Thread: Government Motors

Originally Posted by Minnow

Yes, you get my point ...
Manufacturing cars? One word: NO!

I guess it's just a matter of perspective, prioroities, and where you want the lines drawn, then.

I got no problem with the government spending money ensuring I have the right to life (e.g. defense spending, dams and water projects assuring a higher standard of living),

Higher standard of living is certaily a different level of Maslow's higherarchy than defense spending is.

Maslow's_Hierarchy_of_Needs_svg.png

Sure, we need defense, and that is definately in the broad base there, in the second tier "red zone" of security.

But dams- as you rightly point out, a dam holds back water, and that can be both a resevoir to drink from, and power to power industry. Both items that kind of push into the red zone on the Maslow's chart. But then again, so does "security of employment" on the chart.


Luckily, we don't need to take community assets (tax money) to help out car companies very often. In fact, we've done it twice now. Chrysler in the early 80's, and now both GM and Chrysler in 2009. Both times it was an unforseen economic downturn that could have had very very bad long-term economic consequences on hundreds of thousands of American workers.

And both times it seems to have worked to stem prevent the massive unemployment that could have resulted from the economic shock had they gone under.

Like I say, it's a matter of one's priorities, and what they think the nation's resources should be used to save--education and schools, or jobs and employment.

Then again- if there were no jobs, both would take a huge hit, wouldn't they? we wouldn't be able to fund education, AND we'd have a huge drain through unemployment compensation, and trying to stimulate the creation of NEW jobs in new sectors. That would cost society a lot, maybe even a lot MORE than saving Auto jobs would cost, I would say.

Originally Posted by James48843

I guess it's just a matter of perspective, prioroities, and where you want the lines drawn, then.

Not to bicker, but IMHO no it most certainly is not. It is about principles and fundamental rights. Drawing lines or slicing the american pie is what american politics (the allocation I mentioned earlier) is all about -- and you know that. Backstopping private industry should not enter into the equation. A person does not have the right to a job, therefore; the government should not "ensure" that right. Our founding document(s) simply recognized our fundamental rights, it did not bestow them upon us. But we are getting into political theory here and Tom will stop us soon, so I'll stop.

American automakers, as private entities should resolve themselves to lead (like Germany/Sweden and Japan), follow (downsize and get leaner so they can regain their competitive edge and not get bloated as before [can you say GMAC financing?]), and the government should stay the hell out of the way. Again, your mileage may vary.

Oh, Maslow was a pretty astute fellow, but having just briefly studied him in college, it's my opinion that his theories do not extrapolate very well. In other words, good theory, too bad the theorist is full of $h!t.

This forum needs one of these:

Sweden!!...I was able to stay out of this until you said that!
Volvo and Saab were financially failing until Ford and GM, respectively, purchased them years ago. Ford managed to sell Volvo to the Chinese. Saab could not be saved, in part, because GM was unwilling to give up heavy intellectual property invested in order to support Saab as long as it did...but moreso because the business case just could not be made.

Governments in Germany and Japan, especially Japan, massively support their auto industries...even before you consider healthcare liabilities . VAG, the Volkswagen group currently battling arm and arm with GM for global market dominance, is HEAVY into finance. We can talk about free market ideals all we want but in this global marketplace the deck would be seriously stacked against us. Which brings up those massive worker healthcare costs our industries need to pay...or our support of defense contractors...but I'll stop myself right there.

Anyway, I agree with not supporting private industry as a general rule and I agree with the SERIOUS need for infrastructure spending. However, letting GM, or the banks for that matter, fail would have a massive event for the US economy. We have no way of knowing what might have happened...but we certainly know it would have been unimaginably disruptive.

As to other points made:
Deficit and Debt are negatives on the balance sheet. NO, they aren't the same; but tax revenue is a positive that is used to offset negatives...for the sake of this general discussion that is all that really matters.

The only reason I ever weighed in on this convo was to point out that there is also whole lot of GM bashing going on. I never was a big fan of GM or their vehicles but GM, Ford, Chrysler at their core, are much more "American" companies than the other global automakers. GM was failing for a myriad of reasons. The gov't was on the hook one way or another; hopefully by helping GM restructure it's costs the gov't can make a better return on it's investment than if they had let it fail and had to support/retrain all of GMs employees and rebuild that level of industry from the ground up.

