Do Sales Merit An Auto Bailout?

[bowtieguy]

it is my view that the auto bailout is a no win situation given the lack of demand for new vehicles. a decisive plan by the manufacturers MIGHT warrant some type of assistance, but that remains uncertain to be sure.

i believe a bailout, in present circumstances, would only delay a collapse of 2 or more of the big 3 US auto makers. but then, the tax payers would be left holding the bag(of taxes).

i've created a poll to find out what GS members would do to stimulate, if at all, new car sales. afterall, i believe you all to be the most informed of consumers. sorry for our non-US members, but please feel free to vote. any way, please give your vote!

[bowtieguy]

if you'd like to comment that you will buy new, just not any of the big 3, that's fine as well. that was part of my thought process--that the big 3 MUST compete better w/ imports!

[theholycow]

If they don't change but do get help, they'll fail in a few years. Even if they DO change and get help, they could still fail -- a major portion of the problem is image. I don't think they deserve a bailout, and I don't believe that the taxpayers should have to cover it.

However...I believe that delaying their doom is a good plan, when it's all said and done. It's not out of concern for them; as much as I like GM vehicles, they (and the others) have to sink or swim on their own. However, this is a particularly vulnerable time for the economy to take a big hit. Up and down the supply chain, and following the impact out from there, there would be a huge effect...and a few years ago or a few years from now (probably) would be a more acceptable time for it to happen.

It's not like we're not going to pay anyway; even if we don't bail them out, we'll still be paying unemployment and bailing out the workers (not just GM's workers, but those all along the supply chain, and the ones hit by the ripple effect). Now's just a bad time for a big shock.

[Rayme]

GM has been going downhill for over 10 years, how's more money going to help them out?

Fun read from 1994..it seems like history is repeating itself over and over.
http://query.nytimes.com/gst/fullpag...50C0A962958260

[bowtieguy]

i understand there are a lot of jobs hanging in the balance, but we simply can't save them with tax dollars. the demand is not there. imagine lending a friend money to support his vcr repair business. yes, he may hang on for awhile, but eventually they will become obsolete yielding entirely to dvd.

auto manufacturers, especially the big 3, MUST reinvent themselves. restructure pay/benefits and lower prices is a start. how about cut out the UAW multi-million dollar golf resort?

[GasSavers_BEEF]

I have actually been thinking heavily on a new vehicle. and when I say new, I mean new. I looked at the smart and the yaris mostly.

the domestic counterparts seem to be less comperable to what the foreign auto makers have to offer. the corrola gets better mileage than anything that the big 3 have and it has a better look and resale (with the exception of the cobalt XFE which I think is the same mileage) along with the fact that none of the domestic has a hybrid that is comperable to the prius or the civic hybrid. one of the most dissapointing thing was the malibu hybrid. I was hoping that it would see mid 40s like the civic hybrid but it has the same size 4 cylinder as the non-hybrid version so you can't expect but so much better.

because of the economy, my family has decided to stick with the two vehicles we have (I have recently sold my truck as well) and I am in the process of paying off my wife's element which would leave us with no car payments. it has been a while since I could say that. not sure if I would take a new car if it was under 10k. if they gave it away, I would take it just because but I can't see that happening any time soon.

*edit* and I didn't vote, none really applied to me. good thread though

[Snax]

Originally Posted by bowtieguy

i understand there are a lot of jobs hanging in the balance, but we simply can't save them with tax dollars. the demand is not there. imagine lending a friend money to support his vcr repair business. yes, he may hang on for awhile, but eventually they will become obsolete yielding entirely to dvd.

Agreed, though cars are hardly approaching obsolescence as fast as the VCR. It's unlikely most people will simply switch to walking, biking, or riding the bus in this country anytime soon!

auto manufacturers, especially the big 3, MUST reinvent themselves. restructure pay/benefits and lower prices is a start. how about cut out the UAW multi-million dollar golf resort?

