Saving the auto industry

[suedanim]

Why not use $25 billion from the $700 billion to bail out GM, Ford and Chrysler?

If those companies fail, thousands of autoworkers will go on welfare? Why is that a good option? The government will pay in TANF, food stamps, Medicaid and more. Its either corporate welfare now of citizen welfare later. Why isn't saving those jobs as important as saving the jobs on Wall Street?

The argument that bailing out these auto companies is corporate welfare seems weak though, but more, hypocritical...since the bailouts for AIG and Lehman Brothers was essentially the same thing. Right?

Seems to me some of the money Paulson is sitting on could be put to good use and avert what many are saying will thrust the US into a Depression.

Finally... can Republicans ever hope to win another vote if they block bailing out the auto industry thereby saving jobs of average, hardworking Americans?

[Dufrel]

Why not use $25 billion from the $700 billion to bail out American Airlines, Delta and Southwest?

If those companies fail, thousands of autoworkers will go on welfare? Why is that a good option? The government will pay in TANF, food stamps, Medicaid and more. Its either corporate welfare now of citizen welfare later. Why isn't saving those jobs as important as saving the jobs on Wall Street?

The argument that bailing out these airline companies is corporate welfare seems weak though, but more, hypocritical...since the bailouts for AIG and Lehman Brothers was essentially the same thing. Right?

Seems to me some of the money Paulson is sitting on could be put to good use and avert what many are saying will thrust the US into a Depression.

Finally... can Republicans ever hope to win another vote if they block bailing out the airline industry thereby saving jobs of average, hardworking Americans?

Feel free to replace company names and *airline* with your own favorite industry which has a large hand in driving itself into the ground.

[potter]

Oooo...I wanna play too!

Why not use $25 billion from the $700 billion to bail out Circuit City?

If that company fails, thousands of workers will go on welfare. Why is that a good option? The government will pay in TANF, food stamps, Medicaid and more. Its either corporate welfare now or citizen welfare later. Why isn't saving those jobs as important as saving the jobs on Wall Street?

The argument that bailing out these circuit City is corporate welfare seems weak though, but more, hypocritical...since the bailouts for AIG and Lehman Brothers was essentially the same thing. Right?

Seems to me some of the money Paulson is sitting on could be put to good use and avert what many are saying will thrust the US into a Depression.

Finally... can Republicans ever hope to win another vote if they block bailing out the Circuit City thereby saving jobs of average, hardworking Americans?

[suedanim]

Either way...we're all a bunch of UNFETTERED socialists going to hell in a handbasket.

Those socialist Republicans, gotta love 'em! See... with Republicans you just do a little word play and socialist is REALLY economic PATRIOTISM. See how that works? Then its all good in the 'hood... with no accusations of being anti-American.

Well guess what, I watched this morning too and I agreed with Buchanan and Scarborough too. Why NOT pick winners? And why shouldn't those winners be American companies for American workers?


Joe Scarborough is an "unfettered socialist"

Mon Nov 17, 2008 at 05:13:25 AM PST

And so is Pat Buchanan apparently. And so am I. Per Chrystia Freeland, managing editor of the Financial Times.

I know friends don't let friends watch Morning Joe, but today I'm glad I tuned into the fireworks on this morning's show during discussion of the possible bailout of the Big Three.

It was in this discussion where Pat Buchanan spoke passionately about a return to economic patriotism where our American governmental leaders protected and supported American industry and Joe Scarborough forcefully declared his support for a bailout because bankruptcy would mean the end of GM and that was unacceptable.

And I agreed with them. (so did I)

Chrystia just sort of smiled and furrowed her brows cynically listening to their viewpoint, jokingly called them socialists and at one point chastised them for holding such views out of step with conservative free market idolatry despite being Republicans.

