Jonathan Cohn of The New Republic makes the case for a conditional bailout. A quick and informative read, exploring the (un)likelihood of recovery under a Chapter 11 scenario and the alternatives.
Update: 6 Myths About the Detroit 3 from the Detriot Free Press.
8 comments:
Most of the articles I've seen explain why a bailout won't work. Here's an article that explains why chapter 11 won't work. I don't see any actual numbers here but anything you do will be good and bad.
Even he's willing to admit the problems created by the UAW. I said a lot of this stuff years ago but nobody wanted to listen to me.
If Ford and GM can show that they can have competitive overhead I say give them a bailout and see if it works. They'll have to downscale regardless. Maybe a soft landing is better than a crash landing. But you got to downscale. The American market is just too saturated with cars. As far as the Volt goes. Toyota already has a Prius set to go that will get better mileage for less money. And yes, it's a plug in.
And I'd love to see them get rid of the GM executives. Wonder what kind of severence package they'd get?
You may be right about downscaling. Given the current economic situation, the demand for new cars will be low, and will likely remain so for a bit.
As for the Volt, as I understand it, it will have better mileage than the Prius, given that the gasoline engine only serves to charge the battery, and only kicks in after roughly 40 miles of travel. For most folks, they would not use the gasoline engine in an average day's commute. The Toyota plugin-project currently can only go about 7 miles before the gasoline engine kicks in. In addition, the Japanese are rather new to the plugin game, while GM has been working on it, in one form or another, for more than a decade. So while we all are familiar with Japanese ingenuity, the Americans have a head start.
Just as clarification I didn't mean to say that the Prius would be better than the Volt. Just that the new ones will be better than the non plug in Prius's. I was just writing too fast for my subpar typing skills. I'd have to assume that the new Prius will have a much more favorable price point though. I've ehard 30,000 dollars for the Volt. This new Prius will be able to roll off assembly lines that already exist.
Its all exciting stuff to me. I drovbe a Prius to Atlanta for work one time and got 45 miles to the Gallon. Made it from Columbia and back on one tank.
Hybrid Technologies is a cool company to take a look at. They're working on a car withand engine in each wheel of the car. Its all cool stuff.
I guess if the bailout can be seen as an investment in more fuel efficient cars than I say do it.
Toyota and Honda won't just sit around and let themselves get beat though.
There is something to be said for the cost of the Prius-plugin being cheaper, given that they won't have to do as much retooling of their assembly lines as will GM likely will. Still, 30k, while placing the Volt out of the price range of many lower-income folk, is something that most middle-class people could probably afford, especially if the governments further incentivized buying them (maybe reduced property taxes for American hybrids, something like that - of course, that sort of thing would be done on the state level).
I say we dump the auto industry completely and all get segways!
Who's with me?
And if you bailout the auto industry, who's to say they won't fuck us over just like the financial institutions are and just sit on the money and earn interest?
I have a better idea. Why don't we just hand out 700 billion fucking dollars to the middle and lower classes of America(Fuck Yeah) and I bet you'd have all kinds of honkeys buying up cars, tv's, and coffee all over this mother fucker. That might solve both the bailout and consumer confidence issues.
I second B's idea. I'd buy enough cigarettes to last me and my family the rest of our lives. And of course I would buy a baby with straight cash. I'm rich biatch!!
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