Big Three Bailout Dead

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I'm not supporting the UAW at all, I think they're one of the prime examples of unions gone wrong. I'm just stating the fact not related to really anything else in the thread about the costs the big 3 have to pick up that other companies don't. They did make some epic fuck ups and managed to not keep with the times at all, but people ARE buying their cars, GM still was the biggest seller of cars around the world last year

 

The retired/pension versus working/payroll numbers that madcap gave us have to play a huge role (alongside inertia, of course) in the Big 3's troubles. Our babybooom (no fault of their own, I guess) is going to sap us dry. If you want to get a little back, buy stock in pacemakers, adult diapers and coffins, cuz here they come.

 

So now the question is, how much will the stock market crash come Monday?

 

It actually went up as the white house the other day said it was considering using some of the original $700 billion bail out fund to help the companies

But to use the money now they would still need approval by congress

 

I don't know, Madcap. I think the $700 billion has already been turned over to the administration -- with pretty much no strings attached. They've only used about half of it. The Treasury Dept. might be able to take $40 billion (or whatever the Big 3 is asking for) of the remaining $350 billion for the auto industry on its own. I may be wrong, but that's what I've gathered from the news reports I've heard.

 

No they need congressional approval now, people are starting to get pissed over the fact 1/2 that money has been spent so far and almost none has made it back to the normal populace, and congress to not look like a bunch of idiots is starting to act pissed now. It's actually pretty funny, I was watching hearing the other day and I actually saw angry congresspeople with balls for once

 

I do not support the UAW, and if they're going to hold the country's economy hostage for greedy objectives I support government outlawing any affiliation with it.

 

I've also heard some interesting arguments about the auto industry potentially being a national security issue. I don't necessarily agree with it, but some have referenced World War II and how quickly we were able to convert all our auto factories into military equipment operations. If we shutter all these auto plants, abandon the workers and equipment, then suddenly have to mobilize for large-scale war, will we have the capability?

It's interesting, though I'm not sure I buy it.

 

I thought they already did that with the Iraq war. GM even melded the consumer market with the military one with their Hum-V and Hummers. They made a handsome profit and now they are pleading poverty.

With gas prices low again, they could simply market this thing as the next generation consumer SUV:



The gun turret would come in handy for consumers during times of civil unrest.



.

 

Honestly, there is nothing wrong with protecting your fellow workers in the UAW. CEOs get paid billions of dollars and corporate lobbyists have spent billions of dollars fighting government regulation for decades in the judicial system. Every step of the way, corporations have been fighting regulation, they groan at a raise in minimum wage, at emissions regulation, etc. If slavery were legal corporations would be hiring slaves. They essentially do in Free Zones and third world countries.

When the bailout packages or restructuring mandates puts a cap in salary or negotiates away some of your collective bargaining power, then it's fine by me if the workers say enough is enough.

In Oshawa Ontario the other day, the GM plant closed and is scheduled to re-open sometime in late February. Hundreds of working people who have mortgages to pay, kids to feed, families to take care of are bearing the brunt of all this economic slowdown. It's working people who have no voice but the union to bargain their companies for a living wage and fair benefits. The UAW is working people and I fully support them. There is no good reason to blame the poor and the working class for representing themselves in the situation they are in when all they really want is to stop being given the shaft by the American/Canadian government and the Company.

EDIT: Stinkfoot, the problem with the government nationalizing the auto industry or like you mentioned affiliating itself with companies (I hope I understood this correctly) is that by doing so, the government know very well that it would have to provide higher pays to working people. If you nationalize a company then all those workers have to receive equal benefits, pay raises, contracts, better work standards, an environmentally charged structure force, etc. The government knows the costs and the companies know the costs of nationalization; it would mean an intermittently upfront cost with fewer profits.

The workers in the UAW have to compete with non-unionized foreign auto workers in a global market at the expense of lower wages so that their companies can take in the most profit possible from market share.

 

I drive a 1986 Ford Ranger, over 300,000 miles. It's a smallish pickup with a six cylinder, so it gets around 20 miles per gallon stop and start and 28 on the freeway.

But then I grew up doing my own repairs. She's been rode hard and put away wet, but she's still fairly reliable. She still passes smog screening every two years. In truck years I am sure she's older than I am now, and I have a few aches and pains so I can live with her hiccups.

I owned a Toyota pickup at one time, parts were hard to come by and working on it was the pits, so I unloaded it.

 

Always put your horse away dry, son.

 

I totally agree with your position. I am a little tired of the working person always being demonized instead of taking a realistic look at what really created the problem, and it usually turns out to be corporate executive excesses and mismanagement.

 

I think one of the big problems the big three made was doing away with their small utility vehicles, like the Couriers, Luvs, little Ram pickups. Even the Toyota pickup grew to an overblown size. Most average homeowners don't need a full sized pickup. Those little rigs were great for going to the dump, hauling home supplies from the hardware or lumber store, camping etc.

