[roteague]

"A recent FT article discussing a study by the NY Federal Reserve that estimated that each job within NYC's financial industry was responsible for generating 2.5 additional jobs within the city, got me thinking about the number of jobs that are dependant on the American auto industry. I started to do some research on the subject and wasn’t to find anything tremendously concrete, I found numbers as low as two for specific communities and recall a range of 7-9 being thrown out during a NPR story a few year's back but wasn’t able to find it to confirm.

Still while a specific Wall St. job may carry a higher salary, it's quite possible that auto industry jobs may have a larger economic impact due to the large number of actors involved in producing, selling and maintaining a car, the fact auto industry layoffs occur in large bunches, and are indicative of economic problems (e.g. eroding demand) impacting the industry as a whole.

You don't need to be an economist to realize that a single automotive plan probably has more support staff and ancillary industries dependent on it, than your typical banking office, not to mention the fact that Wall St. layoffs aren't usually the result of the closing down an entire operation the way auto industry plant closings are."

FULL ARTICLE

 

[calgaryhhr]

Its an interesting problem with no real solution as I see it.

Many people advocate that GM can't fail because of the economic impact that would result from it. Too many people would lose their jobs and too much money would be lost and the economy would tank. Many people (possibly even those same people) are against "socialism" and don't want to see the government getting involved in matters such as this. The free market and capitalism should be at play and if GM can't find the resources they should be closing the doors for good.

Dang, what to do?

 

[Dr.Show-Me]

They were discussing this on CNBC yesterday, and brought up the number of retirees GM pays for, including health care costs. They said that the direct and indirect number of jobs in the auto industry was more than 2 million people. They concluded that GM and Ford were too important to let fail.* It comes down to what's good for GM is good for the USA. Instead of nationalization, the government should provide loans and grants to get Ford and GM through until 2012, when all the new more efficient cars would be in production.* This is similar to giving Wall Street money to keep them in business, but then withdrawing to let them pursue their goals under better regulation.

 

[genjy]

Yesss

I just happen to like Communism.

 

[Dr.Show-Me]

CNBC guys are not communists, nor am I. They are against government involvement except to bail out their own bacon, and expressed this as important for the country. Get in now, get out after the crisis is ended. A short-term necessity to keep an American car industry.

 

[ConcordeNick]

CNBC guys are not communists, nor am I. They are against government involvement except to bail out their own bacon, and expressed this as important for the country. Get in now, get out after the crisis is ended. A short-term necessity to keep an American car industry.

What most people fail to realize is that the manufacturing sector and automotive sector are intertwined. If you lose the automotive sector, it has implications for defense and national security. It isn't "just" people losing jobs. There is even more at stake. Some government intervention might be necessary as a temporary measure and then have the loans repaid once the industry recovers. In the meantime, our "leaders" should be spekaing out and encouraging people to buy North American cars and other products. It comes down to personal choice but there is a personal responsibility too.

Nick
:bounce:

 

[throwback]

Not matter how you spin it, at the end of the day you have state control of industry. Based on the track record of GM and Chrysler why are some folks assuming they will magically be profitable in 2010? Their competition will not be sitting idle during the next 2 years. Lack of money is not the reason GM has mismanaged their brands for the last 6 years.

 

[2002 Caddy]

Nationalizing Detroit? Is it a Good Idea?

Another easy question... the simple answer is NO... this is never a good idea...

BUT the real question is
Compared to what?

When you compare the other option, which is Chrysler gone this year, GM gone next year, and Ford gone within 5 years.

It might be something that we need too do...
Like really bad tasting medicine.
The impact of these giants failing (and they ARE in BIG BIG trouble) will be DEVASTATING on the economy.

 

[johnnyl321]

CNBC guys are not communists, nor am I. They are against government involvement except to bail out their own bacon, and expressed this as important for the country. Get in now, get out after the crisis is ended. A short-term necessity to keep an American car industry.

they're against a govt bailout EXCEPT to bail out their own bacon....isn't that an oxymoron?
If they want to let capitalism thrive, let it thrive. survival of the fittest and whatnot. personally i think if they want to bailout some folks, why not divvy up that 700bil among all the american citizens? what would that be each, something like 200k. that would buy an awful lot of cars, houses and walmart items!!!

 

[BigThreeForever]

There is this bizarre notion in America that we - and only we - have the right answers to each and every problem, and that temporarily departing from the 1880s laissez-faire business playbook will herald the imminent advent of Marxism-Leninism.

Hardly. The semi-nationalization of Detroit - if it actually happens - is just an emergency measure for an insane economic situation.

The Japanese, Germans, Koreans, French, et al, would all do the same, or something equivalent, if their automotive sector was teetering on the very brink of total collapse.

Sometimes, you just gotta do what you gotta do . . . . I'm not fazed in the least by the prospect.

 

[genjy]

Using socialist/communist solutions to rescue the U.S.

I like the sound of that.


I think the U.S. government owes the USSR, N.Korea, and Vietnam an apology.

 

[t-rex]

There is this bizarre notion in America that we - and only we - have the right answers to each and every problem, and that temporarily departing from the 1880s laissez-faire business playbook will herald the imminent advent of Marxism-Leninism.

Hardly. The semi-nationalization of Detroit - if it actually happens - is just an emergency measure for an insane economic situation.

The Japanese, Germans, Koreans, French, et al, would all do the same, or something equivalent, if their automotive sector was teetering on the very brink of total collapse.

Sometimes, you just gotta do what you gotta do . . . . I'm not fazed in the least by the prospect.

