The American Car makers Bail-out

As one agrees that they should get the loan.

Many years ago the UK had a mass produced car manufacturing base – that went under Thatcher and the remaining Conservative governments. Rather than helping them out the Tory governments said in the world of the free market they will live or die.

There was a problem with the unions at the time – much is the same in the American car industry now.

There was a problem with the crap management – the same with the American car industry now.

There was many who were over-paid for the jobs they did. Again, the same with American car makers now – and lastly but not least – British cars were garbage – much the same with American cars now.

So why would I agree with those car makers getting a loan deal?

If this had happened in the UK all those years ago when the car manufacturers were sold off thousands and thousands of other jobs would have been saved. It isn’t just a matter that the car manufacturer would still be able to produce crap – it could have been negotiated that the lender have some say in what happens from there on in. Get good management in and if necessary renegotiate employment contracts.

That would have to happen – because if you want everyone to have a job there has to be a great deal of give and take on both sides. But one side this time will have to give more than the other. Having those jobs is very important – but you must also be able to sell at a profit so you can reinvest.

It just isn’t about the big 3. It is all about those who supply them and the jobs that will go if one or more of them should close. Making a much better product will be re-tooling – getting those cars built in the US is a part of a larger package.

Part of that package would be the immediate dismissal of such bad designers and management and workers taking a pay cut that reflects their jobs as of today. Getting $45,000 a year is a healthy wage.

People don’ buy American cars and there is one simple reason for that – they are not good cars. THAT is what you have to change first and foremost.

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About Bolshy

Blogging in the ether to see if that elusive literary agent or publisher wants some new talent.
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0 Responses to The American Car makers Bail-out

  1. leapsecond says:

    If they are crap cars (and they certainly are), why don’t we let them fail so there aren’t any crap cars anymore?

    By the way, not everyone deserves a job. And I’ll leave it at that.

  2. Amber says:

    What’s the point of appeasing people with specifications in the legislation when the Administration can in turn ignore many of those restrictions and directives to use the money as they please? They passed the $700 billion bailout under the expectation that they would buy up bad debt but ended up buying corporate shares instead. They also have redacted and blacked out sections of contracts released to the public that specify who is getting paid how much in taxpayer dollars. Now they’re talking about “carving out” a section for the auto industry? Congress doesn’t have the numbers to pass it, but Paulson can do what he wants without congressional approval; he just doesn’t agree with them. That’s why they’re talking about waiting for Obama to take office so they can use the powers trusted to the Secretary of the Treasury to push it through without any go-ahead from the constituency or the congressman that represent us anyhow. The current state of American democracy is sad.

  3. Will Rhodes says:

    If they are crap cars (and they certainly are), why don’t we let them fail so there aren’t any crap cars anymore?

    Brett – it will be far cheaper to retool than it will be to start from scratch. The only thing that will happen if these companies go is that the cars will be built in Korea or Japan or even worse, Europe.

    I agree about the jobs – that kind of management should never be allowed to be a part of any company.

  4. PiedType says:

    Hmm, I just wrote about this earlier today, and I came down on the other side. If GM can’t compete — and it hasn’t for a long, long time — they don’t deserve to survive. The world has changed and GM hasn’t.

  5. leapsecond says:

    I was talking about unskilled workers, but yes, blind and corrupt management is certainly what got these companies into their mess. I agree – those managers should not have a job. Period.

    It doesn’t matter where these cars are built, though, of course, I’d like to see them built here in the US of A. But if these managers (and workers, too) didn’t get their act together and build better cars, they deserve to go down.

    I see the collapse of GM as a message to all American companies: innovate or die. And that’s a pretty good incentive.

  6. An American Liberal says:

    I am not a huge fan of this bailout for the automakers, but at this point, it is starting to look like a numbers game.

    What the hell does that mean? It means that 2.5 million jobs are on the line here, with over $100B worth of yearly salaries about to go up in smoke. Most of these job losses would be in specific municipalities leading to a significant drop in their tax revenues combined with a huge spike in requested services.

    This loss taken to its more grim conclusion results in Detroit and Michigan requesting a loan to keep their respective municipality services running.

    Furthermore, this money was already promised to the Big 3 and signed into existence by President Bush on Oct 1, 2008. The money has not been made available to them due to “red tape”. Guess how much this loan was for? That’s right, $25B dollars. The money had been approved by the federal goverment in the form of a low interest loan to help with the retooling of the auto industry toward the production of more fuel efficient cars. For whatever reason, this money is not being released….

    Today, we had Citigroup, who took our taxpayer money and paid out general dividends, announce they were laying people off. That’s right, for the same amount of money, CitiGroup paid off their stock owners with our tax money and then laid off American workers. That doesn’t make the bile in the back of your throat come up a bit?

    Alternately, we can “loan” the car company’s $25 billion dollars and save 2.5 million jobs ($100B in salaries per year).

    None of us like this process, and to be honest, I am not a big fan of the Big 3. But if I have to pick how my tax money is spent, I chose to spend it to keep American jobs.

    Warmest Regards.
    An American Liberal

  7. Matt says:

    Reposted from “Why not tax?”:

    By advocating the government investment in one company over another, you are unfairly insuring one company over another. Example: I run a business into the ground, but it’s seen as really important to our country (GE, let’s say). The government freaks out, buys stock (or gives lump sums) to ensure I have enough capital to still function and then gets some dividends in the future. You, on the other hand, manage your company well and experience a slow down rather than a crash. The government, though, doesn’t invest in you, because you aren’t failing. Sound fair?

  8. a former republican says:

    6 out of 10 Americans are uninformed ! and they probably haven’t driven an American auto lately either. The most recent press regarding the definition of what is an American automobile…….hum, that’s easy. It all has to do with JOBS ! The transplants may employ Americans; however, their true reinvestment is sent back home (as it should be). Funny we cannot see the affect of this…. Unless we truly believe this doesn’t matter, we need to change the way we think as Americans before we become someone else. These jobs affect retail, state unemployment funds will fail, good bye vacations to the South! America will see how this WILL affect them……….the PBGC will FAIL…..this is the insurance company protecting all ERISA pension funds (trust me ….they are seeing red with this market)……..if you know anyone that is receiving a monthly check…..beware !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! keep buying foreign………………and this IS destiny.

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