My proposal is this:
On Jan 1, 2009 ive GM and Chrysler exactly the operating capital they spent in 2008. On Jan 1, 2010 give them 80% of that value. Decrease that number 20%/year for five years. This gives them a soft landing. Anyone who depends on the auto companies (the oft-quoted but unsupported 1% of US jobs) time to transition.
Five years ought to give the supplier and dealer networks long enough to find something else to do when GM dies -- in exactly five years. Please tell me if there is a single person in the world who, when under truth serum, believes the US automakers are viable without perpetual help.
So there's my soft-landing approach. I still wish we were able to let them crash hard, but I'm willing to do it this way in the current ugly economic climate. Again, no one can tell me why automakers are more important than textile factories.
7 comments:
I forget the rebuttal to the idea that making tanks is more important than making uniforms for national security. What is it? Seriously, I remember there is one but forget what it is.
In general, I think it is a fine plan. I think it is probably possible that if we have nationalized healthcare the US automakers could compete, but as far as your plan goes, I have no problem with it.
Perhaps because the textile factories are already gone. When did the textile factories really start closing? It'd be interesting to know what happened to those workers and their families now that some time has passed.
Oh, and your 5 year plan sounds better than what we are doing.
I'd also be fine with it, with a few caveats:
1. It's way more expensive -- unless I misunderstand your terms, you're talking $200 Billion for GM alone in the first year. Compare that to the paltry few billion we're giving them now.
2. Ford looks to be financially viable as is. Alan Mullally is a frigging commando. They're essentially turning down the government assistance -- they've already made a lot of the hard decisions that are transforming them into a viable entity. Does is skew the market to dramatically support two companies but not the third? I dunno.
3. Re: Jim. Awesome line. Bt I think the tanks are made by General Dynamics these days. Maybe we should let them make the cars? The only drawback I see to that is each car would weight 70 tons and cost $45 million each. On the up side, you could drive right over the cars in front of you in a traffic jam!
I understand GM doesn't currently make tanks, but I'm assuming they could be retooled to make military hardware a little easier than a textile plant could be.
Also, I think Josh's comment is a good one. Don't we need to make something here? Or is that like saying, "Don't we need to have some precious metal backing our money?"?
Jim,
Let me point out that while there is an argument to be made about automakers being better at re-tooling to make tanks than textile houses would be, not one is actually using that as an argument. Their argument seems to consist of simply stating as axiomatic that we need a car industry. I'm challenging that on its face--sort of making you give me a reason. Your military reason is one. I think it's not a strong reason, but at least it's a real reason.
One is that no automaker in the US actually makes tanks, and in fact every piece of military hardware we use is currently being supplied to us by not-GM and not-Chrysler and not-Ford, which includes guns, bullets, missiles, satellites, food, uniforms, tanks, APCs, artillery, boots, knives, wrenches, helicopters, ships, etc.
So if they make none of these things, and we still maintain the best and biggest (in terms of hardware) military in the world's history, what are missing if GM dies? I mean what conflict are you anticipating that would require that the U.S. dramatically increase production of military hardware? There is no plausible condition where that becomes an issue. So be snarky if you want to be about uniforms vs. tanks, but recognize that it still doesn't equal a valid argument.
Liam,
Yeah, my quicky plan is more expensive than what we are doing, but A) we could make the initial payment only 25% of GM's operating expenses in the first year, and B) my plan contemplates a future beyond 366 days, which no other cheaper, actually proposed or implemented, strategy does, and C) it gives the economy time to do something else with workers and factories. And finally, I'm not convinced my soft-landing plan is a good one, but I *know* it's better than just giving GM money and firing its CEO.
So be snarky if you want to be about uniforms vs. tanks, but recognize that it still doesn't equal a valid argument.
I was so not being snarky. I tried to de-snark my response with saying, "I forget the rebuttal to" and ending it with "Seriously, I remember there is one but forget what it is."
Now, I acknowledge that I brought this on myself, but it is an interesting question about what I would have to do to give a straight reply to a post.
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