The irony being, as I detailed in the previous diary, What Lincoln would tell Obama about the economy, once upon a time Republicans were the party of the American School of Economics which advocated:

1. protecting industry through selective high tariffs (especially 1861–1932) and some include through subsidies (especially 1932–70)
2. government investments in infrastructure creating targeted internal improvements (especially in transportation)
3. a national bank with policies that promote the growth of productive enterprises.[8][9][10][11]

It was these policies that built America's first middle class and created wealth for America that did not rely on empire building or exploitation of workers. And apparently Pat Buchanan and Joe Scarborough understand this, whatever their many faults in other arenas and on many other occasions.

Mika and Chrystia, of course, did not understand this. Mika kept insisting that it makes no sense to help GM because foreign cars are better and no way Detroit can compete with the foreigners with all those pesky union-negotiated perks for their employees. Chrystia complained this amounted the U.S. government picking winners and losers in the economy and that if we were bailing out Detroit then surely we need to bailout those foreign automakers in the South who have factories here in America.

Sadly they just don't get it. In the face of a REAL ECONOMIC CRISIS, a dispassionate and disinterested objectivist Ayn Rand-inspired government response to this will not do.

One in ten Americans has a job connected to the automotive industry. Letting the Big Three go into bankruptcy at a time of recession could very well plunge us into depression.

We have to have a government that acts in wise, deliberate and transparent manner (unlike with the Goldman Sachs bailout) to protect the American economy.

Now keep in mind this... I am not naive to all of the HUGE mistakes that the Big Three have made over the years and all of their self-inflicted wounds. I actually just rewatched "Roger & Me" two days ago and 20 years after its release Roger Smith still makes my skin crawl and my blood boil for the mistakes he perpetrated against the people of Flint, Michigan, General Motors employees and the American people squandering the goodwill that company's brand had built up with the public.

Still, letting General Motors fail will not undo all those past mistakes.

As Jeffrey Sachs said later in the show, letting GM fail could be an even bigger negative shock to the economic system than Paulson letting Lehman Brothers (the Goldman Sachs rival) fail.

To my astonishment, I join Pat Buchanan and Joe Scarborough in calling on Washington to dig deep to discover a little economic patriotism when considering the bailout of the Detroit automakers.

[Anonymous Idiot Savant]

Pretty much.

[contracycle]

Originally Posted by suedanim

Those socialist Republicans, gotta love 'em! See... with Republicans you just do a little word play and socialist is REALLY economic PATRIOTISM. See how that works? Then its all good in the 'hood... with no accusations of being anti-American.

Or indeed, National Socialism...

[Ali.009]

They dont wana bail out each and every industry, since it will make way for socialism.

[CookieD18]

Originally Posted by suedanim

Why not use $25 billion from the $700 billion to bail out GM, Ford and Chrysler?

If those companies fail, thousands of autoworkers will go on welfare? Why is that a good option? The government will pay in TANF, food stamps, Medicaid and more. Its either corporate welfare now of citizen welfare later. Why isn't saving those jobs as important as saving the jobs on Wall Street?

The argument that bailing out these auto companies is corporate welfare seems weak though, but more, hypocritical...since the bailouts for AIG and Lehman Brothers was essentially the same thing. Right?

Seems to me some of the money Paulson is sitting on could be put to good use and avert what many are saying will thrust the US into a Depression.

Finally... can Republicans ever hope to win another vote if they block bailing out the auto industry thereby saving jobs of average, hardworking Americans?

The US has one or two car companies dabbling in Electric cars - very preliminary but they had one sports car [cant remember the company, saw it on one British Ch.4 Doc by John Snow] and planned to bring out a saloon in a few years.

Why not invest in the future rather than the past? Surely virtually all the people involved in making a petrol/diesel car will be involved in the electric car. Engines are still needed - just take away pistons and fuel and use battery cells and dynamos.

Maybe not as many jobs, but it would bring America into the 21st century ahead of everyone else.

[Anonymous Idiot Savant]

Why not use $25 billion from the $700 billion to bail out the GOP?

[scouser1956]

Why not use $25 Trillion from the whole US economy for unsuccesful wars.

