4 ms·

We should have let it happen. That money could have been funneled into social services instead of propping up industries. You played and lost, you don't get m

We should have let it happen. That money could have been funneled into social services instead of propping up industries. You played and lost, you don't get my tax dollars.

walrus01 8y ago
Yes, agreed. They should have gone chapter 7 and the canadian equivalent in bankruptcy law. Some foreign buyer would have bought up the assets worth buying, and made better cars. Maybe 1/3 to 1/2 of the workforce could have been re-hired, the government bailout money could be spent on retraining and supporting the remaining 2/3 to 1/2 of the workforce.
- sonnyblarney 8y ago
  "They should have gone chapter 7 and the canadian equivalent in bankruptcy law. Some foreign buyer would have bought up the assets worth buying, and made better cars. " It's very unlikely. A) Plants are tooled for a specific car, often to platforms that are company specific. B) There is a reason GM is shutting it down, and other companies are probably in the same set of circumstances. C) Do you think company A wants to buy company B's powerful Union? Uhhh, no! It's not entirely rocket science to train people to make cars.
  - amyjess 8y ago
    I'll point you to what happened to MG Rover. Company went bankrupt, a Chinese company bought the assets, and now they make and sell cars in the UK.
    - fredoralive 8y ago
      The current MG ceased assembly in the UK a couple of years ago. As it involved laying off 25 people, it seems like it was a rather token effort in he first place. https://www.bbc.co.uk/news/uk-england-birmingham-37449289 https://www.bbc.co.uk/news/uk-england-birmingham-37449289
      - amyjess 8y ago
        Ack, I didn't know they closed the Longbridge plant. That's pretty sad. Thanks for letting me know.
    - sonnyblarney 8y ago
      They bought the car company, not a factory. A car company, like 'Jaguar' (similar story) has assets.
sonnyblarney 8y ago
"have been funneled into social services" Thos jobs pay for the social services of many, and if GM and Ford went kaput, it would wipe out the governments ability to pay for those services. Now - I'm not saying it's the right thing to subsidize, but in a 'subsidize or collapse' situation, that is the reality. A corporation has many stakeholders: execs, staff, buyers, suppliers, investors, debtors, and then all the ancillary people who benefit independently - they're all in a power struggle to share in the surpluses. If a company is facing legit collapse, and the investors are truly willing to bite the bullet, it's because they don't think their is incentive there for them. The surpluses generated may actually be going into the other entities in the power equation: just because investors own the profits does not mean that profits represent the big chunk of surpluses. My ex-neighbour was a long-tim plant worker, he earned quite a lot, granted he was senior - those are in fact plumb jobs that often pay way above others when you factor healthcare, retirement etc.. Also consider low turnover - most people change jobs every few years and lose a few months pay. When you work in an auto plant, for a bank, for the government etc. the stability factor is a real economic benefit you can calculate. It's hard to tell if companies are bluffing or not, but in many cases they are not - and it illustrates really where the surpluses are and it's not with them. There's a big Boeing 777 business case that's used in B-School for accounting, and it basically demonstrates that the project is kind of a loser for them, and they should not invest. But the government came along with incentives, making it worthwhile. It's not a paradox, it's just a lesson in who profits from what and how.
- amanaplanacanal 8y ago
  Err... I believe Ford didn't want the bailout money. Not sure why you tossed them in here. I am totally in favor of letting bankruptcy courts do the job they are best at. All those assets don't just go away, they are put to better use.
  - sonnyblarney 8y ago
    Ford is just an example of a 'big company' that might go bankrupt. A bailout/subsidy for a company is different than a bankruptcy situation. You can be assured that in a bankruptcy, the factory will probably close, and it's workers laid off. It doesn't matter i some assets are sold off, significant economic activity will dissapear in almost all cases. It's usually better for the economy for a company to survive than not.
AngryData 8y ago
I agree, likely we would have had a few smaller splinter companies from it but I don't see that as a bad thing in anyway except for those handful of people who were at the very top of the managerial/administrative pyramid.

