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Save ’em, but fire all the execs and tax their golden parachutes at 100%.
Let them compete for the money! All three should come up with a plan, the best plan wins,then the spoils of the other two should go to the winner. If we do bail,why do we need to bail out three companies?
@ Mac Guy
Stay in school – you need they education. The problem is not the executive pay. The problem is the union. The car companies can not compete with the union benefits they have to pay. They are profitable in all their other plants except for the ones in North America where they are strangled by the unions. The foreign car companies are profitable in the US because they don’t have they UAW weighing them down. Giving them the money is just a waste because it doesn’t fix the problem and they will either go out of business or come back for more money in 6 months.
Buy a Toyota
#3 Thermo got it right.
The reason for the automakers to declare bankruptcy is to unload the union, thereby making the car companies competitive.
The reason to bail out the automakers is to buy votes from union members.
In this competitive world, hard as it sounds, our standard of living is going down the toilet because we have to compete against the living wages of workers in India and China.
Show you’re support, buy a Toyota.
Our car companies have shown us what they’re all about, spending billions on themselves and zip zagging across the pond buying and selling other countries car companies for profits while in the mean time selling us on the same old horsepower you can out muscle the other guy story while completely ignoring the state of the country and energy.
If the US auto industry crashes there’s alway the bus.
American car companies have to pay around $70/hr for their help. All other car companies doing business in the US pay around $35/hr.
Bailing them out will not solve this problem. The UAW needs to be busted up. Anytime a union controls an entire industry, it is a monopoly of the labor force. They should be told to break down into local unions or face the RICO act.
# 7 LibertyLover said, “American car companies have to pay around $70/hr for their help. All other car companies doing business in the US pay around $35/hr.”
I think Dick Morris said it best. Paraphrase: “This isn’t a bailout of the auto companies, it’s a bailout of the unions.”
Think of the PC – Personal Computer.
Why has it been so successful.
Dell or HP assemble, they don’t make hard drives. Or RAM, etc.
Same thing must happen in the auto industry. I remember my first car, a Chevrolet GEO Metro, that had a motor from Suzuki.
So you keep the assembling local, but auto assemblers buy parts from different suppliers.
This will have price variations based on quality, just like a PC, the faster computer can be either cheap or expensive.
Imagine having Mitsubishi, renowned for motors, specializing in just that. Ford, is able to make great car bodies. Toyota has the better transmission, etc.
If the Big 3 die, smaller, specialized companies will spring up, making a healthy market. Just like PC’s, when IBM dominated, and finally pulled out, from making a PC from start to finish all in-house.
7, 8,
That $70 dollar figure is what we can call an ambiguity. It’s not perfectly accurate but it’s politically effective.
http://mediamatters.org/items/200811220004
Non-union Americans hate unions as much as uninsured Americans hate universal health care… A LOT!
The Big Three made cars Americans wanted… SUV’s. Then, when Americans couldn’t afford them or the gas anymore, the Big Three had nothing left in the tank, so to speak. You guys did it to yourself and now the self-loathing is coming out in spades. Sadly, even if the Big Three made awesome small cars, I doubt Americans would want them. You guys either all have small penises or think small cars are plastered with vaginas that will make you look like a pussy.
But, 1.5 Trillion to the financial industry is such a mystery, most people were just passive accepting it. In fact, its so cold politically it doesn’t even make 10% of the auto bailout coverage in the MSM. Paulson and Bernacke are SO HAPPY that the focus is on a few bucks to the auto industry. Keeps the looting in full swing.
As for the bailout…
GM – No
Ford – No
Cerebus corporation (Chrysler) – HELL NO
GM and Ford should be broken up. Cerebus should eat their own lunch.
F all three. Let a paleontologist figure out what happened in a couple of eons.
#10, I did not say the workers were getting $70/hr. I said their labor is costing them that.
I know it includes retirees because both of my parents are GM retires.
AFA the financial industry – I haven’t lost sight of the either. Guns and tuna are stockpiled . . .
