The Back Alley Archives

big 3 can easily become big 2 or the BIG ONE...that happens, they become more competitive with their global competitors.

EXACTLY (to Rad and Doc)!!!

head of the UAW about ready to speak...dunno if they're gonna relent on their stance or if he's out to talk about how fucked up the system is...we'll see.

and bush is talkin about end-arounding the senate using TARP funds to help bail out the autos....something he's said he wouldn't do before.

See? Already there are companies doing new and inventive things with automobiles. This one in Atlanta making a new kind of Police Car...

http://www.foxnews.com/story/0,2933,465329,00.html

"You would never send a pickup truck to go put out a fire," Li said. "Why would you send a family sedan to go take care of a homeland-security issue?"

LMAO!!!

Let the Detroit 3 go under and put all those semi-skilled workers in the new hemp/marijuana industry.

Alli, the problem would be the orders from the Japanese would be too small to keep them in business. Say you sold 10,000 helmets a year to HS and 500 to colleges. You need to sell 5000 a year to break even. Well, all high schools quit playing football. That is what would happen to these types of places. Demand would drop too low. Yes it would be a short term problem but it is just another ripple that would go through the economy. It was believed the Japanese plants would halt production for about a year.

But are you saying people would no longer need cars? Cause that's the only way I can make sense of that analogy. Of course, I realize it would be a problem at first, but after a year or so the economy would start to recover and things would get better. When we keep dishing out bailouts we are prolonging the problems...see the Great Depression which lasted until the war started and really the market didn't start to recover until the 50's. Then you can look at the lost decade in Japan.

For what it's worth, we would be thrilled if Riddell went out of business! Now if people stop playing football...that's another story...but I think that is just not likely to happen...just like I doubt people will stop driving.

I am not saying people wouldn't need cars, not sure how you get to that. I'm saying that more jobs would be lost throughout the economy than just the big three. That ripple would put us into more of a recession or depression. Say Riddell went out of business. There is one plastic maker that makes the plastic necessary for helmets and Schutt buys from them too but Riddell is their main buyer. If Riddell went out of business, this plastic manufacture can't stay in business and has to close it doors. Well, all the sudden Schutt goes out of business cause they can't find someone that makes the plastic or Schutt has to shut down making helmets until a new manufacture can be located. That is the scenario. That assumes that Schutt doesn't sell more helmets because of Riddell going out of business though and thus taking up the slack in demand for the plastic.

But why can't the plastic manufacturer just cut back...they may have to downsize and yes, more jobs lost (for the short term) but why do they have to completely go out of business? I understand what you're saying Todd but unless the market for cars or helmets goes away, I just feel that someone will step in to make some money.

In the scenario you gave me above with helmets, if Riddell went out of business where would kids be getting their helmets if not Schutt, or Adams or whatever...will they just do without and say nevermind...no more football because no one is willing to make or recondition our helmets? I just find that highly doubtful and the same with cars. If there is a demand and a need, SOMEONE or some company will be there to make a buck off of it.

At least that is my belief and how I see the free market system working. OF COURSE, I'm sure there will be a short term ripple effect that could even be a year or so...but in the long term my personal thoughts are that the system will repair itself.

By the way, you know I love ya Todd...I'm not being argumentative (I hope) just having a friendly discourse...I hope you see it that way.

Because that plasticc company has to make X in order to break even. If they don't then it costs them money to operate and would be better to just close their doors instead of lose money. Now you can't make helmets. And you also have to think about the fact that Schutt can't meet market demands. They may already be at 100% production levels so they can't make one more helmet. Say they don't have funds to build a new factory, under current credit markets, they can't borrow money to increase production.

Kids might not be able to play football. Some programs would be cut and more kids would play baseball or soccer.

This is even worse in the auto industry were market barriers are much greater than other industries. It would take years for a new auto manufacturer to get off the ground. I agree the system will fix itself but you could be talking 5-10 years of recession while waiting for market forces to take effect.

It is a friendly discourse, what else would it be?

Well, I think the only disagreement we have here would be how long it would take to fix the problem...and I'm not willing to die on a sword with how long I think it would be...also, I really don't believe that bankrupcy for the auto makers = doors closing and out of business. I think it would be highly unlikely that there would be NO MORE big three...it may be a big ONE, but then again, I dunno.

I just think that people who NEED cars will be able to get one and those that don't will wait a few years (in the meantime paying mechanics to keep their current cars running...helping the auto service industry where many of these AAU workers could find themselves working) until the sytem rights itself. I realize that may be simplistic and I could be totally off but eh, it's just hard for me fathom all this.

Oh, cars would be available, if you could afford one. A huge decrease in supply like that would cause a major spike in the price of cars. I'm not saying that above scenario will happen, but it is possible. A industry like this is very difficult to fully understand by anyone. I know I don't have my head around the system as a whole or even all the small pieces. This whole thought process harks back to my days studying Economics.

i just know that if there were to be a bankruptcy, those UAW contracts would be rendered null and void...i'm thinking, if and when the big 3 emerge as something else (after a day of bankruptcy or two or a month or 3), the UAW would i assume be first in line to negotiate contract talks.

guessing those contracts will HAVE to be competitive with their competitors at that point.

17.4BLN out the door.

17.4BLN out the door.

Yeah, but it was already gone, wasn't it? Didn't it come out of the TARP money?

yes - but that's 17.4BLN that was dedicated to helping the banking industry

easy come, easy go.

Hopefully those fuckers will pull themselves up by their bootstraps and start becoming leaders again...but I doubt it, although I do like the Ford CEO and think he might lead them to success.

I heard that Chrysler was coming out with some sort of hybrid minivan or one that runs on bio-fuel or whatever. Anyway, I would totally buy a minivan that were more fuel efficient...I've been wanting that for years! I really don't mind my Dodge Grand Caravan anyway...it's a-ight.

they (car companies in general) made a ton of hybrids...people didn't buy them. People love to bitch about the environment, but most aren't going to do anything about it. Personally, I'm not even going to go far enough to bitch about it. Either way, these car companies are fucked and have been dying off for decades. Let them rot.

^^^Well in my case there was two reasons I didn't buy them. They didn't make one that was a minivan...plenty of SUV's but when you are trying to get four kids in their car seats, nothing beats a minivan for ease of doing so. The second reason is they are too expensive...why that is? I guess it's a number of reasons. I've also heard that the batteries or whatever cost a TON to replace. They just need to make more economically sound energy efficient cars.

There's almost no getting rid of the high cost of hybrids, IMO, unless we can come up with a more efficient hybridization...the two entirely separate drive trains I think kills them on overhead.