Juxtapose: The 5+ carpooling is a bit of a red herring since the Ford Escape and a typical small car both have legal seating for the same number of people, 5. At least here in Canada.
Granted, you could successfully make the argument that because Americans are statistically more obese, Americans require a larger car for five people than the rest of the world would, but thats just a whole different discussion on what we mean by need.
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quote:While I agree there are benefits to larger cars, I'm having trouble thinking of one that, relative to smaller cars, benefits someone other than the owner/user.
Carpooling.
I concede the possibility, but I doubt it amounts to a significant difference. I suspect the number of 5+ passenger carpools doesn't amount to a big slice of the pie.
Try being 6' 6" and shopping for an import in the 1990's and early 2000's. Thankfully, as a whole ergonomics are getting better for small cars, and I can at least sit in them now without craning my neck to either see out of the windshield or keep my head from wedging into the roof.
I chose a full-sized sedan over mid-sized this past time around because in the mid-size, which I could fit comfortably, there was literally (I measured), less than 3.5 inches between the back of the driver's seat and the rear seat. And I was regularly driving three people around in addition to myself, so a 3-seat car wasn't a palatable choice.
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quote:Originally posted by Jhai: I think that counts as a benefit to the owner/user.
Dean or Tasha, the people who regularly had the back seat, would probably disagree it was a benefit exclusive to me.
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I'm not saying it's not a legitimate concern at all, but just that it doesn't particularly help others not associated with you.
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Sure it does, if being able to ride in relative comfort in his back seat keeps them off of the road in a separate car.
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(For the record, a Toyota Camry Hybrid which is a relatively large car which should count as a full-sized sedan still posts significantly better fuel mileage than the Ford Escape (either four wheel drive or not)
For those people that truly are larger and are shopping for a hybrid, that might be a suggestion. Nonetheless, I don't think 6'6" people were exactly what Juxtapose had in mind when he was talking about large slices of pie, so this is a bit of a digression)
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quote:Originally posted by mr_porteiro_head: Sure it does, if being able to ride in relative comfort in his back seat keeps them off of the road in a separate car.
This was the what I was going for. Headed to meetings / lunch / whatever from work, my car was the only choice that wound up with us taking one vehicle. The alternative was to take Dean's benchseat Dodge Ram and Dan's small Audi that could feasibly seat three (for the aforementioned reasons). And we did just that on occasion, like when my car was out of gas or had a flat.
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quote:Juxtapose: The 5+ carpooling is a bit of a red herring since the Ford Escape and a typical small car both have legal seating for the same number of people, 5. At least here in Canada.
Oh, I was talking about large cars generally, since many SUVs and vans can seat 7-8.
Architraz Warden, that's perfectly fine. I've been in cars that were too small for me, and I'm only 6' even. As I said earlier, I'm really not trying to argue for a one-size-fits-all system.
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Mucus, the Ford Escape Hybrid is an SUV. I don't think it is fair to compare it to a Toyota Camry Hybrid, which is a mid-sized sedan. Unless you have figures on the curbside weight of each vehicle for comparison.
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quote:Originally posted by mr_porteiro_head: Sure it does, if being able to ride in relative comfort in his back seat keeps them off of the road in a separate car.
Good point; I didn't think of that. Maybe it's 'cause we've been the only ones with a car in our urban group for awhile, so the idea of multiple vehicle transportation did not occur to me.
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Ron Lambert: I think you misunderstand me. The Camry Hybrid note was in reference to Juxtapose and AW's exchange in finding a car that can seat five people comfortably for carpooling. It was not in reference to SUVs in general.
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And actually, the Escape is actually a pretty fair comparison to the Camry (2008 hybrid models), both in terms of curb weight and interior space, which is a little surprising to me.
EDIT - interesting, it looks like Hybrids are generally several hundred pounds heavier than non-hybrid models. I assume it's the weight of the battery.
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It is. They try and lighten the weight everywhere else when they can, but those batteries are crazy heavy. One of the benefits that GM hopes to reap from the Volt is that it'a considerably lighter than you'd expect for its size, which comes from reducing the weight of the frame and such and from the reduced weight of the battery pack.
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If I understood correctly what my brother (who is a GM engineer) tried to explain to me, the advantage and difference of the Volt to conventional hybrids is that the car is always powered by the batteries, not the gasoline engine. The gasoline engine that charges the batteries runs at a constant speed, optimum for fuel efficiency. How this translates into final gas mileage efficiency, I have not heard. As Juxtapose said, it is scheduled for 2-3 years in the future.
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Which is why calling it a hybrid in the traditional sense might not be fair. It's really an electric car, with its own on board power plant if you need it. One of the problems they've had to focus on is testing to see what happens when a few gallons of the same gas sit in your tank for weeks or months at a time, which they think will happen from people charging the car up every day.
They've spent a lot of time coming up with more energy efficient amentities too, from the AC and heater to the radio, trying to make sure that the things that don't actually make the car go aren't sucking up all the juice so they can get every mile out of the batteries that they can.
The original shape was dramatically changed because it wasn't right for wind resistance, so after a lot of wind tunnel testing they came up with the best model to reduce drag and increase efficiency.
Right now a lot of the main work is really being done on the batteries. They have prototype packs from both of the finalist suppliers, A123 and Continental. They're currently working in mules with a Malibu frame to test them in real world conditions, and elsewhere they're rapidly charging and depleting them in extreme cold and heat to make sure the batteries can survive thousands of charge and deplete cycles in extreme temperatures without losing capacity.
They're also in a fight with the EPA over mileage standards. The EPA wants to create a whole new set of rules to test them that wouldn't take the electric part of the car into account at all. GM thinks it's unfair to not take that into account since it's really an electric car, and it actually gives hybrids an unfair advantage in advertising. I'm mixed on that one. I think the electric part should absolutely be taken into account, but I also think it's valuable to know what kind of gas mileage it gets once all the juice is gone.
Also, technically the engine won't "charge" the battery while the car is in motion. When the battery gets down to a certain charge level the engine will kick in to keep the car running, but it won't charge the battery back up and then turn off. It will keep the car moving until you turn it off and recharge it from the wall, or at least that's what I've read.
I don't believe they've really crash tested it yet, but I'm sure they are taking safety into account, especially when it comes to the battery. One of the big issues that had to be overcome in the battery technology is that these types of batteries previously tended to be a bit unstable and had a tendency to ignite. But both companies say they have fixed the problem. Plus they both have different chemical designs for their batteries, they aren't identical technologies, but I won't even try to go into the differences. I could regurgitate it, but I don't pretend to understand it.
What's funny about this is that both Toyota and Honda are jumping up and down claiming that the auto industry isn't ready for the Volt, that LION batteries aren't ready yet, that the whole thing is a big mess, but at the same time they are trying to push out their own plug in hybrids (still traditional hybrids but with bigger batteries), and they're also starting to sink money into R&D for their own version of the Volt. GM trying to leapfrog everyone else technologically. I don't know if it will work or not, and frankly if it doesn't I really do think they are sunk. They're basing a big part of their reorganization around the platform that the Volt is built on, and on the Volt being a game changer, and they're spending billions on this single car just to make it happen. If it flops, I think they're screwed.