The ripple effect of allowing these companies to die would be devastating, and set back economic recovery many months. They do need new management and serious restructuring. I’m just not sure if a Car Czar is the one to do it. In my opinion government oversight has never been that productive. All car sales are down, and that will continue for a while. Lines needs to be shut down, and inventory cleared, even at considerable losses. Get creative and retool for the recovery with cars people want. The UAW has a fraction of the power it once had. They’re in no position to demand anything, and will have to give many concessions or dissolve because they’ll have no membership.
13,
There is tonnes of good equipment in those factories that GM, Ford and Cerebus own. Toyota, Honda, VW, BMW and the rest would love to get their hands on fully developed infrastructure.
As for cars Americans want… SUVs. Hasn’t changed. Won’t change.
http://tinyurl.com/5wrw96 from myfox, SUV sales surge thanks to lowered fuel prices.
And the cycle begins anew.
A lot of people’s jobs depend on these companies. They should be bailed out, but with major tags attached.
# 13 RTaylor said, “The ripple effect of allowing these companies to die would be devastating,”
They wouldn’t die. If they BKed and restructured they’d be better off. The ONLY reason the Dem congress is pushing for a bailout is to protect union benefits. There is no business reason to stop a BK. Congress is just protecting votes.
16,
How can they go Chapter 11? That would stop their credit line and finish them off for good.
It seems that nobody realizes that keeping the big3 around is a matter of national security & PRIDE. (pride is something this country used to have)
#6 can figure out how our troops can hop on a Mitsubishi bus to move around on foreign soil.
#9 obviously has not looked under the hood of a car made after 1978. You think your GM car is all GM? Think again.
@#10: “The Big Three made cars Americans wanted… SUV’s.” – complete falsehood. SUV-craze came from: Govt. set higher gas mileage, pollution and safety standards. Carmakers didn’t want to do that so they lobbied in “exemption” for SUV’s. Hence, SUV’s were more profitable to make (cheaper as build standards were lower and by definition larger vehicles have bigger margin). Hence, carmakers promoted SUVs until they come out of their noses. Gullible populace bought the ads and “wanted” SUVs although they didn’t need them for real. Blinded by success of hoodwinking the customers carmakers failed to plan for the future, which inevitably came as economic reality snapped people from their ad-induced dreams … In the while Union milked out insane ponzi-scheme contracts that were doomed to fail no matter how good economy was.
Hence two main culprits, both of which need to pay. Management who failed to plan and tried to scam customers while allowing incredible Union contracts. Unions whose contracts can’t be supported by any viable industry.
I’d give them money under two conditions: complete managements (at least top 100 for each company) leave FIRST (than carmakers get money) and agree to a contract never again to work in auto industry. Unions agree to abandon their all contracts FIRST (now) and sign new one with American People who are saving their jobs (and this contract gives them average pay and benefits workers in functional auto plants [non unionized] have at the moment). Also, top Union management must go FIRST.
19,
So Americans are brainless automatons that have to obey what they see on TV? Get over it. Americans have ALWAYS LOVED big vehicles. Always. And now that fuel is lower, SUV sales are rising again.
The Big Three didn’t even want seat belts back in the day. When the gov’t implements regulation their first action is to refute it. The Big Three are to the gov’t what the Union is to the Big Three.
And as for the Union bashing comment again… only in the US are unions blamed for the failure of the auto industry. How unimaginative. BMW, VW, Toyota, Honda all have unionized plants. maybe not in the US, but elsewhere. And here is a good little article for you.
http://blog.mises.org/archives/009076.asp
It was a dead heat. General Motors sold 9.37 million vehicles worldwide in 2007 and lost $38.7 billion. Toyota sold 9.37 million vehicles in 2007 and made $17.1 billion.
Must be the unions fault.
As an aside, in most industrial countries, health care is nationalized and therefore that cost can be eliminated by the employer. but, Americans LOVE paying out of pocket for Health care.
# 17 Named said, “How can they go Chapter 11? That would stop their credit line and finish them off for good.”
Like it finished United? It would actually help them get credit faster. Once banks knew they were out from under the crushing debt of future pension/healthcare contract costs, they’d have lots of credit offers.
