Was The Government Bailing Out GM A Good Thing?

[SavageTaker]

I think that the government bailing out GM was actually a good thing. Now, I know that some people think it’s a bad thing because the government buying into a corporation and owning the majority is considered to be a communist or socialist thing (whichever one it is) but please read what I have to say and maybe I’ll change your mind. If you still disagree after reading my post, then respond to me so that we can have a debate.

My first reason why I think the government bailing out GM was a good thing is because they saved thousands of jobs. According to Wikipedia, GM employs 244,500 people. That’s a lot of jobs that would have been lost had the government not stepped in. But fortunately they did and they were able to save all of those jobs. But why is it a good thing that those jobs were secured? Well, it’s because one of the things that keeps the economy running is the consumers. If the consumers aren’t consuming then that means the economy would suffer. Thanks to the government stepping in and saving those jobs it means that those people are still making money and are able to go out and buy products which in turn help the ailing economy.

My second reason is that with the government owning GM, they can change the way cars are made. The reason that more people started buying more foreign cars when gasoline doubled in 1973 and Chrysler had losses that exceeded $1 billion in 1979 is because foreign cars saved energy, saved money, and because they offered longer warranties. Now with the government having the majority ownership, they can do things that will appeal to the people and force them to buy American made cars which will help the auto-industry and the economy.

My last and final reason why I think the government bailing out GM was a good thing is because that if GM ends up recovering then that means that a lot of the money they end up making will go to the government. If the money ends up going to the government (if they still own the majority of GM by the time they recover or if they recover) then that means it will not only help the economy but they could make sure the money would go to good things.

Those are my three reasons why I think that the government bailing out GM was a good thing, but before I ask what your thoughts are I want to make it clear that I don’t support the government buying into corporations because then it’s considered a communist or socialist type of thing (which I don’t think is good) but this is one of those times that I think it’s okay for them to do so because of the good things that can happen. Now I want to know what your thoughts are.

 

[FromTheSouth]

I think that the government bailing out GM was actually a good thing. Now, I know that some people think it’s a bad thing because the government buying into a corporation and owning the majority is considered to be a communist or socialist thing (whichever one it is) but please read what I have to say and maybe I’ll change your mind. If you still disagree after reading my post, then respond to me so that we can have a debate.

I'll read it, but I don't think my mind will change.

My first reason why I think the government bailing out GM was a good thing is because they saved thousands of jobs. According to Wikipedia, GM employs 244,500 people. That’s a lot of jobs that would have been lost had the government not stepped in.

The 244,500 jobs are all union jobs. The unions are a bad thing. Unions were established to ensure workplace safety and help employees retain jobs. Since the inception of OSHA, unions have expanded their influence on companies, and as a result, have raised the wages and secured astronomical benefit packages for their employees. The benefits and pension of UAW members rivals any other position. They get five years of full salary upon retirement, full medical, dental, and vision forever, all at the cost of the consumer. Japanese companies, like Toyota and Nissan, have decided to make their cars in non-Union states, like Texas. They do not have to pay workers as much, and thus, the car comes off the line for a much lower cost, with the savings passed onto the consumer. Now, if there are two comparable cars, one is $15,000 and one was $22,000, which would you buy? The answer is simple for the majority of consumers. When you don't have to pay someone $48 an hours to screw on lug nuts, and pay him $75,000 a year for five years after he retires, you can make a less expensive car. GM is shooting itself in the foot by dealing with the unions.

Filing for reorganization bankruptcy would allow them to relocate to a non union state, employ 500,000 people instead, non union, not have to hide the crushing demands of the unions in the cost of the car, and compete. Not bailing out GM would have allowed for the process of deunionizing the auto industry to begin. This is how the American car industry should survive. Market based solutions are always better than government solutions. It was the maket that started using ground oil instead of whale oil. It was the market that built the rails. The governments attempts to change the nature of American life are always failures. Look at The Postal Service, Amtrak, and NASA. All three of these American institutions are examples of inefficient, incompetent failures that are always over budget and asking for more money.

Furthermore, the government gave 20% of GM to the unions, further entrenching the problem that has plagued GM for the last 35 years. I would argue that the government has made it worse for the future of GM, and by extension, the entire American auto industry.

And I didn't even need to call anyone a commie.

But fortunately they did and they were able to save all of those jobs. But why is it a good thing that those jobs were secured? Well, it’s because one of the things that keeps the economy running is the consumers. If the consumers aren’t consuming then that means the economy would suffer.

