Big 3 "Bailout" (well, cheap loans really)

[gmcbob]

Apparently the Big 3 are going to ask the Govt. for $25 Billion in cheap money.

The term "bailout" kind of pisses me off, but that's how our brainiacs in the media love to spin it. I personally have mixed emotions about it, because there's this part of me that feels a lot of the Big 3's problems were brought on by themselves. But on the other hand, if we can spend untold millions in Iraq (Halliburton anyone?) - give money to Isreal, spend money on army bases in Japan, have the Federal Reserve "bail out" other big banks and mortgage companies, etc, etc; then I say, why not give money to the Big 3? After all, they're actually producing a useful, tangible product that utilizes American resources and employs a lot of people within our own country.

http://online.wsj.com/article_email/SB1219...MjMyNjI1Wj.html

Edited August 23, 2008 by gmcbob

[loki]

federal reserve is not part of the gov't. it was created by it, but not part of it. it is just a central national bank

some might say $25billion is change compared how in the hole we are anyway....

[gmcbob]

federal reserve is not part of the gov't. it was created by it, but not part of it. it is just a central national bank

some might say $25billion is change compared how in the hole we are anyway....

I wasn't trying to imply that the Federal Reserve was actually part of the Govt. Loki, you're definitely right - the Federal Reserve is essentially a private bank that loans (or prints) money for our Government; I was simply writing that they're the ones that bailed out Bear Stearns - with the complete backing of our fearless leaders in Washington. Whether or not we think the Federal Reserve should even exist would be a fun topic for the Lounge I think. As an aside, a good friend of mine wants me to read the book "The Creature from Jekyll Island" - he tells me it's a real eye opener about the Fed and their relationship with big banks and Washington.

Edited August 24, 2008 by gmcbob

[gm4life]

I have mixed feeling about this too. I think TMC gets help from Japan all the time. I understand the big three did put themselfs in a sticky situation but part of me says we owe it to some of the last true American compaines. Ehhh I guess I am okay with it. If it were Toyota I would be pissed.

[FUTURE_OF_GM]

You can tell that the author is an anti-Detroit jack ass.

Essentially, this is the same thing that Japan did for Toyota when it financed the Prius. However, you won't see that in the headlines.

I can't wait for the barage of 'american' consumers that refuses to buy cars from the big 3 because of this bailout.

That's okay though, I'll have fun reminding them everyday that their tax dollars helped me purchase my new Camaro.

The car makers can also claim with justification to have been hurt as badly as anyone by Washington's policy blunders. The weak dollar has contributed to the spike in oil prices that has socked their most profitable vehicles. And the nonsensical way that fuel-economy standards force Detroit to subsidize cars that consumers won't buy has helped put the Big Three in this hole.

SPOT ON!

Bailing out "national champions" because of their long history or politically connected work forces is something you'd expect from France. With rare exceptions -- Chrysler in the 1970s -- the U.S. government has managed to remain immune to that European disease. But as the nearby table shows, Washington has begun to make a habit of bailing out any business or industry that can marshal enough political clout. That's a lot of risk to put on the taxpayer dime, and that's not counting such other runaway liabilities as Medicare.

Okay:

1) That's just a $h!ty statement to make in the first place. But consider the source, it's coming from a traditionally conservative publication that probably already had it's ass saved (indirectly) through one of the bailouts already. Conservative publications and 'the street' are traditionally two-faced anyway.

2) Washington has been ran by whatever industry or corporation which had the most clout for going on 30 years now, why stop the circus for a little 'ol economic disaster?

but at least Bear Stearns was put out of business and its shareholders lost nearly everything.

And that's supposed to be a positive thing?

Regardless of where and why these federal bailouts started, American taxpayers can't save everyone. The only way to stop this parade of supplicants is to start saying no -- and Detroit is as good a place as any.

And there is the battle cry to rally the troops.

'We almost have Detroit dead! Say no! To a bailout, or they might actually recover and all our hard work is lost.'

F*ck this guy and ditto all the Honda/Toyota buying citizens that won't consider a domestic (READ: CONSIDER, NOT EVEN BUY) "just because" it's not cool or not in fashion. I hope you yuppies enjoy paying for my company to become successful again.

Sure, the big three screwed up... But how long are they going to have to pay for it in the eyes of these people? I'll tell you how long; until they're dead. So Detroit might as well man up and get cut throat. These people aren't going to buy your cars anyway, so make 'em feel stupid by putting out better product by any means possible.

Edited August 24, 2008 by FUTURE_OF_GM

[Robert Hall]

Here's a related article that appeared today in Seeking Alpha about Bankruptcy and the Big 3.

Bankruptcy and the Big 3

[FUTURE_OF_GM]

80 percent of people close to buying a new car said they would abandon an automaker if it were to file for bankruptcy

And some people here wonder why the media likes to talk up a Detroit bankruptcy and how it hurts the automakers.

Not surprisingly, the numbers were higher for the Detroit 3, and lower for most foreign makes.

But, of course.

At least a big one does. GM and Chrysler combined control just 30 percent of the U.S. market today, a nose dive from the days when the domestics dominated the industry. GM is fending off Toyota for the U.S. sales lead; Chrysler, once one of the "Big 3," is now No. 5 in the United States. And American-built cars from Toyota, Honda, and other "importers" now make up a sizable chunk of overall sales.

Shouldn't this be all the more reason for a bailout?

The presidential campaigners like to talk up manufacturing in american, yet our largest and most proud group of manufacturers is dying... Shouldn't we look at that as "Hey, we need to regain ground in this market" instead of "Well, they're not as relevant now as they were, so we'll just give the market away"?!?!?

That wouldn't happen in the auto industry if GM or Chrysler went down. No doubt there would be more job losses and financial pain, but it would probably be confined to the Rust Belt and other areas where the Detroit 3 were once dominant.

What about the engineering sector or R&D? GM is still one of the largest spenders in R&D in this country. What about the dealers and distribution?

Sure, it wouldn't be as big of a problem as it might've been 30 years ago, but to say that it would be confined to the rust belt is stupidity and an author being naive.

There's one other unsettling prospect: The market may not even need three domestic automakers. In fact, the quick shrinkage or even disappearance of a big carmaker might solve an oversupply problem:

I'll pull out my favorite balthazar quote from years past: "The market doesn't need 3 domestic automakers, yet it needs 12 plus import automakers?"

or borne by a few of the most beleaguered.

Yet another author trying to justify the agenda to murder Detroit.

[loki]

I wasn't trying to imply that the Federal Reserve was actually part of the Govt. Loki, you're definitely right - the Federal Reserve is essentially a private bank that loans (or prints) money for our Government; I was simply writing that they're the ones that bailed out Bear Stearns - with the complete backing of our fearless leaders in Washington. Whether or not we think the Federal Reserve should even exist would be a fun topic for the Lounge I think. As an aside, a good friend of mine wants me to read the book "The Creature from Jekyll Island" - he tells me it's a real eye opener about the Fed and their relationship with big banks and Washington.

i heard about that book, i may look into it myself.

on topic, would "loans" be fair play compared to the other companies (toyota), i can't say NO. I'd love to see GM take a stand and say no and work through it, assuming those loans would be worth anything in several years.

[Oracle of Delphi]

I look at it as a leveling of the playing field.

[regfootball]

I look at it as a leveling of the playing field.

because of all that japan does for its auto companies? lol, well they do....

[CSpec]

This is annoying, but the Fed bailed out Bear by letting JPMorgan buy it for nothing, so I'm not surprised.

[FUTURE_OF_GM]

I look at it as a leveling of the playing field.

[daves87rs]

I look at it as a leveling of the playing field.