But I don't think it will flop. The price point is going to be a little high, but people bought $100K Teslas just because they were electric. Like most things, the people who can afford it will buy it, and when they can scale up and bring the price down, the rest of us will be able to afford it in time. A massive government tax credit certainly helps.
There's still a long way to go, but it's promising, and they're certainly committed to it. It could still turn out that the battery technology isn't quite there yet, but isn't this exactly the sort of thing that we want the Big Three to at least try to do? Seems like it's pretty hypocritical for anyone to bash them for doing what everyone has been bashing them for NOT doing.
I'd say two years is a fair guesstimate by their latest in house estimates. They plan to start production in late 2010 I believe. There's already a waiting list long enough to consume the first year's worth of production.
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Does anyone here know how much effect air conditioning has on hybrids? I especially wonder whether A/C will be feasible with the Volt. I suppose it could run off the gas engine.
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Hybrid ACs are a little more efficient than the average car is. But either way it hurts your gas mileage.
There will be AC on the Volt. Like I said, energy efficient extras has been one of the biggest breakthroughs they've had to make on the Volt, to make sure that you CAN run a car with the AC and radio going and still get your 40 miles to a charge. It'll be uber efficient.
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That sounds good. Typical serendipity: when you innovate, pushing the envelope in one direction, more benefits spin out from it.
Has anyone noticed that the most outspoken Republicans against the Detroit Automaker bridge loan (you can tell which side of the issue someone is on by whether they call it a bridge loan or a bailout), are southerners? This leads me to suspect that the hostility toward the Detroit automakers is at least partly a South vs. North resentment, since it was the manufacturing industrial might of the North that finally crushed the South in the Civil War. Perhaps this is a way for the southern Republicans to "get even."
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The southern states are also at-will employment states, where many European and Asian car manufacturers have their American manufacturing plants. Those plants (and companies) are quite safe, and will neither require or receive any of the bailout. So why should the southern senators force their constituents to pay for a loan to save the competitors of some of their major employers?
If you'll notice, many southern and western democrats are leaning in a similar fashion, while the great lakes republicans are clamoring for assistance.
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I think Canada is in a slightly different situation. Much of our auto industry is concentrated in Ontario and IIRC it actually comprises a bigger percentage of our GDP (roughly double) than in the US. There was some news back a few years (2005?) when we surpassed Michigan in absolute auto production numbers for reasons such as cheaper health care costs and the growth of Japanese factories (i.e. whereas in the US, Honda and Toyota build in the south and shift production away from Michigan, in Canada they just build in Ontario next door to the American plants, so the shift is basically a wash).
Politically, the Ontario premier is more enthusiastic about a auto bailout than his Quebec and BC counterparts who have no auto manufacturing, but have hard hit forestry industries, due to the US slowdown in house construction I suppose. But the geographic split seems to be less contentious than the split the latter two posters are describing in the States.
In any case, I'm in Ontario so geography is not an especially effective predictor.
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Negative. Architraz was the nickname for our (and several other's) College of Architecture building, in that our major kept us just as incarcerated as inmates would be.
My last year of grad school, I was a TA as well as the student in charge of the Architecture print lab. I promoted myself from an inmate to a warden. Hence, Architraz Warden.
(Amending Archi- to everything is a tradition of Architecture... Architraz, Architorture, Archibabble, etc. It's our cultural payback to the world for deciding architecture needed to be usurped for unrelated technological professions.)
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quote:Originally posted by Architraz Warden: The southern states are also at-will employment states, where many European and Asian car manufacturers have their American manufacturing plants. Those plants (and companies) are quite safe, and will neither require or receive any of the bailout. So why should the southern senators force their constituents to pay for a loan to save the competitors of some of their major employers?
If you'll notice, many southern and western democrats are leaning in a similar fashion, while the great lakes republicans are clamoring for assistance.
Which is why Dick Shelby is the leader of the anti-bailout movement. There was an article on the news last night about a couple different groups trying to form "Boycott Alabama" movements, by not visiting the state or buying anything purchased there if they are successful in blocking the legislation.
On the one hand, sure, it's a fair argument to say why should Alabama tax payers help workers in a rival company in Michigan, but flip it around. Why should Michigan tax payers pay for hurricane relief when hurricanes come through and destroy the Gulf areas of Alabama? They were the idiots who chose to live in a much more expensive to repair location that's prone to damage, but WE have to pay for it? The argument goes both ways for a lot of things. Some times we're 50 states and sometimes we're one country, but it seems pretty selfish to try and make those distinctions only when it benefits you. That's how nations start to break down. It's also stupid from a couple other viewpoints. Out of work Michigan workers will cost Alabama taxpayers in a number of different ways.
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I both agree and disagree with you Lyrhawn. No company should be too large to fail, and no state should be so reliant upon a single industry that downturns in that industry raise the specter of bankruptcy. The threat of failure simply cannot be a bluff if we're going to call this
I agree that all the Big Three's employees being unemployed would be a massive burden to the nation. But I also think that even in spite of the economic situation, the Big Three (the decision makers that is) have brought this upon themselves.
They are so absurdly unsustainable as corporations that our MBA thesis class almost six years ago centered around "How should Ford, GM, and Chrysler dig themselves out of this hole". One of the groups (that had GM) suggested they declare bankruptcy, made a very sound argument for it, and feared our professor was going to fail them for it. It seemed extreme as a suggestion then, but I'm really starting to think that they may have hit the nail on the head with their suggestion.
A 100 year legacy is something to be proud of if you've dedicated that duration to adaptation and innovation. The moment you stop, every year is another link of chain getting that much closer to binding you to an anchor. This loan may be just the lifeline they need, or it could be a band aid trying to six a severed limb. The danger comes from the gorilla in the room, in the form of 20, 30, or even 50 years of mismanagement they must fully overcome to step back from the grave.
Politics is all about perception. It's easy to rail against $15b to save a perceived rival, and hard to rail against $8b for FEMA, particularly when since the Big Three's backyard took the lion's share last year during the floods. Is it right, that's debatable. But even living in a place effectively free of both industry and natural disasters, I feel less qualms about my tax money going towards disasters.
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quote:Originally posted by Ron Lambert: If I understood correctly what my brother (who is a GM engineer) tried to explain to me, the advantage and difference of the Volt to conventional hybrids is that the car is always powered by the batteries, not the gasoline engine. The gasoline engine that charges the batteries runs at a constant speed, optimum for fuel efficiency. How this translates into final gas mileage efficiency, I have not heard. As Juxtapose said, it is scheduled for 2-3 years in the future.
