rokemronnie on December 7, 2008 at 3:36 AM

That is exactly the point I try to make. Yes, it seems that free market principles would dictate that we let the auto companies fail, and I would love to stick to that, but there is a lot more connected to them than just the companies themselves. Bankruptcy might not eliminate all of them, but it could certainly eliminate quite a large number of companies that are in direct business with one of the big three. And yeah, that would be pretty darn painful for our country. I like that you mentioned defense, that is something I hadn’t thought of.

Because I live in Michigan and the company I work for is connected to GM, I would really hate to see them go under. And that isn’t only because of my job, but because a lot of the tool and die industry/manufacturing in my area does the majority of their work for the auto companies. That’s a lot of commerce in the area, indirectly connected but reliant upon Detroit.

ral514 on December 7, 2008 at 3:56 PM

How we elected her again is beyond me. We’ve had one of the worst economies and highest unemployment rates among the states for quite a long time; while not her fault directly, it doesn’t seem to me that Lansing’s approach really helps.

Democratic politicians are like baseball managers. Failure is a career advancing move. Even when they lose elections, they get appointed to sinecures. Look at Sandy Levin’s son, Andy, who lost a 2006 election to the state Senate. Granholm appointed him to be assistant director of the Mich. dept. of labor and economic development @ $124,000 a year plus bennies.

When I see what kind of pay and benefits government employees make it’s almost enough for me to say to hell with the private sector. When I see the feds shoveling money at billionaire bankers I feel like finding out how I can get on the gravy train.

It’s just that I don’t see any way out of this mess without drastic failure. It isn’t all about CAFE standards and the UAW, it’s about a suicidal political climate that has taken over the whole environment. There aren’t any political or business leaders here to stand up for rationality – the only people able to rise to power and influence in Michigan are the leftists and their enablers. My neighbors continue to cancel out my vote with their mantras of hope and change. Do you know what happens when you try to reason with these people? I suspect that most here do know, and the rest can well imagine.

My god, they reelected Granholm after she spent 4 years promising that, if we were just willing to make one more sacrifice, happy days would be here again. She’s trying to increase the gas and sales tax AGAIN, and I have no doubt that she’d still win reelection if she was able to run. There are plenty of decent and intelligent people that are still here, but we’re hopelessly outnumbered. I suspect that there are a lot of people here who are realizing that they’ve been backing failed ideas, but they’ve been arguing for those ideas so forcefully, for so long, that they can’t back down now without admitting to allowing an unconscionable amount of responsibility for the harm that’s been done. Most of them took their positions out of a desire to feel good to begin with, so they’re not likely to adopt any new position that would make them feel that “bad”.

Such a waste. Such a ridiculous waste. If there’s a way off of this cliff edge, I’m listening, and I keep hoping that someone actually does know of one, but I’m fresh out of ideas. All I know is that it’s sometimes easier to rebuild than to repair, but you have to do it before all of the resources are destroyed.

http://snltranscripts.jt.org/86/86dadobe.phtml

True or False:

CAFE standards imposed by the Federal Government manipulate what the Big 3 manufacture.

The Big 3 make profits on SUVs and Trucks, but lose money on many smaller, compact vehicles that are aprt of their strategy to reach a certain CAFE #.

(As mentioned) the Big 3 are heavily unionized, and have huge legacy costs. These are the primary differences between their cost equations and the cost equations of their foreign owned competitors, who build a large % of their cars here in the US, emplying US workers.

If I am wrong on any of these, please provide links. THX

I love how your long, rambling tale of chains and webs and tiers and drains and fear leaves out two glaring facts: Only heavily unionized auto companies are making over-priced cars nobody wants, and are the only ones failing. You see, if the Big Unionized 3 collapse, it will leave a gaping hole that could be filled with, wait for it, new non-union companies and factories making non-garbage vehicles!

Nobody wants? So if I said nobody wants Apple computers would you believe me? After all, they have less than a 3% market share of the pc market. The American auto makers still have a 55% market share of the US car market. That’s right, a majority of cars sold here are by the Detroit companies. GM outsells Toyota. Ford and Chrysler both outsell Honda, Nissan and Hyundai.

Keep repeating the same bullshit about nobody buying American cars or that American cars are crap. I’m no fan of the UAW or other unions but you folks are as bad as 9/11 troofers in the urban legends and myths you believe.

