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post #1 of 113 Old Nov 12th, 2008, 11:37 am Thread Starter
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Bailing Out The Auto Industry

This is a bad idea. What's the message here? Even if you make unwise (stupid) management decisions, don't worry, we'll bail your ass out if your company goes belly up. When does this nonsense stop? None of us have that safety net. The vast majority of businesses in this country don't have that safety net. Why should the auto industry?
It's like a kind of corpaorate black mail. If you don't bail us out there will be so many people unemployed, etc. etc. etc.
So, let them be. I'm sorry but I not very sypathetic to the mess that greedy unions and inept management have created all on their own. If the industry needs to collapse, let it. It will have to reorganize and get its act together and stop being stupid.

Greg
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post #2 of 113 Old Nov 12th, 2008, 11:58 am
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Smile Re: Bailing Out The Auto Industry

Quote:
Originally Posted by gpolakow
This is a bad idea. What's the message here? Even if you make unwise (stupid) management decisions, don't worry, we'll bail your ass out if your company goes belly up. When does this nonsense stop? None of us have that safety net. The vast majority of businesses in this country don't have that safety net. Why should the auto industry?
It's like a kind of corpaorate black mail. If you don't bail us out there will be so many people unemployed, etc. etc. etc.
So, let them be. I'm sorry but I not very sypathetic to the mess that greedy unions and inept management have created all on their own. If the industry needs to collapse, let it. It will have to reorganize and get its act together and stop being stupid.
You may be absolutely right.
The trickle down effect of the massive layoffs will be very painful though.
And then, why not apply the same practice to the banks, insurance co's, mortgage holders, homeowners etc.
Not that it would be a bad idea, just very painful and probably lead to many other unforseen situations that could get very ugly.
That being said, I agree with you.
JS
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post #3 of 113 Old Nov 12th, 2008, 12:17 pm
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Re: Bailing Out The Auto Industry

First, let me state up front, I've got a dog in THIS fight! My largest client is General Motors.

I am NOT in favor of bailouts. But in this case, we really do need to keep what little heavy industry is left in this country and the Big 3 account for a significant percentage of that capacity.

We have only to look back at the start of WWII. One of the main reasons we were able to win that horrendous conflict was the automotive companies retooled and built tanks, planes, and other needed war products.

The loss of them now would not be a good thing. Unlike the huge banking bailout, that was largely created by stupid practices, the domestic automobile crisis that we are seeing was largely created by fallout of that economic failure and the subsequent lack of financing available, not to mention EVERYONE tightening their belts a bit.

GM has become a global leader in product development, Hybrid technology, Lithium Ion technology, Hydrogen technology, and has pulled this old manufacturing base into the 21 century. They have spend a ton of money on R&D and expanding their base.

In the end, I simply believe, as odious as bailouts are the loss of this industry would have far more devastating effects on the industries' huge work force, the American Psyche and our nation as a whole than we can possible imagine.

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post #4 of 113 Old Nov 12th, 2008, 12:48 pm
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Re: Bailing Out The Auto Industry

I don't know what to think. Coming from detroit, I do know I hate to see people out of work, this is a big problem.

When they bailed out Chrysler, what happened? They didn't make it (unless you call that "merger" making it).

When you sell things that fall apart (my daughters pontiac is an atrocity), your repeat sales are going to suffer.

I was in total shock when the auto industry came out with the behemoths (giant SUV's, etc) in times when MPG should have been a bigger issue.

I don't think there is an "American" car made today but still, I do agree that keeping a warm industrial base and skilled workers is necessary for national defense, if we ever need it again.
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post #5 of 113 Old Nov 12th, 2008, 12:52 pm Thread Starter
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by starky
You may be absolutely right.
The trickle down effect of the massive layoffs will be very painful though.
And then, why not apply the same practice to the banks, insurance co's, mortgage holders, homeowners etc.
Not that it would be a bad idea, just very painful and probably lead to many other unforseen situations that could get very ugly.
That being said, I agree with you.
JS
Thre is a price to pay for the sins of our financial mistakes. We will pay it sooner or later. This kind of thing (bailouts of the banks, AIG, and now the big three) only prolongs the agony and makes it worse. Is no one else worried with all this printing of money we will end up in a hyperinflationary disaster?
Let the natural consequences of poor management and shortsightedness and greed and stupidity take its course. What will emerge will be a better, stronger system. If we continue to prop up a system that is busted, it will drag us down to greater economic depths than would otherwise be the case.
Yes, we will all have to tighten our belts and learn to live a less consumer oriented lifestyle. There will be an adjustment. Let's let it occur and stop trying to shore up the dam with straw and mud.

Greg
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post #6 of 113 Old Nov 12th, 2008, 12:58 pm
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Re: Bailing Out The Auto Industry

I do agree Greg but I also wonder how big the tent cities would become if we followed through. With kids in them. And old folks. People who've worked all their lives and end up there.

It sure ain't an easy problem to solve but I'm with you, it would make a stronger economy/companies, IF we survived it.
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post #7 of 113 Old Nov 12th, 2008, 1:27 pm
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Re: Bailing Out The Auto Industry

I'm not really sure how it all works, but I have an idea of the masses of employees; aka union members; and the amount of taxes that sector pays to the government................I really couldn't give an accurate number there......but just as a "for-instance"; the government is propping the Big 3 up with 25 billion; which may not last until spring; but how many billions would the payback be to the government through that sectors personal income taxes?

My mind has a tendancy to work in strange ways..............any body care to guess?


B-Safe; Jim
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post #8 of 113 Old Nov 12th, 2008, 1:50 pm Thread Starter
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by Palerider
I'm not really sure how it all works, but I have an idea of the masses of employees; aka union members; and the amount of taxes that sector pays to the government................I really couldn't give an accurate number there......but just as a "for-instance"; the government is propping the Big 3 up with 25 billion; which may not last until spring; but how many billions would the payback be to the government through that sectors personal income taxes?

My mind has a tendancy to work in strange ways..............any body care to guess?


B-Safe; Jim
Jim, your point is valid ONLY if a bailout works. My point is, it won't work because it isn't aimed at curing the real problem. And the reason it isn't is because that would take more than money to fix and it would require an immediate and drammatic change in our culture. But it would fix the problem not just for a few months but for decades. And what would emerge would be a better, stronger, wiser version of capitalism.

Greg
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post #9 of 113 Old Nov 12th, 2008, 2:04 pm
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Re: Bailing Out The Auto Industry

I think we're missing the point.

The auto industry is in terrible trouble due to the OBLIGATIONS it has. The Union negotiations over the years created an industry with a huge disadvantage in labor costs.

I wish I remebered the exact figures, but, there is something like a 50% to over 100% cost per labor hour disadvantage with the US car makers compared the Japanese/Koreans/Germans (even in this country).

This bailout has Less to do with the Big 3 and National Security and is a bailout for the United Auto Workers Union. Wonder how many contributions were made??

After we spend an additional 25B on them, what will change to make their cost structure better?? Nothing!

