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Re: Should our governments help out the auto industry?
Wid #250059 03/03/09 10:21 PM
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I can't imagine the degree of difficulty involved in "creating" decent-paying jobs in the USA. Lower labor costs overseas mean that almost every manufactured thing we buy is made in China, so there is almost nothing left to manufacture over here and sell for a profit. I'm no economist, but I don't see how an economy based largely on the service sector can fly.


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Re: Should our governments help the auto hindus?
medic8r #250062 03/03/09 10:27 PM
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What's an auto hindu, anyway?

Re: Should our governments help out the auto industry?
Worfzara #250063 03/03/09 10:37 PM
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It's just one of those topics that has a high likelyhood of not ending well. We're usually a friendly bunch, I don't think any of us are too keen on getting into political arguments that will only result in feelings being hurt.

Everyone is concerned about the economy. Even if your job is secure, people are worried. A constant stream of doom and gloom from the media tend to do that. And as Yoda teaches, fear becomes anger.

My opinion is that GM, Ford, & Chrysler have too many factories employing too many people producing too many cars. They're producing 1000 widgets a year and the market can only sustain 500. It's pretty simple. All three have been skirting the line on being sustainable businesses for years now. They're getting by now on loans. And just just like the millions of people who took out loans to pay the bills, that party is coming to an end.

If they're going to survive, all three companies need to be able to significantly reorganize themselves. And I think that the only way they can effectively do that is through the bankruptcy process.

It will be painful. But with pain comes change. Managed well, change becomes agility. Applied successfully, agility becomes success. GM & Ford can be successful companies. I just don't think keeping them alive on government life-support indefinitely is a recipe for success.



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Re: Should our governments help the auto hindus?
pmbuko #250064 03/03/09 10:38 PM
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If we look at our history, it was Henry Ford who created what we now call a middle class. And he did it via the manufacturing sector.

Granted it's 100 years later, but I also ponder, without a manufacturing sector, automotive or any other, are there enough mid paying jobs to sustain a "middle class".

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Re: Should our governments help out the auto industry?
medic8r #250069 03/03/09 10:52 PM
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 Originally Posted By: medic8r
Lower labor costs overseas mean that almost every manufactured thing we buy is made in China, so there is almost nothing left to manufacture over here and sell for a profit.


While we're taking out trillions in loans to save our economy, China's on a shopping spree with all that money we've given them over the past 30 years.

How am I preparing for the future? I think learning Mandarin might be a good place to start. ;\)





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Re: Should our governments help out the auto industry?
PeterChenoweth #250070 03/03/09 10:58 PM
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Good article, PeterC.

On that note, I'm off to a business dinner...


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Re: Should our governments help out the auto industry?
PeterChenoweth #250071 03/03/09 11:11 PM
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 Quote:

How am I preparing for the future? I think learning Mandarin might be a good place to start.

The same was said for Japanese during the late eighties...


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Re: Should our governments help out the auto industry?
JaimeG #250072 03/03/09 11:15 PM
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 Quote:
The same was said for Japanese during the late eighties...


And it was probably true, right up to the point where the Japanese started pushing most of their manufacturing to cheaper countries just like we did.

I don't have a problem with shifting manufacturing to other countries as long as we know what *we* are all going to do for a living and are realistic about where the money will come from. I always had a nagging feeling that half of our economy depended on western companies being able to sustain a hefty margin between built-in-Asia cost and sold-in-Europe-and-NA sell price.

I do think we're in an overshoot on the downside (ie things will improve a bit soon) but we still need to learn to live without a trillion-dollar trade deficit and the same amount of money coming back to feed government borrowing -- and that is *not* going to be easy, particularly since we're so strongly polarized between "we need tariff walls to rebuild our own industry" and "protectionist measures are what made the Great Depression so bad". My feeling is that there should be some kind of middle ground but I don't know if it's going to be possible to work out a decent compromise that works reasonably well for all countries.

Last edited by bridgman; 03/03/09 11:36 PM.

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Re: Should our governments help out the auto industry?
bridgman #250075 03/04/09 12:00 AM
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 Quote:
right up to the point where the Japanese started pushing most of their manufacturing to cheaper countries just like we did.


I'm not an expert in Japanese economics (or just plain economics for that matter) But Japan economic slip after the eighties was initiated by the burst of Japan economic bubbles; amongst other things like lack of innovation and population growth. I don't think it was triggered directly by "pushing most of their manufacturing to cheaper countries".


The sailor does not pray for wind, he learns to sail. --Lindborg
Re: Should our governments help out the auto industry?
JaimeG #250077 03/04/09 12:17 AM
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I agree that Japan was hit bad by a bubble (it was primarily commercial real-estate, wasn't it ?) but the optimism that goes with bubble growth makes too many people think they no longer need traditional industry, and without traditional industry the impact of the bubble bursting is much greater.

The current situation is doubly difficult because (a) traditional industry was hit by the credit shortages which grew out of our bubble bursting, and (b) as a society we've never learned how to gracefully lead the economy back to a sustainable level after a bubble, and IMO (c) we spent the last 30 years forgetting that providing decent jobs for *everyone* in our society is one of the responsibilities of industry and not just government.

Point (b) is the skill we desperately need to learn. I still feel that too many of the bail-outs are aimed at getting us back to the unsustainable level.

Last edited by bridgman; 03/04/09 12:18 AM.

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