Bailing out the Detroit automakers

[jimotis4heisman]

Originally Posted by MaxBuck

I disagree; the real losers are Ford, Honda, Toyota and GM's other competitors who are constrained from using the same rules.

more favoritism and benefits to stack the deck in favor of gm. the real losers here are american taxpayers,

implies that it puts gm at a competitive advantage. or in other words a leg up on their competition, while short changing the irs. in your list you clearly should mention chrysler also, hince why it is not a union type thing as i think they over stretch, chrysler is much more union owned than gm. i doubt we might even see a profitable gm once we see this pent up demand blow out in the next few years. maybe, but it will be strapped on the back of the american tax payer if we do. long story short, tag an extra $16,000,000,000 to whatever number you see in the gm bailout total in tax savings... and note that this isnt a loan, its real live cash, every dollar, every cent is not leveraged against us, its taken directly from the potential coffers of the irs.

[MaxBuck]

Originally Posted by jimotis4heisman

implies that it puts gm at a competitive advantage. or in other words a leg up on their competition, while short changing the irs. in your list you clearly should mention chrysler also, hince why it is not a union type thing as i think they over stretch, chrysler is much more union owned than gm. i doubt we might even see a profitable gm once we see this pent up demand blow out in the next few years. maybe, but it will be strapped on the back of the american tax payer if we do. long story short, tag an extra $16,000,000,000 to whatever number you see in the gm bailout total in tax savings... and note that this isnt a loan, its real live cash, every dollar, every cent is not leveraged against us, its taken directly from the potential coffers of the irs.

Well, if GM were liquidated there would be no taxes paid in future by them, so we got that going for us.

[jimotis4heisman]

Originally Posted by MaxBuck

Well, if GM were liquidated there would be no taxes paid in future by them, so we got that going for us.

their however would be taxes by those entities which purchased the liquidated assets...

the house votes to toss 2b more at cash for clunkers.
House Votes to Extend 'Clunkers' Program - WSJ.com

i also find the whole "reimbursement" process unreal. apparently car dealers have sold cars with contingency of the applications being accepted by the feds, theyve offered a contractual transfer prior the completion of the sale and completion of the app by the feds. i dont want to discuss it to much since im far from an expert, i however spoke to a lawyer friend of mine this morning and his firm has been contacted by half a dozen "buyers" already. this appears it might be a boon the lawyers...

[Gatorubet]

Don't thank me guys...

[Jake]

I think I'd have more respect for our Prez if he just cut a check for $2 billion to the UAW and skipped the part where we pretended that wasn't the motivation behind all of this nonsense. At least that would be honest.

"Detroit" needed to be restructured under Chapter 11. They wouldn't have disappeared, but would've been reshaped into a cost model that could possibly survive without being carried on the backs of taxpayers. Of course, that would've involved shredding the unaffordable contracts with labor, and negotiating deals that make sense for the industry. Big Labor was never going to let that happen, and they gave millions to Dems to make sure it didn't happen...at our expense.

I haven't bought a Chrysler or GM car in years, and I never will again.

[Sdgobucks]

Originally Posted by jimotis4heisman

U.S. ‘Clunkers’ Auto Program Suspended, Senator Says (Update1) - Bloomberg.com
here is your linkage for the halt.

also they did a switcheroo on a bunch of cars...
Cash-for-clunkers auto eligibility list changed - USATODAY.com

basically our open and transparent govt changed govt estimated mileage on in excess of 100 cars, many of the cars had been on the road for more than 10 years...

Mich. lawmakers push to extend 'CARS'
word is we may, "throw a little more money at this program"

direct injection into government motors and the labor unions...

I disagree with the last part, this CFC bull[censored] is every bit as much of a bail out for the Japanese and Koreans as it is for the big three. As far as I heard, Honda, Toyota, Kia, and the rest are all just as eligible.

At least the money they throw at the big three with CFC will be a little less money that they will throw at them in another way. I would rather the domestic companies get the money (even as broken as they are) than see tax dollars go over seas.

[fourteenandoh]

The question is, is this an environmental thing, or an automotive stimulus? if it is the former, then the company selling the car shouldn't matter. if the latter, then it should be US companies only.

[MaxBuck]

Every time I think I'm no longer a Republican, the Democrats pull a stunt like this.

[jimotis4heisman]

Originally Posted by fourteenandoh

The question is, is this an environmental thing, or an automotive stimulus? if it is the former, then the company selling the car shouldn't matter. if the latter, then it should be US companies only.

if its environmental then any upgrade should count, not just cars under 18mpg, heck if your car gets 23 and you upgrade you should get credit, or 28, or 34, or 50... a reduction is a reduction... and gaining 3 or five or whatever number for every auto would be a generally good thing...

[Tresselbeliever]

And it's not like there's no one out there looking to make and sell cars in the US. If the government ever allows BYD to take over the fixed assets of the domestic manufacturers, there is no doubt that they would find a profitable way to do it with the advise and contacts from Warren Buffet, who had put down $200 million initially on the company, which has now grown to 1.25 billion dollars.

