November 13 at 9:22 am
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Igor Poltavskiy, Arnaud Fischer, Mike Reynolds and 10 other people liked this
"Advocates for the nation's automakers are warning that the collapse of the Big Three -- or even just General Motors -- could set off a catastrophic chain reaction in the economy, eliminating up to 3 million jobs and depriving governments of more than $150 billion in tax revenue." - Dave Winer
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If the American auto industry is no longer a viable business enterprise, no amount of government financial aid is going to save it. It's over. They blew it a decade or two ago. - Sean McBride
Except if they did the right thing and started making green cars. The only reason they didn't was to appease Dubya's oil barron bosses (that is, if you believe Bush's entire presidency was pwned by the oil industry). - V for Veselka
I'd rather this bailout not happen, but at a minimum the government shouldn't just give the auto industry money for "business as usual", which is clearly a failing model. Just as they changed the rules of the financial bailout to spur institutions to resume lending, if the auto industry wants our money, they need to give something back in return. We can start with accepting higher CAFE standards and add elimination of the tax breaks for large vehicles (like huge SUVs) that are falsely classified as "agricultural" vehicles. Ideally, there'd be some mandate that a meaningful percentage (5-10%?) of every company's model line will run on non-fossil fuels by 2012. That's eminently doable. The gov't has the leverage right now to make a backward ass, hidebound industry move forward and they should use it. - Kevin Pedraja
+1 Kevin - todd
Propping up these dinosaurs is the worst thing we could do for our economy in the long term. - Chuck LeDuc Díaz
+100 Chuck - V for Veselka
This is not a black and white issue. The auto industry was quickly retooled to make tanks and aircraft for WWII. Without an industrial base America is extremely vulnerable. Secondly, these are jobs and taxpayers and productive citizens, without the industry, we have a few million more unemployed. - Phil Boiarski
If you want to pump billions of taxpayer dollars into the auto industry, don't subsidize Hummers and Corvettes and inferior fit-and-finish sedans. Give it to the people innovating and working aggressively to reduce dependence on foreign oil. Help them start scaling up quickly so they can take over the responsibility of supporting the component and subsystem suppliers. Some candidates: http://venturebeat.com/2008/01... - Ken Sheppardson
We're actually doing a pretty good job of making tanks and aircraft right now. - Chris White
Phil, thanks for making sense. The people who think we could turn away and let the auto industry fail are, for lack of a better word, wrong. You wouldn't want to live in the US after that happened. The aftershocks would take down the entire economy. - Dave Winer
Bravo Phil, a more cogent argument for a socialist industrial economy hasn't been made since Leonid Brezhnev. And for the record, I'm a communist. - Chuck LeDuc Díaz
These bailouts, every one of them, simply enforces incompetence and stupidity in business. If the weak ones fail, the industries become stronger. Specifically to the auto industry, wouldn't the suppliers stay in business making parts for other companies? Wouldn't the other auto companies need to increase production/distribution? - Mark VandenBerg
Mark: Unfortunately one of the issues is the auto industry has excess capacity. We just don't need as many vehicles as the industry can produce each year. - Ken Sheppardson
No doubt a bailout will be bad for the country, but a failure would be worse. Do you think your pride could handle selling them to the Chinese or Japanese? If they would buy them (a big if). Those people have to work, and Detroit still sells half the cars in the US and there are lots more people who work for companies that depend on them. Figure out how to wind them down over 20 years, and let's do it, but we can't handle the shock of an immediate failure. Not when the cost of propping them up is so small. - Dave Winer
Some auto industry experts say the outside risk is 40,000 jobs. It's not like the entire auto parts, services, sales and auxiliary elements will just go away while everyone takes to riding bikes. - tom matrullo
+1 Kevin and Dave. The auto industry is vital to the American economy. Period. There should be conditions for the investment, but the industry as such is just too important to fail. If auto makers fail, I want it to be because there's a viable industry or other manufacturers around to replace them. A sudden failure would be devastating. - steplow = Steve Lowe
Dave Winer: on what grounds do you believe the bailout will work? What is the track record of the people who brought the American auto industry to this pass? - Sean McBride
Bailout or no bailout these rotting carcasses of companies will fail. - Brian Sullivan
It is a strange belief indeed that the government can save an industry which can't save itself. Is Barack Obama smarter about running the auto industry than the current management? - Sean McBride
I just keep returning to "creative destruction" that free market folks *used* to chant as a mantra. If there is any worth there, some other company can purchase it, and if not, let it fail. And I'm incensed as a taxpayer that I could end up propping up a crappy business that I wouldn't even by a product from! - Jason Kaneshiro
The bailout won't work -- it won't make our auto industry work. But... None of the auto companies are selling cars now, not the Japanese or Koreans or Europeans. No one is buying so no one is selling. Do you want to have an auto industry if the economy comes back? Or do you just want to give up? The other countries aren't going to let theirs go under, because its suicidal for them to. We won't either Sean. We're not stupid (at least not that stupid). - Dave Winer
Exactly, Brian. They all are beholden to the UAW which has bled them dry, while producing substandard products under the protectionism of tariffs. Why prolong the inevitable? The only problem I see is funding the pensions/healthcare for the retirees. Maybe that's where the 'bailout' money should go. - Mark VandenBerg
Ahhh, the UAW comes into it now. And that's why I said yesterday we need to invest in the Republican Party -- because the Democrats can't not bail out the unions. So four years from now the Republicans may well win the White House because someone has to tell the unions the bad news. Or maybe Obama will. That's his most turdlike shit sandwich. - Dave Winer
For those in favor of bailouts, what companies would you not bailout? - Chris White
So Dave -- you are arguing for a bailout that you claim won't work -- and you think that is not stupid? - Brian Sullivan
It's not a bailout, it's a loan with interest that the industry has a spotless record of paying back - Erin Kotecki Vest
How can the American auto industry pay back the loan, when it doesn't seem to be able to make products that people want to buy? That's how it got into this mess in the first place. - Sean McBride
The only possible way that this can work is for the US government to ban all auto imports immediately and put severe restrictions on "foreign" companies manufacturing in the US forcing Americans to choose between no new cars/trucks and inferior products (even then they might choose not to buy) - Brian Sullivan
I'm not arguing for anything -- you guys don't make the decision, we're just kibitzing here. The discussion here has absolutely no consequence. As soon as I'm arguing for things that becomes work. :-) - Dave Winer
Dave -- I admire your boldness in staking out a strong position on this issue. :) I also think it will be a nightmare if the American auto industry collapses. I'm just not convinced that the government can save it at this point. It has been making bad decisions for several decades now. - Sean McBride
Sean I'm absolutely sure the government will prop up the auto industry. It's not that I want it, it's just that it's so obviously going to happen. Just as I'm absolutely sure that we'll still have troops in Iraq at the end of 2009 (another hot potato/no win/shit sandwich). - Dave Winer
Dave -- your predictions are probably correct -- I'd bet on it. - Sean McBride
I suspect we're already in the "catastrophe" stage unfortunately. - Dion Hinchcliffe
Union haters should consider that we would not even have a "weekend" without unions. My grandfather worked for $6.50 a week and was paid for coal by the ton. Trouble was those who worked nearer the mine entrance would take his i.d. tag and replace it with theirs, claiming his labor. None of this is simple. Kneejerk reactions that don't think things through need to be weighed. We can take this chance to remake the industry into a smarter, greener business. Why not do that? - Phil Boiarski
@davewiner Oh, in that case, "spending" $50b to save $150b makes sense. - Mike Reynolds
