To bail or not to bail...

[Steve C.]

Should we or shouldnt we? Bail 'em out to save the (much needed) industry, and all its related jobs? Or let 'em die the death their overpaid staff/oversized vehicle designs deserve. The thought of saying you guys screwed up, BIG-TIME, but heres a get out of jail free card irks me, if they get a bail-out, using my tax dolars, then where's mine? I could use the help for wasteful spending ive done over the years.

What do you guys think? should we or shouldnt we? how do we save 'em? here's a link to an article on 10 ways to do so...

http://fastandloud.com/how-to-save-the-us-...o-simple-steps/

[MightyMouseTech]

I would really like to see GM collapse, unfortunately, that would probably mean US and Canadian economies would collapse with it..

[Huronlad]

GM needs to file a chapter 11 so they can rid themselves of the UAW, excess dealerships, pensions, all the other dead weight and either restructure or allow themselves to be bought by an automotive company that has better business sense. I don't for one second believe that GM alone can destroy the US and Canadian economies. Bailing them out would just delay the inevitable and in 6 months, a year, maybe two, they would have to come back looking for more hand-outs. Something as broken as GM can't be fixed by throwing little bits of money at it.

[bilgladstone]

The only way to do any of these... bailouts... properly is to attach a number of clear, concise, and iron-clad strings. Aircraft-grade, stainless steel, boron-reinforced, high-tensile strength wire strings.Numbskull US administration just gave hundreds of millions of dollars to banks in order for them to solve the mortgage default problem and what did the banks do? Invest in other stuff - acquisition of other banks for example. No strings = free money to burn.

[cappytanjack]

No to a bailout, but to a loan with conditions, maybe. I would rather see any money go to Tesla Motors in the U.S., a company with real vision and a bright future or ZENN in Quebec with similar attributes but a much less sexy electric vehicle but definitely more affordable and practical. Even Ballard of British Columbia. Back to the conditions for the pr!cks (er I mean GM, Ford and Chrysler). Remember that these are the same companies currently in litigation for collusion against fair market pricing between Canada and the U.S. In a nutshell colluding to prevent the cross-border purchase of Canadian-made vehicles at a cheaper price in the U.S. and vice versa for American shoppers when the exchange rate favours the greenback and Americans looking to purchase vehicles north of the border. While not currently looking for a handout you can also throw Bombardier into the mix with the above three Amigos as the last time I looked you can still purchase any Bombardier ATV, motorcycle, Skidoo or Seadoo for much cheaper south of the border if a dealer is willing to sell to a Canadian in spite of the threat by Bombardier to stop shipment of said goods if caught. The economy in general is in the sh!tter for many reasons but greed boils to the surface most readily with both the Stock Market and the above 3 Amigos. Chapter 11 bankruptcy exists for a reason. Let the free market economy be just that and let the chips fall where they may. I would rather see Tesla, ZENN or Ballard rise out of the ashes of GM, Ford or Chrysler than continue to watch and listen to why these dinosaurs need to be saved from extinction. My two cents.Cappytanjack (a smart owner for a reason, to send a signal to the North American auto manufacturer) ...

[MikeT]

Nationalise them and call them General Leyland Motor Corporation

[Steve C.]

a good article on 6 reasons detroits in trouble, from the fatcat ceo's to lack of small cars...

http://money.cnn.com/galleries/2008/autos/...uses/index.html

[Tardis]

No to bail out! there was a good report on CTV about the GM head going to Washington hat in hand so to speak on his PRIVATE JET it only cost him a mere $20,000.00 to do so. They just don't get it do they? Apparently Ford did the same. Each company owns 8 jets for their own use even the wives use. No they ain't hurtin much. I say trim the fat off the top before the little guy and retool the plants to produce cars that are realisic in todays enviroment.My opinion any wayKaren

[Duck]

Well said, Karen!

