Comments on: Auto Industry Bail-Out: My husband works for Chrysler http://traciscottage.com/2008/11/19/auto-industry-bail-out-my-husband-works-for-chrysler/?utm_source=rss&utm_medium=rss&utm_campaign=auto-industry-bail-out-my-husband-works-for-chrysler Musings on Quiverful & Large Christian Families, Parenting, Homeschooling, Modest Christian Dress & More! Tue, 20 Jul 2010 15:12:45 +0000 hourly 1 http://wordpress.org/?v=abc By: Ron Amundson http://traciscottage.com/2008/11/19/auto-industry-bail-out-my-husband-works-for-chrysler/comment-page-1/#comment-3407 Ron Amundson Tue, 25 Nov 2008 16:55:54 +0000 http://traciscottage.com/?p=1002#comment-3407 I'm not connected to the auto industry, but in looking at the ripple effects, the big 3 are really to big to fail, and that would include chapter 11. I was 100% against bailing out the financial sector, as that industry can rebuilt in a flash, should there be a demand, and there will be some demand for it. Manufacturing otoh, once shut down can take years to recover, and in some cases, may not be able to. Granted neither is optimum, but it galled me to no end, that Citi gets $300 billion of free money and virtually no downside, all the while, the auto industry is on its way to collapse. As far as ripples go... 1. Its not just chapter 11 for the big 3, its also chapter 11 for the thousands of suppliers, and their suppliers, and likely that means mainstreet banks, and utilities as well, all across the US, not just in MI. All of those bankrupticies would need to be coordinated, and thats going to take a long time... 2. Once chapter 11 ensues, pensions get sent to PBGC, where is likely many will get 10-30% on the dollar, thus putting most retirees in pretty dire straights. Not only would they loose their healthcare, but getting a 70-90% cut in their pension as well, will be a very sad day. 3, KERPS will kick in per the bankruptcy courts. If folks were outraged at exec compensation before, having the bankruptcy judges award huge bonuses way beyond what was previously granted to execs, all the while millions of average joes are rapidly descending towards poverty is likely to cause huge civil unrest. That does not bode well at all. I think the thing is, few see how tightly and integrally manufacturing is connected all across the US, and even fewer can relate to the tremendous value of hidden IP, that once gone, is likely to never return. Most of govt has about zero manufacturing connections, instead being typically based in law and finance, thus the bailout the buddies type scenarios as we have been seeing. I dont think they realize that if the finance world collapses, life will continue, and it will rebuild in short order. (barter and commerce always work, and will morph back towards finance for convenience) where as manufacturing, once the IP is upended, may well never return, or at least not on any of the scales and modicums of efficiency previously held. I’m not connected to the auto industry, but in looking at the ripple effects, the big 3 are really to big to fail, and that would include chapter 11.

I was 100% against bailing out the financial sector, as that industry can rebuilt in a flash, should there be a demand, and there will be some demand for it. Manufacturing otoh, once shut down can take years to recover, and in some cases, may not be able to. Granted neither is optimum, but it galled me to no end, that Citi gets $300 billion of free money and virtually no downside, all the while, the auto industry is on its way to collapse.

As far as ripples go…
1. Its not just chapter 11 for the big 3, its also chapter 11 for the thousands of suppliers, and their suppliers, and likely that means mainstreet banks, and utilities as well, all across the US, not just in MI. All of those bankrupticies would need to be coordinated, and thats going to take a long time…

2. Once chapter 11 ensues, pensions get sent to PBGC, where is likely many will get 10-30% on the dollar, thus putting most retirees in pretty dire straights. Not only would they loose their healthcare, but getting a 70-90% cut in their pension as well, will be a very sad day.

3, KERPS will kick in per the bankruptcy courts. If folks were outraged at exec compensation before, having the bankruptcy judges award huge bonuses way beyond what was previously granted to execs, all the while millions of average joes are rapidly descending towards poverty is likely to cause huge civil unrest. That does not bode well at all.

I think the thing is, few see how tightly and integrally manufacturing is connected all across the US, and even fewer can relate to the tremendous value of hidden IP, that once gone, is likely to never return. Most of govt has about zero manufacturing connections, instead being typically based in law and finance, thus the bailout the buddies type scenarios as we have been seeing. I dont think they realize that if the finance world collapses, life will continue, and it will rebuild in short order. (barter and commerce always work, and will morph back towards finance for convenience) where as manufacturing, once the IP is upended, may well never return, or at least not on any of the scales and modicums of efficiency previously held.

]]> By: smarmoofus http://traciscottage.com/2008/11/19/auto-industry-bail-out-my-husband-works-for-chrysler/comment-page-1/#comment-3392 smarmoofus Thu, 20 Nov 2008 04:06:27 +0000 http://traciscottage.com/?p=1002#comment-3392 Interesting that you stand to be directly impacted by this, and you are against the bail-out. I have no connection to the auto industry, and I support a bailout. We both agree that they don't "deserve" it, but I believe the claims that one or more of the Three closing would severely hurt the economy. But as you say... we can only watch and wait. -<a href="http://smarmoofus.com/?p=227" rel="nofollow">smarmoofus</a> Interesting that you stand to be directly impacted by this, and you are against the bail-out. I have no connection to the auto industry, and I support a bailout. We both agree that they don’t “deserve” it, but I believe the claims that one or more of the Three closing would severely hurt the economy. But as you say… we can only watch and wait.

-smarmoofus

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