I hate to say it, but, you have to let them fail and the pieces rebuilt into a better cost structured entity. The only other choices are either renegotiate with the Union (Fat Chance) or Nationalize the Auto Industry.

With our current Leftward-Ho march, I expect to have our own US version on the "People's Car" (Volkswagon), perhaps the "Barrack-Track", or "Obama-Charma".

Let's just take all industry over.

Glad to get that off my chest

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post #10 of 113 Old Nov 12th, 2008, 2:48 pm Thread Starter
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Re: Bailing Out The Auto Industry

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Originally Posted by joegottberg
I think we're missing the point.

The auto industry is in terrible trouble due to the OBLIGATIONS it has. The Union negotiations over the years created an industry with a huge disadvantage in labor costs.

I wish I remebered the exact figures, but, there is something like a 50% to over 100% cost per labor hour disadvantage with the US car makers compared the Japanese/Koreans/Germans (even in this country).

This bailout has Less to do with the Big 3 and National Security and is a bailout for the United Auto Workers Union. Wonder how many contributions were made??

After we spend an additional 25B on them, what will change to make their cost structure better?? Nothing!

I hate to say it, but, you have to let them fail and the pieces rebuilt into a better cost structured entity. The only other choices are either renegotiate with the Union (Fat Chance) or Nationalize the Auto Industry.

With our current Leftward-Ho march, I expect to have our own US version on the "People's Car" (Volkswagon), perhaps the "Barrack-Track", or "Obama-Charma".

Let's just take all industry over.

Glad to get that off my chest

Joe
forget about the leftward march stuff. It just won't work. It's rewarding bad behavior, greed, ineptitude, stupidity, on all sides...labor and management. The price to pay for placing yourself in a situation where you can no longer compete is extinction. that's how things work.

Greg
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post #11 of 113 Old Nov 12th, 2008, 2:59 pm
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Re: Bailing Out The Auto Industry

I think you just nailed it. The Unions once served a vital role, but not any more. All they do now is suck a company dry. They completely crippled the steel industry, and now it looks as though their greed is going to bring down the automakers. Let's see how good there benefit package and wages are when they're on the unemployment line. These blood suckers need to wake up and realize what they're doing to the companies they work for and for the rest of the economy. $75/hr to put a seat in a car? Please!

And the auto makers aren't the sharpest knives in the drawer either. Continuing to manufacture the big land barges that can't pass a gas station without stopping is stupid. They should have learned their lesson during the oil embargo in the 80's. They should have had a viable alternative fuel vehicle ready by now. But to their defense, it's hard to mass produce a methanol car when there's no methanol stations to refuel them.

Let 'em go under. We'll be stronger for it. Let the entrapenuers create the next generation of vehicles. Tesla's got a great idea. Instead of bailing out an industry that has historically fought change, why not throw the $25B Tesla's (and others like) way. I bet they could use it.

Now, back to the Unions (can ya tell I hate them?). Their next victim will be the telecom industry. They continue to demand better benefits, better wages, and guaranteed jobs. Meanwhile the non-Union workers are getting laid off. And what happens when you lay off a Union worker? They sue the company. Yeah, bite the hand that feeds ya. Jerks!

Sorry...........just having a bad day seeing all the 30 day letters hitting some of my friends........


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post #12 of 113 Old Nov 12th, 2008, 3:19 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by ldbikin
When they bailed out Chrysler, what happened? They didn't make it (unless you call that "merger" making it).
Actually when Chrysler was bailed out in 1979, it proved to be a success. With Lee Iacocca at the helm they repaid the 1.5 billion and the US government earned 350 million in interest by 1983. They came up with a new product mix and almost doubled their corporate average fuel efficiency.

The merger was much later and didn't make it under what the goals of the merger were. The merger with Daimler in 1998 formed a new corporation, DaimlerChrysler, intent on building a new mix of "world competitive" automobiles. DaimlerChrysler sold the Chrysler division to Cerberus Capital Management in 2007. Cerberus also owns about 50% of GMAC, General Motors financing arm. DaimlerChrysler is now known as Daimler AG.

Each American auto company has its own set of problems, but all of them are facing huge legacy costs stemming from union contracts concerning health care and pension. General Motors faces additional problems since it really needs to trim its broad spectrum of brands, but the contracts it has with dealers makes it prohibitively expensive. States protect the dealers, by making it virtually impossible for GM to cease production of any brand, unless they buy the dealers out. Shutting down Oldsmobile is reported to have cost GM tens of billions. GM also has huge real estate commitments.

American auto manufactures have to foot the bill for its employee health care, where most of its worldwide competitors do not. GM is one of the world leaders in flexible fuel, hybrid and battery technologies. GM funds that research where the other worldwide players enjoy government subsidy.

Korean companies are free to sell automobiles here, yet the US auto industry cannot sell in Korea. While I do not tend to be protectionist by nature, most of the rest of the world is. Somehow the US automakers must be allowed to play by the same rules as their worldwide competitors.

It is certain that there are a number of factors at play and some hard choices to be made. It is impossible to point at any one factor as being dominant in the current mess the American auto industry is in.

For GM I don't think that any bailout will work, without substantially restructuring its agreements with dealers and labor unions. Neither of these groups will voluntarily compromise enough to allow GM to succeed. Unfortunately the only way they are likely to be able to become viable and solvent in the long term, is to restructure under the protection of bankruptcy, where they can start over on some of these contracts.

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post #13 of 113 Old Nov 12th, 2008, 4:10 pm Thread Starter
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Re: Bailing Out The Auto Industry

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Neither of these groups will voluntarily compromise enough to allow GM to succeed. Unfortunately the only way they are likely to be able to become viable and solvent in the long term, is to restructure under the protection of bankruptcy, where they can start over on some of these contracts.
Bankruptcy is certainly a viable option. I mean that's the option the rest of us have and other businesses.

Greg
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Re: Bailing Out The Auto Industry

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Originally Posted by Randy
Neither of these groups will voluntarily compromise enough to allow GM to succeed. Unfortunately the only way they are likely to be able to become viable and solvent in the long term, is to restructure under the protection of bankruptcy, where they can start over on some of these contracts.
Bankruptcy is a perfectly viable alternative to a wholesale bailout.

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post #15 of 113 Old Nov 12th, 2008, 5:09 pm
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Re: Bailing Out The Auto Industry

From Cliff Mason - senior staff writer for Mad Money:

"The people who oppose an auto industry bailout are missing a huge point: letting these companies fail will be more expensive than a bailout. That's true in the short run, and it's true even if you just look at the tax revenue the federal and state governments would lose as autoworkers lose their jobs. And I just found some new data that makes Jim's argument in favor of a bailout for the autos even stronger.

In a study from the Center for Automotive Research, which I'll admit may not be the most unbiased organization, they estimate that if the Big Three cut their output and employment by 50% to cope with their declining market share in a declining auto market, 2.46 million jobs would vanish. That would lead federal, state and local governments to lose $108 billion in tax revenue over the following three years. And that's the less pessimistic scenario they outlined.