[yolanda]

Bailouts don't work. We've bailed these crooks enough times already and yet here they are again. People sit around dissing welfare bums and then we put all that money into rich men who can't keep a business working.They're closing the canadian plants like flowers in frost anyway.

[MikeT]

Corporate Welfare Bums was the phrase Tommy Douglas coined.

[Gordon]

Following is a snippet Michael Moore's comments on the bailout on Larry King recently. Moore argues the fall of the auto giants would spell disaster throughout the US economy. His point is interesting, to paraphrase:

If we're giving (as taxpayers) $25 billion to the company, shouldn't we own the company? If you give me $25 billion to make a movie, you own the movie.

It's not in this clip, but Moore goes on to suggest that the US government do exactly that, and then redeploy the vast resources of the big three to public works projects: building buses and the like, expanding public transportation.

[Dang]

Technically I believe it's a loan rather than a bailout. When the U.S. government did it for Chrysler back in the '80s (and it was only $1.3b), the government actually did make money on the deal. That said, I'm still against it. It kills the incentive to run the company properly. The fact all three are in the same boat is a clear indicator of the problems.Cheers! Dang

[SMRTENUF]

It not only kills the incentive to run the company properly - it kills the incentive for any company to be run properly. In graduate business school this is the definition of disincentive. A free market economy must allow for failure.

Technically I believe it's a loan rather than a bailout. When the U.S. government did it for Chrysler back in the '80s (and it was only $1.3b), the government actually did make money on the deal. That said, I'm still against it. It kills the incentive to run the company properly. The fact all three are in the same boat is a clear indicator of the problems.Cheers! Dang

Edited November 24, 2008 by SMRTENUF

[lebikerboy]

Never mind the manufacturers, what about the 3500 Canadian dealers who think they should get bailed out by the feds even though they're having the third best year in history!!!

[MikeT]

It is the biggest begging festival ever and it is quite the spectacle. Just wait until the layoffs hit, and what those people expect.....

[deezle]

I'm with Tardis. I'd say let all three die a quick death ----- their top management has left the companies with their wheels spinning in the ditch of the 20th century. There has been no vision nor industry leadership. The VP of GM still thinks that global warming is a crock. Their engineering divisions have been mostly playing catch-up to Japanese or European automakers. Bailing them would be so Soviet.I do, however, feel sadness for the fate of the thousands of families of laid-off autoworkers. Therefore, instead of bailing out the corporate dinosaurs, I would make a similar amount of funding available to visionary start-ups, clean energy producers, and public transportation developers that would ween North Americans out of their single-occupant petroleum-guzzling SUV's.

[bilgladstone]

Yes, imagine the stimulus to the new "green economy" if that money (what was it -350 Billion?) were offered to companies for development and bringing to market within... five years(?)... off-oil technologies! What a kick in the pants that would be. Retrain 20th century automobile assembly-line workers to build solar arrays, wind-and-water electric generators, home retrofit kits, light rail transit etc., etc.Good-bye recession! :thumbup:Yeah, not quite as simple as all that, I know; but what a forward-looking possibility.B

[ValgardForkbeard]

Their engineering divisions have been mostly playing catch-up to Japanese or European automakers.

Unfortunatley, part of their problem is that they don't even seem to be aware that they need to play catch-up at all; they still think they can convince everyone that a high margin SUV is what everyone needs.Making loans with conditions could help keep the economy intact, but the government won't do that; they will just hand over the money, and things will continue as they are now.MG

[scwmcan]

