Ideology says, 'let the market kill off the failed US auto industry'

[CADsortaGUY]

I have to admit to being pleasantly surprised. I figured any money given to Chrysler might have well as been burnt. Here's to hoping we don't have to bail them out yet again in another couple of decades.

I remain astonished that Fiat could turn around what Mercedes Benz could not (admittedly the situation was pretty different, but still).

Fiat didn't turn them around. Chysler's tanks are what have lead to it's "turn around".
<-owns 2 chrysler tanks( 2010T&C and 05 Ram)

 

[Genx87]

If the suppliers went to bankruptcy, somebody would buy their assets and restart the lines when there was demand. Every industry has a supply chain. If Walmart fell over would we bail them out because all of their suppliers would feel the pain? How about McDonalds, Best Buy, Target, Cargill, ect ect?

How many mythical jobs has this administration "created or saved"? 4 million from the stimulus, 1 million from auto bailout, how many more do they have in their bag of tricks?

 

[ProfJohn]

Nothing in your posts in any way changes the fact the Democrats did the right thing.

Your own article points out that Bush was the first one to loan them money.

Or did you skip over that part?

 

[Siddhartha]

Democrats said, make a sensible investment that helps our economy against a temporary fallout from the financial crisis caused by Wall Street:



I think we have a pretty clear choice here between the two sides - the one that follows ideology to a disastrous result, and the one that had a clue how to govern.

Still waiting for all the hyperbole about Washington designing cars badly to be found.

When I think of the GOP economic policies I think of:

The Republican Congressman who wanted to cut Federal government spending in response to the US losing over 700,000 jobs back in Feb 2009.

Also someone, maybe Anar 420, on this forum who thought a 1930's type economic depression would be a good thing for the US.

The GOP talking about not raising the debt ceiling and allowing the US to face the consequences because it would be a good thing the country.

 

[Genx87]

And what is people's problem with Ford doing the right thing and leveraging itself in the private markets instead of saddling tax payers with the risk? That is a bad thing?

 

[Genx87]

Your own article points out that Bush was the first one to loan them money.

Or did you skip over that part?

Craigfail's head assplodes.

 

[Ape]

If auto makers would build what people wanted to buy and build those things well then we wouldn't have to bail out anyone. No one wants to see a company fail but it they are doing everything wrong and losing money shouldn't they be allowed to die? Let the market, not politicians dictate who wins and who loses.

 

[Zebo]

Much (if not most) of the parts production has already moved out of the country under Delphi and the Robert Bosch Corp. That started early, though, so we have a lot of Mexico along with China.

More to the point for Automobiles, though - They're expensive to ship, and once the volumes are sufficient it's cheaper to open an assembly plant in the target nation than it is to build them elsewhere then export & ship. Parts can be crated and manhandled in bulk. Assembled vehicles can not.

Not to mention incentives/tax breaks for jobs in the target nation.

Interesting, Thanks.

 

[Greenman]

Democrats said, make a sensible investment that helps our economy against a temporary fallout from the financial crisis caused by Wall Street:



I think we have a pretty clear choice here between the two sides - the one that follows ideology to a disastrous result, and the one that had a clue how to govern.

Still waiting for all the hyperbole about Washington designing cars badly to be found.

So this somehow vindicates government spending? Ford turned around without Government help, what does that prove.
This is the sort of foolishness I don't like about P&N.

 

[shira]

When is paying back a loan not really paying back a loan?? hmmm

From NPR of all places:
http://www.npr.org/2011/05/25/136650503/chrysler-repays-billions-was-bailout-worth-it

$65 billion and we still own 8% of the company...

First you say we're not getting paid back. Then this very article says we're getting almost all of it back, and YOU object that after getting almost all of it back, we'll still own 8% of the company.

So tell us again what your objection is: We're NOT getting a very small fraction of the loaned $65 billion (and you're conveniently ignoring that 8% profit), or we're getting back too much?

Surely, a slimy ideologue like you can figure out how to answer out of both sides of his mouth.

 

[ProfJohn]

Craig and Chrysler is claiming that they paid back all of the money given to them.

I was pointing out the truth that there is a LOT of money that we gave them that we will never see again.

From my understand that $65 billion figure is money that we will never see again and it above and beyond the loans that gave them. (The money went to more than just Chrysler)

The 8&#37; ownership just points out the fact that we are still not free and clear of the company. That 8% was given to us in exchange for money that we gave them and again proves that Chrysler has not 'repaid' all that was given to it.

 

[glenn1]

If the suppliers went to bankruptcy, somebody would buy their assets and restart the lines when there was demand. Every industry has a supply chain. If Walmart fell over would we bail them out because all of their suppliers would feel the pain? How about McDonalds, Best Buy, Target, Cargill, ect ect?

How many mythical jobs has this administration "created or saved"? 4 million from the stimulus, 1 million from auto bailout, how many more do they have in their bag of tricks?

If your primary goal is to save jobs, it would have been cheaper to allow GM and Chrysler to fail. Then, have the companies stop making their crappy cars; buy a few million Hondas and use the former workers to rebadge them as "General Motors." Voila, you'd have cars people would actually WANT to buy, the workers would still be paid, and the U.S. would have still saved billions of dollars.

 

[chucky2]

Hey, can we all just start pulling stuff out of our butts now?

I've explained this a hundred times, but I'll do it again. First - Ford was saved from bankruptcy because they mortgaged everything, BEFORE the crash happened. They literally took the blue oval to the bank and took out a loan against it and every Ford facility on the planet. Had that gamble failed, you'd be looking at a bank-owned Auto company, if they hadn't been sold off in pieces.

