More on the auto bailout
Obviously, you can probably tell that I am more of a "car" guy than a "banking" guy, because of the number of posts I have made about the Big 3 vs. AIG... LOL
Well, it appears that Bush and the Congressional Dems have a deal worked out. $15 billion of taxpayer money being thrown into three failing companies, and perhaps more to come. There's no guarantee that this thing is going to make a huge difference given that these companies have been consistently losing market share to more reliable makes (Honda, Toyota, etc.) for a long time. And it's not American-made cars that are failing, it's more-so the American brands that are... in fact most of the Toyotas, Hondas, and Nissans you buy in the U.S. are manufactured here in the States. My 2000 Honda Accord (that I bought in 2000) built in Marysville, OH was quite good.
The thought that congressional oversight and a politically appointed "car czar" is the magic bullet is, IMHO, quite absurd. If the companies need to restructure (and they do), there is a $15 billion cheaper way to do that... file chapter 11. Mitt Romney has talked about this being the solution, and being as he's one of the only talking heads with a business background and knowing what I know about bankruptcy laws (Delta just came out stronger from C-11 and I have no issues with flying them, to play devil's advocate to GM's CEO's claim of confidence in the product), it'll make the companies stronger b/c the bankruptcy restructuring will force them to jettison the dead weight, which is what they need.
But, for your information - here is an article on the bailout agreement.
http://finance.yahoo.com/news/Hill-sources-Democrats-White-apf-13796359.html
Ben Stein has also written an article about the bailout in support of it... http://finance.yahoo.com/expert/article/yourlife/127875 usually I agree with Ben Stein but on this case I'm going to have to respectfully disagree, for a couple of reasons...
1.) either way, it's going to be painful... why make it more painful by throwing out taxpayer money?
2.) He may have had great experiences with US nameplates with his '62 Corvette and such, but most of us that have swore off American cars and haven't gone back did so in a large part b/c we tried an American car and got frustrated (because we really didn't want that close of a relationship with our mechanic). I swore off GM when my 1996 Saturn was in the shop over 3 times in the span of a year (transmission, belt breakage, alternator, may have been another thing) when it got past 36,000 miles... got rid of the piece of junk (which was supposedly one of GM's most reliable brands) and bought an Accord that I only had to maintain by taking it in for an oil change.
So, in my case (and many others'), GM failed on the second moment of truth, I switched, got happy with my foreign nameplate car, and never went back (despite the fact that GM is the #1 advertiser in the US... sounds like that Apple "Vista" commercial
Perhaps a restructuring that helped these guys get leaner, fix processes that would actually improve product reliability, and do it in a way that would make business sense would be possible... do you think a politician can do that?
I don't... that's why I hope that a potential RNC filibuster happens so we can continue this debate rather than panic and throw more good money after bad.
Well, it appears that Bush and the Congressional Dems have a deal worked out. $15 billion of taxpayer money being thrown into three failing companies, and perhaps more to come. There's no guarantee that this thing is going to make a huge difference given that these companies have been consistently losing market share to more reliable makes (Honda, Toyota, etc.) for a long time. And it's not American-made cars that are failing, it's more-so the American brands that are... in fact most of the Toyotas, Hondas, and Nissans you buy in the U.S. are manufactured here in the States. My 2000 Honda Accord (that I bought in 2000) built in Marysville, OH was quite good.
The thought that congressional oversight and a politically appointed "car czar" is the magic bullet is, IMHO, quite absurd. If the companies need to restructure (and they do), there is a $15 billion cheaper way to do that... file chapter 11. Mitt Romney has talked about this being the solution, and being as he's one of the only talking heads with a business background and knowing what I know about bankruptcy laws (Delta just came out stronger from C-11 and I have no issues with flying them, to play devil's advocate to GM's CEO's claim of confidence in the product), it'll make the companies stronger b/c the bankruptcy restructuring will force them to jettison the dead weight, which is what they need.
But, for your information - here is an article on the bailout agreement.
http://finance.yahoo.com/news/Hill-sources-Democrats-White-apf-13796359.html
Ben Stein has also written an article about the bailout in support of it... http://finance.yahoo.com/expert/article/yourlife/127875 usually I agree with Ben Stein but on this case I'm going to have to respectfully disagree, for a couple of reasons...
1.) either way, it's going to be painful... why make it more painful by throwing out taxpayer money?
2.) He may have had great experiences with US nameplates with his '62 Corvette and such, but most of us that have swore off American cars and haven't gone back did so in a large part b/c we tried an American car and got frustrated (because we really didn't want that close of a relationship with our mechanic). I swore off GM when my 1996 Saturn was in the shop over 3 times in the span of a year (transmission, belt breakage, alternator, may have been another thing) when it got past 36,000 miles... got rid of the piece of junk (which was supposedly one of GM's most reliable brands) and bought an Accord that I only had to maintain by taking it in for an oil change.
So, in my case (and many others'), GM failed on the second moment of truth, I switched, got happy with my foreign nameplate car, and never went back (despite the fact that GM is the #1 advertiser in the US... sounds like that Apple "Vista" commercial
Perhaps a restructuring that helped these guys get leaner, fix processes that would actually improve product reliability, and do it in a way that would make business sense would be possible... do you think a politician can do that?
I don't... that's why I hope that a potential RNC filibuster happens so we can continue this debate rather than panic and throw more good money after bad.
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