by Victoria Miu
America's Big Three—General Motors, Chrysler, and Ford—are in big trouble. Sales from the not-so-fuel-efficient fleet of American-made vehicles had already suffered considerably because of high gas prices even before the financial crisis began to get serious in September of 2008. Faced with undesirable terms in private credit markets, the Big Three are now turning to the government for financial assistance. The House passed a bill to rescue the Big Three car companies with $15 billion in emergency loans on Wednesday, December 10, but the Senate abandoned the plan the day after. Should the government bail out the auto industry?
Those in favor of the bill argued that the rescue plan can prevent the loss of 500,000 jobs in the auto industry. Job losses in the auto sector would most likely have spillover effects in other sectors. As auto workers lose their jobs, they would consume fewer goods and services, negatively affecting industries in retail, health care, and financial services. With unemployment already rising, supporters of the bailout argued that keeping auto workers in their jobs is much easier than creating new jobs for them.
Opponents of the bill compared the bailout to the inefficiencies generated by government subsidies and tariffs. Many companies face financial problems—why should the government save the Big Three and not the others? Poor performance is typically a good signal that a company should change how and what it produces. A partial government takeover of American auto companies will not ensure that the firms will start producing vehicles that people want to buy. A bailout, according to critics, will simply prolong the inevitable: the consolidation of the American auto industry, the large number of layoffs that come with it, and the migration of workers from autos to more profitable industries.
Discussion Questions
1. What is the role of labor unions in contributing to the financial problems facing the Big Three? In particular, how well do the wages reflect the productivity of the workers in the Big Three? Click here to read more.
2. Do you think the problems faced by the Big Three stem primarily from the recent financial crisis or from longer-term decisions about what types of vehicles to produce and how to produce them?
3. Some suggest that another reason leading to the failure of the Big Three is that American consumers prefer cars made by foreign companies, such as Toyota and Honda, to cars made by American-owned companies. How does the market of foreign-made cars affect the demand for American cars?
67 comments:
I think the most prolific feature of America's economy lies in the auto industry. By refusing to bail them out, you keep a lot more jobs. If you save them, more people are laid off and that is something this economy doesn't need. I believe what stops most Americans from wanting to save the auto industry is the fact that these corporate CEO's have helicopters and private islands. What's to stop them from inadvertantly pocketing the money from the government for personal gain.
I believe that the government should not bail out the auto industry. The problems faced by the Big Three stem from long-term decisions. Many consumers purchase cars based solely on fuel efficiency. Many of the cars that the Big Three have made ignore consumer taste and, thus, demand decreases. Moreover, foreign car makers offer wages that are significantly less than workers at GM and Ford. If thats the case, some wages have to be lowered, particulary at the higher end in order to save the Big Three.
The government should not bail out the auto industries and should let the economy take its’ natural course. If the car industry does not want to come out with cars that can compete then they should not be bailed out, but left to disappear. Although the government, may save some jobs they may also prolong the recession and cause the economy to hurt more in the long run. The recessions in the past have been prolonged because of government intervention. We do not need to waste more of the American tax dollars.
-Court Rod
By bailing out the auto industry we save jobs but go more into debt. The American people think that we should not bail out the American auto industry again is because of the CEO's of those companies. They have such high salaries and reward themselves with planes and very expensive vacations. Greed from the CEO's is hurting the company. The role of labor unions gives the workers from the companies high wages and so many benefits that it's hard for the company to pay so many at such a price.
These days, I am more skeptical than ever about the idea of a "bailout". A sinking Titanic with one man and a teacup trying to dump the water off the ship comes to mind. A bailout is like a band-aid, a quick fix, something which, theoretically, money can solve. If the auto industry is a sinking ship, throwing money at it will do little to stop it. While the market will take a huge hit when the "big three" fail, companies that cannot keep up with the market will always, inevitably, go the way of Old Yeller. Times are changing, and the auto industry has not maintained and adapted correctly, in the long run, a bailout will only buy a limited amount of time. There is no money made bandage large enough to cover the gaping hole in demand for automobiles, nothing but time, patience and ingenuity will fix the economic mess we’re in.