Agree. Ford had a Leadership team that did the right thing, and they succeeded. Whether they did that because they really did see the incoming economic issues, or because that's just where they were as a Corp. at that point in time, only they really know. That has nothing to do with GM or ChryCo though.

Next. snip

That's all well and good, but the fact remains, had GM gone t1ts up, or ChryCo, the US populace would still have needed to get its product from somewhere. And that somewhere would have been the other auto manufacturers. Would have it been painful? Yes. Would it have been hard? Yes. Is listening to a bunch of industry and economic insiders agree with each other to keep their business as usual money flowing expected? Yes.

Why are the Big 2 of 3 and their suppliers more important than the thousands of small businesses that are on hard times each year, and their suppliers? Why don't we have the Gov bailing them out at $65B a pop? I betcha with $65B, we could have stimulated the economy a hell of a lot better, and saved more jobs, giving - and/or loaning, since the Big 2 of 3 got both - small businesses $65B.

And not have set near as a horrible precedent at the same time.

Chuck

 

[chucky2]

There's a huge difference between Wall Street companies looking for bailouts after over-leveraging and creating a disastrous risky system, and automakers who had a crisis getting capital to operate as a result of Wall Street's crashing the system. Moral Hazard applies to the former, not the latter.

But thanks for your expertise correcting all the experts on the industry.

All the "experts" that were so expert, they didn't correct the issues before they happened? All the experts that turn to each other and agree with a smile and wink so they can keep their system going?

Yeah....No...

 

[ElFenix]

I remain astonished that Fiat could turn around what Mercedes Benz could not (admittedly the situation was pretty different, but still).

MB burnt chrysler to the ground. when MB took over chrysler it was the most profitable automaker on the planet with a good product pipeline. MB took the money out of chrysler to fix their own mistakes in MB. and it left chrysler with a joke of a product lineup outside of the charger/300.

 

[Patranus]

LOL - Chrysler is a Italian company.

 

[bfdd]

Why do people assume just because we wanted them to fall and possibly die that we think everything would have been fine? I know damn well shit would have got worse and that doesn't cchange my position at all. No one learned their lesson and we're litterally going to start seeing a repeat of a few years ago over the next couple. All because it's impossible to learn without failure.

 

[Zebo]

You "free marketeers" are funny. All their competition gets state subsidies whether chaebols, keiretsu, state heath insurance and retirement etc none are lone wolfs and you're willing to throw hundreds of thousands maybe millions on the street for ideology.

 

[Steeplerot]

Their idealogical blindness has nothing to do with capitalism ornfree markets and everything to do with the whole " gubbermunt is bad at everything and is out to screw me!" Childishness. Big industry has been telling them for years private industry is king. You might as well try to explain to a wild-eyed street preacher that there is no historical cal record of jesus. They have ignorance tied into their ego and small lives. Its a talk radio fairytale that MUST be true as its the only religion they have. ( cuz these folks sure as he'll don't follow their jesus. Its all about the corporate televangalists on talk radio fox rw websites. Hallelujah. Facts? There are no facts liberals are the infidels just like we are to radical Muslims. Far righie is a far rightie -same shit.

 

[Zebo]

There is definitely some interesting cultural anthropology going on. This 100B is chump change compared to around 7 trillion between FED and USG has been pouring to the top/elite failures. Hardly a peep about peoples they look up to.

Anyway I'll continue to buy American and support American labor as long as I can. First they may buy something I sell second I don't like paying to house them to watch TV on welfare.

 

[glenn1]

Their idealogical blindness has nothing to do with capitalism ornfree markets and everything to do with the whole " gubbermunt is bad at everything and is out to screw me!" Childishness. Big industry has been telling them for years private industry is king. You might as well try to explain to a wild-eyed street preacher that there is no historical cal record of jesus. They have ignorance tied into their ego and small lives. Its a talk radio fairytale that MUST be true as its the only religion they have. ( cuz these folks sure as he'll don't follow their jesus. Its all about the corporate televangalists on talk radio fox rw websites. Hallelujah. Facts? There are no facts liberals are the infidels just like we are to radical Muslims. Far righie is a far rightie -same shit.

It has very little to do with government in comparison to the folly of spending tens of billions to prop up a failing company whose products suck and will still fail again unless the government continues to prop them up. If the government is going to "invest" in some company, at least let their billions buy Google or Apple or some company that isn't a steaming pile of shit like GM and Chrysler. Letting them fail would have been a great instance of allowing them to serve as a shining example to everyone else for how NOT to run a company. Instead, Uncle Sam has turned them into zombies that eat capital instead of brains.

 

[Deeko]

Debate on the repayment aside, this is why I don't like Pelosi. From her quote:

and the Democratic Congress

Goddamnit, shut up with the partisan crap! Can't you just say "yay good job Congress", you have to insert this partisan nonsense into your statement?

 

[Zebo]

Everything I read is American cars are very good. Especially Fords. US cars alone take prize in half the categories
http://www.jdpower.com/autos/ratings/quality-ratings-by-category/

You sound biased prolly drive a ricer I'd run over with my F350 and not feel a thing. (safety + too)

 

[piasabird]

Too large to fail? Maybe we should force some of the car companies to break up and form several companies. What we really need is some competition. Most cars made I could not and would not purchase new.

 

[Acanthus]

5B+ of Chrysler's debt was forgiven for Fiat to buy a stake in the company.

There is no doubt that both GM and C will not even come close to paying their debts.

That being said, i think the impact on the United States would have been worse if they were allowed to fail. Much worse.