This is a very significant difference. Plug in hybrids have a fuel efficiency dependent upon driving habits. For instance, some designs I've heard of would run off the battery exclusively for 50 miles, so if you drive under that distance in a day (most do), you would burn no gas. When the gas generator went on, you would be burning about one gallon for about every 50 miles, and that rate would be fairly constant, because the battery would always be charging at the same rate. It's fabulously efficient when compared to internal combustion.
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I both agree and disagree with you Lyrhawn. No company should be too large to fail, and no state should be so reliant upon a single industry that downturns in that industry raise the specter of bankruptcy. The threat of failure simply cannot be a bluff if we're going to call this
I agree that all the Big Three's employees being unemployed would be a massive burden to the nation. But I also think that even in spite of the economic situation, the Big Three (the decision makers that is) have brought this upon themselves.
They are so absurdly unsustainable as corporations that our MBA thesis class almost six years ago centered around "How should Ford, GM, and Chrysler dig themselves out of this hole". One of the groups (that had GM) suggested they declare bankruptcy, made a very sound argument for it, and feared our professor was going to fail them for it. It seemed extreme as a suggestion then, but I'm really starting to think that they may have hit the nail on the head with their suggestion.
A 100 year legacy is something to be proud of if you've dedicated that duration to adaptation and innovation. The moment you stop, every year is another link of chain getting that much closer to binding you to an anchor. This loan may be just the lifeline they need, or it could be a band aid trying to six a severed limb. The danger comes from the gorilla in the room, in the form of 20, 30, or even 50 years of mismanagement they must fully overcome to step back from the grave.
Politics is all about perception. It's easy to rail against $15b to save a perceived rival, and hard to rail against $8b for FEMA, particularly when since the Big Three's backyard took the lion's share last year during the floods. Is it right, that's debatable. But even living in a place effectively free of both industry and natural disasters, I feel less qualms about my tax money going towards disasters.
I have a hard time seriously arguing against disaster relief, but after the relief keeps going to the same areas over and over again, I start to wonder why there are still people living there that constantly expect the rest of us to continue to pay to clean up after their poor settlment decisions. And it may be that those decisions were made decades ago (not unlike some business decisions made by the Big Three), but it doesn't change the fact that they never really learned from changing circumstances does it? When you get to the nitty gritty, if we're going to give someone money because they just lost their home due to a flood or hurricane, we might as well give it to the guy who is about to be just as homeless becuase his job evaporated and there's nothing else for him to do. In some ways that should be the easier argument to make.
But I'm also of an apparent minority decision that not everything about the Big Three's situation is their own fault. They wouldn't be where they are now if not for the credit market collapse. They'd already started to institute many reforms a few years ago before this most recent crunch time appeared. That and the fact that the shift from a demand for SUVs to a demand for cars came so rapidly that it was hard for them to adjust, but even given that they still came up with several great selling small cars. It's not that they don't have them, it's that no one wanted them until now and they're rushing to catch up with a quickly shifting consumer market.
I think if the credit collapse hadn't happened, they'd have had a rocky but realizable road to being good profitable companies. Ford was already well on its way before this happened, and that's probably why they are the best off. Bu they got kicked when they were down. The ones doing the kicking, the credit industry, got billions of few strings attached dollars with lax oversight, while the ones who got kicked and did no worse than them, arguably they did much better, are being scrutinized and humiliated for public spectacle and political posturing while asking for just a tiny fraction of what the banking industry is having handed to them.
The question before everyone is: Will the Big Three return to viability? I think the answer is yes. Everyone keeps saying "well where is their plan?" and I'd point you to the past, not the future (the recent past anyway). They've shut down and retooled factories to reduce total output and switch from SUVs to cars, they've slashed labor costs, including expensive legacy costs, and they've dramatically increased quality. The benefits reaped from such changes don't happen overnight, they take awhile, and in an industry like the auto industry, sometimes that means years. But they are responding to the demand for more efficient cars with better fuel economy, more hybrids and even electric cars, and are cutting costs across the board.
Public perception seems to be that only a month ago they all of a sudden realized there was a problem and are scrambling to fix it. Maybe it's the false stereotypes being spread around as supposedly long held truths that bother me more than anything.
And for the matter the casual indifference with which a lot of people are treating the millions of people who are barely treading water and will drown without some sort of rope thrown to them. "Let em fail" sounds sickeningly callous to us who actually live in Michigan, and I can say, without much pride and a little sadness, that if somewhere down the line one of those "let em fail" people lives in a state that needs help, I'll rail to my Congressmen 24 hours a day that they be told to just suck it up and bear it like we were told to, and I'll also move to support those that supported us. I don't feel particularly proud of such a vindictive, retaliatory mindset, and I wish I could say I'd rise above it, but frankly I'm too shocked and pissed at how callous, selfish and ignorant many are being about the potential pitfalls involved in this situation.
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As I said in my previous post... people living on the coast pay hefty fees in insurance to live in such regions. Have the Big Three paid additional taxes above and beyond to preemptively defer some of the $34b they're asking for?
Yes, I'm probably being a short sighted and cold hearted bastard, but I'd rather see that money go toward infrastructure projects than a bridge loan that stands a not insignificant chance of being defaulted on.
Their future viability, though, is partly where we agree. Ford has made amazing strides in the past years. GM has some amazing and industry changing ideas in development. Chrysler never truly got their partnership with Daimler working, and are now relearning the ropes as a private entity.
That being said, they've had what look now like the right ideas before, and never followed through with them. All three need to end their badging ambiguity. GM got rid of Oldsmobile, but needed to continue the streamlining and drop two or three more 'brands' (what does Saab even do now). The rebadging of a car with superficial changes (Saturn Sky and Pontiac Solstice, Any GMC product and it's Chevy twin, etc) simply dilutes a brand. Toyota is known for their efficiency, and limit their cost effective options to Scion, and Luxury to Lexus. There is a very strong brand identity there. Honda and Acura are similarly distinct. Those lines as so blurred in Ford and GM, they may have four nearly identical cars competing with each other, each sharing some components but with different assembly plants for some lines (which is what they're retooling, adapting and closing right now).
GM also had an amazing idea with Saturn. As a whole-owned but independently functional company with it's own plants, employees, and culture, Saturn was on it's way to developing a strong identity, and working out the kinks on its own. Instead, every generation of Saturn became closer to another Chevrolet or Pontiac clone. Instead of having an established method for spinning off companies to be individually viable, GM is back to the status quo while Toyota gains the benefit from GM's trials and tribulations, and is doing spectacularly well with Scion (this in spite of truly horrific looking designs it's first generation).
And no matter how much better they have gotten, GM will still take the approach of "We know what our customers want, even if they aren't asking for it." SUV's were a strong case of this. If you want a better example, look no farther than the Pontiac Aztek. With a little more focus, it could have been a competitor for the Subaru Outback (which still has almost no direct competition), but it was a shotgun approach to design, and had absolutely no standout feature aside from it's near-Pacer hideousness.