The polemic between government and the automobile industry stems both from the financial crisis as all industries are adversly affected by related good particularly related goods and capital as show by supply shifts as well as long-term consumption decisions such as outsourcing labor for production and the changing preferrence of American consumers to foreign-made vehicles. This is posited by the labor unions and the exponentially larger wages that American workers receive. If unions continue to exist on the behalf workers to receive more pay and that exacerbates the condition of the economy and causes them to be layed off, then we are forced into a double bind: either (A) support the workers and the unions and increase labor wages for the sake of American workers and the economy and endure the reprucussions a defeated domestic market or (B) pay them less, effectually ignoring the union, to seek fiscal efficacy in being competitive with the efficiency of foreign markets and lose workers to outsourcing and transfer payments. Either way, the difference can seem negligible. So in defense of Detroit, while they may produce cheaper cars, a bailout embodies that marginal reduction, i.e. $800. Dissolving labor unions, expanding the market (not the financial capital of companies) in America by requiring subsidies to spent in particular ways, and then promotion of efficient, cost-effective domestic vehicles should be the implementation strategy to consumate the effect of improving the economy through government planning.too bad doing that relies on Congressional bureaucracy :(.
Corrections for Blue Alozie:
(1) advertently* not inadvertently - it is no serendipidous event that CEOs hoard money; they surely intend to do so.
(2) Refusing to bailout means that we lose jobs, not keep them. If we don't provide subisides to these companies they are forced to lay off workers as they no longer have the money to pay.
The bailout creates a larger burden for the American public, who obviously have turned their backs on the domestic automakers themselves in order to buy cheaper, foreign cars. It would be against their will to provide these companies with revenue, thus increasing their capacity to produce, creating an excess of supply of cars that nobody wants to buy, especially Joey, who went from a Hyundai to Honda, because he is a fiend for foreign cars and hates America.
Even though the auto industry is one of the original foundations of the American economy, I think that there are other things that the government should be worrying about because American auto producers cannot compete with the labor advantages other countries have over the US because we have minimum wage. Instead I think that the United States should focus on becoming energy independent so that we won't have to keep importing the resources that run the vehicles.
I don't like that the government is having to spend so much money in order to save America's Big Three. They are having financial trouble and they should have to deal with it just s other companies have to. Yes they do have tons of job opertunities but what is the point of a bail out if you are just going to lay off workers anyways? Do you really need money to pay the people that you are laying off? NO... I know that they need money to remain open an keep their cars rolling off the asembly line but then again they could focus more attention on selling cars rather than going out of business because if you sell cars then you won't go out of business. I drive a GT Mustang which is made by Ford and it is a great car. I am not as fond of foreign cars as I am of American made cars. I don't think that long term projects such as the develope of the 2010 cars is as important as the financial problems facing the Big Three. If worse comes to worse then you don't produce 2010 models in order to stay in business. Also, there are still plenty of 2009 models still waiting on the lot to be sold.
The Government should not bail out the Automotive industry because that would just increase the national debt without guaranteeing good results. Didn't Congress already give billions of dollars to these companies because they claimed it would help them keep jobs, and yet many companies laid of thousands of workers just to make ends meet. Perhaps its time to let the Invisible Hand smack down these companies, even though there is bound to be a lot of collateral damage; the government cannot set a trend of helping whichever company makes bad decisions. Many people would lose their jobs, but saddling future generations with trillions of dollars of debt would be worth it.
VARUN KUNCHALA
I believe that if a bailout of the auto industry were to happen, then the leaders of US auto companies would have to be changed. I've been watching the things that American car companies have been doing, and the things they are dong are pretty stupid. For example, small cars that they sell in Europe like the European version of the ford focus or the ford fiesta would be very successful here, but it seems they are under the delusion that people only want gas guzzlers (gas guzzlers=NOT granola).
I am pretty neutral about the whole thing. It is a slippery slope, who's to say other companies don't deserve a little help because they don't make as much money? The people getting layed off sucks, but that's inevitable when a company goes down the pipes. I like the companies, especially Ford, and I don't want to see them go down. So that is my 2 cents, I'm split on the whole situation.
The government should help out these companies considering after we dig ourselves out of a recession their revenue will be important. It reminds me of AIG taking a vacation as soon as the government loaned them billions because they had already planned on it and didn't want to cancel. Selfish, greedy imbeciles like that need to be spurned by the nation. The government needs to have a bailout with strings attached such that the company replaces their leadership. Toyota (in the US), while not an American brand, is under new leadership and they are doing much better than GM, Ford, and Chrysler.
The government should stop putting money into something that is probably not going to have any success irrelevant of how much money the government does or does not give. Also the companies should stop asking for money they know is not going to help instead they should figure out ways of dealing with their issues and working out a solution.
