Government to bail out Vauxhall?

[rynnor]

Since GM didnt get the money they said was needed from the US government they look set to go into bankruptcy any day now.

Apparently the UK government has said vauxhall is viable so we look set to bail em out - where will it end?

 

[Darthshearer]

Since GM didnt get the money they said was needed from the US government they look set to go into bankruptcy any day now.

Apparently the UK government has said vauxhall is viable so we look set to bail em out - where will it end?

Scarey as fuck man.

 

[`mongoose]

I'm not sure whether it;s a good idea or not to bail them out.

On the one hand if they go under how will it affect the UK economy? How many jobs will be lost? On the other hand if we're a purely capitalist economy why should we bail them out?

We didn't bail out the miners or the steel workers. There was no real effort to save Rover. Why all of a sudden are we bailing out a company or companies?

I could see the reason why the banks were bailed out - if they went under the countys economy may well have been fucked beyond saving, but a car company?

I dunno - the softy lefty side of me thinks good - those people will still have jobs, the "wtf are they spending taxes on now?" part of me thinks we're just throwing good money after bad. Again.

M

 

[Mabs]

as long as the government bails out all the people who face losing their homes due to the recession im all in favour of it... either help -everyone- or dont fuck around

 

[Darthshearer]

I'm not sure whether it;s a good idea or not to bail them out.

On the one hand if they go under how will it affect the UK economy? How many jobs will be lost? On the other hand if we're a purely capitalist economy why should we bail them out?

We didn't bail out the miners or the steel workers. There was no real effort to save Rover. Why all of a sudden are we bailing out a company or companies?

I could see the reason why the banks were bailed out - if they went under the countys economy may well have been fucked beyond saving, but a car company?

I dunno - the softy lefty side of me thinks good - those people will still have jobs, the "wtf are they spending taxes on now?" part of me thinks we're just throwing good money after bad. Again.

M

Thats a very good point about Rover, if the government do bail these out I bet the people at Rover are going to be mightly pissed!

 

[rynnor]

Rover failed during the good years tho - not much you can do for those companies.

Vauxhall could well be viable just screwed by the demise of its parent company - if the government stepped in they should buy it off of GM.

It all makes me uneasy though - right from when we bailed out the banks - it sets a precedent with no obvious ending.

 

[Cadelin]

Rover failed during the good years tho - not much you can do for those companies.

Vauxhall could well be viable just screwed by the demise of its parent company - if the government stepped in they should buy it off of GM.

It all makes me uneasy though - right from when we bailed out the banks - it sets a precedent with no obvious ending.

I thought with Rover the Government effectively subsidized it for 2-3 years while it looked for a buyer/new partner to develop new cars with? The buisness failed in the end but the government helped it as much as they could.

The banks were different in that peoples saving are guaranteed by the government so it would have had to have done something and the bail out was the lesser of the evils.

I don't understand why they need to do it with car manufacturers though, if the buisness is viable then even if the parent company goes under somebody will buy up the profitable bits and get it working again. Any government bail out is just supporting in-efficiency.

 

[MYstIC G]

We should only buy it if they commit to selling off all the Jags used by MP's and the like and replace them with zafiras

 

[`mongoose]

We should only buy it if they commit to selling off all the Jags used by MP's and the like and replace them with zafiras

Surely they'd have to replace them with the Corsa?

Thinking about fuel emissions and the likes. It hardly makes sense to encourage the rest of the country to buy cars with low fuel emissions whilst you're being chauffered to work in a 4 ltr monster does it

Tbh - it would be worth them buying them out IF that happened. I'd love to see some of our politicians trying to get out of the back of a corsa

M

 

[old.user4556]

No we shouldn't bail them out.

 

[Tom]

If Vauxhall weren't making such shit cars, perhaps they wouldn't need help.

 

[old.user4556]

There is a similar sentiment about GM and Ford; some of their cars are just old, dated designs and technologies.

Look at Rover and British Leyland and all the sub divisions of that; the cars were shit and the company didn't last.

