Big Three Bailout
 

GMA had a segment this morning about the Big Three (GM, Ford and Chrysler) and their request for a government bailout to the tune of $25 billion. :mad:

Let them file bankruptcy. It wouldn't be the end of GM (or any of the auto makers). They're blaming their problems on "an across the board decline in auto sales". GM is whining that they will run out of money before the end of this year. Me, too.....:rolleyes: Let them file bankruptcy....many other companies have (United Airlines, Texaco, Georgia Pacific) and have emerged stronger.

Bankruptcy would let a judge supervise union contracts and benefits that have made it nearly impossible for them (Big 3) to compete against foreign car makers. Toyota, Honda, and other non-Big 3 auto manufacturers that employ over 100,000 Americans have shown that they can make a profit building cars in the U.S. The best way to keep U.S. auto workers employed in the future is to make it profitable to keep them working. If I can figure this out then it can't be too difficult to understand!! :rolleyes: If you have the time google the "Job Bank" that GM has .....it's a big eye-opener and will get your blood boiling.

My late DH used to work for GM (his only job and he started there at age 18). The plant he worked in is no longer there. I think (no, I know) he would be totally disgusted at the way management has allowed things to become.

I will never, ever buy another car made by any of the Big Three companies again. Not only are Honda's and Toyota's more reliable....I honestly don't think we have to worry about them getting into the mess that the "Big Three" have ventured into.

Kelly - I can't believe they are doing this either. I hope Congress doesn't not give in to them. I agree there are so many other companies out there that went through the same thing.

As far as I am concerned they can file bankruptcy just like everyone else. I feel bad for the people who are losing their jobs but management should of planned a little better and maybe taken a pay cut to survive!

Kelly .. I agree ... maybe if they wouldn't try selling ONE car at over $36,000 ... and then some .. maybe everyone would benefit and have nice reliable cars at a decent price ...

why should we have to 'finance' a vehicle?? they should file bankruptcy and rethink their positions!

Hopefully this isn't too OT but what about the huge pay checks, bonus' and severence pay, the fat Daddys that run these companies continue to get? :mad: I will never understand the concept. If my business loses money that year I surely don't get paid. Where is the logic in this, let alone the fairness?

Isn't there a country, maybe Sweeden or something, that has rules where the CEO of a company can only make a certain amount of money more than the lowest paid employee? As much as love capitalism and have enjoyed the fruits of my labor this sure sounds like a decent idea to me especially because in my experience some of the lowest paid employees have the hardest jobs anyway.

It is disgusting and I agree with all of you. Part of me certainly does not want to bail these guys out.

But the tickle down effect would overwhelm this country and certainly throw us deeper into a recession or depression.

It will start with the auto makers closing, significant layoffs at the automakers, then layoffs and closing at the parts manufacturers and then all those people spend less and it works its way to all the local businesses like supermarkets etc and then they have to cut costs and let people go.

And the closing of the parts plants would probably even hurt the foreign automakers in this country. I work at a place that handles business for a foreign automaker and because of the economy and the big three domestic guys they are getting pinched and already cutting abck by 1/3 which caused layoffs where I work.

However there should really be some come to jesus repercussions of running these businesses into the ground and being irresponsible.

And I totally agree on all the perks and severances. Failure should not be rewarded at all.

So as much as I do no wat the government ot bail these guys out I hope a solution is found so that it does not make the economy even worse.

All of the officers, managers, union bosses and other bums should go to jail and have to work for food and housing. There is a Sheriff in Arizona that would love to have them all build a new white-collar prison for the scumbags.

I detest what they have done to their own workers and suppliers.

Bring in a new team to reshape the methodology within which these companies work.

If they want to build cars, then build cars and get out of the finanancing business.

If they want sales, then build competitive products, not the crud that they produce.

Finally, I think that ALL of the officers should be stripped of every penny they have and have it placed in the retirement plans of the workers.