Jessica Rodrigues
Hmm it seems to me to be one of those pick the lesser of two evils. Either way this is not going to turn out well, either with the loss of thousands of jobs or with more and more money dumped into this bottomless pit that is the auto industry. I personally am in favor of not bailing them out because I think that is only a quick fix, and we need to look ahead to the future. Let the invisible hand smack them down. But then again, what is another couple hundred billion dollars of debt when were already trillions behind. . . I mean its just a number. . .
Eric J: Thanks for that, I chuckled heartily after hearing "Joey hates America"...
Anyways, I am split between the two. The government throwing money at any corporation without any regulation is just giving the owners an extra couple billion before their company crashes and burns and they live comfortably. Why don't the CEOs and Presidents put their own money into their company like every other small business owner, why do we have to pay for their mistakes? I'm pretty sure the CEO of Ford has billions of dollars invested in his belongings. If he doesn't want to put his money into his business then he should lose it. Rather than taking the profits, they should invest all their profits back into the company, and then they will possibly come afloat. Also the companies should be making better quality cars. I plan on buying foreign made cars because Japanese cars are better quality than American made cars.
I'm straddling the fence. The concept of so many people being left without means to provide for their families, and being forced to reorganize does not appeal to me, but at the same time, so many people already have. I do see a need for the companies themselves to reorganize, it has become apparent that what they're doing isn't exactly working.If there is to be any money shelled out to bennifit them they had better use it to research and figure out how to pull together a product the people will be willing to spend their limited funds on. -Charmecia Morris
This is capitalism guys, if a business is not good enough they should fail, American, Asian, or European. This is a free market system. The government should not interfere and bail this company out. Every company should feel the burn and down size when needed so that they learn to compete and this will make a long term fix rather than bailing them out making this a short term fix. -cooper
The government needs to bail out these three companies for the good of everyone. Once the recession is over people will begin to buy cars at a much higher rate.Adding to the unemployment rate will not help our country. This is a huge American industry and the U.S. can't afford to lose there 3 min producers. We must help these companies get through this recession.
I believe the government should bail out the Big Three. Although these companies have not made wise decisions when it comes to the efficiency of their products, soo many jobs lie in the auto industry field. I think in this economy it is important to salvage as many jobs as possible. The government should provide them with the help they need but warn them and have some strings attached. I think the industries deserve one bail-out, but nothing more than that.
It seems like all the government is trying to do is go for the quick fix which will end up making things even worse down the line... What they are doing is throwing money into the fire with these bailouts... A failing industry is not suddenly going to have a miraculous recovery... They are on life support and we need to pull the metaphorical plug instead of letting them vegitate... American automakers have been on the decline much longer than we have been in a depression... Anyone that has picked up an issue of Consumer Reports or Automotive News the past decade would realize that these companies are getting what has been coming to them for a long time... American consumers have been switching to the foreign carmakers who produce a cleaner, more efficient, more reliable product at much better prices... Think about how many cars we import than try and think about the last time you heard of someone importing American cars... The government does not need to bailout companies that fail, they need to let them die...
The existence of the unions in the auto industries make it difficult for the CEO's to put more money back into the business to help it succeed. Yet, these CEO's are also guilty of over-paying themselves just to have luxurious lives. Giving these companies more money may be a quick fixer, but the employees and employers of the auto companies are going to have to learn to forfit some of what they have for the betterment of the companies and the economy. You can not expect to have a successful company with the paychecks going out as high as they are today. The problem is no one is willing to give up what they are making, especially now. It all comes down to the willingness of the top dogs to try and make these companies succeed.
I don't think the government should bail out the US car industry. It's ridiculous and it's creating an even larger defecit. Yeah, hundreds of thousands of jobs are going to be lost but I agree with the statement that this bailout will only prolong the inevitable. Foreign cars outperform domestic ones. As an owner of a foreign car and a past driver or domestic cars, I am much more happy driving my Honda than I ever was driving my dad's Mustang and Silverado. There's no comparison to the Honda's durability, efffeciency, and price.
The market demand of domestic cars has been decreasing for years, as the NY Times article states. I think they've been having problems for years but it only became as evident as it is today because of our current economic crisis. Perhaps this wouldn't be as much of a problem right now if it wasn't for the market crash.
