If you’d like specific examples, you can easily see things like safety requirements, laws requiring headlights and windshield wipers, laws requiring manufacturer’s meet or exceed cafe standards. While some of them might be done willingly by the companies themselves, it does not mean all of them are good ideas or ideas that the company would choose to do if they were not forced, at the point of an auditer’s pen, to make.
True, the new toy-testing requirements are supposedly hurting small businesses.
B) They were all but forced to take the bailout instead of bankruptcy.
Forced? By who?
Bankruptcy would have resulted in the shredding of the union contracts which is why significant pressure was brought to bear to force the companies to find a different solution.
Bankruptcy, as the auto execs pointed out, would have meant no one would have bought their cars. Who would buy a car from a company that’s in bankruptcy?
Why is it a man can earn $22/hr in compensation at Toyota but $67/hr for compensation at Dodge? (The numbers are close to that, it was December I was hearing the actual, to the penny figures, so mine might be off a little.) That’s combined compensation btw.
It’s worth pointing out that Japan has national health insurance, so it’s indirectly subsidizing it’s industries by taking health care off the bargaining table entirely. If we had a similar program, the big 3’s labor costs would go down.
Of course the companies that are paying 3 times as much in labor costs are going to have to cut costs somewhere else to remain competitive. In this case, they cut costs in number of products marketted, material quality and services offered to get the price down to where people would buy the products. Meanwhile, their competitors are raking in the billions of dollars of increased sales from people realizing the other product is of higher quality.
Actually, we make pretty good trucks. The big 3 have to find a way to renogotiate union contracts without filing for bankruptcy. They’re taking steps in the right direction: buyouts of older employees.
Also, I feel that if the house is going into foreclosure, then most people will choose to
renegotiate walk away from the terms of the a non-recourse loan. This is not a reduction in principle, just the terms such as interest rates, fixed or adjustable rates, and number of months to pay off. They obviously wanted the house because they bought could flip it. Also, moving has a great small amount of expenses associated with it that walking away would far outweigh any benefits you might see if you should find try to find a buyer in this market.
Rather, even if they are upside down on their mortgage, they still have a
tangible asset liability.
Furhermore, if you default on your mortgage, the bank reposesses the home and sells it at auction, you STILL HAVE TO PAY THE DIFFERENCE BETWEEN AUCTION PRICE AND MORTGAGE BALANCE. (Not yelling, emphasising.)
Not on a non-recourse mortgage, which is what most mortgages are.
“A nonrecourse mortgage is one in which, by the terms of the note and mortgage, the mortgagee (creditor) agrees to look solely to the secured property to satisfy the note, in the event the note is not paid when due. That means that the mortgagee can seek to have the property securing the note sold and have the proceeds paid to the mortgagee to satisfy the note. However, if the proceeds are insufficient, the mortgagee has no recourse to the other assets of the debtor.”
So even if your $80,000 house has a $100,000 mortgage and it is reposessed and sold at auction for $1 USD, you still have to pay the other $99,999 you owe (and it is no longer bankruptable like it is if you have the asset). So now you owe the money AND have no place to live. Nah, people will renegotiate to prevent that from happening, even when they are upside down for a brief hiccup in history.
What percentage of mortgages do you think are non-recourse?