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43% say they would eventually feel an effect from such a bankruptcy, and 24% say they will never feel the impact. (http://www.cnn.com/2008/POLITICS/12/03/auto.poll/index.html)

http://www.cleanmpg.com/photos/data/500/gm_ford_chrysler_copy.jpgCNN - Dec. 03, 2008

Big Three acted as if this would never happen in 2006, even after the Katrina gas spike. -- Ed

A national poll suggests that six in 10 Americans oppose using taxpayer money to help the ailing major U.S. auto companies.

Sixty-one percent of those questioned in a CNN/Opinion Research Corp. survey out Wednesday are dead set against the federal government providing billions of dollars in assistance the the auto makers, with 36 percent favoring such a bailout.

The poll, conducted Monday and Tuesday, also indicates that a majority of Americans, 53 percent, don't think government assistance for the auto makers will help the U.S. economy... http://www.cnn.com/2008/POLITICS/12/03/auto.poll/index.html

It's a loan, they should do it. They messed up, but we gave 700 billion in uncharted money to the ceo's of certain financial institutions without even so much as a "Are we getting any of it back?"

Loan them the money. Importing causes us to lose.

If we can however, direct that money to smaller companies (domestic) that show much better integrity and capability, then the current big three can be shown the door.

my $.02

The times are only going to get worse for the automakers. As the economy improves, the price of oil will increase, cuasing them more pain. This will continue until we run out of energy, and then we die.

I'm opposed to this. I was opposed to the financial bailout, too.

But the financial one happened. Double standard if this doesn't.

Any parent of a 3 year old knows, you don't reward for poor behavior. It only leads to more of the same. How will this be different? :eyebrow:

The big 2.3 have lost the battle for the hearts and minds of those who foot the bill ...

My big gripe with the Detroit-3 getting federal assistance is the almost chance that the CEOs would squander the money. I wouldn't mind a government *loan* to the Detroit-3, but it seems to me that the executives would just use the money to buy a few more corporate jets and an extra mansion or two, on top of some new bonuses for their management genius. I have very little faith that the Detroit-3 CEOs can make the right decisions.

I'd be more in favor of the loan if it required the current boards of executives to resign (and with no golden parachutes). Ditto for the Union goon leaders.

61% oppose Fed Assistance to the Detroit Three. And with their market share at about 39%, it seems possible that those who are not opposing are those who are wondering what the resale value of their current car will be if it becomes the next Studebaker/Nash/Hudson/etc

I just stopped at the bank before. Outside the bank are four Chevy models placed there by the local dealer to catch your eye and hopefully arouse interest. They've done it for years, and the cars would get rotated out as they sold. You'd see the same car for almost a month and then they'd swap one out for a different model. So far, the four parked there - Cobalt, Traverse, HHR, and Tahoe Hybrid, have been there since early September (late Sep for the Traverse). No movement in three months, so the dealer is already paying interest on this unsold inventory. And that's a lot of money on the Tahoe Hybrid, which is selling for about $10 a pound.

Don't give them the money, that's not how free markets work best. The original idea behind the financial bail out was to buy up "bad assets" that were clogging up the credit markets. In the end we have to ask what is the best for the country, in the long run, I don't think throwing money at failing businesses is a good idea.

Should we also throw money at the print newspaper companies? They inefficiently sell products that no one wants. Sounds like they qualify also.

I am against the automotive welfare.

I also see it as repeating if we give this to them... They want Billions to avoid bankruptcy for just one year... as if one year will magically change the world and all of a sudden their problems will just go away... I don't buy it...

The last time I checked... GM currently has more debt than the combined value of all of their assets... Even with all $25 Billion going to GM alone ... if the debt gets called... GM will still have to declare bankruptcy anyway.

I am also against the $25 Billion that was pasted in 2007 to bribe the 3 to make higher MPG vehicles... the government shouldn't be paying or bribing people to do things... I don't get a check because I didn't kill anybody today... you pass a law and give a penalty if you break the law... if you want higher MPG vehicles... change the current law... If they go under ... so be it... they will be replaced.

Also after they get the $ Billions ... GM has already said they will fire 10,000 or more of their employees.... so people will loose jobs either way... Don't waste the tax payer money... we won't get it back because it only prolongs the inevitable.

Ok.... So the United States should not make cars? Would it be better to have a start-up company take out millions or billions in loan money to start a new company?