I think that bailing out the three big automakers is not a good idea. Obviously the CEO's and managers of the companies did not do a good job in running these industries. Why should the government spend all of this money on companies that cannot hold out on thier own? How do we know that after giving them all these money they will not make the same mistake again. I believe in Adam Smith's invisible hand, when a company cannot not flourish in the economy then it should not continue to operate. It seems to me that these car industries are losing to foreing automakers and given them more money will not correct their bad decisions the CEO's continue to make
okay, well I can see why they should bail them out and why they shouldnt. cause the unemployment rate is already really high, and if all three of them fail, it would rise even more. But its pretty much their fault this happened. if they didnt make inefficient cars people would buy more of them over the foreign ones. American made cars also cost more. something like 1500 is added to each car because of the health care benefits they have to provide for their workers. that extra money doesnt have to be added to the cost of foreign cars. I guess thats the union's fault for getting health care for their members.. but yeah if the gov. does bail them out they need to do some serious regulation afterward so they dont keep failing. control the industry so that money doesnt just go down the drain.
Honestly, I don't really have much of an opinion. I think the situation just sucks in general. Even if the government spends billions more to save the auto industry, there's no guarantee that it will fix everything. The Big Three might keep going downhill and end up asking for even more money later. If the government lets them fail, thousands of jobs will be lost. I don't know enough about probable outcomes or anything to really make a decision.
Well, I think that the government needs to bailout the auto industry, because we cannot afford to have so many people lose their jobs at such a crucial time. Even if we are just postponing the inevitable, America needs some time to sort out the many problems due to the recession.
Personally, I don't believe the government should bail out the big three. Yes, without a bailout many jobs would be lost and without a doubt many other industries would feel the negative effects of the hit the auto industry would take. However, I do not believe the state the automakers are in is solely because of the recession. Bad decisions by people high in the company and incorrect allocation of their funds definitely pushed them over the edge. If the government saves them, what is that saying the American people? I believe it is saying that while we may not approve of corporate decisions made in these companies we accept their activited as inevitable so we choose to bail them out. If a company cannot survive on it's own, we should let the free market play it's role and let the auto industry take this hit. Something tells me that while this would be painful lessons would be learned and postive changes would be made.
Although I am a partriot I still believe in the Adam Smith, survival of the fitest economics. To bail out the big three is to give undeserved reaources. If Americans are buying forgien cars then find out why. The big three need to compete with other auto makers around the world, not wine to Washington. In the long run a bail out just slows us down in the world market race. What if the government just pumped cash to every American industrty? We would lose that competetive drive that keeps us on top. Granola out.
There should be NO Government intervention. The auto makers got themselves in this mess by extremely poor management and some greed. Why should we bail them out with our money.Executives have these enormously high salaries. 10 years ago when they were making record profits they had the money to shore up the health and retirement benefits problem they are in. But they choose not to and take give themselves these Hugh multi-million bonuses. Sorry to say it...but let them go bankrupt or bought out by some foreign interest. They screwed themselves up. The only way I would even consider a government bail out is if every executive over the past 20 years returned their hundreds of millions of dollars they all got in bonuses.
I feel like with all these bailouts, we are just digging ourselves deeper and deeper into a hole that frankly, is going to be difficult to get out of. Where the auto industry is important and is a large sector of our economy, I do not think a bailout is going to be sufficient in the long run. Where it may serve as a temporary fix, i just don't believe a bandaid is the proper way of "fixing" the auto industry. Similar to what many have been saying, CEO's that are getting 10 million dollar bonuses in no way are helping the American people believe that a bailout is beneficial. I think we have much more than an economic crisis on our hands. It is a question of bureaucracy, capitalism and the hope our citizens have in this bailout and effort to revive the economy.
Like everyone else has already said, by keeping the auto industry and helping these manufacturers that need help, we are keeping more jobs alive and not adding to the unemployment rate. There are pros and cons to every situation. By bailing them out, America goes into more debt, but we save a lot of jobs. Everything is having trouble right now because of the economy, so the auto industry is just having trouble like everything else and should not be left out because of that.
It is true that the automakers have gotten themselves into this mess and I definitely think that the Big Three do not deserve bailouts. However the point of a bail out is not whether the company can recover or not with or without the bailout in the long run, because no one can really answer that question due to the complexity and the myriad of confounding factors. The focus has to be on right now. If the auto industry fails, it is very likely the recession will get worse. Unemployment would rise dramatically and as a result a ripple effect will ensue that will reach other sectors of the market as the article says. So maybe the question at hand is not if the government should bail out the Big Three but whether the government and the economy can afford not to. Can America survive the fall of the Big Three?
i think that we shold not bail out the auto companies because the more of them that go out of business so that i can buy a car for really cheap and it will be a really cool car like a tundra. but seriously the car companies got started on there own so they can do it again from scratch. suck it up america we can take a punch like this. AMERICA!!!!
