That's all true, but the problem here is that the people paying for GM's failure will be the workers. As usual, the fat cats will walk away unscathed.

Mom, apple pie, baseball and Chevrolet... and 3 million jobs. Plus another 1.7 million jobs supported by the money the 3 million spend. Five percent of the US manufacturing base. In short, this is not something we can let happen without some careful thought.

If the economy were good, I'd say let 'em crash. But at this point in time, I think we're headed for an environment where govt is going to have to directly create jobs. It might be cheaper to salvage jobs this way than to create new jobs with public works projects or such.

Are we going to bail out the employees if the Big 3 fail... pension plans, health care, etc.? Another expensive proposition, and I don't think we can, or should, do that unless we're willing to do the same for all citizens.

Clearly, a restructuring is in order one way or the other. Many divisions of these companies are profitable and should be allowed to survive. Unfortunately, others are making vehicles nobody wants today and/or are inferior to the competition. The manufacturers cannot retool because they can't borrow the money needed to do that given the credit crisis.

Like it or not, there is going to have to be a re-negotiation with the unions... and yes, a cutback in labor costs. A 10 percent reduction in pay/benefits is preferable to unemployment.

GM, until earlier this year, was the largest manufacturer of vehicles in the world and is the largest manufacturer of trucks. Painting them as only a manufacturer of large, inefficient, unwanted SUVs is only part of the story.

What we absolutely should not do is throw a bunch of money at them (the way we did with the banks) with no strings or conditions attached. Therefore, I conclude that is exactly what we will do.

A reduction in pay should only be allowed with an increase in tax on the gross income of upper management. I'd like to add 10% tax on gross income for every 1% that employees give up.

Unfortunately, I think you're right. We'll give them the money and then whine when the waste it on their island vacation homes.

Agree, the pain has to be shared. CEOs and other management types should take a bigger hit than the production line workers. The pain has to be across the board with no one spared.... and a 10 percent cut on the CEOs is a lot easier for them to absorb than a similar cut to the workers.

I'm thinking we should bring in a team from Walmart to oversee the auto bailout. Put somebody in charge that knows how to cut costs and be profitable. Bringing in auto sector management types to oversee just perpetuates the problem. The whole sector needs a little culture shock, they have been way too complacent for way too long.

You missed my point: 10% of the gross for every 1% reduction employees take would be 100% loss for management if the employees were to lose 10%. I'm 100% fine with that, but it won't happen. :D

As for Walmart, I don't like the idea of giving the most anti-American company in the country any more power than they already have.

I think that Detroit has been too complacent, but only upper management. While the rank and file may be better paid than those at many US companies, I still think they're underpaid. Management everywhere needs to take large pay cuts, the savings should go to the people who really make the economy run: the middle class employees.

I think we have to view Walmart for what they are.... they have a real world view of the environment in which they operate and do what is necessary to thrive in that environment. Walmart did the US products only things years ago... and prices went up and their customers complained, so they went back to importing from China/Mexico/Puerto Rico and on and on.... cheapest product they could put on the shelf because that's what people want.

Just bought a watch at Walmart.... exactly what I wanted, $4, made in China. I don't think US producers could put an empty box on a Chinese shelf for $4. (Hadn't owned a watch for years, got tired of repairing the Seiko... hey, I'm retired, what the heck do I care what time it is anyway?)

It is now an international market, we can recognize that or live with the consequences (ala GM, Ford).

Do you really think you've benefitted from the ability to get a $4 watch that won't last a year? All you've done is help to put more American workers in the unemployment line, which will increase your taxes. Where do you think the huge trade deficit comes from? Because of it, and shipping costs: both financial and environmental, you're going to pay more than the real cost of a decent watch, but you won't see the money leaving, so you'll continue to think that you got a deal. You didn't. You got robbed.

Oh, my! CWT, you're a protectionist. Should I buy US built cars, too? Or do you think Toyota profits don't go to Toyota? This is what free trade is all about.... compete internationally or die.

The watch is disposable.... the replacement battery is $4.75. I honestly bought the watch that best met my predetermined needs, actually the only one that did. Price was irrelevant to me.... well up to a fifty or so. Utilitarianism and all that.

