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Post by graybeard on Nov 22, 2008 12:12:19 GMT -6
Whether saving the automakers is a national priority is open to debate, but putting the money in at the top is senseless. They're broke because they aren't selling enough cars. Giving them money because they aren't selling cars won't fix anything. Btw, I don't think the country needs 18 million new cars a year, or even 10 million.
To keep it fair, new car buyers should be given a tax rebate based on US content of the car, either in value or labor invested. A Ford engine made in Japan does no more for our economy than a Kia engine made in Communist China.
If the rebate were US value based, the automakers would be incentivized to declare as much US content as possible, thereby shifting fewer dollars to the place with the lowest taxes. Right now they play games with the price of imported parts to shift the dollars to follow lowest taxes.
This would open the door for tariffs, which we so badly need.
GB
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Post by waltc on Nov 22, 2008 19:47:14 GMT -6
Great idea Greybeard but Obama won't do it or more to the point all those D.C. insiders who he appointed support our current model of cut throat trade deals that harm American producers won't.
I wish he would have appointed some qualified outsiders rather than those odious Clintonistas. Some of them are really bad people who care nothing for the country.
That said, the big 3 are too big to fail at this critical time. 10 years ago it would have been a different story. I'd have said, fine let them croak. But now with employment falling and businesses imploding left and right. Letting them fail would only make things worse for a economy ready to drop dead.
If Obama was smart he'd have them retool to help rebuild our railway system(build trains, railcars, rails, etc) which is currently overtaxed. Take other portions and retool them for producing Wind turbines, pocket Nuclear plants, etc. Another portion could become the nucleus for producing local goods again.
It won't happen either.
My guess Congress will just keep the big 3 on life support until they can't afford it and then let them flatline sometime late next year. And when that happens watch out.
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Post by xtra on Nov 24, 2008 14:50:19 GMT -6
This was in the letters to the Editor of my local paper enjoy 3 Options There appear to be three basic options to assist the U.S. automakers: a full bailout with no strings (socialism), a limited bailout with some strings (socialism light), and bankruptcy (capitalism), and there are three candidates. Congress is deadlocked, but they’ve failed to realize that this is an excellent opportunity for an economic experiment. GM chief Rick Wagoner says that the crisis has nothing to do with their business model, products or long-term strategy and their board says bankruptcy is “not an option.” So, all Congress has to do is figure out which bailout package is offered to Ford and Chrysler. After a couple years, we’ll all know which economic model is best. The only thing too big to fail is the federal government. Greg Scott Evergreen
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Post by unlawflcombatnt on Nov 24, 2008 16:37:33 GMT -6
Just out of curiosity, does anyone know what exactly the automakers would do with $25 billion of taxpayers' money? Are they going to be able to sell more cars, just because they have more capital? Will giving them $25 billion cause them to invest more capital into production, even when the sale of production is falling? Will increasing supply increase demand? Does supply create demand?
How will giving them $25 billion solve their underlying problem--that of greatly decreased auto sales and demand?
I have a suggestion on how to solve this underlying demand problem.
Along the same line of thinking of Graybeard regarding tariffs, how about if we put exorbitant tariffs on imported foreign cars--thus reducing demand for foreign imports--resulting in a compensatory increase in demand for American-made cars.
Then let the automakers see if they can survive in a more "normal" consumer market. (i.e, a market where demand for American-made cars isn't suppressed by purchase of imported cars.)
If we did that, we'd find out for certain whether American auto makers have a successful business model or not. If they can't survive with this new, tariff-induced increase in demand, then they should be allowed to fail.
The only handout they should get at present is a Medicare buyout of their health insurance costs for their employees. That would eliminate their allegedly "exorbitant" health care expenses (~$4.80/hour, based on the cost of insuring a Medicare beneficiary for $10K/year).