1. The workers are working so it's not like they don't deserve their money. The article even said that the $73/hr included insurance, etc. so it's not like they're receiving real money for those things. I would like to say that labor unions are causing problems because I think they're annoying but then I'd be biased.
2. Longer-term decisions. Even before the recession, more people were buying Japanese cars. Maybe we should learn to specialize and not spend so much money making cars when Japan's obviously doing a better job at it, since we prefer to buy more of their cars than ours, and maybe concentrate on Apple electronics or something.
3. Lowers the demand of American cars.
It's hard to say. Either choice will have consequences that we'll have to deal with. But if I had to make a decision, I wouldn't want the governtment to bail out the Big Three. The company hasn't been fighting to keep their companies running. And why spend more of American tax dollars on an outcome that's impossible to predict. And like the article stated a bailout's only going to prolong the inevitable.
I don't think the government should bail out the auto industry because anywhere and everywhere one wants to go, they use the car to travel. And when it gets bailed out it just makes it hard for people to get access to the transportation they are relying on. It certainly is true that more people are going for foreign cars than they are for the american ones, which makes it hard for American Auto industry to go on. But maybe if they would consider supplying better products, more people may switch their option from Foreign to American.
Ann Tharakan
I do not think the government should bail out the Big Three auto industry. The money the government would provide would only help in the short-term because the problems faced are problems that have happened over a long period of time. Also, since they are losing money, that means consumers are buying less from them. This basically lets them know that they are no longer making the type of car that most people prefer, so people naturally will buy less from them. If they continue with the same production lines, even if they get government help, that money will eventually be used up and wasted as well because they will still have less customers than before.
I'm a bit torn. By bailing out the auto industry, of course many jobs will be saved, but how much longer before they're in trouble again? Consider AIG for example, they've been given money by the government but now they need more? It seems like it'd turn out to be a never ending cycle. If the government decides to bail out the auto industry, it does not automatically mean that people will be more willing to buy cars. People's desires to save money probably won't change which means the bail out was a waste and it will pull our country deeper into debt.
The auto industry should not be bailed out. They fought for decades fighting better fuel standards and shipped jobs overseas for years. They know because they have so many jobs that we will be forced to bail them out no matter what risky decisions they make. Spending 4bil a month between the big 2 would barely give them 10 months, and that’s not counting retooling. They have had many many years to retool but failed to want to claiming loss of jobs and costs. Well, now that we have more loss of jobs then they claimed and more losses what do they have to show for it? Nothing.
They should be helped but not by having money thrown in their face. If these companies do really need several billion dollars to continue functioning then sure give it to them BUT the taxpayer needs to get something for it. Stock in the company for example or portions of future revenue. Also the people that are responsible for such a failure need to pay, namely each individual executive or chairmen. Their salaries and benefits should be cut to the salary of an average worker and should stay that way until they have payed off their share for the failure cost. If they are not willing they should be the ones to get layoffs and the government could use maybe 1 million of those billions to pay a comity to find the best men/women for the job.
Anytime the government sticks its dity clumsy fingers into any sector of the economy, they will mess something up. These bailouts the government has been giving out are going to hurt more than they help in the long run. As the government spits out money, the common confidence level will fall and we'll head even deeper into recession.
I believe this has been a direct result of the downturn in the economy. that doesn't mean the labor unions aren't evil as well
Personally I believe that the bailout of the car industry is not a good idea. However it seems that there might not be any other way to save the car industry in America. However the economy does not completely hinge on the car industry. As for foreign makers, This is the time to keep making those very fuel efficient cars. The production of these cars is the main reason, i believe, as to the success of such car makers as Toyota and Honda. This is not due to the economy though, because gas prices have also gone down along with everything else, So fuel efficiency is not a great factor.
The auto industry I believe is by far one of the most important aspects to our economy. That's why I think that the government is trying so hard to save it. But I do think that there is a reason why they are in the situation they're in right now, may it have been bad financing or the misshandling of income. Also, by not bailing them out you are assuring the loss of many jobs. I do agree with bailing the "big three" out, but with severe conditions. All of these companies need to be under strict supervision in the financial aspect. Otherwise, if they blow off the bail-out money, it would have just been a waste. And that is something we really can't afford.