If the domestic auto industry collapses, Toyota and Honda won’t be able to build cars here either. They rely on the same supply chain – which will no longer exist.

I see. So what would prevent the tier 2 links from doing business with other surviving auto companies?

What would prevent them? Oh, just a little thing like being out of business. This is how it will be: GM is liquidated in a Ch. 7 bankruptcy. Tier 1 vendors go belly up because GM isn’t paying them what they are owed now that they are unsecured creditors. That means the Tier 2 vendors aren’t getting paid either and they also go out of business. While many vendors sell to the global auto industry, most US suppliers are dependent on sales to the domestic companies. When you lose 60% of your sales because your three biggest customers are no longer extant, it’s kinda hard to stay in business to serve the remaining 40%.

The lead time on many automotive components, even for the holy Toyota and the saintly Honda, is measured in years, not days. If the domestic companies implode, it will make it very difficult for the transplants to operate.

It will also make it very difficult for US defense plants to operate, since they rely on much of the same supply chain.

If HotAir is representative of the conservative movement I despair that conservatives will remain in the political wilderness for a generation. You guys are so angry at union boogeyman that you’d let our ability to build weapons disintegrate just to crush the UAW.

If you knew anything about the history of the US labor movement, and how fiercely Walter Reuther fought to keep communist and socialist influence out of the UAW, unlike, for example the Mine Workers union, you’d realize how silly you all sound. Like I said, I’m no fan of organized labor and consider it a necessary evil at best (along with stock markets and venture capitalists).

But hey, when its your job that’s chopped because of fallout from a liquidation of GM, well, I suppose you can blame the UAW.

Meanwhile, 1.8 million federal civilian non-postal employees average over $66,000/year in salaries and about an equal amount in benefits. California is broke because of public employee pensions. Federal employees average about $103K/yr in wages and benefits compared to $50K for people in the private sector. The federal government is transferring billions and billions out of California, the industrial Midwest, and states like New Jersey and sending it to the South, Southwest and the DC suburbs.

But go ahead, blame the UAW.

When we have to buy tanks and jets from the Chinese, you can tell me how it’s all the fault of greedy autoworkers.

Meanwhile, Google [Toyota, engine, sludge] and [Honda transmission problems] and tell me how perfect Japanese cars are.

This is a favor for the American people…

Thanks, but no thanks.

Let my people go, already.

let them file chapter 11 and end this circus of idiots now.

The Big Three, through the Unions, made promises to workers that when they retired, they would be taken care of… free medical… pay… while knowing all the while that there was no funding for it….

The US Gov, has made promises to take care of all retirees, with funds and medical…. while knowing they do not have the funds to do it…

Big three, being smaller, are just going under first.

go drive a 6yr old honda or toyota.
results will speak for themselves.

UNREPENTANT CONSERVATIVE CAPITOLIST on December 6, 2008 at 10:48 AM

I own and drive both an American auto (Chev) and a Japanese auto (Lexus). In my humble opinion the japanese product is far superior to the American product in both functionality and service. My experience with Honda’s and other American branded cars were similar. I have no bone to pick here . . . I simply know what I like.

JellyToast on December 6, 2008 at 9:54 AM

Exactly. No one likes to see a company fail, and the consequences aren’t very pleasant. But life goes on. We humans are kind of like a bunch of ants. Someone may step on our ant hill from time to time and things might grind to a halt, but it’s only a matter of minutes before it’s back to business as usual and everyone comes together to rebuild.

I cannot even calculate how much the incompetence, corruption and union thuggery of the Big Three has cost America over the past 50 years. I would have to multiply every UAW-made vehicle sold in that period of time by what amount….maybe $5,000?

thomasaur on December 6, 2008 at 10:10 AM

I know, I was just making a stand for the product but noting that they don’t deserve any special treatment. I posted on the Union thread that I would love to have a break down of the number of employees and their salaries of the Union itself. It would be interesting to see what benefits they get when you consider that nothing changes for them if there is a strike and that they live off the dues of the workers. I think the Unions are getting a free ride in more ways then one in this mess.

Congress is doing this to look tough to the American people, while NOT doing anything about the Unconstituional creation of large amounts of Money by the Federal Reserve Bank, to help out the banks WHICH OWN IT.

This is 35 or so billion, while DAILY the bank bailout grows, until now we are apparently on tap for 7.5 TRILLION.

This is a circus being used to distract the American electorate from the total takeover of the Banking industry by a select group, using US Fed Funds to do so.