If those wars succeed arms companies fail, thousands of the armed forces and the arms industry will go on welfare? Why is that a good option? The government will pay in TANF, food stamps, Medicaid and more. Its either corporate welfare now or citizen welfare later. Why isn't losing these wars as important as saving the jobs on Wall Street?


Seems to me some of the money Paulson is sitting on could be put to good use and avert what many are saying will thrust the Cheeney into a Depression.

Finally... can Republicans ever hope to lose another war if they block bailing out the arms industry thereby making Vice presidents and his cronies very rich., ?
__________________

[clownboy]

Originally Posted by CookieD18

The US has one or two car companies dabbling in Electric cars - very preliminary but they had one sports car [cant remember the company, saw it on one British Ch.4 Doc by John Snow] and planned to bring out a saloon in a few years.

Why not invest in the future rather than the past? Surely virtually all the people involved in making a petrol/diesel car will be involved in the electric car. Engines are still needed - just take away pistons and fuel and use battery cells and dynamos.

Maybe not as many jobs, but it would bring America into the 21st century ahead of everyone else.

I don't believe the electric cars are the immediate panacea you think they are. You're just shifting the burden, and without changing behavior, the outcome is the same, possibly worse. The thing is, if you successfully change behavior (driving FAR less, and more efficiently, eating/shopping from the local pool that only requires the minimum of transport), you're already closer to the goal than the switch to full electric.

I've always been fascinated by the electric vehicle, but their manufacture requires a pretty high energy and "dirty" materials profile. Fueling the vehicles is problematic and would quickly, with any significant adoption, swamp our system. 50% of our electricity is coal generated.

The batteries alone are studies in rare metal poisoning of the environment.

[Francois Cellier]

Originally Posted by clownboy

I don't believe the electric cars are the immediate panacea you think they are. You're just shifting the burden, and without changing behavior, the outcome is the same, possibly worse. The thing is, if you successfully change behavior (driving FAR less, and more efficiently, eating/shopping from the local pool that only requires the minimum of transport), you're already closer to the goal than the switch to full electric.

I've always been fascinated by the electric vehicle, but their manufacture requires a pretty high energy and "dirty" materials profile. Fueling the vehicles is problematic and would quickly, with any significant adoption, swamp our system. 50% of our electricity is coal generated.

The batteries alone are studies in rare metal poisoning of the environment.

Unfortunately you are right.

[clownboy]

I still maintain the first step is the shift to renewable and "cleaner" fuels. Even IF the environmental savings are smaller in the end run, at least we'll be rolling our own and will have taken the Peak Resources clock off our backs. We can do that with existing technology and with no change to consumer behavior. The side effects would be more non-perishable jobs, less expensive fuel, cleaner air and water, and the ability to tighten the system environmentally later on as the tech matures.

A reminder than the first cars ran on peanut oil.

[Anonymous Idiot Savant]

Originally Posted by clownboy

I don't believe the electric cars are the immediate panacea you think they are. You're just shifting the burden, and without changing behavior, the outcome is the same, possibly worse. The thing is, if you successfully change behavior (driving FAR less, and more efficiently, eating/shopping from the local pool that only requires the minimum of transport), you're already closer to the goal than the switch to full electric.

I've always been fascinated by the electric vehicle, but their manufacture requires a pretty high energy and "dirty" materials profile. Fueling the vehicles is problematic and would quickly, with any significant adoption, swamp our system. 50% of our electricity is coal generated.

The batteries alone are studies in rare metal poisoning of the environment.

LOL, cellphones.

In terms of harmfulness to the environment its lead, nickel, lithium; in that order.

Lead is in most cars, nickel is in the current crop of hybrids, and lithium is what will be in future cars.

Anywho, we're obviously in need of an overhaul of all aspects of our entire energy system. You can't just change one part here or there and call it a day. Similarly you can't discount advances in one area because of sluggishness in another.

The real problem is going to be retraining people to properly maintain a lithium ion battery.

[clownboy]

Originally Posted by Anonymous Idiot Savant

The real problem is going to be retraining people to properly maintain a lithium ion battery.

