Should the big3 get a bailout??

[LisaR]

How about cutting the salaries of the CEO's at Ford , Chrysler & GM to $1 in 2009 if they get a bridge loan?

How about having the vice president and vice chairman of GM take 20%-30% pay cuts?


How about no executive bonuses through 2009?

How about having GM is work with the UAW to be fully competitive with Toyota on labor by 2012.




Would that be a good beginning?

I have some more!

How about they sell their corporate planes?

How about they let over 100,000 workers go?

How about they shut down unproductive plants and merge other plants to save money?

How about Bill Ford Jr. goes another year without taking a salary. After all, what is one more year when he hasn't taken one since at least 2004? Not that he is hurting but would this be a good start?

How about if they restrict travel for all employees except in absolute mandatory situations?

How about if they reduce health care benefits to all salaried employees and make them pay for part of it out of their pockets?



Would any of these ideas fulfill your requirement?

 

[minnie61650]

Anderson Economic Group and BBK said in a report released early today that the effects of a bankruptcy by two of Detroit’s automakers would cost taxpayers up to four times more than the proposed federal bridge loans.

Chrysler, Ford and General Motors are asking Congress for $34 billion in bridge loans. GM and Chrysler have warned their companies are in danger of reaching minimum levels of cash needed to sustain operations.


“The report shows the immediate impact of the collapse of even two automotive manufacturers … would only further exacerbate our current economic crisis and likely would precipitate a complete shutdown of nearly all auto production in the U.S. for some time,” Kriss Andrews, of BBK’s automotive practice, said in a statement. “The other direct economic costs of a bankruptcy would be similarly distressing.”


BBK is an international business advisory firm that helps troubled companies.


The report estimated direct taxpayer costs under multiple scenarios over a two-year period and found that the losses of employment, income and tax revenue are “unequivocally” higher under a bankruptcy scenario than one with the federal bridge loans, a statement by the group said.


The groups said 1.8 million jobs would be lost if two of Detroit’s three automakers fail under bankruptcy.

“We hope this research report provides policymakers and taxpayers with an objective, independent assessment of what an automaker bankruptcy would look like,” Patrick Anderson, of Anderson Economic Group, said in a statement. “The findings indicate a bridge-loan scenario would be the more financially sound choice of the scenarios currently under debate in Washington, with lower relative economic costs than not providing any type of financial support.”

 

[minnie61650]

I have some more!

How about they sell their corporate planes?.....


Would any of these ideas fulfill your requirement?

GM & Ford are selling their private jet fleet:

Good ideas!

 

[LisaR]

I have noticed a lot of the responses here say something along the lines of: We gave money to the Banks so we should give money to the Auto Industry. And then people debate the merrits of the Banks vs. the Auto Industry.

My opinion: Just because the government made a bad decision in the way they bailed out the Banks does not mean that they should have to make the same bad decision in regards to the Auto Industry. I think there has been a lot of outrage over the way the Bank bailout went down - too much money given/not enough oversight or accountability. I fear that bailing out the Auto Industry will be a prime example of throwing good money after bad.

I support the loan to the auto industry 100% but not because we gave the banking industry a loan.

I do find it very ironic that we were able to approve a $700 billion bailout without ANY stipulations in a weeks time but we can't find $34 billion to give to an industry that has presented a business plan.

An industry that is necessary for our military vehicles.

An industry that supplies over 800,000 million new vehicles on the roadways just in America alone.

An industry that would add between 1 to 2 million more unemployed people to the statistics if they were to fail.

An industry that has attempted to get loans from the banking industry but they refuse because they don't want to use their bailout money to help the auto industry. Apparently they would rather use their bailout money to have company parties.

An industry that seems more than willing to do what it takes to become profitable again like cutting CEO salaries and significantly reducing their work force and expenses.

An industry that will still give us some major production in the US. We went from a producing nation to a consuming nation and the loss of the auto industry would make that situation go from bad to worse.

So, no, I do not think they should get money because the banks did. I emailed my senators during the banking bailout and BEGGED for stipulations. I do not think there is anything wrong with asking the auto industry or the banking industry for stipulations when giving large sums of money. Seems like common sense to me.

I think they should get the money because it would devastate our economy if they were to fail.

 

[Galahad]

GM & Ford are selling their private jet fleet:

Good ideas!

I'm not sure it's such a slam dunk that this is a good idea. If there is a lot of business travel that has to be done (and with operations all over the world there would be) it's sometimes more cost effective to own a plane/planes. Our company (a fortune 500 company) owns 2 jets that seat 8 each. They never fly with less that 7 people. If costs between $3500 and $4000 to fly the plane from Indy to DC, for example. That can be much more cost effective than buying 7 tickets - especially on short notice. Add to that not being at the whims of airline schedules and snafus and it can really save a company a lot of money to own their own planes.

 

[adkkev]

An industry that is necessary for our military vehicles.

I don't believe that this is true. But I could be wrong.

