Big Business Bailouts?

Ford/GM/Chrysler bailouts........Opinions

#1. Ford said they might not even need bailout, but want $9 Billion in case
#2. According to The Daily Show w/ John Stewart's Moment of Zen, the companies have no assurance that the bailout will help.
#3. If a business fails, it fails, it shouldn't be bailed out......

What are your thoughts???
Additional Details
The moment of zen (although Stewart is fake news) had actual C-SPAN footage

If they don't get the loans they will just move to China and export them to the U.S. . If they get the loan they will have to lay off 35 % of the work force , cut benefits by 10 % and raise their prices by 6 % to make a profit . You gotta love the morons that tell us the problem comes from the American demand . Lets see , how about if we sell the people cars they don't want like the Chevy Aveo's and Dodge Neon's . In 1975-1989 foreign manufacturers produced the cars people wanted and we had the Oldsmobile .

If the unions don't cooperate, I think the only way to keep the jobs here is by adding a excise tax to vehicles not manufactured in the U.S.

Ford did not say they wanted 9 billion, they said they needed a loan guarantee in case they actually need to borrow against it.
If they do, they will be borrowing from the private sector, and will not actually be using federal funds.
There is a good possibility they will not have to borrow at all.
If the Big Three are allowed to fail, there will be between three and five million job losses, not just in the big three, but subsidiary jobs as well.
There will be further spin off job losses in almost every other sector, including retail, and many of those people will be forced onto welfare.
Guess who will pay the freight on that through increased taxes, right, you and me.

No one is buying cars.
No demand for product means no work being done at factory level.
No work at factory level means no pay being given out and jobs lost.

If the bailout is given, what will the cash be spent on? It won't go to the workers. If it's put into retooling for hybrids, that's fine, but who's going to buy them? The workers in the plants won't gain anything in the retooling work, because that will be sourced out.

So. Where is the money going to go? Until they can come clean about that, I think they should be sent packing.

If I was in Ford's place I would ask for money as well. Regardless of whether they need it or not, it will surely lower there cost of capital which is reason enough to do it.

I agree the businesses should not be bailed out, failure is a part of capitalism. If companies want to enjoy the benefits of capitalism during the good then they should accept consequences.

If they are allowed to receive funding this will eliminate their moral hazard; what is the benefit of being more productive and creating more desirable vehicles when the consequences of not doing so are limited.

1) Ford will probably not see anywhere near $9 billion - Congress is already talking about scaling the package back to $15 billion and are less likely to give out anything as a "just in case" gesture.
2) Nope, this could be a last gasp attempt to save the major U.S, car industry
3) In most cases, almost everyone would agree with this point. Unluckily, a massive meltdown of the US auto industry carries major ramification will beyond just GM, Ford and Chrysler. Each Big Three job supports 5 other jobs in the US economy. While any one of the Big Three shutting down would cause major economic repercussions, all three shutting down in short order could create a catastrophe as the layoffs rippled through the economy. even worse, these are not minimum wage jobs being lost, but well-paying jobs that place the workers solidly in the middle class - a class that is already shrinking and which the US can ill afford to lose. Probably the only other industry that would cause a similar level of pain would be the wholesale closing of the steel industry (luckily, the mini-mill companies provide a buffer against that happening as they remain successful).

You gotta love the people who love to throw in welfare into every conversation. Conservatives are nothing if not predictable.

Anyways, yes this is a touchy subject. The total job loss is widely speculated from 1 to (apparently now) 5 million jobs, and this is the industry that is pretty much the backbone of what is left of American manufacturing (meaning we don't make things anymore).

The problem with GM and Chrysler is that they have no cash, but Ford recently said that it forecasts to have enough cash on hand to last through 2009. Even with cash on hand, that doesn't mean the company is doing well.

The problem comes from American demand, as well as short-sightedness by the Big Three. You see, SUVs and those big pick-up trucks have HUGE profit margins. The Big Three made tons o' cash off of them. So much so that they were willing to take a loss on almost every compact car they sold, because they made so much on the gas guzzlers.

What happened? Fuel skyrocketed. Demand for the gas guzzlers began to fall, thus killing their cash cow. Those profits should have gone to more research into hybrids and electric cars (find the movie, Who Killed the Electric Car for more info). Instead, they put more and more dollars into advertising for these monster vehicles. Now, the only product that has any demand loses them money.

The demand for cars is down, but that's not what's hurting them, like the first post said. The demand for the profit cars is plummeting, while the demand for the "upside down" cars is dropping some.

In other words, if Ford could make the Focus for a profit, they wouldn't need a bailout. If GM didn't have a MOUNTAIN of trucks that will never be sold, they wouldn't need a bailout (Just-in-time Inventory, look it up and what country it comes from "ahem" Toyota).

Blame it on the economy if you want. Blame it on the UAW if you strive for the easy way out (though it makes me cry every time someone says we don't need unions anymore). But if you want a real answer, blame it on a failed business model and our own nation's cursed addiction to huge trucks that have raised my gas prices over the last several years (Yes, you are to blame for some of it).

I don't believe that the businesses will fail and disappear. They will be bought out (most likely by a foreign company) and after some job losses initially, the country will continue the way it has been. The only problem is, these companies won't be American anymore. I'm sure some sort of bailout will happen, and I hope for my nation's sake that they use that money for future development and stop making those damn trucks.

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