montado wrote: ↑Thu Feb 06, 2020 2:30 pm
Not a fan of bail outs. But the cost to the taxpayers if bombardier goes down the drain won’t be cheap.
Let’s say you give a billion dollars to a company with 40k employees, that’s 25k per employee. Now if these are good paying jobs, you will basically get all your money back in a year of income tax. So this is a great investment if the company can turn itself around. The other option is have everyone lose their job and you will spend more than a billion on social programs to support the 40k people.
So the question is are we better bailing out and keeping the jobs, or do you think if bombardier goes under another company will step in and give these people jobs. The sad reality is these jobs won’t be replaced with the same types of jobs, most of these people will need to go back and get an education and start over. It’s not like if bombardier fails the world needs another company to build planes and trains and the world wants this company to be in Canada. So I’m really divided on the bailouts, but you can only do this so many times before you have to give up on it I guess. Sucks to lose those jobs if we let them sink!
If only economics were that simple. What makes you think that if the federal government gives them $1B they won't be back in a year asking for another $1B? Isn't this what has happened with BBD time and time again? What makes you think that these employees will sit on EI? Why won't they get other jobs with stronger companies?
This is the way capitalism works. Weak companies go under while stronger one's rise, hiring employees. Eventually, the tables turn and someone else becomes the stronger company.
Edit: a word
Bombardier has not been given a billion dollars every year, so this is what makes me think they won’t receive a billion dollars every year. Bombardier employees have paid more in income taxes than the company has received in bailouts, so this may be better than the outcome of having many people collecting ei.
Why do I think these people will sit on ei? Because you can’t replace thousands of good paying jobs over night. If bombardier fails, Canada is not likely to have a new aerospace company pop up. More than likely these jobs, and this market share will be passed on to bigger companies like Boeing and Airbus. So say bye bye to the jobs, the odds of a company starting from zero that competes with Boeing and Airbus takes decades. This is why I know many people would lose their jobs and need to re educate, or move to be able to continue in their careers.
You are not wrong in that this is how capitalism works, but it’s not over night. Let’s say air Canada was to fail, no bail out. You instantly have 40k jobs lost. Who’s going to pick up the pieces? Where are these people going to work? What’s the loss in tax revenue? What’s the impact on the economy? I don’t know why any tax payer would be salty about a bailout. All you are doing is buying time, and maybe the company can turn around. From the tax payers perspective it’s 6 to one half dozen to the other... either you pay for the bail out or you pay for the economic impact of the loss of jobs... the question is what’s cheaper, and I would argue it’s cheaper for the tax payer to bail out companies most of the time.
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Last edited by montado on Mon Feb 17, 2020 10:37 am, edited 1 time in total.
Why, to take the flip side, would I as a (theoretical) investor / founder in Canada, watching developments, want to start / expand / invest in any competitive aerospace enterprise, knowing Bombardier will get another bailout?
Why, in an atmosphere with unlimited investment capital, none has found its way to Bombardier?
Interesting to consider, why exactly why so much investment capital -- and high value jobs -- flee Canada for other locales where one isn't competing with the government.
Private capital would rather risk its money on money losing enterprises like Uber, WeWork, cannibus, space companies, and a hundred other things, for this reason. They don't want to partner with the Quebec government.
Bombardier employees have paid more in income taxes than the company has received in bailouts,
Can this be substantiated in any way?
Well let's say the average salary at bombardier is 60k I don't know how many Canadian employees they have but they have about 70k world wide. So easily over 1 billion a year is paid in income tax from this company alone. I'm sure someone could give so more solid figures. 70 thousand people paying about 15k a year in tax.
montado wrote: ↑Thu Feb 06, 2020 2:30 pm
Not a fan of bail outs. But the cost to the taxpayers if bombardier goes down the drain won’t be cheap.
Let’s say you give a billion dollars to a company with 40k employees, that’s 25k per employee. Now if these are good paying jobs, you will basically get all your money back in a year of income tax. So this is a great investment if the company can turn itself around. The other option is have everyone lose their job and you will spend more than a billion on social programs to support the 40k people.
