GM Spirals the Drain (Part 2)

[KrazyHorse]

Originally posted by Whoha
I'd rather the big three were bailed out than the financials.

Of course you would.



Then again, you're also against free trade.

[Naked Gents Rut]

That said it is far, far easier to create a new bank then it is to create a new automaker.

There will be plenty of automakers around even if Chrysler and GM go under.

[Dinner]

Originally posted by KrazyHorse


Of course you would.



Then again, you're also against free trade.

I think he is like me. For free trade except as required for national security. Maintaining a domestic manufacturing base which can be used in times of war is a matter of national security.

[Naked Gents Rut]

Maintaining a domestic manufacturing base which can be used in times of war is a matter of national security.

You should support the destruction of GM and Chrysler then, as Honda's American factories and factory workers are much more efficient than Detroit's. Letting the Japs take over the remains of the Detroit automakers will be better for American national security.

[Whoha]

nope, KrazyHorse got it in 1. By the way, our virtuous defender of fiscal conservatism Senator Corker, is partly responsible responsible for what is one of the largest cash incentive that has ever been given to any automaker just a few months eariler.

[Darius871]

Originally posted by Naked Gents Rut
Letting the Japs take over the remains of the Detroit will be better for American national security.

[Whoha]

bleh.

[Dinner]

They won't take anything over. We'll just be left with a big hole in our manufacturing base. Even the "American made" foreign cars are largely designed over seas, use foreign suppliers to a greater degree then the domestics, and just don't produce as many American jobs as an American company does. I am fully confident that the domestics can be successfully reformed with out putting them in a death spiral the way Bankruptcy would and that is what should be done.

Thankfully, that is what will be done. Idiots like Drake will continue to eat up the posturing of the politicians he likes but the facts on the ground won't change. Posturing is just posturing and in the end Republicans don't want to repeat the Hoover experience. That's not my words; that's vice President Dick Cheney's words.

Sadly, Drake doesn't even know he's been played.

[Naked Gents Rut]

They won't take anything over. We'll just be left with a big hole in our manufacturing base.

Of course they will. Someone is going to take over GM's market share if they don't make it out of restructuring.

I am fully confident that the domestics can be successfully reformed with out putting them in a death spiral the way Bankruptcy would and that is what should be done.

No one with a brain agrees with you.

[DinoDoc]

I think Oerdin just likes the idea of an Auto-crat.

[DinoDoc]

Originally posted by Oerdin
I am fully confident that the domestics can be successfully reformed with out putting them in a death spiral the way Bankruptcy would and that is what should be done.

In what way do you see the Big 3 being peacefully allowed by the union to deploy capital in ways that the market would dictate, such as closing plants and layoffs without being forced to do so as being in Chapter 11? This is especially true if they have the government acting to subsidize uncompetitive contracts and taking the concept of failiure out of the marketplace. I'm starting to think Bush owes Chavez a big apology given his recent nationalization spree of late.

[TCO]

The financials should have guns stuck to their heads. They are in the business of taint risks. let them lose.

[Impaler[WrG]]

It is foolish and naive to think that the foreign automakers (by import or local manufacture) simply fill the void left by the loss of the domestics. The domestic manufactures won't fade away they will implode, contracting the consumer base and worsening the overall economy, car consumption in absolute numbers will fall and it's doubtful that foreign car sales (either imported or locally manufactured) would rise in absolute terms in the wake of that. If anything I would assume the loss of competition would allow foreign automakers to raise their price (if demand loss is so great that it outweighs the supply loss of the big three then we are truly F****), supply and demand dictate that if a huge portion of the worlds car production is removed prices will rise all over the world.

Theirs also the issue of part supplies which are shared to a great degree between all the manufactures, theirs speculation that the domestic part suppliers will all fall like dominoes if the Big Three go under. This might endanger even the locally made foreign automakers and bring ALL car production in the US to a halt. I'm skeptic that this is inevitable but it is a serious danger and represents the worst case scenario that must be considered.

Another fact which has gotten scant attention in the media, it is virtually impossible to create a car industry once it disappears. They are such huge size and complexity and really on so many layers of part suppliers and brand loyalty that it would require MASSIVE state intervention to get a fledgling auto industry to blossom again. Its a comparably huge task to Europe's creation of Air Bus which took more then a decade and untold billions. The cost of saving the industry now must be weighed against the cost of re-building it later if such a feat is even possible as I can't even think of a single example ware that was ever done.

[Asher]

The problem is there is an auto industry without the Big Three. You don't need to create one again.

It'd just contract, but not disappear...

[Naked Gents Rut]

If anything I would assume the loss of competition would allow foreign automakers to raise their price (if demand loss is so great that it outweighs the supply loss of the big three then we are truly F****)