Auto Bailout: Once More Into The Breech
There is a lot of smoke and even a little fire on the Detroit automaker bailout front. I posted my own ambivalent take at length here, and there is a consensus emerging among pundits with brains and economists with slide rules, or whatever they use these days, that a bailout is a bad idea.
George Will, who got his driver's license in 1957 or thereabouts, says it best: It is simply too late to keep automakers from failing. Mitt Romney, of all people, agrees.
Pat Buchanan, who has a few more miles behind the wheel than Will and the Mittster, sees such a failure in apocalyptic terms.
Those wildly divergent points of view so noted, empywheel provides a timely update of how the $700 billion (or $2 trillion or whatever it is) bailout package might be used for the Big Three.
Then there is Helen Philpot, my blogospheric heartthrob of the moment, who suggests in light of record oil company profits that "As long as Detroit continues to make cars for the Gas-Capades let the oil companies bail them out. It's a robbing Peter to pay Paul kind of thing except in this case Peter and Paul seem to be riding the short bus . . . and it's not to save on gas."
Finally, it should be yet again noted that the denial of General Motors management at this point is pathological: No bankruptcy. No regime change. No doing anything we don't want to do. Translation: Give us the money or else.
The UAW needs a little tough love. It derailed the Cerberus deal at Delphi. Today GM suffers a loss of about $2,000 per vehicle sold. On the other hand Toyota whose employees are not part of the UAW earns a profit of about $1,200 per vehicle sold. If GM was able to operate with labor prices near Toyota’s it would have pocketed an additional $29,715,200,000.
ReplyDeleteGM bailout nonsense
These guys are disgusting. Fox News reported that they flew private jets to Washington today for their hour of begging before Congress. What really ticks me is the Big 3 provides a low cost, quality, fuel efficient, green car to foreign markets that far exceeds anything we have here in the US. LET THEM FALL. I hope the CEOs, especially GM's Wagoner, end up in the soup line.
ReplyDeletehttp://cpr-dionysus.blogspot.com/
what about bailing out the companies - but using their assets to lower barriers to entry in the automotive industry ,by changing industry structure ? this would enable more startups to compete , increase innovation , do alot to reduce global warming , and since america is the best country in the world in building startups , it might enable america to have the best automotive industry in the world .
ReplyDeletewhile not without risks , currently there are no low risk options to this crisis.
maybe worth a try ??