The consumers aren't consuming American cars. They're buying Nissan's and Toyotas. 2008 was the worst year for the American auto industry since 1992.

http://www.huffingtonpost.com/steve-parker/2008-car-sales-every-carm_b_155480.html


Of the top ten cars sold in America this year, only three are American, and two are trucks who are often sold in fleets to companies who employ laborers. Work truck sales (of the Silverado and F-150) artificially inflate the numbers, showing that consumers want foreign cars, and this is due solely to price concerns.

http://online.wsj.com/mdc/public/page/2_3022-autosales.html

Thanks to the government stepping in and saving those jobs it means that those people are still making money and are able to go out and buy products which in turn help the ailing economy.

They'd still be able to make money by disavowing their unions. GM isn't out of the woods yet, and if it fails, the government is out billions of dollars with no way to recover. The unions are the problem and a pro-union government is not helping any.

My second reason is that with the government owning GM, they can change the way cars are made.

This isn't the government's job. Automobiles are developedproduced, and sold within the free market. Very minimum gas standards and safety features are understandable, and grants for hybrid production are excusable, but government mandates to double fuel mileage do not nothing but drive up the price of the automobile. Furthermore, the government has no business dipping into the market, as they exist to regulate interstate trade (tariffs and taxes) and protect the people. This is an example of government overreaching into the lives of Americans.

The reason that more people started buying more foreign cars when gasoline doubled in 1973 and Chrysler had losses that exceeded $1 billion in 1979 is because foreign cars saved energy, saved money, and because they offered longer warranties.

I would argue that is solely a cost issue. The environment is a great subject to rattle a saber, but on election day, as well as purchasing day,people vote or buy based on who is going to leave more money in their pockets.

Now with the government having the majority ownership, they can do things that will appeal to the people and force them to buy American made cars which will help the auto-industry and the economy.

I hope you don't mean this. I also hope that you don't hope the government forces anyone to buy anything. I also hope that understand the consumer has a right to buy whatever he wants, and that the lower of prices of the foreign cars are a benefit that they have every right to exploit in a free market.

My last and final reason why I think the government bailing out GM was a good thing is because that if GM ends up recovering then that means that a lot of the money they end up making will go to the government.

20% of that money goes to the Canadian government courtesy of us. Furthermore, in a free market, where GM would be allowed to compete on the terms of the market, would generate quite a bit of tax revenue anyway.

Where do you get the idea that large corporations are not trying to make a profit? Why do people treat that profit as if it is a bad thing? It seems like the left in this country has put the idea into the head's of Americans that jealousy is a good thing, and that jealousy should be taken out on private industry. They've even directed that anger at the industries they want to change; automobile, energy, and healthcare. Meanwhile, telecom and technology get to profit as much as %230 every year unchecked, and in fact, aided, by the government. I would call this unfair, I believe the courts will call the illegal within the next couple of years. All it takes is a legal challenge to get in front of the Supreme Court.

If the money ends up going to the government (if they still own the majority of GM by the time they recover or if they recover) then that means it will not only help the economy but they could make sure the money would go to good things.

First of all, that money would be going to China, not our government. And, I love this blanket assumption that the government is going to spend money well. What has happened in America in the last 30 years to make you think that the government is going to spend that money well? Is it the ten trillion dollar debt? Is that what makes you think the government is responsible with money. Go to Recovery.gov and read some of the projects that the stimulus is funding, and then tell me if eight million dollars to build a frisbee golf course in Austin, Texas is a responsible use of tax payer money.

Those are my three reasons why I think that the government bailing out GM was a good thing, but before I ask what your thoughts are I want to make it clear that I don’t support the government buying into corporations because then it’s considered a communist or socialist type of thing (which I don’t think is good) but this is one of those times that I think it’s okay for them to do so because of the good things that can happen. Now I want to know what your thoughts are.

I think you are completely wrong.

 

[SavageTaker]

The 244,500 jobs are all union jobs.

But it’s still 244, 500 jobs that would have been lost if the government decided not to bail out GM. Don’t you think it’s better to keep all of those people working over putting them in the unemployment line?

The unions are a bad thing.

I know you’re going to tell me why you think they are bad, but personally I think that they can be good if done properly. Take a teacher’s union we have here in Florida (it’s actually called an association but some teachers refer to it as a union) for example, to be honest it’s not really that good. According to some of my teachers, they haven’t received raises in over 2 years and there have been other things that make them say it’s a bad union. I won’t go too much into it but that would basically be an example of a “bad” union, but it doesn’t mean unions are always a bad thing.

