Why Bailout US Auto Manufacturers?

[Kulindahr]

Well of course nothing is absolute. However, if the stick is losing all of your money and the carrot is profitability then the CEO must have something to put in or the stick doesnt have very much deterent effect.

For instance if I were to take over ATT and I had 5.6 million in net worth so I used all of that as my equity to put in 5.6 million to ATT so I could take over, I would then be very concerned that ATT prosper. If I only had a 100K then the stick isnt quite as painful.

Here I thought you'd argue that the CEOs of initial low worth would end up wealthy if they proved to be good at the job, but disappear if they weren't.

 

[HenryReardon]

Ford is prospering in Brazil. Why? because it is doing things down there that the greedy unions in this country won't allow:

http://info.detnews.com:80/video/index.cfm?id=1189

 

[Kulindahr]

It's interesting that the problem is that Americans just aren't buying cars, but the money for help is going to the automakers. You'd think that create Republicans would be proposing things like a $500 tax credit for buying a car newer than the one you have.

 

[frankfrank]

I'm FOR a bailout of the Big Three (in the manner proposed) - it's not that often that I disagree with G_A.

I haven't read the entire thread, but ALMOST EVERYBODY IS FORGETTING THEY'RE ASKING FOR A BRIDGE LOAN, NOT A GRANT/GIFT. A loan which, chances are, cannot ever be repaid - but "officially" entirely different from the GIFT of having a Trillion $$$ or so that was just THROWN AT the bankers, money launderers and Ponzi schemers.

The U.S. basically told the bankers, HERE'S YOUR MONEY, GODDAMIT, WE *INSIST* YOU TAKE IT OR ELSE, WE DON'T GIVE A FLYING F*** WHAT YOU DO WITH IT. The Big 3 want an amount that's a SMALL percentage of what's been done so far, and they're made to jump through so many hoops, including INVISIBLE hoops.

NOTHING, no accountability, no concessions, no changes, no oversight was asked of the financial houses.

I think the Big Three could get a bailout LOAN without changing the amount of money taken out so far. Take it out of what's been promised to the financiers!!! If the Republicans insist that the promises of the UAW contracts be busted and shattered, they can certainly break 3% to 5% (or even less, if there's actually been $2-3 Trillion or more of bailouts as I've been hearing in some places) of the promises made to the banks.

 

[smelter]

Ford is prospering in Brazil. Why? because it is doing things down there that the greedy unions in this country won't allow:

http://info.detnews.com:80/video/index.cfm?id=1189

.... but what about the future costs of building and maintaining retirement communities for the robots when none of them have company pensions or social security? Who's going to pay for the WD-40 needed to keep their joints from rusting in the damp Brazilian rain forest?

 

[JayHawk]

The U.S. basically told the bankers, HERE'S YOUR MONEY, GODDAMIT, WE *INSIST* YOU TAKE IT OR ELSE, WE DON'T GIVE A FLYING F*** WHAT YOU DO WITH IT. The Big 3 want an amount that's a SMALL percentage of what's been done so far, and they're made to jump through so many hoops, including INVISIBLE hoops.

NOTHING, no accountability, no concessions, no changes, no oversight was asked of the financial houses.

So we were absolutely ignorant the first time out of fear and we should continue to make stupid decisions.

 

[Kulindahr]

(shakes head with dismay) When will people learn that laissez-faire doesn't work?

That's hard to comment on, because laissez-faire has rarely been tried. Right now, we're far from it, with numerous de facto government-approved (or established) monopolies, privileged guilds, industry-dominated regulatory boards, etc.etc.

 

[Kulindahr]

Kulin, I don't know if I can agree with this. If there was ever a time that laissez-faire was tried, it would have been between the Civil War years and Teddy Roosevelt--years racked with periodic economic depressions...

That would be close, but there was still a lot of cozying up of big corporations and government types.
Things were pretty darned laissez-faire back after the Revolution, too, but that was a totally different economic climate, when corporations were still strange to most people, so everything was small shopkeepers, and the biggest businessmen were in shipping.

 

[HenryReardon]

.... but what about the future costs of building and maintaining retirement communities for the robots when none of them have company pensions or social security? Who's going to pay for the WD-40 needed to keep their joints from rusting in the damp Brazilian rain forest?

Take a look at the video a second time. Robots are the very least of what is happening in Brazil.

The really revolutionary part of that plant is the fact that some of the major suppliers of components have their own assembly lines within the Ford plant, and that is truly revolutionary - not to mention it must surely save a ton of money. I cannot imagine the UAW ever agreeing to such a thing in the USA.

 

[Kulindahr]

Take a look at the video a second time. Robots are the very least of what is happening in Brazil.

The really revolutionary part of that plant is the fact that some of the major suppliers of components have their own assembly lines within the Ford plant, and that is truly revolutionary - not to mention it must surely save a ton of money. I cannot imagine the UAW ever agreeing to such a thing in the USA.

It's not that revolutionary; it was written about back in the 40s, IIRC.
Of course, that was academia, and we know how American industry jumps on everything academia says and tries it!

That's why Japan killed us so bad economically for so long: after WW II, they realized it was our industrial power that had beaten them, so their businessmen sat down and read all the latest stuff from America about how to run businesses. When they put it into practice, most of it worked....
And in the 80s and 90s, when I had quite a few friends in engineering and other industrial internships, American industry was just getting around to even paying attention to work from the 20s and 30s.


Anyway... the concept is elegant, and has appeared in some science fiction, even: build everything in parallel, and converge the lines so when they're completed, they go in.
Beautiful.

 

[HenryReardon]

It's not that revolutionary; it was written about back in the 40s, IIRC.
Of course, that was academia, and we know how American industry jumps on everything academia says and tries it!