I say, if they change everything wrong, then why not try to help them make it right?

Maybe we are looking at this from the wrong end, folks. Ford says they can make it with "only" the "possibility" of some 9 billion of guarantees on loans. Maybe the right thing to do is to offer to give them the whole works, and see what kind of a plan they could come up with to make it profitable and save as many jobs as they could.

Just a thought.

We are in a severe recession. Losing our domestic auto industry will make that much worse.

Be careful what you wish for. You might just get it.

And don't think a severe recession/depression won't affect all of us.

Harry

The US does make cars, Toyota, Hyandai, and Nissan have plants in the south. It sounds like Ford may make it through fine. GM was highly mismanaged in the 80s and 90s, and the best way for them to turn things around is to file Chapter 11 like the airlines and reorganize.

There is a chance of depression if they all go bankrupt at once, but I don't think GM can turn things around without bankruptcy. They have plants that are closed where they still have to pay the lease, it takes them much longer to change vehicles on the assembly line, they really need a huge overhall, and part of that needs to be the stock holders losing money, the debt holders losing money, the lease holders losing money, the union losing money.

Bottom line, there is no way GM can compete with Toyota, Honda, in their current form. File Chapter 11 and reorganize.

Also, Chrysler is owned by a bunch of billionaires, and is small enough that if they liquidate it would not lead to depression.

Breaking news:

http://www.foxnews.com/politics/elections/2008/12/04/report-gm-chrysler-mull-bankruptcy-bailout/

GM and Chrysler may be seeking a pre-arranged bankruptcy deal, as a last resort.

Harry

We are in a severe recession. Losing our domestic auto industry will make that much worse.

Be careful what you wish for. You might just get it.

And don't think a severe recession/depression won't affect all of us.

Harry

Agreed - I think some are being delusional in "it won't affect me"...I fear this might turn out something like the large SUV drivers 2-3 years ago screaming "I DON"T CARE IF IT'S $10 A GALLON"....no one is an island, folks.

I strongly suspect that if we lose Chrysler and GM is a shadow of itself, a number of members that answered "let Detroit die" are personally going to get hurt after their wish is granted....if 1-2 million jobs disappear in the auto industry, are 1-2 million going to magically appear?

If anyone thinks I'm for a blank check or anything that lets Detroit continue to focus on selling guzzlers with beer marketing, they are mistaken. I've said numerous times it's a complete mess: too many incompetent managers, too many constraints by the UAW, bad Energy Policy by the government, and the general public that lusted after guzzlers until $4.00 gas and limited credit pimp-slapped them.

Anyone have any idea how badly in every post I want to sarcastically reply: HUMMER!.....I can't tell you how SICK I am of years and years of ads that don't sell it's a quality vehicle that fits my needs, but makes me seem powerful, or restores my manhood nonsense. Detroit desparately hoped they could get by selling gas hogs until this year - problem is they may have waited too late. For over 30 years they avoided building a quality fuel-efficient sedan because it was not profitable in their twisted corporate culture...now they have to if they want to survive.

Blindly sending money won't work, but neither will just letting them die....it's like a parent with a wild child.

To all those who responded that the bankruptcy of the big 3 wouldn't impact you, I don't think you're fully understanding the amount of business that these 3 companies do. It's not just assembly line workers, or engineers, or CEO's, or administrative staff, or dealers. The effect would overflow to the airline industry, who relies heavily on their business. Also the chemical industry, which researches and produces new materials to use in the vehicles. We're not talking tens of thousands of plant jobs, this would spell economic disaster.

Do I think it's fair for every struggling business to ask uncle same for help? No. But it is a LOAN. A loan that is an ORDER OF MAGNITUDE smaller than what we just GAVE the financial sector. A drastic scale-back will undoubtedly occur, and even if they do just go bankrupt a year later, it will give some of these industries that heavily rely on autos to adjust business plans.

But it is a LOAN. A loan that is an ORDER OF MAGNITUDE smaller than what we just GAVE the financial sector.
I see it as the same thing. We did not GIVE money to the financial sector, it was also a LOAN. The issue here is how likely will this LOAN get repaid. I think the odds are pretty low. We are likely throwing money away because GM NEEDS to file Chapter 11 to reorganize.

GM pays ~$75 including benefits compared to ~$45 for Toyota. Tell me how they can ever build a competitive car with costs like this. This doesn't even include all the pension obligations they have. Their factories are out of date, they have 3 times as many dealerships, just many issues that they are required by law to keep.