All of the Big Three were horribly naieve in the early 2000's. The first time they offered "Employee Pricing" or "0%" interest, they started down a slippery slope that had no where to end but where we are now (albeit a bit accelerated). Offing such incentives creates almost no new demand, it simply steals what demand you were going to have in the future quarters and moves it up. When they did this the first time, the only way they could get their sales to rebound was to do it again. Eventually, conditions weren't going to be favorable to someone to buy a new car every few years, and they would suffer a significant drop in sales. They faced that this past year, and they'll face it again next year. If they'd trimmed production in 2001 instead of front loading their sales, they would have had a better chance at a smooth sales curve instead of the peaks and valleys they had (and a valley which they currently are having a hard time climbing out of).
All this being said, I'm actually amazed at the changes Ford has made towards change. They've taken an amazingly conservative path (efficiency over innovation), but it is absolutely working for them, and the lower gas prices now will play to that strength.
I currently own a 2003 GM car. It has been back to the dealership once under an optional recall that wound up with nothing being changed. Knock on wood, five years later and the only thing that has happened to the car is that the hi-beam lever doesn't set right every so often. This speak volumes towards the improvements they've made towards reliability. And the Malibu probably is the best mid-sized car on the market right now. At the very least, it's the first American car to compete with the Japanese on their own terms. It's a bit unfortunate (and baffling) they kept a name that had such a negative reputation the decade before.
I stand by my earlier thoughts. I think the Big Three will become viable and profitable manufacturing operations again (in this country). But they have miles to go before they sleep, and I'm not the least bit convinced that Bankruptcy is such a bad thing for them. Bankruptcy exists so a company isn't buried by it's past decisions with no hope of recovery, and while penalized, has a chance to start anew with most of their existing capabilities intact. Ford should stick it out. Chrysler is owned by a private venture company now, they need at least a chance to decide where they want to go. GM should probably declare bankruptcy, and use the opportunity to shed Saturn, Pontiac / Buick, and Saab (either eliminate them, sell them, or spin them off into independently run entities). I don't think GM will have the ability to do what's required while struggling to hang on to their status quo, and they'll slip farther and farther into the hole.
But, to be frank, the whole SUV and Truck blow up... is their own damn fault. They milked that trend way too far, and held on to it for way too long. When something ceases being profitable isn't the time to evaluate other options, if you're a business that plans to stay in business, you must have better foresight than that.
And don't worry about feeling guilty, Arizona has already gotten our fair share of the national ill will shaft. We ask for federal help with our immense immigration problems, and we get a chain link fence along the border and high tech surveillance system that barely works. So, the state itself has to burden the share.
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First, I agree with 98% of what Architraz Warden posted. I think SUVs and trucks still sell and saying they held on too long is a bit unfair. Let's face it, you can't haul farm feed or tow a boat with a mid-sized sedan, and people still need to do both. Americans are still obese, and SUVs have more room and don't make you climb down into them. The market may not have the size it did when they were status symbols, but there's still a place for bigger vehicles.
Second, Lyr, I get you anger. I totally respect it. But I think your complaint about natural disasters is a little much. Everyone gets them. There's no where to live that doesn't have something to worry about.
The south gets hurricanes. Up north it's blizzards. The midwest has tornadoes and floods. The desert gets flash floods. The pacific coast gets earthquakes, mudslides, wildfires, volcanoes, and maybe the odd Pacific cyclone. Alaska probably still has the volcanoes and floods, though you don't hear about them as often. Hawaii gets volcnoes and I think cyclones. Everyone gets drought or too much rain or bad crops or animal plagues.
Yes, people should be more compassionate. But disagreeing about how best to fix the Big 3's problems isn't the same as not caring. It might feel like America doesn't care, but you've certainly seen that the majority of Hatrack does. We just have a broad spectrum of cures. It may not be much comfort, but it's something.
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quote:But I think your complaint about natural disasters is a little much. Everyone gets them. There's no where to live that doesn't have something to worry about.
The south gets hurricanes. Up north it's blizzards. The midwest has tornadoes and floods. The desert gets flash floods. The pacific coast gets earthquakes, mudslides, wildfires, volcanoes, and maybe the odd Pacific cyclone. Alaska probably still has the volcanoes and floods, though you don't hear about them as often. Hawaii gets volcnoes and I think cyclones. Everyone gets drought or too much rain or bad crops or animal plagues.
That's a specious argument. No area is immune from disasters of one type or another, but that is not the same as saying that all areas have equal risk. When was the last time that thousands of people were left homeless in Arizona, the last time Denver was evacuated, the last time FEMA provided housing to residents of New England? Certain areas of this country are unquestionable at much much higher risk of natural disasters than others. There is no argument here
quote:As I said in my previous post... people living on the coast pay hefty fees in insurance to live in such regions.
This is unfortunately not true. Insurance industry regulations in every coastal state end up giving a heavy subsidy to homes in high risk beach front areas. That subsidy is either passed on to tax payers or to homeowners in lower risk areas. In many areas, people who own multimillion dollar homes end up buying tax payer subsidized coverage that was intended for low income housing that was otherwise uninsurable.
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quote:Originally posted by AvidReader: First, I agree with 98% of what Architraz Warden posted. I think SUVs and trucks still sell and saying they held on too long is a bit unfair. Let's face it, you can't haul farm feed or tow a boat with a mid-sized sedan, and people still need to do both. Americans are still obese, and SUVs have more room and don't make you climb down into them. The market may not have the size it did when they were status symbols, but there's still a place for bigger vehicles.
Oh, SUVs and Trucks are absolutely useful vehicles, and they will be about well beyond the immediate future. But, be honest... of all the SUVs or Trucks you see on the roads, how many do you really think have ever towed a trailer? Hauled feed? Ever been on anything more intimidating than a two lane residential road? I certainly wasn't saying they should stop making these, merely that these were an infinitely poor choice to base 5-10 years of your business model on.
quote:Originally posted by TheRabbit: This is unfortunately not true. Insurance industry regulations in every coastal state end up giving a heavy subsidy to homes in high risk beach front areas. That subsidy is either passed on to tax payers or to homeowners in lower risk areas. In many areas, people who own multimillion dollar homes end up buying tax payer subsidized coverage that was intended for low income housing that was otherwise uninsurable.
Two issues here...
I'm well aware people choosing to live in disaster prone locations do not cover 100% of the costs they incur for disasters through insurance. But they do pay heavily increased premiums. I have a pair of friends about 30 miles south of Houston that are genuinely worried they won't be able to afford to live there because of Flood / Hurricane Insurance rates alone. And they didn't make a claim during the past two hurricanes to slam into the area.