Unions were established to ensure workplace safety and help employees retain jobs.

I don’t see what’s bad about that at all. Surely you would want a union for whatever your job is if it’s going to ensure you a safe workplace and help you retain your job, no?

Since the inception of OSHA, unions have expanded their influence on companies, and as a result, have raised the wages and secured astronomical benefit packages for their employees. The benefits and pension of UAW members rivals any other position. They get five years of full salary upon retirement, full medical, dental, and vision forever, all at the cost of the consumer.

I don’t see what’s wrong with that. They are just looking out for their employees and getting them the best possible pay and benefit packages they can get them. I know I would want to have a union for whatever job I had if it’s going to get me those things. But maybe that’s just me.

Japanese companies, like Toyota and Nissan, have decided to make their cars in non-Union states, like Texas. They do not have to pay workers as much, and thus, the car comes off the line for a much lower cost, with the savings passed onto the consumer. Now, if there are two comparable cars, one is $15,000 and one was $22,000, which would you buy?

I know this might sound ridiculous, but I wouldn’t buy the $15,000 car just because it’s less expensive than the $22,000 car. I would buy the one that was better and had a longer warranty even if it’s a little more expensive. But then again, maybe that’s just me.

Filing for reorganization bankruptcy would allow them to relocate to a non union state, employ 500,000 people instead, non union, not have to hide the crushing demands of the unions in the cost of the car, and compete.

Even if they filed for bankruptcy, wouldn’t it cost them a ton of money to do that?

Not bailing out GM would have allowed for the process of deunionizing the auto industry to begin. This is how the American car industry should survive. Market based solutions are always better than government solutions. It was the maket that started using ground oil instead of whale oil. It was the market that built the rails. The governments attempts to change the nature of American life are always failures. Look at The Postal Service, Amtrak, and NASA. All three of these American institutions are examples of inefficient, incompetent failures that are always over budget and asking for more money.

I understand that you feel unions are a bad thing, but my guess is that most of their employees wouldn’t be very happy knowing that they aren’t going to get some if the things they would normally get with unions if GM decided to relocate to place where they wouldn’t have to deal with unions. Doesn’t GM want to keep their employees happy?

And I didn't even need to call anyone a commie.

There was no need to call me a commie anyways because I don’t agree with communism; I just think that this is one of the times that it was good for the government to step in because of the good things that could happen. But it’s not something that I want to see happening often.

The consumers aren't consuming American cars.

And that’s something that the government can now try to change.

They're buying Nissan's and Toyotas. 2008 was the worst year for the American auto industry since 1992.

http://www.huffingtonpost.com/steve-parker/2008-car-sales-every-carm_b_155480.html


Of the top ten cars sold in America this year, only three are American, and two are trucks who are often sold in fleets to companies who employ laborers. Work truck sales (of the Silverado and F-150) artificially inflate the numbers, showing that consumers want foreign cars, and this is due solely to price concerns.

http://online.wsj.com/mdc/public/page/2_3022-autosales.html

Why are people buying foreign cars? Because they are good cars that are cheaper, save them money on fuel, and because they offer longer warranties. With the government owning the majority of GM, they can change the way GM makes their cars and try to make them the way people want them to be so that they are more inclined to buying American made cars.

They'd still be able to make money by disavowing their unions.

Then that means the employees wouldn’t be happy, and that’s not a very good thing, now is it?

GM isn't out of the woods yet, and if it fails, the government is out billions of dollars with no way to recover. The unions are the problem and a pro-union government is not helping any.

I think that’s the main concern with people. If it fails then a ton of money is gone, but if their plan succeeds then a ton of money could be gained. I can’t really argue against you on this one because it’s a concern I have too.

I would argue that is solely a cost issue. The environment is a great subject to rattle a saber, but on election day, as well as purchasing day,people vote or buy based on who is going to leave more money in their pockets.

I guess that could be the case, but people don’t always buy based on who is going to leave more money in their pocket. I remember when my grandma bought a new care about 2 years ago; she could have bought either a Ford or Suzuki. The Ford was actually cheaper but she wasn’t going to get the same warranty as she would with Suzuki and according to the people that helped her, she would be spending a ton more money on gas on a Ford car. So ultimately she decided to get the Suzuki. Maybe this is just one example, but I think more people should buy depending on which car is better, even if it’s a little bit more expensive.

I hope you don't mean this. I also hope that you don't hope the government forces anyone to buy anything. I also hope that understand the consumer has a right to buy whatever he wants, and that the lower of prices of the foreign cars are a benefit that they have every right to exploit in a free market.

