The Auto Bailout Scam

[Liberalman]

Ever since the banks got bailout commitments from the American government companies are lining up to get theirs.

The big three American auto manufacturers are taking a run for their chunk of change and they are ready to put the boots to their employees to get the money.

Where are the sales for these automobiles and I mean big sales where they slash prices to get rid of their excess stock?

No you don’t see it because the big three auto dealers probably have a secret pact like the pact they have when the union is negotiating contracts with each company one by one.

If these auto makers were serious about making money then they would be selling those cars at a loss just to recoup their money but they’re not they are just going to shut down operations for a couple of months and let their employees pressure the government to get their money while they just sit on their behinds sipping Champaign and taking it easy at the country clubs.

I hope the government makes them sell their excess stock at real rock bottom prices.

People will buy those new cars if the price is low enough then they can make more.

If the carmakers refuse to do this then they should go under and then they will be forced to do it then and everyone wins.

 

[#juan]

It might be better to just melt that junk down and build something people want. Junk is still junk no matter how cheap it is.

 

[mit]

What is scary is that the Feds think the Automakers S/B building green cars - Toyota Prius sales down 48% - GM pickup sales down only 38% - Each Automaker likely sells more pickups than all the hybrids sold combined - they are expensive to buy - limited life span - and no ROI at todays gas prices.

 

[DavidB]

I am opposed to the bailout too. If the government has 3 billion dollars to throw away, why not just eliminate taxes on, say, four-cylinder cars. People are encouraged to buy cars, while still deciding which car manufacturer deserves their money, PLUS they would be tempted to purchase more fuel-efficient cars instead of some big gas-guzzler (help us live up to the Kyoto Protocol expectations). Kill a couple birds with one stone.

In any case, if it were up to me, there would be no bail-out. Period.

 

[Kreskin]

Problem with selling them at firseale prices is they benchmark the future values of vehicles. How would someone like to have bought a 2008 vehicle for 25k 6 months ago and see the same vehicle sold for 15k today? That means your 25k vehicle is probably worth 10. Would you ever buy a car from that automaker again? The same principle applies to their leased vehicles.They'd all be worthless when handed back.

 

[Colpy]

Four Billion bucks as a reward for building cars nobody wants.

Great.

 

[Kreskin]

It's technically a loan. I'm sure if they didn't have it they would simply shut down. That wouldn't do much for tax revenues or the economy. Like what happened in the forest industry, and mills, shutting a mill down we quickly discover how many secondary industry jobs go down the drain too.

 

[Ron in Regina]

You think this is an Automotive scam? Well...it is! Here's another Automotive scam
that made me laugh too.

 

[Kreskin]

Ron, I love your photos.

One would have to sell a lot of beer to recover the cost of a car.

 

[Ron in Regina]

Ron, I love your photos.

One would have to sell a lot of beer to recover the cost of a car.

How did this woman land a job at Hooters anyway? (Toy Yoda. That's funny!)

 

[Kreskin]

She was a hooters waitress? Is that true?

 

[Kreskin]

We were thinking the same thing. How did she get the job? lol

 

[Ron in Regina]

She was a hooters waitress? Is that true?

Click on the picture. It'll make it bigger so you can read the article.

 

[bobnoorduyn]

That was about 6 or 7 years ago, she sued Hooters, aparently they settled and she got the car, only in Amerca eh.:roll:

 

[mit]

The wild card in North American vehicle production is Mexico - They are the 10th largest automaking country in the world - They have quietly been given many assembly and parts making jobs by the MBA's and Beancounters at the Big 3 and Toyota and Volkswagon along with Sterling Trucks - International trucks and a host of farm equipment manufacturers. Their $3 to $8 hour wages are very attractive - No ocean crossings - minimal border issues - similar culture for business - some graft but not as many restrictions to foreign ownership like China - Stable government. They have expanded trade agreements - most recently with Japan where autoparts can be exported to them from Japan and put on cars that can sneak across the border courtesy of NAFTA. GM Ford and Toyota have made Billions of dollars in investment in recent years - They are producing the small cars that SUPPOSEDLY everyone wants while North American plants produce the luxury and midsize cars that SUPPOSEDLY nobody wants.
Not sure how it is now there but one company I worked for was interested in purchasing a paper mill complex in Mexico - They were attracted by the government incentives - low wages etc. Thing was when they did their due diligence they found that productivity levels were poor - they had a high turnover of staff (Some would work till payday then not show up for a month) - To operate at the quality levels needed they had a large well paid North American management staff that negated any labour savings when combined with the poor productivity - Infrastructure issues like water and electricity caused numerous production outages. This was over 15 years ago so things might have changed but I remember reading an article about Ford's assembly plant there at the time - They had the highest quality rating that was touted by Ford - One Ford executive said - "Now if we could only figure out how to make money here"

