, the stores...

But I am sure a man who knows quite a bit of economics is being hysterical

By the way... the term worst case scenario means chap 7 for all three and the rest of that scenario

You knew that right?

[soothsayer]

20. and all the component mfg (mirrors, airbags, etc.) and aftermarket

[FKA MNChimpH8R]

21. Nationalize the Big Three

rescue them, after firing with extreme prejudice all of the top management, retool for fuel efficient cars, allow them to import fuel efficient models from other markets and sell the companies to the workers after a five-year (or whatever time it takes) interregnum. Worker owned companies will never vote for 25 million dollar salaries or private fucking jets.

Soichiro Honda never made more than $350,000 per year. That's good enough for anyone operating a Big Three company.