Comments on: The Auto Bailout & The Bankruptcy Myth http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/ Fri, 10 Feb 2012 20:30:50 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Steve in Detroit http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9713 Steve in Detroit Mon, 24 Nov 2008 21:58:54 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9713 While the Big 3 may have brought this financial situation on themselves in some respects, the government had a part in their failure as well. In this respect I think the government should be shelling out lots of cash to the American Auto Companies; by mandating ridiculously stringent fuel economy standards, they have forced them to create vehicles that cannot be supported by the market. While the 35mpg madate due by 2020 hasn't reached it's full effect yet, the cost and investment that is required to meet the standards is incredible! Meeting this standard will require leaps and bounds in materials and powertrain technology. This involves developing more hybrid powertrains, alternative fuel vehicles, and aluminum and carbon fiber intensive vehicles. This all sounds great... and is feasible, but can you afford an aluminum/carbon fiber, lithium ion, hybrid automobile? The cost is extraodinary! If the government is going to require the auto makers to meet ridiculously stringent standards, they need to be willing to shell out major cash to support the expensive research and development projects. As far as the problems that the automakers have brought on themselves, most of them, especially Ford, have been dealing with the issues effectively (and brutally in terms of job/cost cutting) enough to fix the problem themselves. If they can't do it themselves, they deserve to go bankrupt just like any other company. While the Big 3 may have brought this financial situation on themselves in some respects, the government had a part in their failure as well. In this respect I think the government should be shelling out lots of cash to the American Auto Companies; by mandating ridiculously stringent fuel economy standards, they have forced them to create vehicles that cannot be supported by the market. While the 35mpg madate due by 2020 hasn't reached it's full effect yet, the cost and investment that is required to meet the standards is incredible! Meeting this standard will require leaps and bounds in materials and powertrain technology. This involves developing more hybrid powertrains, alternative fuel vehicles, and aluminum and carbon fiber intensive vehicles. This all sounds great… and is feasible, but can you afford an aluminum/carbon fiber, lithium ion, hybrid automobile? The cost is extraodinary! If the government is going to require the auto makers to meet ridiculously stringent standards, they need to be willing to shell out major cash to support the expensive research and development projects. As far as the problems that the automakers have brought on themselves, most of them, especially Ford, have been dealing with the issues effectively (and brutally in terms of job/cost cutting) enough to fix the problem themselves. If they can't do it themselves, they deserve to go bankrupt just like any other company.

]]> By: michelle, Indiana http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9393 michelle, Indiana Wed, 19 Nov 2008 13:39:49 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9393 I agree with john on organizations charging dues for protection. Almost sounds like another organization that people had to pay for protection. I just would like to see America become, once again, a great country. Let's stop borrowing money from our own and foreign countries. Let's get in there and fix it ourselves. We're greater than this. At least I hope we are. I agree with john on organizations charging dues for protection. Almost sounds like another organization that people had to pay for protection. I just would like to see America become, once again, a great country. Let's stop borrowing money from our own and foreign countries. Let's get in there and fix it ourselves. We're greater than this. At least I hope we are.

]]> By: Tom, Indiana http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9392 Tom, Indiana Wed, 19 Nov 2008 13:32:37 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9392 There are several problems with chapter 11. First can the auto companies even get DIP financing with the credit markets like they are. Second will people buy cars (the second largest purchase for most people) from a company in bankruptcy? Sure alternate forms of warranty could be found but people keep cars longer than warranty periods. Also will parts be available in the future at reasonable prices? And last will banks loan on autos that may lose a lot of value if the company goes chapter 7? Third, how many other companies will go into bankruptcy due to GM, F, and/or Chrysler going into chapter 11. (These are suppliers that lost receivables.) How many of the suppliers will wind up in chapter 7 instead of 11? Will a supplier going into 7 pull the rug out of GM, F, and/or Chrysler and how will it affect the other companies that build autos? There is no doubt the auto companies need some of the things they could get from or that would result from bankruptcy but perhaps the best option for all is doing things in a non-conventional way. There are several problems with chapter 11.

First can the auto companies even get DIP financing with the credit markets like they are.

Second will people buy cars (the second largest purchase for most people) from a company in bankruptcy? Sure alternate forms of warranty could be found but people keep cars longer than warranty periods. Also will parts be available in the future at reasonable prices? And last will banks loan on autos that may lose a lot of value if the company goes chapter 7?

Third, how many other companies will go into bankruptcy due to GM, F, and/or Chrysler going into chapter 11. (These are suppliers that lost receivables.) How many of the suppliers will wind up in chapter 7 instead of 11? Will a supplier going into 7 pull the rug out of GM, F, and/or Chrysler and how will it affect the other companies that build autos?

There is no doubt the auto companies need some of the things they could get from or that would result from bankruptcy but perhaps the best option for all is doing things in a non-conventional way.

]]> By: john , Indiana http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9334 john , Indiana Tue, 18 Nov 2008 21:58:45 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9334 The situation the big three automakers are in is something I like to call Studebakers revenge. They went broke trying to support the union, and with A little help from the big three they vanished from the face of the earth. Dont get me wrong, I like to support american products, and I buy made in U.S.A. whenever possible, but I dont like organizations that charge dues for protection and support A political organization with my dues that I dont particularly care for. Sounds like the democrats dont it. By the way, If barney Frank has anything to do with the big three bailout, you wont find me buying any more new cars. The situation the big three automakers are in is something I like to call Studebakers revenge. They went broke trying to support the union, and with A little help from the big three they vanished from the face of the earth. Dont get me wrong, I like to support american products, and I buy made in U.S.A. whenever possible, but I dont like organizations that charge dues for protection and support A political organization with my dues that I dont particularly care for. Sounds like the democrats dont it. By the way, If barney Frank has anything to do with the big three bailout, you wont find me buying any more new cars.

