Information Management and the Consumption Induced Bailout Strategies-Editorial Comments

By Hsieh, Chang-tseh | Journal of International Technology and Information Management, May 2009 | Go to article overview

Information Management and the Consumption Induced Bailout Strategies-Editorial Comments


Hsieh, Chang-tseh, Journal of International Technology and Information Management


INTRODUCTION

Now that the Federal (Feds) government had already provided GM and Chrysler with $13.4 billion to support their operations though the first quarter of 2009, the questions confronting the new Administration is how many more billions would be needed to help both companies flow again. All eyes are now aiming at monitoring the outcome of such a huge bailout program. Although it may be too early to predict the effectiveness of such a rescue program, primarily information from the even bigger bailout funds loaned to the financial institutions seem indicate that much more rescue money would be needed to help the Detroit big-three to survive the worst recession since the World War II.

In 2009, the Feds kicked in $2 billion initially in "cash for clunkers" program. The program, which initially ended on August, offers the consumer to buy a new car, priced at $45,000 or less and rated at least 4 mpg better than the old one (gets a $3,500 voucher). If the new one gets at least 10 mpg better, you get the full $4,500. The popularity of the program caused the Feds to extend the program to November with additional $2 billion added to the pot.

Despite the overwhelming responses to this program, most observers concluded the program had very little impact on the domestic auto markets, and had little help to GM and Chrysler. Ford is probably the only one seeing some benefits from this program. The main reason is current bailout programs can be characterized as the supply pushing programs. Money is injected into the suppliers in hoping for them to come up better products to generate needed cash flow quickly. Unfortunately, for GM and Chrysler, it may be too late and too little to have any significant impact on the bottom lines of these companies. Unless the Big Three can come up with the cars that the consumers wanted quickly, and the consumers are willing to spend tens of thousands dollar to purchase them, it is unlikely the billions loan to the industry would yield the desired results.

CONSUMPTION INDUCED BAILOUT

To be more effective, the bailout programs may have to focus on the demand side of the market instead of the suppliers. In our opinion, money should be spent to induce the consumption of the targeted products - i.e. the cars already assembled by the Big Three and are sitting in the Dealer's lots as well as the cars to be made in the near future. The catch is to convince the consumers to open their now tightly guarded wallet to purchase the cars that may jeopardize their financial security during this severe recession period.

We believe the consumption induced bailout programs can help solve several issues confronting the Feds. These include the job creation, energy independence, and obviously the future of the Detroit's Big Three. We'll explain how these critical issues could be alleviated, if not fully resolved with the consumption-induced bailout programs in details.

OBJECTIVES TO BE ACCOMPLISHED

1. Job creation

The Feds could offer the stimulus programs to subsidize the car buyers to purchase the car that is assembled in the US with certain percentage of domestic components. For example, if the consumer would like to purchase a new car which is 100% made in the USA (i.e. all parts are made in the USA, and the car is assembled in a domestic factory). Then the government may offer a purchase credit of, say $10,000. With such a hefty subsidy, bank would have less risk when a loan is issued to the buyer, and more consumers would be able to afford buying a new car. The amount of subsidy would reduce for the cars which were made with less than 100% of the domestic components. The subsidy would be eliminated for the car which is made with less than 50% of domestic components.

To benefit from such stimulus program, the car makers would have to increase their domestic manufacturing activities, and motivate their parts suppliers to have their products produced domestically. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Information Management and the Consumption Induced Bailout Strategies-Editorial Comments
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.