News Should General Motors be bailed out?

[old.user4556]

Banks I can understand, but car manufacturers asking for bailouts? Isn't that a case of tough titty? What next, call centres?

BBC NEWS | Business | US car firms ask for $25bn aid

Edit: just read it's Ford and Chrysler too

 

[rynnor]

The problem of letting one of hese huge manufacturers go down is the number of secondary industries that they support.

I saw an estimate that if one of these went bust 2.5 MILLION JOBS would be lost - thats why they have to bail em out.

 

[old.user4556]

But what about the electronics industry in the UK that died on its arse?

 

[Tom]

A large part of their problem is the amount of money they're paying out in the form of healthcare.

I hope they don't go down the tube. The world needs cars with big lazy V8s

 

[ECA]

The problem of letting one of hese huge manufacturers go down is the number of secondary industries that they support.

I saw an estimate that if one of these went bust 2.5 MILLION JOBS would be lost - thats why they have to bail em out.

No they really don't and shouldnt.

They let these companies go bust and there will be more competition in the workforce, wages will go down and the american economy will become more competitive.

It's kinda like having a subsidised coal industry slowly bankrupting the country.....

 

[old.user4556]

It's kinda like having a subsidised coal industry slowly bankrupting the country.....

That did spring to my mind.

 

[Scouse]

Definately not. They shouldn't have bailed out the banks either tbfh. They need a new banking model and a hugely modified economic model...

 

[MYstIC G]

The problem of letting one of hese huge manufacturers go down is the number of secondary industries that they support.

I saw an estimate that if one of these went bust 2.5 MILLION JOBS would be lost - thats why they have to bail em out.

Sorry but lets get real here, it's better to continue mass producing cars that won't get sold instead? I don't think so.

Things break for a reason, the problem here is that everyone wants to keep things "just exactly how they are" which won't work.

 

[old.user4556]

Definately not. They shouldn't have bailed out the banks either tbfh. They need a new banking model and a hugely modified economic model...

Not bailing out the banks would have been folly, but that is an issue for another thread.

 

[Scouse]

Not bailing out the banks would have been folly, but that is an issue for another thread.

Bailing the banks out was like clinging on to a long-dead relationship IMHO

 

[old.user4556]

The problem is that they're bailing out the banks and still letting the same fannies run them (except the RBS twat). They need to (speaking from experience here) sack useless dead wood management en masse; sometimes it seems there are more managers talking about work than grunts actually doing the work. I'm not saying new people will do better, but new coat of paint and all that.

 

[Ctuchik]

The world needs cars with big lazy V8s

actually they dont. thats why the car manufacturers are in such a deep shit, sure the global financial situation isnt helping them any but still.

only the stupid and the diehard fans still buy those shit cars. and unfortunately theres ALOT of stupid ppl out there with no clue, or that just dont care.

just look at Volvo and Saab for example. those 2 brands were doing pretty good before they got americanized, sure they werent doing GREAT, but good enough. now with all the shit cars Opel and GM makes with the Volvo/Saab brand on them, and especially Saab, its just a matter of time before these 2 swedish icons are no more.

Volvo might have a better future depending on who's buying it but i still dont have any hopes that neither brand will survive this unless their respective owner starts to fucking think alittle. i mean, Saab doesent even have enough cash to make new models now.

but back on topic, yes they should bail out the car manufacturors. because its not just THEIR jobs on the line.

were talking a potential ~5 million jobs lost here if these 3 go down and take their sub supplyers with them.

and i have hard doubts that ANY nation can afford their share of those layoffs.


all this has been comming for quite a few years now but to few with any saying in the matter wanted to see it, they just kept making these bigass gas guzzling monsters, and now they pay the price. and from that standpoint they deserve to burn, but i dont think we can afford to let it happen.

 

[Cadelin]

Isn't there an inherent difference between the banks and the car manufacturers?

Banks:
They compete with each other but also lend money to each other (which was done because banks had assumed that other banks wouldn't go bankrupt.). Therefore if one bank goes bankrupt it can causes others to fail. Infact the whole banking system relies on having some confidence in the system. No bank, even the best run bank in the world would be able to pay all its customers back if they walked in an demanded their money.

Car Manufacturers:
They just compete with each other. If one goes bankrupt it should just make life easier for the others because there is less competition.

I think that the US government should look at it from the perspective of if there was no credit crunch. If the companies needed loans for re-structuring which they would have got, if it wasn't for the fact that nobody is lending money to anyone else at the moment, then I don't see a problem with a "bail out". However I suspect its more likely that the companies are in-efficient in which case a bail out is simply delaying the inevitable.

 

[Ctuchik]

The problem is that they're bailing out the banks and still letting the same fannies run them (except the RBS twat). They need to (speaking from experience here) sack useless dead wood management en masse; sometimes it seems there are more managers talking about work than grunts actually doing the work. I'm not saying new people will do better, but new coat of paint and all that.

sure but who's gonna take over? you basically want to fire every bank manager and above in the buisseness.

you gonna hire mr and miss snakeeyes down in accounting to take those jobs?

