Should the American auto companies be saved?

[badbullgator]

The mining business is changing all the time. There are the new iron nugget processes being installed that provide nearly pure iron from the mines. But you can't sell when the market tanks. There goes the investment.


The economy of the UP is sort of isolated. I don't know about where you live, but if we lose the mines there isn't much else here except pulp logging. You can't support 300,000 people on that.

If the worst happens, don't count on doing any deer hunting here. Mama will have the bugger baked up in pasties before we leave camp. So will my neighbors.

Lush, maybe the answer for that area then is to move to something else that will keep them viable...

[Lush Lumbago]

Lush, maybe the answer for that area then is to move to something else that will keep them viable...

A couple of problems with that. I don't know if you ever been here but the UP is kind of a special place. As with any area that is relatively isolated by geography, it has its own culture, even its own dialect--Yooper. Most Yoopers would rather bid the wife goodbye than leave the UP.

The local skill set is geared to extraction especially mining. If the economy tanks mining goes down all over--globally these days. There isn't too much of an option left if you have been wrestling mine timbers or side hill gouging for a living unless you want to work in a car wash somewhere at minimum wage. You can't keep a family together on that.

Of course, a few with education get away. We lose the Kelly Johnson's (Lockheed), Glen Seaborg's (Atomic Energy Commission), Paul Kangas's (PBS Evening Business Report). They take their skills elsewhere. Educated kids don't stick around because the future is better elsewhere. It kills the family ties.

[Steve Hester]

Bail out the American automakers, but drastically gut the UAW, which is the cause for the American automakers not being competitive any more.

[badbullgator]

A couple of problems with that. I don't know if you ever been here but the UP is kind of a special place. As with any area that is relatively isolated by geography, it has its own culture, even its own dialect--Yooper. Most Yoopers would rather bid the wife goodbye than leave the UP.

The local skill set is geared to extraction especially mining. If the economy tanks mining goes down all over--globally these days. There isn't too much of an option left if you have been wrestling mine timbers or side hill gouging for a living unless you want to work in a car wash somewhere at minimum wage. You can't keep a family together on that.

Of course, a few with education get away. We lose the Kelly Johnson's (Lockheed), Glen Seaborg's (Atomic Energy Commission), Paul Kangas's (PBS Evening Business) reports. They take their skills elsewhere. Educated kids don't stick around because the future is better elsewhere. It kills the family ties.

I understand that, however, are you saying that since these people only seem to know one thing that they should be able to do that for the rest of their lives? I have no idea how much ore there is up there, but at some point it seems that it would run out (maybe not in our lifetime) and then what? Isolation is not an excuse. Ever call Dell? Not exactly in the middle of downtown Manhattan now is it? We had a very similar issue here with mullet fishermen back in the late 80’s when the state banned gill netting. Entire communities were mullet fishermen and that was the only skill set many of them had. They too were located in relatively remote places with their own language as well. Guess what. They all adapted and got other skills. Some stayed in commercial fishing and others went into the mainstream jobs. Stuff happens. I myself use to own a construction company many, many years ago. Anyone can tell you that construction in Florida has great highs and devastating lows. I had enough of the constant swings and went back to school and moved on to something far more stabile.
Are you suggesting that the government subsidize an industry because people refuse to adapt?
Look I don’t mean this as a personal attack on the fine folks of the UP or anywhere else. I am just saying you must adapt or die regardless of who you are or what you do.

[badbullgator]

I know what your saying, but most folks with a family here can't afford to go back to school. You got to stay in Florida but, my folks are here.

I understand it is not easy, but then again nothing worth having is easy to get. Going back to school is not for everybody and with the current situation jobs in anything are hard to find. All I am saying is that you can't prop up an industry only becasue it will affect people. I don't mean that if it closes tomorrow that all the people you speak of could move into something else, but I am saying they should all be planning for the future and that may not include what they do now. Heck for that matter it might not include what I currently do.
BTW- I am in Florida now, but that does not mean that I have always been here as far as work goes. Even worse is that if my current job goes away I will more than likely have to move at the very least out of the area and more likely well out of state

[Henry V]

Here's a real upbeat article on the outlook for the auto industry. NOT.

http://www.tradingmarkets.com/.site/...0News/2201881/

[Lush Lumbago]

Most people here with a family to support can't afford to go back to school.

What happens to us is going to be repeated on a humungous scale country wide. The auto industries are tied to just about every segment of the society. You can prime the pump or you can pay unemployment and welfare. Or you might support a massive retraining program. Which is cheaper? Anyway you slice it the depression is going to take massive expenditures to dig out.

Jobs give dignity as well as a paycheck. I rather see people working and producing.

There is a pent up demand for cars. But you are not going to sell cars when people with 700+ FICO scores are refused a car loan. That $5 billion in bonuses that went to one banking company's execs would have helped buy a lot of cars.

[badbullgator]

Most people here with a family to support can't afford to go back to school.

What happens to s is going to be repeated on a humungous scale country wide.
You can prime the pump or you can pay unemployment and welfare. Which is cheaper?

Jobs give dignity as well as a paycheck. I rather see people working producing.

There is a pent up demand for cars. But you are not going to sell cars when people with 700+ FICO scores are refused a car loan. That $5 billion in bonuses that went to one banking company's execs would have helped buy a lot of cars.

The way I see it, it is one in the same. Dumping tax payer money into a dying industry is pretty much welfare, it just makes those reciving it feel better about themselves because it comes from their company and not the welfare office. Same thing different location

[Lush Lumbago]

There isn't much dignity in a welfare check.

[Franco]

Letting the free market rain is fine but you have to accept the reality that another firm may not pop up in their place. We may loose it all together. There is a very large entry barrier to car manufacturing. Most large firms like that only pop up in the infancy of the industry when the competition is small and growth is large or when there is an isolated market like Japan after the war. This is for several reasons for this including:

1. Economies of scale: if you make 100 cars the cost will be 100,000 each, if you make 100,000 cars the cost is 20,000 each.
2. Need for a service infrastructure. Mechanics need to be trained and there needs to be a 3rd party parts system.
3. Brand and Name recognition need to be developed to compete.

So if you want to start a car company it would take what 5 Billion plus. It is very had to do this and very risky and likely no one would enter.

Ford will most likely make it. I would provide funding but only if Chrysler and GM merge. It is easier to keep them then to hope another industry will pop up and employ 500,000 people (GM + Parts and service networks). Honestly though. If you let Chrysler go bankrupt then give GM 10 Billion to fund ops and to acquire Chrysler, and with the economic hard times they really hammer out a good deal with the unions, and strip down the product lines to only the best ones, in ten years GM could be a very viable company. Also both companies have really closed the quality gap and have made strides in the design area.

I disagree. A new car company doesn't have to open on the same scale as the present domectic companies. A start up company with good ideas and a good product can do it for a small fraction of your 5billion quote.

The Big3 can not be fixed, not with the UAW involved! We will always be throwing tax payer money at them to keep them afloat.

AS SOMEONE ELSE POINTED OUT, WE ARE NOT SAVING THE BIG 3. WE ARE SAVING THE UAW. Can you say, "political payback".