Throw in the cost of unemployment benefits for 2.46 million people, and you're seeing how costly it would be for the government to let the Big Three fail.

If these numbers are right, the feds should be willing to pony up at least $100 billion to save the automakers, and probably much more than that. Because even if we just gave the Big Three that money, rather than making loans or taking equity stakes, it will cost us less over the next three years than letting them go under.

This shouldn't even be an argument simply because of the way the numbers stack up."

I'm personally all for it - but there must be some serious strings (and maybe a couple of ropes with nooses) attached. First off would be to shit can Rick Wagoner of GM - what an idiot. He and the board have sat on their asses for five years and did absolutely nothing to avert this crisis.


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post #16 of 113 Old Nov 12th, 2008, 5:57 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by RonKMiller
From Cliff Mason - senior staff writer for Mad Money:

"The people who oppose an auto industry bailout are missing a huge point: letting these companies fail will be more expensive than a bailout. That's true in the short run, and it's true even if you just look at the tax revenue the federal and state governments would lose as autoworkers lose their jobs. And I just found some new data that makes Jim's argument in favor of a bailout for the autos even stronger.

In a study from the Center for Automotive Research, which I'll admit may not be the most unbiased organization, they estimate that if the Big Three cut their output and employment by 50% to cope with their declining market share in a declining auto market, 2.46 million jobs would vanish. That would lead federal, state and local governments to lose $108 billion in tax revenue over the following three years. And that's the less pessimistic scenario they outlined.

Throw in the cost of unemployment benefits for 2.46 million people, and you're seeing how costly it would be for the government to let the Big Three fail.

If these numbers are right, the feds should be willing to pony up at least $100 billion to save the automakers, and probably much more than that. Because even if we just gave the Big Three that money, rather than making loans or taking equity stakes, it will cost us less over the next three years than letting them go under.

This shouldn't even be an argument simply because of the way the numbers stack up."

I'm personally all for it - but there must be some serious strings (and maybe a couple of ropes with nooses) attached. First off would be to shit can Rick Wagoner of GM - what an idiot. He and the board have sat on their asses for five years and did absolutely nothing to avert this crisis.

There may be some "short term" pain associated with letting them fail (or more likely get bought out/merge with different "employment contracts"), but, the article assumes these workers will not get other employment and lower our "risk".

Granted, low skill, non-degree-ed, $50+/hr jobs are hard to come by, but, I personally believe they will get work and not stay on unemployment insurance. I thought they paid into the Union to have insurance in case they lost their jobs, or is it only if they blackmail (go on strike) their employer; I keep fogetting,

Anyway, there is no industry "too big to fail", that is a myth, IMNSHO.

I still don't see how paying them $25B of OUR money make them more efficient and able to compete in a global economy??? How does this reduce the cost to produce cars/trucks??

I stand by my earlier statement that this is a Bailout for the UAW more than anything else.

I can see the "Protectionist Government" coming, if the "Big 3" can only hold out until January

Joe

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post #17 of 113 Old Nov 12th, 2008, 6:04 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by RonKMiller
From Cliff Mason - senior staff writer for Mad Money:

"The people who oppose an auto industry bailout are missing a huge point: letting these companies fail will be more expensive than a bailout. That's true in the short run, and it's true even if you just look at the tax revenue the federal and state governments would lose as autoworkers lose their jobs. And I just found some new data that makes Jim's argument in favor of a bailout for the autos even stronger.

In a study from the Center for Automotive Research, which I'll admit may not be the most unbiased organization, they estimate that if the Big Three cut their output and employment by 50% to cope with their declining market share in a declining auto market, 2.46 million jobs would vanish. That would lead federal, state and local governments to lose $108 billion in tax revenue over the following three years. And that's the less pessimistic scenario they outlined.

Throw in the cost of unemployment benefits for 2.46 million people, and you're seeing how costly it would be for the government to let the Big Three fail.

If these numbers are right, the feds should be willing to pony up at least $100 billion to save the automakers, and probably much more than that. Because even if we just gave the Big Three that money, rather than making loans or taking equity stakes, it will cost us less over the next three years than letting them go under.

This shouldn't even be an argument simply because of the way the numbers stack up."

I'm personally all for it - but there must be some serious strings (and maybe a couple of ropes with nooses) attached. First off would be to shit can Rick Wagoner of GM - what an idiot. He and the board have sat on their asses for five years and did absolutely nothing to avert this crisis.
Hate to say it guys; if you wnat to talk the talk, you have to walk the walk.
At least that's the idealogue speaking. However, there's nothing wrong with a little socialism every now and then.
Socialism really means being for the social good.
It's clear that a bailout will be in the social interest but probably not in the theoretical interest.
Everything is just too big to fail unless you're prepared to redraw the theoretical framework lines of the country.

The American dream, as it turns out, may only be sustainable if the government props it up.

Oh Well, you can all move to Canada if things get really tough.
We always seek to prop up anyone who needs it.

JS
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by RonKMiller
From Cliff Mason - senior staff writer for Mad Money:

[b][i]"The people who oppose an auto industry bailout are missing a huge point: letting these companies fail will be more expensive than a bailout. ....
That all is very true, but I would argue that they cannot become sustainable enterprises until some of the legacy costs, costs of reducing brand proliferation and roadblocks to global competitiveness are addressed.

According to GM from 2007: "Base wages average about $28 an hour. The average reaches $39.68 an hour, including base pay, cost-of-living adjustments, night-shift premiums, overtime, holiday and vacation pay. Health-care, pension and other benefits average another $33.58 an hour."

An article in the National Review from 2005 shows some of the problems:

"Take grass cutting. As defined by the current United Auto Worker contract negotiated with the "Big Five" (GM, Ford, Chrysler, and top parts makers Delphi and Visteon), an auto "production worker" is a job description that covers anything from mowing grass to cleaning the toilets. In the real world, these jobs would be outsourced to $8 an hour, no-benefit wage earners, but on Planet Big Five, these jobs get the same wages as any auto line-worker: an average $26 an hour ($60,000 a year) plus benefits that bring the company's total cost per worker to a staggering $65 an hour.

But at least the grass cutters are working for their pay. The UAW contract also guarantees that 12,000 autoworkers get full wage for doing nothing. On the heels of Miller's straight-talk, the Detroit News reported that "12,000 American autoworkers, instead of bending sheet metal, spend their days counting the hours in a jobs bank." These aren't jobs. And they certainly aren't being "lost" to China.

"We just go in (to Ford's Michigan Truck Plant) and play crossword puzzles, watch videos that someone brings in or read the newspaper," The News quoted one UAW worker as saying. "Otherwise, I've just sat."

The coming months will be painful for many American autoworkers. Accustomed to a certain lifestyle, they will see their wages cut in half, jeopardizing second homes, college tuitions, and car payments. One blue-collar Delphi worker interviewed by the Detroit News makes $103,000 a year operating a forklift and fears the consequences if his pay is drastically reduced. But many Americans will ask how a forklift operator felt entitled to a six-figure income in the first place (according to Bureau of Labor Statistics, the average forklift operator wage in the U.S. is $26,000)."


