Auto industry bailout, I vote no....

[Donald Farris]

Hi,

Stan, as you know I am a UU, and I carry that philosophy over to my politics where I take the best from all the parties. The two main reasons I supported Ron Paul were to get us out of the war and to renew our civil liberties. Dennis interestingly enough had the same agenda for his top 2 priorities, but he seemed even more of a long shot. Maybe those two things can still occur.

1) Health care should be a right and not a priviledge. We have made a total mess of it in our country. Most of the other countries in the world do a better job providing health care to everyone at a lower cost. And we do provide health care for everyone in the most expensive way when they come to the emergency room really sick. OFten these are problems that could be fixed easily if the individual could have had their problems treated earlier.

2) It is an economic problem. The auto industry has stated that they can make cars significantly less in Canada because they aren't paying for health care. Canada has the same standard of living that we do. This is an even playing field. But this problem is with all of the products that we export - our cost is higher because of our health care costs.

3) We hear about problems with veterans having to drive miles to the nears VA for treatment - we wouldn't need a VA medical system if everyone got health care.

4) Many of our people are going bankrupt trying to pay medical bills. Who should have to decide between medicine for their children or elderly parents and food or heat?

Now I know AIG is an important company - I hear the SPA industry is dependent upon them. But for what we have given that one organization, I think we could have provided health care for everyone in the US.

I'm sick of seeing grotesque amounts of money handed to special interests like the oil industry and AIG for pedicures. And I am furious that we are spending 10 billion a month helping Iraq, who has plenty of money and we are borrowing to give it to them. Seems to me that they can hire Blackwater instead of us.

Then at the same time Bush a few days ago cut Medicaid and refuses to sign bills to provide health care for children. And when the Auto Industry that provides jobs to 1 out of every 10 Americans needs help to retool to make energy efficient cars, we balk? 10% more unemployment with all of the ramifications from that will not help our country at all.

[Lynn Farris]

Jim you said:

How does the big 3 involve our national security

Historically we have used our auto industry in the military operation to make tanks and vehicles when we needed them.

Now we are at a loss as we have already pretty much lost the steel industry which was a critical aspect of this industry.

We have outsourced so much of our manufacturing industry to other places. What if we had a war and they didn't want to help? We need to be self reliant at least a little.

I agree with you that we need to put strings on any money that we lend - it needs to be for retooling plants in the US and for energy efficient cars.

[Stephen Eisel]

I thought that Oshkosh Defense manufactured the majority of tanks for the US military

[Stephen Eisel]

How about General Dynamics?

[Jim DeVito]

I am just going to go out on a limb here and say that we do not need the modern auto industry for defense of any kind. Back when we mustered up american manufacturing to make war time parts we had wuite a few more people in our military. We are maxed out right now fighting two wars and i still don't see the auto makers stepping up. Sorry to dwell on this point so much but I just don't like when "everything" becomes a matter of national security. In the post bush days I hop we can overcome that fear.

[Stephen Eisel]

I am just going to go out on a limb here and say that we do not need the modern auto industry for defense of any kind. Back when we mustered up american manufacturing to make war time parts we had wuite a few more people in our military. We are maxed out right now fighting two wars and i still don't see the auto makers stepping up. Sorry to dwell on this point so much but I just don't like when "everything" becomes a matter of national security. In the post bush days I hop we can overcome that fear.

I agree.. The furnace must be broke in hell today..

[Steve Hoffert]

I am just going to go out on a limb here and say that we do not need the modern auto industry for defense of any kind. Back when we mustered up american manufacturing to make war time parts we had wuite a few more people in our military. We are maxed out right now fighting two wars and i still don't see the auto makers stepping up. Sorry to dwell on this point so much but I just don't like when "everything" becomes a matter of national security. In the post bush days I hop we can overcome that fear.

As I stated in a previous post it's RESERVE capacity. The tool and die industry is not just "tanks and planes". Every wearing part in every piece of machinery can be produced by this industry or a foundry. Most foundries have long since departed the shores of the US. Pumps to pistons, valves for your sink or toilet, bearings for any rotating piece of machinery are made by these people. National defense is not only the war machine but every other piece of necessary equipment needed to keep society operating.

I can machine these parts myself from raw materials and have seen fit to outfit my facility with both a milling machine and lathe, so at least one plant will be in operation when the lights go out (unfortunately it's not in Lakewood but I'll sell you water for a whole lot more when you're dying of thirst and you'll gladly pay.)

For those of you who do not work with machinery, you will be surprised to find that you can't buy anything off the shelf. Try to buy a new pump or a part for a pump and wait 14 to 26 weeks to get it. When the parts dry up from overseas and the water plant goes down for lack of parts I call that national defense.

The point is that this industry has the capacity to make these parts. Ford has a casting plant in Brookpark. They have the machinists to produce these things. If you shut down the auto industry and sell their machines to china (which is done on a daily basis) what do you do when the machines are gone?

[ryan costa]

If you're like me, nearly everything you own was made overseas. Even most of the food is picked, packed, slaughtered, or butchered by illegal immigrants. Most of the time its easy to be too busy consuming to worry about how things are made or work, let alone care who makes them.

The national self-esteem revolves around consumerism more than competence. Farmers markets are for hippies, but an American brand automobile erases all doubts. If you're still having doubts you can vote to bankrupt the country invading and occupying two medium sized third world countries.

During World War II the U.S. cranked out war planes by the tens of thousands. management in manufacturing seemed to have a rounder competence at mechanical engineering and production to switch over production so fast. They sure didn't have MBAs. They didn't have autoCAD or even computerized accounting. Granted, war machinery back then was much less sophisticated.

