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09-25-2008, 10:06 PM
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#1
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bitch
Join Date: Jul 2006
Location: East Coast Baby!
Posts: 1,635/1.91
Threads: 322
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Another Bail-Out, Really?!?!?!?!?
So I'm sure most of you have heard of the proposed bail-out of the financial sector of the economy, along with the laundry-list of other bail-outs that have already taken place---AIG, Freddie Mac, Fannie Mae etc. Add to the list the automakers, just the "American" ones though now. Here's the article, and I've included some posters comments that I really agree with after the article. What do you guys think about this?
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House clears $25bn for Carmakers: The House of Representatives on Wednesday approved a $25bn package of low-cost loans to help hard-pressed carmakers and their suppliers finance plant modernisation at a time of restricted access to public capital markets. The automotive loans are separate from the proposed $700bn bail-out for the banking sector, which is still being debated in Congress. The House approved the measure 370-58, setting the stage for Senate approval within days. US blue-collar workers look for bail-out - Sep-23 Car dealers hit as loans splutter - Sep-12 Ford and Chrysler back loan drive - Sep-17 GM chief to lobby Congress on low-cost loans - Sep-12 Age of the auto - Aug-06 US bids farewell to era of Model T - Jul-23 The industry’s case has been helped by the fact that Michigan and Ohio, the two states most dependent on the car industry, are key swing states in the November 4 presidential election. Executives of General Motors, Ford Motor and Chrysler and their suppliers have lobbied heavily for the loans. Both presidential candidates, John McCain and Barack Obama, have expressed support. Shelly Lombard, analyst at Gimme Credit, a corporate bond research company, told clients this week that “blue collar workers are more sympathetic victims than ‘rich’ investment bankers. So it’s easier to defend loans designed to save close to 100,000 jobs in the shrinking US manufacturing industry.” The go-ahead for the car industry loans has been written into a stop-gap spending bill, known as a continuing resolution, which must be passed to keep the federal government running beyond the end of the fiscal year on September 30. Congress and the White House have yet to agree on details of the fiscal 2009 budget. The loans were originally authorised in an energy bill passed last December to finance the retooling of plants for more fuel-efficient vehicles, especially hybrid and electric cars. But they have become a crucial prop for Detroit carmakers. The continuing resolution provides funding for $7.5bn, which is the estimated subsidy on the loans – in other words, the cost to the government of providing them at well below market rates. The loans will not take effect until the energy department has written detailed regulations dealing with, among other issues, which investments will qualify and conditions for repayment. Congress has directed the department to begin writing the regulations quickly and will provide any extra staff required to do so. One lobbyist said he hoped the regulations would be completed by early 2009. All carmakers and suppliers with operations in the US are theoretically eligible. However, the energy bill restricts benefits to plants that have been in operation for at least 20 years, thereby excluding most foreign carmakers. A Toyota spokesman said his company was agnostic on whether it derived any benefits. It has kept a low profile in the debate on the loans. The Detroit-based carmakers have insisted that the loans, known as the Advanced Technology Vehicles Manufacturing Incentive Programme, are not a bail-out because they must be repaid. But critics have questioned the wisdom of supporting the motor industry with taxpayers’ money, especially in the wake of the huge amounts being provided to Fannie Mae, Freddie Mac, AIG and Wall Street investment banks.
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First posters comment:
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Wait a minute. They were making the big SUV"s because Americans were BUYING them as fast as they could build them. And, to satisfy the never ending desire for larger and more luxurious vehicles, they kept making them bigger and wider. Of course, clever advertising and marketing made the target buyer feel they needed these leviathans instead of the more responsible mini vans they were replacing. But the American public is not blameless in this situation. Everyone who felt they just HAD to have the Escalade, Yukons and 3 ton Expeditions, look in the mirror. The automakers were doing what any company is supposed to do; sell what the public is buying, and sell they did. These cars also had huge profit margins, so they were all serving their shareholders with good business. Climbing gas prices brought some sanity to this nonsense, and the only fault of the automakers was to put too many eggs in the SUV basket. But it"s hard to blame them. I bet 2 liter hatchbacks weren"t exactly flying off the sales lots 4 years ago. So, they stopped making them. I agree that taxpayers should not help these companies to re-tool, but let"s not put all the blame in their direction. You own a school bus sized vehicle, you share the blame.
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And the second:
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This is just crazy. If you run a business and are going under you shouldn't get government funds to continue the slide. Billions for weathy corporations while the rest of us have to play by the rules, and those getting taxpayer's money are the same ones who cry "SOCIALISM" whenever a poor or lower middle class person gets food stamps.
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09-26-2008, 12:04 AM
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#2
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Erica Ownz me!
Join Date: Dec 2004
Location: 5280'
Posts: 8,090/5.67
Threads: 333
Gold Member
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Re: Another Bail-Out, Really?!?!?!?!?
1st - Thanks for posting this, it is not in the big news.
2nd, your comments are both correct as well.
We do love the big brash gas guzzling cars and trucks. We are Americans!!!
yes, now we are in deep shit!
Yes, We as citizens are to blame as well! Marketing, government, people - WE all are to blame. Well, except for the folks that do not own a SUV/Truck/Camaro and ride the bus or trains. They are kinda getting the drive shaft.
It is the Big Three that are in so deep. Hell Toyota is the only one making money, because they do make a great product.
But they also made large SUVs and V8 Trucks - just not as many, and not the primary focus.
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09-26-2008, 01:02 AM
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#3
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Test Tickel
Join Date: Feb 2007
Location: houston, texas
Posts: 1,737/2.67
Threads: 75
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Re: Another Bail-Out, Really?!?!?!?!?
Number bug help:
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Originally Posted by joerockhead
1st - Thanks for posting this, it is not in the big news.
2nd, your comments are both correct as well.
We do love the big brash gas guzzling cars and trucks. We are Americans!!!
yes, now we are in deep shit!
Yes, We as citizens are to blame as well! Marketing, government, people - WE all are to blame. Well, except for the folks that do not own a SUV/Truck/Camaro and ride the bus or trains. They are kinda getting the drive shaft.
It is the Big Three that are in so deep. Hell Toyota is the only one making money, because they do make a great product.
But they also made large SUVs and V8 Trucks - just not as many, and not the primary focus.
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WR
> Banter
> Edge of the Hole
Another Bail-Out, Really?!?!?!?!?
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