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Call it Crazy says

I believe two of the major ones did....... and we (the taxpayers) got to bail them out....

Sure, but would they have if Wall Street hadn't decimated the Global economy? Should every company prepare for such an eventuality?

Call it Crazy says

CL says

Sure, but would they have if Wall Street hadn't decimated the Global economy?

What does Wall Street have to do with the way internal management of a corporation is run???

Clueless....

CL says

Should every company prepare for such an eventuality?

YES, But they should go bankrupt WITHOUT the bailout of the taxpayers if they can't run the company successfully!!

Wall Street caused a tsunami, wiping out much in its path. Can you imagine how much productivity would be lost if every business had to reserve all that capital? To prepare for a disaster of this magnitude?

IDDQD says

CL says

Sure, but would they have if Wall Street hadn't decimated the Global economy? Should every company prepare for such an eventuality?

Somehow Ford was prepared. So it wasn't as impossible as you are implying.

Why did Mulally ask for the credit lines, and state, “In particular, the collapse of one or both of our domestic competitors would threaten Ford because we have 80 percent overlap in supplier networks and nearly 25 percent of Ford’s top dealers also own GM and Chrysler franchises.”

http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-on-bailouts/

http://www.forbes.com/sites/joannmuller/2012/08/29/automakers-report-card-who-still-owes-taxpayers-money-the-answer-might-surprise-you/

and they still haven’t paid it back!

I'd say the myth that Ford was beyond reproach is deserving of a correction.

If we bailed out the banks at a cost of a trillion dollars, even though they were the ones who freaking caused the problem, then why the hell should we let the automakers fail when their rescue cost a small fraction of the extortion the banks took?
We should have let the banks twist in the wind. If that causes cannibal anarchy then so be it. We can go back to paying cash for things.

To be fair, the money the government gave the automakers were loans, it wasn't free money. The surviving automakers are paying back the loans. The government loaned GM 24 billion dollars, if it allowed GM to go under, 70,000 GM employees in America would be out of work. (and 10's of thousand more in the goods and services jobs supporting those 70k employees) If the maximum weekly unemployment benefit in Magician in is $362, over the course of 26 weeks, that's 650 million dollars in unemployment benefits. And this is just employees directly working for GM, it's estimated that the auto industry employes 850,000 workers in manufacturing, and 1.8 million workers in auto dealerships. (although it's not clear is all of them were American workers), if the government had to pay the 26 weeks unemployment benefits on 850k workers, that's 8 billion dollars, if they turned out to be 99 weeker's, that would be 30 billion dollars. In the long run I think the bailout was a good investment of 25 billion dollars (total bailout cost)

My point, and question is, even in the best scenario, where the auto manufacturers made the stuff that everybody loved, should they be required to have enough in reserves to handle a depression? Should any industry? I think the obvious answer is no, and that that idea would sink the entire system. No innovation, lousy employment, etc...I mean, aren't the banks crying about adding 1% to their capital reserve requirements based on that premise? That Dodd-Frank simply asks too too too much of them, and that that will hurt the general economy?

So, if an industry with widgets that sell for multiple 10s of thousands, and is heavily dependent on finance, working off smaller margins, and vulnerable to recessions, etc, supposed to keep enough of its own cash-on-hand to survive a near-economic collapse?

Is any business required to do that? What would the net effect be if it were?

These were taxpayer funded bailouts of the UAW. The bondholders and shareholders are the ones that got screwed. If they were left to go bankrupt it would not have been a liquidating bankruptcy, so that automakers would have had the opportunity to renegotiate their onerous UAW contracts as well. The end result is that these companies will go bankrupt again.

CL says

should they be required to have enough in reserves to handle a depression? Should any industry?

Yes to both.