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Post by jeffolie on Nov 24, 2008 17:58:25 GMT -6
US TAXPAYER bailout money given to GM is going to fund foreign workers and governments. GM is screwing with the US. GM is building and opening this year new plants in Brazil, Russia and India while GM closes plants in the US: ---------------------- Monday, November 24, 2008 The General Motors Corporation said yesterday that it planned to invest $1.25 billion in three new plants in Brazil. The company said it would spend $600 million to build a plant in Rio Grande do Sul state to make 100,000 Chevrolets a year. It would also spend $500 million for a components plant in Santa Catarina state and $150 million for a body-parts plant in Sao Paulo state. Local suppliers would provide 40 percent of the investment. G.M. said the new plants would bring its total investment in Brazil to $3.5 billion. query.nytimes.com/gst/fullpage.html?res=9A06E1DE113CF930A35751C1A960958260---------------------------------------- ST. PETERSBURG, RUS. November 7, 2008: General Motors (GM) opened today a $300 million, flexible assembly plant in St. Petersburg, Russia, in presence of President Dmitry Medvedev. The plant will add 70,000 units of capacity to more than 100,000 already available to GM at joint venture and partner facilities in the country. It will build the Opel Antara and Chevrolet Captiva SUVs and, as of late 2009, the all-new Chevrolet Cruze compact sedan. The plant features a flexible, modern design that can accommodate a variety of different models. “Today’s plant opening underlines GM’s strong commitment to Russia,” said GME President Carl-Peter Forster at today’s opening ceremony. “This new plant will cement our position as the number one non-domestic manufacturer in Russia, www.theautochannel.com/news/2008/11/07/224691.html------------------------------ GM China Partner Opens New Plant Date:2008-09-25 From:edmunds SHANGHAI, China - SAIC Motor this week opened a $425 million assembly plant here as part of an effort to lead China's growing market for domestic brands. The 150,000-unit plant, located in the Lingang Industrial zone about 50 miles south of downtown Shanghai, is dedicated to building models in SAIC's rapidly expanding Roewe range. The plant is the third one to be opened by SAIC Motor, whose parent company, Shanghai Auto, is the Chinese partner of General Motors www.china4auto.com/ennews/html/Industry/20080925/12223045736683.html---------------------------------------------- GM opens second India plant The Associated PressPublished: September 2, 2008 TALEGAON, India: General Motors Corp. opened a second plant in India on Tuesday, boosting its production capacity from 85,000 to 225,000 vehicles a year. www.iht.com/articles/ap/2008/09/02/business/AS-India-GM-Plant.php
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Post by jeffolie on Nov 24, 2008 20:00:19 GMT -6
In my humble opinion, GM will continously come back to beg for $Billions for years. I favor a 'pre-packaged' Chapter 11 with the government supplying the 'debtor in place' financing to allow GM to restructure without collapsing its suppliers and customer base.
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Post by waltc on Nov 24, 2008 20:51:07 GMT -6
Good catch Jeffolie.
It shows GM has no intention of saving its American factories and instead will use that money to prop up its foreign divisions.
Bastards.
GM deserves to die.
I just wish for once the MSM would show the truth about our corporations rather than whitewashing that pack of Ivy League criminals.
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Post by graybeard on Nov 25, 2008 0:30:04 GMT -6
I keep coming back to the words I first saw on this Forum: A company too big to be allowed to fail is too big to exist. We need real anti-trust back in the DOJ, to prevent companies from getting too big.
GB
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Post by Cactus Jack on Nov 25, 2008 12:41:20 GMT -6
I keep coming back to the words I first saw on this Forum: A company too big to be allowed to fail is too big to exist. We need real anti-trust back in the DOJ, to prevent companies from getting too big. GB Sounds like Amtrac How many billions upon billions of Dollars have been sunk into that failed transportation conveyance? To everybody who lives in the vast expanses of Middle and Western America, Amtrac is an ongoing entitlement taxpayers cannot afford. It's another rathole politicians throw $$$ into to buy votes. Along with the Big U.S auto, these two industries need to go belly up because both have failed miserably at what it is they are supposed to accomplish.
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