Selected in the top 100 Economics Sites

Follow me on Twitter

Thursday, December 11, 2008

Detroit gives their answer.

Without putting the auto companies in receivership or government driven Debtor in Possession we will be pouring money down a rat hole. They lose $25 billion a quarter.
Pay up sucker.


Anonymous said...

Should we bail out every company that gets anhilated by the competiton. Maybe we all should start a business.

Anonymous said...

Business Plan:
Start a company
Invite a union to organize your company
Sell at a loss in perpetuity
Pay yourself tons anyway
Be Green, promise to be greener
Seek Bailout

Anonymous said...

I don't know if you read about it but the SEIU is starting a campaign to unionize McDonalds. Apparently the prospect of card check is just too much to resist.

It's great how they're calling small business owners who are franchisees big corporations that can afford to give workers gold plated packages.

Randall Parker said...

Imagine the service and work ethic you will receive when McDonald's is unionized. It is all a conspiracy to get Americans to eat more healthy diets (connect the dots). Card check is an outrage and must be opposed as the anti-American fascist vehicle that it is. Imagine here in America not being able to vote your conscience because of threatened violence and retaliation. If you are one of my Southern friends you do not know of union thuggery. I do. When it comes to the vote, any no votes in the non-secret tally will have their knee caps busted in the plant parking lot. "I don't know what happened, the guy fell down." And you can cash that ticket Pard!

Andrew_Grodner said...

Here is a timeline of the GM's 100-year Odyssey.">

About the unions: as a Polish guy, I can say they are certainly good for taking down the Political system. It seems to me that the unions are in general a great destructive machine which can take down an Economic system as well, not to mention a decent Business.

By the way, I think that it is not a coincidence that since the fall of Socialism nobody misses unions in Poland and the economy and workers are doing just fine, thank you. When something needs to be destroyed again, I think we know the number. Till then, we are happy to read about the unions in the history books ...

Bryan said...

What would be wrong with having mergers between these companies? I understand that people would lose there jobs, but they'd get the best ones for the position. Hard work would get rewarded. Just a thought.

Andrew_Grodner said...

Here is an interesting story: if it is better to be in jail than walk the streets of Detroit then something is seriously going wrong in the "Motor City":

Bryan - I totally agree, there probably should be merger between GM and Chrysler to make them viable and change the perception - I even believe it would be somewhat beneficial to change the name for the new company to give them a "fresh" start. Now, I believe they go bankrupt no matter what - I cannot imagine people buying their cars under the constant cloud of bankruptcy. Remember, Toyota may post its FIRST EVER quarterly loss, and it is probably the best automaker in the world. How can anyone expect any US automaker to make profit in the next year under the current economic circumstances?

Finally, I do not see how any government "bailout" or company "restructuring" could help. I think GM and Chrysler's debt and bond obligations are over 100 billion (above what they are worth now + cash) and growing, so the government would run of money by trying to help them within couple of years. Well, maybe all the workers could be laid off and the government could pay for their college as a cheaper alternative. Hopefully in four years the recession would be over and the workers would have some new skills to offer. From my calculations we can afford to pay everyone's an education at ECU because all would get over 33,000 (100 billion expense for 3 million workers). Well, that's more of a joke but I could not resist. I really wish the auto industry well, but I am afraid that Chrysler will be the next "Lehman Brothers bankruptcy" sooner or later.