What do you do when your industry starts to go belly up and you can’t make enough revenue to stay afloat? If you’re a short-sighted U.S. auto maker, you beg the government for $25-50 billion in immediate, low-interest loans in order to retool your plants, so you can start producing the hybrid cars you should have been planning years ago.
The U.S. House of Representatives is considering loaning at least $25 billion to GM, Ford, and Chrysler, possibly as part of a second economic stimulus package. If so, they’ll have to move fast. Congress will go on break at the end of this month and may not reconvene for the rest of the year.
“House leadership weighs loans for automakers” [Reuters]
(Photo: Getty)
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Heh. So old satire songs still have some legs, apparently–here’s Tom Paxton’s “I Am Changing My Name to Chrysler,” performed by Arlo Guthrie:
It is not just the leadership, you should listen to some of the UAW union workers. They feel that they are entitled to the excellent benefits and pay while being able to slack off. While 3/5th’s of my relatives and in-laws work for either GM, Delphi, or Ford, I do not think this loan/bailout should happen.
The whole industry needs a reboot. Let them go bankrupt and either restructure or get bought out. There is way, way, way too much waste at the Big 3. Pensions and health care are the big problem. They should have stopped offering pensions and health care for life a long time ago. UAW members did not even help pay for health insurance until three years ago.
@scooby2: I’ve got to agree with you on that one, about the union laborers. At some point a mindset developed that you should get paid no matter what you do.
A friend told me about his union days. His job got changed and he had to start work in another town and had to get on the line making cars in order to keep his pay. Long story short, he didn’t like it…yadda, yadda, yadda, and the plant’s operations manager suggests that he should take a fall and get worker’s comp until his retirement years. He didn’t do it (and I think he regrets the decision), but he’s told me other stories about he and other guys not work for days but still get paid and borrowing company equipment for personal use. And more.
After hearing his stories I could just imagine how much cheaper my automobile could be if the percentage of the workers who played those scams could have been fired.
We already are bailing that failed war out at the tune of $125 Billion PER YEAR. What’s the big deal?
3 trillion in war debt. Hmmm… I would rather spend money bailing out failing companies than killing people with million dollar bombs.
I’m just saying, it’s a drop in the bucket at this point.
This is actually what the Republicans would try.. oh wait.. the Democrats are the ones proposing this….
OMG what will the Obama people think?!?!?!
Maybe if we had a real choice for president instead of one in the same we’d have some real change this election instead we’ll have more buyout’s of corporations first Airlines, then banks, then Car companies, what’s next? we buy out Beer companies? or maybe Kraft foods?
I’m going to be shouted down for this but here goes.
It is a loan that’s proposed. The automaker must pay it back with interest. Small interest, yes, but interest nonetheless. With Chrysler’s billion dollar bail out, Lee Iacoca and the others got that paid back and made the company profitable (thanks minivan). Yea, too bad it didn’t last for Chrysler, but that’s the breaks. They were bought out by Daimler (sorry, merged) and then sold again when Daimler realized that the American car market is crazy. Hmm, sounds like capitalism to me. In the end jobs were saved with Chrysler’s bail out back when and we were able to see such beauties as the Dodge Viper come to market.
I don’t see loans to the auto industry as communistic.
So wait….how does this work again? If you’re a big corporation and you succeed, you keep all the profits, and your CEO’s and high-level managers all retire to an island in the South Pacific with millions in the bank.
If you fail, it comes out of the taxpayer’s pocket. Sure, it’s a loan, but a company that shows such ineptitude deserves to succumb to “natural selection.” If I go out and make a bunch of bad investments, horrible financial decisions and generally mismanage *my* money, nobody is going to be there to help me.
“Borrow all you want, we’ll print more.” The auto companies will get their chance just as soon as the treasury is done printing the funds for the Fannie Mae/Freddie Mac bailout.
I mean if this was Haliburton, the GOP would be SCRAMBLING and taking out second mortgages to keep them going.
@ironchef: You have to wonder how many mortgages the Whitehouse has on it.
Screw them. Just because they’re losing their butts to foreign companies that actually innovate and give people what they want doesn’t mean they deserve to be rewarded for it. This is just as asinine as the ongoing airline bailouts. Invest that money in infrastructure for other means of transportation like high speed rail and catch up with the rest of the world already.
Perfect – Let ‘em all go under or get bought up by the European and Asian manufacturers. GM and Ford can scream all they want about how great their cars are for mileage, but when you also figure in depreciation and their pitifully short operational life, the costs go up dramatically.
Let Ford be taken over by Honda, GM by Toyota, and Chrysler by …..well, I guess no one wants them!
Hell to the hell NO. Let Toyota buy them for pennies on the dollar so future business students will nod sagely and say, “Short term profits alone will lead to ruin!”
Besides, they export more jobs than the international auto companies import.
Guess they wish they saved a few billion dollars they spent years past convincing US consumers that driving street sweepers were “safer” about now, hmm?
Go to another country and SUVs/Compensatory Pickups are commercial vehicles. What BillyJoBobJimmyJack drives to their minimum wage job is what other nations use to repair roads and haul freight. Think of driving a PennDOT (I’se from Pennsyltucky) Maintenance truck for commuting. Yeah, it has great utility and is really safe for your progeny. Just don’t hit the long-haired, Birkenstock-wearing, literate liberal on the bicycle.
We should not have dropouts making physician wages. That’s just stoopid. However, Henry Ford had the correct idea…pay your labour enough to afford your product.
Capitalism, yet the government bails out its businesses, that whines enough. Either thats hypocrytical or we are not a free market anymore, something of a mix between capitalism and socialism.
This is such bullshit. This provides a temporary bandaid to a gaping stinking infected pus filled gangrenous wound – wholly inadequate. Plus it encourages big companies to be short sighted, take dangerous risks, NOT perform their necessary duties, etc etc ETC. This is just bad bad business. This is almost as stupid as that 600$ tax refund check bullshit earlier this year. As if that wasn’t socialism wrapped in a f$#@ you note from G Bush. What an ass!
I would rather bail out an American Auto Manufacturer then to continue to dump billions of dollars in Iraq. It’s time to re-focus on our own issues at home. Furthermore, that bailout will help to alleviate our dependency on foreign oil.
If this happens, and Congress shows its face in public, then it will be time for for THE PEOPLE to take over OUR government.
Chrysler’s Chairman/CEO is worth a BILLION or more.
Ford’s families are worth a BILLION or more.
GM management team can cough up a BILLION or more.
I do not have this type of chump change to hand out! They must think we are CHUMPs.
@davebg5 [quote]Getting many of the execs to walk is kind of the idea. They were dead wood who got these companies into this problem in the first place. I could think of worse things than seeing some no-talent assclown of a CEO step down in disgrace b/c he can’t get all this free taxpayer money to clean up a mess of his own creation/perpetuation unless he takes a massive pay cut.[/quote]
Yes, but many of these CEOs have Harvard/Yale/Princeton/Stanford degrees. Doesn’t that make them better than us?