I just worded things funny. I didn’t really mean that they could force people to do that, I hope you understood what I was trying to say though.

20% of that money goes to the Canadian government courtesy of us. Furthermore, in a free market, where GM would be allowed to compete on the terms of the market, would generate quite a bit of tax revenue anyway.

Before I make a formal respond, do you think you can tell me why 20% of the money goes to the Canadian government?

Where do you get the idea that large corporations are not trying to make a profit?

When did I say they aren’t trying to make a profit? Of course they are trying to do, why else would they be in business if they didn’t want to make money?

Why do people treat that profit as if it is a bad thing?

I’m not treating it as a bad thing; I don’t why other people do though.

First of all, that money would be going to China, not our government.

Like with what you said about money going to the Canadian government, can you explain to me why that money would go to China?

And, I love this blanket assumption that the government is going to spend money well. What has happened in America in the last 30 years to make you think that the government is going to spend that money well? Is it the ten trillion dollar debt? Is that what makes you think the government is responsible with money. Go to Recovery.gov and read some of the projects that the stimulus is funding, and then tell me if eight million dollars to build a frisbee golf course in Austin, Texas is a responsible use of tax payer money.

While I don’t agree with the decisions the government makes (like the example you gave) I still do have some hope that they would do something right with this if it succeeds.

I know this is probably not the response you would have expected, but at least I am responding.

 

[FromTheSouth]

But it’s still 244, 500 jobs that would have been lost if the government decided not to bail out GM. Don’t you think it’s better to keep all of those people working over putting them in the unemployment line?

1. You could rehire everyone of them if they just disavowed the union.

2. You could go hire people in other states.

I know you’re going to tell me why you think they are bad, but personally I think that they can be good if done properly. Take a teacher’s union we have here in Florida (it’s actually called an association but some teachers refer to it as a union) for example, to be honest it’s not really that good. According to some of my teachers, they haven’t received raises in over 2 years and there have been other things that make them say it’s a bad union. I won’t go too much into it but that would basically be an example of a “bad” union, but it doesn’t mean unions are always a bad thing.

Unions abuse their power, threaten to halt production, and make a general scene all under the guise of helping the worker, when, in fact, all they do is cripple the company.

Teachers' and government workers' unions are a completely different ideal all together. When salaries are decided by government, you need a lobby group to ensure that benefits and employment are retained. The UAW doesn't need a lobby group. The UAW brass doesn't even lobby, they just intimidate management into giving in to every demand. These demands cost the company more, and causes prices to rise. The UAW is what is pushing American car companies out of business.

I don’t see what’s bad about that at all. Surely you would want a union for whatever your job is if it’s going to ensure you a safe workplace and help you retain your job, no?

You need to read the next passage.

I don’t see what’s wrong with that. They are just looking out for their employees and getting them the best possible pay and benefit packages they can get them. I know I would want to have a union for whatever job I had if it’s going to get me those things. But maybe that’s just me.

They're not getting them the best package they can get for them. They're using mob tactics to strong arm management into giving in to every demand. It is a huge difference. Toyota and Nissan hire people in non-union states, pay them less, but still pay them very well, and pass the savings onto the consumer. Which is why 9 or the top 12 selling cars in America are foreign.

I know this might sound ridiculous, but I wouldn’t buy the $15,000 car just because it’s less expensive than the $22,000 car. I would buy the one that was better and had a longer warranty even if it’s a little more expensive. But then again, maybe that’s just me.

My argument was about comparable cars. That means the warranty, quality, etc. would have, at most, negligible differences. In my situation, you would be overly patriotic or idiotic to buy the American car.

Even if they filed for bankruptcy, wouldn’t it cost them a ton of money to do that?

The debts are paid over time. The court's decide at what pace the company pays back the debts, and it keeps them from having to lay people off in the short term.

I understand that you feel unions are a bad thing, but my guess is that most of their employees wouldn’t be very happy knowing that they aren’t going to get some if the things they would normally get with unions if GM decided to relocate to place where they wouldn’t have to deal with unions. Doesn’t GM want to keep their employees happy?

Tough shit. They don't deserve it. Guys who screw on lug nuts get upwards of $40 an hour. Give me a fucking break. Before I hear one more complaint about actors and athletes, I want this fucking investigated. Why are UAW members so important that they get full salary on a pension, for five years? Cops don't even get that.

Furthermore, the UAW's constant demand for rising salaries is the reason for Detroit's disrepair. The constant raises have raised Detroit's cost of living, expanding the number of impoverished people, those who don't work for the car companies.

