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Big Three Bubble To Burst – Bailout or Bankruptcy Best Tool?

3:46 pm General Interest, Service Manager, Tech/Mechanic

Bubble_1

Courtesy of Brainstuck.com

Big three auto makers bubble is soon to burst, the question is should the Government bail them out? What is the best tool to use when it comes to their situation? What would your grandparents suggest? And what guarantee do we have that they won’t come back again later knocking on our door, begging for money like a drug addict in the middle of the night. What remains obviously apparent is that without bankruptcy, the big three will not be able to re-negotiate their obligations with the unions. No doubt, the unions have done their job of getting every dollar that they could for their members. The problem is, they may have just priced themselves out of a job.

Question: Should the US Government bail out the big three or should we let them go bankrupt?

Answer: In my opinion, rather than you and me (the US Government) borrowing money from the Chinese and writing the big three a check, we should let them clean up their own mess. After-all, unless they undergo some major restructuring, they are likely to be back asking for more money later, unless the market makes an unbelievable turnaround.

Question: What about all the jobs that would be lost if we allow GM and the others to go under?

Answer: It wasn’t the end of the world, when AMC (American Motors Corporation) went out of business. My guess is, that the Japanese car companies that have manufacturing plants in the US (and by the way are not struggling like the American companies) will take up the slack. They may take up the slack by simply increasing their market share or by some sort of takeover. Either way American jobs will still be here in one form or another.

Oh yeah, this is an automotive tool blog tailored to the automotive repair industry, this is how this ties in. No matter what the outcome, we are heading into some hard times. The good news for auto technicians is that there will be more people keeping their cars longer, insuring more repairs will be needed. Auto repair shops that are ready to provide dependable service are likely to benefit. Automotive repair shops must also be financially sound, with little debt so that they will be around and have the staying power required. I predict that automotive tool sales will increase on the Internet compared to tool truck sales. This makes the most sense, because of the lower overhead, on-line merchants are able to provide many of the same name brand automotive tools that the tool trucks provide at a much lower cost. Try this. The next time you step onto the tool truck and see a brand we carry, for example an OTC Genisys Scan Tool or an SK wrench set. Write the product number down and search our site for a comparison price. Many times you’ll find up to a 50% difference in price.

What’s your thoughts on the bailing out the car manufacturers and other industries that may follow suite?

2 Responses
  1. dennisb - Auto Tool Sales :

    Date: December 21, 2008 @ 10:23 am

    I agree it’s not going to be pretty.

  2. dennisb - Auto Tool Sales :

    Date: June 1, 2009 @ 12:42 pm

    Good call TracyAllen… GM just filed.

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