The overarching achievement of the American Medical Association and hospital management theory over the last 45 years are enormous healthcare costs, and the cost of insurance to pay for them just in case. even small injuries like a broken arm or slicing your hand trying to change a light bulb can cost far more than whatever insurance premiums you pay. health insurance is healthy people paying to subsidize the care of weaker people.

[Jeff Endress]

Does anyone really believe that all the auto plants and the ancillary support factories are simply going to be shuttered and the machinery shipped to China? That isn't going to happen. A bankrupt GM has far too much in the way of manufacturing equipment for a well heeled investor NOT to buy the corporation out of bankrupcy and reformulate the business model to reflect the realities of the 21st century. Some venture capitalist buys the whole enchilada, dimes on the dollars, off loads all the inefficiencies and burdens from union contracts and starts producing......

The reality of any bailout is the huge swishing sound of trillions of dollars going down an insatiable drain.

Assume, just for a moment, that there is enough money to keep even two of the big three in cash long enough to retool and start making the products that they declined to produce over the past decades....when they focused on high mark up SUV's. Any sucessful rescue is premised on the manufacturer being able to sell products. Given today's economy, or even the predicted eonomy of 2010, what are the chances of GM selling a boat load of Volts? ANd even if they do manage to stay afloat long enough to get retooled autos into the remaining showrooms, what difference will it make if the underlying, faulty business model is still at the core?

If GM goes bankrupt (followed in due course by Ford and Chrysler) there WILL be a huge bill to pay for pensions, unemployment, etc. I understand that. It will probably be more than the bailout money. But, throwing huge sums at an industry that still operates under a business model from a century ago is as effective as putting a bandaid on a severed limb. Even after the rescue, they're still going to go under.

Jeff

[Steve Hoffert]

Jeff,

While I agree with some of what you are saying, have you seen the plants already shut down by GM? Empty. Most of those machines were not redistributed to other facilities in the US, they were shipped overseas.

I'm not a fan of bailouts but certain industries must remain onshore. Let them file bankruptcy and reorganize but as a requirement for any financial help, require a that a minimum manufacturing capacity must remain in the continental US. This money should be used for retooling, not payroll. This would allow them to cut operating costs while maintaining functional production capacity.

Doctors, lawyers, bankers and artists don't create wealth they are the beneficiaries of an economy driven by value added manufacturing.

[ryan costa]

someone once wrote European manufacturers are eager to manufacture in America because there's less red tape and fewer barriers to hiring and firing people. Maybe GM will hold a liquidation sale. BMW, Volvo, Fiat, Renault, etc will buy up plants and churn out European style cars.

Or Honda and Toyota.

For Americans, Freedom mostly means the ability to do a shitload of driving. It is kind of profound that our 3 remaining personal automobile manufacturers have consolidated and grown into 3 giant zombies.

The first 700 billion dollar bailout Secretary of Treasury Henry Paulson asked for was to bail out folks who create abstract financial instruments and trade them back and forth to each other. derivatives. mortgage-backed securities. hedge fund shares. We can do it a lot faster with computers.

Manufacturing is a legacy industry best handled by third world labor and japanese engineers seems to be the view from the penthouse condo.

[ryan costa]

There is a strong chance the feds will end up taking over some of the pensions of autoworkers. They already funded this years bonuses for Morgan Stanley higher-ups.

And the folks at Morgan Stanley? They're planning to pay themselves $10.7 billion this year, much of it in bonuses — almost exactly the amount they are receiving in the first phase of the bailout. "You can imagine the devilish grins on the faces of Morgan Stanley employees," writes Bloomberg columnist Jonathan Weil. "Not only did we, the taxpayers, save their company...we funded their 2008 bonus pool."

Here is one innovative strategy for saving some aspect of the autoindustry. It isn't that innovative. It draws from traditional American economic policy. And traditional northern-Republican policy.

Raise tariffs on automobile imports and automobile part imports to 35 percent. Help broker deals for the Big Three to lease some of their Assembly Plants to rich foreign automakers. convince the Unions to settle for about what Honda of America workers make. Convince management, engineers, and executives to work for about what Honda of America management, engineers, and executives work for. Think of it as the inverse of the old Lend-Lease Act of World War II.

[Bill Call]

This money should be used for retooling, not payroll. This would allow them to cut operating costs while maintaining functional production capacity.

Todays Plain Dealer quoted a UAW official as saying the labor contracts had nothing to do with GM's financial problems.

I am opposed to any bailout because the money will simply be used to subsidize business as usual. To make matters worse the Congress will insist that GM make cars that no one wants to buy.

The auto industry bailout is not about saving an industry it is about political payback for the UAW.

[Jim DeVito]

This money should be used for retooling, not payroll. This would allow them to cut operating costs while maintaining functional production capacity.

Todays Plain Dealer quoted a UAW official as saying the labor contracts had nothing to do with GM's financial problems.

I am opposed to any bailout because the money will simply be used to subsidize business as usual. To make matters worse the Congress will insist that GM make cars that no one wants to buy.

The auto industry bailout is not about saving an industry it is about political payback for the UAW.

Bill, I am treading into dangerous territory by almost agreeing with you. Except for the part about congress forcing them to make cars nobody wants to buy. I think one of the reasons they are in this mess is because they were making cars nobody wants to buy with the high price of oil.

[Tim Liston]

From an editorial in today's Wall Street Journal....

"General Motors is a once-great company caught in a web of relationships designed for another era. It should not be fed while still caught, because that will leave it trapped until we get tired of feeding it. Then it will die. The only possibility of saving it is to take the risk of cutting it free. In other words, GM should be allowed to go bankrupt."

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