Beautiful.

The concept may be old, but the execution of it is somewhat more recent, particularly in that industry.

Too bad Ford et al aren't allowed to innovate to that extent in this country.

 

[smelter]

Take a look at the video a second time. Robots are the very least of what is happening in Brazil.

My comments about robots were all satirical.

The really revolutionary part of that plant is the fact that some of the major suppliers of components have their own assembly lines within the Ford plant, and that is truly revolutionary - not to mention it must surely save a ton of money. I cannot imagine the UAW ever agreeing to such a thing in the USA.

They would if the component workers were also unionized. Why are you so dead set against assembly line people making a fair wage? Whats wrong with workers having representation to prevent management abuses. Management is measured by profits that result in fat bonuses for themselves, reason enough to have worker protection.

 

[Kulindahr]

I must have missed your previous post in which I could find proof to this assertion. What stops Ford from innovating?

If it were in Oregon, a number of things would stop them, but mostly it's been the unions. Ford simply cannot put more workers in its U.S. plants who will be getting extortion wages.

The fact that Henry Reardon points to operations in Brazil as some sort of laudable goal shows the typical tunnel vision that infects the Republican Party.

Brazil is not any kind of role model. Let's look at the statistics: Upper Class in Brazil=1%; Upper Middle Class=3%; Middle Class=11%.

The poor? 85%.

Do we really want to copy Ford's operations in Brazil?

Yes, we do, because Ford's operations in Brazil are efficient and effective. They provide a good wage.


And before you go citing single-point statistics, go look at the progression -- the grand total of what you list used to be under 5%, and not all that long ago. So Brazil really is a good example, because they're evening the economic slope -- while the U.S. is worsening it.

 

[Kulindahr]

I am a real patriot -- I look for goods made in America, by America. Anytime I need something, and my only choice is one "Made in China" or some other place, I feel great shame. I'd rather have nothing at all, than junk made in foreign countries.

I'd say you're a shallow patriot. A real patriot doesn't support things just because they're American, he supports whatever is best. He also supports what is best for the rest of Americans, and for the lower half of the economic rung, that means whatever goods can be afforded. When the quality is the same, you go with the lower price.

With all his advice on being frugal, I believe Benjamin Franklin would laugh at your definition of being a patriot -- as I in fact do.

 

[HenryReardon]

I must have missed your previous post in which I could find proof to this assertion. What stops Ford from innovating?

The United Auto Workers would NEVER allow that kind of innovation - it's much to threatening to their continued existence.

 

[Kulindahr]

It's a patriotic position to have. The Detroit companies are part of our identity here in America. Could you imagine the scandal if Germany let Volkswagen, Mercedes, and BMW fall apart?

The belief that that's patriotic is one reason American car makers slipped so far and for a long while made such crap: they knew that Americans would buy their cars, no matter what they turned out. It's what made both unions and corporations believe they could just leech off Americans for whatever they wanted.

Patriotism would acknowledge that the foreign competition is a good thing for the United States, because it has forced U.S. automakers to change their ways. Obviously, they haven't changed enough.

Reagan had it right when he said we should pursue excellence. If the excellence in automobiles lies with a foreign make, I'll buy it -- a "vote" to tell American manufacturers to get with the program.
See, that's called "freedom" -- and it's support of freedom that is truly patriotic.

 

[HenryReardon]

Brazil is not any kind of role model. Let's look at the statistics: Upper Class in Brazil=1%; Upper Middle Class=3%; Middle Class=11%.

The poor? 85%.

Do we really want to copy Ford's operations in Brazil?

The country in which the operations take place are totally irrelevant to the point. Totally.

 

[HenryReardon]

They would if the component workers were also unionized. Why are you so dead set against assembly line people making a fair wage? Whats wrong with workers having representation to prevent management abuses. .

Who is to say what constitutes a 'fair' wage? You? The UAW? Hardly.

A 'fair' wage can be fairly described as the amount an employer is willing, but not under compulsion, to pay to a worker who is willing, but not under compulsion, to accept.

Labor Unions are inherently evil and have outlived their usefulness by at least a century. Time to do away with them once and for all. Not to mention the fact that "collective" bargaining is inherently anti-American in concept.

 

[Centexfarmer]

Who is to say what constitutes a 'fair' wage? You? The UAW? Hardly.

A 'fair' wage can be fairly described as the amount an employer is willing, but not under compulsion, to pay to a worker who is willing, but not under compulsion, to accept.

Labor Unions are inherently evil and have outlived their usefulness by at least a century. Time to do away with them once and for all. Not to mention the fact that "collective" bargaining is inherently anti-American in concept.

And you say this as if every Corporation outside of the US Auto Manufacturers haven't driven down wages, off-shored jobs, or sold out the American work force, that somehow all of that is the fault of the Labor Unions.

A "fair" wage is whatever the market will bare, and up to this point with "illegal immigrants" flooding the workforce, and products being sold in bulk over the item itself, and depressed wages because of all of the above to "remain competitive in a global economy," we can blame the Labor Unions?

Right.

 

[Centexfarmer]

The United Auto Workers would NEVER allow that kind of innovation - it's much to threatening to their continued existence.

Do you have any sources to back up your assertions here?

Hell, I'll even give you anything from Wikipedia!

The UAW is only attempting to exact fair compensation that the Board of Directors are giving their CEO.

But that problem with everything is that the "Unions" aren't allowing the automotive industry room to compete with foreign manufacturers?

The Republicans have always been looking for an excuse to "bust the unions," and I'm not the least bit surprised that they would use this as a chance to further disenfranchise the American Workforce (with our without a bailout) so that they can put another jewel in their hats all in the name of "conservative capitalism."