"Big Three bailout may be around corner"

[CompoundInterestFan]

Presidential election could bring Big Three bailout - Sep. 4, 2008

"Cole argues the loan package could be a relatively cheap alternative to the economic harm that would take place if one of the automakers were to fall into bankruptcy."

So are GM/Ford/Chrysler really too big to fail? I don't pretend to understand all the workings of the economy, but to me this seems like yet another case of privatizing the gains and socializing the losses. Also, if American taxpayers are going to bail them out, shouldn't we get some kind of guarantee that they can't send jobs overseas?

 

[Texas Proud]

IIRC.... and I might not be.... but the last time they bailed out an automaker was in 1980 (ish)...

It was loans and the govmt was paid back with interest.... no loss...

 

[2B]

"It's different this time." It's always dangerous to say that but I think in the case of the auto companies it really is this time. The proverbial chickens are coming home to roost as far as the high cost retirement and health plans are concerned. That is what is killing GM and Ford. They have to make so much of a markup just to cover those for existing retirees that there's nothing left for product development or profit. Toyota and Honda's plants don't have a retiree burden and never will based on their personnel benefits.

If the government bails them out, all it will do is provide a bridge loan until the next cash crunch which will require another loan. This problem will only get solved when the auto companies and the UAW end the unsustainable retirement benefits or the companies go under which will also end them.

The bankrupt company could then come back without the retirement plans but the loss of customer confidence may be too much. I've believed for years that Chrysler, GM and Ford are doomed. It was just a question of how long the UAW will drag it out.

Remember the steel companies? The USW was more than happy to run almost every domestic producer into the ground. They wouldn't allow any "competitive improvements" in the contracts because they knew that would be the end of the union.

 

[travelover]

I think this should be in the Soap Box section.

Don't mess with my pension and keep yer kids off my lawn!

 

[2B]

I think this should be in the Soap Box section.

Don't mess with my pension and keep yer kids off my lawn!

I can't disagree. Our moderators don't police the off topic threads very well. I demand a refund!

 

[CompoundInterestFan]

I think this should be in the Soap Box section.

I guess I don't understand why this one's off-topic but all the other financial news in this section (Fannie/Freddie, Bear Sterns, banks going under) isn't.

 

[jazz4cash]

I think this should be in the Soap Box section.

Don't mess with my pension and keep yer kids off my lawn!

Don't mess with my pension and keep yer [-]kids[/-]cats off my lawn!

 

[travelover]

I guess I don't understand why this one's off-topic but all the other financial news in this section (Fannie/Freddie, Bear Sterns, banks going under) isn't.

My ox was Gored. Oh no, another hot button name! Eeeeek!

 

[barbarus]

Where will the money come from to buy all those new vehicles?

Will the government loan out the necessary billions to busted purchasers too?

 

[tryan]

Oh, I thought the "big three" where: Fannie, Freddie and Sally ... my bad.

 

[barbarus]

Oh, I thought the "big three" where: Fannie, Freddie and Sally ... my bad.

Not at all Sir. They are being socialized even as we speak.


Ya ain't seen nothin yet folks!!!