[Alloy Dave]

Originally Posted by 68fastback

Ford is only asking for what they would have obtained from the banking industry if it wasn't broken right now. Also, if GM/Chrys get direct assistance it would put Ford at a disadvantage: it's all-three or nothing, imo.

Good point Dan. Why can't they go to the same banks that are loaning Honda and Toyota money? I'm ignorant on this....are they Japanese just not in need of loans, or are they using Japanese banks?

Originally Posted by 68fastback

The three also agreed that, to the extent they accept gov-loan money, they'd agree to grant a Congressional oversight committee (as I predicted Congress would realize they need) the same powers of a bankruptsy court to reorganize their businesses if they fail to perform -- all three agreed to that.

This doesn't give me any tummy comfort, as our Congress has oversight of many things that have turned into a mess...so I don't trust them to do the right thing either.

Originally Posted by 68fastback

How would this be any different than bailing out a bank with the agreement that money would get allocated to traditional asset-collateralized loans to the big three. As I see it the only diference is that the bank would get a markup on the money -- a gift they are not worthy of, imo.

First of all, let's assume it's NOT any different. I still don't want it...I didn't want it for the banks either and I'm irate that they did it anyway. Secondly, I think they are a bit different because the banks affect ALL parts of the economy, not just one. If you do this for the Big 3, why not the boat business? What about RVs? What about mattress makers? How about Eli Lilly? Microsoft? Where does it end?

Originally Posted by 68fastback

So why not have the government just bypass the banks and provide the assistance directly but under the same terms/penalties as in a functioning banking system.

Why not bypass the Big3 and just give all Americans the money to spend at any business they want...which would address my issue above about picking a particular industry? I know the answer...because some people would save the money instead of spending it on cars.

Originally Posted by 68fastback

I also liked the pressure that is being put on the UAW leadership ...they have some $2B in their coffers over $1B of which is specifically for the next strike! Congress asked their chief a$$hole if he's be willing to kick that money (just the $1B part) to reduce labor costs ...dodging and weaving BS words and he would not be pinned down (it's the memebers' money -- fair enough) but it seemed clear that being able to cripple their members employers is more important than their members having employers.

I agree on this point....I think the union is going to have to make the lion's share of the sacrifices. Until they get to the point where their wages/benefits/productivity are essentially the same as the Japanese, the Big3 will be in trouble. What's amazing is that the wages are not THAT different...Honda is paying a fairly good wage...but they are not unionized, so the labor flexibility is much greater, which increases productivity and drives down costs.

Originally Posted by 68fastback

I don't see, on balance, there is any sensible choice except to help.

I say let them fail. The consequences would be dire. Lots of unemployment, lots of downside in the market..IN THE SHORT TERM. But over time, someone will start a new car company and compete....perhaps more than one. I think there is room for at least 2.

We've lost whole industries on other items. It's not good, but it happens. Electronics. Shoes.

I am terrified of the consequences of failure in the short term, but I still think leaving them to the free market is the best long-term approach. The union guy has been saying "this is not a bailout, it's a LOAN". Well guess what....a loan IS a bailout when no one except the government will give it to you.