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+--- Thread: Should We Nationalize GM ? (/showthread.php?tid=67431)
Re: Should We Nationalize GM ? - davester - 12-03-2008
JoeH wrote:
I personally do not care if it is repackaged existing tech, apparently it matters to davester. But it is not innovative in the big "I" type of innovative that is likely to create or greatly (or even more than slightly) change a market.
What? You're the one who brought it up, so now you don't care about it? It is not that significant an issue to me, I simply responded to what I thought was an inaccurate statement. Now you're talking about "innovative in the big "I" type of innovative", which wasn't the topic at all. As to whether it is "repackaged existing tech", that all depends on what the meaning of "is" is. So what if Tesla licensed some of AC Propulsion's patents. Tesla has done a huge amount of research and development, and as a result their components are significantly different and incorporate advances that do not appear in AC Propulsion products. In your book, perhaps that is repackaging, in my book it's a lot more than that.
Re: Should We Nationalize GM ? - kj - 12-03-2008
The Tesla is innovative, and I would much rather our gov't put money into it, and other ventures, than waste it on GM. If tesla could sell as many cars as hyundai, I think that would change the market pretty substantially. And it might be a product someone from outside the U.S. would be interested in, too.
It changes my perspective to think that rather than bail out or nationalize GM, why don't we all just make our next purchase a GM car? That would bail them out, and we'd get a car. With the bailout, we pay for a car, and don't get a car. But would people bail them out by buying their cars? Apparently not, so why bail them out and likely get nothing back, especially if you would never buy their product? kj.
Re: Should We Nationalize GM ? - JoeH - 12-03-2008
Davester, you called it as "all incorporate significant and fundamental technological advances that are far beyond any EV technology used before", usually "innovative" is a shorter term to describe that. I responded only to show it was not as you thought. On my part, stating "Tesla in the end is mostly repackaging existing technology into a vehicle", was in response to karsen's use of the company in an example where he talked of stifling "competition and innovation". At this point, Tesla is not particularly competitive or innovative, or at least yet. As I said, it appeared to make a difference to you, but as you now state, it looks like it is about on my level of care. I don't wish them ill , and maybe they will be a factor at some point a decade or more in the future. But as a potential solution to the current mess in the car market, they are not even in the running.
Karsen uses the standard arguments for free market, let the chips fall where they may, approach to running the economy. But what we actually have to deal with is a market where there are many impediments to the entry and replacement of existing suppliers of items. One of the biggest is that many aspects of current and future technology take large sums of money to even bring to market, tends to keep small players from even getting in. And unless there are incentives, the big players tend to go for "safe" choices, look where that got GM, Ford and Chrysler. At this point there are three main options. One, we nationalize; two, we "bail out"; and three, let whoever fails, fail. I don't think the first is going to happen, or should happen. Most of the argument is whether we do the second and on what terms. The third might happen, but there is a lot of pressure to not do so because of the other impacts on the US economy.
Re: Should We Nationalize GM ? - karsen - 12-03-2008
mattkime wrote:
>>As for Tesla, it is a niche maker, with a niche product.
Kinda like Apple?
I thought the same thing. Doomed!
What would have happened 15 years ago if the government said Microsoft is too big to fail, and stepped in and gave Billions of dollars and government backing to Microsoft, essentially forcing the competition like Apple out of existence? Everyone would have to use a shitty OS and use shitty brown Zunes.
It's quite simple, competition spurs innovation. Get rid of the incentive to compete and ultimately you get rid of innovation. It continues to spiral downhill form there.
Re: Should We Nationalize GM ? - karsen - 12-03-2008
This is a serious question, not trying to be a smart ass here:
How is it the Big Three ALL need money at the same time? How is it that these once fierce competitors are now united in an effort to ALL receive Government funds? If the problem really is the credit crunch and the Big Three really just need some funding to help them through this downturn in the economy then why aren't we hearing about Toyota and Honda woes?
I find it hard to believe all three of them are on the brink of complete failure. I find it EXTREMELY hard to believe that ALL THREE will fail if they do not receive Billions (perhaps trillions) in bail out funding. Maybe I'm just being cynical but if one of the big three fails, isn't that great news for the other two? I could see a scenario where one fails and the other two are stronger because of it.
Re: Should We Nationalize GM ? - mattkime - 12-03-2008
>>At this point, Tesla is not particularly competitive or innovative, or at least yet.
