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Auto Industry Bailout - what do you think?

Original post made by Carl on Nov 12, 2008

The automobile industry wants federal help, our hard-earned income taken as taxes. Has anyone asked - why NOT let the weaker companies go bankrupt or fail? Our national economy has survived the restructuring of the steel and airline industries. In the high tech world entities are constantly coming and going.

Let GM restructure as market forces demand. To bailout this firm only delays the inevitable.

As President-Elect Obama has said...

"There's new energy to harness, new jobs to be created, ...
"The road ahead will be long. Our climb will be steep. ...
"And we know the government can't solve every problem. ...
"And, above all, I will ask you to join in the work of remaking this nation, the only way it's been done in America for 221 years - block by block, brick by brick, calloused hand by calloused hand.

The unleashing of intellectual capital held by GM into other industries, the reconfiguration of the assets into more fuel efficient car manufacturing, so much potential is being held back by the forces who don't want *real* change.

Let GM and others fail. This the real change we need.

What do you think?

Comments (25)

Posted by Cholo, a resident of Livermore
on Nov 12, 2008 at 8:27 am

I think that the auto industry in the US will collapse despite the federal bailout. I don't know anybody that owns a car made in the US. They have failed, NO MORE BAILOUTS.

Invest the $$$$$$$$$$$$$$$$$$$$ in schools, math, science, arts, sports, streets free of criminals, green technology and bicycles. What else?
Plain clothes and get rid of QVC!

Find some honest people like myself control the money.

Posted by pay my own way, a resident of Another Pleasanton neighborhood
on Nov 12, 2008 at 8:48 am

I agree with the above posters. I pay for my own expenses and now get to pay for those of the greedy people who have been bailed out already. Have you read about ANOTHER big party, this one in Phoenix, for the benefit of AIG executives? Food, drinks, entertainment, limos, what next? The government will never police the spending of these idiots so we better just not give them the money at all. US automakers gave us the moronic Hummer -- let them eat s**t for all I care, they will get what they deserve.

Posted by Another Gatetree Resident, a resident of Amador Valley High School
on Nov 12, 2008 at 9:17 am

My father worked for Chrysler in the late 1960's. He was laid-off when the Japanese Automakers started making huge in-roads in the American Marketplace. At that time, he became an employee of Datsun and I can vividly recall him stating until Detroit retooled and built smaller, more fuel efficient cars they would continue to be losers in the marketplace. He restated that opinion during the gas shortage of the late 1970s -- prefacing it with "Detroit still has not learned."

As a result, I tend to resent this bailout. However, there are a lot of other "connected" industries that will suffer if Detroit does crash and burn. What does need to happen is very close monitoring of fund usage and progress toward REAL fuel efficient car manufacturing.

BTW, the Hummer was originally built for military use by American Motors Corporation in the late 1980's.

Posted by Unless, a resident of Amador Valley High School
on Nov 12, 2008 at 3:55 pm

Unless the Feds are willing to offer any business in trouble a "bailout"...... I think the best thing long term would be to let the big auto makers fail. You'd find that smaller more efficient and state of the art vehicles would be built and sold and American car makers could truely become competitive in the world market. Union labor is what is KILLING the auto industry.

Posted by MainStreetDiva, a resident of Vintage Hills Elementary School
on Nov 12, 2008 at 4:25 pm

Say what you will about American cars, I LOVED LOVED LOVED my bright red Ford Mustang convertible! And never had a problem with it through 100k miles.

One report I saw stated that the cost to help bail out the auto manufacturers NOW will be *drastically* lower than the cost to help address the ripple effect of their failures later. This is mostly due to the tens of thousands of employees looking for work in a different industry, plus the feared failure of so many businesses who provide parts and services to the automotive industry. I'll try to find a link to that article and post it here.

Posted by Another Gatetree Resident, a resident of Amador Valley High School
on Nov 12, 2008 at 4:34 pm

Unless -- I disagree. While I don't believe Unions have the clout or value they've had in the past (soon to be evidenced when the AT&T/CWA contract expires on April 4, 2009), the real issue lays at the feet of Corporate AND the Consumer.

The most important thing to Corporate is stock value and sales numbers. Investing in research and development is a drain on Corporate Coffers. Why R&D when Americans LOVE Gas Hog SUVs with all the gadgets that do nothing but add more weight and decrease gas mileage?

If Consumers were demanding more fuel efficient vehicles, WE would have driven Detroit to respond to the marketplace. Instead, we had "Sarah Palin's" shuttling kids to practices in SUVs they can barely drive, let alone park. But they looked cool and trendy in the process.