The problem with that argument is that you're comparing an industry (albeit large industry) to something that a majority of the population of the US is affected by. Almost all of CA's population is in an area that could be devastated by an earthquake. Everyone living within a hundred miles of the east coast could lose their house to a hurricane, and no matter how unlikely, this includes NYC. Denver, and any city in the plains for that matter, is at risk for tornadoes (OKC and Ft Worth anyone?). The truth is that the disaster safe portions of the country are some of the least populated.
And the issue of the wealthy abusing tax breaks and shelters meant for low income families is a whole other argument...
Posts: 1368 | Registered: Sep 2002
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quote:Originally posted by Lyrhawn: ... On the one hand, sure, it's a fair argument to say why should Alabama tax payers help workers in a rival company in Michigan, but flip it around. Why should Michigan tax payers pay for hurricane relief when hurricanes come through and destroy the Gulf areas of Alabama?
A few others have noted a few problems with this argument, but I'd like to note a couple more.
First, states don't literally compete in the same way companies do. Arguably, the United States is stronger with both a successful Alabama and Michigan. However, the same is not the same in the business world. Corporate taxes are a sizable fraction of revenue, so its not just taxpayers having to bailout a failed company. The successful company in this case literally has to subsidize in part, their competitor. In effect, we're handicapping a successful company to subsidize a failing competitor, this is pretty bad for a marketplace.
Second, there are unintended consequences to consider. After the financial bailout, you must have heard that more successful American banks simply used the money to acquire smaller competitors while others simply used it to boost their capital ratios. Unfortunately, there is a consequence parallel to protectionism here. Some smaller American banks and the Canadian banks which survived the subprime crisis relatively unscathed, now had to compete with the larger banks which got cheap federal money at low interest rates.
We can already see that the same effect is shaping up with the auto industry. The Canadian government has effectively committed itself to a bailout that is proportional to a potential US auto bailout in order to just maintain the status quo. Chinese and European auto manufacturers have stopped their criticism of the US auto plan and have started lobbying their respective governments.
Unfortunately, the number of auto industry jobs in the world is rather limited now, so these governments are just stepping on each other for the same jobs. Contrast this with disasters. When the US helps out New Orleans, it doesn't really hurt Sichuan after the earthquake.
That said, if you really believe that it was wrong to repeatedly aid the states affected by hurricanes (and I agree there is some merit to that argument), the ideal thing should be to lobby to discontinue that. To lobby for an auto bailout as payback seems to just be attempting to make two wrongs, in the hopes of making it right.
quote:Originally posted by Lyrhawn: ... But I'm also of an apparent minority decision that not everything about the Big Three's situation is their own fault. They wouldn't be where they are now if not for the credit market collapse.
I may note that the "fault" discussion is a bit of a red herring. Its certainly an exacerbating factor for why we *really* shouldn't bailout these particular firms. But its not a sufficient factor. In other words, even if these companies had done nothing wrong it would not be enough to argue for a bailout. After all, thousands of businesses will probably die during this year and the next without being "at fault". We're effectively picking and choosing by doing an auto bailout.
In a free marketplace with healthy competition, not being at fault is not good enough. GM is competing against foreign companies that have planned better for the future (and yes, even Ford seems to have planned better). However, the bailout just intervenes and discourages this kind of planning ahead. Its actually worse than just playing favourites (arguably there are many other deserving companies in the construction industry or the rest of the manufacturing industry), its actually rewarding short-term thinking.
As a small example, when GM uses 0% financing to increase their sales numbers, they are willingly accepting the risks of what happens if they can't raise money on those terms. Thus when Toyota starts aggressively promoting 0% financing now to take advantage of GM not being able to, thats just the flip-side of that risk. If the bailout came earlier, Toyota probably would have seen a smaller relative advantage. Its not that GM is necessarily at fault for using 0% financing, but Toyota is thinking ahead and its not necessarily wise to interfere in this process.
Posts: 7593 | Registered: Sep 2006
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posted
I didn't quite have room in the previous post, but there is another issue that differentiates disasters.
Consumers literally vote with their dollar in determining which company to support. Some customers are motivated by price and features, but others are motivated by which companies they wish to succeed. Secondly, investors can decide which companies to support. At the extremes, there are ethical funds that only invest in "green" companies or companies producing moral products.
We're not just asking taxpayers to support companies from rival states. We also asking consumers to support companies they may be boycotting or investors to support companies that they believe are either immoral or bad investments.
People can rightfully encourage the collapse of a company that stands for values that conflict with their own. I'd be pretty horrified if anyone encouraged a disaster.
quote:Originally posted by Lyrhawn: ... And for the matter the casual indifference with which a lot of people are treating the millions of people who are barely treading water and will drown without some sort of rope thrown to them. "Let em fail" sounds sickeningly callous to us who actually live in Michigan ...
You're right. This is a major public relations problem for the anti-bailout side. But I disagree that this is necessarily a problem.
Its like triage as a doctor. A doctor shouldn't really let his/her personal feelings affect who to save and who to let die. They should really be looking at maximizing how many lives can be saved as a whole. Maybe there are millions of people treading water in Michigan, but Michigan is not alone in this downturn, there are plenty of jobs in other areas that are also at risk. Is it necessarily wise to give a push to tens of millions of people treading water elsewhere to throw a rope to millions here? Its a tough decision.
In the end, I don't know if its necessarily a fruitful decision to turn this into a regional argument. I don't know that the posters that have spoken out against the bailout are doing so because they don't live in Michigan any more than you're speaking for it because you live in Michigan.
Posts: 7593 | Registered: Sep 2006
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Wow. Tons of assumptions and false premises in there.
I'm not going to go through a series of quote boxes, but I'll take your points chronologically so you can follow along.
1. That's already true of a LOT of things. Are you going to argue against R&D dollars for renewable energy because taxes from fossil fuel companies are paying for a portion of it? Any research or funding for anything we do in America likely comes from at least one source that could be harmed by such a venture. If we're going to use THAT as a basis for how we spend money, we'll need to backtrack across at least 50 years of government spending, a lot of which has brought about revolutionary changes for the better in our society. Besides, there are other concerns and circumstances that I think override what you consider to be a main concern. We haven't had laissez-faire capitalism in American in, well, some might argue we NEVER had it, but it's been awhile since you could argue we even really seriously paid lip service to it. The government has been decided what is and isn't important and what is and isn't deserving of protection for a long time, and there's a strong argument to be made that it's served us by and large for the best.
2. You'll have to expand on this. I'm not seeing what the comparison is to banks buying smaller banks.
quote:That said, if you really believe that it was wrong to repeatedly aid the states affected by hurricanes (and I agree there is some merit to that argument), the ideal thing should be to lobby to discontinue that. To lobby for an auto bailout as payback seems to just be attempting to make two wrongs, in the hopes of making it right.