I don't necessarily agree with that. Small changes can make a big difference, even with existing technology.
Re: Should We Nationalize GM ? - JoeH - 12-03-2008
karsen wrote:
This is a serious question, not trying to be a smart ass here:
How is it the Big Three ALL need money at the same time? How is it that these once fierce competitors are now united in an effort to ALL receive Government funds? If the problem really is the credit crunch and the Big Three really just need some funding to help them through this downturn in the economy then why aren't we hearing about Toyota and Honda woes?
I find it hard to believe all three of them are on the brink of complete failure. I find it EXTREMELY hard to believe that ALL THREE will fail if they do not receive Billions (perhaps trillions) in bail out funding. Maybe I'm just being cynical but if one of the big three fails, isn't that great news for the other two? I could see a scenario where one fails and the other two are stronger because of it.
To be serious, in my opinion it is because all three basically followed the same "safe" and "short term" business decisions over the last decade or so. Oil and gasoline prices were relatively low for a while, let's push high profit margin light trucks and SUV's in the consumer market. Instead of putting R&D money into improving fuel economy, they lobbied for no changes to the CAFE standards instead. Also to keep those high profit LT's and SUV's out of the CAFE calculations.
As for quality, most of the improvements I have seen have been only in reaction to market pressure from the quality of the cars from the Japanese makers and then the Koreans once they got their act together. Too many reports of cars from the Big 3 with less than good reliability in transmissions, engines and other components during the late '90's and earlier this decade. For some models they have finally achieved parity with Toyota and Honda, but some of that has been through decreased quality from some of the US assembly plants for those makers compared to imported from Japan.
As for one failing being good news to the other two, how well did that work out for Chrysler? They got a little bigger when AMC was absorbed by them, but only short term. In another way, it was also a journey down that path towards short term profits from the Jeep line of SUV's.
So all three put much into a market segment that basically imploded after a few years of high fuel prices. Ford appears to have seen the writing on the wall first, and seems to be the closest to retooling and realigning its production. But all were behind in getting to that point. Some of it could have been avoided or sped up if they had put the money and time into R&D, for instance GMC restarting its electric vehicle development recently after killing off the EV1 line and the work connected with it back in the '90's. Add the credit crunch on top of that, and they are all in almost the same condition, though it appears GMC is in the worst. As for Toyota and Honda, they are also hurting, sales for them were down about 30% the last few months compared to down around 40% for the US companies. But they have alternate vehicles in their product line already, they are not needing to retool as much.
Re: Should We Nationalize GM ? - Ted King - 12-04-2008
The amount of money the auto industry in the US is asking for is roughly equivalent to the amount of money the US government pays out every year - and has paid out for many years - for farm subsidies. Where's all the hand wringing about that? It's odd that at a time when we are giving HUNDREDS of billions of dollars to financial services corporations and banks with practically no accountability, that giving a small fraction of that to auto makers is eliciting so much more concern. If those who think it is a bad idea to give money to the auto makers are right then we will have thrown away about the same amount of money given away every year on farm subsidies, but if they are wrong then we may save a LOT of jobs for no more than a fraction given to bankers and financial outfits or as much given in just one year to prop up farmers (and the majority of that farm subsidy money goes to large corporate farms).
Re: Should We Nationalize GM ? - mattkime - 12-04-2008
the farm subsidies are wrong as well.
otherwise i don't think there's any similarities between the reasoning behind bailing out the financial system and the auto companies. the auto companies are asking because now is the time and they're screwed by the lack of money for loans.
Re: Should We Nationalize GM ? - mikeylikesit - 12-04-2008
Ted King wrote:
The amount of money the auto industry in the US is asking for is roughly equivalent to the amount of money the US government pays out every year - and has paid out for many years - for farm subsidies. Where's all the hand wringing about that? It's odd that at a time when we are giving HUNDREDS of billions of dollars to financial services corporations and banks with practically no accountability, that giving a small fraction of that to auto makers is eliciting so much more concern. If those who think it is a bad idea to give money to the auto makers are right then we will have thrown away about the same amount of money given away every year on farm subsidies, but if they are wrong then we may save a LOT of jobs for no more than a fraction given to bankers and financial outfits or as much given in just one year to prop up farmers (and the majority of that farm subsidy money goes to large corporate farms).
Public reaction to an auto bailout is based on name recognition. Archer Daniels Midland may suck more out of the treasury than all the auto makers combined but no one buys an Archer; at least not like they buy a Buick.