 

[ntsammy5]

I don't believe that this is true. But I could be wrong.

No, you're absolutely correct - there are no land conmbat vehicles produced by the big 3 any more - they haven't done that for years and years.

 

[Galahad]

No, you're absolutely correct - there are no land conmbat vehicles produced by the big 3 any more - they haven't done that for years and years.

Here's a "directory" of manufacturers. The big three don't play.

http://dir.yahoo.com/Business_and_Economy/Business_to_Business/Weapons/Combat_Vehicles/

FWIW, Rolls Royce, a UK company I believe, makes military engines and stuff. They have a big plant here in Indy. They announced they are adding jobs - particularly looking for those experienced in manufacturing like autos.

 

[MarkBarbieri]

Earlier this year, they took my money and handed out checks to a bunch of people as "tax rebates", except that some of us taxpayers got shafted and others that don't pay taxes got free money. Then they took $700 billion and used it to bail out banks. Now they want to bail out auto companies. I've had enough. Let me keep my money. If they want a bailout for auto companies, they should send out donation envelopes and let the people that want a bailout put their own money up. Quit being so darn generous with MY money. I need what little I have left.

At $34 billion, we are talking about $100 from every man, woman, and child in the country. For what? To stave off a GM bankruptcy a little longer. I say we should let them go bankrupt now and if we are going to help, help the people that take over the post-bankruptcy version of GM.

The notion that this is cheaper than bankruptcy is garbage. It's not going to fix GM's problems. It's just deferring them. Don't think so? How about a policy where all of the people that support the bailout co-sign on the "loan" so that I get my money back GM fails.

With the bailout, it's going to make things even worse for the big 3. Now they are going to have congress telling them how to run their businesses. You already see it in the demands for greener cars, selling planes, etc.

Don't make GM another Amtrack, perpetually suckling on the taxpayers wallets. Let the current shareholders get wiped out. Let the creditors take possession of the assets. Lets see what they can do with them.

 

[Kathi OD]

Just curious. Say we don't give the Big 3 their $34 billion bridge loan and they go out of business and 3 million additional people are added to the unemployment rolls.

How much will the unemployment benefits for all those people cost taxpayers? Will the 20 week extension that is in place for those states that have 6+% unemployment rates spread to other states, causing an even higher amount of funds to be needed? Will unemployment benefits be extended for an even longer period of time?

More than $ 34billion? Close to $34 billion? If so, I'd rather keep the Big 3 in business for however long (far) the $34billion takes them, keeping as many people as possible working for as long as possible. Sure it might be just prolonging the inevitable, but keeping people in jobs, earning money and spending in other parts of the marketplace can't necessarily be a bad thing.

 

[Handbag Lady]

I wasn't a big fan of the bank bailout and this one's not looking so good either. Accountability is a key factor for me. I don't want the bank CEOs to get any bonus just as the auto people need to start wiping their noses.

Why not start looking at the interest rates credit card companies are charging ALL people who are trying to pay off their giant holes? Maybe this would start generating some spending by John Q. Public. (I know what I pay know in interest is NOT what I signed up for when I got the card).

 

[Quiksilvr]

I don't believe that this is true. But I could be wrong.

No, you're right, but I wouldn't go down this line of thought anymore. The pro-auto bailout folks will start posting about how sure, the Big 3 don't make military vehicles, but if the Big 3 fail, all of our steel will disappear like dust in the wind if there isn't a GM or Chrysler to purchase it, and thus, no steel for military vehicles produced by companies that somehow currently purchase steel from steel companies without any input from the Big 3.

 

[minnie61650]

Here is a steel distribututor who supports the Dtroit 3:

Thursday, November 20, 2008

WARREN — A steel distributor that has a warehouse here is giving its workers cash payments if they buy a car that’s made in the U.S.

Payments to workers of Sunbelt-Turret Steel and its affiliate Turret Steel Industries range from $250 to $750.

Wayne Gould, president of the companies, said the auto industry is crucial to the country.

“I don’t think we should wait for government bailouts as the only answer,” he said.

Workers will receive $250 for a vehicle purchase or lease if the vehicle is made in the United States and has a domestic parts content of at least 75 percent. An extra $250 will be added if the vehicle is from General Motors, Ford or Chrysler.

Plus, if the vehicle gets at least 20 mpg in the city and 25 mpg on the highway, another $250 will be added.

“With each purchase of a fuel-efficient vehicle, we are putting less dollars into the pockets of people who don’t like Americans very much,” Gould said.

Turret Steel operates a warehouse in Warren that handles solid steel bars. Company officials would not say how many employees work there. The company is based in Leetsdale, Pa. Sunbelt-Turret Steel is based in Charlotte, N.C.

 

[eliza61]

Moot point now.

http://abcnews.go.com/Politics/story?id=6416783&page=1

They will get their bailout.

