The title of my main page is "rants and raves" of a real estate professional. Well this is definitely a rant. I spent the better part of the weekend listening to politicians telling the press why we should let GM and the big three die off. As I heard one politician after another rail on the big three for not being adaptive and adjusting to the marketplace and that the unions made the cost of builing a car not competitive with the foreign automakers...I started to get mad.
These same politicians voted for a $700 million bailout bill of the very institutions that put us in this colossal mess!! The companies that gave out all of those high risk loans at virtually usury rates made a fortune on those loans and expected the consumer to come back again in a few years and pay those same fees again when they refinanced. The finance companies knew exactly what they were doing and cashed in when times were good....they knew the risks. Now they come to the politicians and say "We want a do over". The politicians say "OK" because the banks are in the back pockets of the politicians. If you look at the list of the top contributors to election campaigns the top names are executives of banks.
Now the auto industry cannot get financing because these glorious financial institutions have seized up the money supply of the country because of their stupidity. On top of that what have the banks done with the money from the bailout. They have hoarded the money..used the money for M & A's of other banks....everything except get money to those who need it to survive. You now need a 700 credit score to get a car loan because the banks don't want to lend money or take any risks....Oh how times have changed. Why can't the big three sell cars? Because the banks will not unhoard their bailout money.
The auto industry is the lifeblood of our nation. The auto industry builds things. They are manufacturers. They employ people that live on main street and the side streets of America. If we let the auto industry die we will be letting down America. Over 3 million jobs will be lost if the american auto industry goes under. All of these people will not be putting money into the economy. The government will have to take over health benefits and unemployment payments.
What will this do to the Michigan Real Estate market? These people will not be staying in Michigan because there are no jobs in Michigan. They will be relocating to other states to find work and purchase housing there. Michigan already has a 2 billion dollar deficit...what do you think the loss of the Big Three will do to that amount? The State of Michigan has created a tax structure for businesses that makes it unattractive to businesses looking to relocate their business. Why would they come to Michigan when States such as Texas and North Carolina open their arms to businesses and don't try to tax them to death.
One out of every two deals right now is a short sale or foreclosure. Estimates are that number would push up to 70% of every sale would be a distressed sale. What does that do the Sellers who legitimately are trying to sell their home and competing against all of these Short Sales and Foreclosures?
I am not trying to be a pessimist. I have been accused of being overly optimistic in the past. I am now right in the middle...I am a realist. If the auto industry were to go under we might as well turn off the lights and shut the door behind us. Maybe we could consolidate with Ohio or Indiana. I am a lifelong resident of the Ann Arbor area and Michigan but the demise of the auto industry would punch my travel ticket out of the area.
We all need to call and write our local politicians and tell them to approve "LOANS" for the auto industry. The auto industry is not asking for a bailout...they are asking for "LOANS" they cannot get because of the debacle the financial markets have created. The auto industry is willing to comply with any concessions it will need to make in order to get this injection of money. Let's help out our fellow Michiganders and auto bretheren and keep the auto industry in America and in Michigan. We need these workers in Michigan and I for one will do what I need to do to let our politicians know that I want MY MONEY going to help manufacturing in America and not the Armani wearing bankers who already made their money.
Are you with me? Let me hear your thoughts.
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