IF low wages were the only way to make money - Haiti would be where all the autos would be made.

 

[Machjo]

It's technically a loan. I'm sure if they didn't have it they would simply shut down. That wouldn't do much for tax revenues or the economy. Like what happened in the forest industry, and mills, shutting a mill down we quickly discover how many secondary industry jobs go down the drain too.

Yeah and if they go bankrupt anyway, then we can kiss the loan goodbye. If it's such a wise investment, why weren't people banging on their doors offering to lend them money? I'm sure if the banks thought this a wise investment, they'd be investing in it. They're not. Doesn't that tell us something?

 

[L Gilbert]

Bank boards are not interested in helping out Joe Average or anyone else. They along with the auto makers' boards and all the other boards of corp'ns are interested in profit for them and their investors. It isn't hard to figure out. For the most part, people like this have to be forced to give a crap about anyone else. Sad state of affairs but that's how we have developed our society so we have to live with it.

 

[Kreskin]

Yeah and if they go bankrupt anyway, then we can kiss the loan goodbye. If it's such a wise investment, why weren't people banging on their doors offering to lend them money? I'm sure if the banks thought this a wise investment, they'd be investing in it. They're not. Doesn't that tell us something?

If the banks could get all of the future tax revenue from the industry and industry partners they'd probably line up to find the funding. What's at stake for the government is very different.

 

[Machjo]

Bank boards are not interested in helping out Joe Average or anyone else. They along with the auto makers' boards and all the other boards of corp'ns are interested in profit for them and their investors. It isn't hard to figure out. For the most part, people like this have to be forced to give a crap about anyone else.

That's not the point. If the government is investing in the auto industry, there has to be a reason beyond job creation (jobs could just as easily be created in new industries). What what might these reasons be?

1. Public good. Nope. A person can servive without a car, use the bus, cycle, move close to work, etc. The poor can't afford a car with or without a bailout, so it doesn't benefit them either. A car bailout doesn't hep the environment. So what does this bailout intend to do for the public good that some other job creation programme couldn't do? If there was a legitimate value to society beyond financial gain, I might have supported the idea, but there is none. It's not an essential service, doesn't help the poor, harms the environment. What's the argument on this one?

2. financial profit. Nope again. If that was the case, the government wouldn't need to bail them out because plenty of investors would be offering to buy shares in the company. The company would have no problem finding investors then.

So clearly 2 above is not the reason for the bailout, so we can kiss the 'loan' goodbye unless we're very lucky. And 1 isn't the case either unless I missed something.

If the objective is job creation, then lowering interest rates and education for the growing industries of the future would seem to make more sence, don't you think?

Now I was debating voting Green last election. I generally simpathize with the NDP's intentions. But I have to say that the Conservatives were (not 'are') right on this one. No effin' car bailout.

 

[Machjo]

If the banks could get all of the future tax revenue from the industry and industry partners they'd probably line up to find the funding. What's at stake for the government is very different.

Then please educate me. What's at stake for the government other than rewarding their union supporters for teh NDP and shareholder support for the Conservatives, with the Liberals geting a little of both?

It stinks of partisanship to me. If they support the bailout of a big industry with strong union roots, it benefits all sides, NDP especially.

What what good does it provide for the country? The poor? Ecology? Economic benefit?

Nada unless I'm missing something here? Like I said, please educated me here, and if indeed I missed something important, I'd be willing to change my mind aout it.