I don't have an accounting or business degree, so I realize this may be a stupid idea. But for those more educated than me, tell me what you think of this idea, or tell me it's already been proposed and laughed out of some very important persons office.

I was thinking about the whole down hill slide that all of the American car manufacturers are experiencing and was remembering back when Chrysler was asking the government for help to bail them out back in the 80's. Somebody from Chrysler was telling the goverment, in some hearing, that it'd be cheaper to bail out the corporation than it would be to pay un-employment benefits to the laid off workers, not to mention the lost tax revenues. That's not exact, but pretty close to the conversation I remember.
It got me thinking, when the automakers complained to Bush recently about poor sales, unfair competition etc. and all he could say was "make more desirable cars" why wouldn't the government want to help encourage sales of American made products? Why wouldn't they be willing to give some kind of sales tax break to the consumers for buying American versus foreign owned/manufactured products? The more high paying American jobs that go away, the less taxes the Federal and State governments collect. And with less money coming in, the Government puts more aid money out. I don't have an exact strategy or any real numbers to back anything up, but it just sounds like common sense to me. The US should be showing favoritism to it's biggest tax contributors and encouraging their growth.

 

Giving them the home field advantage would be nice in the short-term, but the more healthy way to go is to have them fend for themselves and succeed on their own merits. Tax breaks will only give them the incentive to make sub-par cars again.

 

3SuperSports, you are 1000% correct. And then some.

However, as Bush often says in things: "It's a matter of principle".


It's far cheaper by a mammoth margin to gurantee loans to an auto maker or give tax breaks, or even hand over a vault full of cash than to pay out unemployment compensation, government family aid, healthcare costs, for employees of the automaker, employees of the OEM suppliers, members of the communities, towns, and cities that depend to a large degree or totally on a local plant that has employees that spend in the area, creating jobs that would be lost.

Quebec Canada was faced with that prospect, and they essentially provided GM free money, and a financed plant in exchange for keeping production at Ste Therese till at least 2002. Although GM got to make the F-bodies profitable in a circumstance that they shouldn't have been, the governments of Canada, Quebec, and Ste Therese all won big in that there weren't swamped with thousands of unemployed workers and a decimated community. The workforce was gently reduced over the years, and the small contengent that was left when the F-bodies stopped production, were either pensioned or given other GM or local jobs.... and the governments saved bank.


Even if nothing more was done than implementing a more agressive trade agreement, or applying the same trade standard to each country that's applied to our exports to them would do alot to change the tide.

However, and I don't want this to become political (even alot of republicans even agree), this administration seems to feel it's easier to say "build better cars" than it is to tell China (who covers most of our defict spending by buying bonds) that if they want to sell cars here, they'll have to build plants here or they can't sell here, or tell Japan & Korea (other big investors in the US deficit spending) that we'll impose the same restrictions on their imports if they don't lower their tariffs.

No excuse me while I abandon this thread before it becomes yet another tired political liberal vs conservative fourm.

 

Maybe they can get the President to invade or bomb countries that subsidize their auto industries instead.

 

Don't get me wrong on this, I still believe a manufacturer has to earn it's business. But if there is an unfair advantage to manufacturing in the US, I'd say it's everybodies problem to help solve.