Tesla Motors on Detroit Bailout | Hacker News Reader

Tesla Motors on Detroit Bailout

teslamotors.com

42 pointssh1mmer13 comments

From Peter Klein (via 37s)

"The proposed bailout of GM, Ford, and Chrysler overlooks an important fact. The US has one of the most vibrant, dynamic, and efficient automobile industries in the world. It produces several million cars, trucks, and SUVs per year, employing (in 2006) 402,800 Americans at an average salary of $63,358. That’s vehicle assembly alone; the rest of the supply chain employs even more people and generates more income. It’s an industry to be proud of. Its products are among the best in the world.

Their names are Toyota, Honda, Nissan, BMW, Mercedes, Hyundai, Mazda, Mitsubishi, and Subaru."

I think that foreign automobile makers would fill the space rather quickly. Some brands would disappear, but most would be continued one way or another.

It would also open up for innovation in the car space, something america hasnt had for a long time.

I find myself enormously frustrated by this whole situation. I don't like many cars produced in detroit and I would never buy one. I don't want to prop up companies whose products I don't admire. At the same time, I don't want to see so many people out of jobs because the big three go bankrupt. I've never been to detroit, but I can imagine that if the big three went bankrupt the city would be in dire straights.

The people that are pondering these problems are going to have some very tough decisions ahead of them. Balancing what is better for the country as a whole and what is good for "detroit" (all the companies, people, and suppliers that are interwoven with the big three) is an enormously tough job.

I think what is interesting to examine is whether the bankruptcy of these three particular companies would leech all the jobs and potential to make money out of the Detroit Metro area.

Personally, with such an abundance of skilled workers I'd be surprised if other manufacturers didn't pick up the pieces and carry on. However the concern is say the Japanese car giants stepping into the market without reinvesting in that area or the US economy as a whole.

The foreign car companies are in a position to act strategically (unlike the domestics whose hands are so tied they can barely act). If the physical and human assets of the Big 3 went on the market, Toyota and others would swoop in and buy them up, bring it up to date, and hire those recently unemployed workers to build cars for the US economy and to export. They wouldn't be city patrons of Detroit like the Big 3 were, but the Big 3 have been broke for so long that their patronage is just historical anyway.

I bet Detroit would be much better off if foreign car companies moved into the space abandoned by the Big 3.

Agreed, it's a tough situation. An important question is this: are the big three on life support anyway and close to death?

If so, giving them bags of cash may only extend their life a few more years before they crash and burn. Then we (the people) are out bailout cash and the people that might have lost jobs have now officially lost them.

This is what I worry about. The whole SUV debacle is interesting because it showed the US automakers making a comeback, but then gas prices soared and nobody wanted a big car like that anymore. It shows poor leadership to me that they weren't diversified into cars that would be feasible after a gas hike. Even if those cars weren't best sellers, they would enable a faster retooling into cars like those now.

I drive a '96 subaru outback. There is nothing like it from american automakers. I used to live where it snows a lot, and I would only consider buying a subaru.

Ford Taurus X is pretty much the equivalent of the outback or Dodge Caliber AWD

It's partially the jobs but it is also how many people hold the stock and would see that evaporate in bankruptcy.

GM. Market cap: 3.2B... How is giving them $50B a good deal here?

It isn't. Nobody (sane and informed) thinks that this is an economic move or any sort of sensible investment. Thats not what the debate is about. Personally, I would rather these 3 companies went bankrupt than continue to be a drain on the taxpayers.

close down the money hole? tell that to the man that has spent the last 10 years of his life digging on 8 hour shifts. the hole is all he knows.

I'm no expert on Detroit's economic situation, but the detail I will never forget is how much it cost to park in a lot downtown for the day last time I was there. $5.

It's an easy $27-40 to park in downtown Chicago for the day.

I actually got chills when I saw how cheap it was.

You can park for free in downtown LA, or even for paid parking.. $8 for the day in Pershing Square, and similar $5-$10 amounts all over the place.

I know this is a somewhat unfair comparison, but if the parking prices in Detroit had crashed I'd say there's something in it, but not in comparing to another city with different dynamics.

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