Predictions of the next auto industry collapse( I say it starts in 2013) (complaint, companies)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I agree that the government should not be the one to pick winners and losers in a capitalistic society. But, using your "Wimpy" analogy, letting two huge manufacturing giants implode in the midst of a global financial crisis, in the hopes that something good would emerge from the ashes, may be the ultimate "bird-in-the-hand" scenario. I doubt that any other country would not have helped out a flagship manufacturing entity under similar circumstances.
It is estimated that 30,000 jobs were lost when Circuit City went under. Mostly not so great paying retail jobs. It was estimated that without government intervention more than 1,000,000 jobs would have been lost in the already suffering "rust belt". A huge difference!
FWIW: "In all, the Center for Automotive Research (CAR) in Ann Arbor, Mich., reckons the government's bailouts of the U.S. auto industry spared more than 1.14 million jobs in 2009, and prevented "additional personal income losses" of nearly $97 billion in 2009 and 2010. Another 314,400 jobs were saved in 2010. The research organization based its conclusions on the potential impact of auto-industry collapse for jobs at U.S. automakers and suppliers, and ripple effects on the economy at large. Like it or not, the auto industry is critical to the U.S. economy. CAR estimated the loss of 3 million jobs over three years if GM and Chrysler were allowed to go belly-up, with only about 240,000 jobs being at the auto manufacturers themselves. The rest were the attendant industries that interconnect with autos. The loss of personal income by the end of 2011 would have been $400 billion by the end of 2011, and the costs to the U.S. Treasury would have been $156 billion, according to CAR."
Circuit city was a retailer in a sea of other retailers. GM and Chrysler are both US manufacturing giants. Long before Circuit City closed it's doors the products it sold were already rerouted to other distribution channels. Not nearly the same overall impact as seeing 2/3 of US automotive manufacturing snuffed out.
Until the GM stock is sold, no one knows how much the US taxpayer lost. Fair Market Value of GM stock is estimated to be twice what it currently trades at. Meanwhile GM has regained their #1 top selling position and is generating billions in tax revenues annually, while their employees continue to earn wages. Not all bad.
So, just a few pieces of info to view through your objective lenses. As far as the political thing, I'll give you the benefit of the doubt. But, an individuals own determination of their objectivity is mainly, well, subjective! And support of the auto industry bailout is very much split along lines of political ideology. "Elected officials such as Alabama Senator Richard Shelby, who can't count a Detroit auto plant among his constituents, has been against the bailout. But Shelby, against government assistance for private companies in general, has been nonetheless supportive of hundreds of millions of dollars in taxpayer subsidies going to Mercedes-Benz, Hyundai, Kia and Honda and parts companies to attract those companies' plants to Alabama"
But we don't know the opportunity cost of not allowing Chrysler to fail in the 70's, the more we prop up any failing business the more we reward inefficiency in the market.
I don't care about elected officials that talk out both sides of their mouth. These subsidies, bailouts, etc. are all wrong.
But we don't know the opportunity cost of not allowing Chrysler to fail in the 70's, the more we prop up any failing business the more we reward inefficiency in the market.
I don't care about elected officials that talk out both sides of their mouth. These subsidies, bailouts, etc. are all wrong.
AIG is a thriving company that earned the US taxpayer a profit of $28 Billion. That represent real results not hypothetical constructs. Jobs were saved and confidence in the US economy was maintained. No one ever knows the result of the road not taken. But, positive outcomes speak for themselves.
The Fed got permission to pump up the DOW after that shoe fell so we are just having another bubble. And it may be big enough to drag the EU up with us.
The Fed got permission to pump up the DOW after that shoe fell so we are just having another bubble. And it may be big enough to drag the EU up with us.
The worst part is that the bubbles get larger each round, while the pain on the street gets worse (even during the "good times" and "recoveries").
The worst part is that the bubbles get larger each round, while the pain on the street gets worse (even during the "good times" and "recoveries").
If you want to relieve the pain on the street then higher wages on the bottom end. Turn this bubble into inflation that will relieve debts all the way around.
The auto industry "come back" seems like nothing more than the fulfillment of pent up demand from when consumers weren't buying nearly as many cars during the last recession. That being said, I predict that the industry will face another downward spiral once this pent up demand is satisfied and the channel stuffing GM and Chrysler are doing catches up to them. I think this will start to happen sometime early next year which of course will be after the election, giving Obama the luxury of continuing to run on his "success" at bailing out the industry. That's my prediction, anyway. I'd be curious to know what the prevailng wisdom is at large.
I want my 1990 Fleetwood Brougham back, and will reward any company that makes an equivalent. I got my first Fleetwood at age 22, it's all I have driven since. If 1990 GM could make a 6 passenger, 5500 pound car with a 5.7L and get 27 HYW, why aren't the new small cars getting 50 out of the gate.
It was very frustrating during cash for clunkers to see that my favorite caddy was now 40% smaller, sat 2 less and lost 1/3 of it's HP but was ineligible because it got the same gas mileage. It would take a real clustertruck to pull that off.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Data are your friends
