America Needs to Return to Manufacturing Health Again
The Big Three Auto Manufacturers see the long line of other industries getting government bailouts, and wonders why not jump in and get some before it all runs out? We listen the the requests of the Big Three car manufacturers and wonder, why?
The Big Three Have Nothing New To Offer – But They Want Money For It! We Have An Answer For Them Here In This Article!
Democratic & Republican leaders in Congress crafted a plan to fork over at least $25 billion to Detroit, above and beyond the $25 billion in loans the government already consecrated to aid the Big Three make more fuel-efficient cars. The problem with that is that is it actually a UAW Bailout and will do more injure than good. The Big Three need to go through Chapter 11 of the Bankruptcy Code so they may reorganize and level the playing field with alien Manufacture of automobiles. While the huge three are in chapter 11, Congress may sanction recapitalization and the following tax law changes.
Eliminate All Income Tax & Capital Gains Taxes on the Auto Industry
Replace the income tax with a national automobile sales tax that is equivalent for all automobiles. Both American and Foreign. This way American Manufacturers will now have a level playing field. Finally, we will have economic justice. After the U.S. Treasury see how helpful the tax law changes are, other industries will have to be permitted to sign on. Capital will flood into the automati industry, after filing Chapter 11, and the taxpayers will not need to put up the capital. See the bottom of this report for further information.
Following are various primary reasons why a bailout is not a good idea:
- A bailout would provide cash only for short-term survival. It wouldn’t change car makers’ seriously flawed business models. GM is running through cash at the rate of $2 billion a month. So $10 billion from the government would give it only five months’ breathing room. Can they turn over their business exercises in that period? We all know better than that! They would be merely to come back to taxpayers for more. These companies need new business plans. The old ones must have been scrapped in 1973.
- A government handout would grant the Big Three to keep out of the way of necessary cost cutting. Because of a strong union, the intermediate GM employee received $70 an hour in combined compensate and gains last year. And it’s not just line laborers who are making too much. GM chief executive Richard Wagoner garnered with regards to $24 million a year in 2006 and 2007, while leading his company toward oblivion. That is too much cash to be remunerated for crashing a legendary company! What is wrong with CEO compensate plans that remunerate so much to executives who trash companies like this?
- Bankruptcy isn’t a bad idea, it is a very healthful idea whose time has come. It doesn’t mean liquidation, which is what a Chapter 7 would be. It means taking the painful steps the companies have been unwilling to contemplate to date. The real losers in such a deal are car makers, equity stock holders and creditors. Bankruptcy would give the automakers the prospect to throw out existent employee contracts with their onerous health and pension systems. The unions would be forced to temper their demands if they want the car companies to survive. In the case of GM, it could also dump numerous of it is uncompetitive product lines such as Pontiac and Saturn. Discontinuing five of GM’s eight domestic brands would save the company $5 billion annually. The unions either go along or go beneath with the automakers. That is reality and that is their choice. Remember that GREED KILLS!
- Taxpayer cash won’t change the fact that galore alien cars are made better than their U.S. counterparts. Kelley Blue Book declared it is top 10 brands for resale value this week, and not one of the Big Three was on the list. Chryslers, for example, keep only 24.2 percent of their sticker price on intermediate after five years. By contrast, Hondas retain 44.5 percent of their value. The taxpayers already have $25 Billion committed to aid the Big Three retool the plants and now it is time to retool the labor contracts.
- Bailout funds would support automakers carry on their outsourcing of automati jobs to alien countries, where costs are lower. All of the Big Three have increased the portion of constructing and assemblage done overseas in the past year, exceptionally in China and Mexico. In May, Ford consorted to build $3 billion automati plant in suburban Mexico City and upgrade two other Mexican plants, the biggest alien investment in Mexican history. We need more jobs here in America, not in Mexico. If we run short of workers, we may change our immigration laws and upgrade our guest-worker program.
- Big Three bankruptcies wouldn’t mean the end of automati industry in the United States. It may increase production here. Foreign companies, which already have plants here, could pick up the slack and open new factories. Some 78,000 Americans already work for alien car makers, a number likely to rise in the wake of any U.S. automaker demise. The downhearted South could gain specially from increased production of alien automati companies. Let us move forward now!
- Other industries have pulled through bankruptcy just fine. Most of the major airlines have expended time in bankruptcy, including United, Continental, Delta, Northwest, and US Airways. Their predicament looked specially dire after 9/11. But the major carriers made it through. And to the extent that they suffered, low-fare contenders such as Southwest and JetBlue picked up the slack, often times providing superior service in addition to for less prices. Southwest does pretty well and seldom turns in a loss. Is anybody paying attention? It is past time for lazy overpaid executives to sit on outdated business plans. It is time for investors to shake up stock holder meetings. Let’s have a good deal of fun!
- Bailing out the automati industry would only give hope or courage to other spheres to beg for government handouts. Remember that the $750 Billion Troubled Assets Relief Program was designed only to support banks, but now insurance companies and even credit card giant American Express are attempting to get in on the action. Home builders, who arguably are as strapped as the automakers, could lobby for a good deal of of the action.
- Stockholders is worthy of no mercy. Some argue that they ought to be paid for the fact that GM and Ford’s percentage prices have hit their lowest levels in decades. We all recognise that is pure 100% non-sense! But in a free market, stock prices go down as well as up. The automakers’ difficulties have been clear for years, so investors had a great deal of time to get out for demand overdue changes. As for Chrysler, it’s owned by private equity firm Cerberus, no innocent victim itself. The share holders have not kept the manufacturers accountable. From this day forward, they need to do just that. Then we would have more American Economic Justice.
- Bailouts have been tried in the automati industry, and they don’t work. In the 1970s, Britain’s Leyland hit the skids, hurt by slipping quality in it is vehicles and imports from Germany and Japan. Sound familiar? Leyland, which made MGs, Jaguars (Jaguars are now schedules to be made in India) and mass-market cars, accounted for 36 percent of the UK market. So the government sunk in $16.5 billion to keep it afloat. The result? Unless you’re a car buff, you’ve in all probability never heard of Leyland, because it no longer exist. The same will occur for the Big Three if we bail them out.
So let us consider the four items below:
- Fair Access Amendment – ([http://justicetimes.com/?p=1254])
– Fair Tax Act – (http://Fairtax.org)
– Read The Bill Act – (http://downsizedc.org)
– One Subject at a Time Act – (see above)
If you are concerned when it comes to our nation, please determine how you may participate. At a minimum, please submit your thoughts and comments: We are looking for a PHP programmer who may aid us design a one click plug in for people to be capable to contact their elected officials. Please advise if you recognise of someone who could do this in interchange for an equity position with Justice Times.
Please consider joining our little group of investigative writers. You may exploration and write in your spare time and share the advert revenue.
We are also taking into account investors who would like to be salaried off the top from all incoming revenues rather of the typical business model of “if there is any profit, we will portion it with you unless we vote to keep it.”
HORRRRRIBLEEEE