 

[Moriath]

they are gonna be bailed out by the yanks

Bush said he will just take money already promised the banks and give it to the car ppl .. as 14bn out of 700bn or whatever isnt that much anyway

 

[rynnor]

they are gonna be bailed out by the yanks

Bush said he will just take money already promised the banks and give it to the car ppl .. as 14bn out of 700bn or whatever isnt that much anyway

They doubled their requirement in a week though to 30 billion - theres no popular sentiment in the US to offer them a never ending bailout so sooner or later GM will go bankrupt.

Its not a bad thing really as its the only way they can get out of the terrible union deal that makes them un-competitive.

 

[Bullitt]

The thing I struggle to grasp is the idea that the government will bail out certain companies in certain industries. After all a car manufacturer is a business just like any other. How do they quantify what seems viable as a possible 'bail out'? Is it employee numbers? The necessity of what they manufacture?

How do they justify bailing out Vauxhall if they (for example only) let Woolworths die on its arse?

My ultimate fear in all of this is that the government takes control of multiple large companies and we end up in 'government controlled manufacturing' 1984 style society. Which I hope someone will point out is irrational of me.

Quote for reference:

"The Ministry of Plenty' forecast for had estimated the output of boots for the quarter at a hundred and forty-five million pairs. The actual output was given as sixty-two million... In any case, sixty-two million was no nearer the truth than fifty-seven million, or than a hundred and forty-five million. Very likely no boots had been produced at all. Likelier still, nobody knew how many had been produced, much less cared...And so it was with every class of recorded fact, great or small. Everything faded away into a shadow-world..."

-George Orwell, Nineteen eighty-four

 

[Ch3tan]

Woolworths has 30000 employees, and the loss of the company would have huge knock on effects to its suppliers, distribution networks, people supplied by EUK, DVD and music publishers, chinese manufacturers. List is very long, even the post office and couriers would be hugely affected because of the amount they use them.

Would be intresting to see how many jobs would be at risk because of Vauxhall.

 

[JingleBells]

It's simple, the government will bail out companies where the majority of customers and workers are going to be typical Labour voters, see: Northern Rock, Equitable Life

 

[Chilly]

Woolworths has 30000 employees, and the loss of the company would have huge knock on effects to its suppliers, distribution networks, people supplied by EUK, DVD and music publishers, chinese manufacturers. List is very long, even the post office and couriers would be hugely affected because of the amount they use them.

Would be intresting to see how many jobs would be at risk because of Vauxhall.

Thing about woolies is that its one or two (or more) stores per city/area/whatever rather than 2 or 3 giant facilities that supply the majority of jobs in nearby towns. Wiping woolies out adds a few people to the line in all jobcentres, knocking vauxhall out destroys a handful of towns entirely. Both have serious supply hcian considerations, and I'd suspect vauxhall's supply chain is bigger than that of woolies so might warrant more attention.

It's a fucking hard situation to appraise really, ether choice has serious defects. But at the end of the day it boils down to a private company asking for taxpayers dorrar to bail it out because of mismanagement or bad luck. I'm kind of morally opposed to that, but on the other hand I do feel for the large number of people put out of work (perhaps permanently) by closures and foldings.

I suppose its a cost thing. Which will cost more over the next decade? A high upfront of bailing out or a long term increase in benefits to support the unemployed? Either way I and other workers pay, I just hope they do the sums right and choose the appropriate course.

 

[old.user4556]

Throw a general election in 18 months, set to speed 'high' and give it a whirl.

 

[rynnor]

How do they justify bailing out Vauxhall if they (for example only) let Woolworths die on its arse?

To me I can see a big difference between the two - woolworths is at the bottom of the supply chain - if these jobs go the business that woolworths had will go to the other retailers which will help preserve other jobs - the suppliers will just supply to the other retailers - the net effect will be the loss of some jobs at woolies which is regrettable but it will save jobs elsewhere.

Vauxhall is very different - it sits at the top of a pyramid of suppliers - cars are very complex devices - their components are sourced from large numbers of specialised suppliers. The uk has a lot of these medium sized component suppliers - if vauxhall go they will take a lot of these suppliers with them.

