It’s a totally safe loan to make, right guys? right? anyone?

surely large, rent-seeking corporations that take advantage of corporate tax breaks ARE the logical conclusion of free market capitalism? I don’t see how you can say it’s not the failure of capitalism or at least the form of capitalism that has dominated the global economy since the 80s.

This is a semantic debate.

What you describe is not free market capitalism but pro-statist corporatism.

http://usfinances.info/site/2008/12/08/a-big-three-bail-out-don%e2%80%99t-you-have-to-make-money-to-stay-in-business/

Toyota- $30.00 per/hour
Honda- $28.87 per/hour
Nissan- $25.00 per/hour
The UAW President has said that labor or wages are 10% of the total cost of manufacturing. There really is not much difference between foriegn and domestic.
Now let’s talk about “legacy” costs. Most of those costs are pension contributions that HAVE NOT been fully paid yet. They were earned, but because of various “loopholes” and corporate/IRS schemes they were not paid, but now they must be made up. The amounts that are owed are:
GM- $7 billion
Ford- $4.4 billion
Chrysler- $3.5 billion
Let’s also consider executive pay, or compensation. Most of that is deferred or paid to a pension account for the executive, and cannot be written off until it is actually paid out. Not to mention the fact that most pay-packages include tax payment on behalf of the executive, numerous perks that also have the direct cost and the tax paid by the company(private use of corporate planes) and the only ones that are pulicized are the CEO and the top 5 executives.
Add to this the amount of debt that these corporations have. Now they want MORE debt!! These companies are run by some people that are not very forward looking either. GM just shut down a plant in Wisconsin that made SUV’s recently, and that it was scheduled to be shut down a year from now. The public quit buying those SUV’s awhile ago when gas prices skyrocketed, but they kept making them! It wasn’t like the spike up in gas prices was a temporary thing either, it has jumped up since the Spring of 2000.
Well, now that we have some FACTS out in the open, let’s look at the core issue of the problem. NOBODY IS BUYING CARS!!!!! Foriegn and domestic both make good cars, and different models have different problems. I personally know people that own cars that have very high mileage on them, both foreign and domestic. The “credit crunch” or the lack of available financing to purchase a new car/truck might be an issue, but noone has addressed the fact that the economy is tanking as I type this. How many people are out shopping for a new car or truck or buying one if they aren’t sure if they will have a job next month?
There has been a lot of theatrics by quite a few politicians as to the mode of transpertation to the congressional comittee hearings, to the republican media blitz about union wages. This is not a new thing inthe republican bag of tricks. Good ole union-busting has always been a mainstay of the republican party, just as much as sucking up to organized labor(unions) by democrats. There have been a lot of stupid questions asked by our elected politicians, and quite a few that were not. It’s a shame that they didn’t ask the same questions or make the same demands of wall street. Look at the waste and abuse of federal funds there. Today the bailout amount was stated as $17 billion, and it is supposedly a loan, although it doesn’t have the same demands as conventional financing, like that criteria you and I have to adhere to.
The only thing this whole bailout b.s. is missing is sex! Give it some time…..there are politicians involved!!

You’d take a Miata in a heartbeat, a car that was made possible because of Ford’s large cash and engineering infusion in to Mazda in the ’80s.

@ #39

If you can’t guess at what Chrysler’s financials look like by looking at Ford’s Income statement, Balance sheet, and cash flow statement; or GM’s Income, Balance, and CF, then you ought not be giving such broad financial advice. But don’t worry, most of the highly-opinionated economic minds that we have running the show in Washington (and I use that as sarcastically as is possible) and most Americans really can’t read them either. Because they don’t care.

So many people in this country, even after this mind boggling failure in our economy, are content to sit at the sidelines and vote with their gut rather than any sense of REAL knowledge of the economy.

People see fit to whittle the problem down in to a set of problems having to do with up and down, gain and lose, and it simply cannot be solved from such a simplistic point of view.

“Permanently” destroying jobs is rhetorical nonsense. Better jobs will be created when other/new companies buy up that capital and labor force to put it to better use. The fact that this can’t happen until the “big 3″ go bankrupt is the problem.”

Free marketers have been saying this for over fifty years.

But it doesn’t happen. Better jobs are not created. The labor market was moved overseas. New companies are founded. But they are overseas. We simply lose the jobs. Wal-Mart jobs do not count. What jobs are created have no pension, health care that chains people to the company until they no longer needed, no job security, and damned poor wages.

A “free” market will leave most of America a welfare wasteland. The only winners will be the prison industry barons.

I remember a wealthy pundit investment broker on cable TV once lecturing the moderator that America would have to adjust to the fact that wages would have to come down to match the lowest in the world, and that people should get over it.
I noted he did not include himself. “Free market” ideologues never include themselves in those wage reductions.

There Ain’t No Such Thing As A Free Market, and never will be. Anyone who tells you the opposite is stealing something.

Ford is also the only US carmaker that has managed to get anywhere close to Toyota and Honda in engineering and build quality.

