GM & Chrysler Bailout

[ucalgary2000]

Hi folks,
I am torn over this one - having lived in Ontario before, I understand how the economy is so dependent on the auto sector and that the government has to step in to minimize job losses.

But it seems like such a terrible waste to spend all that money to cover CAW pension plans! Especially considering the huge deficit that the country faces over the next two years.

Die if you do, die if you don't.

Thoughts?

[CaptainCrunch]

Originally Posted by ucalgary2000

Hi folks,
I am torn over this one - having lived in Ontario before, I understand how the economy is so dependent on the auto sector and that the government has to step in to minimize job losses.

But it seems like such a terrible waste to spend all that money to cover CAW pension plans! Especially considering the huge deficit that the country faces over the next two years.

Die if you do, die if you don't.

Thoughts?

From my understanding the federal buyout money can't be used to top up the pension, however the provincial buy out money can be.

Sadly like Alberta's dependance on the energy industry, Ontario is far too dependant on the manufacturing and automotive industry.

I'm not a big fan of mass bailouts by governments on private industry. I think the money could be better spent on retraining the people who lost their jobs, and encouraging diversification of the economy.

[ucalgary2000]

A lot has been made about the fact that working tax payers in Ontario, particularly workers in other successful automotive companies, are having to subsidize the free-falling American giants through taxes. Unfair? Absolutely, although right now, there seems to be no choice.

[Finny61]

Somewhere in the past some auto manufacturing workers felt they deserved to be paid and treated like they were executives. It all went downhill from there, personally as much as it hurts these companies need to fall and we need to start from scratch.

[Bill Bumface]

The disappointing part for me is I thought the bankruptcy route would break GM out of their horrible union contract and crush the UAW. Unfortunately it's sounding like they'll have more power than ever. If so, bye bye GM. I really hope not. They were just starting to turn out some great vehicles.

[HOZ]

ObamaHarper Motors!!

Within hours of General Motors filing for Chapter 11 bankruptcy protection, the U.S. and Canadian governments announced billions in new funding to bail out the troubled automaker.
U.S. President Barack Obama confirmed Monday that his government will be giving GM another US$30 billion in investment cash while taking a 60 per cent stake in the company.
Meanwhile, Prime Minister Stephen Harper said the federal and Ontario governments will have a 12 per cent stake in GM, secured by an additional investment of US$9.5 billion.

[3 Justin 3]

Sweet, we own GM.

[lucky1]

I think we own some of Chrysler too, no?? or Chrysler/Fiat....whatever they are going to call it

It will be interesting to see what kind of cars these 'new' companies will be building. I hope that there will always be some kind of offering for the enthusiast, not just cars that get really good mileage.......it would also be nice to see some deisels in cars other than VW's.....

[Kjesse]

This is awful.

So much for free enterprise. I would've hoped the Harper government would be a little more 'conservative'.

Obama didn't pretend to be a strong believer in the free market, so you get what you should expect.

Harper on the other hand worked for and seeming held beliefs consistent with his a right wing think tank, but has sold his beliefs down the river to maintain power.

Kind of like how McCain sold out to the religious right in an effort to try to get the presidency.

Power is apparently more important than sticking to your beliefs. Maybe it is when you hit the highest levels, who knows. Very Machiavellian.

I'd still take Obama over McCain, though I doubt I'll want Obama in for a second term.

And when its Harper v. Ignatieff, well, its just a bad choice either way. Pick door 1 or door 2, you get a socialist either way.

[HotHotHeat]

There's no right answer here.

Option A is do nothing and let them die. The economy would absolutely tank if that happened. The reach of GM into various sectors of the economy is widely unknown. This would also cause both Obama and Harper to hurt in the polls.

Option B is what has happened. They've rescued a company with a terribly inefficient business model, pension nightmares, and a crappy product that doesn't compete with other automakers. But, they've saved countless jobs in doing so.


Again, it's easy to say you shouldn't spend the money propping up a badly run company. Who knows.

[lucky1]

its political suicide to just let the automotive manufacturing base just evaporate in 'vote rich' eastern canada. I think that this was the best move that they could have made...Ontario has already slipped into a 'have not' status, and with the increased job loss (directly and indirectly) the equalization payments (ie Alberta's money) would have increased substantially.....although they still may.
As far as the Union bashing, Unions dont get into a workplace by accident....there generally is a problem, like the employer trying to screw you over. The high wages and legacy costs were the direct result of poor negotiating on part of GM, not the fact that a union was in place.
Harper a Socialist? are you serious??

[BlackEleven]

Originally Posted by hulkrogan

They were just starting to turn out some great vehicles.

Such as?

I'm not necessairly disagreeing, I'm just curious to know which vehicles you're referring to.

[Jedi Ninja]

The guy on the radio this morning was saying that the federal government will take in a total of $26b in corporate taxes this year, so it will be spending almost half the take of corporate taxes on propping up GM.

Can you imagine what $10b invested in emerging industries could do?

Or a $10b corporate tax cut?

[awildermode]

Uh....what happens with GM Place?

[Ironhorse]

[Wookie]

Originally Posted by awildermode

Uh....what happens with GM Place?

Harper Place,
Conservative Square

Just a sponsorship, GM doesnt own.

[ucalgary2000]

Originally Posted by Ironhorse

Nice! Maybe the 'nucks won't suck as much anymore - on the other hand, it probably won't change a thing.

[MelBridgeman]

Originally Posted by HotHotHeat

There's no right answer here.

Option A is do nothing and let them die. The economy would absolutely tank if that happened. The reach of GM into various sectors of the economy is widely unknown. This would also cause both Obama and Harper to hurt in the polls.

Option B is what has happened. They've rescued a company with a terribly inefficient business model, pension nightmares, and a crappy product that doesn't compete with other automakers. But, they've saved countless jobs in doing so.


Again, it's easy to say you shouldn't spend the money propping up a badly run company. Who knows.

i have no problem with saving the company as long as entire upper management is fired.

[Tower]

Now if it is truly part public. I bet there is a free car in there for Canadian and American Citizens... 9.5 billion worth of cars in Canada.

[valo403]

Originally Posted by MelBridgeman

i have no problem with saving the company as long as entire upper management is fired.

I get the sentiment, but then who do you fill the void with? There are only so many 31 year old Yale grad students out there. Not every single person in every position of power at every failed company did a horrible job, it's just easier to paint them all as crooked thieves. There certainly needs to be some major restructuring, but the "fire everybody" refrain is an overreaction.