To bailout, or not to bailout? That was the question being asked across Washington on Wednesday, as top management from the Big Three automakers begged for a rescue from looming bankruptcy.
Some are furious that the CEOs’ cite the financial meltdown as one of the key factors that has driven the auto industry over the edge.
But members of Congress said the industry needs to be held accountable for bad business models that include costly CEO perks.
Proponents of the $25 billion lifeline include not only the CEOs, but union executives and auto workers. In their view, it is not just the companies that are at stake. More info here
Here’s an idea I heard on the radio yesterday….
Instead of just giving the automakers billions and billions of dollars in cash, why not give each American family a certificate worth… say $5,000 as a down payment on a new car. That would help a lot of families, the automakers and the economy as a whole. What about the families that don’t need a new car or don’t drive? Let them trade in their certificate for cash or something else that would help families or the economy.
Interesting idea, but if the cash value of the certificate is $5000, I suspect people would simply opt for the cash.
If the cash value was less, say $2500, then I suspect a market for sales of the certificates would appear quite quickly. Someone looking to buy a car would presumably be willing to pay more than $2500 for a certificate that they value at $5000.
Yes, you could regulate and restrict the use, transfer or sale of the certificates. And you’d need a way to actually manage the distribution to all valid recipients, and account for complaints from people who claim they didn’t receive the benefit. I sense a “Department of Subsidized Vehicles” being created, with 1000’s of employees, managers, and regional branch offices.
I’m in favour of letting the Big3 restructure under bankruptcy protection, so that they an emerge stronger and more sustainable, rather than flushing more money down the sink hole of their existing business operations, and have to bail them out again in 6 months.
Did anyone else read the story on Drudge about the 3 auto CEO’s flying to Washington on their private Lear jets? Cost of about $20k per flight. They don’t get it now and they never will. They need to figure a way to bail themselves out and not do it on the backs of the American Taxpayer.
How about no bailouts for any company until their entire executive team and board of directors are fired and have their assets confiscated? The fired executives would be welcome to re-interview to get their old jobs back I suppose.
As I understand it, even the first $1500 made on a base model Chevy Aveo (GM’s cheapest car) goes towards health care for retired auto employees. They’ll never be able to compete against the imports operating like that, and we shouldn’t be giving them a dime to perpetuate this Ponzi scheme. They should go through bankruptcy and be given the chance to restructure their way out of such a mess.
I’ll be the first to admit I don’t really understand how all of this works, but if I start a business, say a bagel shop, and my business starts to go under, can I “beg” the government to bail me out? If this is the policy, I’ll start opening businesses left and right!
And then, when people realize they have to pay sales tax, higher property taxes & insurance premiums on that new car they really couldn’t afford but thought they could BECAUSE THE GOVT. AGAIN STUCK THEIR NOSE WHERE IT DOESN’T BELONG, then the people will be wondering where THEIR bailout is. Kinda sounds like the mortgage “crisis”, doesn’t it?
Buy autos made in the USA – Quality automobiles built by your friends and neighbors in Ohio, the heartland of America the Beautiful –
…Honda – built by Americans in Marysville Ohio
…Acura – built by Americans in East Liberty, Ohio
(Neither one asking for handouts.)
Interesting reading… http://edition.cnn.com/2007/US/11/01/auto.main/
$25 billion divided by 116,000,000 households in the US would only net $215 per household.
If you did go with the $5,000 figure, that would result in a $580,000,000,000 bailout (that’s 580 billion dollars).
Just throwing it out there, having national healthcare would go a long way with helping employers and employees. As mentioned above, the first $1500 goes towards healthcare costs at the Big 3. That’s a huge chunk of change. Not only that, it would also encourage a lot more enterprise in that people won’t have to worry about healthcare costs when starting up their own businesses. Small companies could actually compete with the big boys for the best employees. It could potentially dramatically shift our economy away from large corporations back to local companies so that we aren’t held hostage by large corporations every time they are about to fall under.
I only caught part of this but when they asked who WASN’T taking a private jet back home, not one put their arm up. That is their sense of Entitlement.
Screw the big three let them go under,the unions fuc*ed the big three why do think mercedes and kia put their plants in the south
i am sorry every time i think of the big three i think of robocop.
Not going to happen.
We need not bail out these companies who chose not to get it right (it to them simply not being worth it to make fuel efficient vehicles).
What is a “free market” if your business employs enough people and makes X amount of big bucks if the government is going to be there to bail you out?
These big 3’s SHOULD go under. It’s not the same circumstance as housing.
The market will balance itself out? If we didn’t intervene before, they would have sunk a long time ago.
F the American car companies – It’s a business not looking out for public interest and the people want efficient cars or total independence from oil and polluting vehicles.
Electric cars are BS, too. Let’s get this honda fuel cell. Water=Fuel.
stupid idea, sounds like a republican came up with it. line your pockets while an industry goes down the tubes.