I park my little Ranger in a parking lot, and come out of the grocery store and I can't find it because it's totally surrounded by huge SUVs and pickups.

 

Be sure to thaw the bit when it's cold too.

My mother was saying the other day that when she was living through the Energy Crisis in the 70s, everyone was convinced that they would never have large vehicles again. They started producing compact cars and even made the parking spaces in parking lots smaller because nobody was manufacturing big boat size cars.

The deflated oil prices created a consumer demand for affluence and luxury vehicles like Hummers, SUVs, family vans and trucks. Consumers were under the impression that fuel economy was meaningless since gas was so artificially cheap. Diesel prices were low and affordable everywhere except in most regions in the USA, so the type of fuel most people were using there was unleaded petroleum, and even refined and supreme petroleum fuels were considered affordable and worth it for a lot of folks.

Anyway, I'm blurry-eyed and rambling. I forget where this was leading.

 

What I suggested was the government take over the pensions NOT the automakers- though the management should absolutely be thrown out. The UAW should be given a chance to renegotiate the pay and benefits scale to be more in line and more competitive with Toyota and Honda. If they are unwilling then bust the union... outlaw it.

The automakers would not be in quite the same mess if banks actually lent using the money taken from the TARP fund instead of sitting on it or buying up smaller banks. I suggest nationalizing the banking system... with the Fed assuming the role of consumer lender. If there are solvent banks willing to assume a role in the economic recovery they can buy up the remaining principle of any loans provided they do not change the terms of the agreements. From where I sit, I see very little being done at the consumer level to alleviate the crisis.

 

Do you think the Senate Republicans even considered that option? Are US taxpayers prepared to take on that burden?

 

Its not about class, or social justice, or blaming management vs workers. Its about the fact that the industry has been slowly but steadily dying in this country for decades, despite all kinds of government protection and support. This may be the year that it finally wheezed its last breath, but it has been a long time coming. Management has made mistake after mistake, and the unions have dug their own grave with their greed. But that's not unique to GM, that's what happens to dying industries. The US should be a niche player at cars, not a global producer of everything automotive.

That's why is shouldn't be bailed out. How could it be bailed out? Nobody thinks tens of billions will save it, it would only prolong the inevitable. The US has lost other industries along the way to where it is today, as do all countries.

I especially disagree that the US auto industry should refocus on green cars or some other crap. Why? Is Porsche focusing on green cars? No, they focus on what they do best. So should the US companies - that means SUVs, big trucks like Ford's F series. All the sedans and econoboxes and middle of the road stuff should just be abandoned, closed down, everyone sent packing. A bankruptcy could get them there. A government sponsored bailout where they switch to electric cars would end up as one of the biggest financial disasters in the history of government intervention.

Let them die so they can be reborn smaller, healthier, and viable.

 

We won't be equipped to take on any burden if things are left to implode as they seem to be doing. If the economy isn't resuscitated there won't be tax revenue and you will be right. Could they not use TARP money to assume that burden? Instead of giving temporary relief without addressing the causes of the crisis we're delaying the inevitable. By relieving them of the burden of current pensioners (NOT assuming all future retirements) we're helping to make then leaner and potentially more competitive. Dump the big money execs... let them fend for themselves. They've already shown their willingness to run the companies into the ground. Give the rank and file a CHANCE to renegotiate their contracts using the UAW and if they insist on clinging to bloated salary and benefits that drain the bottom line unduly then the union has demonstrated that it is not going to be a constructive player in a recovery.

It's economic Darwinism at work here and the weakest out there must either adapt or die. Considering that the automotive industry helps to sustain so many other industries some extra effort ought to be put forth to help them adapt and survive... or otherwise identify that they cannot (or will not) adapt, in which case let them die quickly before money gets thrown at the problem. My suggestions are based on the assumed willingness to adapt. Barring that some thought needs to be put into either supporting the segments of the economy that currently depend on automotive business to survive- like retooling and retraining in order to take on other business.

I harbor suspicions about the information being spoon fed as to the real peril of an industry that initially had its top executives fly to the Capitol in private jets in order to panhandle for relief. Were they falling behind in yacht payments? The beast showed its bloated belly... cutting away the top executives is a necessary first step- perhaps the pensions are also part of the fat that needs to be looked at. Does a UAW pensioner need the monthly SSI check? In any case what good are rich compensation packages when there is no retail economy to convert the cash to goods and services?

 

I agree management should have focussed on a niche market. That's only good business. Right now you can't hardly tell any of the big trucks apart, they all look the same and in my part of the world, they are all basically white. I don't know when that started.

And the new Mustangs and Corvettes look so much alike it's hard to see how one is better than the other.

The midrange vehicles all look basically the same. And probably drive the same.

Chrysler tried I think with the Cruiser to come up with something new and different, and I see Chevy has their spinoffs of it now.