Govt bailout for GM Luton

[HDi fun]

What's your opinion of the Government's £270 million UK bailout for GM's Luton plant?

OK, it's secured 354 jobs (in the short term, anyway) - but what about the other unemployed 3 million people in the UK?

What a fantastic amount of money to hand to private shareholders. To save just 354 jobs.

If the £270 million was split amongst the 354 redundant workers they'd net over £750,000 each.

Let's say we set the bar at £100,000 per head of redundant staff, which is far more than they're ever going to get in a traditional redundancy package.

That would only have cost the government £35.4 million.

Once again, Stupid's [Gordon Brown's] government seems to have failed to see the bleedin' obvious solution.

 

[herb]

sorry to sound crude here but a cheaper solution for the country would be let them be made redundant, let gm pay the redundancy put them on job seekers allowance at a cost of £1,288,560 per anum + another £2m? for other benefits. the government buy up the land sit on it until the price of land rises and sell on for a profit

 

[HDi fun]

I suspect the other benefits will amount to a bit more than £2m but your proposal is sound.

 

[herb]

£2m was an estimate but i predict the £1,288,560 jsa per anum would be less? cause most of the 354 wouldnt stay on jsa for a year? cause £70 a week isnt enough to live on! cause even on nmw @ 40hrs a week its double jsa after tax and ni (its just if the people have the right attitude and would accept the wage decrease?)

 

[HDi fun]

I'm not actually after the 354 workers. It's the UK government's ridiculous waste of money.

If the government has got £270 million to spare then why not pump it driectly into the benefits system and, at the same time get rid of the ridiculously complex mechanisms that honest benefit claimants have to go through to get a totally legitimate claim agreed (the admin costs must be hideous).

It seems that the benefit fraudsters are getting away with everything whilst legitimate claimants are left fighting a multi-limbed, self-regenerating, government backed, administrative monster, just to get some support when things are stacked against them.

Stupid [you know who I mean by now] should seek urgent medical attention.

 

[turbonutter69]

Totally agree Hdi.

 

[herb]

It seems that the benefit fraudsters are getting away with everything whilst legitimate claimants are left fighting a multi-limbed, self-regenerating, government backed, administrative monster, just to get some support when things are stacked against them.

Stupid [you know who I mean by now] should seek urgent medical attention.

well speaking from a mates experience over the last 6 months i can relate he got his jsa no problems but help with his mortgage and other benefits was virtually none existent! its only now 6 months on he is getting help but not before threatening letters of repossession by his mortgage company (which is frightening for him with a wife and 3 children!)

i have to say though you keep calling brown stupid but lets face it he is just a figure head! i would still prefer to be in the position we are in under a labor government than how much worse it would have been if it had been conservative!
now this is where i become a hypocrite this year who ever gets in it doesnt really matter to me be it conservative or labor! they will have some serious sh!t to sort out! but as long as they keep the nhs i dont mind who comes in caus lets face it who ever wins they have some serious taxing to do to get the country back on its feet!!

 

[HDi fun]

JSA is totally inadequate. The ESA benefit is an administrative disaster.

WE don't have a labour government. We have a New Labour government and it is not for society. This Labour is a Top-Down-State-First-and-Foremost government.

There is a significant amount of stuff to fix. Where I struggle is with the fact that Stupid Brown was Chancellor since 1997 (until 2007) yet he seems to deny any responsibility for the economic state of this country.

Chancellors are supposed to be aware of global situations and take sensible actions. Stupid people should not be Chancellors. He denies all responsibility.

Brown is a pathological liar; a dangerous political personality and this country would be better off if he was removed.

Let's get a true socialist government. Which party - I really don't know.

Anyone fancy starting a civil war?

 

[WLBjork]

Getting back to the OP, £270m is probably the equivalent VAT raised in 12-18 months by sale of GM cars (assuming an average price of £20K, that's about 90,000 cars).


The amount of debt this country is in is nothing short of shambolic though. National Debt is at 60% of GDP, borrowing is still at about 25% and this is despite tax revenues having almost doubled (£215bn 1997, £412bn 2009).

Labour - no fiscal responsibility whatsoever.

 

[dpsubaru]

HDi: spot on, and actually think it would be so much more sensible to go with the first proposal. Give each worker GBP100k - this should equate to some years salary, 3 years perhaps? (dontk now how much is made on an assembly line so lets say average). Then they have this money plus govt handouts to last them this time period before finding a new job. The govt then has the rest of the money to spend on something worthwhile instead of giving a non-UK company money.

Unfortunately, could not really see the current administration doing anything worthwhile with the remaining funds although with their current taxing policies driving more people overseas they will certainly need anything they can to make up the ever widening shortfall.

Not sure which School of Economics Gordon Brown and his Darling buddy subscribe to but if any one in provate enterprise went to this they would surely have been fired long ago for this continually ridiculous decisions.

 

[obi_waynne]

There are lots of other factors that affect these decisions. I would not claim to know them all. IMO the bailout sum seems obsene and daft but I'm sure the following considerations come into the equation.

1) When a business fails, there are lots of other businesses and creditors affected. The ripples from a major failure are difficult to predict.

2) Manufacturing brings money into the economy from use of steel, exports and other materials. The hole created by a failure is not necessarily filled by the competitors.

3) Credibilty and stability are ILLUSIONS than must be maintained. A failure of this size will attract headlines and force others to keep their hands in their pockets and cut back.

I'm interested in your opinions on these points. Just playing devils advocate here....:evil:

 

[HDi fun]

It'll take a lot more than a few dubious Vauxhall models being made in Luton to create a good enough illusion or maintain any kind of stability for the steel industry.

 

[dpsubaru]

1) When a business fails, there are lots of other businesses and creditors affected. The ripples from a major failure are difficult to predict.

2) Manufacturing brings money into the economy from use of steel, exports and other materials. The hole created by a failure is not necessarily filled by the competitors.

3) Credibilty and stability are ILLUSIONS than must be maintained. A failure of this size will attract headlines and force others to keep their hands in their pockets and cut back.

I'm interested in your opinions on these points. Just playing devils advocate here....:evil:

1) and trust that the businesses supplying this company are not shortsighted enough to be reliant on one customer as their sole source of income. GM Luton is not a stand alone company, i dont think, GM would be liable for outstanding debts.
2) how much are they exporting? isnt this for domestic consumption under the Vauxhall badge? correct, the hole is not necessarily filled but this is where the govt should be creating some kind of industry not just pumping money into a black hole.
3) how long ago was GM Luton a credible money making business - what illusion is being maintained, those with half a brain are clear the economy is in the toilet. Why should others cut back - dont believe that most private companies are gambling on public handouts to stay afloat.