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Looks like President Obama’s team has a loose grasp on the realities of the U.S. automotive market, as in who builds what where. Either that or a firm grip on what the public needs to hear to sign-off on the roughly $100b’s worth of taxpayer money headed in Motown’s direction, pissed away trying to resurrect the dead and forestall the inevitable. I mean, preserving an important part of America’s industrial base and protecting America’s middle class.
30 Comments on “Bailout Watch 408: “The Cars of Tomorrow [have to be] Built Here, By Americans for Americans”...”
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Simple Formula.
No domestic auto industry = no nation.
Well, it’s a good thing we still have Ford.
Last I checked, the Brits are still holding on as a country and only have a few botique automakers that are Brit-owned.
It’s a bird…
It’s a plane…
It’s Buickman!
I can’t stand these press secretaries. All of them talk in circles giving non answers to an uncritical press corps.
Whenever I hear an American say “cars of tomorrow”, I can only think of a carburated 750hp v8 that only turns left.
Be careful what you wish for. Trade protectionism is not rocket science. Other nations can do just as good a job at it as Americans do. Last time I checked, almost two thirds of GM’s sales are abroad.
“Trade protectionism is not rocket science. Other nations can do just as good a job at it as Americans do.”
The US has a massively negative balance of trade, so doesn’t it stand to reason that the US is in a position to do more harm to its trading partners than they are to the US?
Plus, what if Japan, Europe and the Asian Tigers wanted to retaliate against US trade? Couldn’t the US simply start pulling back the defensive umbrella we pay for on behalf of those countries and tell them to start spending their own money and blood to defend themselves? Instead of closing military bases in the US, how about closing those in German and South Korea?
This –ahm– guy is –ahm– the –ahm– new Press –ahm– Secretary? The –ahm– press –ahm– conferences will –ahm– take –ahm– –ahm– twice –ahm– as –ahm– long.
Well, GM is laying off all its engineers and designers because, outside of bankruptcy, all GM’s money needs to go to unnecessary UAW workers, massive debt payments and the costs of redundant brands and dealers.
Without Chapter 11 GM has no future.
If GM does not go through Chapter 11 the cars of the future will still be built here, but Toyota and Honda will build them.
TEXN3: Life has gone on in Britain without an auto industry, and the Swiss do quite well without one. But the real lesson from the British is that Britain lost its auto industry because the government intervened and bailed out its auto industry, not because it didn’t.
Oh, I know that no_slushbox, but we’ll fail to learn the lessons of the Brit’s history.
John: In Germany, there barely are enough troops left to defend Ramstein Airbase from peasants armed with pitchforks, and South Korea likewise has only a token contingent. THAT would be a hollow threat.
The problem of trade wars is that the consumer will pay for them. Go ahead, start a trade war with China et al. Inflation will kill the U.S. Foreign reserves parked in the US will be repatriated. The US will go bankrupt. Be careful what you wish for.
The US is already bankrupt, they just haven’t realized it yet.
Some of you guys still think this is about bailing out the Little 3(or at least two of them so far). It is the UAW bailout, otherwise the companies could just go into bankruptcy.
The government is also frightened of the concept of picking up the tab for the ten retirees for every worker. This way they pay all that overhead without appearing to do so. Bankruptcy would make the pensioneers the governments problem.
What a tangled web.
bluecon-some good points
UAW bailout-check
pensioneers-does the gov have that much foresight?
Bunter
This is all about not sinking the UAW with a bankruptcy. If they go into bankruptcy reorganizationall the union contracts are on the table and gonna be cut. Likely the pensioners will be cut loose.
This is a very union friendly government.
Bertel Schmitt:
The US consumer will pay for it, is paying for it, one way or the other….either in higher prices for imported goods, higher cost domestic goods, or in taxes to pay down the debt for decades in the future. Since we are already paying, might we not be better off to get/keep some domestic jobs out of it?
“Free Trade” as a concept is a fine idea, if the rest of the world had been playing along. Also, since much of our exports is food, I would think the world would have a tough choice in saying they wouldn’t allow in American exports….
Don’t know the answer myself, but I’ve been watching the trade deficit grow and the manufacturing employment base in this company shrink for years….and the so-called “service economy” we have built in the US has proved extremely susceptible to this crisis.
@Bertel
57,000 troops in Germany and 27,000 in Korea in 2007.
http://www.financialsense.com/editorials/quinn/2009/0218.html
The US won’t start a trade war with China, that would be suicide. Of course so is the stimulus spending, so maybe they will.
Sales are going to nosedive anyways. Britain is close to going bankrupt and others will follow Iceland this year. Just wait for the commercial real estate meltdown that is soon going to occur.
The children are in charge of the Federal Mafia candy store now.
The brilliant Walter E. Williams had an excellent article yesterday about how the economy just works. I love his example of having a tuna czar (like a car czar):
http://townhall.com/columnists/WalterEWilliams/2009/02/18/economic_miracle?page=1
“Go ahead, start a trade war with China et al.”
So Bertel, have you ever said anything critical of China’s trade policies? Would you find it acceptable if the US simply adopted the exact same trade and investment rules as China has in place?
Go ahead, start a trade war with China et al.
China needs the US middle-class to buy their shit quality asbestos-ridden goods at WalMart prices.
Simple Formula.
US without auto industry – US aviation industry = Britain.
The nightmare continues……….
Wonder if this guy quoted someone in East Germany, Czechoslovakia, Russia or Yugoslovia?
Just substitute any one of those nations for America….