Chapter 11 is the best shot at keeping them going.

How it happens - I don't know, but this is what needs to be done:

Each company should have no more than three brands long-term.
Never let the UAW drive labor costs beyond the market again.
Consolidate management.
Reduce dealerships.
In the near term - improve fuel efficiency and marketability on non-hybrid sedans. It's been neglected....case in point: Taurus.
Longer-term: hybrids, PHEVs, clean diesel (NOT just doolies), and lighter weight construction
PR and advertising acknowledge they MUST depart from the business model of the past 30 years...take responsibility for the past, announce they are going to pursue FE like they once did with performance and bloated vehicles.At this point, I'm not sure Chrysler is salvageable. Other than Jeep and minivans, what is not redundant or needs $1.50 gas to sell? That leaves GM and Ford.

I might encourage GM & Ford to over the next five or so years to share projects and their R&D until they are out of the woods. That would be crazy a few years ago, but these are not normal times. Ford is about to introduce compacts and subcompacts that can sell now - GM has the Volt.

To all those who responded that the bankruptcy of the big 3 wouldn't impact you, I don't think you're fully understanding the amount of business that these 3 companies do...

I probably would have voted "no impact" if I hadn't read your post first. However, their impact would be pretty limited...

My daily driver is not under warranty anymore, so if Ford dies... Well, someone else can fix it.

My tow vehicle gets very few miles, so if Dodge dies... chances are my truck won't need any work until the warranty expires anyway and then it will be the same situation as with Ford.

I don't own a GM product right now, but I am fairly certain my roommates HHR will outlast it's warranty as well.

However, you brought this to mind:
Prices for autos and parts are lower since there are more competitors right now. With one or more of the Big 3 gone, so is that competition so some prices will go up. The more companies drop, the higher prices will go.
The job losses would be felt for years. More potential workers drives down hiring costs (supply and demand, large supply drops prices or wages). Forclosures and loan defaults increase, more banks close, more jobs lost, etc.

My job is safe, but in around two years I will be retiring from the Air Force and getting a job then could be difficult (though I have always been able to find a job).

..take responsibility for the past, announce they are going to pursue FE like they once did with performance and bloated vehicles.

I would be happy if they pursued FE like they did before. Wasn't it you that said they all had vehicles that would get 40+ mpg within the last 20 years?

I would be happy if they pursued FE like they did before. Wasn't it you that said they all had vehicles that would get 40+ mpg within the last 20 years?Recently I mentioned that the average US car got around 28mpg in 1988, so if the performance and size was froze but the engine efficiency continued, I would not be suprized if today it was 35 instead of around 22

98 dodge/plymouth neon got 41mpg highway

1998 ford escort got 38-39mpg hwy

2001chevy prizm got around the same hwy.

I don't support it because it doesn't go back to the people. We would've had universal health care a long time ago.

Wouldn't affect me directly (there's no domestic auto manufacturing within about a thousand miles of where I live) but there's if the Detroit 3 fully went under it would hit the economy as a whole and we would ALL be affected to some degree. But even if they survive, domestic auto manufacturing will take a huge hit that will reverberate through the economy.

I share Earthling's concern about the state of our economy. About the only WORSE thing that can happen to an economy than a wage-price spiral (such as we saw in the '70s) is a deflationary spiral. Prices dropped a full 1% in October (an annual rate of about 13%), and if the November number is similar we are in deep doo-doo. The auto industry's troubles might prove to be the least of our worries, and are a symptom of the absolute collapse in demand that we've seen this fall. And THAT is the bigger problem that must be addressed immediately.

My daily driver is not under warranty anymore, so if Ford dies... Well, someone else can fix it.




Fix it with what? Worst case scenario: the Big Three all go down and are liquidated, since there isn't financing available for chapter 11 bankruptcies. This takes the part suppliers down with them.

You won't have a dealership to repair a Big Three car, and there won't be any parts available for repair or maintenance.

On TV this afternoon, an economist testified at the Senate hearings that if the car makers go out, they would be liquidated, not restructured, and the effect on the US economy would be "cataclysmic."

This economist added that, if they were to be restructured, the government would have to finance it, since adequate financing for Chapter 11 Bankruptcy is simply not available at the present time. He also added that it would be preferable that they be restructured without resorting to bankruptcy.

Harry