Big 3 Loan Failed to Pass - Congress voting...Not promising.

[Justin]

While you're correct that it's not the role of the government to bail out private companies, it is the role of the government to work for the people, which includes measures to protect their jobs. The government is issuing a loan to help sustain the economy, because of the size of the shockwave that would occur should the big three fall under.

I think the point that he was making is that Honda, Toyota, etc. haven't been producing cars in the US as long as we have, and to be perfectly honest really up until the late 80s or early 90s, nobody really foresaw Honda, Toyota, etc. becoming as popular as they have in the US, and therefore you can't really blame the big three for holding onto that business model. Once that was done, they had binding contracts that they couldn't just leave to pay for things like healthcare and pensions, which are things that Honda and Toyota don't have to worry about with US employees, because they haven't been operating here anywhere near as long, and the mentality as far as jobs and unions go was completely different when they did start operating here, then when GM was signing contracts in the 70s to insure that their employees would have pensions and healthcare packages, which if they hadn't given their employees, they wouldn't be here today. GM has done everything within it's power to reduce those costs, but they can't just make the go away now. Even if we say they were a mistake then, which I personally don't believe they were, GM can't just say "Oh, by the way, we're going to ignore this contract and get rid of your pension. Peace out."

You can't blame this on the business model, because it's not GM's business model, it's America's business model circa 20 years ago that companies like GM are still locked in to.

And, on the subject of it not being the role of government to bail out private companies, I highly suggest you contact some senators and ask why it is they gave grants, not loans, grants to foreign companies to open plants in their states, but now are balking at saving our own companies. They threw free money to foreign industry, and now refuse to loan it to our own. Our automakers actually benefit the American economy, foreign automakers do far less to benefit our economy.

As far as protectionism goes, I think the point was that if Japan isn't going to let us do business in their country and expand into that market, then why should we let them come over here and try to dominate ours? If I let you park your car in my driveway all the time, I'd expect that when mine gets paved you'd let me park mine in yours.

(I think I kept the tone of this pretty impersonal and not political, but if not please just point it out. I don't mean to offend, and quite honestly you make very valid points, and good-spirited debate like this is a great thing, IMO.) (Also, post pics of the 'vette. :-D)

[kevin2323]

Originally Posted by rmyers

It is the job of the US Government to provide for the defense of this nation. It is NOT the job of the US Government to bailout banks or private companies.

the auto industry is tied to our defense.......

[MerF]

Originally Posted by Justin

While you're correct that it's not the role of the government to bail out private companies, it is the role of the government to work for the people, which includes measures to protect their jobs.

This isn't a response to Justin, just my thoughts on the quoted comment. The people who argue that it's not the Government's job, I whole-heartedly agree, EXCEPT for the fact that they forked over $350 BILLION DOLLARS to some already FOR FREE. Any more rebuttals about what the gov't can and can't do are out the window now. That's my take on the hypocrisy of that.

[The_Blur]

Originally Posted by MerF

This isn't a response to Justin, just my thoughts on the quoted comment. The people who argue that it's not the Government's job, I whole-heartedly agree, EXCEPT for the fact that they forked over $350 BILLION DOLLARS to some already FOR FREE. Any more rebuttals about what the gov't can and can't do are out the window now. That's my take on the hypocrisy of that.

I agree that it is vital for the government to protect the people and their interests. Recently, they've been protecting the rich people more than the people as a large mass. That's bad. The auto companies are important for more reasons than just the people they employ, however. They also provide national infrastructure that would be necessary if the US were ever to enter a state of total war. They also fund the federal budget heavily with taxes from wages and sales from the Detroit automakers, their suppliers, their employees, their suppliers' employees, their dealers, their dealers' employees, maintenance companies that service car, the employees of maintenance companies, aftermarket companies, the employees of those companies, and so many other industries that one wouldn't expect. Each of these people spend the money that they earn on clothes, accessories, technology, and other items. The places that they buy things will not be as successful because their clientele will be unemployed, causing them to reduce incentives and personnel. As a result, there will be more people that are added to the mess of unemployed. The companies offering incentives, like insurance, to businesses will have less clientele because businesses will cut costs. That will lead to more layoffs, leading to more unemployment. Eventually, you've got people at hotels losing jobs because no one is going on business trips or vacations because they are unemployed. You could safely argue that saving the auto industry is saving any other industry. An influx of unemployment injected into the current market would cripple it for years. The government, by helping GM, Ford, and Chrysler, protects those aforementioned employees and their own tax resources. Without wages and purchases to tax, the government won't have resources for coming years.

On the flipside, helping the likes of AIG stay afloat only allowed them to continue loaning at a 40-to-1 ratio when it comes to money that they actually have. They will grow rapidly after this and fail again in a certain number of years depending on how the market develops, speculation, and what expert economists say. It's all ridiculous. They should have tried to buy up the bad debt like they said originally. At the very least, speculators would have seen something positive for their gambling and the American people would have restored faith in their government as one that truly serves the people. I still believe that it does serve the people, but sometimes the problems the government resolves are so abstract that the average American simply would not care to investigate the depth of the problems. Unfortunately, that sort of abstraction and confusion is exactly why we need the government to help us when things go wrong. The world is far more intricate and complicated than the average person is willing to accept. Hopefully, the decisions of the US federal government and other powerful economic leaders will reverse the turmoil that has inexplicably damaged so many lives.