Then replace any thoughts of communist era Trabants, Wartburgs, Skodas, Moskviches, Ladas, Dacias and Zastavas (Yugos) with new names…
The Pelosimobile, the Obamamobile, the FedResmobile, the CONgressmobile…
Pricing will start at $299,999.99 not including Federal Excise Tax (only 49%), state sales tax (ranging from 39% to 57%), air pollution tax (only 75% of the total price including FET and sales taxes – yes! a tax on a tax), and of course, E63 or E85 to fuel it with, will run you $18.99.9 per litre ($72.19.6 per the old US gallons). If you can find any, that is. Plus the 78% Alternanative Minimum Federal Income Tax which also helps subsidize the ethanol industry, the auto industry, the post office, friends of O (once known as ACORN), etc etc
Bluecon, you obviously read a lot of the same stuff that I do and have your eyes wide open and mind, too.
I’m not terrified; I’m past that. I’m resigned to what’s inevitable.
99.9% of the population are just fat dumb & confused about what’s juuuuuust up the road a tad.
Have a peek at this, folks.
menno;
Those 99.9% of people have trusted their systems and their elected representatives. This is not bad. This is just the way people are. That’s why we have leaders.
Those traders should not yell so loud. Many of us place the blame for this whole mess firmly in their overpaid laps.
@tankd0g
Hotdamnity! A 750HP car that only turns left! Sign me up! I’ll take two!
(and if i need to turn right i’ll donut left 270 degrees!)
John Horner said:
The US has a massively negative balance of trade, so doesn’t it stand to reason that the US is in a position to do more harm to its trading partners than they are to the US?
Negative balance of trade is very beneficial to the US. If all imports and exports stops, the US is the one hurt the most.
If the US has to pay gold for those goods, then you are right that the exporters will be hurt more.
But understand this, this is not just trade, the exporter are actually financing the US to buy those products. The US only to need to print a paper note called “national debt” to give to them. Americans paid with paper and got physical goods. That’s why I said it’s beneficial.
If all trades stop, the exporter will face a massive recession. They will have to be used to sell good to their own people.
But the US, will face the great inflation of this age. You will be looking at $500 Levi jeans and the next stimulus package will make them $1000. (Roughly speaking, the average American makes 20 times more than the average Chinese, or 40 times more than the average Indian).
John Horner said:
Plus, what if Japan, Europe and the Asian Tigers wanted to retaliate against US trade? Couldn’t the US simply start pulling back the defensive umbrella we pay for on behalf of those countries and tell them to start spending their own money and blood to defend themselves? Instead of closing military bases in the US, how about closing those in German and South Korea?
Again China and Russia and India will be glad to see that (weakened Japan and Taiwan). And you call that a retaliation?
@bluecon: For even juicier numbers, go straight to the source In August of 08, there were a mere 55145 active duty personnel in Germany. And 0 in Iraq. 0 in Afghanistan. Why? March to the footnote “deployments.” 18K of the 55K soldiers officially still stationed in Germany are deployed, fighting a war in Iraq and Afghanistan. The rest are needed to support it from Germany. Ramstein Airbase. Landstuhl Medical Center. Stuff like that.
@John Horner: So Bertel, have you ever said anything critical of China’s trade policies?
I live here and I like them. Works for me. And for the gadzillions of US companies that are here because of that. Btw. remember to correct the China footnote in your next bailout scoresheet. It’s wrong. Trust me, I’m in the business: It’s much easier to import a foreign car to China than to the U.S.
Would you find it acceptable if the US simply adopted the exact same trade and investment rules as China has in place? Absolutely. I lived, worked and invested in both places. Why do you think is foreign investment money (or what’s left of it) still pouring into China?
Remember: Probably the only place where even a challenged company called GM can turn a healthy profit is called China.
And to those who are still worried about China flooding the world with cheap goods, stop worrying. The world is increasingly unable to afford even the cheap goods.
@ Bertel Schmitt
And to those who are still worried about China flooding the world with cheap goods, stop worrying.
I don’t worry about the price of items, so long as they’re not INTENDED to be disposable.
If I buy a Dell server and a 1c capacitor fails 2 years in causing the whole unit to be trashed because someone decided stealing a capacitor fluid recipe and saving 0.01c was a suitable risk then the world can not afford that.
Or the lead-acid batteries that last 18 months, because building them again is “cheaper” than building them properly the first time.
Or the power drills that use a lower grade of motor winding causing more heat release and rapid failure of the plastic housing. Repair?? No just replace it because it’s so “cheap”.
Or the hand tools that have plastic handles that harden over time making them unsafe in 2-3 years when a wooden handle would last 50 years.
Or the plastic clothes pegs that disintegrate in the sun, but people repeatedly buy them because they seem “cheap” compared to wooden pegs.
Or the industrial water pumps that use more energy and poorer bearings for 30% less cost but have a 50% shorter lifespan.
Or the conveyor bearings previously manufactured in Germany, now made in China that only last 1/3 the time, but are 50% cheaper.
You’ve said before, you can manage the quality, but my experience in China is you have to RIDE IT HARD, too hard.
Somehow (mostly at consumer level) we’ve descended into a “disposable is acceptable” approach which the Chinese love because they can create busy-work twice or three times! It’s not sustainable.
I feel sorry for this guy. Somebody, probably his boss, told him, “Hey, get out there and tell the AP we’re doing something about Carmageddon.”
And he probably said, “What should I tell them? We’ve got nothing to report.”
And they said, “You’re our press spokesman. That’s why you have the job. You can think of something.”
And that’s what you’ve got. A guy who will do that for the next 15 months, and he’ll think about leaving to do something else for two months, and leave in about 17 or 18 months.
Poor bastard.