12voltman59
Nov 24, 2008, 7:39 AM
Waking up this morning-----the news is talking about the imminent collapse of Citibank, one of the world's largest financial companies, and the decision by the Treasury to extend them a "bailout" to the tune of about $350 billion.
You do have to wonder---where and when will this all end???
It seems that instead of anything getting better-----the hole just gets deeper and deeper.
They get talking about "when is the other shoe going to drop?" I thought the metaphorical person we were talking about was a two footed being----now it seems this "person" is some sort of hydra monster with many, many feet.
We have the pending wholesale collapse of the US auto industry----something that if it does happen-----that is thought too scary to even contemplate----I know it does for me and my family----my parents own a company that is a second tier supplier of parts that are made for direct line suppliers of assemblies for the auto, light and heavy truck, railroad locomotive and railcar manufacturers--all industries in deep, deep do-do now!
If the US car makers go down (at least GM and Chrysler are in danger of going)---at least going into bankruptcy proceedings--something that in terms of seeing to the necessary retooling those companies do need to do----it will be a disaster for the rest of us who supply them----they don't have to pay their suppliers along the supply chain at least for a time ---and guess what folks--if they don't pay us little guys out here---we can go maybe six months at best--then we are alll GONE!!
Actually--many of the little guys who supply the auto industry are in not that bad of shape-its just that we do operate on a thin edge--it is the big main line, first tier of auto suppliers like Delphi and Dana Holdings that will be gone--they are all companies that have been in trouble for some time.
When the auto companies would emerge out of bankruptcy proceedings----those in Congress who wanted this will have won that battle only to have lost the war because there won't be anyone left to supply them the parts they need to run those auto plants--unless of course they give all of us a big bailout too--but I doubt that--we are just the little "mom and pop" pisants that don't get on the radar of the crowd in Washington---
If all of our little supply companies go down--those companies represent many, many jobs in many, many places all over America, Canada and other countries--many of those workers are at a point in life--the probability they will find another job of any consequence is pretty damn low in better times--and in this current situation---pretty much going to be nil.
If many of the little companies go down--those people no longer go eat in mom and pop cafes--they don't buy new cars or houses----they start cutting their own hair at home with a set of clippers bought at Wal-Mart and not go to the barber shop or "hair stylist" shops----I could go on--
The fact is--the "multiplier effect" of the auto industry is simply incredible--it is something like a ratio of ten to one--for each job lost directly at one of the big three---you lose at least ten jobs in the greater and wider economy----
I hear that one US Senator talk on the taking head shows---Richard Shelby of Tennessee----in one way he is right--the auto industry has made a whole series of mistakes that need to be rectified, so he thinks that bankruptcy is just fine and the best way for that to happen--on the one hand---I agreee if the times were different---but with things as they are now----to risk all of those second and third tier suppliers with a period of time the auto companies don't have to pay what they owe---now is not the time for that!!!
He may be correct on the surface of things--but with at least GM and Chrysler going into bankruptcy--that will be a disaster for so many people----
The auto industry does need a bailout----but not without some very big strings attached---and it does seem that there are those in Congress who are looking to put such proper conditions in place in order for the automakers to get their bailout.
Actually--the nature of the bailout would somehow best be used to supply credit to those who want to buy a car----because with the current credit lock up---even people with great credit are having a hard time getting auto loans----of course---the other problem is--if you think you are going to lose your job----you don't want to take out a big note---and that is wise----
We do need some sort of major stimulus program to get the economy moving again--because that is the crux of the current situation--those in Congress want to bash the automakers for their past sins----not help them with the current problem. They conflate the two situations.
That is another point---many of the little companies out here----we have good credit ratings, pay our bills and such--and we have great relationships with our banks---banks that are not in trouble because they acted prudently--but--they are finding it difficult to get credit themselves--so they can't lend us those various short term loans and lines of credit that is part and parcel to doing business----so---if we come to a crunch time--one incident can set us off down a negative spiral that only ends in our crashing hard to the ground!!
I do like to try to be optimistic about things--but I dare say folks----there is not much to be optimistic about at present---it is the uncertainty of what we face----we know we are going to go through some hard times---the question is---how bad is it going to be and for how long will it last???