-Vic

P.S. I own a Ford F-250 pickup truck and a Chevy Suburban. Both are gas guzzlers, but both are maintained by me and have a combined 375,000 miles on them. HOWEVER, I spend only a few bucks a week on gas because we either walk, ride the scooter or bike everywhere but to project sites...AND we have invested in the tools and Motor Manuals needed to keep these vehicles in good shape.

Voting for Vic! I want bailout money too!

shelley said what i was thinking ... it's not just the CEOs & the big business that will be affected, it's the employees, families & communities , that includes all the tax payers too.
If businesses close employees will be laid off and who pays then?
The working tax payers do....
Less wages paid out = less tax revenue to the government & more $$ paid out in unemployment benefits.....

But those companies do need to rethink the products they are making & selling. It would show some true intent for change if the top management take pay cuts.

ps hey Vic - I drive a 84 Volvo with 360,000 miles on it. We maintain our own cars too.

I need a bail-me-out fix too Vic!

I should have added that clear conditions & terms would need to be set if any bailout happens. I think that is one of the details the gov. is considering in all of this.

Then you get into cities & states asking for bailout money too... arrggghhh what a mess.

But still, we as a country, even with all these problems...have it wayyy better than so many other places.
:grouphug:

We already got our Bailout money....Don't forget our Stimulation checks..:rolleyes:

Let's be careful that we don't regulate anything Vic...LOL!!

P.S. How come the gov't can keep us safe from MJ but can't seem to control our greedy Execs...

Mitt Romney came out today and said that if the Big 3 get the bailout, you can kiss the American auto industry goodbye. He is a wise money man, and his dad was an auto exec.

He says if we don't bail them out, they'll have to drastically restructure themselves. If we do, they'll just keep going down the suicidal course they are on.

I heard one of the Union leaders say they can't make any concessions. Well, I guess if they'd rather have their companies go bankrupt and lose many jobs rather than taking some cuts in pay and benefits - fine!

On some news program it says Big 3 workers average $71 an hour with benefits, as opposed to those who work at American plants for Toyota/Honda that average something like $40 an hour. Big difference!

This year I want a $100k bonus. When my business faces bankruptcy, I want the government to bail me out. :rolleyes: If they don't, all my customers and suppliers will suffer. :icon_rolleyes:

I agree, replace all of top management or at the very least cut their pay to realistic amounts that will allow the companies to stay solvent. Also, the workers may have to take pay cuts to keep the company afloat until they can produce a quality product.

When my company starts lagging, we all take pay and benefit cuts to stay in positive territory.

Jules, I totally agree with you. I started to voice my opinion about the CEO's and other bloodsucker's but my post got to be so long I figured I'd just address the bail out issue! But I agree with you 100%.

I believe it's inevitable that they will get a gov't bail-out - how much I don't know....but the money needs to be handled by someone other than the executives that got them into this mess in the first place. If they do get the $$ then wipe the slate clean and start over. They've proven they can't run a company.

Did anyone see the surveillance of the CEO of Ford getting off a chartered jet? GMA had a story about it. He was confronted about it by a reporter and pretended he didn't hear the question! :rolleyes: Diane Sawyer also asked one of the execs why he should continue to get his $21 million bonus when others are being laid off. It's just insane. :mad:

My late DH worked for GM all his life. First and only job he ever had. I don't think he'd be happy with the turn of events happening now. We always drove GM vehicles. Now, the only GM vehicle at our house is Kevin's truck....and when its paid for it will be traded for a Honda or a Toyota (if it's worth anything by then...:rolleyes:). He got a great deal on it and with the employee discount it was too good to pass up. It's his truck so it's ultimately his decision but he's disgusted with the Big 3, too. I drive a Honda Accord. Matt drives a Ford and he desperately wants to get rid of it, too. You just can't sell anything right now....you take too big of a loss. But I will never again purchase a vehicle made by any of those three companies. I never thought the day would come where I'd ever say that. :(

Oh, and Vic......a white-collar prison? I don't think they even deserve that. I think a "tent-prison" would work just fine.....out in the hot desert!

