TriShield

http://money.cnn.com/2006/01/26/news...ex.htm?cnn=yes

So... when did we become content to sit back and let our domestic industries be ravaged by foreingers to their benefit at our detriment? When did it become really cool to buy only foreign cars?

I've been reading political discussions of US auto industry aid and many on both sides seem content that our government should do absolutely nothing to counter Japan's currency manipulation or South Korea's subisdizing Hyundai both of which aim to dominate globally.

They really believe we will all be better off if Ford and GM simply disappear and that sound economics dictates that any sort of help would be a horrible idea. Of course there was no shortage of people who believed the government should support all the workers who are left jobless and without retirement when their employers disappear.

Does this actually make sense to anyone? What does everyone think about this?

Vendetta

There are a ton of arguments to be made here... capitalism is a free enterprise, social darwinism rules. GM has been **** in the opinions of most people for the past decade... if there's a better product, it will succeed.

At least, that's the hope that all who believe in our system place in capitalism... unfortunately it's not always true IMO.

TriShield

It's certainly not the case here. It seems most people assume the playing field here and globally is completely level when it fact it really isn't. They also seem to assume the governments of other automakers follow the same economic philosophy the US does.

If attitudes don't change it's going to cost us our domestic automobile industry and trickle down from there. It won't stop with just autos either.

PongoX11

iTrader: (15)

So you prefer a Socialist system coupled with trade barriers?

TriShield

You prefer our government allow an entire sector of our economy to evaporate?

LS1LT1

iTrader: (16)

Exactly.
They don't buy ours, I won't buy theirs.
GM and Ford FOR LIFE!

Hoss Ghoul

iTrader: (2)

Imagine if tarrifs didn't force the Japanese to sell their cars/trucks at what they could actually afford to sell them at!

The government has done enough to protect the U.S. auto industry, their failings reflect the product they produce in the main, and the social reality of labor unions in the U.S. to a lesser extent.

PongoX11

iTrader: (15)

An entire sector of 'our' economy. The foreign car companies that produce here are not part of 'our' economy? Further, what is the point of pumping money into a company that has reported heavy losses and who's stock is considered junk? Certainly doesnt sound like a sound investment to me. If that is where my tax dollars were going, I'd be pissed. If you want the Gov to do anything, perhaps they should back the pensions of the current people who are eligible for and who already have retired--pour some money into occupational re-training for the rest of the employees. The bottom line is the bulk of the market has spoken, and they feel there dollar goes further with product produced by foreign companies. Now you want to take the tax dollars from those very people and slide over to help sustain the production of a product they dont want?!

Hoss Ghoul

iTrader: (2)

The funny thing is some of the same people who I guarantee are against welfare, and other social "handouts" are very much in favor of GM/Ford getting assistance from federal tax payers(even more than they already do_)....

TriShield

Absolutely and I understand that. But I do not believe that our country will be better off if the government refuses to do anything to help them in bankruptcy (ala Chrysler, airlines, etc.) and just sits back twiddling thumbs instead of leveling the playing field or helping our home teams.

The governments of Japan and South Korea will do whatever it takes to ensure their companies dominate here and globally. Japan has been manipulating the value of the yen for years to give their companies a big edge in costs and pricing. South Korea subsidizes Hyundai, enabling them to spend more on R&D, expand quickly globally, and release all new vehicles at a furious pace. Do you think China is going to play fair when their automakers start dumping here in the US and abroad?

Boeing is facing a similar problem with Airbus, which is being supported by their governments as well.

infinitebird

iTrader: (11)

I agree, corporate welfare is still welfare. I don't think the Gov. should be in the business of subsidizing private industry. That already occurs way too often in the farming sector. I would prefer not to see it expanded.

TriShield

I meant in the event of total bankruptcy. Are we better off to let the sole remaining US automaker evaporate at that point or give them a loan to resume operations and retain the jobs?

Would you argue we'd be better off without Chrysler today who was loaned money and paid it back?

If you support using tax money to pay the workers retirements and pensions than why would you not support it to keep the employer in business as well? If the business is responsible for bankruptcy how are the employees any less responsible for not diversifying their retirments with this employer?

Schwindj

I would like to see both companies succeed without government help, but that is not guaranteed. Though I would rather see GM and Ford survive.

James

Hoss Ghoul

iTrader: (2)

I hear what you're saying, but nobody plays fair. The U.S. auto industry didn't play fair to become the bloated pig that it is today.

In any event, how do you propose that the govt. levels the field, as it were? You can't force the Japanese of Koreans to pay their laborers more, you can't force them to set up big pensions and health programs...so, that leaves you with what? Free money to U.S. auto makers? Cut wages and benifits for U.S. workers? Break up unions? Raise tarrifs and start a trade war?

This is a situation that can really only be solved by FIRE(in the analogous sense). Detroit and the U.S. auto industry needs to play by the same rules as every other business, they need to put a better product out at a price consumers will pay, while finding a balance between profits and worker pay. No handouts.

infinitebird

iTrader: (11)

It's very unlikely they would just evaporate in the event of bankruptcy. They would probably just be restructured and possibly bought by someone else.

TriShield

Automotive empires don't rise out of nowhere however, and can't be completely replaced in a day. When entire industries go down a huge vacuum is left that isn't filled and it trickles everywhere. Is allowing that really good for all of us or do we have nothing to worry about?

This might just be me, but I really don't think we'll be in a good place as a country when we have no US cars, no US planes, and very little US manufacturing left.

Hot02SS

Ill tell you whats driving away buisness to China and Japan, these damn unions! For gods sake, people who barely are didnt finish high school are making 20$ an hour to screw in a bolt or clean the bathrooms! They are only causing their own demise. The CEOs getting million dollar bounses are bullshit too!

Also NAFTA, and globalization is desroying the little man. We need to focus on our own economy before handing out billions of dollars to every damn country on the planet. Otherwise we are fucked and our economy will go down the toilet as well!

TriShield

You disagreed then with the Chrysler bankruptcy loan as well as aid for US airlines, etc?

TriShield

This is definitely a huge and complex problem, but what I'm referring to specifically is that in the event of total bankruptcy would we be better off letting Ford and GM die or loaning them money to totally restructure and start all over again like Chrysler?

Is the President making the best call when he says he won't give any aid?

Hoss Ghoul

iTrader: (2)

The thing is that GM and Ford won't just disappear. If they file for bankruptcy they'll shed debt(healt costs/pensions/factories/etc) and reorganize and emerge as a better and more profitable company than before.

Obviously they are trying to do the above without filing for bankruptcy, hopefully they will succed, but I wish for them to do it on their own merits, as you or I would be expected to do.