Here's my take on the subject. I also would prefer not to see these companies get the money they are asking for, and if the north american economies were strong at this point I would be with those who are saying file for bankruptcy and let the chips fall where they may, but the economy is not that strong at this point and adding 500,00-3,000,000 (depending on what the numbers really wound up to be) to the unemployment lines in North America at this time would just not be a good idea, so I guess some sort of assistance should be given. That said they cannot continue with business as usual. I say the governments should agree that for a short time period (say three or four year) (or even for good if possible to maintain the safety and emmissons etc) that the north american rules be made to align with the european rules. This would allow the importation of more fuel efficient cars immediately (helping all manufactures and consumers). The stipulation would be that these cars would have to manufactured in North America as soon as the factories could be retooled and/or built, and by the next model changeover the cars would have to meet the North american standards (unless a new global standard could be introduced). One stipulation would be that the current labour force from any idled factories would be used to assist in the retooling/building of the plants at the current market rate in the area for such work, and when returned to building cars will be paid the average rate in the foreign manufactures plant (including benefits). The government would have to guarantee the pensions of retired workers, but health car would be made to be a normal corporate standard instead of the platinum packages they have now. Only manufactures who were prepared to build these car in North America would be allowed to import them during the exception period. Also money would have to be provided for the R&D of alternate energy cars, this would include zenn, and tesla etc. as well as alternate transportation (high speed rail etc). hopefully this would in the long run provide a strong transportation manufacturing sector in North America and avoid some of the pain associate with changing careers etc of the labour force.Just my thoughtsScott

[deezle]

"....and when returned to building cars will be paid the average rate in the foreign manufactures plant (including benefits)."Now I know that you're thinking Europe or Japan when you say that....... but what about Chinese automakers??!!!!!! Some amazing ideas here ----- none of which are ever likely to be seriously considered by the decision makers. I think that high-powered (and high-priced) lobbyists have way too much influence in government circles. Taxpayers and consumers (both current and future generations) are frequently being saddled with handouts to irresponsible industries. We're even being forced to breathe their foul air and witness the slow death of our planet. The CEO's with their heads in the trough seem oblivious to reality.

[Duck]

I think the problem with threads like that is that none of us work for any of these big car companies, or are executives who know what goes on - so really, it's all just opinions and I think's. Not that there's anything wrong with that! I'm just saying that the issues at hand are far more complex than any of us probably really understand.

-Iain

[deezle]

The executives of the not-so-big-three have clearly demonstrated for several years that they don't "know what goes on".The entire point of this topic is "What do you guys think?" ie: opinions.

[scwmcan]

"....and when returned to building cars will be paid the average rate in the foreign manufactures plant (including benefits)."Now I know that you're thinking Europe or Japan when you say that....... but what about Chinese automakers??!!!!!! Sorry, some clarification here, I meant the transplants (Ie toyota, BMW, Honde etc plants in north america), and it would be fine by me if the chinese (or anyone else for that matter ) bought or set up plants in north america to produce their cars that meet the european saftey and emmisions standards, since that is the condition I set, and that they met the new conditions after the temporary change. I should add that I don't agree with GM (or any of the others) speculating that they can get back on their feet with a 12 mil car market as they see next year being (read this in a CBC report I believe), to me instaed of working their bussiness model on the most optimistic numbers, they should be aiming for profitability in say a 9 mil market, and anything over that would be extra and would only add to the bottom line, I just think that planning for the worst is better than planning for the best, if you plan for the worse and are wrong it doesn't hurt, if you plan for the best and are wrong you still won't be profitable.Some amazing ideas here ----- none of which are ever likely to be seriously considered by the decision makers. I think that high-powered (and high-priced) lobbyists have way too much influence in government circles. Taxpayers and consumers (both current and future generations) are frequently being saddled with handouts to irresponsible industries. We're even being forced to breathe their foul air and witness the slow death of our planet. The CEO's with their heads in the trough seem oblivious to reality.

[MikeT]

I remember when Chrysler was bailed out back in 1980 when Lee Iacocca was in charge. He had to leak news of the K-Car to the legislators in order to secure the bailout.The current crop of industry leaders came with NOTHING last week. I'm not surprised they were turfed out on their ears. What kind of idiotic leadership would beg for a bailout with nothing to offer in terms of restructuring their product range to become in tune with the market?