People like to buy the best product they can get for the cheapest price they can get it. This is why people buy foreign cars, because the Japenese companies perfected an American invention. They have the resources, and we have the desire to purchase them. If the American companies can't keep up and make poor executive decisions, its not our responsibilty to pay for that.
I think the reason American companies are failing right now is because they haven't been producing the appropriate vehicles that the American people need at the time. Due to the rise of gas prices, the demand for SUV's and other high gas-consuming cars has decreased, so instead of marketing Hummers, which are unreasonable purchases to most Americans, they shoudl have been producing more consumer friendly cars.
I agree with what most people are saying; a bailout is only a temporary fix. If these three companies go in to debt on their own, it's their problem. Not the government's. The reason these three companies are failing is because they simply aren't efficient. Gas mileage is the main thing people are concerned about with cars. American companies can no longer compete with foreign car manufactures. Do we see any of their companies in such bad shape as ours? Don't think so.
Along with Crunk cooper and Spider Brian I agree that pumping cash into the big three doesn't help a problem but hurts them more. They need to advance with the asian cars and provide a quality product at a reasonable price...honestly who needs a refrigerated glove box its so ANTI-GRANOLA.
Austin Darsey
I do believe that a baliout is necessary. The loss of these 500,00+ jobs would bring about even more problems than America would face if they would just bail out the auto industry. I think the what the automakers do with this money should be closely monitored and made sure that it is being put to use in a way that would benefit the consumers. Maybe if the CEO's would take a large paycut, the companies could save some costs there. If we were to lose our American automakers, we would have to rely solely on foreign automakers to provide our transportation. That is a large risk that very few people are willing to take.
I think that if the government bails out the big three thousands of jobs will be saved. But, there will still be the big possibility of more people to be laid off. Auto companies have been a part of out economy for a long time and losing the big three will probabbly effect the economy in a big way. Before the government gives the companies anymore bailout money, drastic changes should be made about what the companies spen their money on. I believe that the companies overspending on such things as vacations and bonuses have greatly contributed to their problems and the recession is the straw that broke the camel's back.
America was built on free trade with Adam Smiths indvisible hand guiding the way. Although many times the government had to step in and regulate the tough fist of big business, it never played a crucial role in the sucess or failures of business. Today we find ourselves in the middle of one of the worse financial crisis that America has ever seen. Many business are failing due to bad decisions and that is just the nature of the game and the basic principles of the indvisible hand. The government should not jane to step I'm and pay millions to fix their mistakes, instead they should focus on the small business sectors who played by the rules and really need the help. Although many jobs will be lost, the end result will be more jobs created to find better ways to effectively make smarter cars.
America was built on free trade with Adam Smiths indvisible hand guiding the way. Although many times the government had to step in and regulate the tough fist of big business, it never played a crucial role in the sucess or failures of business. Today we find ourselves in the middle of one of the worse financial crisis that America has ever seen. Many business are failing due to bad decisions and that is just the nature of the game and the basic principles of the indvisible hand. The government should not jane to step I'm and pay millions to fix their mistakes, instead they should focus on the small business sectors who played by the rules and really need the help. Although many jobs will be lost, the end result will be more jobs created to find better ways to effectively make smarter cars.
First off, the wages cannot be used as a compartive method for reflecting productivity. However, for the lack of demand and excess supply that the three motor companies are experiencing, they should not be paying workers that much. They need to focus on fixing the problems, not just throwing money at it. These problems have risen not only due to the lack of consumer interest, but also, the lack of upgrade in technology. This is the reason why foreign competitors are doing so well. I think the government should not bail the companies out. Sooner or later, the invisible hand is going to punch them in the face. Rather, the automakers should stop making cars at the moment (they are overproducing) and employ their workers into something useful. Or, the government can employ those workers about to be laid off into public works programs, such as during the time of President Roosevelt's New Deal.
One of the largest industries in America is the auto industry. It affects not only the people that make the actualy cars on the assembly line but also people that make cars, those involved in auto insurance, and body shops that fix cars. By not bailing out the auto industry, we are putting hundreds of thousands of people out of jobs. However, I don't think that the auto industry should be fully bailed out. This would put strain on the American people in an already stressful time.
