piranha: red origami crane (Default)
[personal profile] piranha
seems like harper is looking to bail out the big 3 automakers here in canada. man, that must make his little, stony, "the free market is god" heart go into arrythmia.

what's with the $6 billion price tag for that bailout? they're asking for $14 billion in the US, and our car-manufacturing sector is what, 1/10th of that of the US? hello! and say, what's the plan? what will we get for those $6 billion? anyone?

also, parliament is prorogued. GM claims it's going bankrupt even as we speak, within days. how is this going to get done?

i can smell a huge deficit coming our way. ah, conservative governments.

on 2008-12-12 17:39 (UTC)
Posted by [identity profile] elissaann.livejournal.com
How confusing! Aren't conservatives opposed to big government? Or is that another "divided by a common language" thing?

conservatives opposed to big government

on 2008-12-12 21:10 (UTC)
ext_481: origami crane (Default)
Posted by [identity profile] pir-anha.livejournal.com
yes, they are. but just as in the US, they don't always do what they say -- though to be fair, harper's conservatives are somewhat better about it than bush's. and harper really hates the bailout idea, it's pretty clear from looking at him when he talks about it.

on 2008-12-12 20:38 (UTC)
Posted by [identity profile] dubiousprospects.blogspot.com (from livejournal.com)
If he doesn't do something, he hurts the electoral chances of his party in Ontario; worse, he improves those of the NDP. :)

The few public statements I've seen have been very clear that this is all supposed to be loan guarantees and credit, no actual give-away on the American model.

It's all moot anyway, since the US isn't going to bail theirs out, so there will be a general collapse in North American auto making.

A sensible PM would seize the opportunity to set up more, smaller, debt-free worker-owned car companies to make electric and non-ICE hybrid-electric vehicles, and actually have not only export product but unique expertise.

But if you think this is sending Monsieur Harper's heart into arrhythmia, one can only imagine what that would do.

on 2008-12-12 21:07 (UTC)
ext_481: origami crane (Default)
Posted by [identity profile] pir-anha.livejournal.com
i don't think it's moot.

two reasons:

- the bush administration has now said it might use the TARP money for this. (the NYSE promptly started going up from being down ~200.)

- even before that i've read conservative noises that they might act somewhat independently from the US.

also, only GM and chrysler are very seriously in water up to their eyebrows right now. ford is in not quite as bad a shape.

your idea would make harper's heart secede from the rest of his body. :)

on 2008-12-13 00:03 (UTC)
Posted by [identity profile] dubiousprospects.blogspot.com (from livejournal.com)
Acting independently of the US is all well and good, but the auto industry isn't really separable along national lines. If the US one goes, the present form of ours goes no matter what.

I mean, at current market values, the Canadian government could by the three core companies, but taking on the whole sector would be a stretch, and probably not be welcomed even if we offered to take all of Michigan.

Bush administration intervention doesn't seem likely to be effective given the time frame.

And I really like the mental image of M. Harper's heart, escaped from his chest, shouting "Liberty! Equality! Fraternity!". Waving a little flag clutched in it aorta...

on 2008-12-13 01:38 (UTC)
Posted by [identity profile] flarenut.livejournal.com
In the current environment, loan guarantees are an awful lot like real money.

And as for the numbers, the Big 3 started asking for $25-35B down here, but no one was biting, so the number finally got whittled down to 14 before being scuttled by a bunch of senators whose states have given a billion or so in subsidies to non-US carmakers that employ non-union labor. So $6B from a conservative PM sounds like a nice round number.

I don't know if how Canada's central banking system and treasury work; in the US, the treasury and fed could pretty much guarantee loans by fiat at this point.
ext_481: origami crane (Default)
Posted by [identity profile] pir-anha.livejournal.com
yeah, i was wondering what those conservatives knew that i don't know, about propping up the auto industry even if the US doesn't.

time frame? the bush treasury department can decide overnight that they want to use TARP money, and how -- they pretty much got a blank cheque. it'd be faster than anything else.

i'm tempted to do a little photoshopping now. :)
Posted by [identity profile] dubiousprospects.blogspot.com (from livejournal.com)
Harper has to do something for the Canadian auto industry because otherwise he'll be going to the poll with a sucky economy and having handed organized labour several knives with which to carve their initials in his liver in Ontario. He can't afford that, so he's trying to bribe them not to do it.

The Bushies have the blank cheque, yes, and could pay off GM and Chrysler's arrears with their creditors, hand over operating funds, and so on, with the stroke of a pen.

What they can't do is cause GM and Chrysler to start making cars (enough) people want to buy. That would take at least a couple years to really get rolling, and would also require being rather mean to members of the executive class. It's also very unlikely that they actually want to; they've been handed their best opportunity for union busting in generations, and I doubt they can be prevented from taking it.
ext_481: origami crane (Default)
Posted by [identity profile] pir-anha.livejournal.com
i am actually surprised the bushies are so into the bailout. under normal circumstances i would have expected them to let the US-owned auto industry sink. as you said, best opportunity at union busting in ages. maybe bush just doesn't want the apocalypse to happen on his watch; presumed legacy and all that jazz.

sure, $14 billion, or even $35 billion is just a bandaid; none of that will change the management style and the decisionmaking of the big 3. also, even if it did -- the car market is pretty much saturated in the US, and it's not like people are going to be buying lots of spiffy cars while in a recession headed towards a depression. and china's automakers are eyeing the market -- they're much cheaper, and already a massive threat in their own country.

i just don't see this looking good even if the bailout bandaid tides them over for a while. for how long will it do that?

well, that didn't take long

on 2008-12-13 17:26 (UTC)
ext_481: origami crane (Default)
Posted by [identity profile] pir-anha.livejournal.com
and here it is. $3.4 billion contingent on the bushies forking over their share first, and on government approval of long-term plans.

this is what peeves me considerably:

None of the automakers and their Canadian subsidiaries have revealed publicly how they would spend government aid nor provided any details of plant closures, shrinkage of operations or job losses.

on 2008-12-14 00:54 (UTC)
Posted by [identity profile] huashan.livejournal.com
I believe it to be just like the bigger bailouts that failed first time through. Congress is waiting for the second round through so they can show horn a bunch of pork into the bill when it goes through.

I'm talking about US, hopefully Canada won't go that route.

The big question is...since the companies that own the automakers still have money and the parts of the automakers companies that exist outside the US still have money, why does anybody believe they actually need to be bailed out? I think it's like a lot of the dotcom failure...a bunch of companies used it as an excuse to fire people and make changes they couldn't normally get away with. But mostly I just think that it's greed and corruption running rough shod over everything and everybody they can find.

Not that I have a negative opinion of politicians or corporate heads...

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