We were just discussing this auto bail-out in the office this morning and someone said..."Hey in the bible in the book of revelations...didn't the end of the world start with a moneyless society...":eek:

That sure shot my day.

How can these executives sleep at night? Knowing that they have taken billions of dollars in bonus pay yet the plant worker who lives paycheck to paycheck might not have a job next year.

If it were me....I'd not take another dime until the company was turned around. Maybe it would set an example for the other "execs" to follow. Probably not.....just my naivete' showing again. :o

Fox News was just making a big deal about how ALL THREE execs from the Big Three arrived in D.C. on separate private jets.

These guys could have saved a lot of the American auto industry's money if they'd carpooled in one of the cars they make, or they could have taken a bus...or even if they'd flown in the public transportation of the sky. (in coach!)

Nope, they probably had to have their own private bathrooms that none of the "unwashed masses" have used.

Well, all I know is what goes around comes around. These people will have to answer to someone much higher in the chain than me......and when that time comes I want a front row seat with popcorn 'cos the shows gonna be a good one! :cool:

No different than AIG....rubbing our noses in the fact they got bailed out by taking yet another "working vacation" after they were rescued.

Until the people say "enough is enough" this is just going to keep happening.

At this point I don't think the workers should suffer for the ignorance of management. I think the current management should be let go (no severance), new and unbiased management brought in with a cap on salaries and the unused bonus money dumped back into the company to help get it back upright.

These CEO's and management execs do not deserve one more dime from those companies and it should be considered theft if they take anything else.....especially if they do end up getting a government bailout. :mad:

If you think the average UAW worker is "living paycheck to paycheck" you might want to look at the numbers again. Their average pay is $71/hr. If you multiply that by 40 hrs and 50 weeks per year, that is $142,000 per year. If you have to "live paycheck to paycheck" making $140,000/yr, you are doing something wrong.

Look, the management is obviously bad...they need to go. I also agree that publically owned companies should have limits on the ratio of CEO pay to employee pay. However, the collapse of the big 3 is a clear case of unions that were given too much power in the 70s and 80s taking too much from the automakers and refusing to accept a fair wage in the face of stiff foreign competition. Why did the UAW refuse to settle for fair wages? Because they had the power to demand more. They had the power and they used to to bring the big 3 to their knees over and over, while demanding higher and high wages. Sure, manage of the big 3 is bad...but management of the UAW is as bad or worse. Do you think the UAW president flies economy when he goes to DC? I bet you anything he flies in a private jet too.

Right now, because of the UAW contracts, the big 3 lose about $1000 on every single car they sell. Why on God's green earth should we agree to spend $25 billion to bailout a group of companies whose current business model is to sell their products for less than it costs to make them?!? The only way we should agree to give Detroit a dime is if the unions agree to lower their wages to a level that allows the automakers to have a chance to turn a profit. Otherwise we are just pouring money down a black hole.

My personal favorite for how to do the bailout is to take $700 billion...and give it back to the people. A large portion of us will use it to pay off credit cards, pay off mortgages, and to pay off car loans. With all of those debts off of their books where they don't have to hold reserves for them anymore, the banks and financial companies will have plenty of money to start lending again...credit crisis over!

The workers aren't suffering from the ignorance of the corporate management...they are suffering from the ignorance of their elected union leadership who forced noncompetitive contract terms on the big 3. Strikes were intended to be used when working conditions are so bad the workers could not be expected to go to work. The UAW and today's union leadership as a whole has used the weapon of strikes as a strategic negotiations tool to force unreasonable contracts on the management, knowing the investors would punish management if they let disruptions of production impact the quarterly earnings reports. The result is a non-competitive business. Continuing to put blinders on and accept the class warfare fantasies of "big bad management" and "poor suffering workers" will only help the unions continue the death spiral of american manufacturing. It is no secret nor a surprise that the only places in America where manufacturing is thriving are in right to work states where the unions don't hold absolute power over companies.