So the question is are we better bailing out and keeping the jobs, or do you think if bombardier goes under another company will step in and give these people jobs. The sad reality is these jobs won’t be replaced with the same types of jobs, most of these people will need to go back and get an education and start over. It’s not like if bombardier fails the world needs another company to build planes and trains and the world wants this company to be in Canada. So I’m really divided on the bailouts, but you can only do this so many times before you have to give up on it I guess. Sucks to lose those jobs if we let them sink!
If only economics were that simple. What makes you think that if the federal government gives them $1B they won't be back in a year asking for another $1B? Isn't this what has happened with BBD time and time again? What makes you think that these employees will sit on EI? Why won't they get other jobs with stronger companies?
This is the way capitalism works. Weak companies go under while stronger one's rise, hiring employees. Eventually, the tables turn and someone else becomes the stronger company.
Edit: a word
Bombardier has not been given a billion dollars every year, so this is what makes me think they won’t receive a billion dollars every year. Bombardier employees have paid more in income taxes than the company has received in bailouts, so this may be better than the outcome of having many people collecting ei.
Why do I think these people will sit on ei? Because you can’t replace thousands of good paying jobs over night. If bombardier fails, Canada is not likely to have a new aerospace company pop up. More than likely these jobs, and this market share will be passed on to bigger companies like Boeing and Airbus. So say bye bye to the jobs, the odds of a company starting from zero that competes with Boeing and Airbus takes decades. This is why I know many people would lose their jobs and need to re educate, or move to be able to continue in their careers.
You are not wrong in that this is how capitalism works, but it’s not over night. Let’s say air Canada was to fail, no bail out. You instantly have 40k jobs lost. Who’s going to pick up the pieces? Where are these people going to work? What’s the loss in tax revenue? What’s the impact on the economy? I don’t know why any tax payer would be salty about a bailout. All you are doing is buying time, and maybe the company can turn around. From the tax payers perspective it’s 6 to one half dozen to the other... either you pay for the bail out or you pay for the economic impact of the loss of jobs... the question is what’s cheaper, and I would argue it’s cheaper for the tax payer to bail out companies most of the time.
So by your logic, should the government support every large employer (or small for that matter) because the taxes paid exceed the bailout provided?
“It's a story of corporate arrogance, greed and mismanagement by a family company that has multiple voting shares and doesn’t have to answer to an independent board or to the common shareholders.
The thing that has really killed them, and which I think when the company fails will be seen as the deathblow, is this decision to compete against Boeing and Airbus by creating the CSeries of jets. They bet the whole company on it and failed.
I can’t imagine either the Canadian or the Quebec government coming up with more money in these circumstances. Maybe I’m wrong, but it’s very hard for me to see the taxpayers putting up with more money going down the sinkhole.”
THIS -- is well said.
A friend of mine retired from BBD in management in charge of a large portfolio. I spoke to him about the difference in quality that I notice between the Boeing's and the RJ's. His words: Boeing promotes the best in their organization. The best engineers become project managers, the best project managers become executives. At BBD, it was always about who could fill what quota. Did they speak French? A minority? etc. It bred a culture of mediocrity.
(Yes I know all about the Max. Yes the C-series was a great design.)
If only economics were that simple. What makes you think that if the federal government gives them $1B they won't be back in a year asking for another $1B? Isn't this what has happened with BBD time and time again? What makes you think that these employees will sit on EI? Why won't they get other jobs with stronger companies?
This is the way capitalism works. Weak companies go under while stronger one's rise, hiring employees. Eventually, the tables turn and someone else becomes the stronger company.
Edit: a word
Bombardier has not been given a billion dollars every year, so this is what makes me think they won’t receive a billion dollars every year. Bombardier employees have paid more in income taxes than the company has received in bailouts, so this may be better than the outcome of having many people collecting ei.
Why do I think these people will sit on ei? Because you can’t replace thousands of good paying jobs over night. If bombardier fails, Canada is not likely to have a new aerospace company pop up. More than likely these jobs, and this market share will be passed on to bigger companies like Boeing and Airbus. So say bye bye to the jobs, the odds of a company starting from zero that competes with Boeing and Airbus takes decades. This is why I know many people would lose their jobs and need to re educate, or move to be able to continue in their careers.
