Quote:
Originally Posted by longdx
I find the statement from the EU very ironic. France has assisted in essentially subsidizing its auto industry for years until they were able to be profitable (re: Renault, Peugeot, Citroen,. In Germany, Porsche, VW, Audi all have an interconnected relationship.
The essential problem with bailouts is that it rewards failure. IF the Big 3 receive such a bailout, then there needs to be stipulations of how the money is to be appropriated. The Big Three do not have a problem building reliable cars, its building cars in a cost competitive fashion (re: legacy costs). They have to overcome decades of shoddy workmanship, shady dealer networks, in a business model that relied of rebates/incentive rather than competitiveness to move metal.
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And you have to conclude that any country with national health care, regardless of how you feel about it, and strong national pensions, to be a form of subsidizing their businesses. Yet, we can't make loans or loan guarantees? Are they kidding (and I'm first generation - my family is from Europe).
The so-called bailout is a bridge loan, to get them through to 2010, when the last provisions of their most recent contract kick in, and their labor rate drops to near Toyota levels. No one ever said it was a grant or a handout. If the feds can bailout AIG and AIG doesn't produce a thing, why shouldn't they loan money to three companies that manufacture?