Does R&D Justify Auto Bailout?

At least bailing out the car companies will be slightly more effective in keeping people in work rather than the trillions flushed down the pan bailing out the financial fraudsters institutions.

Maybe we should get back to a barter economy...I'll swap a bag of turnips for 5litres of petrol...

Del

In what cases has Government ownership of companies worked? Actually I am not familiar with any. Maybe you could make a case for NASA, as an R&D citizen owned company. Apparently Universities and Colleges either State, or Private do R&D and sell it. Maybe the Government ought to buy the car companies, and charge NASA with designing what they made? Still, why don't we buy any Russian made cars? We don't buy many Russian made airplanes either. Why is that? It is interesting why one country makes machines that are successful internationally and domestically, and others don't. I am very interested in how the India company Tata, and its car turns out. I understand that its central factories make the parts for the car, and then ship them to the dealer, where when purchased, the car is assembled. There are a lot of reasons that this system appeals to me. -One being I could buy the car in a box and take it to my mechanic to put together. -Two even if I paid the dealership to put the thing together the building of cars would be less concentrated as a source of work for me or my neighbors. -Three shipping costs would be lower. Four, a car that could be shipped in a box and assembled where it was sold would by its very nature demand that it be simple to put together. Nevil Shute wrote in his autobiography Sliderule, about the British experiment whereby a contract was let out for the construction of a Diridgible, (Airship) to private industry, and the Government built one to compete with the one private industry built. The Government Built Airship crashed 50 miles from departure point, and the privately built airship went to Canada and back. Unfortunately a good number of people died in this experiment. Over the past era, there has been an assault in the US over the separation of Church and State. It is interesting that as religion has been given more power, ethics seem to have been very compromised. (When my business failed, it did not occur to me to ask the government for a bailout. Hell, I told my main backer that in the situation it would take an awful lot of money to gain any competitive standing.) -Of course I was not so big as to be "Too Big To Fail", or was I? To tell part of the truth about my failure, it did have to do with my health. I had built up a company and paid off inherited debts, was non union and independent, fighting for jobs with the Unions with inferior equipment when there was an East Coast and West Coast Competition for Commercial contracts that produced a Lockout, along with Government Code changes for my electric distribution system. Oh, yeah, my back was wrecked. No work, and no way to pay on my dime more for fixing my back. Desperation is a hallmark of the American incentive to invent. Garage Bands and Basement inventors have depended on Intellectual Property Rights. Orville and Wilbur Wright went round about these things. I think they sold their planes to the government, so it is hard to figure out exactly what is best. I do think that my government rightly ought to pay for infrastructure, but have great doubts about how much it should pay for machines designed to use it. There is in the history of mankind a number of experiments that have come along to have happened whether they were ethical or not. If we are to actually come to a conclusion about what is best, I suggest we as a group determine what experiments happened, what they really mean, and what then is the best course of action according to the results of the experiments. I have become attracted to the idea of Technocracy, and am interested in evidence to support my attraction.

R&D is important, but there is a larger consideration usually overlooked. Without the bailout, China or some other foreign country will probably buy at least GM. Many of the US military vehicals are built by GM. Do we really want to have the Chinese supplying our Army? Not to mention the inevitable technology transfer.

I agree with Harry.

If R&D is a consideration, not only should the auto industry be protected, but I think that NASA and the space program should be better funded in the future. That program has provided our society with a lot of new technology, some that even made it to the auto industry.

If were it to come to a foreign country to buy any of the little 3 I would like to think that the pointy heads in Washington would have the smarts to carve out any military divisions of said little 3 and not allow them to be part of the deal.

But, this may be hoping for too much because a lot of the mess we're in now (overall financial, not speciffically automotive (the automotive companies have been going out of business for 10 years, they're just coming to terms with it now)) can be laid at the feet of many in Washington, who ironically are now the ones who are going to "fix" it and make everything alright.

So often at work I see those who CAUSE problems through poor design get honors and high praise when they are seen "fixing" the problems (they created). At the same time, those of us who's designs go to the shop, get built, installed and work fine are ignored because we are not seen waiving our hands telling everyone how hard we're working. The same thing applies to those who got us into this financial fiasco.

Travis

Of course R&D is important not just for the big three, it also is important for all the smaller industries supplying the big three, without the demand from the car manufacturers, automotive related R&D claims would be that much harder to substantiate, and there would be little incentives. The big three need to be "the big one, or two" along with keeping their R&D work from years back gaging along, they definitely need assistance, a bailout to tie them over for three months is not a fitting plan without accountability.

R&D is one of the areas that is not commonly outsourced, often it is "owned" by the beholding company, hence if the ships go down, current development in the big three will go with it to a large degree. The amount of developments and fitting applications will decline as the need declines, and the fabric that created them is torn, and will have a lengthy repair time.

It is important that different Countries do their own R&D to keep everything competitive and maximize the variety of advances. No Company can nor will truly concentrate on R&D when they are on shaky ground.

All right now, everyone go out and buy a new car! Maybe the big three could offer these vehicles with a 50% government backed return on purchase price if they go down, or if the companies are sold within a year? That should drive some sales, and go full circle - .

As to if R&D is the reason to keep the big three afloat, no, R&D is a steroid when everything is already running. The tax incentives compared to the returns on good developments are likely small. R&D generally is an advanced engineering function and the effects of todays efforts do not generally assist until beyond three months in the future, tax incentive aside. Hopefully the R&D from some time ago was valuable, and can be be put to use. The R&D from past years can be further branched and developed with a reduction of requirement for qualification. R&D efforts can be slowed until the big guys and the governments have handed in their bailing buckets.

A lot of R&D efforts actually also are passed along from the Aerospace sector, that can continue until the Auto Execs do not need their Jets anymore to get to their bail-out meetings and business air travel is reduced, which is when everyone employed in the car industry will need a car again for four hour travel destinations.

Let's get real folks. If the gov't depends on GM then why not BUY it? Look here for the total share value of the company at 2.4B, why pay more? Just buy the damn thing.

The first comment to make sense. It would save a lot of money.

No R&D does not. GM had a perfectly viable electric car and sold the battery rights to an oil company that owned a major part of them. You are paying the oil company to withhold R&D from the consumer.

I'd have the Government buy it but their master's the banks would turn it into a bigger mess in their favor.

As for China buying it, they already own major shares in west coast ports and shipping and it is rumored they hold the mortgages to most our National parks that back our governments National debt.

Mercedes could not turn Chrysler around because it does not want to be anything but a leach on society. Pay me more for cars that are not as competitive as foreign cars.

Japan learned from us that constant improvement work and made it a national mantra. Yet our auto industry is pay me more because I have been here longer and now do less. To maintain their bloat they withhold technology that would benefit the consumer and the environment.

GM helped destroy our public transportation industry for a short term profit. To them it is all about money not progress. I see no difference in the other two when they share UAW and many of the same influential stockholders.

When greed rules all and money is their drug, giving them money is the same as giving a junkie his vice. The question is are you a rehab or a dealer. 1/3 of 15 billion to a 2.4 billion dollar company is not a rehab it is a cartel move.

Show me something worth saving? The UAW? The Stockholders? The over paid upper management? It is sure not the product that can be stole with a screwdriver and a rock then cost $800. plus just for pot metal parts to repair. Seat belts that any race club would ban on sight. To bad the rest of the world learn to build failure into their cars from them.

Now what kind of message does that send to our industries? our competitors? our allies? our enemies? So what is the real reason for this bail out? Because it is coming out of your pocket and your children's pockets.

Brad