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The bailout for the Big 3 go far beyond trying to keep their jobs. If any of these of companies were to go under thousands of people would lose the warranties on their car(s). Also if one of them was to go under you would see other layoffs from the vendors that supply them. Tire manufacutures to freight companies would layoff because of the lost of revenue. Also don't forget the dealerships that would fold up overnight due to one of them closing down.

What would propose to do to help the layoffs of one company much less several. The number given for GM is 266,000 american workers. Not only are they going to get laid off but the GM employees in Europe, Canada, and Mexico would be out of jobs. The layoffs would impact the economy globally not just locally.

I hate the fact that I have to use my taxes toward a bailout for the Big 3, but I don't know if there is a better plan. I do believe that if the bailout is passed there needs to be many stipulations placed on the bill and an investigation on the management should be done. One stipulation that should be on the bill is that the company should have to do more in researching alternative energy sources and cleaner emissions. I also believe that management should be fired based on the outcome of the investigations.

All of these fearful predictions suffer from the same narrow view of the the auto market itself and adjacent industries.

The picture painted here is that GM closes and this causes a GM supplier, such as a supplier of headlight housings for example, (they get headlights housings from a manufacturer in Brazil) to also downsize and engage in lay-offs or even closure. The plastic supplier for that headlight manufacturer thus has troubles, and the results spread vertically.

The whole matter thus extends to people in finance, in auto insurance, the oil companies, tire manufacturers, auto glass manufacturers, car audio, it goes on and on.

What is narrow about this view is the disregard for the rest of the auto industry and the total auto market. The company in Brazil will now sell more product to Ford because previous Chevrolet customers will buy Fords. The tire manufacturers will still sell tires through Hyundai, Volkswagen, Toyota, and others.

Now, some will quickly look at what I'm saying and bring this objection: "But a-train, the whole industry is selling less cars, so GM is going to close and those other car companies won't sell more cars. The total units sold in the auto industry is down, a-train. So those adjacent businesses will not be able to keep selling the same level of product through other car brands."

My answer to that is: "Exactly!" So it won't "bail-out" the auto companies if we give billions to GM. They still won't sell more cars and their suppliers will still sell less product. So the chain reaction that everyone is so worried about will happen regardless of the "bail-out". However, we will actually spread the disease even further with the "bail-out". Rather than quarantining the afflicted, we are infecting many more.

When there are two many sellers of a given product, the market is saturated. If saturation reaches a point so dire that many cannot even survive, what should be done? Someone needs to leave the market and allow it to be less saturated. Who should? Who does the market say should? In this case, the market is saying GM.

Americans need to stop being sissy and start getting busy. I know that sounds harsh, but we all have to. I sold cars this summer. I made decent money, but the writing was on the wall and I left. My personal abilities to perform productive labors for my fellow beings would be wasted if I were to sit in a car dealership watching snow collect on cars all winter.

The massive amount of capital at GM is poorly allocated. These people need to go to work building something other than cars, or perhaps different cars (like Toyotas). These people need to take their talents, their knowledge, and their capital and do something that the global markets will reward with real business.

Propping up these bad investments will only make matters worse and make them worse for more people. In fact, it will do just exactly what you are raising concern about, it will spread the problem to more and more businesses effecting more lives.


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Now that the government is going to nationalize the auto industry, it will be interesting to watch how the criminals in Washington deal with the criminals who run the unions. Anyone up for a bloodbath?

I'm sure the foreign investors are leaping at the opportunity to invest in American auto manufacturing. GM stock is only down 85% since a year ago and 95% since a peak price in 2000.

It would seem that our companies are not outsourcing fast enough and Congress is trying to speed the process by simply ruining as much business opportunity as possible through regulation.

It will all ultimately lead to heavy protectionist policies preventing the good ol' days when you could get a quality Japanese automobile at a great price.


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