This is not a coincidence. Ford is still suffering from the well-deserved consumer skepticism generated by several decades of pumping out crap-mobiles, but if they keep it up they might eventually repair their reputation.

Also, all the people whinging about how the US customer DEMANDED huge land yacht and only huge land yachts are full of shit. Toyota, Honda, and Nissan have been making money hand over fist selling reliable, long-lived small to mid-sized cars to those same consumers for thirty years.

As I pointed out in my first response, to several million people this is no more humorous than hurricane jokes to a New Orleans resident.

Oh the hell with it

Fuck You.

Wh nds vwls anwy

But I didn’t see a bunch of senators hectoring the executives of Goldman Sachs for arriving at Congressional hearings by private plane instead of bicycling or hitch-hiking or riding a Greyhound bus. And I won’t see twenty-eight times as many cutesy mock-ads decrying their bailout, will I? No, it’s not that anybody in power today cares about the money. They just calculate that if Washington deliberately lets the hedge fund crooks drive Detroit into bankruptcy, then it will break the UAW. From their point of view it’s well worth permanently destroying a half-million U.S. jobs if they can wreck a big labor union in the process. They don’t know anybody who works in a factory, after all.

January 20 can’t arrive too soon.

we just want to stop throwing good money after bad.

Again, this represents a total lack of understanding of not only these issues in particular, but the American economy as a whole.

And as for the purely economic interests out there? The $15B, or even the whole $34B that the auto companies are asking for, is a mere drop in the bucket, compared to what it would cost the taxpayers if even one of the companies goes under. Beyond the unemployment that would need to be paid out, there is the federal guarantee of pensions, the additional folks added to medicaid/medicare, etc. etc. etc… amounting to hundreds of billions of dollars. If you want to talk economics, a bridge loan is a bargain, compared to the alternative.

As for “let them declare chapter 11″ folks? No one is going to buy a car from a bankrupt company. That is a fact, and it isn’t an option.

In a couple of years I’ll be trading it in. I’d love a Mustang but after sitting in one at the recent L.A. Auto Show, closing the door and hearing the chunky clunk? No, thank you.

Then I checked out the Honda Fit. Although the same price as a Mustang it was the superior vehicle all around (IMO), and will better suit my needs than the Mustang.

As much as I love the Pony Car, I cannot bring myself to buy one this time around. Maybe when I’m in my 50s I’ll get a classic Mustang. At least then the clunkiness would be excusable, and I can always blame the onset of senility for buying such an inappropriate vehicle.

Ford may be making better cars than yesteryear, but they took Dr. Deming’s advice far too late; they still have a lot of catching up to do.

I suppose it’s arguable that at least the auto workers are creating something of actual tangible value in contrast to the financial sector and its pyramid schemes, smoke and mirrors, and financial instruments.

To sum up: the stockholders, who demanded big returns and fat dividends, ate up the cash. The company bent over backwards to pump up the stock price by increasing sales by selling highway tanks. The stockholders were not interested in long term planning.

Americans wanted tanks. Oil was cheap. Americans screwed themselves over by forcing the Big 3 to produce tanks that are now cluttering up parking fields, unsold.

Oil traders jacked the prices up, screwing us all.

Oil companies refused to build a new refinery for over thirty years, despite the free tax money we toss at them in the way of special tax cuts, thus reducing capacity and raising prices.

Our Smartest Men in the Room, once again, Enronned us by playing games with markets, killing us and enriching themselves.

Bush’s ideologues deregulated what they could and ignored regulations that they couldn’t change. They take no responsibility for this: Bush blames Clinton.

We went to war against Iraq, per Cheney’s lies, and jacked the price of oil up by shutting off the spigot. I suspect that that was not a happy coincidence.

A lot of things happened, but they were mostly the collective stupidity, ideological blindness, and greed of the American people. Reality sucks.

We all got to duck, when the shit hits the fan,,,.

YES they’ve made some shitty cars.
YES they’ve remained focused on gigantic luxury vehicles and ignored consumer demands for fuel-efficient economy cars.
YES their CEO-level compensation packages have been just as terrible as those in other major corporations.

But honestly, can we afford to let them fail?
With unemployment skyrocketing, can we afford to lose the millions of jobs wrapped up in the manufacture, sales, support, and supply of American automobiles?

They should be given the money.
The companies should undergo radical restructuring.
The corporate management should be replaced with leaders in the field from companies like Tesla Motors and ZAP! who have proven that they can create successful companies in a difficult market.

Instead of saying “THEY SCREWED UP! LET THEM FAIL!” we should be saying “THEY SCREWED UP! WE’RE GOING TO TAKE THEM OVER AND RUN THEM BETTER AND FORCE THEM TO START MAKING THE KINDS OF CARS THAT AMERICANS WANT!”

nice summation.

Y’all need to understand teh humor of the Beast.

http://www.buffalobeast.com

Real estate prices goes up. Bet our collective futures on it.

This idiot belief was the gas bag that the recession finally ignited.

We told you so. Sigh.