[tuebor]

What do you all think about the $25 billion loan package that the Big 3 have asked for? I assume most of us would regard this as good for Michigan. Would it be good for the country as a whole? Should this be considered a "bailout"?

On NPR today they had an interview with Wall Street Journal reporter Paul Ingrassia, who opposes the loans. I don't think I agree with his argument, which basically boils down to the same ol' dogma that the WSJ always preaches: "Woe unto ye who follow not the way of the free market, for it is holy and can do no wrong!"

The Three Ps: Why Bailouts Are Problematic : NPR

[allbusiness]

It's a loan, isn't it? That means is is supposed to be paid back. Sounds fait to me to assist the #2 economic engine in Michigan.

[Coldjensens]

I do nto believe that it will happen. It creates a precedent that the government cannot afford. If they did nto bail our Lehmann, they will not bail out G.M.

[MittenDweller82]

Agreed, lending the money to the big 3 will not solve the larger issues at hand, the issue is much deeper and is rooted with unionized problems. Other auto manufacturers (Subaru, Honda and others) are not in need of "special" treatment, they have diversified product lines, and happy employees. This issue of the big-3's survival is crucial to Michigan, loans are not the answer, it is a deep seeded workplace culture that needs to change. In order for the big three to be profitable, unions must disappear, and employees need to start thinking about their companies, and not their personal welfare. Michigan's auto workers needs to embrace the fact that the "good old days" of high wages and frivolous spending are never coming back.

[tuebor]

"People are tired of privatizing profits and socializing loss."

Agreed. But that's not what would happen here. The loans are not like what is happening with Fannie & Freddie or AIG. The loans would be invested in new technology, not used to clean up bad debts.

Higher CAFE standards should have been forced on US carmakers long ago, but they weren't, and now just when they finally have been raised, the US carmakers have taken such losses that they don't have the money to invest in the research that will make it possible for them to comply with the new standards. It should also be remembered that the legislation that raised CAFE standards also promised them help with compliance.

Some of the other points raised are factual and some are not. The '09 Corolla does not get 40mpg and does not cost $1000 less than the '09 Cobalt; in fact, a base-model Corolla costs MORE and has WORSE highway mpg ratings than a base-model Cobalt Side by Side Comparison on Yahoo! Autos, and GM products are not unreliable. But quibbling over the ratings of specific models will not answer the question at hand, which is whether investing in a new generation of technologically advanced, highly efficient vehicles -- and saving thousands of jobs -- merits a public loan.

I see that some will try to turn this into another union-bashing thread. It is management, not labor, that got the US carmakers into the jam they are in. They're the ones who let quality slip in the 70s and put all their eggs in the SUV basket in the 90s. Labor has already made large concessions to help them out of that jam.

[xlabel]

I say loan the big 3 some money, what the heck we hand out money to other countries like it's water and most of them hate us anyhow. I have a 99 Escort Zx2 with 200k on it and a 93 Ranger with 300k on it and I've been under the hood and in the shop way less than friends of mine with toyotas amd hondas. I think the big 3 can compete if they ditch the gas guzzlers focus on the best sellers and quit changing the name all the time,people are largely brand loyal. Another way .I believe to compete with Japan is to make it easier for the car owner to make repairs, this is the do it yourself era. That was one great aspect of the old muscle cars if you had a cresent wrench and a screwdriver your not walking home.

[1eyedjack]

Why don't the big three go to Mexico, Canada, or other places over seas to get there money? That's where my job went and there are more parts made out of country for so-called U.S. made vehicles than most people realize.
Buy American, buy American, that is what your told. Well since the majority of cars parts etc. are not made here; screw the big three. They should not even be called the big three any more anyways!

[Coldjensens]

They are usually referred to as the former big three now.

Although many parts are made where labor rates and terms are more competitive, the engineering, management, profit, marketing ect portion of the purchase of a car still comes home to Michigan. Those people then buy things, dry clean their clothing, eat out for dinner, watch plays and movies, do home improvements, etc. In the end, that money poltential gets back to each of us in one way or another. It is not a huge amount compared to the jobs that are being lost, but it helps some. We need to hang onto everything that we can get to support the Michigan economy.

So yes. Buy American. At least the executives, engineers, marketing persons, and everyone who supports them is getting some money. It is better to have that money spent here than in Japan or Germany.

Now, if only they would make some decent cars. Where is something that seroiusly competes withthe Honda Fit, the Smart for 2 car, the Prius or the other high mileage commuter cars? Cobalt, Focus and the Mazada 3 are not real competition for any of these options. (Does Chrysler even have a high mileage type commuter car?).

[ChunkyMonkey]

I think that the government should not bail out the Big Three. They bet on the SUVs and lost, so they need to take their lumps and be more efficient. Helping them out will just postpone the pain if the companies do not fundamentally reform themselves. The government is now broke and shouldn't be in the business to bail anybody else.


Excerpt from Now GM, Chrysler and Ford want a bailout too - Sep. 18, 2008

"Even if Detroit pays the government back, the loan would still come at a cost to taxpayers, who are already feeling the sting of the growing queue of federal bailouts. Citing the declining credit market, Congressional Budget Office director Peter Orszag said on Monday that the government would have to allocate $7.5 billion to subsidize the loans."

[Coldjensens]

I just saw the new GM cars in the basement display at the RenCen. Wow! They are really neat. GM can certainly turn around if they get those cars on the market quickly. Unfortunately, I heard that the Volt will not be out until 2011. That is just plain stupid. By then five other car makers will have already produced something similar.

I am not sure that they can justify refusing to bail out the car makers who lost by betting on SUVs given that they bailed out the banks and insurnace who lost making a supid bet on real estate.