I was using the aid thing as an example. I wasn't randomly bringing it up like I'm crusading against it or anything. Your wording there makes it sound like I've always supported cutting off disaster aid and that I only support the government auto loans becuase I want to stick it to the south, which is ludicrous.
quote:In a free marketplace with healthy competition, not being at fault is not good enough. GM is competing against foreign companies that have planned better for the future (and yes, even Ford seems to have planned better). However, the bailout just intervenes and discourages this kind of planning ahead. Its actually worse than just playing favourites (arguably there are many other deserving companies in the construction industry or the rest of the manufacturing industry), its actually rewarding short-term thinking.
I disagree. Well, maybe in theory you're right, but you're talking about economic principles that have regularly been ignored in American history. We can sit around arguing about textbook examples and theories all day, but the relationship between government and industry is rarely that academically correct.
Furthermore I disagree that the government loans encourage stagnation. It would seem that you are suggesting that if they get this money, which only guarantees short term survival in the amounts being discussed, they'll breathe a sigh of relief and then for some reason go back to how they conducted business in the 1990's or 80's. It ignores several years of concerted effort to change their business model and method of doing business. Believe it or not, they aren't ridiculously stupid, nor are they living in a bubble. They're already making the changes or have already made the changes that everyone is demanding of them. All that's left is sustained will and seeing how things come out in the wash.
As to your second post, well, you're positing something in the first part that's hard to argue against since it consists of a very large number of assumptions on the part of consumers. First of all, the Big Three sell more than half the cars sold in the US. They were just making too many cars, so they've scaled back, and have more scaling back to do. Saying we shouldn't spend tax payer dollars on something unless 100% of us agree on it is basically saying the government should never spend another dollar, which coincidentally, not everyone agrees with either. There will never be a spending measure that EVERY American agrees with, and since we're just talking about the 8 or so million Americans every year that for whatever reason choose to buy foreign rather than domestic, that's hardly a controlling interest in the electorate.
On your last point, it's actually not quite like triage as a doctor. You're the one who has specified distinctions between consumers and voters, and between business and government. Government is made up of a diverse collection of electorates as much as it is a single electorate. But let's say, for the sake of argument that it IS like that. Your analogy misses a couple points though. If the industry fails there WILL be a cost to taxpayers, a big one. So really the question is more like, there's two doctors and a lot of patients, then one of the doctors gets hurt. If you sacrifice the doctor, more people will die, but if you save the doctor, people will die, but you'll end up with more doctors to save more people. If the result is the same, why not save the doctor? You're presenting extremely cut and dry arguments.
quote: Is it necessarily wise to give a push to tens of millions of people treading water elsewhere to throw a rope to millions here? Its a tough decision.
And as it stands, that is NOT the decision before us. If you'd like to explain why you think it is, then go for it, but a small auto loan from the government isn't going to cause tens of millions of people elsewhere to suffer.
Finally, no one has suggested that anyone on Hatrack is posting a certain way because of a region bias. I don't know where you got the idea from.
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quote:Originally posted by Lyrhawn: 1. That's already true of a LOT of things. Are you going to argue against R&D dollars for renewable energy because taxes from fossil fuel companies are paying for a portion of it?
Again, two wrongs don't make a right. If you're asking me whether I'd remove renewable energy R&D dollars in exchange for eliminating ethanol and farm subsidies? I'd do it in a heartbeat. On the whole, I think most business-level subsidies probably do more harm than good.
quote: 2. You'll have to expand on this. I'm not seeing what the comparison is to banks buying smaller banks.
Well, thats kind of the point. They're called unintended consequences for a reason. We didn't know that the banks would squander money before the bailout, we do now. We don't how GM will end up wasting money yet, but you can bet that they will. It always happens when you just throw around these huge sums of money. That said, we do know that the bailout will spark a protectionist backlash. That much is certain.
quote:I was using the aid thing as an example.
Hence the *if*.
quote: Furthermore I disagree that the government loans encourage stagnation.
Then you're a much more optimistic guy than me. Human nature is eternal For example:
quote: Chrysler found itself on the verge of collapse, largely because high oil prices had made its gas guzzlers unappealing. Company executives and union leaders came to Washington, hat in hand, arguing that Chrysler’s demise would wreak unacceptable damage on the American economy. Congress and the Carter administration responded by arranging for $1.2 billion in subsidized loans. The Reagan administration helped further in 1981 by restricting Japanese imports.
On its face, the Chrysler rescue was a huge success. Under Lee Iacocca, the company came out with the K-car line of smaller vehicles, like the Dodge Aries, as well as the original minivan. By the mid-’80s, Chrysler had repaid the loans. Mr. Iacocca appeared on the cover of Time magazine as “Detroit’s comeback kid,” and his autobiography became a No. 1 best seller.
But if you take a moment to think through the full Chrysler story, you start to realize that it’s setting a really low bar. The Chrysler bailout may have saved the company, but it did nothing, after all, to stop Detroit’s long, sad decline.
Barry Ritholtz — who runs an equity research firm in New York and writes The Big Picture, one of the best-read economics blogs — is going to publish a book soon making the case that the bailout actually helped cause the decline. The book is called, “Bailout Nation.” In it, Mr. Ritholtz sketches out an intriguing alternative history of Chrysler and Detroit.
If Chrysler had collapsed, he argues, vulture investors might have swooped in and reconstituted the company as a smaller automaker less tied to the failed strategies of Detroit’s Big Three and their unions. “If Chrysler goes belly up,” he says, “it also might have forced some deep introspection at Ford and G.M. and might have changed their attitude toward fuel efficiency and manufacturing quality.” Some of the bailout’s opponents — from free-market conservatives to Senator Gary Hart, then a rising Democrat — were making similar arguments three decades ago.
Instead, the bailout and import quotas fooled the automakers into thinking they could keep doing business as usual. In 1980, Detroit sold about 80% of all new vehicles in this country. Today, it sells just 45%.
The first part seems strikingly familiar. It remains to be seen if the latter part will come true. But as others like fugu13 have aptly noted, the whole point may be moot since the firms will probably collapse in a year, bailout or no bailout anyways.
quote: First of all, the Big Three sell more than half the cars sold in the US.
This is just plain wrong. See the previous. American auto firms are a minority in their own market and have been for at least a year.
In any case, since the voters disagree (43% favour to 51% against http://www.gallup.com/poll/112993/Americans-Still-Buying-Auto-Bailout.aspx ), since the domestic auto maker market share has been descreasing rapidly like a rock, and the stock market views GM as an awful investment. We should really be asking if the government should be overriding all three of the people, the consumer, and the investor.
quote: If you'd like to explain why you think it is, then go for it, but a small auto loan from the government isn't going to cause tens of millions of people elsewhere to suffer.
First, the bailout will be between 30 billion and 50 billion. Since when is that "small"? Second, as you've previously noted the downturn is affecting all automakers. Toyota and Honda are both planning to cut production. There would be less of a need to do that if the Detroit auto manufacturers entered bankruptcy. Ultimately, in the short term there are only a limited number of auto jobs. Either the cut happens in Detroit or it is spread out across the entire industry including successful companies. Third, the bailout needs to be paid for which hurts all taxpayers in their wallets.
quote: Finally, no one has suggested that anyone on Hatrack is posting a certain way because of a region bias. I don't know where you got the idea from.