 

[Ctuchik]

Car Manufacturers:
They just compete with each other. If one goes bankrupt it should just make life easier for the others because there is less competition.

you'd think so but then you would end up with a monopoly, and thats never good, just look at microsoft.

you need competition to keep the prices down, if there isnt any you will end up with 1 massive company and a few tiny ones that really doesent have a chance pretty much doing what ever the hell it want.

 

[Raven]

No, they should not bail them out, if they can't move with the times and stop building massive fuel/tax eating monsters then they deserve to go down the toilet. Its a shame about the staff ofc, if anyone should get financial help it should be them with retraining, health care, dole money etc.

Its purely down to mismanagement on their own part, any fool can see that an increase in oil prices would lead to people wanting smaller, cheaper more economical cars whether they believe in the global warming swindle or not.

No economy can survive like it has done over the last 10 years or so without going pop, the bigger it gets the bigger the bang. Big companies have been recording massive profits year in year out for ages now, what did they do with all that money? Its fairly clear it wasn't save for the inevitable rainy day.

Fuck-um, let them sink. It will send a message to the rest of industry that you cannot run your company in such a dangerous way without any consequences.

As for the banks that is completely different, no I don't think they should be bailed out at all for the same reasons as business, record profits year in year out etc but millions of peoples mortgages were riding on it so there wasn't much choice.

 

[DaGaffer]

just look at Volvo and Saab for example. those 2 brands were doing pretty good before they got americanized, sure they werent doing GREAT, but good enough. now with all the shit cars Opel and GM makes with the Volvo/Saab brand on them, and especially Saab, its just a matter of time before these 2 swedish icons are no more.

Erm, Ford owns Volvo, not GM, and its the only bit of the former Premier Automotive Group that Ford want to keep (Jag, Aston and LR have gone and they've remerged Lincoln back into Ford).

The Saab situation is a good example of why GM shouldn't be trusted with anyone's money though; fucking clueless "Saabarus", rebadged Chevys sold as Saab SUVs and rebadged Saabs flogged as Cadillacs. Ridiculous. If it wasn't for the pension problem the US gov would probably let GM die, but they're probably doing the sums to see whether its better to run a pension scheme with a car company attached (and hence get some revenue), or deal with all those retirees (current and future) directly. I think it will be a close call.

The biggest irony is that there are GM cars in the pipeline that may actually be relevant and worth owning (e.g. The Chevy Volt; a much better idea than the Prius), but one car isn't going to turn them around.

 

[Cadelin]

you'd think so but then you would end up with a monopoly, and thats never good, just look at microsoft.

But there are plenty of car manufacturers, those are just 3.

Also microsoft does have competition.

 

[Chilly]

I believe some form of bailout could be appropriate, but ZERO dollars of any american tax dollars given should end up in shareholder's hands, directly or indirectly. The governemnt should take a mandatory 25% stake (or more, depending on the value of the company atm) and force the board to make sure the money will not fund pay rises, dividends (freeze them for a while), or expansion. Ring fence the money into employee costs, paying decent redundancies to the portion of the workforce they *have* to let go and try to minimise the blow of such a large number of job losses with extra dole money etc.

I think it would be a disgrace if the money ended up funding a buyout or expansion or was spent on developing new big models of car. The american tax payer should get what it pays for in this instance. I feel pretty much the same way about the UK bank subsidies, the UK govt should have taken a stake in the companies as compensation immediately, rather than as a condition of failure.

 

[inactionman]

No. Otherwise where will it stop?

 

[old.user4556]

BBC NEWS | Business | US car firms 'should go bankrupt'

So who will buy up the assets if they go bankrupt? Tata motors?

 

[Trem]

Erm, Ford owns Volvo, not GM, and its the only bit of the former Premier Automotive Group that Ford want to keep (Jag, Aston and LR have gone and they've remerged Lincoln back into Ford).

The Saab situation is a good example of why GM shouldn't be trusted with anyone's money though; fucking clueless "Saabarus", rebadged Chevys sold as Saab SUVs and rebadged Saabs flogged as Cadillacs. Ridiculous. If it wasn't for the pension problem the US gov would probably let GM die, but they're probably doing the sums to see whether its better to run a pension scheme with a car company attached (and hence get some revenue), or deal with all those retirees (current and future) directly. I think it will be a close call.

The biggest irony is that there are GM cars in the pipeline that may actually be relevant and worth owning (e.g. The Chevy Volt; a much better idea than the Prius), but one car isn't going to turn them around.

GM own Saab as well don't they? Unless thats what you were saying.

Actually Saabs got more reliable when GM bought them, especially the god awful hydraulic clutch system in the older Saabs.

Having said that I am a Saab and Volvo fanboi, got a Volvo S60 T5 at the moment and its sexy.

 

[Raven]

BBC NEWS | Business | US car firms 'should go bankrupt'

So who will buy up the assets if they go bankrupt? Tata motors?

Nothing of what he says is untrue though. The management of the companies has been dreadful, they still live in the eighties.

 

[MYstIC G]

Things die. Why should the US motor industry be any different?

 

[Chilly]

Because in a practical sense, too many people will lose their jobs, and it's cheaper to subsidise than support them on the dole. It may not be the "right" thing to do, but it decreases economic strife for more people than the other option. At the end of the day, this is why we hate politicians. Yes they can make bad decisions, but they MAKE DECISIONS when the alternatives are both fucking awful. Gotta give them some respect.