The above was from 2005.



GM is paying the healthcare costs for over 400,000 retired employees.

How in the world can an american auto manufacturer be competetive with those labor costs?

That is but one small part of the financial puzzle for GM.
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post #19 of 113 Old Nov 12th, 2008, 6:21 pm
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Re: Bailing Out The Auto Industry

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Originally Posted by Randy
GM is paying the healthcare costs for over 400,000 retired employees.

How in the world can an american auto manufacturer be competetive with those labor costs?

That is but one small part of the financial puzzle for GM.
But you forget, we are all getting FREE healthcare

This will even the playing field

Did you ever hear the story about the Goose that Layed the Golden Eggs and how She met the UAW?? She got it before and after laying those eggs.

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post #20 of 113 Old Nov 12th, 2008, 6:40 pm
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Re: Bailing Out The Auto Industry

Why you telling us?

Get on the phone and tell your elected officials. I e-mailed all of the ones that should be listening to me. Told them no more bail outs for any industry, don't care what it is. Now if they'll listen and act accordingly..........

B D R
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post #21 of 113 Old Nov 12th, 2008, 7:04 pm Thread Starter
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Re: Bailing Out The Auto Industry

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Why you telling us?

Get on the phone and tell your elected officials. I e-mailed all of the ones that should be listening to me. Told them no more bail outs for any industry, don't care what it is. Now if they'll listen and act accordingly..........
I did the same thing. No more bail outs. This industry has had the congressmen and senators from Michigan for decades protecting it from competition. How unAmerican is THAT. And so they were free to enter into these ridiculous contracts with dealers and the unions based on that protection. But they NEEDED to sell the big gas guzzlers to make it all work. And they have resisted any the most obvious kinds of changes like seat belts as well as any attempt to regulate gas mileage. The deserve to go down and we must trust that something better will emerge.

Greg
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post #22 of 113 Old Nov 12th, 2008, 7:39 pm
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Re: Bailing Out The Auto Industry

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Originally Posted by gpolakow
Bankruptcy is a perfectly viable alternative to a wholesale bailout.
Hmm, I think that's a very simple view of an amazingly complicated problem.

Here's the reality:

If you reorganize the auto industry by bankruptcy it would be like reorganizing the whole US economy. The supply chain is absolutely HUGE with millions of jobs, thousands of business, and lord knows how many retirees - not to mention entire states like Michigan and Ohio.

I've heard estimates that it is 10% of our economy.

10%!

If they do fail there is only ONE consequence - a MUCH longer and deeper recession and an enormous spike in unemployment.

Who wants that?


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post #23 of 113 Old Nov 12th, 2008, 7:56 pm
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Re: Bailing Out The Auto Industry

If people weren't buying Super Useless Vehicles (SUV's) Detroit would have stopped making them. The American public needs to realize this also.

Roy

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post #24 of 113 Old Nov 12th, 2008, 8:43 pm
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Re: Bailing Out The Auto Industry

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Originally Posted by RonKMiller
Hmm, I think that's a very simple view of an amazingly complicated problem.

Here's the reality:

If you reorganize the auto industry by bankruptcy it would be like reorganizing the whole US economy. The supply chain is absolutely HUGE with millions of jobs, thousands of business, and lord knows how many retirees - not to mention entire states like Michigan and Ohio.

I've heard estimates that it is 10% of our economy.

10%!

If they do fail there is only ONE consequence - a MUCH longer and deeper recession and an enormous spike in unemployment.

Who wants that?
NOT ME by any stretch.......UNLESS it finally FIXES the problem.

How does it benefit 10% of our economy to artificially support it? The fact is not every enterprise must survive forever. Not the Auto Industry (in its current form).

They are not going the way of the blacksmiths. Some "enterprising company" will purchase them and make them viable.

Granted, the $80K "toilet cleaners" may not be able to retire in "both homes", but, the industry (and its 10% impact) will be in tact.

By the way, the parts suppliers, won't they decide to sell to the companies that take over the "Big 3's" market share?

The consumer will still buy cars, they will still be made and due to the RISK of new "protectionist policies", Honda/BMW/Kia/etc. will continue to manufacture here in the USA.

This buyout is all about protecting the "Rich" (at least compared to me) Auto Workers and their Union Bosses!

Penny Wise and Dollar Foolish IMNSHO.

Joe

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post #25 of 113 Old Nov 12th, 2008, 10:49 pm
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Re: Bailing Out The Auto Industry

If AIG is "too big to be allowed to fail", Ford, Chrysler and GM are bigger by far. Yes, they all have union labor issues, but they are dying off, however slowly.

If they are allowed to fail, what then becomes of:

- Michigan and Ohio - unemployment would bankrupt them too
- All the industries that support the Big 3
- Further negative impact on the balance of trade, with everything on the road becoming an import (except for H-D).
- What little is left of the US Steel industry
- Military vehicles - is the Army going to use Land Rovers or Rav 4's in Iran?
- The cost of unemployment would exceed the cost of the bailout

But on the other hand, the line has to be drawn somewhere. The federal government must draw the line somewhere, or everybody will be at the trough. Coming soon:

- Airlines (again)
- Insurance companies
- Hospitals

Damn. Its too wet and cold to ride and get my mind off this horror story.

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post #26 of 113 Old Nov 13th, 2008, 1:13 am
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Re: Bailing Out The Auto Industry

Many years ago, Congress decided they could be re-elected if they gambled the future health of our country by allowing US automakers to call any vehicle a truck if it was built on a truck frame. This allowed US automakers to sell non trucks with much lower gas mileag than cars.

Congress also allowed companies to under fund pension liabilites because if they fully funded their liabilities they wouldn't be able to compete with other companies without pension liabilites.

Congress passed the glaring problems into the future.

The future is now HERE!

US auto makers are bankrupt.

Pensions, most of which hold stock, especially stock in AAA rated finance-insurance companies, are also bankrupt.

ANyone want to guess if US tax payers are on the hook for bankrupt pension plans?

So by all means. Perpetuate the illusions with more tax payer funds to insure re-election of a few at the expense of all Americans.

Another round of "Emperor's New Clothes" please. We need another chaser of "Ethanol" subsidies to the farming states if corn prices drop because of less ethanol consumption.