What does a golf course have to do with anything? It has ZERO impact on the contracts with the manufacturers. It's up to the membership to decide if it's worth their dues - and vote accordingly at meetings. Whether it stays or goes however will not change compensation. Jumping further off the rails, it's worth noting that the course is open to the public, and members who use the facility must still pay per use, albeit at a discount.

With respect to restructuring, GM and Chrysler executives have spent the last 10 years screwing the pooch by not innovating beyond gasoline aggressively enough. It's not really the fault of even most of the white collar guys, but rather the ones at the tippy top, opting instead to maximize short term gains by selling out the long term future. And that is the crux of the problem with our current publicly traded stock system: People are able milk the cow to near death, then move onto the next cow just before the previous one falls over. There is no long term accountability for the top executives, so it virtually always ends up a contest of them getting as much for themselves as possible before their time in the sun dithers.

WE cannot save the automakers directly. They must save themselves. All that we can do is extend the opportunity for them to do so via a loan. Unfortunately the conditions set for such a proposal have so far smacked of throwing good money after bad.

Forgot to add that we are apparently endless suckers for the latest and greatest models - much to our own financial peril. :P

[Snax]

Originally Posted by Snax

What does a golf course have to do with anything? It has ZERO impact on the contracts with the manufacturers. It's up to the membership to decide if it's worth their dues - and vote accordingly at meetings. Whether it stays or goes however will not change compensation. Jumping further off the rails, it's worth noting that the course is open to the public, and members who use the facility must still pay per use, albeit at a discount.

Ok, so I've read a little more about this lavish facility, and the hoopla over it is outrageously laughable when you start to really apply the numbers.

The UAW over the last 5 years has lost $23M on the facility. That's quite a figure isn't it? Well, consider that the UAW has 465,000 members who have supported this loss with their union dues. $23M / 465k = $49.46 lost per member over the course of 5 years. Yup, those pretentious UAW members lavish lifestyle has cost them almost $10/year to maintain.

I guess they should have spent that money on 15 extra latte's during that time.

[theholycow]

Originally Posted by Snax

Yup, those pretentious UAW members lavish lifestyle has cost them almost $10/year to maintain.

The same process and logic can be applied to any example losses on either side -- golf courses, private jets, high salaries. It doesn't excuse the general short-sighted irresponsibility practiced by both the unions and the auto automakers (and everyone else involved).

Nobody is concerned with sustainability. The automakers failed to plan for when profitable SUVs wouldn't sell. The unions milk the hell out of the automakers. The stock-buying public, the government, the consumers...everyone.

It's human nature to want to blame a single scapegoat, but the reality is that it's just not that simple. Every group is at fault, and each group has individuals who tried to do the right thing but were overcome by the rest of the group.

[Snax]

Originally Posted by theholycow

The same process and logic can be applied to any example losses on either side -- golf courses, private jets, high salaries. It doesn't excuse the general short-sighted irresponsibility practiced by both the unions and the auto automakers (and everyone else involved).

I don't disagree with the rest of your post, but this specific issue is a comparison of something that benefits just a few executives vs. something that benefits nearly half a million people for a relative pittance from their wages. Seriously, they only have to use the facility once per year to get their $10 back through the discount. Being a non-golfer, I think it's a silly waste of money, but how many workers in this country have gym memberships costing more than that and never go? Singling this golf course out is a ridiculous red herring in this discussion, as many employers provide far greater perks to their employees for more cost than that - even if that is only in the form of corporate partner discounts (ala x-plan pricing on Fords).

Arguably, the union needs to decide whether they want to work or not. After all, not giving in to further concessions means diddly squat if the company goes into bankruptcy protection - in which case they will all end up having to endure major cuts anyway to keep their jobs - if the jobs still exist. It's a tough situation no matter how you look at it.

It won't stop us from purchasing a new car in the next year or two however or really even affect which manufacturer we select, because even in bankruptcy there will likely be service support available to owners. Most likely however, we will end up holding off on purchasing anything due to our own circumstances wherein I am considering a career move and relocation for a more secure income.