No, I'm not a protectionist! I'm simply against allowing any company to externalize costs because that is Socialism for corporations. It is most definitely not free trade, or anything like it. It amazes me that anyone could think that using taxpayer dollars to clean up after corporations is even close to a free market. I'm not at all concerned with whether or not Toyota profits go to Toyota. I'm sure that their management will see that it does. I'm more concerned that all of Toyota's (or any other company's) expenses are paid by the company and not taxpayers.

The watch is irrelevant. Price is not. The real price of the watch you bought is far more than $50, but you're blissfully unaware of the real cost.

I guess I am missing your point. Agree on corporate responsibility. But, nobody has ever had to clean up after Walmart, and for sure the US taxpayers won't be cleaning up after the Chinese manufacturers.

The trade deficit is a two way street. If we competed better in foreign markets, it would even out. We gain nothing by subsidizing US manufacturers with preferential treatment... what we get is GM and Ford when we do that.

In any case, we've strayed a long way from Canadian banks, though for sure it is all interrelated.

UAW says they won't budge.... taxpayers should subsidize them.

http://news.yahoo.com/s/ap/20081115/...t_gettelfinger

@CWT: you often refer to "free trade" and often give us examples of what free trade is not, but I don't recall your ever having exactly defined what the term means to you. When you've got a moment sometime, you might start a thread with your definition and see what others thought, or give us a chance to ask questions.

Every time a Walmart employee who can't afford health insurance goes to the emergency room, taxpayers and people with insurance pickup part of the tab. That's billions of dollars in clean up right there, but that's only the tip of the ice berg.

US taxpayers, as well as those in other countries, are paying and will continue to pay a heavy price for the huge number of dirty coal fired power plants that China builds every week, just so they can sell $4 watches.

There you go with this mythical free market again! Nobody's talking about subsidizing US manufacturers. I'm talking about forcing all manufacturers to pay their own way. No more US taxpayers subsidizing Walmart's employee health insurance program, or Chinese power plants.
Canadian banks, US banks, Walmart, it's all the same: Corporate welfare is the problem.
A free market cannot be free if organizations aren't required to pay their own way. I would say that a free market would be one in which companies expect to pay a living wage for any job just as they expect to receive a fair price for their products and services. To look for ways to avoid paying living wages is to look for government handouts: corporate welfare.

If a business can manage to force the taxpayers into paying a portion of its own costs, then that business is manipulating the market. If the market is manipulated, it is not free. In today's market, corporations are laying pollution costs, health care costs, security costs, and many others onto taxpayers. Then when these corporations still can't manage their affairs, they ask for bailouts, but don't accept any responsibility.

I don't think such a market ever has, and I suspect, ever will exist. There are too many trade-offs..

We were much closer to it in the 1990s than we are today, but whether or not is has existed is almost irrelevant. We have swung so far from a free market that it's become just a buzz word used by corporations to advance their own selfish interests. One example: In what free market do the corporate officers of failed banks get bonuses?

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NovaScotian: Great thread! Very interesting.
And many worthwhile thoughts by other posters.


PS. CWT, you’re beginning to sound like a broken record.
I am not belittling your points, but you really don’t have to repeat them in every thread. ;)

I think what you're really saying is the US did a poor job negotiating trade agreements and regulating our own corporations. Monetary exchange rates are not always fair. That is, however, the world the way it is.

Should I not buy a Mac because the hard drive was made by Toshiba? Half of a US car is assembled with imported parts. Should I compare percentages before a purchase? Or should I simply do the best I can until utopia gets here? Paying more won't make the problems go away.

But I keep seeing the same idea in these threads: "We can't do x because that would violate the free market." You can't violate something that doesn't exist.

I would be happy if people would just recognize that the government isn't the only organization capable of taking actions that are against the principles of a free market. That in fact, large corporations can be even more detrimental to free market principles because they have more influence throughout the world than most (if not all) governments.

True. You've got to pick your battles. Walmart however, is the poster child for these kinds of abuses. They've taken them to levels never before dreamt of by large corporations.

Walmart, McDonald's, you name it.... all the same thing. Low wages, no health insurance for part time employees which they use extensively, etc. Only a national health care program and a mandated minimum wage will level the playing field.... and you can't force that internationally.