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« Previous Entry | Main | Next Entry » If There Isn't a Bailout of the Big Three Auto Firms, What is the Overall Effect on the Government and on Our Economy? Name:
Wendell Taylor
Question/Comment: If there isn't a bailout of the Big Three auto firms, what is the overall effect on the government and on our economy? Paul Solman: Well, in a time of fearsome recession or worse, the loss of another quarter-million direct jobs, and hundreds of thousands more at suppliers and other affected businesses - that would be a turn of the screw. I spent yesterday in Lansing, Mich., for a story slated to run hopefully this week. Here's one relevant answer from Steve Bramos, head of the United Autoworkers union branch at the General Motors plant we visited: "We're currently in a recession. I think that will further deepen the recession, possibly put us into a depression. We're asking for $25 billion. And it's not a bailout, it's a bridge loan. And if we go the other route, bankruptcy, it's going to cost the government $75 - 110 billion -- quite a dramatic difference -- because of all the social programs, and the people that will have to be taken care of who will now be on the unemployment rolls. The cost incurred that the government would have to assume on pensions alone would be astronomical. It would far exceed the $25 billion that's being asked for." -- Posted November 20, 2008 | Comments (10) | Permalink
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i am sure prof. siegel of the wharton school has a defined benefit plan. he is an idiot and don't believe for one minute that he is fooling people out here. we are supposed to fund our 401k plans, now 201 plans, so wall street can steal the money as fast as they get it. thanks prof, for nothing.
I strongly believe that if the congress doesn't do something before Obama gets into office, the three US auto manufacturers will file for bankruptcy. This will lead to the worst financial crisis, including unemployment as high as in 1930's. I haven't owned an american car since 1967 when I owned a Buick. This was a personal choice, because I felt foreign cars were better designed. If I needed a truck or a tractor or a jeep, I would buy American. We have too many people who would be jobless and pensionless if we let the American car manufacturers wait until February.
Regarding the auto bailout, while I am strong union person and support the workers, it is obvious that the philosophy of the automakers is a reflection of their inability to open their eyes to the competition of the past 30 years. Will giving a bailout change significantly the automakers' approach to making affordable cars that can compete with the foreign automakers and the American public will buy, assuming they have the money?
the rep from AZ said the auto companies can not compete with the others because of the legacy...and there should not be a bail out until we the auto companies get rid of the legacy (our pensions) lets see that the AZ rep give up HIS PENSION THAT WE THE PEOPLE PAY SINCE HE FEELS WE SHOULD GO WITHOUT A PENSION. all the money spend in the war and to bail out other contries now when our country the working class needs it they have to think about it... you bet he would not had said this BEFORE THE ELECTION.
So!
Is there a bail-out plan for you and your family when you loose your savings? or your job?
Pull yourself by the bootstraps we are told, so should they.
The question begs, are free-market rules only valid until the top dogs of capitalism begin to loose?
Detroit's problem is absolute incompetence of the CEO's. Their main aim to fill their pockets. To hell with the rest. They did not negotiate better contracts with the UAW union and thus have "legacy" costs. The average cost/h of labor in Detroit is $ 49.00. Whereas elsewhere in the US it is about 26.00! It takes about twice as long to build a car in Detroit than in non-Detroit plants. A non-Detroit plant needs about 2.2 years to change models. Detroit needs about 4 years! Toyota and Honda started building hybrids in 1996. Detroit started in 2005, the decrepit Ford SUV.
Why don't the foreign car makers ask for billions???
Also, when you go into chapter 11 you do not stop production. You keep on going and you reorganize. Thus, there will not be millions of unemployed. This is only a scare tactic, which might work with our empty-headed politicians?
Why not take some Federal dollars and set up a research and manufactureing factory at the soon to be closed Truck Plant in Highland Park MN. It's a highly robotic plant, nestled in a high tech and engineering center, with a hard working and stable work force and a supportive community.
St. Paul, Minnesota wants to build the Green Model T.
Click on The Becker-Posner Blog to read two right wingers argue the different sides of this issue. (You might want to take a guess first as to which is in favor of a bailout; which, opposed.)
In the program criticism was made of the monthly 2 billions that might be needed for auto makers in a car market where large numbers of foreign cars are being left at piers because they can not be sold.
No mention was made of AIG which has already cost taxpayers over 100 billion dollars in two months and is still in trouble.
Where is a program explaining why 1 trillion dollars of taxpayer funds have been spent for a financial system that can not make loans?
The auto makers have problems but there appears to be no concern for why over 1 trillion dollars of taxpayer funds being used on banks that should go into bankruptcy.
The poor management of auto makers appear as sound judgment in comparison to the judgment of major banks.
Bailout? Don't worry about it. House Republicans have already killed off the first steps to a National Recovery Act and the Auto-Makers are going to have to roll out Project, "Every Man, Woman, and Child for themselves" along with everyone else in the Economy. Good going guys! Nothing Like free market and free trade ideologues to ruin everything for everyone.