You are not wrong in that this is how capitalism works, but it’s not over night. Let’s say air Canada was to fail, no bail out. You instantly have 40k jobs lost. Who’s going to pick up the pieces? Where are these people going to work? What’s the loss in tax revenue? What’s the impact on the economy? I don’t know why any tax payer would be salty about a bailout. All you are doing is buying time, and maybe the company can turn around. From the tax payers perspective it’s 6 to one half dozen to the other... either you pay for the bail out or you pay for the economic impact of the loss of jobs... the question is what’s cheaper, and I would argue it’s cheaper for the tax payer to bail out companies most of the time.
So by your logic, should the government support every large employer (or small for that matter) because the taxes paid exceed the bailout provided?
If you have been following my post you would have seen my logic. I said I don't really like bailing out companies as the tax payer. But my logic says that sometimes bailouts cost the taxpayers much less than the economic impact of thousands of people without work and being on EI. So would you rather pay a billion in EI, or a billion to keep thousands working who will pay back the billion in income taxes and then also keep their homes their jobs and pay more taxes every time they purchase things.
My point is people need to stop talking about bailouts as if they are some stupid thing we should never consider. Just do the math on what a bailout costs vs the cost of failure. Both options suck. Would you all rather see 50k people instantly end up on EI? I don't know why some are so against a bailout. I guess they don't care about seeing 20k people lose their homes... Shoulder shrug right?
Obviously these guys who lose their jobs will just pull their boot straps and become airspace engineers at that other big Canadian airplane manufacturer/s... Nothing to see here! No consideration for a bailout needed.
So put yourself in the shoes of the politicians and ask yourselves what is the best thing for all Canadians? Let them fail and end up with 50k lost jobs, huge hit to the economy. Or make the taxpayers pay, however they receive all this money back in income taxes from the individuals who remain employed?
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Last edited by montado on Mon Feb 17, 2020 2:44 pm, edited 1 time in total.
telex wrote: ↑Mon Feb 17, 2020 2:43 pm
70 000 employees worldwide doesn't mean $1 billion in tax paid in Canada.
The worldwide tax is not bailing the operation out.
Sometimes it's better to cut out the rot and start fresh.
Well until you know how much tax revenue we would lose from canadian employees from the impact of a complete shutdown of the bombardier operation we don't know if it's better to cut the rot and start fresh.
If air Canada was on the brink of bankruptcy would you also let them fail? What would that impact be?
telex wrote: ↑Mon Feb 17, 2020 2:43 pm
70 000 employees worldwide doesn't mean $1 billion in tax paid in Canada.
The worldwide tax is not bailing the operation out.
Sometimes it's better to cut out the rot and start fresh.
Well until you know how much tax revenue we would lose from canadian employees from the impact of a complete shutdown of the bombardier operation we don't know if it's better to cut the rot and start fresh.
If air Canada was on the brink of bankruptcy would you also let them fail? What would that impact be?
Recall your history. It was Canada 3000 or Canadian that would be allowed to fail. Only one could be saved. Air Canada is obviously not allowed to fail.
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Liberalism itself as a religion where its tenets cannot be proven, but provides a sense of moral rectitude at no real cost.
montado wrote: ↑Mon Feb 17, 2020 2:35 pm
If you have been following my post you would have seen my logic. I said I don't really like bailing out companies as the tax payer. But my logic says that sometimes bailouts cost the taxpayers much less than the economic impact of thousands of people without work and being on EI. So would you rather pay a billion in EI, or a billion to keep thousands working who will pay back the billion in income taxes and then also keep their homes their jobs and pay more taxes every time they purchase things.
I am following your argument. It just doesn't make sense- your analysis is too simplistic.
Bailouts are never made for economic reasons- solely political ones.
montado wrote: ↑Mon Feb 17, 2020 2:35 pm
So put yourself in the shoes of the politicians and ask yourselves what is the best thing for all Canadians? Let them fail and end up with 50k lost jobs, huge hit to the economy. Or make the taxpayers pay, however they receive all this money back in income taxes from the individuals who remain employed?
Perhaps it's better that those 50k people become available to work for another enterprise, that's better managed, and doesn't need bailing out.
Short term costs are not the same as long term costs. In the short term it's less painful to give an addict whatever their craving is for, than to withhold it in the hope that they will seek treatment and recover. But the short term solution doesn't give a long term solution.
