UAW Killing Big 3?

[The_Blur]

Originally Posted by garagelogic

Yes, if that's what it takes to re-boot this great country, absolutely. At least you see some things for what they are. We started down this road to ruin long before any of the most recent happenings in the financial market. We've been moving from a producing nation to a consuming nation for decades and that is the price you pay for doing so.

Other than the national defense, none of those things should be provided by the government anyway. Yes, I can imagine not having those things and it makes me optimistic about the future when I think of people who rely on themselves and the good graces of others, not the government, to get by. And based on your words, you feel none of the 5 million workers displaced by the fall of GM will be unable to find employment for 8 years? If so, that says a lot about those people. Maybe you mean they won't be able to find employment that supports their current standard of living. If so, that's a whole different thing.

Yes, 5 million lives could change dramatically, but you assume that change will only be for the worst. Some of those people will find that they are happier in another field and realize they never really liked the job they had, they just liked the paycheck.

Doom and gloom. Armageddon is what will happen if we allow a business to fail. Please. Times will be extremely difficult for some, maybe many, but the country will not collapse.

I like your idealism! I really like how you believe in a society of smaller government involvement in everyday life. This is not a common believe system anymore, and that bothers me because the West hasn't always been so dependent on the government for basic survival or social needs. I don't completely agree with the ideals you posed because government fulfills some of them so much better than private industry, but I very much respect that small government ideal.

We are definitely becoming dependent on imports as a post-industrial consuming nation. Dependency makes us the victim of foreign markets, foreign governments, and foreign security issues. It has compelled the United States to become very active abroad, and that is good for hegemony as it eliminates national security threats early in many cases, it also promotes nationalist movements that may eventually rise against us—realist theory, applied to economics.

I threw out a long period of time, 8 years, somewhat arbitrarily. I apologize for that. The truth, though, is that the market can't handle that many unemployed people in the US. Some countries do have that many people unemployed, and society has adapted to that with different standards of welfare. The US has very low welfare standards compared to Europe, and that is due to our flourishing economy. When a gargantuan influx of unemployment hits the market, it will annihilate a lot of industries that are otherwise unrelated to cars. Places that usually do well regularly will see 5 million less customers in the long run. With the pay the UAW has demanded in the past, I can imagine that those sales will be above average in size. Plus, there aren't 5 million mid-level jobs to replace 5 million entry-level or mid-level employees in related industries. I have trouble believing that a factory supervisor, for instance, will want to work at Taco Bell after building cars all his life. We have to consider that these are specialists who have skills and experience that can't really be applied to very many industries outside of the automotive world.

We did start down this road a while ago. Domestic companies sold fleets with intention but build whatever they felt was appropriate without much regard for market change. This trend could have been better followed, but I find it impossible to predict this market collapse. We have to give GM, Ford, and Chrysler for building cars that compete with the competition. It hasn't always been that way. I think we need to forgive them for their past mistakes and realize how important to America they really are. Just working in this country make them important because there are so many of them.

[GTAHVIT]

Originally Posted by rmyers

You are assuming they will be able to pay it back.

This isn't the first time the auto industry has gotten a similar loan. And each time they pay it back early with interest.

So, yes, I'm assuming that the Auto industry is more honest about their current situation than banks are being. And will be able to use the loan to weather the current storm, retool factories to allow them to meet new CAFE standards, and pay it back.

Additionally, I make that assumption based on the fat trimming that has already taken place, and the new products already in the pipeline which move them in concert with the market demands.

And to be clear, "being able to pay back the loan" is the assumption any lender makes when loaning money. That doesn't change the fact that, as it is currently being proposed, it is a loan and not a gift/bailout. Which means the big three are expected to pay it back.

The real question is, will this loan keep them from filing bankruptcy or not? If you think they will go bankrupt, don't loan them the money. That wouldn't make sense.