Should the big3 get a bailout??

[Planogirl]

Wall Street hasn't gotten the whole 700 Billion yet. In fact, the auto bailout money would be part of that.

The big 3 bailout supporters keep stressing that the auto industry is failing because customers can't get loans for the cars because of the credit crunch. Yet they keep bashing the bailout of the credit crunch.

We start the money flowing again by bailing out the banks. Now the customers can buy cars again and since this was the reason according to the big 3 bailout supporters for the auto industry failure (not quality or anything else), if the customers can buy cars again, things will be great, no bailout needed.

I agree!!! The automakers will never get things moving again if the banks don't get credit moving again. That is necessary.

I would say let the automakers (or at least GM) declare bankruptcy and reorganize but some experts keep saying that the public is unlikely to buy cars from a bankrupt company. THAT would be bad IMO.

 

[Charade]

Ooo... how'd I miss this!!

 

[minnie61650]

I posted this on another thread a couple of days ago:

Excepts from Detroit Free Press:

.........

Urgency colored every conversation because Michigan knows what other states may not -- that good auto jobs can indeed go away forever.

"I think the numbers are so big that it's hard to get your head around it," said Sarah Hubbard, vice president for government relations for the Detroit Regional Chamber. "This state has lost so many jobs already. We know this can happen."

Wayne County Executive Robert Ficano said a GM or Chrysler bankruptcy filing would devastate services.

"It would affect their ability to pay taxes. That impacts teachers, firefighters and police officers, just to name some of them," Ficano said. "This is serious business, and I hope there's not a lot of showboating by those in Congress. They're playing with real peoples' lives."

Oakland County Executive L. Brooks Patterson echoed that, calling the situation especially dire in Oakland County where auto companies are a major employer and Chrysler LLC is headquartered.

Like many, Patterson said Congress bears much of the blame for allowing the subprime mortgage crisis to swell into the credit crunch.

"If this was the result of bad management, you could afford to play hardball," he said. "But they're here today in this financial crisis because of the bumbling of Congress."



"The numbers they are sharing only underscore the severity of the economic crisis. On the state level, we're feeling it. Michigan is so connected to the auto industry that wherever it goes, there goes Michigan's economy."

There was anger Tuesday not just at Congress but at top management.........


Ford Motor Co. said Tuesday that Chief Executive Officer Alan Mulally would work for $1 a year if the company borrows federal money.


...........

"These people are trying to keep the middle class of America alive, and they can't hardly get a dime out of Congress," ....... "This was a lame-duck Congress that was showboating."

Link to full article:

http://www.freep.com/article/20081203/BUSINESS01/812030378/1014/BUSINESS01

 

[dcentity2000]

Goodness, I have no idea, being totally devoid of any knowledge in the field of economics.

Time to read the Financial Times...



Rich::

 

[minnie61650]

Rally focuses on workers
Auto dealers, suppliers gather to plead for jobs
BY TODD SPANGLER • FREE PRESS WASHINGTON STAFF • December 6, 2008

WASHINGTON -- Car dealers, parts makers, human resources officials and more -- coming in from dozens of states -- stood in the shadow of the nation's Capitol on Friday hoping to be heard by members of Congress.


These weren't the automakers pleading for help. These were the folks whose jobs might go away without them.

"They have to understand," said Kim Meltzer, a state representative from Clinton Township who runs a manufacturing company with her husband in Romeo, "without the auto industry here, there's no money for schools, no money for roads or infrastructure."


Meltzer, a Republican, took part in a morning rally supporting the automakers and their plea for a $34-billion lifeline from Congress. She was representing Michigan, like the others wearing a red, white and blue hockey jersey with the number of jobs believed to be on the line if Detroit's three automakers go belly-up.

All told, the group -- calling itself the Engine of Democracy Coalition -- says more than 6 million jobs could be at risk when you count the automakers, the dealers, the suppliers and all the jobs their failure could cost across the nation.

"One way or another," said Rep. Sander Levin, a Royal Oak Democrat who spoke at the rally and who has been a strong supporter of the auto industry's plans, "there will be a bridge loan because the alternative is really cataclysmic for this country."

But the group -- which grew out of an earlier effort to put together a caravan of supporters to drive to Washington, D.C., to bolster the carmakers' arguments (it was later deemed too difficult to organize) -- readily acknowledged they are facing a tough battle.

Many members of Congress remain cold to the idea of an auto industry rescue, worried that the money will do little to ensure the future of General Motors Corp., Ford Motor Co. and Chrysler LLC, leaving the taxpayers holding the bag on bad loans. Others remember how much ire was directed at them a few months ago when they pushed for and eventually passed a $700-billion bailout for the nation's financial institutions...........


Should one or more of the automakers fail, hundreds of suppliers could be right behind them. Dealerships could collapse. And the money pumped into the economy by all those workers would dry up. Leuliette compared it to a tsunami rolling over the United States.