Bob

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post #27 of 113 Old Nov 13th, 2008, 3:22 am
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Re: Bailing Out The Auto Industry

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Originally Posted by gpolakow
This is a bad idea. What's the message here? Even if you make unwise (stupid) management decisions, don't worry, we'll bail your ass out if your company goes belly up. When does this nonsense stop? None of us have that safety net. The vast majority of businesses in this country don't have that safety net. Why should the auto industry?
It's like a kind of corpaorate black mail. If you don't bail us out there will be so many people unemployed, etc. etc. etc.
So, let them be. I'm sorry but I not very sypathetic to the mess that greedy unions and inept management have created all on their own. If the industry needs to collapse, let it. It will have to reorganize and get its act together and stop being stupid.
Quote:
Originally Posted by gpolakow
Thre is a price to pay for the sins of our financial mistakes. We will pay it sooner or later. This kind of thing (bailouts of the banks, AIG, and now the big three) only prolongs the agony and makes it worse. Is no one else worried with all this printing of money we will end up in a hyperinflationary disaster?
Let the natural consequences of poor management and shortsightedness and greed and stupidity take its course. What will emerge will be a better, stronger system. If we continue to prop up a system that is busted, it will drag us down to greater economic depths than would otherwise be the case.
Yes, we will all have to tighten our belts and learn to live a less consumer oriented lifestyle. There will be an adjustment. Let's let it occur and stop trying to shore up the dam with straw and mud.
Thank you, Greg! A beautiful analysis of one BIG, UGLY industry--and problem! I would submit that we take it one further: the American auto industry MUST FAIL! WTF? Hang with me here, guys:

Their own worthless, corporate hacks say they CAN NOT competitively built SMALL cars to compete with the Japanese. Labor costs are too high! What do we have left? They make money only on larger vehicles--which is exactly what we NO LONGER WANT because they are not practical. They gambled their very future on these large vehicles and sustained low gas prices--and LOST!

The big three are modeled on business plans that were great when they were founded--over 100 years ago. But such business models no longer work in today's auto market. For over THIRTY (30) years now, the big three have been put on notice that it is time to change the business plan. Were they listening? Did they take heed? Well it appears we have our answer: Toyota is the world's largest auto manufacturer!

Everyone at GM, for example, from the janitor to the company's president, from the oldest retiree to the newest hire, have some soul searching to do. Several questions must be answered: 1. Can a corporation like GM ever turn a profit again in today's automotive market? Is it even possible for GM to build a small vehicle with Toyota/Honda-like quality? If the answer is yes: 2. What are they (the GM employees) willing to sacrifice to make GM profitable again?

GM needs to file for bankruptcy and VOID all contracts and all pension agreements. Everything is burned to the ground and they start all over again. All contracts and pensions are renegotiated with sustained profitability in mind--especially union and management contracts.

Throwing the taxpayer's money at the American auto industry is just plain foolish. We're just prolonging the misery by supporting a company whos time has passed. Will the taxpayer's "investment" and subsequent "steak" in such foolery force GM to start all over again? Which government hack would be in charge, regulate and oversee such a massive undertaking?

Of course, the hacks will throw together the PORK auto bail-out bill and we'll get to pay for it! So much for any integrity--or "change," or "hope."

Oh, while your wallet is open wide, have a nice day!

"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." (Some really OLD friggin' White dude who couldn't have possibly known what he was talking about!) WARNING: Official HATE speech!
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post #28 of 113 Old Nov 13th, 2008, 3:50 am
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Re: Bailing Out The Auto Industry

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....there's nothing wrong with a little socialism every now and then....
As long as you're not paying for it?
Quote:
....Socialism really means being for the social good....
WTF? No, it means being some worthless hack's bitch! But, if you swallow on command, who's to say that's a bad thing, right?

I'd rather walk a thousand miles, standing tall, like a man, than crawl even one inch, like a spineless jellyfish!
Quote:
....The American dream, as it turns out, may only be sustainable if the government props it up....
No, the "Amerikan dream" DIED many moons ago. Because you CAN NOT buy FREEDOM--for the only form of payment is blood!

"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." (Some really OLD friggin' White dude who couldn't have possibly known what he was talking about!) WARNING: Official HATE speech!
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post #29 of 113 Old Nov 13th, 2008, 6:26 am
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by jayjacobson

Everyone at GM, for example, from the janitor to the company's president, from the oldest retiree to the newest hire, have some soul searching to do. Several questions must be answered: 1. Can a corporation like GM ever turn a profit again in today's automotive market? Is it even possible for GM to build a small vehicle with Toyota/Honda-like quality? If the answer is yes: 2. What are they (the GM employees) willing to sacrifice to make GM profitable again?

GM needs to file for bankruptcy and VOID all contracts and all pension agreements. Everything is burned to the ground and they start all over again. All contracts and pensions are renegotiated with sustained profitability in mind--especially union and management contracts.

Throwing the taxpayer's money at the American auto industry is just plain foolish. We're just prolonging the misery by supporting a company whos time has passed. Will the taxpayer's "investment" and subsequent "steak" in such foolery force GM to start all over again? Which government hack would be in charge, regulate and oversee such a massive undertaking?
Do you honestly think those greedy Union workers are going to do ANYTHING to help their company??? It'll be a cold day in Hell before they realize what they're doing with their demands. If you listen to any Union worker closely, their view is that the company owes them benefits, guaranteed jobs, retirement, etc.

Let the Big 3 go bankrupt and take that $25B and give it to the likes of Tesla or others that are willing and really need the funding to produce the new breed of vehicles we need. I'm sorry, I don't feel a bit sorry for companies and employees that refuse to see reality.


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post #30 of 113 Old Nov 13th, 2008, 6:55 am
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Unhappy Re: Bailing Out The Auto Industry

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Originally Posted by jayjacobson
As long as you're not paying for it?

WTF? No, it means being some worthless hack's bitch!: But, if you swallow on command, who's to say that's a bad thing, right?

I'd rather walk a thousand miles, standing tall, like a man, than crawl even one inch, like a spineless jellyfish!

No, the "Amerikan dream" DIED many moons ago. Because you CAN NOT buy FREEDOM--for the only form of payment is blood!
Not sure I follow you here Trigger.

I'm sure if you check into all of the services you receive in your daliy life of business and just being a citizen you are the beneficiary of many "social" services.
You can run but you can't hide from even the barest of socialism.
Now, the US has become, much to the chagrin of many, one of the largest, if not THE largest socialist states in the world.

Seems it is not really possible to get away from it and to still be "thy brother's keeper".

When things really start to turn ugly, AKA 1929 or similar, to whom will your brothers turn. You may have to put aside your ideology for a while in order to keep the family together. Then, once everyone's settled down, you can go back to cheer leading for free -er markets.

can anyone spare a dime?

JS
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post #31 of 113 Old Nov 13th, 2008, 7:00 am
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Re: Bailing Out The Auto Industry

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Do you honestly think those greedy Union workers are going to do ANYTHING to help their company??? It'll be a cold day in Hell before they realize what they're doing with their demands. If you listen to any Union worker closely, their view is that the company owes them benefits, guaranteed jobs, retirement, etc.

Let the Big 3 go bankrupt and take that $25B and give it to the likes of Tesla or others that are willing and really need the funding to produce the new breed of vehicles we need. I'm sorry, I don't feel a bit sorry for companies and employees that refuse to see reality.
Unfortunately Doug, I agree with you. I hated to see Toyota FINALLY become the world's largest auto maker, earlier this year. But, in all honesty, no companies deserve to fail more than the big three. It's not like they didn't have--oh--say THIRTY YEARS of warnings!

