Will GM be Allowed to Fail?
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Blake442 said:
I'd like to see the tables turned in such a way that American companies are competitive with Japanese companies because of the labor situation changing. That way, they don't need protection to survive because the market will work to their advantage naturally. Then the workers have jobs, the consumers have good cars, and the company prospers without the iron fist of government getting in the way.
I also have to wonder just where all of this money is coming from? We need to cut government spending, not use the government to prop up industrial dinosaurs which will eventually fail anyways. There is a historical precedent for this sort of thing. It was called "British Leyland". They had labor problems with unions that were terrible, and the company was a massive conglomerate of over 10 brands, none of which liked each other or would willingly share resources. Some of the brands include: Triumph, MG, Jaguar, Rover, Range Rover, Land Rover, Morris, Austin, Mini and a number of other lesser known British cars. So, what exactly happened to them? Well, they too were too large to fail and so the British Government under the Labour Party took it over. This did nothing to improve product quality (BL quality was about the same as the communist block) as the union workers felt they could never lose their jobs. Eventually the Thatcher Government sold off the assets of BL to British Aerospace with the agreement that they could not sell it for 5 years. 5 years later, it was sold to BMW who began the deconstruction of the company. In the end, the government did not save BL. The net result was that the whole British car industry wound up owned by foreign companies like Ford, BMW, and Tata to name a few and many of these old brands disappeared. Plenty of jobs were lost in the end, because government cannot bail out a company with the intention of creating a welfare corporation that exists just to create jobs. If people do not want the product being sold because it is junk all that a government can do is prolong the inevitable and waste tax payer money.
If GM fails, it does not necessarily mean the end. It may mean that the viable product lines and means of production are sold off to other companies who will then do what is needed to make it work. Honestly, does GM really need a Chevy, Buick and Pontiac version of the same car with minor variances in trim? Let the markets work. It will be painful, but what is about to happen is inevitable. Let the market correct itself before we wind up in an even worse situation from the "solution" some politician comes up with.
I really don't want to see a massive printing of new money as it will devalue the dollar to nothing. The risk of hyperinflation is real if we keep printing more and more money. Look at history and see what happens when a government tries to stabilize things by printing too much cash. At one point in Wiemar Germany, the Mark was so devalued that it was actually cheaper to burn it than to use it to buy firewood! Other nations have experienced hyperinflation in more modern times including Mexico, Argentina, Bolivia, and Russia (after the fall of Communism).
If GM fails, it does not necessarily mean the end. It may mean that the viable product lines and means of production are sold off to other companies who will then do what is needed to make it work. Honestly, does GM really need a Chevy, Buick and Pontiac version of the same car with minor variances in trim? Let the markets work. It will be painful, but what is about to happen is inevitable. Let the market correct itself before we wind up in an even worse situation from the "solution" some politician comes up with.
I really don't want to see a massive printing of new money as it will devalue the dollar to nothing. The risk of hyperinflation is real if we keep printing more and more money. Look at history and see what happens when a government tries to stabilize things by printing too much cash. At one point in Wiemar Germany, the Mark was so devalued that it was actually cheaper to burn it than to use it to buy firewood! Other nations have experienced hyperinflation in more modern times including Mexico, Argentina, Bolivia, and Russia (after the fall of Communism).
Gm?The Big 3 (And yes Ford)are not bailed out by 2009 we are fckd big time.. 3.5 million jobs by-by not like there isn't enough yet...but lets give *** dollars to other countrys?dont't get it! :evil: :evil: :evil:
Where's the money coming from? Ronny Reagan invented the Borrow and Spend technique, vs the Tax and Spend. GW loved Reagan and he emulated him in historical proportions. If you voted for Bush you deserve everything coming to you, including a tax bill to pay just the interest on the debt, let alone the humongous debt. I suspect Obama is gonna push his programs and get what he said he wanted come hell or high water.
I am in no way arguing that the failure of the US auto industry is a good thing. What I am saying is that we don't need to spend money to keep them afloat if they have no ability to be self sufficient. There are big problems they face due to both the financial markets and public perception of their products. Remember that GM is VERY tied up in subprime mortgages because GMAC finance has Homecomings (GMAC Mortgage) as one of it's arms, and they catered to the subprime market. I just don't want us to indefinitely prop up companies and incur more and more debt that will never be paid back.
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