Comments on: Open Forum: A Republican Solution to the Detriot Woes?

By: Jarrett

Jarrett — Wed, 17 Dec 2008 04:34:51 +0000

What we are talking about is not a bailout for the Big 3 but a bailout for the UAW. Unions take when they can and then they refuse to help out when the going gets hard. Until the UAW takes cuts no amount of money will save the Big 3. Bankruptcy will be best because the judge can force changes to the labor contracts. We need to make it clear to the UAW that they can be stubborn and “protect” their members for a couple of weeks or even months or they can bite the bullet and protect a majority of the jobs for years to come. That being said Bush should do some sort of stop gap measure to make sure that nothing bad happens to the Big 3 until Obama is in office, to lessen the political implications for the party.

By: Matt Kauble

Matt Kauble — Wed, 17 Dec 2008 00:41:20 +0000

I almost have to agree with Bill Kristol and Pat Buchanan in saying that some sort of deal needs to be done before the year is out for political reasons. If it is not done and at least one of the Big 3 go under the Republican Party will gt blamed even though it is the Democrats who control both houses of Congress. I personally favor something like the Corker Bill which calls for shared pain. However, it looks like the UAW and the Democrats are trying to squeaze the taxpayers and not solve the problem. If some bill that reforms the auto industry even a little bit passes then this mess becomes the Democrats problem when the GM and Chrysler have to declare bankruptcy. The politics in DC are such that real reform will not come until the Big 3 fail and as long as Bush is in the White House, the Republican Party will get the lion share of the blame for letting that happen. If the Republican Party gets blamed, this will hurt Republicans further in Michigan, Indiana, Ohio, Pennsylvania, Kentucky, and Virginia.

By: LibertyNow

LibertyNow — Mon, 15 Dec 2008 22:58:36 +0000

Subsidizing failure does what? Produces more failure. If these companies cannot situate their finances during a positive bubble then they must be allowed to fail during the bust. Honda, Nissan, Mitsu, Toyota, all of these companies seemed to do well during the bubble, and just fine after the bust, even though the market has tanked. The capital used by the Big 3 during the boom that was poorly allocated must be reallocated during the downturn, that is why its referred to as a correction. Governments can do nothing during a correctional period except prop up the tanking market, yet economic law is ultimately inevitable and will eventually correct itself, although re-igniting the bubble through Keynesianism will eventually lead to a harder burst in the future. You either let the correction occur in light of all the malinvestment taken place during the boom, or lengthen the agony and have a worse correction later down the road. Take your pick.

By: Marco

Marco — Mon, 15 Dec 2008 21:13:17 +0000

I think Mike is dead on – my expanded thoughts are here http://aureliusmaximus.wordpress.com/

By: Mike

Mike — Mon, 15 Dec 2008 21:05:51 +0000

YES to LOANS to the Detroit Three. The $15M loan to this industry will have a larger short-term impact than the $350M+ that’s been thrown at the financial industry. It will prevent the immediate loss of hundreds of thousands of jobs and allow for a more orderly restructuring of the industry. Who would buy a car from a company in Chapter 11? Yes, the automakers have made mistakes, but Shelby, Corker, and McConnell are uninformed and talk about our domestic industry as if it were the 1980s or 1990s. They are simply ignorant of the facts and the significant changes that have taken place in the last 5 years, albeit a little late. They would not be in this current situation if it weren’t for the credit crunch. Let’s give them some time to make the corrections, save a ton of jobs in the meantime, and it will benefit the entire country.

By: Sean Bos

Sean Bos — Mon, 15 Dec 2008 20:22:56 +0000

I supported the bailout of the financial industry, but did not support additional money for the auto industry.. However, if Bush would take away money from the financial TO the auto industry, that would be fine.

By: Bobby Lankford

Bobby Lankford — Mon, 15 Dec 2008 19:44:22 +0000

Let’s use whatever money was left from the Wall Street Bailout to bailout General Motors, Ford and Chrysler.

Now, coming from Michigan, where I used to live and having family and friends who have worked in some way in the auto industry, this would be a great help to employees in Detroit and Lansing and other US cities. Without that bailout, those cities would be ghost towns.

And Michigan needs to recall Jennifer Granholm. That bitch has caused Michigan’s economy to go down the toilet.

By: Vladimir Val Cymbal

Vladimir Val Cymbal — Mon, 15 Dec 2008 18:38:55 +0000

The American auto industry has moved away from a capitalist and entrepreneurish system to one based on the demands of consumption. The UAW kept making demands for wages that had nothing to do with the ability to produce a product that the consumer would buy. The management is also not invested in the product but in the value of the stock. Stock value is what has determined their pay, bonuses, and options. The focus has not been on what product will sell at what price but on how much can we suck out of the industry.

Capitalism is based on investment and risk. The investment has been minimal and the risks have not been accounted for. Constantly borrowing to pay wages and benefits without concern for the profitability of the operation is what put the industry in the situation they are in.

To prevent a total collapse of the industry (including suppliers) a rework of operations is necessary, without that no matter how much money is sunk into it, it will collapse completely. Salaries and benefits of management must be based on performance and not stock value or how long they can manage to borrow money to keep afloat. Wages need to be based on the profitability of the product produced. The product lines need to be evaluated as to salability and reduced to those that are profitable.

Once the SOP of the industry is changed then and only then should the government step in with loans to allow the industry to achieve profitability and stabilize the economy.

It is interesting that in the last 30 years Ford Motor Company has been moving production to other countries while Toyota has built 12 new plants in this country. This has produced a $4 billion profit for Toyota in the last reporting period while Ford has lost $9 billion.

By: Thoephilus

Thoephilus — Mon, 15 Dec 2008 18:18:17 +0000

The big 3 need to file just like everybody else.

By: Bill Sitter

Bill Sitter — Mon, 15 Dec 2008 15:32:50 +0000

I am glad the real conservitives stood up for what they belived in. If the bailout has passed is would indicate the nation is continuing to follow a socialist path. The bailout is unconstional because it would Honda and Toyato workers to subdize the big 3 in the United States, which would give Ford, GM and Chyler a unfare advatage which violate the 14th admement, the equal protection clause of the Constiution