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corner.nationalreview.com - 11/17/2008

Detroit: Same Old, Same Old

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Andrew Sullivan points to an article by Jonathan Cohn in the current TNR arguing for the proposed automotive bailout. The core of Cohn's argument is that the Big 3 are turning around, and that the bailout will give them time to complete their transformation to competitive companies. While ...

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No UAW Bailout
Power Line — ... Jim Manzi has done some of the best analysis of the proposed bailout of GM, Ford and Chrysler--or, one should more properly say, bailout of the United Auto Workers, otherwise slated for extinction. Here, he addresses the theory that the Big Three are in the midst of a turnaround, and if we only keep them afloat a while longer, they'll be profitable again. ...

The Auto Bailout
Balloon Juice — ... Over at the Corner, all sorts of gruesome numbers regarding the woes of the Big Three, and the question I have to keep asking is why bail them out? I really do not understand how sending tens of billions on top of the 25 billion in loans to companies that have hundreds of billions od debt and could be bought for less than ten billion is a good idea or one that will work. Furthermore, why are companies that are losing billions and have even more in debt worth anything at all? Is the value of the company only the hard assets they hold? Would you not be obligated to purchase ...

Powerline Proves Universal Health Care Makes GM and Chrysler Profitable
Firedoglake — ... pre tax profits per car The chart to the left shows the losses and profits per car of some major car companies.  John over at Powerline uses it to argue that there should be no bailout, because the Big 3 are so unprofitable it's just pointless.  ...

Mitt Romney...Don't Bail Out The Automakers
Ace of Spades HQ — ... You can disagree with his call for the federal government to invest in basic research but if you are going to spend money on the problem, that's probably the better way to do it. And of course the idea that the UAW is going to change it's stripes any time soon is rather unlikely, though bankruptcy proceedings are about the best shot anyone has of getting it done. For more on the failed Detroit business model (sure we lose money on every car but we make it up in volume!) check out this post from The Corner.

Romney: I've Got An Idea...Let's Try Capitalism!
Slublog — ... retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.As DrewM points out, letting them fail may be the only way to break the chokehold the UAW has on this industry. As a commenter on ace's site pointed out last week, GM has become a pension plan and healthcare insurance provider that partially subsidizes those services with the occasional automobile sale. A bailout would reward this sort of business practice. It would also reward unions for creating this income ...