We should have let it happen. That money could have been funneled into social services instead of propping up industries. You played and lost, you don't get my tax dollars.

walrus01 8y ago

Yes, agreed. They should have gone chapter 7 and the canadian equivalent in bankruptcy law. Some foreign buyer would have bought up the assets worth buying, and made better cars. Maybe 1/3 to 1/2 of the workforce could have been re-hired, the government bailout money could be spent on retraining and supporting the remaining 2/3 to 1/2 of the workforce.

sonnyblarney 8y ago
"They should have gone chapter 7 and the canadian equivalent in bankruptcy law. Some foreign buyer would have bought up the assets worth buying, and made better cars. " It's very unlikely. A) Plants are tooled for a specific car, often to platforms that are company specific. B) There is a reason GM is shutting it down, and other companies are probably in the same set of circumstances. C) Do you think company A wants to buy company B's powerful Union? Uhhh, no! It's not entirely rocket science to train people to make cars.
- amyjess 8y ago
  I'll point you to what happened to MG Rover. Company went bankrupt, a Chinese company bought the assets, and now they make and sell cars in the UK.
  - fredoralive 8y ago
    The current MG ceased assembly in the UK a couple of years ago. As it involved laying off 25 people, it seems like it was a rather token effort in he first place. https://www.bbc.co.uk/news/uk-england-birmingham-37449289 https://www.bbc.co.uk/news/uk-england-birmingham-37449289
    - amyjess 8y ago
      Ack, I didn't know they closed the Longbridge plant. That's pretty sad. Thanks for letting me know.
  - sonnyblarney 8y ago
    They bought the car company, not a factory. A car company, like 'Jaguar' (similar story) has assets.

sonnyblarney 8y ago

"have been funneled into social services" Thos jobs pay for the social services of many, and if GM and Ford went kaput, it would wipe out the governments ability to pay for those services. Now - I'm not saying it's the right thing to subsidize, but in a 'subsidize or collapse' situation, that is the reality. A corporation has many stakeholders: execs, staff, buyers, suppliers, investors, debtors, and then all the ancillary people who benefit independently - they're all in a power struggle to share in the surpluses. If a company is facing legit collapse, and the investors are truly willing to bite the bullet, it's because they don't think their is incentive there for them. The surpluses generated may actually be going into the other entities in the power equation: just because investors own the profits does not mean that profits represent the big chunk of surpluses. My ex-neighbour was a long-tim plant worker, he earned quite a lot, granted he was senior - those are in fact plumb jobs that often pay way above others when you factor healthcare, retirement etc.. Also consider low turnover - most people change jobs every few years and lose a few months pay. When you work in an auto plant, for a bank, for the government etc. the stability factor is a real economic benefit you can calculate. It's hard to tell if companies are bluffing or not, but in many cases they are not - and it illustrates really where the surpluses are and it's not with them. There's a big Boeing 777 business case that's used in B-School for accounting, and it basically demonstrates that the project is kind of a loser for them, and they should not invest. But the government came along with incentives, making it worthwhile. It's not a paradox, it's just a lesson in who profits from what and how.

amanaplanacanal 8y ago
Err... I believe Ford didn't want the bailout money. Not sure why you tossed them in here. I am totally in favor of letting bankruptcy courts do the job they are best at. All those assets don't just go away, they are put to better use.
- sonnyblarney 8y ago
  Ford is just an example of a 'big company' that might go bankrupt. A bailout/subsidy for a company is different than a bankruptcy situation. You can be assured that in a bankruptcy, the factory will probably close, and it's workers laid off. It doesn't matter i some assets are sold off, significant economic activity will dissapear in almost all cases. It's usually better for the economy for a company to survive than not.

AngryData 8y ago

I agree, likely we would have had a few smaller splinter companies from it but I don't see that as a bad thing in anyway except for those handful of people who were at the very top of the managerial/administrative pyramid.