While I do have some resentment on this latest bailout, I also believe by and large we have only ourselves as consumers to blame. Ditto the Mortgage Crisis. And now we're all paying for it -- and dearly.

Posted by Lisa, a resident of Donlon Elementary School
on Nov 12, 2008 at 8:46 pm

This is just one big payback to the Unions. The auto industry is not in trouble...look at how well Toyota is doing here in the US. Last I heard they are part of the auto industry. This is about GM in trouble because of all the unrealistic union contracts they got themselves into and now can't afford. ....Now the Unions are looking for a payback from the Dem party to bailGM out out so GM can honor those contracts. Look @ how many $$$$ went to the Dem party from UNION dues. That money helped get them elected. Anyone who can't see that is just plain blind.

Posted by Another Gatetree Resident, a resident of Amador Valley High School
on Nov 13, 2008 at 4:58 am

*Proudly Blind*

Posted by Unless, a resident of Amador Valley High School
on Nov 13, 2008 at 9:27 am

I'll expand on my comment regarding Unions. 1. They are outdated and fill a role not at all consistent with their founding principles etc... They now seem to represent the highest pay for the least amount of work and have destroyed the competitive market. As soon as any business gains significant presence without union labor they are picketed and the lower level workers brainwashed into believing they "need" the union to be paid "fairly".

2. Ever notice that just like in a lawsuit where the only real winners are the lawyers that in most strikes, the workers almost never get back lost wages? Oddly enough the contract increases agreed end up being a wash at the end of the negotiated contract and the strike ends up with a net zero gain for the workers (almost never recognized publicly). There is a huge overhead for union management which is the only faction of the unions that _really_ benefit from unions.

3. Why do highly paid professional athletes need a union? Unions were originally for stopping "sweat shops" and helped people get a living wage for unskilled labor.

I'll repeat, paying union contract labor outrageous hourly wages for unskilled jobs in the american auto industry is killing that industry. Every other business is being forced to scale back and deal with reality. The sub-prime loan market is at the core of this breakdown. I am tired of hearing all of the complaining night in and night out about how people were coersed, mis-led etc... into taking loans that were bad. Whatever happened to buyer beware, and taking responsibility for ones own actions? All of the "equity" that has been lost in real estate has really not been lost at all, it was simply never really there. All of the energy right now seems focused on rewarding people for bad behavior.... ie... BAILOUT's

2,000 sq ft homes in Pleasanton were NEVER REALLY worth $1M dollars.

Posted by Another Gatetree Resident, a resident of Amador Valley High School
on Nov 13, 2008 at 9:58 am

Unless -- I still disagree -- even with your expansion.

No Union Employee is paid what a Corporate CEO is paid. While they may not be as well educated, I would bet that CEO couldn't do the job a Union Employee does. Thus I stand by my "Corporate" is more to blame than the "Union."

I do not disagree the overhead associated with Union Management is out of control. That's why in all my years as a "craft-level" employee I was never an official member, and for half of those years I didn't pay dues. I simply did not feel I was getting back what my dues were supposed to support. I also do not believe the Union Management has the real interests of the workers at heart anymore.

That having been said, I still feel the real crux of the current issue under discussion is not the Union Rank and File. It is Corporate and the Consumer. Demand Smaller and Greater Fuel Efficiency. Until then, expect BAU.

Posted by Bruce, a resident of Pleasanton Heights
on Nov 14, 2008 at 10:08 am

The major problem with the unions is not current wages. It is the lifelong benefits paid to retired workers that the foreign manufacturers do not have to pay. I read sometime ago that the above costs add about $3000 to the cost of each vehicle. So in order to compete, U.S. mfgr's have to build less quality into their cars, or charge more for them.

The only salvation for the American auto industry will be to file bankruptcy like the airlines have done to change the union contracts, or else have a Federal bailout every year. I'd rather have my tax dollars go to education or some other productive endeavor.

Posted by Resident, a resident of Another Pleasanton neighborhood
on Nov 14, 2008 at 11:01 am

I disagree with bailing out the auto industry. We used to buy only american cars, but they were such poor quality, that we switched, and now only buy foreign cars. The auto industry is in trouble, no doubt, but it has more to do than the current financial crisis - it has to do with their inability to come up with good, reliable, gas-efficient cars. Do not bail them out, there is no guarantee that a bailout will solve their problems.... they need to face the consequences, get rid of incompetent CEO's and others making decisions.

