Serious Question........

[Burt Munro]

Paul,

I stand by my belief that this is different. 

You and I have talked before about working in the airline industry and how FUN & EXCITING it is!  (yeah, RIGHT!)   Being a customer and being an employee create very different levels of impact.

A flight from Chicago to New York on November 26th at 5pm lasts about 2 hrs.  Once that flight is over that seat on that flight can't be reused, resold, modified or rebuilt.  You paid for it.  On November 27th it is no longer a thing of value.   If you make that same trip a year from now you buy a new ticket, maybe on the same airline, maybe not if they've closed the doors.

A Dodge Ram truck built on the assembly line in Fenton, MO rolls off the assembly line on the afternoon of November 26th.   The new owner takes delivery of that truck some time later and pays for it.  He may pay for it in one shot or continue to pay for it over the next 3-6 years.   He may keep the truck for a long time and then sell it to someone else.  Hopefully, it will still be worth a lot of money.  The truck may require warranty work.  Who will handle that?  The truck will at some point require replacement parts specific to that exact vehicle.  Ford and GM make very similar vehicles.   But there is very little likelyhood that a part manufactured by Ford or GM will ever fit that Dodge.   Use of that truck will impact the owner on a daily basis for a long time.

I am impacted daily by the fact that TWA ceased to exist in 2001 only because I use to work there.  But I am only one of about 25,000 people.   Anyone who flies on November 26, 2008 won't be impacted by the fact that TWA isn't around 7 years later, other than the memories of the trip they may still recall.

If I'm the guy who buys that Dodge truck coming off the assembly line on November 26, 2008 I am hopefully still using that truck on a daily basis for years.   If Chrysler ceases to exist even 1 day after I take delivery of that truck I will continue to be impacted financially for as long as I own the truck.

Shutting down an airline or an auto manufacturer affects the employees in much the same way.

Shutting down the airline that I use to travel on or shutting down the company who built my truck impacts me in distinctly different ways.   I'll find a new airline to fly but I'm still paying for that truck I bought and can't get parts for.

 

[Super Dave]

Ok, I'll run with that...

The plane is built, put into service.  During that service life, it is maintained, updated, checked, loaded, and, at some point, it might be sold as an asset yet to another company, etc.

Yeah, the inventory of the single seat is finite, but even a plane with only one paying passenger still requires a substantial amount of maintenance and safety checks and requirements above what the family car takes.  You know, when the family car breaks down, hey, you pull over onto the side of the road.

When a 737 has a mechanical, it's a little different.  So, there is a very large host of inspectors, workers, loaders, and all that are part of that industry.  I'm betting, just like big oil, that a mutual fund probably has investments inside a number of airlines, in addition to various US motor corporations. 

Yeah, the family might have a $400 a month payment on the family vehicle for six years in addition to maintenance, gas, and insurance, I'd bet that a good aircraft might move an actual inventory of about 6500 passengers during a working month at an average of about $100 a fare...plus paid freight?  Might not be important in the garage, but the financial impact again is probably worth looking at. 

Certainly different.  The overhead on the plane side is very different.

[HAWK]

Burt, you are missing one VERY important detail in your argument, I can replace nearly ANY part on that Dodge truck with a part from a different manufacturer. If Dodge were to go under tomorrow you would still be able to get any problem with it fixed on Thursday with after market parts. The whole argument for bailout of the auto industry revolves around that fact that if the big 3 go under all of the manufacturers of the parts they use will be hurt. I worked in the auto industry for 16 years and in that time I would say that better than 90% of the parts I installed were after market. Hell, if you are actually servicing your Dodge with Dodge parts then you would probably save money if Dodge went under.

I stand by my position that the bailout is a mistake. Look at the bailout in general, who has received money, aside from the banks that wrote the bad loans to begin with. The banks wrote high risk loans that the borrowers defaulted on and the banks cried "we're broke". Now the feds give the banks their money and then they tell the banks that they have to give the borrowers easier repayment terms. I sure wish I could make a risky loan and get repaid twice.

[SV88]

My problem with the bailout is two fold:
1. you are rewarding executive incompetence - These guys make bonuses whether they run their co. into the ground or are rock stars - they are accountable and may see lower comp. but even if they're fired, most have golden parachutes which most of the population just dreams about.
2. Gov. should stay out of business - generally speaking except in cases like Enron, Andersen.
3. (Ok I lied) Where's this money going to come from???  While the US tripled its debt in the last 10 years, Canada is now essentially debt free.  The same is true of several european countries.such as Holland.

We are better off letting them fail and using some money to support/retrain/redeploy the workers in growth industries.  Milwaukee went throught really tough times in the early 80's with wide-spread layoffs in big manufacturing plants.  Many of these workers either started or went to work for a bunch of smaller, vibrant high performing small businesses.
I agree with Hawk's (yeah that's rare) position that as long as there is demand, aftermarket manufacturers will provide parts.  Basic economics.