There was no need to call me a commie anyways because I don’t agree with communism; I just think that this is one of the times that it was good for the government to step in because of the good things that could happen. But it’s not something that I want to see happening often.

I didn't call you a commie. I was applauding myself for saying union without bringing up the way Obama wants to start a worker's party to constantly sling mud at the elite out of jealousy.

And that’s something that the government can now try to change.

That's not the government's fucking job. What makes you think that the government should have any influence on the purchases American's make? That is ludicrous and absurd. We live in a free market. I don't know why you have the mystical idea that more government intrusion on our personal lives and decisions is a good thing, but it's not. The free market has always shown itself to be superior in changing methods of production than the government has. The government shouldn't be trying to change anything. It should be staying the fuck out of the way and clearing a path for GM to make as much money as possible. Giving almost half the company to the Unions and the Canadian government is not fucking doing that. It is entrenching it in some kind of quasi-governmental role. This is the same role that destroyed the housing industry. But hey, the more industries you can destroy, the longer the Democrats can keep control, so GoBama!!!!

Why are people buying foreign cars? Because they are good cars that are cheaper, save them money on fuel, and because they offer longer warranties. With the government owning the majority of GM, they can change the way GM makes their cars and try to make them the way people want them to be so that they are more inclined to buying American made cars.

GM is a private company. How hard is that to understand? The government should not be telling it what kind of cars to make. That isn't how it works.

Furthermore, the government wouldn't make them make affordable cars that people want, they would make them make cars that the government wants made. Like I said, the environment is a good issue to raise to get attention, but in all reality, no one really cares.

Then that means the employees wouldn’t be happy, and that’s not a very good thing, now is it?

I don't fucking care. These are the same employees who have abused the situation. It is the fucking employees fault that GM is in trouble in the first place. If it was a CEO running the company into the ground he would be fired. Since it's the employees running the company into the ground, they should be fired. You are reading way to much of the administrations hate against management and executives. Making money is a good thing. The people who went to college, got more education, and are more valuable to the company should make more, a lot more, than someone who puts together the car on an assembly line. Any idiot can do that. Fuck the employees. Their Union is the cause of this mess.

I think that’s the main concern with people. If it fails then a ton of money is gone, but if their plan succeeds then a ton of money could be gained. I can’t really argue against you on this one because it’s a concern I have too.

I would bet on failure. Look at the industries the government has it's hand in. The Postal Service sucks, and is losing so much money that they will not be delivering on Saturdays soon. Amtrak is a failure. The mortgage industry collapsed. So, why do you want the government to run the auto industry? Why do you have any faith in them at all?

I guess that could be the case, but people don’t always buy based on who is going to leave more money in their pocket. I remember when my grandma bought a new care about 2 years ago; she could have bought either a Ford or Suzuki. The Ford was actually cheaper but she wasn’t going to get the same warranty as she would with Suzuki and according to the people that helped her, she would be spending a ton more money on gas on a Ford car. So ultimately she decided to get the Suzuki. Maybe this is just one example, but I think more people should buy depending on which car is better, even if it’s a little bit more expensive.

Then you have made my point for me. At the end of the day, she has more money in her pocket, with better protection, by buying a foreign car that wasn't made by greedy evil union members in Michigan. Case closed.

I just worded things funny. I didn’t really mean that they could force people to do that, I hope you understood what I was trying to say though.

But there are plenty of other examples where you encourage the government to overreach their power. You want the government to force GM to make certain types of cars. It doesn't matter if you meant it here, because you praise socialism throughout your post.

Before I make a formal respond, do you think you can tell me why 20% of the money goes to the Canadian government?

Because there are GM factories in Canada.

When did I say they aren’t trying to make a profit? Of course they are trying to do, why else would they be in business if they didn’t want to make money?

Then explain this to your President, who has demonized the executives and profits in the industries that he wants to control. He has no interest in telecom, because he says nothing about the way they double their money while shooting 300 kHz of cancer into our brains.

I’m not treating it as a bad thing; I don’t why other people do though.


Like with what you said about money going to the Canadian government, can you explain to me why that money would go to China?

Because we've borrowed two trillion dollars from them in the last year.

While I don’t agree with the decisions the government makes (like the example you gave) I still do have some hope that they would do something right with this if it succeeds.

It is doomed to failure, likely illegal, and will be the death of GM, and probably the entire American auto industry.

I know this is probably not the response you would have expected, but at least I am responding.

You did fine.