The big three auto companies in the US appear to be in dire strife. If they go under, it really is going to put the whole national economy on very shaky ground and trigger a massive increase in unemployment.

So this prompts a whole set of questions….

Should they be assisted with a huge bail-out package or should they just be allowed to fold?

If they are to be bailed out, what sort of changes should they have to make?

Is this an excellent opportunity to move away from traditional gas-guzzling oil-dependent transport and take a huge step towards much improved energy-for-transport efficiency and renewable-energy-operated vehicles?

Or should the main focus be the maintenance of current vehicle stock by way of moving out of new vehicle production and fully into spare parts production?

Although this last option would mean the maintenance of millions of inefficient gas-guzzlers, it just might be more environmentally sound than producing millions of new vehicles to replace them. And it might just be the best option for the companies’ survival and the saviour of at least a large portion of the workforce.

What do OLOers think?

I think that by and large.. arrogant, over confident people who have had it too good for too long.. need to be dragged kicking and screaming to the judgement seat of 'imminent bankruptcy' as they suddenly see "no one" (i.e..customers) and realize they might have to sell the condo, the corvette and the Jet ski....before they will actually make a change to their outlook.

The glazed eyes on car dealers who went to Washington begging for a handout is an example of the above.

A tiny glimmer of hope is seen in the CEO's of GM foregoing some of their corporate jet usage... (but again..it is kicking and screaming, not genuine humility)

I'd want to see:

UNIONS forego many of the uncompetitive practices and payments which left wing union bosses have promised them (in order to be relevant and rate highly).

EXECUTIVES forego all bonuses, perks and anything above a reasonable salary

ALL focus on what is 'good stewardship' of the planet rather than pandering to ego and eccentricity.

This means a change of mentality from consuming to conserving.. and more effort is needed in the renewable side of things.. electicity based traction etc.

Yadayadayada

On a spiritual level... II Chronicles 7:14

http://www.biblegateway.com/passage/?book_id=14&chapter=7&version=31

A great question,
To answer it I thing it needs some examination of the fundamentals that have created the problems.
First is acknowledgement that these three were in trouble before the 'financial crisis' and those other corporations are time bombs for humanity.

Their problems are more to do with the inbuilt fundamental structural ideology that encourages behemoth corporations per se. Capitalism’s most basic tenant was the concept of a level playing field. (Notwithstanding the inequities that applied at the time i.e. level playing field was a nebulous abstraction not a reality even then).

Smith etc didn’t allow for the concept of Limited Liability Companies as independent legal entities. Neither did the framers of the 1862 “Companies Act” conceive of the ultimate and inevitable consequences including profiteering, manipulation and thereby activating ‘The capitalist 3rd law of Thermodynamics' i.e. everything tends towards entropy.

Note: “Any on going organization’s primary purpose is its survival”
Corporations have now like Frankenstein’s monsters taken amoral lives of their own smothering humanity’s strongest advantages its individuality/creativity.

Gone is the flexibility to respond timely to changing needs because of their maximize profits through “efficiency” ((limiting choice) while minimizing capital input (cash cow reasoning). (See US history of steel radial tyres).

Neither letting them crash nor bailing them out (like bandaiding a cancer lesion) are long term solutions.

Logic dictates breaking them up into smaller competitive companies forcing them to being responsive customer demands rather attempting to dictate to the market. This is the beginning of sustainable capitalism.

It could be argued that this may seem less efficient for capital but ALL things considered I doubt it. I remind everyone like the Indian chief said “when the water is polluted and the crops aren’t enough to feed the people try eating/drinking money”.
People are more important to money

Polycarp I often wonder why people put the boot into your ribs so hard.
Then you remind me with a post like that.
Left wing union bosses?
Well yes some left and right wing unions are involved in the car manufacturing business.
Can you understand just as the car is a product, one that sells based on price, value, economy and many other things a worker is too?
Workers need wages to live.
Or can you get your head around the fact workers wages are the fuel that drives every thing?
They only have purchasing power if they earn good wages.
How can it be that so many anti unionists are not anti profiteering?
I think it strange that if your God existed he may just want a more equitable world than you.
America long before the oil crisis made over sized tanks, wasted more oil than we use in years.
The fact they can no longer sell the wrong cars should surprise no one.
Make a new peoples car, one that is as good as the last named one and it will sell.
Bailing the car industry out is not about American greed or profit it is about jobs and the national welfare.

seriously, since none of you have the slightest power to influence events in oz, much less the usa, why not confine your discussion to things you know about, and can change?

lessee, that would be...

My opinion would be that this is the ideal time to let the dinosaur of US car manufacture finally become extinct.

There is the simplistic position that says if you are making a product that people don't want or can't afford, you don't deserve to be in business.

But the added dimension is that while such outdated and unprofitable practices are being artificially supported, there is no possible incentive to innovate, and every incentive to maintain the status quo just as long as possible.

The US has ample resources - financial and human - to invest in the kind of research that could change the face of personal transportation for the good - and for good.

But to back such development in the face of competition that is being massively subsidized by government and public alike would be business suicide.

There are so many lessons to be learned from the US auto industry, from manufacturing inflexibility through to unfunded pensions, but sadly I doubt they will be heeded for a while yet. Simply too many, too powerful vested interests.