Stay tuned---I am sure we still have "other shoes to be dropped!"
Sorry to be on such a downer!! :(:(
You do have to wonder---where and when will this all end???
It seems that instead of anything getting better-----the hole just gets deeper and deeper.
They get talking about "when is the other shoe going to drop?" I thought the metaphorical person we were talking about was a two footed being----now it seems this "person" is some sort of hydra monster with many, many feet.
We have the pending wholesale collapse of the US auto industry----something that if it does happen-----that is thought too scary to even contemplate----I know it does for me and my family----my parents own a company that is a second tier supplier of parts that are made for direct line suppliers of assemblies for the auto, light and heavy truck, railroad locomotive and railcar manufacturers--all industries in deep, deep do-do now!
If the US car makers go down (at least GM and Chrysler are in danger of going)---at least going into bankruptcy proceedings--something that in terms of seeing to the necessary retooling those companies do need to do----it will be a disaster for the rest of us who supply them----they don't have to pay their suppliers along the supply chain at least for a time ---and guess what folks--if they don't pay us little guys out here---we can go maybe six months at best--then we are alll GONE!!
Actually--many of the little guys who supply the auto industry are in not that bad of shape-its just that we do operate on a thin edge--it is the big main line, first tier of auto suppliers like Delphi and Dana Holdings that will be gone--they are all companies that have been in trouble for some time.
When the auto companies would emerge out of bankruptcy proceedings----those in Congress who wanted this will have won that battle only to have lost the war because there won't be anyone left to supply them the parts they need to run those auto plants--unless of course they give all of us a big bailout too--but I doubt that--we are just the little "mom and pop" pisants that don't get on the radar of the crowd in Washington---
If all of our little supply companies go down--those companies represent many, many jobs in many, many places all over America, Canada and other countries--many of those workers are at a point in life--the probability they will find another job of any consequence is pretty damn low in better times--and in this current situation---pretty much going to be nil.
If many of the little companies go down--those people no longer go eat in mom and pop cafes--they don't buy new cars or houses----they start cutting their own hair at home with a set of clippers bought at Wal-Mart and not go to the barber shop or "hair stylist" shops----I could go on--
The fact is--the "multiplier effect" of the auto industry is simply incredible--it is something like a ratio of ten to one--for each job lost directly at one of the big three---you lose at least ten jobs in the greater and wider economy----
I hear that one US Senator talk on the taking head shows---Richard Shelby of Tennessee----in one way he is right--the auto industry has made a whole series of mistakes that need to be rectified, so he thinks that bankruptcy is just fine and the best way for that to happen--on the one hand---I agreee if the times were different---but with things as they are now----to risk all of those second and third tier suppliers with a period of time the auto companies don't have to pay what they owe---now is not the time for that!!!
He may be correct on the surface of things--but with at least GM and Chrysler going into bankruptcy--that will be a disaster for so many people----
The auto industry does need a bailout----but not without some very big strings attached---and it does seem that there are those in Congress who are looking to put such proper conditions in place in order for the automakers to get their bailout.
Actually--the nature of the bailout would somehow best be used to supply credit to those who want to buy a car----because with the current credit lock up---even people with great credit are having a hard time getting auto loans----of course---the other problem is--if you think you are going to lose your job----you don't want to take out a big note---and that is wise----
We do need some sort of major stimulus program to get the economy moving again--because that is the crux of the current situation--those in Congress want to bash the automakers for their past sins----not help them with the current problem. They conflate the two situations.
That is another point---many of the little companies out here----we have good credit ratings, pay our bills and such--and we have great relationships with our banks---banks that are not in trouble because they acted prudently--but--they are finding it difficult to get credit themselves--so they can't lend us those various short term loans and lines of credit that is part and parcel to doing business----so---if we come to a crunch time--one incident can set us off down a negative spiral that only ends in our crashing hard to the ground!!
I do like to try to be optimistic about things--but I dare say folks----there is not much to be optimistic about at present---it is the uncertainty of what we face----we know we are going to go through some hard times---the question is---how bad is it going to be and for how long will it last???
Stay tuned---I am sure we still have "other shoes to be dropped!"
Sorry to be on such a downer!! :(:(