Would you care to buy one of these? It's American made.

It's been Car of the Year for 2012 by Sport Auto Magazine.

And it get MPG equal to the Toyota Camry, but rates much better in crash tests.

The 2012 Chevy Malibu.
Can I put you down for one?


chevrolet-malibu.jpg

Mapper, you just made my point(s) for me. Why did Ford and GM even entertain buying Volvo and Saab? Mainly they just made bad business decisions and got a Brand name with very little else. Why should our taxes/tariffs go to back a private company's bad decisio? Plus, go look more deeply why Volvo and Saab were no longer profitable. Quick answer: they got bloated just like their american counterparts. Same will happen to VW unless they change their ways.

Germany and Japan are export countries, not import countries -- big difference between them and us. Their economies are highly dependent upon their respective auto industries. Watch how the Japanese manipulate the yen to maintain a favorable trade balance. The U.S. could stand alone given our wealth of natural resources. We do need a manufacturing base but a government-backstopped one? I think not. Do we need the banking sector at all? One could argue that it has become necessary given the modern age, however; it is parasitic by its very nature and not "so" necessary. Many credit unions and banks weathered the storm just fine with no help at all -- shouldn't the big banks have followed their model?

As for what would've happened if we had not bailed out the auto industry, they would've filed, reorganized, gotten leaner and more competitive or another investor(s)/entrepreneur(s) would have stepped up to the plate and given it a go. Probably would've hired the better, harder working employees and executives as well. As for the banking industry, there's plenty of money to be made with good old fashioned banking in our system. Same results. It would've been disruptive, yes, but at least we would have stuck to our principles. I don't remember anyone telling me I had a right to money and a bank account when I took Government or History 101.

Originally Posted by James48843

The 2012 Chevy Malibu.
Can I put you down for one?

I don't buy new cars anymore... but if you got one of these rusting out in your barn I might consider it:

Saab and Volvo were niche manufacturers that ultimately couldn't compete. Sorry, but calling them bloated like GM or VAG is wrong by orders of magnitude. I don't know why they got purchased by GM/Ford but it was during an era of massive conglomeration in large industry. Likely it was so that GM and Ford could diversify their respective audiences. Both were ultimately liquidated during the crisis. Volkswagen Group's stated goal is to, in short order, be the largest automaker in the world. Clearly a lot of business people in that company find it a profitable proposition.

Originally Posted by James48843

Would you care to buy one of these? It's American made.

It's been Car of the Year for 2012 by Sport Auto Magazine.

And it get MPG equal to the Toyota Camry, but rates much better in crash tests.

The 2012 Chevy Malibu.
Can I put you down for one?

I also only buy used . Actually I'm in the market for a used Volvo XC70...that is, right after I get bored with my Passat. I have a Chevy Astro AWD as 2nd vehicle...that thing is a workhorse...my ski and dog carrying machine. Love getting all changed for skiing right inside the van! Malibu doesn't do it for me.

Originally Posted by Mapper

Saab and Volvo were niche manufacturers that ultimately couldn't compete. Agree wholeheartedly!! Sorry, but calling them bloated like GM or VAG is wrong by orders of magnitude. It was a quick answer to a broad question. Let me clarify: Saab and Volvo were bloated because they took on too much manufacturing without the corresponding increase in product quality. Again, like you said, they were a niche producer. VAG is different but if they rely too heavily on the finance branch, mark my words, they will suffer the same fate, because Germany cannot control the Euro like Japan can "control" the Yen. I don't know why they got purchased by GM/Ford but it was during an era of massive conglomeration in large industry. Likely it was so that GM and Ford could diversify their respective audiences. Both were ultimately liquidated during the crisis. Bad business decision THEY should pay for not ME the American taxpayer. Volkswagen Group's stated goal is to, in short order, be the largest automaker in the world. Clearly a lot of business people in that company find it a profitable proposition. Absolutely and they do make some quality products, no doubt, just like the American carmakers do.

Point being: keep private industry private in the U.S. We will be better off in the long run.

Originally Posted by Minnow

I don't buy new cars anymore... but if you got one of these rusting out in your barn I might consider it:

Nice-

That's a 1970, isn't it?

The 71's had different lens around the lights up front.