Not sure how I feel about the bailouts. Then or now. On one hand, I hate to see those car companies go under. On the other hand, if they can’t be competitive or manage their business, let them go under and they’ll just sell more Toyota’s, Ford’s, Nissan’s, etc. The jobs wouldn’t necessarily disappear. They’d just move to a different manufacturer, to some extent. I can’t imagine all the vehicles manufactured and sold by Chrysler and GM in the last ten years wouldn’t have been manufactured and sold anyway…by someone. Chrysler sold out to Fiat anyway. Maybe GM would’ve just been bought by another entity.
I can’t see bailing out private entity’s with tax money when the debt is already what it is, and I’m already paying the amount of taxes I am. I doubt I get bailed out if the company I work for goes under. Nor would I expect to. So I don’t see the difference between those jobs any my job.
I agree mostly with you. If you look at the TV manufacturing industry, it was gradually taken over by imports and then US or Mexico based foreign manufacturers.
My late father in law had a big Zenith,. “hand-wired to ensue the quality went in before the name went on”. That was the last Hurrah for major US TV manufacturing. No one mourns the death of US based TV makers. The same is now true for major appliances. We own a Top of the Line Whirlpool washer and dryer set but the next set will likely be Korean.
The US car makers were saved by the joint buyout by the US and Canadian governments. In the absence of that, Toyota, Nissan and others would have simply filled the void by increasing their North American car production, taking over and improving some of the existing plants, and temporarily filling the void with imports. Only pickup trucks would have suffered a temporary shortage of product.
What we are seeing now due to natural evolution is the phasing out of car making by the Big Three and that entire segment being taken over by foreign firms.
The Consumer Reports annual auto issue still lists many US made cars but carefully states which models will be phased out soon.There are now nearly as many foreign car plants in Canada as there are domestic ones. .If you do the same count for the US you will be surprised.
Even Trump cannot force natural market development to suit his desires.
From the top to the bottom immediate gratification rules. And those individuals whose inclination is toward long term wealth who are financially able to pour money into investments that cash in on the ‘carpe diem’ trend and still live comfortably are in the driver’s seat. Payday loans, pawn brokers, tote the note car dealerships and $20 down automobile insurance businesses are growing and thriving.
Most Americans wouldn’t give a second look at a candidate at any level of government who promised to dig US out of the ever deepening pit we are in if they were honest and admitted a great deal of austerity would be necessary to do so. But it is likely that sometime in the foreseeable future the creeping down from middle class will be painfully obvious to enough people that a 21st Century “Kingfish” will come along and a populist rush could elect him. All of US who live pay check to pay check want immediate relief from problems, dontchaknow.
And I understand that in these past 10 years easy money and slick advertising has resulted in driveways across the country being decorated with all the glitz and glamour and power that we deserve(?) but all too often can’t afford and if/when the notes are called who will take possession of all those grand vehicles and what will they do with them? And how will the desperate owners get to work… if they happen to have a job?
The company I work for ceased buying GM cars after the bailouts. They use to only by Tahoe or similar GM based SUV. They have not purchased one since. I personally have not bought a GM or Dodge since and have no plans to ever purchase one.
I am not a fan of the bailouts. The fact is that people were still going to buy cars therefore they would still have been produced. The bailout had more to do with bailing out the UAW more so then the companies IMO.
Bankruptcy protections are there for this very reason. There is no reason why they should have got special treatment. There is no such thing as too big to fail.
But could it be that it was an absolute necessity to bail Detroit out in order to bail out the banks? And certainly it was the banks that were the primary benefactors of the bailouts.
And search Brooksley Born for her insight into the debacle long before it occurred.
The banks should not have been bailed out either. Banks fail all the time. Why not bail out the ones that failed last year and the year before that?
Of course it was, just like the bank bailouts were necessary to bail out the banks. What amuses me about the banks getting into trouble is that if I default on my mortgage, I lose my house. If the banks default on what they owe, the government bails them out with my tax dollars. The housing bank bailout was particularly insulting – the government could have bailed them out by giving the homeowners the money with the stipulation that it be given to the banks. That would have bailed out the homeowners and the banks. Instead, it just gave the money to the banks, no strings attached, and the banks then foreclosed on the homeowners and made even more money selling off the houses.
Regarding the GM bailout, the argument was that if GM went under, all the parts suppliers that rely on GM would also go under and GM was therefore too big to fail. My stance is that if any company, car or otherwise, is too big to fail, then it’s too big to exist and needs to be broken up.
At least with the GM bailout it was a loan, not a giveaway. I felt better about that, but not sufficiently better that I was in favor of the idea.
I find it amazing how eager governments (national and more local) are to throw money at companies that don’t need it. NFL team wants a stadium? The state falls over itself scrambling to give them millions, sometimes billions to build them a custom place of business and then grant tax incentives which often equate to a $0 tax bill, all so that bars and restaurants can get a busy night for the 12 days a year that the team actually plays a game at home.
But if I want to start a small business? Screw you - find some place to rent on your dime, and by the way since you’re now in business for yourself you owe about 50% of your income in taxes.