"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." (Some really OLD friggin' White dude who couldn't have possibly known what he was talking about!) WARNING: Official HATE speech!
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post #32 of 113 Old Nov 13th, 2008, 7:12 am
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by starky
....I'm sure if you check into all of the services you receive in your daliy life of business and just being a citizen you are the beneficiary of many "social" services. You can run but you can't hide from even the barest of socialism. Now, the US has become, much to the chagrin of many, one of the largest, if not THE largest socialist states in the world.

Seems it is not really possible to get away from it and to still be "thy brother's keeper".

When things really start to turn ugly, AKA 1929 or similar, to whom will your brothers turn. You may have to put aside your ideology for a while in order to keep the family together. Then, once everyone's settled down, you can go back to cheer leading for free -er markets.

can anyone spare a dime?
Of course you wouldn't follow me, JS! AND when things "turn ugly," the LAST place I'd ever send my brothers/family to would be the local worthless hacks. I have to much love and respect to do that to a stranger, much less my own family! But of course, being from the great bastian of socialism to the north, you wouldn't follow that, either.

"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." (Some really OLD friggin' White dude who couldn't have possibly known what he was talking about!) WARNING: Official HATE speech!
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post #33 of 113 Old Nov 13th, 2008, 7:37 am
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Re: Bailing Out The Auto Industry

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Originally Posted by gpolakow
forget about the leftward march stuff. It just won't work. It's rewarding bad behavior, greed, ineptitude, stupidity, on all sides...labor and management. The price to pay for placing yourself in a situation where you can no longer compete is extinction. that's how things work.
Greg, I agree with that ...................Darwanian theory works in the business world. I am concerned with how the rules for dispersion of the 700B keeps changing..................the program as of now is totaly different from what was proposed originally..................just WTF is going on with this whole mess ?

Good thread guy's; B-Safe; Jim
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post #34 of 113 Old Nov 13th, 2008, 7:57 am
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Re: Bailing Out The Auto Industry

"That all is very true, but I would argue that they cannot become sustainable enterprises until some of the legacy costs, costs of reducing brand proliferation and roadblocks to global competitiveness are addressed. "

Some very good arguments. The quote above is pretty much what I was saying about the merger not working. Sure it worked short term but we're right back where we started.

I know if you drive down 9 mile, a place once full of sub-suppliers/shops, they are all closed up and have been for years. Where did these jobs go? To china? Why isn't china buying our cars?

I'm no economist but if companies don't plan for the long term and also be able to switch gears rather quickly (ie, new cars/designs to market in shorter periods of time), they won't make it.

In that sense, I don't think a bailout is going to work long term without some radical changes/downsizing.

by the way, CA is in the same boat with unions regarding nurses. Unions run the hospitals. Thats not a good thing. CNO's last about 2 yrs out here, not a good thing either.
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post #35 of 113 Old Nov 13th, 2008, 8:44 am Thread Starter
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by bigbear
If people weren't buying Super Useless Vehicles (SUV's) Detroit would have stopped making them. The American public needs to realize this also.

Roy
and how many billions of dollars in advertising do you think the industry spent so that Americans would want to drive those vehicles? Enough to bail them out a few times, I bet.

Greg
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post #36 of 113 Old Nov 13th, 2008, 8:49 am
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Re: Bailing Out The Auto Industry

The unions heavily backed the president elect because they have been dieing a slow death after the use of secret unionization ballots by workers became law. They want that law to go away so that they can expand and grow again. While unions served a real use many years ago, they have become the tail that wags the dog. The car companies are to blame for letting this get so out of hand in the 70's when they were selling junk cars and making lots of money. The union demands did not seem so bad at the time.

Perhaps the government should use only a portion of the money they are talking about to bail out the auto producers and use it to guarantee auto loans (like FHA does homes) to spur the sale of domestically produced cars from manufacturers that have gained major concessions from unions.

(If you are not aware - the unions and their members HATE the companies where they work - and consider themselves employees of the union, not the company. This attitude has been a union tool for years and keeps the workers mindset where it needs to be keep control. How to break the cycle?? Who knows.)

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post #37 of 113 Old Nov 13th, 2008, 8:59 am Thread Starter
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Re: Bailing Out The Auto Industry

I am no fan of the me-first, greedy politcal entities unions have become. But let's remember, folks, they learned from the best. Corporations prior to unions were completely driven by greed and cared nothing at all for the working conditions or living conditions of labor. They would even employ children to work long hours in environments you and I would not wish on anyone. If they had been willing to give even an nod to the needs of labor, I think unions would never have had the opportunity for a foothold. But instead they denied any request for better working conditions or a living wage and used brute force against any who resisited. if the unions are greedy and self-seeking, it's because management was the model they had to follow. Just my opinion.

Greg
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post #38 of 113 Old Nov 13th, 2008, 10:23 am
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Re: Bailing Out The Auto Industry

The choice seems to be GM gets help or goes bankrupt.

BANKRUPCY:
GM could perhaps void contracts in Bankruptcy court. That could include union contracts, obligations to retirees (some still remain), Franchise agreements with dealers, warranty obligations, obligations to provide parts and service information on cars they have sold. I am not saying they would do all this but it is certainly possible. (They are not the sharpest knives in the drawer)

BAILOUT:

Some strings can be attached that may make this better. Management at the top three or four tiers should be replaced. Replacements should be hired to work at the government pay schedule without any chance for stock options or other compensation for the duration of the loans. The government should have convertible bonds that could be exchanged for stock. Currant stockholders equity would be reduced to zero. The government should have a seat on the Board as should representatives of dealers, labor, and suppliers. All golden parachutes and retirement bonuses should be lost. GM could be compelled to raise equity capital equal to the loan.

Both options are bad and probably apply to Ford and Chrysler too. We get to pick one.

Karl
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post #39 of 113 Old Nov 13th, 2008, 10:48 am
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Re: Bailing Out The Auto Industry

I wonder... if the CEO's, CFO's, etc., etc., salary totals for the year and bonus and perks.(the list is endless)
Do you think they come up to what the Co. pays ALL of their employees for the year?

Whenever anybody talks unions...they talk about the car unions. And it is obvious from what people have written here that they have NO time for them and think the unions should be dissolved.

My question is ...what about Teachers unions? Pilots unions? Flight controllers, etc., etc.......

The list is endless.....but....ya never hear anybody bad mouthing those unions.

Fact is one of the worst offenders IMHO is the Teachers unions. They hold our children hostage to get what they want! And it works...we always give in!!

Heading for cover! I hear incoming!

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post #40 of 113 Old Nov 13th, 2008, 10:50 am
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by nocanpickem
The choice seems to be GM gets help or goes bankrupt.