"It can be really bad," he said.

Link:

http://www.freep.com/article/20081206/BUSINESS01/812060360/1014/BUSINESS01

 

[Charade]

So... I'm guessing you voted yes?

 

[DLBDS]

No. Their failure will open the doors to the more innovative car designers etc. The big 3 have had their day. It's time to move on and be more progressive with car designs and what powers them. JMHO.

 

[Charade]

No. Their failure will open the doors to the more innovative car designers etc. The big 3 have had their day. It's time to move on and be more progressive with car designs and what powers them. JMHO.

Like what?

So having a near 50 percent elimination of the US car market will get us where in the short term?

 

[LuvOrlando]

Did you read this about how the first bail out didn't stop trouble?

http://cbs2chicago.com/local/republic.windows.sitin.2.880850.html

Still think the money will help? I would love to think giving the auto industry would work just like I hoped the bank bailout would work, but the money won't be used the way intended because businesses primary allegiance does not go to employees or even to customers, their primary allegiance goes to stockholders, its just the way it is not matter what they tell you. SO these banks used the money to strengthen their business position so the stock stays strong, and that usually means lowering liabilities so that assets appear stronger.... and employees are liabilities .

A bailout of the auto industry won't work, any more than a bailout of the banking industry is working. The trouble with trickle down thinking is that people will horde what comes their way... its human nature. Nothing will trickle down to the bottom if the people on top are allowed to fill their swimming pools and everyone else above you is holding a cup.

I understand that people are desperate. I also see that these bailouts are being offered as a panacea. My disagreement isn't based on thinking people shouldn't be helped, my disagreement is with the idea that the bailouts are the way to go. I think guys in fancy suits are looking to pay off their retirement funds and jump with a golden parachute paid for by us... there is no law that says they need to stick around to clean up their mess. Those CEO's and company are looking to cover themselves and then leave everyone else on the sinking ship, and before you know it we'll be back in the same position with no money left to help Americans.

 

[minnie61650]

The latest news:

Granholm: 'Game over' if no loan for GM

ASSOCIATED PRESS • December 8, 2008


Sen. Chris Dodd said today that soaring unemployment amounts to a “game-changer” in the debate over financial aid to the auto industry.


Dodd said on ABC’s “Good Morning America” show that with more and more people losing their jobs, Washington has no choice but to intervene to keep the Detroit Three automakers from collapsing.

But Dodd also said he thinks any such plan should include a change in the top leadership of the car makers, although he also said that “it’s not my job to hire and fire.”


He did say he thinks overhauling the top management of Ford, Chrysler and General Motors is necessary as a gesture of good faith with the American public, whose money would be used for the loans.


Meanwhile, the head of the United Auto Workers, Ron Gettelfinger, said his union was ready to “go back to the bargaining table” to work with the companies to keep them in business.


But Gettelfinger also said on NBC’s “Today” show that unions represent only about 10% of the total cost of running the companies and “we cannot let workers in this country be the scapegoat for this problem.”


Gov. Jennifer Granholm said on CBS’ “The Early Show” that “it is game over” for GM if it doesn’t get help before the end of this month.


Granholm also sided with those who have said that a declaration of bankruptcy is not a solution to the problem.


“Consumers will not purchase a car from a bankrupt auto company,” she said. “ ... They are not going to trust that they will have access to parts, the warranty.

 

[LotsOfQuestions]

The latest news:

You know, I watched the interview of Ron Gettelfinger on the Today show this morning.

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

Viera asked him if the UAW would be willing to consider pay cuts to help out the cause. He blatantly refused to answer and changed the subject each time she asked.

He finally relented that when all the parties came together, then the UAW would be willing to join them at the bargaining table to see what needed to be done. But he was very determined to make it a point that the UAW had already made their concessions.

What I found interesting is that Gettelfinger obviously reads the DIS boards because he parroted almost word for word what some of the most ardent Bailout supporters post on these threads. (or is it vice versa)

This article you are quoting is very misleading.

Gettelfinger's interview was very telling in how he would NOT commit to anymore concessions.

Dodd is demanding GM change their top people before the bailout can occur, not something that should be "as a good faith for the American People"

It also said that the package being considered is about half of the 37 billion the auto makers are asking for.

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.

 

[Planogirl]

You know, I watched the interview of Ron Gettelfinger on the Today show this morning.

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

Viera asked him if the UAW would be willing to consider pay cuts to help out the cause. He blatantly refused to answer and changed the subject each time she asked.

He finally relented that when all the parties came together, then the UAW would be willing to join them at the bargaining table to see what needed to be done. But he was very determined to make it a point that the UAW had already made their concessions.

What I found interesting is that Gettelfinger obviously reads the DIS boards because he parroted almost word for word what some of the most ardent Bailout supporters post on these threads. (or is it vice versa)

This article you are quoting is very misleading.