Same with the car companies. Let’s bail out GM, and lets subsidize the mega-rich oil industry to the point where it’s not uncommon for Exxon to owe no taxes, but let’s also take away tax breaks for buyers of electric vehicles because we should only be throwing money at established industries, not ones that are trying to get off the ground.
Carlin had it right - the economic game is rigged. “It’s a big club, and you aint’ in it.”
It’s funny, I sort of felt a little better about the bailout because cars (and some were old GM’s and Mopars) are emotional attachments. If the govt wanted to bail out Wal Mart (they employ a lot of people too), or similar, I would’ve immediately thought “hell, no. I’ll just buy more stuff at Target or the local grocery”. Not an apples to apples comparison, but still. I think I felt more favorably about it at the time because who wants to see GM and Chrysler die off? May have just postponed the inevitable. We will see.
Regardless, I’m not sure its a good thing that Fiat owns Chrysler now or China owns Volvo. True plants produce foreign cars here but they are still foreign owned and controlled. So would we rather that China owned Ford or GM or take a chance on a finance/restructuring plan? To me its a no-brainer. At some point we are going to see the effects of foreign owned/controled banks, businesses, real estate, and even schools as they attempt to import their culture into ours that excludes liberty and women in particular. Not just China but the mid east. I think we have no idea how far it has gotten as the globalists fed their greed.
the bailout was nonsense. Mismanagement was prolific in car companies- some due to unions, and some due to greedy corporate heads that would rather sink the whole company that produce a quality product and take care of the employees.
I was proud of Ford for not taking a bailout, and they are still alive and still going at it. GM was known for having rooms of paid employees that were paid to do nothing- because there was no work for them to do, yet the unions made sure they still had a job. complete and utter nonsense.
I have to wholeheartedly disagree with the NYT author. Some companies need to go away or change significantly. Bailouts don’t promote the change needed. And I’m not a big fan of government extending more roots into normal everyday life and commerce. There may have been some short-term good (although I’m not sure of that even), but I’m not sure that the long-term consequences are going to be that nice.
To use a football analogy, I would rather government be the referee of American life; however, government strives to be the quarterback.
I was also so enthusiastic about FMC that I bought 300 shares of their common stock in the wake of the Bush Economic Recession. My Ford stock seemed to be doing nicely for a number of years, but I sold all of those shares in December, 2018 because they were cratering.
Yes, I was able to claim a Capital Loss on the sale of my Ford shares, but that still didn’t save me from being ROYALLY SCREWED by the so-called Tax Cut legislation of 2018. After having an increased tax liability of over $2k, I am… dismayed… to say the least.
At least I can take some satisfaction that I helped the “impoverished” top 1% by personally paying more than $2k additional federal taxes for 2018.
Sounds like you are finally paying your fair share. I noticed a $6,800 reduction in my federal tax liability. I was the poor joe that did not get any of the favorable tax deductions and just a standard old W2 wage filer with no itemized deductions.
I don’t recall exactly what went down, but I read Ford didn’t need the bailout because they’d already kind of sort of taken one, in the guise of something else. Maybe someone else will have the story, but I recall reading an article that basically stated Fomoco was in the same boat as the others, but the timing and semantics were different. They didn’t take a bailout because they’d taken a govt grant in years prior, or some such. Hopefully someone will know. I just remember after reading the article, I came away feeling the same about Ford as the others, and no one seemed to have room to brag.
Regardless, I will definitely shop the Titan and the Tundra when I have to cave in and buy a new truck. I have a feeling if Toyota would truly redesign the Tundra and make it a little more fuel efficient, it could sell like hot cakes. If that were to happen, and they brought back the FJ cruiser with a removable top (to kill the Wrangler), the big 3, or what’s left of them, might be in dire straits. Not many people are buying domestic vehicles other than trucks and and some SUV’s.
So, you are okay with the current administration’s EXPLOSION of the federal deficit?
I desire both tax equity and a reduction in the federal deficit, but the current administration in DC seems to be peachy keen with a huge increase in the federal deficit.
Hint: If we don’t pay our federal bills in the short term, those bills will be exponentially higher in the long term.
Tax revenue is up. Spending is way up. We have a spending problem in this country not a tax collection problem.
It’s all a matter of perspective and media nuance @Propane_Car. And there’s a nuance for everyone’s opinions especially their hot button opinions.
Not to get political, but the right argued the same when Obama was in office. I don’t think increasing the deficit is wise for either party.
I have mixed feelings about the bailouts but it looks like the automakers all paid back the bailout money as of 2015. I hope it works out in the long run but if they just blow it I won’t be so sure. Anyway, the automakers got themselves into that mess. I agree that the govt probably wouldn’t bail out my small business but would hate to see all the domestic makes vanish as well. I know we are in a global economy and some of the foreign names like Toyota and Honda are more US made and employ more US workers than the big 3. They also don’t tolerate the inefficiencies that got the big 3 in trouble. I like that about them.
It used to be that the Democrats were the party of big spending and the Republicans were not. They are BOTH now the parties of big spending. Just pick your poison!