BANKRUPCY:
GM could perhaps void contracts in Bankruptcy court. That could include union contracts, obligations to retirees (some still remain), Franchise agreements with dealers, warranty obligations, obligations to provide parts and service information on cars they have sold. I am not saying they would do all this but it is certainly possible. (They are not the sharpest knives in the drawer)

BAILOUT:

Some strings can be attached that may make this better. Management at the top three or four tiers should be replaced. Replacements should be hired to work at the government pay schedule without any chance for stock options or other compensation for the duration of the loans. The government should have convertible bonds that could be exchanged for stock. Currant stockholders equity would be reduced to zero. The government should have a seat on the Board as should representatives of dealers, labor, and suppliers. All golden parachutes and retirement bonuses should be lost. GM could be compelled to raise equity capital equal to the loan.

Both options are bad and probably apply to Ford and Chrysler too. We get to pick one.

Karl
So if the "Bailout" option is chosen, we will fire the current managers and attract the best turnaround talent by limiting their compensation

Perhaps a "Ministry of GM" could be cabinet level in the BO adminstration?

Even if you did recruit the high level talent needed, all of the big 3 still have the same economic disadvantage. It is labor cost / hr.

Make the tiny cars, make the hybrids, make the sexy fun cars, etc, etc. In any business enterprise, if your competitor has a significant competitive advantage, they will win. We taxpayers will hold worthless Big 3 paper, spend Billions, and they fail anyway.

Sell the companies, fire everyone, hire back the ones you need to run the business at a competitive rate and treat it like a business. The industry was too fat for too long, everyone got their "piece of pie" and the Japanese came over and kicked their butts! We can't throw money at it, can't put tariffs on the Japanese cars (Made in the USA by the way) they have to change the cost structure.

Of course, I have a tendency to oversimplify these things

Joe

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post #41 of 113 Old Nov 13th, 2008, 11:01 am
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by GolfGuy
I wonder... if the CEO's, CFO's, etc., etc., salary totals for the year and bonus and perks.(the list is endless)
Do you think they come up to what the Co. pays ALL of their employees for the year?

Whenever anybody talks unions...they talk about the car unions. And it is obvious from what people have written here that they have NO time for them and think the unions should be dissolved.

My question is ...what about Teachers unions? Pilots unions? Flight controllers, etc., etc.......

The list is endless.....but....ya never hear anybody bad mouthing those unions.

Fact is one of the worst offenders IMHO is the Teachers unions. They hold our children hostage to get what they want! And it works...we always give in!!

Heading for cover! I hear incoming!
You are absolutely correct about the other Unions. I live near 3 Pilots, two working one retired. The retiree is making something like $180K.

One Pilot I don't see much, the other is always home. The Pilots are always looking at ways to "hurt" their company. He told me that during the recent gas price spike, they would leave the jets running longer than necessary. This was to show the company "whose Boss" by further increasing their costs. Demented thinking!

I spent some time over in Japan. I thought it funny at the time, but, every AM the entire company would get together do some excercises and sing the company song. Seems like they are all pulling in the same direction. I wonder how their workers feel about their companies?

Maybe I'm old school, but, if the company doesn't make money how do you make more money? Extortion only works in Politics (and Unions)

Teacher's unions are just as bad. What other business (yes it is a business) has it's employees reach a level where they cannot be fired? Take the summers off, teacher's "work days" all the school holidays, good insurances, etc. All you hear from them is "Bitch-Bitch-Bitch".

That's it, I'M SWITCHING TO DECAF!

Joe

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post #42 of 113 Old Nov 13th, 2008, 11:16 am
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Re: Bailing Out The Auto Industry

What a fascinating and complicated dilemma! Lots of good arguments are voiced here, I am enjoying reading them. I am not in favor of continuing to reward failure. It irks me every time I see news about GM's new Camaro, or Chrysler's re-birthing of their old muscle car too. Ford is not any better.

Chevy continues to brag about their electric car, the Volt....but where it it? Still two years away, in the meantime Toyota is building and selling all the Prius hy-breds they can make.

Wall Street Journal earlier this week published the overall figure of GM labor at average of $83 per hour, all benefits, etc, included. Wow!

Finally, an old Chinese proverb (or curse?) "May you live in interesting times".

Well, these times are certainly interesting!

Bob Allred
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post #43 of 113 Old Nov 13th, 2008, 12:10 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by gpolakow
and how many billions of dollars in advertising do you think the industry spent so that Americans would want to drive those vehicles? Enough to bail them out a few times, I bet.
AND speaking of "those" vehicles (huge 8 MPG suv's): would it be to much to ask that that a SEVENTY THOUSAND DOLLAR vehicle have a reasonable anti- theft/tracking system--so it WOULD NOT be one of the most stolen vehicles in Amerika?! If I had a f'n dollar for every Escalade theft report I've taken.....OK, I'll get off the soapbox now.
Quote:
Originally Posted by gpolakow
....if the unions are greedy and self-seeking, it's because management was the model they had to follow. Just my opinion.
Yes, the "thug" unions were created to battle the "thug" management. It would appear that both "thugs" are no longer profitable in the automotive market of today. Wonder if the relationship between workers and mangement at Toyota has ANYTHING to do with them being the world's largest auto company? You don't suppose we could learn SOMETHING, do you?!
Quote:
Originally Posted by GolfGuy
....Fact is one of the worst offenders IMHO is the Teachers unions. They hold our children hostage to get what they want! And it works...we always give in!....Heading for cover! I hear incoming!
Bob, I say HOLD your ground! Cause you're right. Using LAUSD as an example: in the last 8 years or so, the administration (worthless hacks) has increased by 20%! But, you still hear radio commercials at every election pimping ANOTHER school bond measure. Don't worry, I'm sure the school district will need to be bailed out soon, also!
Quote:
Originally Posted by joegottberg
So if the "Bailout" option is chosen, we will fire the current managers and attract the best turnaround talent by limiting their compensation ....Perhaps a "Ministry of GM" could be cabinet level in the BO adminstration?....Even if you did recruit the high level talent needed, all of the big 3 still have the same economic disadvantage. It is labor cost / hr....Make the tiny cars, make the hybrids, make the sexy fun cars, etc, etc. In any business enterprise, if your competitor has a significant competitive advantage, they will win. We taxpayers will hold worthless Big 3 paper, spend Billions, and they fail anyway....Sell the companies, fire everyone, hire back the ones you need to run the business at a competitive rate and treat it like a business. The industry was too fat for too long, everyone got their "piece of pie" and the Japanese came over and kicked their butts! We can't throw money at it, can't put tariffs on the Japanese cars (Made in the USA by the way) they have to change the cost structure....
My conclusion, also. Unless we completely and radically change the business model of the big three, we're just throwing taxpayer bling down a black hole. Because you're not addressing the root cause of the problem. AND which highly qualified big government czar (worthless hack) would oversee this radical change?
Quote:
Originally Posted by Allred
....It irks me every time I see news about GM's new Camaro, or Chrysler's re-birthing of their old muscle car too. Ford is not any better....
Don't forget about the 620HP Corvette! Well I'm sure GM will sell enough of those monsters to bring 'em back.