Its right in the quote that I used. You said that people that opposed the bailout (i.e. "Let them fail") sounded casually indifferent to people who "actually live in Michigan." There are definitely posters on this thread which are in the "Let them fail" camp and we don't live in Michigan.
Posts: 7593 | Registered: Sep 2006
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quote: No area is immune from disasters of one type or another, but that is not the same as saying that all areas have equal risk. When was the last time that thousands of people were left homeless in Arizona, the last time Denver was evacuated, the last time FEMA provided housing to residents of New England? Certain areas of this country are unquestionable at much much higher risk of natural disasters than others. There is no argument here
I'm not sure I agree with that logic. Yes, the South taken as a whole probably has to evacuate a couple times a year. Should we abandon a fifth of the land mass of the US when your individual city might see a big storm once a century? That makes no sense.
Hurricanes are expensive because we put so much stuff along the water. I know my home-piece of Florida would love a limit on building. Especially if it keeps folks from Tampa out of the county. We've got 18 million Floridians and two of the top twenty most populated metropolitan areas in the country. Where would you put them all so the hurricanes don't get them?
Wiki's got The South at 109 million people, 36% of the nation's population. We're the most populous region. Stick us all in the West and whatever natural disaster they get will suddenly be the most expensive to deal with. It's the people and property values that's the problem, not which disaster we face.
At least we can see a hurricane coming and get out of the way. I'll take that over tornadoes and mudslides any day.
Posts: 2283 | Registered: Dec 2003
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posted
Live up north. We rarely get tornadoes, and when we do they are tiny and cause little to no damage. No earthquakes, no hurricanes, no volcanoes, no mudslides, no tsunamis.
The worst thing to generally hit us is a snow day. A blizzard can be a pain in the neck, but it'll require hot chocolate and some plows and salt trucks, not FEMA and multi billion dollar aid packages.
As far as hurricanes go, states dig their own graves with that. They put little to no effort in sustaining wetlands and barrier islands that for hundreds have years have absorbed vast amounts of the damage that comes from a hurricane's storm surge, blunting much of the damage and reducing the cost. It's not that they choose to live there, it's that they choose to live there in the absolute most careless, destructive, and irresponsible matter possible. I'm surprised they don't seed the clouds off the coast of Africa, it'd close the loop. The wind damage from Katrina was harsh, but what made the city uninhabitable was the storm surge that broke the levees and flooded millions out of their homes. A better levee system would have been better, but the surge never would have gotten over the walls if they had taken care of their ecosystem well enough to preserve those NATURAL barriers to damage.
At least I know that when the once in a million massive earthquake hits California, that those people put a lot of time, effort and expense into making those buildings highly quake resistant, so that smaller more frequent quakes cause little damage.
The Gulf Coast just has no excuse. It doesn't mean that I'd be so callous as to tell a starving refugee that he should have planned better (true though it may have been), but if something happens again anytime soon, I think I'd tie the aid money to a promise that they'd clean up their act in the future. In fact I'm shocked that the last aid package didn't.
posted
It's Louisiana. How clean are you going to get? The bank I used to work for skipped over the state and expanded in Texas instead so they wouldn't have to deal with local corruption.
I agree with you on the barrier islands. Building anything on land that's unstable and moves at the whim of the breeze and tide is pretty dumb. And what our wetlands and estuaries and rivers need is for fertilizers to be banned. It's the fertilized water runoff that builds algae and non-native plants up to destructive levels and does most of the damage I've seen.
But Katrina and levees was going to happen no matter what. She was a strong Cat 4, the levees were only built to withstand a 3. The barrier islands did their job; they knocked her down from the 5 she had been, but they were completely destroyed. This guy seems to think we're in danger of losing all of southern Louisiana.
quote: The dikes along the Mississippi river remain intact but most of the land adjacent almost into the city of New Orleans is gone. This extends on a line almost to Morgan City. There is some question if this is an extended “storm surge” (Note no such thing has been observed before) or if the area is permanently gone. The area involved is about 2000 square miles. The entire area of the state south of Baton Rouge is now in danger of sinking into the sea forever. This includes some areas into the State of Mississippi and the ENTIRE CITY OF NEW ORLEANS.
His emphasis, not mine.
As for New England, they get the occasional hurricane as well. Do their building codes demand they're ready for them? Post-Andrew when our laws changed, the hurricanes haven't caused nearly as much property damage. New construction is built to take a Cat 3. Googling "New England natural disasters" got me ice storms, floods, and tornadoes. Googling "New Hampshire flooding" gave me stories of places that had to be evacuated, the National Guard called in, and Red Cross helping the survivors.
In Alstead, NH, 150 people needed shelter out of 1,977. New Orleans had about 30,000 in the Superdome out of 450,000. That's 7.5% versus 6.66%. Now move hundreds of thousands of folks from the south to the north and strain the infastructure. You'll be up in similar numbers in no time.
No where is safe. I think that's our mistake right there. We can't just say, "Things have changed. We'd better adapt to that." We have to run around trying to maintain an untenable status quo forever. If you city is sinking, maybe you should petition the government to offer some kind of land-swap credit. The south usually has large areas of undeveloped land. You'd think everyone would win if people could give up their land in an unsafe area and get an equivilant value of land elsewhere. Incorporate the new area as part of the old city and you're not even losing city population, you're just moving the city.
Thinking we can build in one place along a changing coastline forever is what's going to kill us in the long run.
Posts: 2283 | Registered: Dec 2003
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quote: A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year's end.
Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with U.S. plants of Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.
The breakdown left the fate of the auto industry — and the 3 million jobs it touches — in limbo at a time of growing economic turmoil. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
Democratic leaders called on Bush to immediately tap the $700 billion Wall Street bailout fund for emergency aid to the auto industry.
...
The White House said it was evaluating its options in light of the breakdown on Capitol Hill.
"It's disappointing that Congress failed to act tonight," Deputy Press Secretary Tony Fratto said in a statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
That bill — the product of a hard-fought negotiation between congressional Democrats and the Bush White House — was virtually dead on arrival in the Senate, where Republicans said it was too weak in its demands on the car companies and contained unacceptable environmental mandates for the Big Three.
...
A pair of polls released Thursday indicated that the public is dubious about the rescue plan.
Just 39 percent said it would be right to spend billions in loans to keep GM, Ford and Chrysler in business, according to a poll by the nonpartisan Pew Research Center. Just 45 percent of Democrats and 31 percent of Republicans supported the idea.
In a separate Marist College poll, 48 percent said they oppose federal loans for the struggling automakers while 41 percent approved.
Personally, I kinda wish it went through with both strong demands AND the environmental mandates although it seems like each party is pushing only one of each.
