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Should governments bail out US automakers?

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  • Should governments bail out US automakers?

    Do you think governments should bail out US automakers? Part of the problem in the US is that they provide pensions for millions of Americans. But is that a reason to support their failure?

    What do you think? If GM, Chrysler or Ford fails (or all of them), the vehicles won't all disappear. Many will be purchased by non-North american automakers (for example, the corvette must have some value). So, it wouldn't devastate the north American auto lifestyle. Or would it? Do you care?
    44
    Yes
    22.73%
    10
    No
    75.00%
    33
    Don't care
    2.27%
    1

  • #2
    What happens if US automakers are bailed out? They'll be expected to protect jobs in the US, not in Canada. That's my only problem with the whole deal. The companies should all be downsized anyway, since they obviously can't compete or make a profit at their current size. It would be better if it were left up to the market, and their divisions sold off to companies who can do what the big 3 have failed to do: make a profit and make good vehicles that are better for the environment.

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    • #3
      3 million people out of work for a start
      Still waiting for the Arlington site to be reborn .......

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      • #4
        The problem with the US automakers is their labor deals. You wouldn't believe some of the stuff that goes on. Shifts only working 4 hours (or less) but being paid 8 hours, people paid full time wage for months on end to not show up to work, it goes on and on. The reason that the American automakers are in such dire straights is because their labor costs are double or triple what they are for an equivalent North American Toyota or BMW factory (which aren't under UAW/CAW strangleholds).

        There's no question that the companies have been poorly managed, but the UAW/CAW will deserve much of the blame when these companies go under.

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        • #5
          Originally posted by raz0469 View Post
          There's no question that the companies have been poorly managed, but the UAW/CAW will deserve much of the blame when these companies go under.
          I agree - although US social security / health care policy failings are part of it too. The unions were in effect, trying to "fix" the things the government was not taking care of.

          It is going to be interesting, for if the government does not bail out, the ripple effect through the US economy - all those pensioners losing their pensions, all that money not available for health care, is going to affect a lot more than just the auto industry. These companies are a de-facto social welfare state (which is a large part of why they can't compete).

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          • #6
            I was thinking about this today: why should government bail out a corporation who has failed to change according to market demands? Seemed to me that they should fail.

            On the other hand though, what if 3 million people go unemployed? What kind of burden does this put on government? EI cheques+welfare+subsidized housing etc. could = a lot more money than propping up a company.

            Or does it? I guess that's the question.

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            • #7
              If the US automakers didn't build crap that passes for automobiles then they wouldn't be losing market share to the Toyotas and the Hondas. Let the market decide. Taxpayers shouldn't be on the hook for the bad decisions of multimillionaire executives.

              The autoworkers can go work at more successful automakers with plants on the continent, or get other jobs.

              As for US automakers disappearing, there's talk of a GM/Chrysler merger brewing.
              “You have to dream big. If we want to be a little city, we dream small. If we want to be a big city, we dream big, and this is a big idea.” - Mayor Stephen Mandel, 02/22/2012

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              • #8
                Originally posted by Sonic Death Monkey View Post
                The autoworkers can go work at more successful automakers with plants on the continent, or get other jobs.
                The retired ones who will lose their pensions / health coverage won't. This will have a big impact - mind you, maybe its inevitable that this pain has to happen? Perhaps an end to it all is better than the ongoing slow death of these companeis that we have been watching?

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                • #9
                  Originally posted by Sonic Death Monkey View Post
                  If the US automakers didn't build crap that passes for automobiles then they wouldn't be losing market share to the Toyotas and the Hondas. Let the market decide. Taxpayers shouldn't be on the hook for the bad decisions of multimillionaire executives.

                  The autoworkers can go work at more successful automakers with plants on the continent, or get other jobs.

                  As for US automakers disappearing, there's talk of a GM/Chrysler merger brewing.
                  And what jobs would they go to in a recession?

                  GM/Chrysler won't be merging anytime soon. Two money losing companies coming together to lose more money doesn't make sense.

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                  • #10
                    I think bailing out the auto industry is a tough call. Sure, there are many jobs at stake, and that means votes, but this has gone on for decades and I think that bailing out the auto industry is corporate welfare. Yes, it will hurt in the short term, but I think that it would be better for governments to support new industries, and offer training for new jobs for those who are laid off.

                    If there is an unfunded pension liability, perhaps our governments could support that to ensure financial security for retirees and those near retirement.
                    "Talk minus action equals zero." - Joe Keithley, D. O. A.

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                    • #11
                      NO! The automobile companies that form the "big three" have repeated shown they can't not function intodays market...they can't catch up with the competition. Focus on building new manufacturing markets.

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                      • #12
                        I think the pensions should have to carry mandatory insurance so they'd get paid out. Just as we have CDIC for bank accounts, there should be an equivalent for pensions.

                        Other than that, let them fail. There has been a lot of bail out lately and very little creativity or effort on the part of the corporate world to help itself and make rational choices to limit the impact of their previous poor investment choices.
                        City Centre Airport is to the sky as False Creek is to the ocean.

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                        • #13
                          These companies have been bailed out or have received financial assistance of some sort so many times now, it must be obvious that throwing more money at them won't help. Chrysler is a particular standout, but neither Ford nor GM are much better.

                          Let them fail if needs be, then let the survivors build something new and viable.
                          Almost always open to debate...

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                          • #14
                            Why is this thread in the Lifestyles section of C2E?!
                            Is there hope for Edmonton? Yes!!! The Oilers? Wait and see.

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                            • #15
                              Originally posted by MikeK View Post
                              Why is this thread in the Lifestyles section of C2E?!
                              Autos are part of our lifestyles. Our lifestyles will change, if some of these north american autos disapear for good.

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