And I Thought October Was Bad
Friday December 05th 2008, 1:03 pm

It would be nice if this mess would just go away, but it won’t. Every day there is more bad news. I spent yesterday afternoon watching CNN which is something I never do during the day. The heads of the Big Three auto makers were requesting a massive $34 billion loan or bailout, or whatever they are calling it, from the taxpayers in the United States. Those companies have only themselves to blame, but it is doubtful they will be allowed to fail. The damage it would cause the North American economy would be too much. Many people, myself included, feel they should not be bailed out, and should file Chapter 11 bankruptcy if they are that bad. It would be survival of the fittest.

Ford, which is the strongest of the three, may survive. The quality of their vehicles have improved, and are now as good as most Japanese cars. They should be rewarded for what they have done, and not pulled down by the other two. Putting money into Chrysler is putting good money after bad, and there is no reason to keep them in business. The auto manufacturers are blaming the banks for not giving credit to customers wanting to buy their cars. I don’t understand why credit isn’t easier to get in the United States now that the banks have been promised their own massive bailouts. I guess they have better use for that money by buying other banks.

The senators, who were questioning the car makers, were emphatic that any financial help from the American taxpayers must be used for American plants. I agree with this because they shouldn’t have to subsidize plants in Mexico or Canada. Most of the vehicles made in Canada are shipped to the American market, but don’t employ Americans. The Canadian government would be expected to also put money into this bailout in order to ensure that some jobs stay in Canada. A financial expert from Moody’s stated that over the next few years the car manufacturers would require $75 to 125 billion to stay afloat, and not just the $34 billion they are asking for now. Canada, unfortunately, would be expected to pay some of this escalating sum, or risk many more job losses. The Canadian government has money ready to give to the auto makers as soon as the American plan has been approved. Can we afford the huge sum we may be required to pay, and is it worth it. Is there any real guarantee that after the Canadian government has put money into the auto industry that jobs will actually stay in Canada.

The car manufacturing fiasco is just like the bank fiasco. The big shots messed up and were greedy so every one else pays. They were making too much money on SUV’s and trucks so they didn’t put any effort into making good quality fuel efficient vehicles. If Ford, Honda, Toyota and Mazda can make good quality vehicles, why can’t GM and Chrysler. What is wrong with their quality control? They even ruined the Saturn, which started out so promising. They have been making junk for years and expected people to buy them.

Our last three cars have been Japanese, and I wouldn’t consider buying anything else. We just purchased a new Mazda last week, so they lost another customer due to their poor quality. We don’t have a credit crises in Canada, so we can purchase any car we can afford. The top three car purchases in Canada this year were the Honda Civic, the Mazda 3 and the Toyota Corolla, which are all Japanese. I don’t see this trend changing anytime soon.