Of course the demand for foreign cars have been higher than American made cars based today’s economy. Gas prices cause American consumers to change their minds on American cars because foreign cars such as Honda and Toyota have more efficient cars giving you a higher amount of miles per gallon than lets say a hummer or a truck. I also think that the government should also not necessarily bailout the Big Three but help them get back on their feet. It is important to let workers who manufacturer the car to keep working or else the economy will not work. As more people get laid off- the less products people will buy. This will eventually hurt the economy more.
Maybe a bail out is the only way to go...maybe it's not. I'm not really sure and my opinion varies since I care little about cars. But this bailout [if it occurs] shouldn't relieve anyone in the auto industry because this doesn't necessarily mean they're going to do better. They need to find a way to make the cars they sell likable by all consumers.
I don't think that the government should bail out the auto industry. There are so many other areas that are having problems, so why would they just bail out the auto industry? I think that they should just let the economy run its course. Part of the problem with the auto industry also is that they make way too many cars. The car dealerships are always so full of new cars, and they keep making more and more. If the auto makers would just make enough cars that we need, there would not be such a surplus of cars. People also like to but foreign made cars because they are usually cheaper. Im American made cars were cheaper, Americans would buy more of them.
Though somewhat neutral on the topic, I'm fairly lenient on the decision that the auto industry should Not be bailed out, simply because they have failed to meet the standards people require ,and want at our present state. Take for example Chevy [GM], who has been boasting about their Electric car, even though it has yet to be released. The Big 3 continue to produce SUVs & Gas Guzzlers rather than switch to fuel efficient models , which is in high demand today...
The bailout may help save MANY Jobs but will only be a temp. fix.
About the auto industry... I'm really into the whole "bail out" plan. They are the ones who got themselves into the mess and now they are too far in debt to get out of it. Yes, it will give people jobs back but whats going to stop them from asking for help again? My family owned a Honda and it lasted a pretty long time (until my dad wrecked it) but that car didnt seem to have as many problems as our Chevy did. From what I have heard the foreign-made cars seem to be safer from the American-made cars.
Kenny Hoyt said...
The thought of the government bailing anyone out is quite alarming. America has a free market with minimal government interference. The way I see it, if you bail out one company then the people of the US are invited the government to enter and try to fix all the companies, which in turn will ruin the free market we now posses and lead to a more socialistic economy.
Well it is clear that the Big Three are majorly effected by our current economic state. It is also in such shambles because they keep coming out with new cars (not speaking of the upgraded models) that aren't selling and they keep producing them. Our country really depends on those companies though because they are our main source of military transportation. So, yes, I feel as if we are obliged to bail them out but I also think that they need someone from the government to manage their spending. They are getting out of control.
There is a natural progression of a corporation. Part of this cycle is death. These corporations must adapt or die. These companies got to where they were, hopefully, by being the best in their field. They grew overconfident, and failed to measure up to the competition. So now we need to let the invisible hand do its work and slap them down unless they can save themselves.
The government should not bail out the Big Three companies. If there sales are down its because their products are no longer attractive to consumers. Giving the auto idustry more money won't make their products any more desirable and the money will be wasted. It will be more burdensome to the economy to 'save' these jobs than to let the economic process run its course.
Sean Rogers
I think that the government should not bail out the auto industry because, as we have seen in the past, situation like this one cannot be solved by just throwing money atvthem. Instead we should let the economy run its course in order fix the economic problems.
"Buying American" is just another form of a bailout. I believe the American auto-industry should be able to remain competitive through ingenuity as it has in the past. Although true, with various unions making labor costs much higher in the U.S. there is no reason to rest on our laurels of former auto-dominance. Also, the American consumer will always buy, just what they want to buy, and if the American government tries to stop them, it's certain there will be hell to pay.
By bailing out the auto industry, the government will save some of the jobs. However, some people will be laid off regardless to cut costs so that the business can recover. Bailing them out will increase our country's debt. I do not think bail out is a good idea. They should be treated like other businesses and be required to find their own way out of the mess they got in with minimal assistance from the government. However, the government should try to help some of the workers laid off in the process.
For this whole deal im pretty neutral over it. I dont think the goverment should go and give billions of dollars to these corpartions that are going under. But on the other hand these corpation like ford, GM, and chysler are part of are history and i dnt want them to be gone in 20 years. I think it would be really sad to see all of us driving forgin cars for the rest of are lifes. I just think its a really tricky situation and i dont have a answer for it.
Post a Comment