[rmyers]

I must have missed that part of the consititution that says its our right to have a job. It is not the role of government to protect jobs at least not in the way they have been doing lately. The role of government is protect the nation, and provide for infrastructure necessary to facilitate a free market and flow of goods and services. I sure can blame the business model and management practices of GM and the UAW for not having the foresight to see that what they were doing wasn't profitable. How many years do you have to lose money before you realize something isn't working. Why couldn't the UAW see that insisting on maintaining these astronomical legacy labor cost was killing the Goose and eventually there would be no more golden eggs.

As for the issue of States giving grants to manufacturers to open plants, that is not even close to the same thing here. The reason is, if a state gives Honda 300 million dollar grant to open a new factory, that will in turn infuse income into the economy, from payroll taxes, property taxes, etc. So it really is a long term investment. If the Fed gives the Big 3 25 Billion dollars, they are getting anything new out of the deal. They won't build new plants and hire thousands of new employees. This will simply keep them afloat for a few more months until they come back to Washington asking for more.

Protectionist practices are wrong, regardless of what side of the ocean they take place. If the Japanese are dominating the market here it is ultimately because the American people are buying their products. And to make matters worst, I suggest a demonstration. I would invite anyone who lives close to an American Car Mfg plant to drive by and count the number of foreign made vehicles in the parking lot. What does that tell you? I can assure you, if I worked for GM, and counted on them for my financial well being, there is no way I would go to work in anything but a GM vehicle. Case in point, when i visited the Corvette factory in Bowling Green, there were 3 parking lots. Front of building was for Corvettes, or XLR's regardless of year, or regardless of your rank in company. First come first serve. The second closest parking lot was for employees with GM vehicles, and the one farthest away was for non-GM vehicles.

I have been consistent in my opinion against the bailout for banks and the big 3 loan. In both cases it was not the role of Government.

Edited to add: I just read in the newsaper that GM has 432,000 retired employees collecting retirement benefits. How many active employees do they have?

PS. Your comments were not personal at all and as you mentioned serve to foster a good solid debate of ideas. For that I thank you.

Here are some pictures of my personal infusion of capital to GM which by the way only represents 1 of the 2 vehicles I purchased that day. However, somehow I don't think we need to see a white cargo van.

[Hylton]

Originally Posted by Justin

You can't blame this on the business model, because it's not GM's business model, it's America's business model circa 20 years ago that companies like GM are still locked in to.

Please tell me you're joking.....

[Camaro_Corvette]

rmeyers, you bought a z06 corvette and a cargo van in the same day. That doesn't happen every day.

[Supermans]

Originally Posted by rmyers

I must have missed that part of the consititution that says its our right to have a job. It is not the role of government to protect jobs at least not in the way they have been doing lately. The role of government is protect the nation, and provide for infrastructure necessary to facilitate a free market and flow of goods and services. I sure can blame the business model and management practices of GM and the UAW for not having the foresight to see that what they were doing wasn't profitable. How many years do you have to lose money before you realize something isn't working. Why couldn't the UAW see that insisting on maintaining these astronomical legacy labor cost was killing the Goose and eventually there would be no more golden eggs.

As for the issue of States giving grants to manufacturers to open plants, that is not even close to the same thing here. The reason is, if a state gives Honda 300 million dollar grant to open a new factory, that will in turn infuse income into the economy, from payroll taxes, property taxes, etc. So it really is a long term investment. If the Fed gives the Big 3 25 Billion dollars, they are getting anything new out of the deal. They won't build new plants and hire thousands of new employees. This will simply keep them afloat for a few more months until they come back to Washington asking for more.

Protectionist practices are wrong, regardless of what side of the ocean they take place. If the Japanese are dominating the market here it is ultimately because the American people are buying their products. And to make matters worst, I suggest a demonstration. I would invite anyone who lives close to an American Car Mfg plant to drive by and count the number of foreign made vehicles in the parking lot. What does that tell you? I can assure you, if I worked for GM, and counted on them for my financial well being, there is no way I would go to work in anything but a GM vehicle. Case in point, when i visited the Corvette factory in Bowling Green, there were 3 parking lots. Front of building was for Corvettes, or XLR's regardless of year, or regardless of your rank in company. First come first serve. The second closest parking lot was for employees with GM vehicles, and the one farthest away was for non-GM vehicles.

I have been consistent in my opinion against the bailout for banks and the big 3 loan. In both cases it was not the role of Government.

Edited to add: I just read in the newsaper that GM has 432,000 retired employees collecting retirement benefits. How many active employees do they have?

PS. Your comments were not personal at all and as you mentioned serve to foster a good solid debate of ideas. For that I thank you.

Here are some pictures of my personal infusion of capital to GM which by the way only represents 1 of the 2 vehicles I purchased that day. However, somehow I don't think we need to see a white cargo van.

I just read in the newsaper that GM has 432,000 retired employees collecting retirement benefits. How many active employees do they have?

[DGthe3]

Originally Posted by Supermans

I just read in the newsaper that GM has 432,000 retired employees collecting retirement benefits. How many active employees do they have?

In North America, 181 000. I can't find global numbers

[Hylton]

Originally Posted by Supermans

I just read in the newsaper that GM has 432,000 retired employees collecting retirement benefits. How many active employees do they have?

Originally Posted by DGthe3

In North America, 181 000. I can't find global numbers

I believe just over 250K worldwide.