Auto Bailout

[chuck92103]

I was watching Senator Chris Dodd speak during the hearings yesterday.

He was discussing market cap of auto makes in general.

He called BMW a niche player with 15B market cap because they sell a lot less vehicles than GM although BMW is worth more than all the big three combined.

I found it funny because BMW is not losing $2500 on every car sold.

When VW has more market cap than any make, perhaps the big three should be called something else?

[techforge]

Yep maybe the three stooges

[deletedelete]

Originally Posted by techforge

Yep maybe the three stooges

lol nice. Or the Bankrupt Three.

[RedGT3]

Originally Posted by chuck92103

I was watching Senator Chris Dodd speak during the hearings yesterday.

He was discussing market cap of auto makes in general.

He called BMW a niche player with 15B market cap because they sell a lot less vehicles than GM although BMW is worth more than all the big three combined.

I found it funny because BMW is not losing $2500 on every car sold.

When VW has more market cap than any make, perhaps the big three should be called something else?

I know some of you won’t like this comment. But the truth is that US autoworkers are paid too much, they also have more benefits than other workers in the same field (other countries). On top of that they build cars that rattle like shit boxes when driven more that 5k.

[mike-y]

its a combination of the UAW's ridiculous contract for it's workers, and poor management. Only in America, can you make poor decisions that lead to your own failure, and then whine and complain about how its not fair that you ran your company to the ground, and the government should bail you out.

Sorry guys, but capitalism doesn't work that way. They need to let the Big three go out of business, so they get out of the UAW contracts and get rid of the piss poor management they currently have. Then they can re-open their doors with new labor contracts and business structure. Throwing money at sinking ship isn't going to fix anything. Oh yeah, actually making cars that people want to buy would help too.

[Sh0cker]

Originally Posted by mike-y

They need to let the Big three go out of business, so they get out of the UAW contracts and get rid of the piss poor management they currently have. Then they can re-open their doors with new labor contracts and business structure. Throwing money at sinking ship isn't going to fix anything. Oh yeah, actually making cars that people want to buy would help too.

This was my original thinking but I've been having second thoughts lately. The autoblog podcasts have some intelligent comments about this topic last week and the week before (they're an hour long, fast forward to near the end if anyone wants to listen).

[ArmyBimmerDude]

Originally Posted by fll335

I know some of you won’t like this comment. But the truth is that US autoworkers are paid too much, they also have more benefits than other workers in the same field (other countries). On top of that they build cars that rattle like shit boxes when driven more that 5k.

Agreed. Check this out then click on Michigan. Are unions that powerful that they can get payed that much for the U.S. vehicles they create? The "little" three need to grab their balls and handle both their product development and the unions. No way do those workers deserve to get payed twice the amount of foreign car company workers.

http://money.cnn.com/news/specials/s...ers/index.html

[osteome]

I would never buy anything from the "Big Three", so I certainly don't think that my tax money should go to own a chunk of them.

If no bank in the nation will loan them money, then why should I?

[Poderes1]

They need to get rid of the union. I can sum it ip this way

Big 3 + union workers = Poor quality product

Foreign automakers + non-union workers = Better quality product

[nissan]

As much as it was needed, I don't support the bailing out of the fin. svcs. institutions out there -- same goes for the auto companies. What I don't understand is why the govt. is playing favorites (letting BSC & LEH fall, banning shorts, propping up MER/AIG/any fin. instit. that asks). It can be argued that many of the large financial institutions also didn't deserve our tax monies b/c their management, too, made bad bets that led to their failure. Yet, the govt. is apparently more willing to help them w/o any sort of justification or requirement that management change its course. Yes, the implications of an AIG failure would be massive, but the principle is the same -- why prop up companies whose management has led it into a disastrous situation?

[ArmyBimmerDude]

Originally Posted by nissan

As much as it was needed, I don't support the bailing out of the fin. svcs. institutions out there -- same goes for the auto companies. What I don't understand is why the govt. is playing favorites (letting BSC & LEH fall, banning shorts, propping up MER/AIG/any fin. instit. that asks). It can be argued that many of the large financial institutions also didn't deserve our tax monies b/c their management, too, made bad bets that led to their failure. Yet, the govt. is apparently more willing to help them w/o any sort of justification or requirement that management change its course. Yes, the implications of an AIG failure would be massive, but the principle is the same -- why prop up companies whose management has led it into a disastrous situation?

Because everyone fears the second coming of the Depression. The trickling effect would be catastrophic.