Gettelfinger's interview was very telling in how he would NOT commit to anymore concessions.

Dodd is demanding GM change their top people before the bailout can occur, not something that should be "as a good faith for the American People"

It also said that the package being considered is about half of the 37 billion the auto makers are asking for.

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.

I wouldn't commit to anything either. I can't see the guy telling the press what the union would be willing to do without even talking to management. Both sides need to make concessions IMO.

Interesting, the idea of Chrysler being absorbed. I hope that it's by Ford if it happens.

 

[LotsOfQuestions]

I wouldn't commit to anything either. I can't see the guy telling the press what the union would be willing to do without even talking to management. Both sides need to make concessions IMO.

Interesting, the idea of Chrysler being absorbed. I hope that it's by Ford if it happens.

I wouldn't commit to anything either on national television, but to paint his reluctant answer that he would join the other factors at the bargaining table as enthusiasm and support to bargain by the UAW is blatantly false.

In fact, if you saw the article, Gettelfinger indicated that the UAW would only come to the bargaining table if forced.

It was definitely NOT a willingness of the UAW to try to work things out.

 

[Galahad]

It would result in the loss of jobs, but is seen as one way to strengthen the American Auto Market.

Anything responsible at this point, sadly, would result in the loss of jobs.

I read a couple of the most incredible op-eds this weekend. One stated that the real failure of the UAW was not unionizing Toyota and Honda and leaving them to be "unfair" competition.

 

[Quiksilvr]

A bridge loan isn't going to save these companies. They're already bloated, fading caricatures of what they used to be; a loan is only going to prolong the agony. For them to really change to be competitive in the 21st Century, they need to overhaul their entire way of doing business. They don't want to do that. I agree with the comment that any responsible resolution to this issue will still result in the loss of many jobs.

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.

 

[manning]

Anything responsible at this point, sadly, would result in the loss of jobs.

I read a couple of the most incredible op-eds this weekend. One stated that the real failure of the UAW was not unionizing Toyota and Honda and leaving them to be "unfair" competition.

I wouldn't be surprised if the unions unionize Toyota and Honda it would end up the cars would be manufactured in Japan or Mexico and shipped here. If it was cost effective the Japanese would not hesitate in coming to that decision.

 

[Quiksilvr]

I wouldn't be surprised if the unions unionize Toyota and Honda it would end up the cars would be manufactured in Japan or Mexico and shipped here. If it was cost effective the Japanese would not hesitate in coming to that decision.

Of course they would. It's what any competitive company would do to keep market share and keep making a profit. That's what running a company is about... it's about maximizing shareholder value, not providing jobs to American workers. People get so upset about it when a company moves overseas, but they also continue to demand lower prices and better value for what they purchase. How exactly is a company supposed to do that without controlling costs in any way they can?

However, I think the Japanese companies would only do that if they could ensure that the cars produced in Mexico had similar quality to the cars produced in the United States. Much of their reputation is based on perceived quality; if they start producing inferior cars in Mexico, their market share will drop. Of course, if there are no US auto manufacturers to compete with, then who knows what would happen?

 

[mickeymedic]

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.

If the Auto Industry is to be saved, there needs to be major restructuring. The CEOs need to have their salaries drastically cut - to reflect that actual performance of their company. The unions need to be willing to compromise in order to save the jobs of many. Dead weight needs to be thrown overboard. IF all that happens, then I would not oppose some form of bailout. However, based on the way the banking bailout was handled, I would be very leary of sending more tax dollars down that black hole.

And, for the record, I think the CEOs of AIG and anyone else who misused the bailout funds should be personally responsible for refunding the taxpayers' money. Their wages should be garnished until it is all paid back (or until they die - whichever comes first.)

 

[minnie61650]

.....If the Auto Industry is to be saved, there needs to be major restructuring. The CEOs need to have their salaries drastically cut - to reflect that actual performance of their company. The unions need to be willing to compromise in order to save the jobs of many. Dead weight needs to be thrown overboard. IF all that happens, then I would not oppose some form of bailout.

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?

 

[amyhughes]

I think at this point we are going to have to. But, also that loan/bail out is going to have to come with some serious stipulations. We can't keep giving money to poorly run companies. It makes no sense. There will have to be changes made to the very core of the way these companies operate. Sorry to say, but if they can't keep their heads above water, and are being outsold by Foreign competitors there has to be a reason.

I have bought Ford my entire driving career. I loved each of my vehicles, they had their issues sure, but overall they were sound vehicles which had nice amenities. The same can't be said for every domestic model out there.

I hope that there is a resolution to this soon. I deal in negotiations every day for my job, and one of the truths of negotiations is when you walk away from the table you won't have everything you wished, and you won't be happy with the totality, but you will be intact and operating.