We are told GM will make it with their new electric boutique car for the wealthy? The world’s auto industries are not waiting for the US to figure things out. Mercedes has just announced a C class 4dr, 3500 lb sedan that only puts out 138 g/km. The Prius and new VW golf 2.0 emit less than 140 gm/km and the coming Prius will under 100 gm/km. The Europeans and Japanese are attacking the mileage needs and carbon emission problems with not one, but a slew of new models. GM???

If the US would introduce a gas tax, it could finance efficient car development and production in Detroit, it could pay for efficiency and renewable energy projects. This would not only create valuable jobs, reduce America’s dependence on foreign oil, improve its trade deficit, but also increase world security.

The US auto industry should not be saved, the reason they are failing is not the current economic problem, it goes back to a history of constant failures for over 25 years.
Mismanagement is the culprit. They had the nerve to fly into Washington on their private jets at the cost of over 20k each for the day, and ask for handouts!
Are they kidding? The arrogance is astounding.

This is an interesting read:

Why We Shouldn’t Save GM
Howl
By Nicholas von Hoffman

http://www.thenation.com/doc/20081201/howl2

We have examples of government action to consider:
 Managed care, wherein physicians spend as much time completing paperwork to justify their professional judgment as they do actually giving care;
 Sarbanes Oxley, wherein companies redeploy significant resources to hiring accountants to examine their records, while still not actually performing the internal audits that just might catch the creative accounting;
 California’s well-intentioned but unnecessary rush to eliminate all asbestos in schools, which robbed resources from a generation of school children and plunged California schools from near the top in the nation to near the bottom in the nation;
 “No Child Left Behind” which redirects valuable teacher time to filling out paperwork instead of grading student compositions and developing lesson plans.
 Airport security, an entire government agency, a virtual explosion in tax costs, that checks our bags at the airport for a minimal improvement in actual security. Wouldn’t we rather have better healthcare?

Bankruptcy, which forces the industry to actually look within and restructure itself by itself without the props and advice of the government, looks like a more promising means to revitalization.

I don’t squat in my pension fund, it dropped by thousands recently. Who’s bailing me out? And another thing I since I’m now a share holder in AIG I want go on one of those nice expensive weekend getaways they going on with my money.

1:Ford Pinto.
2:Chevrolet Cavalier.
3:Chevrolet Astro.
4:Ford Taurus.
5:Ford Explorer.
6:Jaguar X-Type.
7:Hummer H2.
8:Toyota Prius.
9:Chrysler Sebring
10:Jeep Compass.

http://www.usnews.com/blogs/flowchart/2008/11/14/10-cars-that-sank-detroit.html

I am against any of these bailouts. It is better to spend government money directly to lend to businesses and consumers and put people to work on public projects than throw money at capitalists.

If, and only if, the bail out gives them at least two years of survival in order to solve their problems.

When Adam Smith talked about “rational self interest” and competitive markets in his book Wealth of Nations, he envisioned many consumers interested in buying goods and services from many producers. Our politicians allowed the competitive automobile market to become an oligopolistic market in the ‘50’s and ‘60’s instead of a free market.

This oligopolistic market allowed the auto executives either to ignore the coming onslaught of foreign competition or not even to think about it. They knew their “competitors’ at the other two auto companies would match any conspiratory agreement that was reached with the UAW. This occurred because there was no foreign competition to worry about at the time.

Peter you make some good arguments for why the auto companies should be bailed out.

However they dug this hole. Our lack of a national health care system did not help as that is one expense that has not helped them compete with Japanese companies.

If you compare the the price of a night in a hospital in Japan versus this country it’s pretty easy to see how these cost eat into this industries ability to compete.

But…they still made bad decisions , and did so for decades.

There is no easy answer. I think they will get the bailout, they will also still be filing for bankruptcy.