]]> By: The Auto Bailout & The Bankruptcy Myth | debtdeficit.com http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9242 The Auto Bailout & The Bankruptcy Myth | debtdeficit.com Mon, 17 Nov 2008 23:36:49 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9242 [...] Read the original [...] [...] Read the original [...]

]]> By: Weber, Ohio http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9254 Weber, Ohio Mon, 17 Nov 2008 21:58:50 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9254 My guess is that we have enough vehicles already in the U.S. that we could not produce or import any for 1 year and still be FINE. Yes people will be laid off for awhile until the Auto manufacturers can match the market demands for type of cars and quantities. (And labor unions to face reality). The answer isn't to get more people to BORROW money to buy a car they don't really need. And it really isn't for our government to own parts of these companies that NOW need to take responsibility for not being prepared for market shifts and their own bad decisions. My guess is that we have enough vehicles already in the U.S. that we could not produce or import any for 1 year and still be FINE. Yes people will be laid off for awhile until the Auto manufacturers can match the market demands for type of cars and quantities. (And labor unions to face reality). The answer isn't to get more people to BORROW money to buy a car they don't really need.

And it really isn't for our government to own parts of these companies that NOW need to take responsibility for not being prepared for market shifts and their own bad decisions.

]]> By: Sharon/Missouri http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9252 Sharon/Missouri Mon, 17 Nov 2008 21:15:42 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9252 NO BAIL OUT FOR AUTO INDUSTRY UNLESS WILLING TO MAKE HUGE CONCESSIONS. All backing democrats and look what the democrats did with Freddie and Fannie. NO BAIL OUT FOR AUTO INDUSTRY UNLESS WILLING TO MAKE HUGE CONCESSIONS. All backing democrats and look what the democrats did with Freddie and Fannie.

]]> By: Robert Chatham, Hous http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9191 Robert Chatham, Hous Mon, 17 Nov 2008 12:57:09 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9191 BANKRUPTCY is THE ONLY THING that makes sense ! ! The labor Unions, have destroyed MANY of AMERICAS" Sound Stable Industries, under the ":FLAG" of PROTECTING THE LITLE MAN ! ! ! When an AMERICAN PRODUCT is OVER PRICED And POORLEY DESIGNED ,, Because of LABOR CONTRACT INTERFERRENCES, Then The American people can WELL EXPECT the FOREIGN GOVERNMENTS of this WORLD to RECOGNIZE THIS FACT, and TAKE OVER ! ! WHY DO WE WONDER "WAT CAUSED THE AMERICAN COMPANIES TO GO OUT OF THE COUNTRY FOR SO MANY PRODUCTS" ? ? ? ? TWO MAJOR MOVEMENTS< THAT ARE "JOINED AT THE HIPS" have been the BASIC CAUSES OF THE START OF AMERICAS' DECLINE. (1) The ENVIROMENTAL RADICAL MOVEMENTS such as "THE SIERRA CLUB< THE AMIMAL RIGHTS GROUPS < AND THE GLOBAL WARMING "FREEKS" (None of whom have the "REAL FACTS") ! ! and (2) THE LABOR UNIONS ! ! This is JUST the TIP OF THE ICEBERG ! ! ! BANKRUPTCY is THE ONLY THING that makes sense ! !

The labor Unions, have destroyed MANY of AMERICAS" Sound Stable Industries, under the ":FLAG" of PROTECTING THE LITLE MAN ! ! !

When an AMERICAN PRODUCT is OVER PRICED And POORLEY DESIGNED ,, Because of LABOR CONTRACT INTERFERRENCES, Then The American people can WELL EXPECT the FOREIGN GOVERNMENTS of this WORLD to RECOGNIZE THIS FACT, and TAKE OVER ! !

WHY DO WE WONDER "WAT CAUSED THE AMERICAN COMPANIES TO GO OUT OF THE COUNTRY FOR SO MANY PRODUCTS" ? ? ? ?

TWO MAJOR MOVEMENTS< THAT ARE "JOINED AT THE HIPS" have been the BASIC CAUSES OF THE START OF AMERICAS' DECLINE. (1) The ENVIROMENTAL RADICAL MOVEMENTS such as "THE SIERRA CLUB< THE AMIMAL RIGHTS GROUPS < AND THE GLOBAL WARMING "FREEKS"

(None of whom have the "REAL FACTS") ! ! and (2) THE LABOR UNIONS ! !

This is JUST the TIP OF THE ICEBERG ! ! !

]]> By: Eugene Maslov, Leomi http://blog.heritage.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9177 Eugene Maslov, Leomi Mon, 17 Nov 2008 11:56:53 +0000 http://www.foundry.org/2008/11/17/the-auto-bailout-the-bankruptcy-myth/#comment-9177 Fool me once - shame on me, fool me twice.... you know, you can'hm fool me twice... -"YES WE CAN !!!" Hellooo dictatorship. I realized, even if it's a 100% of people disagree with bailing auto crooks out, "people's employees" will do their way. Watch it. Fool me once – shame on me, fool me twice…. you know, you can'hm fool me twice…

-"YES WE CAN !!!"

Hellooo dictatorship. I realized, even if it's a 100% of people disagree with bailing auto crooks out, "people's employees" will do their way.

Watch it.

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