#12 – LL
>>I know it includes retirees because both of my
>>parents are GM retires.
So I guess you’ll have no cause to bitch when their pensions and health bennies are yanked, and you end up paying $140,000/yr if they have to go into a nursing home (or $210,000/yr, if they happen to live in Alaska).
Right?
21,
Lot’s of credit offers? You’re joking, right? If car sales are down 70% WHY would a bank that just got cold hard cash to invest with as they please give it to Detroit when you can see they cannot move inventory AT ALL!
In fact, BOA just invested in Toll Roads… In Spain. And picked up some choice assets in China. Why would BOA put money in Detroit?
I thought Ford pulled out of asking for the Bailout.
I thought they decided to tough it out.
Ford is in decent shape, for the shape they’re in. Over the last several years they’ve made several retirement offers, downsized a fair amount, did some restructuring, and got a new CEO. I think they sold off some subsidiaries, too.
# 23 Named said, “Lot’s of credit offers? You’re joking, right? If car sales are down 70% ”
Once you restructure (to fit demand of product). Then you will be profitable. Why would you keep facilities & people who aren’t needed due to demand?
Don’t ever run a large business. It’ll fail.
26,
I see. Unless Ford or GM or Cerebus goes Chapter 11 they can’t restructure their business according to demand? And they haven’t been able to do such a thing for the past, oh, 15 years? Nice try. Americans wanted SUV’s, Big Three built SUV’s. I believe it was Ford that made the first successful run of them. Once Americans couldn’t afford SUV’s, the Big Three said “BAILOUT” since they had nothing in the pipe that was worth buying. When you look at the price / performance of a 25K car, you have LOTS of choice. And the best ones are foreign branded and probably locally made.
And who says I would maintain unnecessary brands or products? How did you ever extrapolate that? I never understood the multi-brand anyway. At least with, say VW and Audi, the relationship isn’t blatant and allow special branding along rice / luxury. But, what the hell is the difference between a GMC, Chevy, Buick, Pontiac anyway? Is one a “better” car than the other?
Don’t become an analyst. You’ll be wrong.
#22, If you really think $15B is going to save those pensions, you are mistaken. Those pensions are already gone whether they get the bailout or not.
I am so convinced of this I have already started making plans to have my parents move in with me when things get worse.
However, if the bailout fails to go through, I am sure they wouldn’t mind a donation from you as your government failed to help them out.
Liberty Lover,
American car companies have to pay around $70/hr for their help. All other car companies doing business in the US pay around $35/hr.
Maybe you could cite the accuracy of this number. I’ve heard it several times before along with bullshit.
*
Now, let me go back to a cartoon I remember from about 1980 when foreign cars were starting to make inroads.
A supervisor and assembly line worker were having a discussion on the assembly line. The worker was saying,
“Your designs, your marketing, your dealers and service departments, your prototype and testing, your approvals, your methods of production, your production lines, your factories, your parts, your supervision, so tell me again why it is all my fault?”
I live not too far from South Bend, Indiana where Studebaker used to make their cars and trucks. When they closed the South Bend plant in 1964 it devastated the area. The repercussions were felt and reverberated throughout the region for years.
If the “Big Three” go under, the mess will be far worse and spread out across the country. It has been the manufacturing sector that made America great, not the banking industry.
So far $300 BILLION has been given out through the Bail Out Package and the asshole in charge won’t tell us where it went or what conditions are attached. Smaller businesses are still being cut off of credit and forced to close their doors.
If the Big Three fail then we will be in for a MAJOR depression. Not something we can get over with another stimulus package that people will spend at Walmart on Chinese clothes for their kids. Something where even Lawyers and Engineers will be taking government handouts.
# 27 Named said, “I see. Unless Ford or GM or Cerebus goes Chapter 11 they can’t restructure their business according to demand? And they haven’t been able to do such a thing for the past, oh, 15 years?”
Correct. When they lay workers off they still have to pay them. You should study up on all the Union contracts. BK will wipe out ALL these financial commitments. Let me know when you have read all the contracts.