Car Repairs and the GM Bailout
So, something happened this morning that has me really considering the GM bailout: My car freaked out on me. As a result, car repairs are going to have to be (presumably) made. Luckily, we have an emergency fund in a high yield savings account for just these occasions.
But, since my car is a Saturn, I am suddenly more interested in the possible GM bailout on a personal level. The level of: Who is going to fix my car if there is no more GM? Sure, dealerships are a rip-off, but they make cars so that you have to go in to the dealership to have those fancy computer diagnostics run now.
Up until now, I have been thinking about it in general terms, wondering about the affect of a GM failure on jobs, industry and the economy. I’ve also been having internal rants about stupid management decisions, dumb business models and executives who would benefit more from a GM bailout than anyone else. And it is in this state of mind that I found this on BloggingStocks:
Despite the claims that 2.5 million jobs will be put at risk, I think the U.S. would be better off not throwing away billions of dollars by giving it to the executives who have overseen a 95% drop in GM’s value since 2000. Perhaps we can convince better run global competitors to purchase GM’s factories and work with its suppliers. For those who do not get jobs with a new owner, we can provide funds to retrain them for other industries — such as making wind turbines.
An interesting idea. Sell off chunks of GM to others with better business models. The only problem is this: Who is going to buy the icky GM stuff? At any rate, I suppose my car will still be able to get service. After all, the guys who own the dealership already have that fancy equipment. They can still run a service shop.
Tags: car repairs, Economy, emergency fund, fix my car, GM bailout, high yield savingsRelated Stories
POSTED IN: Business, Economy, Family finances
6 opinions for Car Repairs and the GM Bailout
Mike @ Oblivious Investor
Nov 13, 2008 at 7:36 pm
Yeah, I’m having a hard time deciding how I feel about all this. On the one hand, I hate to watch my tax dollars go to bail out companies that are chronically unsuccessful. On the other, it’s hard to stand by and watch as people lose their jobs.
Either way, best of luck with the car repairs!
Miranda
Nov 13, 2008 at 9:09 pm
I think a lot of people are having these same struggles. It’s hard to watch ordinary people suffer for the bad decisions made by others. And it isn’t going to help the economy, either. If the Big 3 go down, then there is more job loss, and more foreclosures as people can’t make ends meet and the cycle perpetuates itself.
Justin @ FixThePig
Nov 14, 2008 at 12:57 am
This is a really tough call. The last thing that our economy needs is more lost jobs. I mentioned on my blog yesterday that in order for a bailout to make sense we as taxpayers need some assurance that the big 3 won’t be back to congress in 6 months looking for more cash. Furthermore I think we need to have an ownership stake in return for any kind of cash injection.
miranda
Nov 14, 2008 at 9:14 am
Thanks for your thoughts, Justin. I agree that some sort of re-organization needs to be a requirement for any bailout money. Some sort of sustainable business model should be required. And I like ownership stakes. The government should have the ability to make its money back.
Jerry
Nov 14, 2008 at 3:40 pm
Don’t worry about your car being repaired. Others will be more than happy to pick up the business I’m sure. I am worried about the several thousands of jobs we are going to lose and I’m frustrated with the fact that the companies aren’t producing cars that consumers want to purchase. I think it has been a slow and arduous process for them. GM announced that they were going to have to cut out R&D facilities in order to make their budgets work. I am very concerned…
miranda
Nov 14, 2008 at 6:05 pm
I was being a little over-dramatic, I suppose :) In fact, I ended up taking my car elsewhere for repairs (read about it here: http://www.yieldingwealth.com/shopping-around-for-car-repairs/). But the fact that my car is a GM vehicle and the GM bailout is in the news didn’t escape my thought processes.
Anyway, I think it’s ridiculous to cut R&D to make the budget work. Without R&D, how is the company supposed revamp its product offerings? Why not cut executive compensation instead? Honestly, though, all of the Big 3 need to restructure their business model. However, this is unlikely, especially if they get bailout money that helps them maintain the status quo.
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