I agree completely.

But the truth is, most Americans (Midwesterners especially) would rather destroy the country than adopt an practice that America didn't invent.

Half the reason this country's a crumbling mess is because of the failure to implement any sort of sane and reasonable practices pioneered elsewhere on Earth.

GM typifies the American attitude: we're going to do it "the American" way — in GM's case, building ugly, sloppy, unreliable cars — rather than adopt good ideas from elsewhere and apply them appropriately.

Americans SERIOUSLY need to get off this "we do everything better" kick. Such thinking will be this country's undoing.

 

[t-rex]

There is this bizarre notion in America that we - and only we - have the right answers to each and every problem, and that temporarily departing from the 1880s laissez-faire business playbook will herald the imminent advent of Marxism-Leninism.

Hardly. The semi-nationalization of Detroit - if it actually happens - is just an emergency measure for an insane economic situation.

The Japanese, Germans, Koreans, French, et al, would all do the same, or something equivalent, if their automotive sector was teetering on the very brink of total collapse.

Sometimes, you just gotta do what you gotta do . . . . I'm not fazed in the least by the prospect.

I agree completely.

But the truth is, most Americans (Midwesterners especially) would rather destroy the country than adopt an practice that America didn't invent.

Half the reason this country's a crumbling mess is because of the failure to implement any sort of sane and reasonable practices pioneered elsewhere on Earth.

GM typifies the American attitude: we're going to do it "the American" way — in GM's case, building ugly, sloppy, unreliable cars — or no way at all, rather than adopt good ideas from elsewhere and apply them appropriately.

Americans SERIOUSLY need to get off this "we do everything better" kick. Such thinking will be this country's undoing.

 

[PRO_USA1776]

The Japanese, Germans, Koreans, French, et al, would all do the same, or something equivalent, if their automotive sector was teetering on the very brink of total collapse.

ahh....they have all done it. I am sick of Americans always being so negative, ask yourself, if you have such good ideas, why don't you work for GM Ford or Chrysler? Talk is cheap.....do someting. I am going to graduate school to get a degree in manufacturing!

 

[supermoto]

I agree completely.

But the truth is, most Americans (Midwesterners especially) would rather destroy the country than adopt an practice that America didn't invent.

Half the reason this country's a crumbling mess is because of the failure to implement any sort of sane and reasonable practices pioneered elsewhere on Earth.

GM typifies the American attitude: we're going to do it "the American" way — in GM's case, building ugly, sloppy, unreliable cars — or no way at all, rather than adopt good ideas from elsewhere and apply them appropriately.

Americans SERIOUSLY need to get off this "we do everything better" kick. Such thinking will be this country's undoing.

Why stereotype a group of people? Is it because you think you're in a position to look down on someone with different views than you?

The reason our country is headed down is because of all those that want more than they work for and want to blame others instead of themselves. Is it crumbling, maybe to some. Scream recession loud and long enough and we'll have one. Government requiring lenders to provide mortgages to too many people that shouldn't have them was a recipe for failure, but government isn't accepting blame for their mistake.

I don't think my 94 Chevy truck is ugly or sloppy and with 264k and no major problems, hardly unreliable. The 07 Tundra with camshaft problems, weak tailgates and transmission issues doesn't sound like their setting a better standard. Appearance is subjective, but I don't call it pretty either.

Most of the assembly plants built in the last ten years have been for SUV's or trucks. Most of the growth has been in those segments, yet Toyota is never accused of focusing on trucks and SUV's. The last refresh for the Corolla was rather tame and the Camry wasn't much better. Toyota has been losing more share in Europe than GM or Ford. Toyota is seeing some major declines in sales here. If Chrysler goes under most of those sales they have would migrate to GM and Ford, which would help them weather the down turn easier, not guarantee they'd be next.

 

[baloo]

Based on the track record of GM and Chrysler why are some folks assuming they will magically be profitable in 2010?

I've been wondering that as well. GM was losing quite a lot of money before gas prices exploded and the financial market blew up. Yeah, there are the union contracts, but GM's product mix will be far from ideal, and freezing development is not going to make them more competitive, either.

 

[eaton53]

I think the government should nationalize GM, then mount hostile takeovers of Toyota and Honda.

 

[Josenez11]

they're against a govt bailout EXCEPT to bail out their own bacon....isn't that an oxymoron?
If they want to let capitalism thrive, let it thrive. survival of the fittest and whatnot. personally i think if they want to bailout some folks, why not divvy up that 700bil among all the american citizens? what would that be each, something like 200k. that would buy an awful lot of cars, houses and walmart items!!!

I like your idea. But the only problem I see is the vast majority of the American people would piss through their money and still be in the same financial situation that they are in now. For some reason a lot of the American people don't mind living up to their ears in debt.

 

[spykebn]

they're against a govt bailout EXCEPT to bail out their own bacon....isn't that an oxymoron?
If they want to let capitalism thrive, let it thrive. survival of the fittest and whatnot. personally i think if they want to bailout some folks, why not divvy up that 700bil among all the american citizens? what would that be each, something like 200k. that would buy an awful lot of cars, houses and walmart items!!!

$700 billion given out to every single person in the country is only $2,300. If given to only tax payers (as a tax rebate) it would be around $3,500. I don't know where all these rumors of massive rebates came from. Not a whole of lot of cars or houses can be purchased with $3500.

 

[Bravada]

The whole discussion aside, I'd pray for the government to do a deus-ex-machina move and nationalize Chrysler in the last minute before Cerberus crashes it into GM...