 

[JingleBells]

Don't forget that Vauxhall Motors Football Club will cease to exist!!

 

[kirennia]

So instead of putting equity aside for the rainy day which many people knew was coming (granted, most didn't realise it'd be this bad), they instead carried on putting all resources into outcompeting others. In the case of woolworths being part of a lot of towns around the UK, that means their undercutting local businesses, putting them out of business and now when they're going down the drain, those very people who were outcompeted have to pay to bail them out?

I'm sorry but it's the fault of the businesses and while it may mean a lot of people are out of work for now, if it rejuvenates smaller businesses in towns once the climate re-stabalises, I for one see that as a better thing.

It's unfair for someone to knock you out of business then when they end up in the same boat, you're forced to help them out. It's becoming a common trend of whenever state of smaller towns come up in conversation, Paignton where I grew up is now a complete mess with small businesses shut down all over the place. All that remains are big shops such as woolworths, arcades, banks, supermarkets and...well not a lot else.

The sad thing is, it isn't just Paignton, it's nationwide. All that dishing out this money is going to do is keep large businesses in business while the smaller firms get wiped out completely.

Large businesses do have their good points of course but do we really want just a bunch of them in each town around the country and not a lot else?

 

[rynnor]

Large businesses do have their good points of course but do we really want just a bunch of them in each town around the country and not a lot else?

Pretty much - it would be hypocritical to say that we dont since pretty much everyone has defected from little shops to supermarkets.

I still remember my mum wandering round to loads of different shops like butchers, greengrocers, grocers etc. - took hours - people want convenience.

The other thing I remember about all those little shops was how expensive (relative to now) everything was.

Little shops have to offer something unique now if they wish to compete - if they dont they are doomed.

 

[Bullitt]

To me I can see a big difference between the two - woolworths is at the bottom of the supply chain - if these jobs go the business that woolworths had will go to the other retailers which will help preserve other jobs - the suppliers will just supply to the other retailers - the net effect will be the loss of some jobs at woolies which is regrettable but it will save jobs elsewhere.

Vauxhall is very different - it sits at the top of a pyramid of suppliers - cars are very complex devices - their components are sourced from large numbers of specialised suppliers. The uk has a lot of these medium sized component suppliers - if vauxhall go they will take a lot of these suppliers with them.

I can understand the reasons, i'm just curious as to where the line is drawn. Will a company be eligible for a bail out if it has x amount of employees? Or does it need to source (and support) x amount of other industries/suppliers?

As a side note it also feels somewhat hypocritical of the government, on the one hand they 'encourage us' (by way of trying to charge us money) to use our cars less. Yet on the other will support the industries producing said vehicles.

In the long term future the ideal is that we have more efficient, less harmful modes of transport. What happens to these car companies then, if they fail to adapt?

 

[rynnor]

I can understand the reasons, i'm just curious as to where the line is drawn. Will a company be eligible for a bail out if it has x amount of employees? Or does it need to source (and support) x amount of other industries/suppliers?

I dont think there are strict criteria - these are generally political decisions.

 

[Mabs]

 

[Uara]

Mabs was there meant to be something there? as its not loading on my screen

 

[old.user4556]

Yeah there is embedded link to:

http://www.myconfinedspace.com/wp-content/uploads/tdomf/59758/Bailout-361x500.jpg

... but it's not working.

 

[Embattle]

Firstly I don't see the government doing much about this, second the critera isn't really set but would probably be looked at case by case basis against a considerable number of factors.

As rynnor states you have to consider the position in the economy both Woolies and Vauxhall actually exist in, neither is exactly great but Woolies in my opinion exists in what is a rapidly shrinking market with far too much competition and with little hope of ever managing to properly recover even if it was helped. However as I stated at the start I don't see the government doing much about Vauxhall, certainly not enough for GMs liking.

 

[Bugz]

Think about it...

Funding comes w/ a price - structural reforms and changes to the motor system.

What are the government pushing for? More economical cars.

Obama had exactly the same idea in mind.