But that would mean no one would buy out UAW's pension plans and outrageous salaries, and that Obama would not secure the union vote for '12. That's why American taxpayers will continue to subsidize their carmakers.

[jimotis4heisman]

Cash For Clunker Policy Is Crackpot Economics - WSJ.com

...
The buying spree is good for the car companies, if only for the short term and for certain car models. It’s good, too, for folks who’ve been sitting on an older car or truck but weren’t sure they had the cash to trade it in for something new. Now they get a taxpayer subsidy of up to $4,500, which on some models can be 25% of the purchase price. It’s hardly surprising that Peter is willing to use a donation from his neighbor Paul, midwifed by Uncle Sugar, to class up his driveway.
On the other hand, this is crackpot economics. The subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years.
...
t isn’t clear this will even lead to more auto production over time, since the clunker cash may simply cause buyers to move their purchases forward. GDP will get a fillip in the third and perhaps fourth quarters, which will please the Obama Administration. But the test will be if auto sales hold up next year and into the future once the clunker checks go away. The debate over the subsidy may even have prolonged this year’s auto slump as buyers delayed their purchases waiting for the free lunch.
All of Washington professes to be surprised that the $1 billion allocated to the subsidy has been used up so quickly, but giving away money is one thing government knows how to do. The Clunkers who are in Congress are now patting themselves on the back for their great success, and the House quickly voted to pass out another $2 billion in clunker coupons. With a $1.8 trillion budget deficit, who’s going to notice this pocket change?
Clearly, we spoilsports need an attitude adjustment to Washington’s new economics. And since money is no object, let’s give everyone a $4,500 voucher for other consumer goods. Let’s have taxpayers subsidize the purchase of kitchen appliances, women’s clothing, the latest Big Bertha driver—our Taylor-made is certainly a clunker—and new fishing boats. These are hardly less deserving of subsidies than cars, and as long as everyone thinks we can conjure wealth out of $4,500 giveaways, let’s go all the way.

...

some very interesting points on the "consumer bailout" as some have begun to dub it...

[xcrunner]

Originally Posted by jimotis4heisman

if its environmental then any upgrade should count, not just cars under 18mpg, heck if your car gets 23 and you upgrade you should get credit, or 28, or 34, or 50... a reduction is a reduction... and gaining 3 or five or whatever number for every auto would be a generally good thing...

Not necessarily... In fact I wonder if 18 mpg is too high a bar.
There's obviously a gigantic difference between how much pollution you reduce when you upgrade from 14 mpg to 20 mpg--much more than if you upgrade from 45 to 60. Switching from 14 mpg to 20 is a switch from about 7 gallons per hundred miles to 5, so a savings of 2... Multiply that over thousands of miles and it's a big difference. From 45 to 60 is something a little over 2 to something a little under 2.. Very negligible difference.

So of course, any difference is good: But then you end up with wasted cars. People build an entire car, it could get SLIGHTLY (negligible) better gas mileage, so they send it in and get a new one, which requires many more resources to be built. In the end you get a net negative effect on the environment.

[Ttown]

GM says the bailout isn't going to hit it's goal and 14,000 more layoffs will have to be made.

GM buyout offers falls short of goal, layoffs loom.

GM has about 54,000 factory workers and wants to end the year with 40,500, a cut of about 13,500. Monday's report means that about 7,500 too few workers took the offers, setting the stage for more layoffs.
Link

[BuckeyeMike80]

Originally Posted by jimotis4heisman

Cash For Clunker Policy Is Crackpot Economics - WSJ.com

some very interesting points on the "consumer bailout" as some have begun to dub it...

hey look, yet another program that I don't qualify for.....

In fact I think the only government program I DO qualify for is more taxes (since I have a job), no help in the way of government funding for anything (I have a GOOD job so I make too much) and I'm not a drag on society (there goes welfare)....

Nice....BTW there isn't squat worth buying out there right now in my area anyway.

[jimotis4heisman]

Originally Posted by xcrunner

Not necessarily... In fact I wonder if 18 mpg is too high a bar.
There's obviously a gigantic difference between how much pollution you reduce when you upgrade from 14 mpg to 20 mpg--much more than if you upgrade from 45 to 60. Switching from 14 mpg to 20 is a switch from about 7 gallons per hundred miles to 5, so a savings of 2... Multiply that over thousands of miles and it's a big difference. From 45 to 60 is something a little over 2 to something a little under 2.. Very negligible difference.

So of course, any difference is good: But then you end up with wasted cars. People build an entire car, it could get SLIGHTLY (negligible) better gas mileage, so they send it in and get a new one, which requires many more resources to be built. In the end you get a net negative effect on the environment.

certainly ill entertain your debate of diminishing returns has some validity. however i dismiss it. was the goal to increase fuel econ, if so all vehicles should be vaild if they meet the requirements. a person driving a camry that got say 22 mpg should be just as incentivized to increase their mileage as the person who drives a pick up that gets 12mpg...

ill also note their were some good deals, a friend of mine traded in his early 90s "farm truck" got 4500 plus dealer matched 4500 plus got a 1500 rebate for a total of 10500, then bought an avenger...