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Auto Bailouts HUGE SUCCESS!

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July 30, 2010 – Comments (5)

With the Obama administration touting over 1 million jobs saved as a result of the Chrysler/GM bailouts, editorials like this that say "The fact that GM and Chrysler are not only alive but modestly profitable in a weak market, after years of losing billions of dollars when car and truck sales were 50% higher, looks like more than just a successful government intervention. It looks like a flat-out miracle.",it's hard to believe we aren't all Communists by now.

Lets take a closer look at the "success" of these bailouts.  It's important to look at the numbers used, because the Obama administration believes that complete destruction of these two companies wouldn't have created an opportunity for rivals, like Ford, Toyota or Honda.  All companies that employ many thousands of U.S. citizens. 

How many new hires would these companies have needed if the companies that controlled 37% of the market share disappeared?

How many Americans would have gotten fire sale prices on their outgoing inventory?  What would they have done with the savings?

There is a new American company that hopes to sell electric vehicles called Tesla.  Their biggest competition is going to be the Chevy Volt.  Will this gov't subsidezed Volt be the death of Tesla?  How many potential jobs have been lost?

The reality is that when the gov't meddles in the economy, the ramifications are often incalculable.  Of course politicians love things that can't be calcultated or we would have kicked them out of office right after the debacle of 1913.  But that's our reality today - a huge $60 billion auto bailout, that may destroy Tesla, the maker of today's ONLY plugin electric car.  

I will make one prediction - by 2020 there won't be any Chrysler cars, if they exist at all they'll be just reselling Italian made Fiats.

5 Comments – Post Your Own

#1) On July 30, 2010 at 10:14 AM, Varchild2008 (84.41) wrote:

The reality is that it was Bankruptcy Court and not the Federal Government that rescued General Motors.

And Chrysler was basically rescued by FIAT when the Feds gave Chrysler to Fiat for a paultry sum.

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#2) On July 30, 2010 at 10:59 AM, ChrisGraley (29.68) wrote:

Obama just rescued the unions for a little while.

Chrysler is no longer a US company, GM is still screwed and Ford bailed themselves out.

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#3) On July 30, 2010 at 11:18 AM, govreg (< 20) wrote:

When the author state something so authoritatively that it is put in all caps "Tesla, the maker of today's ONLY plugin electric car" and it is flat out wrong, it is tough to acknowledge the opinions stated in the rest of the article.  There are dozens of electric vehicles that are in production or have been in production over the last 15 years.  A lot are neighborhood or city vehicles but a few aren't.  Major companies have attempted to put BEVs into production at higher volumes than Tesla.  Unfortunately, this isn't a Field of Dreams.  If you build them, they won't necessarily come.  Plus, Tesla is hardly a car for the masses.  It is a niche vehicle, including its yet to be produced $60k+ Model S.

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#4) On July 30, 2010 at 1:00 PM, MegaEurope (< 20) wrote:

"the Obama administration believes that complete destruction of these two companies wouldn't have created an opportunity for rivals, like Ford, Toyota or Honda."

According to who in the Obama administration?  It seems pretty clear you are just making this up.

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#5) On July 30, 2010 at 1:37 PM, rofgile (99.43) wrote:

Tesla's car is not for the masses, and their lower priced car is only vaporware for a long time.

The Volt is not cheap either, at $41000 (34000 with rebate from US govt).  But, its much more affordable than Tesla.  

So don't argue that the life of GM is killing Tesla.  Tesla's practically vaporware - if you choose to invest in it, its at your loss.

-Rof 

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