Is it an OK question to ask if the USA should spend billions more on GM?

[KansasVoter]

And I hate the money we wasted on the Banks. So don't say GM deserves it if the banks do. Bad answer. Maybe both are wrong.

How many billions will GM cost us the next 10 years and even then their future is not sure!

What do you honestly think the chance of GM making a profit in the next 10 years? 10%? 50%?

Maybe Honda, Ford, Toyota, Chrysler will pick up the slack and hire more people when the economy recovers.

I hate throwing more money at something that cannot be fixed.

I hope this is not a flame thread but an ideas thread.

And if GM can be viable then explain to me how.

[OhioChick]

1. As long as people don't have jobs...or are in fear of losing their jobs

They won't be purchasing a new car of any brand anytime soon.

[rurallib]

2. I would rather see GM get the money than:

faith based initiatives
money for the war in Iraq or Afghanistan
maintaining troops all over the world
money for any president whose last name begins with B
Gitmo
foreign aid for Israel(?)

that is just off the top of my head. At least we may get some jobs and maybe decent products from GM.

[DJ13]

3. The flaw with that sentiment is that its not just GM

Its the hundreds of thousands of workers that work at suppliers and supporting industries effected as well.

Take a company in a small town of 20,000 in the midwest that makes say seatbelts and employs 1,000 people, what happens to their economy if we followed the GOP "let them die" mentality and large numbers of local businesses in the towns of the various suppliers fold because the biggest employers had to close?

Then what happens to the other small towns who did business supplying that town's local businesses?

The issue is that if the MSM said Citibank was too big to fail, GM really IS too big to fail, because a liquidation of GM would completely collapse the entire midwest economy.

[doc03]

4. GM and Chrysler were poorly managed and deserved to fail

the government should have let the free enterprise system work. If GM completely shut down people would still buy cars and Ford, Toyota and the others would have picked up their market share and become profitable again. The government let around 40 inefficient steel companies close and the remaining companies picked up their market share. So now you have Ford and others that apparently did something right being punished for it. It's the survival of the fittest, that is what makes capitalism work better than any other system.

[DJ13]

5. the government should have let the free enterprise system work

We dont HAVE a free enterprise system here.

Never have, never will.

[doc03]

6. How you figure never have never will? When did the government

pick the winners and losers in industry before. We are moving in the direction of the old Soviet style central planning in my opinion. Nobody stepped up and saved my industry, it was either take concessions or look for a job. Our pensioners were thrown under the bus. The government never stepped in to save dozens of other auto companies over the decades. They did bailout Chrysler and it wasn't long before they were on the ropes again.


Definition of the free enterprise system
http://www.teachmefinance.com/Financial_Terms/free_enterprise_system.html

Capitalism: http://www.answers.com/topic/capitalism


Trabant:http://en.wikipedia.org/wiki/Trabant

[LiberalFighter]

7. Let companies fail because the financial market started the problem?

When money gets tight and in this case because banks buying credit default swaps and other bad investments it makes it difficult for companies to operate.

[RoadRage]

8. No offense..

but I think that GM, Ford & Crysler were all in heaps of trouble long before the credit markets dried up.

The problem with the American Auto Industry as a whole is that their product's perception is to be less then their international competitors (Toyota, Honda, etc). It costs them MORE money to make the exact same product as their competitor due to the cost of employing a US worker vs. an International one.. and the cost of pensions and health benifits that they pay on workers who have retired.

That in itself is a recipe for bad business.. i'm not saying it's fair or that it doesn't suck - i'm just saying that it is what it is. I don't know if the government throwing more money after it is going to fix anything.

But, on the flip side - if all of those people are out of work, and no longer getting pensions and health benefits.. guess what? They're all going to be collecting welfare, unemployment benifits, medicare/medicade, anyway - so the Government IS going to be paying those people.. it's just a matter of in what form.

