Tuesday, December 9, 2008

Saving the Big Three

Congress just might be helping to save the Big Three after all.

http://www.economist.com/business/displayStory.cfm?story_id=12755433&source=features_box3

Now, for those of you, like me, who probably do not fully understand the situation and why the Big Three are being hit so bad, i will mention several possible reasons why. First off, many foreign companies, in particular Japan, are doing better than US car companies and it may be because the Japanese haved a better structure and it may also be because of outsourcing. One commentor, z3m says that because of oursourcing, the big 3 ended moving factories away from the US and because of that, US workers were out of a job and out of money. Generally, when making something, companies hire workers in a area and because of that, the area does generally better due to jobs and such and because they moved out, workers were not hired, did not get money, could not buy things and thus, could not buy cars. In contrast, the Japanese have moved into the US and established factories and their workers buy those japanese cars. Leading to Japan faring better than the US. Another possible reason is that Japan has tougher circumstances and thus, have improved more than the US. As Dan M said, Japan has had tougher cirumstances to sell in the US since Japan has greater difficulty in procuring resources and thus, they have a much harder time. Therefore, the Japanese had to improve manufacturing techniques and cost management while the US companies have been generally lazy about such things. They have benefited from the US government too greatly and thus, these companies hare having difficulty surviving.

Anyway, should these companies be bailed out?

I don't really think it would be a good idea because these companies are failing for a reason. The government has done a lot to help these companies and generally, it seems like letting them live won't change anything. These companies would need to reformat themselves in order to survive and make themselves more "green" which at this time seems impossible. These companies are way behind in the times and it doesn't seem like they can survive on their own given the current market so it might be better to instead of paying huge amounts of American tax dollars to these foolishe companies, not help them and whatever survives will have a painful lesson to learn and not make it again. However, if these companies do fall, many people will be out of work although, i personally wonder if it would be better to simply give the money to the workers outright and cut the middle-man. Anyway, what does everyone think? Should these companies be bailed out and will they be able to survive?

4 comments:

G Chang said...

Congress'll save the Big Three, it's definite. Way too many jobs to lose, too many risks, plus this bailout might actually make the automakers look at making more efficient quality cars that everyone will actually want to buy. And if these automakers are buried beneath the competition, who's gonna provide government vehicles for the US, Japan? That'll be the day. It's really not a matter of whether it'll happen or not, it's just a matter of how much discipline and how many deals congress can squeeze out of GM, Ford and Chrysler before they agree to the bailout.

Unknown said...

no one should be bailed out. Ever. it ruins economic Darwinism. its creating a weaker economy and is a bad idea. companies should survive in a capitalist environment because they deserve to, not because the government wants them to. especially in times of economic recession, this is a waste of our money. no one is going to buy cars because they want to save their money. therefore the government will need to step in again and rebail them out. its just a bad idea for government to ever step into the affairs of the economy unless they run a socialist government. and our country is capitalist

alex sortwell said...

Congress should save the big three. You can talk about about economic darwinism all you want and come up with your own theories about why these companies shouldnt be bailed out, but when it comes down to it can you imagine our whole country driving hondas and toyotas? wheres your sense of pride, do you really want our whole automobile industry to just collapse? Maybe congress needs to take some extreame measures to oversee operations with these buisneses but the only thing that I know is that I'm not willing to let go of American made cars.

sam & jo said...

I agree. If bailing out the Big Three can save jobs, then I think we should definitely go for it. Japan's success and our success doesn't really matter at the moment. What matters is saving our economy and I think we should do whatever it takes.