GeminiAtlas

Automaker Bailout Fails: This Is Not Good

So they (congress) are willing to give the financials $700B in addition to all the other pledges, guarantees etc. that the Fed/Treasury are putting up that add up to $8T, but they are unwilling to put up a "mere" $15B loan to the auto industry. That'd be hilarious if it didn't have such dire consequences. The $15B is pocket change compared the rest. And the banks aren't even lending, they are using the money to buy out smaller/weaker competitors to get even "too bigger to fail." Basically, the banks are in CYA-mode now. I do think that the auto industry needs a major overhaul but putting millions more people out of work can't be good. Who will the banks lend to then? All the people without jobs?
Hey johngognole, what's wrong with Arizona ('m from AZ)? I don't live there now but I'd much rather be there than in Detroit (ugh!). They should make MI a right-to-work state just like AZ. Why do you think many companies are relocating to the sun-belt away from the closed-shop rust belt?

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

Acrew, agree with you on the wages of the average worker. I have an advanced engineering degree and get paid not a huge amount more than these workers. And I live in an area with houses probably twice the price of houses in Detroit. D'oh!! Maybe I should quit my job and move to Detroit for one of those jobs...Not!
But another trend these unions are fighting is further automation of their jobs. This wave will continue just as during the industrial revolution farm workers went to the city to work in the factories. The farm related employment is 1 or 2 percent of the country and yet farm production is many multiples more than before the industrial revolution. There is also the myth of US "de-industrialization.... The manufacturing jobs have declined but overall industrial output is as high as ever due to increasing automation. This will probably continue until it's much like the agricultural industry, 1%-2% of the population to run the robots that make everything. The percentage of GDP will also shrink, but there will still be more "stuff" that is made. This trend is also starting to take hold in sectors of the service industries. Have you called up a travel agent lately to book airline flights? I thought not. Increasing levels of automation and innovation will continue these trends. Even in engineering, I see these trends, increasing use of ever-more powerful software that automates certain low-level engineering design work are increasing the output of each engineer. The effect is better designed products that are developed with increasingly faster product-development cycle times. Also, the diversity of products being designed are proliferating. The cost-effectiveness of these products will come from "flexible" manufacturing cabilities that can run low-number production numbers easiliy and with less and less set-up costs. Pretty soon, the cost/part of a one-off part will be almost the same as a million part-run. Companies will be able to make parts "on-demand." Read about "the long tail" coined by Chris Anderson to get the idea. What effect will this have on jobs? Well, I'll tell you, those that are the most creative, the most agile, most networked, most innovative will be the winners, and those that cling to the way things are will be the losers. And the need for strong technical skills is a plus but increasingly, those are becoming "commoditized." so that even those without technical skill but have creativity, can compete by having good ideas and "innovation networks."
But where does that leave the low-skills laborer of the future? Good question. Not sure, not sure but "smarter" investments in education would be helpful.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

All of you talking about "fairness" need to go back to Econ101. It's not about what is "fair" pay to a line worker or an executive, but what the market will bear. Clearly, at the levels the big 3 pay both their line workers and executives, the market is not bearing it. So something's got to give, either A) They all take a pay cut to produce the current cars that no one seems to want to buy to become cost competitive i.e. the Walmart option B) Innovate to make better cars that have higher value-added, to justify the current cost per vehicle and to compete with the foreign cars at those higher price points i.e. the Apple Computer option