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+--- Thread: Should We Nationalize GM ? (/showthread.php?tid=67431)
Re: Should We Nationalize GM ? - kj - 12-03-2008
>>>The only thing that can possibly be green about any car is the paint color. Please stop using "green" and "car" together.
You're absolutely right about that. I'm not even sure you could say "relatively green". Sort of like "relatively dead".
>>>I'm with kj here.
If you're trying to placate me, well, it'll work until I figure you out
.>>>I think it is legit to question the need for behemoth vehicles. Maybe it got too heated, but they are a terrible idea that people have simply convinced themselves is necessary.
There are a lot of people driving F350s around without so much as a scratch in the bed, and I think that's lame too.
>>>And kj, I am sorry because you did talk to me like an adult and I ignored it. Thank you for that.
No biggie, I actually went back to make sure I did, and almost couldn't find it in there. Thanks. kj.
Re: Should We Nationalize GM ? - davester - 12-03-2008
Karsen does have a point. If an automobile company fails and goes bankrupt, it doesn't necessarily disappear, though that could happen if an uncontrolled collapse was allowed to occur. The facilities and resources are still there to be picked up at fire sale prices after a bankruptcy, and if there actually is a market for Big 3 vehicles then the buyers would almost certainly simply reorganize the companies and continue production. Look how quickly Lehman Bros was snapped up by Lloyds, etc after they were allowed to go bankrupt. Most of the employees kept their jobs, too. I definitely don't agree with the concept of handing them money with no strings attached. If we hand them money, there should be an extremely rigorous set of strings (enough to allow repayment of the taxpayers and/or seizing of resources in the event of further losses, and a significant amount of control by the government (i.e. the taxpayers) regarding management of the company). You can call it nationalization if you like, but there's no way the government should give our money to the automakers without getting ownership rights in exchange. There's also no way that the government should allow the Big 3 to fail completely (i.e. the right wing wet dream of laissez faire capitalism) without making a significant attempt to ensure the best possible outcome for the workers and local economy.
Re: Should We Nationalize GM ? - Mac1337 - 12-03-2008
People who write these columns know no history. Nationalization of British Leyland in 1975 by the British labor government and its eventual demise in 2005 oughta be enough of an example. Having owned a one in the 70s I must say that Lucas electrics must have more to do with the demise of British cars than anything else.
Re: Should We Nationalize GM ? - karsen - 12-03-2008
Regarding Nationalizing GM:
Imagine you are the founder, or employee of an upstart American automobile company. You're part of a company that is making sound business decisions. Your company is profitable and your future is bright. Your automobiles are top notch and they being bought up left and right; you're starting to make a real dent in market share, both because of your wise choices and the poor choices made by your competition.
Your competition is slow to react to market needs. They have a bloated product line with repetition and self induced competition. They sell vehicles that are well made, but greatly overpriced compared to yours, partially due to their legacy agreements with labor. Your competition is hurting, and it's good for you. But wait... The government steps in and bails out your competition. Now the government is the majority owner of your biggest rival!
Will the government give sweetheart deals their new nationalized business? Do they get special breaks on taxes or fees? Do they get special consideration regarding zoning and pollution? What about tariffs? How does this affect your business? How can you possibly compete with a company with complete backing of the government? You're now up against a company with control over every aspect of business; someone who has the power to change the rules as they see fit; a company who if need be, can simply print more money to squeeze you out of business.
This is no longer an even playing field. This discourages small business and innovation. This is no longer capitalism.
Re: Should We Nationalize GM ? - mattkime - 12-03-2008
>>This is no longer an even playing field. This discourages small business and innovation. This is no longer capitalism.
Best argument argument against it.
Re: Should We Nationalize GM ? - JoeH - 12-03-2008
Problem is karsen, your entire argument falls flat on its face because there is no "upstart American automobile company" anywhere in the wings looking to take over a piece of the market. Given the startup costs to enter in this day and age where you have certain technologies required to even have a sellable vehicle, it is unlikely there will be a "new" company able to enter the market. Most likely if the GM, Ford and Chrysler portion of the supply goes away it will be filled from the other existing players in the field. That is of course, unless a government action takes place to protect the new company from competition until it is profitable.
Now as for nationalizing GM or one of the other US car companies, that is more than I see a need for at this time. But if we as a country do end up "bailing them out", we do need to get something back in exchange for that help.
Re: Should We Nationalize GM ? - Mac1337 - 12-03-2008
The country needs 15 million vehicles every year. Somebody has to make them, big three or not, and they all can't be imported. So what is the problem?
Re: Should We Nationalize GM ? - mattkime - 12-03-2008
>>Problem is karsen, your entire argument falls flat on its face because there is no "upstart American automobile company" anywhere in the wings looking to take over a piece of the market.
It would still hurt those who invested in competitors and cause those who were considering it to hesitate.
Re: Should We Nationalize GM ? - JoeH - 12-03-2008
Which competitors are those? Ford and Chrysler made pretty much the same bad decisions as GM. About the only difference is that Ford appears to have realized it sooner and started changing their business model just a little earlier than GM and Chrysler. But not soon enough. All the rest of the competition is owned by foreign companies except for a few producers of niche vehicles. Even Chrysler was foreign owned for a while, until Daimler gave up on turning them around. Your argument is nice in theory, but ignores that the US auto industry has been an oligopoly market for decades, and the last few has shown all the worst symptoms of that status.
Re: Should We Nationalize GM ? - davester - 12-03-2008
Dakota wrote:
The country needs 15 million vehicles every year. Somebody has to make them, big three or not, and they all can't be imported. So what is the problem?
Sorry, imported versus domestic has no bearing on whether to bail out the big 3. The foreign makes build a huge number of cars in the US, while the Big 3 build a huge number of cars in Mexico and Canada to avoid US labor and healthcare costs.