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Will US watch its auto industry die?
Dec 12, 2008 03:37
  • JIMMYB
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14 billion bailout to the auto industry in US collapsed in the Senate. Before, the House had agreed to this bailout plan. The reason is that the UAW refused to accept Republican Senators demands for wage and benefit cuts.

Without 14 billion bailout, the Bush Administration needs to take out some money from the 700 billion rescue package approved for U.S. banks. However, President Bush said no that possibility. GM says they will go bankrupt unless they receive the cash by the end of the month.

Will US watch its auto industry die?
Dec 12, 2008 07:35
#1  
  • CARLOS
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I doubt there is enough money to give all that are in need in the US. There will be a total shake up for the US economy.
However, the collapse of the bailout does have some worldwide effects too which just might help the US a little bit. US dollar is weakening again. Economists in Europe are worried about it because it will do harm to European export industry.

What comes to wage ans benefit cuts, they will be cut anyway because of the situation the car industry is going without extra money. Seems like the Democrats would like to support the car industry because their status is quite strong there. For same reason the Republicans would deny the bailout. If that´s true, politics is walking over the people?

Carlos
Dec 12, 2008 07:38
#2  
  • CARLOS
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Anyway, I drive a Volvo. Looks like Volvos will be manufactured in future too, as a part of some Chinese company.

Carlos
Dec 12, 2008 09:28
#3  
  • APAULT
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If the Unions have turned down a deal with some benefits in it and prefer to receive nothing, they must believe there is a chance of more in the future. Most likely they are hoping President Obama will be a pushover next year.

Dec 12, 2008 17:10
#4  
  • WCTMAN
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A bailout of 700 billion was "granted" to Wall Street in near record time so as to "save" the US economy. Now, when the auto industry, which directly and indirectly employs upwards of 3 million workers, asks for about 4% of this total, the answer is NO. It is time to turn out the lights, the party is over.
Dec 12, 2008 20:45
#5  
  • KEVIN0518
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Looks like Volvos will be manufactured in future too, as a part of some Chinese company.

Carlos, I heard this too. Ford is discussing to sell Volvos to Changan Automobile Group, a Chinese auto group.

If that´s true, politics is walking over the people?

The answer is "Yes, definitely". The politicians do walk over the people. They use the people's money to enjoy themselves and never feel guilty.
Dec 13, 2008 11:24
#6  
  • CARLOS
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Kevin, I just read an aphorism that said: my conscience takes more room than my innards altogether. I guess that was not written by any politician then.

Carlos
Dec 13, 2008 11:49
#7  
  • GEARBOX
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The politicians are confused and running scared. The knee jerk reaction of bailing out the Banks and AIG with no pre set conditions, unlike in the UK, allowed the Banks not to lend more money as it was intended to do and AIG had a party. So now the pendulium has swung the other way and the rest of the 700 Billion is on hold. It didn't help when The big auto companies didn't have a clue on how much they needed nor had a plan to recover. Can the US afford to lose the auto industry and will congress let this happen? No. Obama made too many promises and the country cannot take this hit at this time. But nothing says we can't make them squirm for a bit. The positive side is a possible bankruptcy or what politicians are suggesting now as a bankruptcy without actually filing for one. What this means is to give the auto makers the treatment and privilages of bankruptcy without the stigma of being bankrupt. Semantics in my mind, but it will allow them to restructure, put off immediate obligations, void past contracts and renogotiate its contracts with its labor pool the UAW. Hopefully, they will emerge stronger and more efficient without any excess baggage.
Dec 13, 2008 18:50
#8  
  • COOLSPRINGS
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Iraq War has emptied Fed Vault. Corp citizens take advantage of this crisis to ask for cash is like looting a burning house, which is not that responsible. Unreasonable high labor costs, sooner or later, will let US auto makers die. So Refusal on bailout request and bankrupcy ( overseas units not included) would be an alternative for US automaker to be reborn.
Dec 15, 2008 00:45
#9  
  • JIMMYB
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Although 14 billion dollars bailout was refused, GM, Ford and Chrysler said that they were confident in Chinese market and they wouldn't change their development strategies in China. Failing to getting help from the government, these three US auto giants intend to expand their shares in Chinese market. I am doubting if it is possible.
Dec 16, 2008 23:53
#10  
  • BRYANFANG
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I think it is a bad idea for him at the currenct moment, but it maybe a good new for him in future, which is subject to the china market. 60% of chinese people who get the income not less than $300 per month, how long they can buy a car?
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