Quote:
Originally Posted by cody
First of all, I believe that oil companies report profits higher than any other industry or something along those lines. They can do it because we will pay it. It seems to me that the price of gas rarely has anything to do with the cost of doing business. They can most likely afford to bail out the car companies without passing on the cost to us...doesn't mean they wouldn't use it as an excuse if forced into it, but the proposal was that they would do this voluntarily to promote demand, down the road.
2nd, keeping the gas guzzlers coming is going to keep demand high which is in the oil companie's best interest. So bailing out the car companies would likely raise the cost of gas, but only down the road when we continue to have gas guzzlers on the road sucking up the supply with their demand.
I haven't researched it, but I bet gas prices are low right now because demand has gone down due to the high costs forcing people to change their vehicles and driving habbits. We're starting to curb our oil addiction so they're making it cheap again.
That's my take anyway.
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The root of the problem wouldn't be solved by an oil-cartel bailout, because it's a lack of demand for American cars. NOBODY outside of the US buys American anymore, and we're steadily buying more and more imports for a variety of reasons- some tangible, some purely in our heads- that the bailout won't fix. That's why the question in Congress isn't whether or not Detroit should get the bailout, it's whether or not one would do any good, and are the Big 3 ready to finally learn what Japanese and German manufacturers figured out 30 years ago? If they really are going to restructure and shift responsibility back towards R&D and engineering/design and away from marketing and accounting, then I would be in favor of giving them whatever they need to get there. If they're going to continue sitting on their ancient marketing models for selling cars, no dollar amount in the world is going to stave off their slow, strangling death.
35 years ago Honda and Toyota figured out how to beat us at a game we invented. All we have to do is copycat them right back with just a dash of innovation and we can return to being the 800 pound gorilla of the industry.
Oh, as for current prices- it's a direct result of the giant crap the worldwide economy is taking, not from reduced demand. Demand has barely fluctuated in the last year.