The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need additional aid from the U.S. government to remain solvent.
In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope to eventually strike a balance between their cost structures and a dismal market for new car sales.
GM, for example, said it would cut 47,000 more of its 244,000 workers worldwide; close five more plants in North America, leaving it with 33; and cut its lineup of brands in half, to just four: Chevrolet, Cadillac, GMC and Buick.
Everyone needs more money. Why don’t we authorize them to print script which would would be legal tender and then they could issue what they need? We seem to have decoupled money from anything of value to include individual labor so why not issue a few trillion more?
Kendal,
It’s odd because this article [url=http://finance.yahoo.com/news/GM-needs-up-to-30-billion-in-rb-14392493.html]Yahoo GM[/url] says GM alone will need up to 30 billion.
But yes, I think everyone, is asking “Why more money?” The sad thing of course, is that they’ll probably get it, and come back and ask for more in 3-4 months.
As a UK resident who remembers the problems of our car industry in the 1970’s, it all sounds sadly familiar.
The basic problem was that our car plants were inefficient (underinvestment and entrenched union intransigence). The result was that they made cars which were inferior to foreign-made cars. UK consumers stopped buying Austin, Morris, Triumph and the rest, because Toyotas, Hondas (and some of the US-owned firms such as Ford) were a better way of spending your hard-earned.
I know that American contributors to this blog will rise up in righteous indignation and tell me how great their Chevrolet Rustbucket (or whatever) is, but regrettably US cars do not have a good reputation in the wider world. Apart from Jeeps, you just don’t see them around here – and they are more of a fashion statement than a sensible choice of car.
The indigenous US car manufacturers seem as incapable as our companies were thirty years ago of making models that people want to buy (though the overseas arms of Ford and GM make some great cars). Watching them flounder now is painfully reminiscent of the death of the nationally-owned UK industry.
If there’s a silver lining to this it is that the UK is now manufacturing more cars than it was in the 70s. Its just that the plants are owned by Ford, GM, BMW, Honda, Nissian and Toyota, who seem to know how to do it.
I’ve heard that the American companies have improved their designs and quality standards in recent years, but they are saddled with cost structures related in great part to retired workers which make them uncompetitive.
It’s no surprise at all that they’re back for more money.
Chapter 11.
The US auto companies will get everything they ask for. It will be a handout to the Unions, disguised as a bailout, leading to government control of more commercial institutions ( [url=http://www.econlib.org/library/Enc/Fascism.html] Fascism:[/url]
).
The underlying competitive disorders of the American Automobile Industry are being considered a feature, as opposed to a bug.
Of course they want more money. Some of us were saying this would happen before they got the first pot of money – reason we shouldn’t have given them the first pile.