What makes these times interesting is that so many people do not have the intestinal fortitude to make the tough decisions--and stand their ground. Just a few days ago, Obama was talking about the pain we will have to endure to get through this extreme economic adjustment. Well with a suggested $50 billion pork-out of the auto industry, the pain may be never ending!
Quote:
Originally Posted by RonKMiller
....This shouldn't even be an argument simply because of the way the numbers stack up."....
Ron, we need to look at the big picture, and not be so myopic. If these outdated, archaic auto companies do not radically change the way they do business, the root cause of the problem will not be addressed. If the root causes of the problems are not addressed, what's to keep them from failing again in the near future....on the taxpayer's bling?!

The only way to radically change the way they do business is to do a chapter 11 bankruptcy, burn it all down, and start over again from scratch.

"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." (Some really OLD friggin' White dude who couldn't have possibly known what he was talking about!) WARNING: Official HATE speech!
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post #44 of 113 Old Nov 13th, 2008, 12:20 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by RonKMiller
From Cliff Mason - senior staff writer for Mad Money:

"The people who oppose an auto industry bailout are missing a huge point: letting these companies fail will be more expensive than a bailout. That's true in the short run, and it's true even if you just look at the tax revenue the federal and state governments would lose as autoworkers lose their jobs. And I just found some new data that makes Jim's argument in favor of a bailout for the autos even stronger.

In a study from the Center for Automotive Research, which I'll admit may not be the most unbiased organization, they estimate that if the Big Three cut their output and employment by 50% to cope with their declining market share in a declining auto market, 2.46 million jobs would vanish. That would lead federal, state and local governments to lose $108 billion in tax revenue over the following three years. And that's the less pessimistic scenario they outlined.

Throw in the cost of unemployment benefits for 2.46 million people, and you're seeing how costly it would be for the government to let the Big Three fail.

If these numbers are right, the feds should be willing to pony up at least $100 billion to save the automakers, and probably much more than that. Because even if we just gave the Big Three that money, rather than making loans or taking equity stakes, it will cost us less over the next three years than letting them go under.

This shouldn't even be an argument simply because of the way the numbers stack up."

I'm personally all for it - but there must be some serious strings (and maybe a couple of ropes with nooses) attached. First off would be to shit can Rick Wagoner of GM - what an idiot. He and the board have sat on their asses for five years and did absolutely nothing to avert this crisis.
Ron.............Where in the Hell did you find those numbers? I really was just shooting from the hip working off of some weird idea that it was a bunch of folks................Now I don't see that many folks out here in BFE Wyoming but I had to figure it was quite a few............judging by the number of Ohio and Michigan lic. plates that have invaded the county since the 'Boom'

It is my belief that the Country we love; and the Constitution as we know it are targeted for some difficult times...................could get tough for all of us............I fly the Flag as a symbol of 'Hope for the Future'............I refuse to let the bastards get me down....................

Hoo'aah ! and B-Safe; Jim
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post #45 of 113 Old Nov 13th, 2008, 12:41 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by Palerider
It is my belief that the Country we love; and the Constitution as we know it are targeted for some difficult times...................could get tough for all of us............I fly the Flag as a symbol of 'Hope for the Future'............I refuse to let the bastards get me down....................
And that shoud be something we can ALL agree upon

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post #46 of 113 Old Nov 13th, 2008, 3:07 pm
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Re: Bailing Out The Auto Industry

I will not pretend to fully understand the complexity of this bailout or any of the others.
The simpleton in me says we need to stop rewarding bad behavior or it will never change.
For what it is worth

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post #47 of 113 Old Nov 13th, 2008, 4:00 pm Thread Starter
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by gglove
I will not pretend to fully understand the complexity of this bailout or any of the others.
The simpleton in me says we need to stop rewarding bad behavior or it will never change.
For what it is worth
That's it in a nutshell. Perfectly stated.

Greg
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post #48 of 113 Old Nov 13th, 2008, 4:38 pm
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Re: Bailing Out The Auto Industry

The perfect way to ensure the health of the US auto makers is rather simple.
People aren't buying truck frame vehicles because they don't want to have to fill them up with $4 a gallon gas.

Congress can enact a law making gas affordable at $2 a gallon for 10 years by removing all fed, state and local taxes on gas. And then subsidize the difference between market price and $2 via tax rebates.

This will stimulate demand.

Plus, Congress can stimulate demand by interest free auto loans.

If gas guzzling tanks still don't sell, why then Congress can subsidize each purchase with a low gas milage rebate for each purchase.

Simple!

Congress gets to do what they do best--take from the many to give to the few--garner votes to get re-elected and pass the costs and negative consequences into the future. Plus, they get to add Billions of earmarks into the bills.

Auto industry saved; jobs saved; pensions get funded.

At it finest, Congress at work. Pork to save an industry and it's suppliers for greater good of re-elections.

Bob

"He was a foul caricature of himself, a man with no soul, no inner convictions, with the integrity of a hyena, and the style of a poison toad." H. S. Thompson
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post #49 of 113 Old Nov 13th, 2008, 6:28 pm
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Re: Bailing Out The Auto Industry

Quote:
Originally Posted by BecketMa
The perfect way to ensure the health of the US auto makers is rather simple.
People aren't buying truck frame vehicles because they don't want to have to fill them up with $4 a gallon gas.

Congress can enact a law making gas affordable at $2 a gallon for 10 years by removing all fed, state and local taxes on gas. And then subsidize the difference between market price and $2 via tax rebates.

This will stimulate demand.

Plus, Congress can stimulate demand by interest free auto loans.

If gas guzzling tanks still don't sell, why then Congress can subsidize each purchase with a low gas milage rebate for each purchase.

Simple!

Congress gets to do what they do best--take from the many to give to the few--garner votes to get re-elected and pass the costs and negative consequences into the future. Plus, they get to add Billions of earmarks into the bills.

Auto industry saved; jobs saved; pensions get funded.

At it finest, Congress at work. Pork to save an industry and it's suppliers for greater good of re-elections.
The auto industry and big, bloated government, working together, for the good of the people! "I only wanna help you." Almost a good as socialized medicine.

"Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety." (Some really OLD friggin' White dude who couldn't have possibly known what he was talking about!) WARNING: Official HATE speech!
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post #50 of 113 Old Nov 13th, 2008, 8:02 pm
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Re: Bailing Out The Auto Industry

Uuuuuum.

we've had government subsidized health care for the few ever since CONgress allowed a company to expense benefits to employees and not tax the benefits employees received.

America would truly suffer if every American had the same health care as CONgress. We just wouldn't survive as a country unless a large percentage of Americans suffer preventable deaths, illness, pain, disablement, hearing loss, loss of usable eye sight, tooth loss from infections etc.

Our country would grind to a halt if tax payer funds were used to benefit the many if the health and welfare of every American were more important than health and welfare of people in foreign countries.

Just imagine! Aide to Americans before Foreign aide. Aid to all Americans before earmarks. Aide to all American before special interest groups.

Our country would become so weak, Mexico would invade us.

Bob

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