 

[Quiksilvr]

Moot point now.

http://abcnews.go.com/Politics/story?id=6416783&page=1

They will get their bailout.

Of course they will. I don't think there was every any real chance they wouldn't. The Democrat Congress basically said that. It was just a matter of when it happened; the Dems wanted to get something done to keep the Big 3 in business until after the inauguration, which is what the current controversy was about. They needed to find a way to get Bush to sign the bill, which is why they went with a smaller number with a different source. In January they will no longer have that particular problem and then they'll pass something else to continue propping up the auto industry.

If these bailouts and stimulus packages blow up in their faces and we're still in the same place in 2010, I think the Congress swings back to the red. These bailouts are hugely unpopular unless you're in an industry that benefits directly from the money.

 

[Colleen27]

He actually would not commit to any concessions by the UAW, stating that they had already made numerous large concessions.

I can't blame him. There's a big difference between management making concessions, knowing that when they're once again in the black they'll be back to making their millions, but quite another for labor. I think recent history shows that cuts in pay and benefits aren't undone when companies profit. Anything the UAW gives up now is gone for good, and they have to keep that in mind through the negotiation process.

The other interesting tidbit - the suggestion that Chrysler should be absorbed by either GM or Ford to become the big 2 instead of the big 3. It would result in the loss of jobs, but is seen as one way to strengthen the American Auto Market.

Personally, I'd hate to see that happen for entirely selfish reasons - I buy American and I drive a minivan, and Chrysler is the only one of the Big 3 that hasn't killed the minivan in favor of the massive SUV. But it could be a good solution in the big picture, particularly if the deal is with the more stable Ford.

 

[JARNJ3]

It had to be done.

I'm glad for all those workers' sakes.......

As well as my own (the industry I work in is also eventually connected to the auto industry.....

 

[Colleen27]

One of the hallmarks of an insolvent company is inefficiency. The Big 3 are paragons of inefficiency. If they were efficient and could keep their costs down, they would not be in such dire straits. I think it would still be rough because in this economy there aren't as many people purchasing cars, but they'd be able to better weather the storm.

Yes, paragons of inefficiency because they pay more than minimum wage and offer benefits that their workers can afford to use. We *need* their kind of inefficiency in our country.

 

[Quiksilvr]

Yes, paragons of inefficiency because they pay more than minimum wage and offer benefits that their workers can afford to use. We *need* their kind of inefficiency in our country.

I was actually referring to inefficiencies in production, not necessarily cost (at least directly... obviously inefficiency translates into cost). Those kinds of problems are solved more by innovation rather than throwing more people onto an assembly line.

However, I get the point you were trying to make, and if what you say is true, then you need to be willing to accept higher prices for goods and services. You claim that we "need" this sort of "inefficiency" and by that I take it to mean that you believe we need employers who are willing to pay higher salaries to more American workers to produce more goods in America. That costs money! Profit margins go down, stock price goes down as well. What goes up? Price. Price to you. Are you ready to pay the premium?

Suppose an American company can produce a widget in the United States while providing great salary and benefits to its employees at a consumer price of $500. A Japanese company can produce a very similar widget in India at a similar quality point, but they can do it for a consumer price of $300. Assume that you are a middle class American consumer. Which one are you going to buy? I'm curious to see at what point an American consumer's "ideals" can be bought, because that's essentially what happens. I think most of middle America buys the cheaper widget because they get the same level of quality for less money. Eventually, the American widget manufacturer can't compete because no one wants to buy its $500 widgets when they can get the same widget for $300. The widget manufacturer rings up the government and demands a bailout because they are no longer competitive in the widget market yet they employ hundreds of thousands of people.

Sound familiar?

You are basically promoting the idea that American businesses should be uncompetitive in a global economy and that the government should make up the difference. I disagree 100%.

 

[eliza61]

IHowever, I get the point you were trying to make, and if what you say is true, then you need to be willing to accept higher prices for goods and services. You claim that we "need" this sort of "inefficiency" and by that I take it to mean that you believe we need employers who are willing to pay higher salaries to more American workers to produce more goods in America. That costs money! Profit margins go down, stock price goes down as well. What goes up? Price. Price to you. Are you ready to pay the premium? Suppose an American company can produce a widget in the United States

Sound familiar?

You are basically promoting the idea that American businesses should be uncompetitive in a global economy and that the government should make up the difference. I disagree 100%.

Unresounding YES!!

I'm sick unto death of paying for the CRAP that comes out of China. Yes, I will pay an extra $25.00 bucks to have a computer made in the states. I'm sick of calling tech support and getting some dude in Pakistan that can barely speak English and cost me $15.00 bucks because I have to repeat myself 20 times or say excuse me could you repeat that.
I'm sick of going to Epcot and the American Pavillion is the only one that does not sell stuff made in it's own country. France, Italy, Mexico, Britian all have products from their respective countries. America= cheap tee shirts from China. Yes I willing to pay the extra 5.00 bucks.
Give me my American widget!!