[Honeycombe8]

11. Yes, their problems started LONG before the current recession.

Their problems are a result of bad management, not the recession. The recession just hastened their decline.

Example: Ford has not taken any taxpayer $ and is hanging on, despite the recession.

But I don't think GM's problems result directly from cost issues. Costs will be important in getting on its feet again, if that's possible. But the reason GM sank in the first place was management's decision not to compete with the fuel efficient, higher quality small foreign cars, choosing instead to focus on the trucks and larger to mid-size vehicles that were not fuel efficient but had more power. The market they aimed for was the young guy who likes to drag race and have powerful cars, the older white male, rural folks, older folks. They also had too many models of similar cars. In other words, if their sales hadn't declined, they would not have failed, despite the union costs. Just like Ford didn't fail, despite union costs. (Ford was more innovate and had more fuel efficient vehicles.)

GM also had trouble with reliability ratings. That is a quality issue. And that is the fault of the big brass, who decided to make cars that would intentionally fail in a few years, so people would have to buy another car.

Case in point: I bought my last car in 1997. I looked extensively at Fords and GM vehicles. I researched vehicles on the internet. I bought a Subaru Forester because GM and Ford quite simply didn't make something like that. It wasn't that they had a similar vehicle but it cost more. They simply didn't make a small-med vehicle with a cargo area that got 20 mpg in the city that had a good a/c, decent horsepower, high reliability ratings, and a good safety record. Only the "foreign" makers did. I WANTED to buy American, but was unable to. They simply weren't marketing to ME.

[doc03]

15. Same here I wanted a mid-size pick-up in 2006

The reason was gas mileage and the full size ones wouldn't fit in my garage. I had bought Ford Rangers for 20 years but Ford just abandoned the Ranger and never updated them for a decade. I tried the Chevy Colorado and it was nothing but rattles and underpowered for towing a boat in SE Ohio's hills. The Dodge had a horrible reliability record and was a gas hog. So I was left with the Toyota Tacoma and Nissan Frontier to chose from. Both were great trucks but I settled on the Toyota.

[blue_onyx]

12. You feel the same about the financial institutions?

Should they have been allowed to fail?

Ford and Toyota aren't being punished. Toyota even said they wanted GM and Chrysler to survive. That's because they realize the damage done to the supplier network would hurt them as well. Thankfully for GM, Chrysler, and MI, you aren't making the decisions and Obama is.

[Honeycombe8]

9. Yes. Is the U.S. going to give GM more? nt

[Blue_Tires]

10. GM can be be viable with a little forward thinking

1. eliminate reduntant models and brands...all GM really needs is Chevrolet, Cadillac, Saturn and maybe GMC Truck -- all of their top products (especially the soon-to-be-dead Pontiac G8) need to be reeled in and re-aligned under one of those brands...

2. fully diversity the product offering -- everything from electric (PLEASE bring back and try to evolve the EV1) diesel, hybrid, to full-on performance offerings...It goes without saying to eliminate many of the badge-engineered SUV models which clog factory tooling...

3. (although this will never happen) if you want to go racing, participate in a race series which pays off with trickle-down technology for street cars--which means PULL OUT OF GODDAMNED NECKCAR which is little more than a glorified, overhyped, WAY overpriced advertising outlet costing tens of millions every season...

4. this is most important and the most underrated: improve the dealer experience for the customer -- this means better service, and less weasel tactics by focusing on quality dealers rather than quantity (and I know many dealerships are getting cut now)...Dealerships also have to be upgraded to a modern, universal look and feel -- no more of the old-assed kitschy holdovers from the 60s that are as clean and inviting as a Greyhound Bus station...

and 5, never forget that product is king -- if you have something customers want, they will move heaven and earth to get it...and no amount of money, magazine payoffs or flashy advertising can cover up a shitty product...

[Occam Bandage]

13. Yes, you of course can ask where your money is going. nt

[grantcart]

14. 50,000 jobs

also if GM survives and prosper we get all the money back that we put into it.