Posted by mooseturd, a resident of Another Pleasanton neighborhood
on Nov 14, 2008 at 12:13 pm

mooseturd is a registered user.

NO, NO, NO. No gifts. No handouts. No loans. The big three have failed. The sooner we sweep up the wreckage, the better off we will be.

Posted by Restructure, a resident of Foxborough Estates
on Nov 14, 2008 at 12:42 pm

The entire US auto industry needs to be restructed period! All a bailout will do is prolong the inevitable. The US auto industry has been on life support forever. That is WHY they must have credit to survive as they never get to a cash/profitability position. If after 50+ years any business hasn't figured out whether it can be profitable it dosen't deserve to exist!

Posted by jackals, a resident of Vintage Hills Elementary School
on Nov 15, 2008 at 7:29 pm

Save the US auto industry, not GM and Ford.

As Carl stated, other companies have either evolved or failed and the same has to happen to GM and Ford.

I think the US taxpayer should make a substantial investment in moving the industry away from gasoline powered vehicles as the technology is here just not yet the funding and demand to bring it to market with mfg scale and efficiencies.

Some dollars should buffer the impact to the rank and file workers.

Bond holders and shareholders took their risks and should not be bailed out!!

Posted by Qwerty, a resident of Another Pleasanton neighborhood
on Nov 16, 2008 at 3:10 pm

Bailing out the automakers would be a bad idea. Look what has happened with Amtrak. What incentive do they have to operate efficiently if they know they're going to get help from teh government?

Posted by MainStreetDiva, a resident of Vintage Hills Elementary School
on Nov 20, 2008 at 8:49 am

After reading a bit more about the Auto Bail-Out issue, it seems that allowing these firms to go bankrupt would allow them to restructure to be more competitive. Here is an article that explains how that option could work:

Web Link

Posted by Another Gatetree Resident, a resident of Amador Valley High School
on Nov 20, 2008 at 8:53 am

When three CEOs and the UAW's Union Head can board private jets (rather than "jet-pooling") to beg for a bail-out, there clearly is something outta wack here.

I recommend they go tin-cupping somewhere else.

Posted by Call your representative, encourage a NO on the auto industry bailout, a resident of Another Pleasanton neighborhood
on Nov 21, 2008 at 4:32 pm

I just emailed Mcnerney asking him to oppose the bailout. I recommend for everyone to do the same.

The auto industry is suffering, but it has to do with more than just the financial crisis. Their CEOs are paid too much, get too many "goodies" and their union contracts are simply outrageous.

I oppose my taxpayer money to go to a bailout that will finance fat paychecks and ridiculous union contracts.

Please email your congressman/woman and let him/her know that you oppose the auto industry bailout. And if you know anyone in Pelosi's district, please encourage them to do the same. I mean, Pelosi seems out of control, her letter to the auto industry (posted today on CNN) does not mention anything about money not going to the unions should the bailout pass.

Make your voice be heard!

Posted by email address, a resident of Amador Valley High School
on Nov 21, 2008 at 4:50 pm

Nice post Call,

Can you please post McNerney's email address since you just emailed him. It will make it easier for folks to email him quickly if they can just cut and paste it.


Posted by Jerry, a resident of Oak Hill
on Nov 22, 2008 at 1:49 am

Why waste your time e-mailing McNerney. He'll do what Pelosi tells him to do...

He'll "glad hand" at his so-called "Town Meetings", then do what he's told be his party leaders...

This is a trait used by all politicians that wish to remain at the public trough...

Posted by Mcnerney Info - district 11, a resident of Another Pleasanton neighborhood
on Nov 23, 2008 at 9:41 am

Web Link

Web Link

Posted by James, a resident of Pleasanton Meadows
on Nov 24, 2008 at 1:25 pm

I strongly oppose the automakers bailout. ford and gm have ignored the market and consumer trends for decades and keep pushing out the same old garbage vehicles. i have tried to stay loyal to american car makers but my last two ford products have been maintenance nightmares.

to say nothing of the fact that standard features on most japanese cars are still added expensive options for american cars. i think that both the corporate suits and the unions are equally to blame- they cannot or will not adapt so they face extinction by their own hands.

Posted by Carl, a resident of Del Prado
on Dec 8, 2008 at 9:18 pm

This article explains more about why a bailout/loan is not a good idea.

Web Link

Posted by Carl, a resident of Del Prado
on Dec 10, 2008 at 5:44 am

Updated link:

Web Link

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