It seems like Bush may have the last laugh anyways, so it might be a moot point.
quote: The White House said that the US economy could not withstand a body blow like the collapse of the auto industry.
It said that the Federal government may have to step in.
Earlier this year, the US approved a $700bn (£467bn) bail-out for the finance industry, known as the TARP programme. It had previously been reluctant to use this money for other industries.
"Given the current weakened state of the US economy, we will consider other options, if necessary including use of the TARP program, to prevent a collapse of troubled automakers," White House spokeswoman Dana Perino said.
She added that it would be "irresponsible" to further weaken the economy by allowing the Detroit car companies to fail.
I presume that using TARP funds would alleviate the need for getting Congressional approval. However, only the first half of the TARP program has been approved by Congress and as of last count I think they spent most of it, so it may be tight.
The other option is another Senate pork gambit like with the TARP bill where they add billions in random crap to persuade Senators.
posted
I could be giving them too much credit, but I think that this was a shrewd political move by the Republican Senate.
The Repub strategists must have been doing quite a bit of thinking after getting crushed in the elections. One of the big things that the party has lost is the brand identity with fiscal conservatism. By pushing very hard on this to the point where it was almost guaranteed to have it fall apart, they push it back onto the President, who will now use TARP funds with few strings attached.
This gives them the ability to say "Look, we're fiscal conservatives. It was the President and some of those ex-legislators who betrayed these ideals." while still getting the non-failure of the U.S. auto industry (for a little while, anyway).
Posts: 10177 | Registered: Apr 2001
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quote:Originally posted by MrSquicky: I could be giving them too much credit, but I think that this was a shrewd political move by the Republican Senate.
Until the analysis comes out that the cost of inaction by the government (in the form of unemployment benefits, etc) will be as much if not more than the cost of the bailout, since that will render their objection into 'obstruction' at the 'cost of' working class americans.
Or when people start checking out how much of a disparity there is between governmental support of the foreign automakers, such as the support Toyota and Honda get from Japan.
Or when people look at the percentage of the GDP that will be obliterated by this, or when people analyze the fact that the cost of the bailout is pretty much, perhaps a bit less, than what we spend monthly in Iraq.
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Samp, But there's not going to be government inaction. That's kind of my point. The Republicans didn't set up a situation where the auto companies don't get money. They set one up where the auto companies get money, but that they can say that they fought against the liberal policies of the Democrats and the Bush administration.
Yes, if the auto companies didn't get money and went bankrupt and there were enormous financial consequences, this stance would really come back to hurt them, but the main consequence here seems to be that the companies get the aid without anywhere near as many strings and the Republicans can put all that blame on other people while largely avoiding the blame for what would have happened if they had actually succeeded in obstructing this bailout.
Posts: 10177 | Registered: Apr 2001
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posted
It's possible but I'm noting that by Putting Their Foot Down (all political trope style) they've sparked a huge amount of theorycrafting into the pointlessness of inaction, which rubs off badly on them, like they're withholding payment for the sake of schadenfreude that comes at the cost of joes and janes.
This is just a laconic observation that they may more or less cement a bad perspective, as 'obstructionists to beneficial spending' or sommat.
Posts: 15421 | Registered: Aug 2005
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"...governmental support of the foreign automakers, such as the support Toyota and Honda get from Japan."
The closest Japan ever got to subsidizing its auto industry was requiring a new replacement if the old engine didn't meet extremely strict pollution standards (ie failed to meet the criteria set for new engines).
Chrysler was in cardiac arrest by the time Daimler-Benz bought it for $36billion. And when Daimler-Benz discovered that they couldn't revive it (ie lost further billions), they "sold" Chrysler to Cerberus* for a token amount (while actually paying Cerberus a few billion bucks to ensure it became dead dead dead) so that the Chrysler retirement-obligations zombie wouldn't eat Daimler-Benz. ie Daimler-Benz assumed that UScourts would probably enforce pension-protection laws against a financially strong foreign-held company, but would probably allow a US-based vulture-fund to eat the remains (by saddling the US taxpayer with Chrysler's retirement obligations). Which is why Cerberus hired RobertNardelli to run Chrysler: for his proven ability to gut even a very healthy company (HomeDepot) for fun and profit without triggering prosecution for business fraud.
* "Cerberus...guards the gates of Hades, to prevent those who have [died] crossed the river Styx from ever escaping [death]."
quote: Ottawa and Ontario will provide an estimated $3.4-billion to the Canadian units of the Detroit Three, while U.S. President George W. Bush will throw a $14-billion (U.S.) lifeline to their parent companies.
Federal Industry Minister Tony Clement called a hastily arranged news conference Friday night to announce the Canadian aid package.
“The seriousness of the situation dictates that we be here this evening,” Mr. Clement said.
...
Mr. Clement would not provide a specific figure, but he said the amount of money in the Canadian bailout represents this country's one-fifth share of the Detroit Three's North American vehicle production and on Canada maintaining that percentage.
“Clearly, this amount of money is meant to be, as the U.S. is finding out, a way to keep the doors open for the domestic auto sector while they continue their long-term planning,” he said.
However, he stressed that the support package would reflect the interests of taxpayers and is contingent upon the auto makers working with their unions and parts suppliers on a long-term solution for the sector. It's also conditional on a U.S. deal coming together.
So roughly 110 CDN per Canadian and 50 USD per American, with the Canadian bailout conditional on the US one. I guess it could have been worse.
By comparison the bank TARP bailout was 2833 USD per American and our equivalent was roughly 1666 CDN per Canadian. *sigh* Its a race!
Posts: 7593 | Registered: Sep 2006
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quote:Originally posted by fugu13: Exercise some reading comprehension, Telp. Nobody has said nothing bad will happen to any of the factories, just not all of them. Furthermore, I've been quite explicit at many times that a lot of pain will be endured. Just understand that the least pain for your city will be a significant restructuring of the auto industry, and the loss of many jobs right now, as opposed to the loss of far more jobs on far worse terms, later. Bad things happen, and the proper response is not to curl up in a ball, start making up things about what will happen (incredible damage to our country's ability to defend itself, for instance), and tell people that if only they hand over more money the bad things will stop.
Reading comprehention? Arent we in a snarky mood. Aynyway, what have you to say on the subject of the Senators of the south who have blatantly said they're adgenda is not the survival of American industry but the breaking of the unions so they can court foriegn comanies with huge tax breaks... only to have said companies bring in Polish workers on questionable B-1 work visas. And these foriegn comanies have the backing of their governments.
Posts: 4953 | Registered: Jan 2004
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posted
Surely you have some quotations about desiring to court foreign companies with big tax breaks? I won't even bother asking about the Polish worker thing.
edit: also, the Big Three have hardly been without gov't assistance -- they've had quite a bit, actually. Indeed, I'm proposing giving them more gov't assistance, in the form of bankruptcy protection and reorganization.
Posts: 15770 | Registered: Dec 2001
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