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DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
Why is the assumption that all these employees will be collecting EI and applying at the nearby Tim Horton’s to make the next mortgage payment?
When my dad’s mill where he worked was sold they just fool down the old sign, put up a new one, and gave the employees new uniform shirts. That happened about 3 or 4 times until he retired.
You can’t simply uproot entire assembly lines and processes and move them overseas if you don’t want to seriously affect production.
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“If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.”
-President Ronald Reagan
Panama Jack wrote: ↑Tue Feb 18, 2020 4:08 am
Why is the assumption that all these employees will be collecting EI and applying at the nearby Tim Horton’s to make the next mortgage payment?
When my dad’s mill where he worked was sold they just fool down the old sign, put up a new one, and gave the employees new uniform shirts. That happened about 3 or 4 times until he retired.
You can’t simply uproot entire assembly lines and processes and move them overseas if you don’t want to seriously affect production.
I was writing under the assumption of letting a business fail, not talking about being bought out. The situation how it’s unfolding has been bailouts and buy outs. The jobs will stay in some shape or form until the buyer makes changes.
So if a large business is about to fail, and you don’t have a buyer, sometimes a bailout is the best thing for the taxpayers.
Bombardier has not been given a billion dollars every year, so this is what makes me think they won’t receive a billion dollars every year. Bombardier employees have paid more in income taxes than the company has received in bailouts, so this may be better than the outcome of having many people collecting ei.
Why do I think these people will sit on ei? Because you can’t replace thousands of good paying jobs over night. If bombardier fails, Canada is not likely to have a new aerospace company pop up. More than likely these jobs, and this market share will be passed on to bigger companies like Boeing and Airbus. So say bye bye to the jobs, the odds of a company starting from zero that competes with Boeing and Airbus takes decades. This is why I know many people would lose their jobs and need to re educate, or move to be able to continue in their careers.
You are not wrong in that this is how capitalism works, but it’s not over night. Let’s say air Canada was to fail, no bail out. You instantly have 40k jobs lost. Who’s going to pick up the pieces? Where are these people going to work? What’s the loss in tax revenue? What’s the impact on the economy? I don’t know why any tax payer would be salty about a bailout. All you are doing is buying time, and maybe the company can turn around. From the tax payers perspective it’s 6 to one half dozen to the other... either you pay for the bail out or you pay for the economic impact of the loss of jobs... the question is what’s cheaper, and I would argue it’s cheaper for the tax payer to bail out companies most of the time.
So by your logic, should the government support every large employer (or small for that matter) because the taxes paid exceed the bailout provided?
If you have been following my post you would have seen my logic. I said I don't really like bailing out companies as the tax payer. But my logic says that sometimes bailouts cost the taxpayers much less than the economic impact of thousands of people without work and being on EI. So would you rather pay a billion in EI, or a billion to keep thousands working who will pay back the billion in income taxes and then also keep their homes their jobs and pay more taxes every time they purchase things.
My point is people need to stop talking about bailouts as if they are some stupid thing we should never consider. Just do the math on what a bailout costs vs the cost of failure. Both options suck. Would you all rather see 50k people instantly end up on EI? I don't know why some are so against a bailout. I guess they don't care about seeing 20k people lose their homes... Shoulder shrug right?
Obviously these guys who lose their jobs will just pull their boot straps and become airspace engineers at that other big Canadian airplane manufacturer/s... Nothing to see here! No consideration for a bailout needed.
So put yourself in the shoes of the politicians and ask yourselves what is the best thing for all Canadians? Let them fail and end up with 50k lost jobs, huge hit to the economy. Or make the taxpayers pay, however they receive all this money back in income taxes from the individuals who remain employed?
All I can say is look at GM Oshawa. Huge bailout, never paid it back, all the workers let go. To keep pouring money into such an incompetent and corrupt company as Bombardier is a waste. Without a major change in management they will fail no matter how much money is dumped in and the workers will be let go.
I wouldn't mind supporting engineering businesses like this, because it helps to have a few smart people around, without going to the States, like all the Apollo people from Avro. I just wish the clowns at the top wouldn't steal it all before it gets to the company itself.
