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Why be mad at anything? At most be mad at car makers for running so leveraged that they had liquidity problems at the same time that all the major lenders in t

by 3am 13y ago

Why be mad at anything? At most be mad at car makers for running so leveraged that they had liquidity problems at the same time that all the major lenders in the financial system ran into solvency problems (and feel free to be mad at the financial sector) But given that, it was _excellent_ government policy to guarantee loans to the automakers, just from a cost/benefit perspective. And there's no shame in not going above and beyond the repayment terms of a loan - but good for Tesla for doing so (and great marketing).

Uhhrrr 13y ago
GM was in trouble long before the 2008 crash: http://www.thetruthaboutcars.com/2008/06/general-motors-death-watch-181-bankruptcy/ http://www.thetruthaboutcars.com/2008/06/general-motors-deat... (in June 2008, they were already up to part 181 in their series) Also, guaranteed loans for automakers might be excellent compared to other government policy, but given that Ford didn't take a loan, and there are many foreign companies which didn't need loans, the existence of any benefit from subsidizing more poorly-run automakers is questionable.
- dragonwriter 13y ago
  > Also, guaranteed loans for automakers might be excellent compared to other government policy, but given that Ford didn't take a loan, and there are many foreign companies which didn't need loans, the existence of any benefit from subsidizing more poorly-run automakers is questionable. FWIW, Ford's CEO disagreed, which is both why he went to Congress in 2008 to argue for the bailout, and defended the bailout in 2012 as having been good for the country, the industry, and Ford even though Ford wasn't a direct beneficiary [1]. [1] http://articles.latimes.com/2012/apr/19/news/la-ol-ford-ceo-rebuts-mitt-romney-auto-bankruptcy-view-20120418 http://articles.latimes.com/2012/apr/19/news/la-ol-ford-ceo-...
  - Uhhrrr 13y ago
    Well yeah. The bailout terms were heavily slanted towards the unions. Of course Ford preferred the bailout to competing against some company which might buy all the assets at bankruptcy prices and then hire workers on much more favorable terms.
    - rtpg 13y ago
      >some company which might buy all the assets at bankruptcy prices and then hire workers on much more favorable terms. You do realise that care companies are one of the most asset-heavy companies in the world right? Nobody would have been able to pick up the pieces in a credit-crunch recession. Independently of that, there would still have been a long period between the shutdown of the company and it being picked up, and in the meantime tier-N companies would all suffer greatly as well.
      - Uhhrrr 13y ago
        >Nobody would have been able to pick up the pieces in a credit-crunch recession. All the pieces? No. But some. With a chance at picking up an additional 10+% of the US market, you don't think Toyota or similar could get enough credit to buy a couple factories and hire the better half of the laid-off workers?
        deleted 13y ago
        [deleted]
- csense 13y ago
  > the existence of any benefit from subsidizing more poorly-run automakers is questionable The automotive sector is one of the few manufacturing industries which hasn't totally packed up its bags and moved out of the USA entirely. They employ a lot of workers in politically important states and have powerful labor unions. I live in an area that's been through tough times when a lot of industry went overseas c. 1980-2000, and much of the local political attitude is "government should do whatever it takes to keep plants from closing" -- not just among those directly employed by automakers and dozens of smaller suppliers, but among the entire community, since there's a feeling that dollars from those factory jobs indirectly support every local business. I feel that the automotive bailout was a direct bribe to communities like mine, to calm the anger over the Wall Street bailouts by giving us a piece of the pie. I think the whole thing stank, and voted accordingly -- not that I have any illusions that the current or future US government is or will be any better than it was in 2008-2009.
- samolang 13y ago
  Ford did get a $5.9B loan from the same DOE program as Tesla though. https://lpo.energy.gov/our-projects/ https://lpo.energy.gov/our-projects/

by 3am 13y ago

Uhhrrr 13y ago

GM was in trouble long before the 2008 crash: http://www.thetruthaboutcars.com/2008/06/general-motors-death-watch-181-bankruptcy/ http://www.thetruthaboutcars.com/2008/06/general-motors-deat... (in June 2008, they were already up to part 181 in their series) Also, guaranteed loans for automakers might be excellent compared to other government policy, but given that Ford didn't take a loan, and there are many foreign companies which didn't need loans, the existence of any benefit from subsidizing more poorly-run automakers is questionable.

dragonwriter 13y ago
> Also, guaranteed loans for automakers might be excellent compared to other government policy, but given that Ford didn't take a loan, and there are many foreign companies which didn't need loans, the existence of any benefit from subsidizing more poorly-run automakers is questionable. FWIW, Ford's CEO disagreed, which is both why he went to Congress in 2008 to argue for the bailout, and defended the bailout in 2012 as having been good for the country, the industry, and Ford even though Ford wasn't a direct beneficiary [1]. [1] http://articles.latimes.com/2012/apr/19/news/la-ol-ford-ceo-rebuts-mitt-romney-auto-bankruptcy-view-20120418 http://articles.latimes.com/2012/apr/19/news/la-ol-ford-ceo-...
- Uhhrrr 13y ago
  Well yeah. The bailout terms were heavily slanted towards the unions. Of course Ford preferred the bailout to competing against some company which might buy all the assets at bankruptcy prices and then hire workers on much more favorable terms.
  - rtpg 13y ago
    >some company which might buy all the assets at bankruptcy prices and then hire workers on much more favorable terms. You do realise that care companies are one of the most asset-heavy companies in the world right? Nobody would have been able to pick up the pieces in a credit-crunch recession. Independently of that, there would still have been a long period between the shutdown of the company and it being picked up, and in the meantime tier-N companies would all suffer greatly as well.
    - Uhhrrr 13y ago
      >Nobody would have been able to pick up the pieces in a credit-crunch recession. All the pieces? No. But some. With a chance at picking up an additional 10+% of the US market, you don't think Toyota or similar could get enough credit to buy a couple factories and hire the better half of the laid-off workers?
      - deleted 13y ago
        [deleted]
csense 13y ago
> the existence of any benefit from subsidizing more poorly-run automakers is questionable The automotive sector is one of the few manufacturing industries which hasn't totally packed up its bags and moved out of the USA entirely. They employ a lot of workers in politically important states and have powerful labor unions. I live in an area that's been through tough times when a lot of industry went overseas c. 1980-2000, and much of the local political attitude is "government should do whatever it takes to keep plants from closing" -- not just among those directly employed by automakers and dozens of smaller suppliers, but among the entire community, since there's a feeling that dollars from those factory jobs indirectly support every local business. I feel that the automotive bailout was a direct bribe to communities like mine, to calm the anger over the Wall Street bailouts by giving us a piece of the pie. I think the whole thing stank, and voted accordingly -- not that I have any illusions that the current or future US government is or will be any better than it was in 2008-2009.
samolang 13y ago
Ford did get a $5.9B loan from the same DOE program as Tesla though. https://lpo.energy.gov/our-projects/ https://lpo.energy.gov/our-projects/