Inconvenient facts related to the auto industry situation
On the possibility of big three auto company "bailouts," I am seeing lots of commentary on this site wihich seems unaware of the following situations.
Reported November 19 in the New York Times Business Section, as well as elsewhere:
A Sea of Unwanted Imports: Unsold Foreign Cars Hogging Space at California Port, filed from Long Beach, California.
In the print edition, there was also a chart illustration showing unsold inventories way up for Mazda, Nissan, Mercedes-Benz, Hyundai, Honda, Volkswagen, Subaru, Toyota and BMW and refers the reader to another news item:
Facing a Slowdown, China's Auto Industry Presses for a Bailout From Beijing, filed from Guangzhou, China.
The port article itself mentions another situation at the Long Beach port: their single largest export is also piling up, recycled cardboard and paper which typically goes to China to pack the products they sell.
Then, we have this situation:
Advantage of Corporate Bankruptcy Is Dwindling
in which examples are given of failing companies choosing to shut down and liquidate rather than reorganize because they cannot obtain the financing to operate while they reorganize.
I am seeing lots of arguments that seem to be unaware that this is a global recession, this is not your garden variety U.S. recession. Jobs are going to be in short supply worldwide. In the short term, if you downsize American business, if you are arguing, for example, that "tough medicine" for "Detroit" is necessary to get their act together as they have not before, you will benefitting the workers of foreign companies and calling for higher unemployment in the U.S., at least short term. If a U.S. citizen needs a new car, they have them sitting there in Long Beach, and they will sell them cheap. Sure, long term, innovation and the smart consumer will prevail, and maybe we've still got both those things. But in the short term, and I am talking a couple of years or a decade, any tough medicine you prescribe for the auto companies, you or your family or friends may also eventually have to take in the lack of jobs.
I think the global economy is evolving right this minute, and the winners and losers in the new global economy are being chosen. It may even be the right thing to let the auto companies fail.I don't have any answers and I pray the new administration has some. But I don't see any benefit in arguing for "tough medicine" without the realization that much of the world is in the same boat as us, as if we are alone in the world. This is not the same old same old auto or airline company bailout situation. Realize the ramifications of what you are asking for.