I think the current battery tech is a dead end. It's non-renewables, jumping from the frying pan into the fire. The lasting effects of staying with that tech are unacceptable. There are already alternatives. There are new lines of shock-resistent capacitors that store, recycle, and discharge their charge gracefully in a virtually unlimited manner. They last and don't yield the horrendous waste at the destruction end of their lifecycle.

I agree that this can't be done overnight. Everyone has their vision of the ideal and they all want to be there tomorrow. But it will take a longterm staged plan to get us anywhere. The alternative is to do what we're doing now - argue until it's too late and allow our decisions to be made by the necessity of the immediate.

We need to start by fueling what we have in a way that will allow us to move forward to these energy utopias everyone dreams of.

[MississippiMud]

Originally Posted by suedanim

Why not use $25 billion from the $700 billion to bail out GM, Ford and Chrysler?

Because 25billion will do squat to solve their problems. What they need is the reality check of reorganization under chapter 11 bankruptcy. Let the system work how it is supposed to. They wont go under. they will restructure.

[R Lance]

I tend to agree with Romeny

Bailing them out wouldn't solve the problem

Mitt Romney: Let Automakers Go Bankrupt

Wednesday, November 19, 2008 12:03 PM

By: Jim Meyers Article Font Size


Former Massachusetts Gov. Mitt Romney — whose father once ran American Motors — says he opposes a bailout of the American auto industry and believes bankruptcy may be the only path to solvency for the Big Three automakers.

In an opinion piece published in Thursday’s New York Times, Romney states that if General Motors, Ford and Chrysler get the bailout the companies have sought from the federal government, “you can kiss the American automotive industry goodbye … Its demise will be virtually guaranteed.

“Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.”

Romney, who has had success revamping corporate finances and is credited with turning around the 2002 Winter Olympics in Salt Lake City, said automakers must take several steps to survive, including:

# They must eliminate the huge disparity in costs relative to foreign brands by devising new labor agreements that align pay and benefits with those of workers at Honda, Nissan, Toyota and other competitors. If this disparity is not dealt with, any bailout “will only delay the inevitable.”

# Management as is “must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.”

# Automakers should cut executive perks drastically. “Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat,” Romney writes.

# Investments must be made for the future. “No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years.”

Romney also said the federal government, instead of handing over billions to the automakers, should invest more in basic research on new energy sources, fuel-economy technology and the like, which will ultimately benefit the automotive industry.

He concludes: “The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

“In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.”

Romney’s father George Wilcken Romney was chairman of American Motors from 1954 to 1962, served as the governor of Michigan from 1963 to 1969 and ran for president in 1968, ultimately losing the Republican nomination to Richard Nixon.

© 2008 Newsmax. All rights reserved.

[Gilles de Rais]

Now, expressed like that, it sounds OK.

But anyhow, even with a bailout, I would imagine restructuring was needed... The toughest stuff is the workers' pensions and health plans. If i understand correctly, they're gone if the companies are gone... Who will look after them?

NB to Justin and others: That's another reason why company plans/individual stuff isn't as good as a fully socialised system...

[Anonymous Idiot Savant]

# They must eliminate the huge disparity in costs relative to foreign brands by devising new labor agreements that align pay and benefits with those of workers at Honda, Nissan, Toyota and other competitors. If this disparity is not dealt with, any bailout “will only delay the inevitable.”

Same old BS arguments against Unionized labor.

The author does realize that labor (including health care and pensions) only makes up about 10% of the cost of an American car right?

And if you look at the foreign companies that have plants in the US, the only reason their costs are lower is because they're new and they don't have retirees, yet. The wages are basically the same.

# Automakers should cut executive perks drastically. “Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat,” Romney writes.

WRT to greater economic collapse as a whole I think part of it is a reflection of our inbreed elite. 2nd, 3rd, and 4th generation leeches who don't understand how to create wealth, only how to delegate out what was handed to them.

AIG still continues to blow millions on retreats.

Its why I support the Estate Tax.