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+--- Thread: Should We Nationalize GM ? (/showthread.php?tid=67431)
Re: Should We Nationalize GM ? - Silencio - 12-03-2008
Devil's advocate here: how would people feel if GM were allowed to go Chapter 11 and some Chinese company swooped in and bought all the good bits for pennies on the dollar? Would that be bad for our national interest, or is that just free market, global capitalism at work?
I have no love lost for the Big Three, that's for sure. I have never owned one of their vehicles and never had plans to ever consider owning one. However, the crisis they're going through currently is IMO more directly related to the ongoing credit crunch and the spike in gas prices this past summer than it is to their collective inability to innovate or beat the UAW into a pulp.
No good choices here. None that I can see...
Re: Should We Nationalize GM ? - Black Landlord - 12-03-2008
davester wrote:
[quote=Dakota]
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.
Besides which this country does not need 15 million vehicles a year.
It needs to learn to do without 15 million vehicles a year.
Re: Should We Nationalize GM ? - mikeylikesit - 12-03-2008
cbelt3 wrote:
I'd rather see us nationalize energy. Electric power was created with government funds- bond sales, primarily. Now incredible profits are being made and no further investment is done.
Since they're not taking the money and building more power plants and improving the infrastructure, offer to buy 'em out and control them.
Power to the People !
(Yeah, Ohio is about to 'deregulate' electricity. We're all gonna get Enronned to death. It's going to be a cold winter, and me without a wood burner.)
Interesting but little noted side note to the California/Enron story. When the industry was deregulated the local DWP was not since it was owned and operated by the City of LA. The incumbent mayor, Richard Riordan a Republican, made a determined run to sell it off and privatize the utility.
The debate raged for some time and eventually the mayor lost out to locals so by the time Enron began their price run-up, LA DWP was still publicly owned and operated.
While California private utilities were hauled over the coals by manipulation of markets and supplies and while consumer rates went to astronomical levels and brownouts were common statewide, LA never experienced a rate increase or brownout. The local agency had locked in contracts and purchase agreements that insulated it from the havoc the spot buy private utilities were subject to.
If the local DWP had been seeking short term profits for shareholders, it might have been a different story. If the short sighted Republican mayor had his way it might have been a different story.
Those who think government can't do anything right ignore that Social Security is the single most successful government program in our history, it's still solvent and the drums they recently employed announcing it's demise 30-years from now ring hollow next to the current day failure of private enterprise and our banking system.
When the system fails it's ours; when it profits it's theirs!
Re: Should We Nationalize GM ? - Gutenberg - 12-03-2008
Since we're talking fantasies here with upstart American auto companies, imagine what a b!tch it would have been if the United States had been forced to contract with Japan and Germany to make its tanks and vehicles during World War II. Or France, for that matter.
Re: Should We Nationalize GM ? - karsen - 12-03-2008
JoeH wrote:
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.
There are some small American automakers, Tesla for instance. I'm sure they'd like a bigger piece of the market. That's not my point though, my scenario was obviously fictional, the point being it stifles competition and innovation.
JoeH wrote: 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.
If you think it's unlikely now, wait until a potential startup has to compete against a nationalized mega corporation.
Re: Should We Nationalize GM ? - swampy - 12-03-2008
This is a Michigan bailout. The car manufacturers in the south don't seem to have the problems that the Big Three in Michigan do. Let 'em go belly up.
Re: Should We Nationalize GM ? - lafinfil - 12-03-2008
swampy wrote:
This is a Michigan bailout. The car manufacturers in the south don't seem to have the problems that the Big Three in Michigan do. Let 'em go belly up.
You lack a basic understanding about how the supply chain works in the automotive industry.
The various domestic and import manufactures use many of the same suppliers for a lot of basic component parts.
Many of the import manufactures that you seem to think are doing well are already starting to hurt
because of a slowdown in manufacturing from sub suppliers because reduced overall demands.
I have a cousin that is a product manager for a company that supplies lighting parts to just about every manufacturer
out there - both OEM & after market in the US and around the world. We were discussing last spring
how slow downs in the auto industry had hurt their ability to fulfill contracts to automakers that
had not slowed down production. Problem is that it's noy as cut and dried as you seem to think it is.
Re: Should We Nationalize GM ? - JoeH - 12-03-2008
swampy wrote:
This is a Michigan bailout. The car manufacturers in the south don't seem to have the problems that the Big Three in Michigan do. Let 'em go belly up.
Now I know you are just out there in the weeds, but most people know that just because the headquarters are in Michigan, that does not mean all their operations are there. They have assembly plants and suppliers from the east coast to the west coast, in the south and the north. Not to mention also in Canada and Mexico. So in no way is this just a "Michigan bailout".
Re: Should We Nationalize GM ? - Gutenberg - 12-03-2008
The Port of Baltimore is about 2/3 dependent on the auto industry, foreign and domestic.
Re: Should We Nationalize GM ? - JoeH - 12-03-2008
karsen wrote:
[quote=JoeH]
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.
There are some small American automakers, Tesla for instance. I'm sure they'd like a bigger piece of the market. That's not my point though, my scenario was obviously fictional, the point being it stifles competition and innovation.
JoeH wrote: 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.
If you think it's unlikely now, wait until a potential startup has to compete against a nationalized mega corporation.
Your scenario was obviously fictional, it is also completely not based in any economic reality that exists. It would stifle "competition and innovation" no more than the current and past bad oligopolistic practices of the US big 3. As for Tesla, it is a niche maker, with a niche product. At their best, they might do a fraction of a percent of the market and maybe produce as many cars as Honda produced Insights the first year of production. Tesla in the end is mostly repackaging existing technology into a vehicle.
As for a nationalized "mega" corporation, the difference between almost no chance and next to no chance is so small as to be no difference.