RE: All I want for Christmas is an auto industry bail-out
The big three - once great symbols of being “All-American” to now defunct, slow-moving companies.
Should the companies be saved?
One part of me, the sentimental part, shouts “yes!” I think back to Ford and his assembly line allowing for cars to be built economically, resulting in savings passed-on to consumers. I then think about all the cars my family has purchased: yep, every one of them has been American-made, from the gas-guzzling-beast-of-an-SUV Tahoe to their shiny, sexy Mustang. Even all my cars have been made in the US of A. You can call us hicks, but we like our cars American. Now, don’t take that to mean we don’t know that our automobile isn’t truly all made in the USA, rather my engine is probably from some European country and my door handles from Asia.
But you know, my family and I…we are not alone in liking our “American-made” automobiles. I know people who will only buy Ford or only buy Chevy…now they could be called either hicks or dedicated while the rest of us are fair-weather fans when it comes to our automobile brand.
My sentimental side also takes note of the practical issue of what-if the Big 3 do fail; what about all those jobs lost? It is difficult enough trying to find a job now, but what will happen if you flood the market with even more people without a job? Will more houses foreclose as these people who lost his/her job can no longer make a house payment? Will store sales dip further as people are no longer able to afford items outside the basic needs? Could the loss of all these jobs further depress this already poor economy?
As with everything there are two sides, and my more cynical side laughs and thinks that if you dwelled on the nostalgia of years past no progress would be made. Sure, the booming years in Detroit, a city now filled with the poor and gangs, and the great status symbol of an American car once was are great things on which to reflect. But with every business there is a natural life cycle to it from the early stages to the declining stages. Either something must be done to prime the pump and get some life back into it or eventually it will die. The Big 3…they are dying despite repeated attempts to stimulate life back into them.
My more cynical side also thinks about how if given the choice between that sleek X5 Beamer or the boxy Ford Explorer…you would take the Beamer hands-down. And today, the Wall Street Journal has an article that entertainingly describes why help should not be given to the Big 3…going as far to say that it would be a better decision to burn the money than give it to them (http://online.wsj.com/articl/SB122669746125629365.html). While, that seems quite extreme to me there is another more persuasive article on why GM would be much better-off in filing for bankruptcy than giving money to them.
To put it concisely (something not done in my above remarks), I am not completely sold that the stimulus money should be given to them (http://online.wsj.com/article/
SB122688631448632421.html). I do not think that these companies should be allowed to flounder around with so many jobs at stake, but there might be something to calling Chapter 11 Bankruptcy…most of our airplane companies are in Chapter 11 and people are still flying on them. Bankruptcy would allow the companies to escape Union deals and restrictions without getting sued in the process. I think all 3 should file for bankruptcy and reorganize and figure out once-and-for-all that new business model they want to take and GO FOR IT! Do not lose sight of it and if it fails, well at least you can say you tried and it may finally be time to just put the company to rest.
Should the companies be saved?
One part of me, the sentimental part, shouts “yes!” I think back to Ford and his assembly line allowing for cars to be built economically, resulting in savings passed-on to consumers. I then think about all the cars my family has purchased: yep, every one of them has been American-made, from the gas-guzzling-beast-of-an-SUV Tahoe to their shiny, sexy Mustang. Even all my cars have been made in the US of A. You can call us hicks, but we like our cars American. Now, don’t take that to mean we don’t know that our automobile isn’t truly all made in the USA, rather my engine is probably from some European country and my door handles from Asia.
But you know, my family and I…we are not alone in liking our “American-made” automobiles. I know people who will only buy Ford or only buy Chevy…now they could be called either hicks or dedicated while the rest of us are fair-weather fans when it comes to our automobile brand.
My sentimental side also takes note of the practical issue of what-if the Big 3 do fail; what about all those jobs lost? It is difficult enough trying to find a job now, but what will happen if you flood the market with even more people without a job? Will more houses foreclose as these people who lost his/her job can no longer make a house payment? Will store sales dip further as people are no longer able to afford items outside the basic needs? Could the loss of all these jobs further depress this already poor economy?
As with everything there are two sides, and my more cynical side laughs and thinks that if you dwelled on the nostalgia of years past no progress would be made. Sure, the booming years in Detroit, a city now filled with the poor and gangs, and the great status symbol of an American car once was are great things on which to reflect. But with every business there is a natural life cycle to it from the early stages to the declining stages. Either something must be done to prime the pump and get some life back into it or eventually it will die. The Big 3…they are dying despite repeated attempts to stimulate life back into them.
My more cynical side also thinks about how if given the choice between that sleek X5 Beamer or the boxy Ford Explorer…you would take the Beamer hands-down. And today, the Wall Street Journal has an article that entertainingly describes why help should not be given to the Big 3…going as far to say that it would be a better decision to burn the money than give it to them (http://online.wsj.com/articl/SB122669746125629365.html). While, that seems quite extreme to me there is another more persuasive article on why GM would be much better-off in filing for bankruptcy than giving money to them.
To put it concisely (something not done in my above remarks), I am not completely sold that the stimulus money should be given to them (http://online.wsj.com/article/
SB122688631448632421.html). I do not think that these companies should be allowed to flounder around with so many jobs at stake, but there might be something to calling Chapter 11 Bankruptcy…most of our airplane companies are in Chapter 11 and people are still flying on them. Bankruptcy would allow the companies to escape Union deals and restrictions without getting sued in the process. I think all 3 should file for bankruptcy and reorganize and figure out once-and-for-all that new business model they want to take and GO FOR IT! Do not lose sight of it and if it fails, well at least you can say you tried and it may finally be time to just put the company to rest.