I was going to post something about this - thanks, Kelly! I'm absolutely spittin' mad about this one! During the last bailout (seems like it was only last month...oh, wait, IT WAS!!!) I was up late writing to my congressmen...is it time to do that again?

I still say let 'em fail, just like I said about the banks. My father in law works for one of the big suppliers and has already agreed to take the buyout this time, but I do worry about my sis and her husband, who work for a supplier as well.

I live in Harris County, GA, which is experiencing explosive growth - due to the auto industry! We have a kia plant slated to open next year, and you should see the number of supplier plants coming in...it's amazing. The "big three" could learn a thing or two from the plants down south (Montgomery AL has the Hyundai plant).

BTW - we have two Hondas as well with a combined 300,000+ miles - my itty bitty Del Sol is almost a classic!

My DH worked for GM all his life and nobody in the UAW made $71/hr. Anyone who believes that...well, I've got some oceanfront property in Arkansas I wanna sell you. That figure includes all benefits added to the hourly rate (life insurance, medical, dental, disability, etc.). At the time of his death he was making roughly $21/hr (this was 8 years ago). So yes, we did live "paycheck to paycheck" because we had two boys to raise plus all the expenses of a home. He would have loved to make $140,000 a year but that just wasn't happening....at least not at GM.

Why not have the execs and CEO's forgo that multi-million dollar bonus if the company isn't making any money? Seems only fair to me.

I do like your idea for the bailout money, though. I think I should get about $900,000.....yeah, that'd pay off all my debt, buy me a house and small car, allow me to save some for my old age care and be able to eat meat more than 3 X a week!!! :p

Do you happen to have a copy of the latest UAW contract...or know where one can be read and reviewed?

You know while I agree that certain things are excessive this is horrfically excessive its also a classic case of the media blowing things out of proportion and manipulating the news.

Should they have been smarter about the jets sure but I have another opinion that many will not agree with me on. But in my business I see CEOs and jets all the time and the amount of work that gets done on those jets is far more efficient than having them stand in line at an airport for two hours especially baed on what they get paid per hour.

And based on what they get paid I want those guys working 24/7 to solve these problems.

That does not mean that I think things are ok as is. There has to be massive change and the unions are not willing to change. And chage is hard to swallow. BUt that means the automakers have to be willing to give concessions as does the unions. And right now the unions do not see the forest through the trees.

So sure let them go bankrupt. Then what will the unions do when all their rank and file are unemployed?

Its unfortunate that the people that will really suffer through this will be the regular people, not upper management and not union management.

And you think the foreign autos are fine? Not by any measure. So goes the domestic autos and in time so go will go the foreign. Its like the tide and boats. They will all rise and fall together just maybe not as far. Foreign sales are down right now 30-40%, how long can that go on before they start cutting those $40 an hour American workers too. Right now the foreign automakers are privately panicking.

I certainly am for reform and absolutely want accountability all the way up the ladder.

But I am terrified of the ripple effect. Some parts of the country may be booming right now but this will affect the whole country and I just hope that we are not being shortsided with our lynch mob mentality right now. We need all these people to work hard to solve these problems.

You make some good points, Shelley. :)

The $71 average is total for salary and benefits - not just salary. A large portion of the $71 is the carrying cost of health insurance after retirment (the employee keeps the same plan as when working). In 2010 this expense will be transitioned to the Unions and the cost to the companies will drop by about $25 - putting the S&B on par with the foreign company auto workers.

This was outlined in the paper today - probably the Washington Post, but maybe the Wall Street Journal (sorry I can't remember which).

I have to say this too....about the jet thing and the media (since I work in media)...none of those reporters ever fly commercial. Maybe NBC, CNN and all the other media companies should start by making Tom Brokaw and every reporter fly commercial coach.

Hmmm Pot....Kettle....Black. The hyposcrisy of the media is sometimes laughable.

We definitely are all in for a rough time from what is coming economically. But every time the federal government spends a penny, it has to come out of somebody's pocket. If the government is going to take $25 billion of our money and give it to somebody, I want to make damn sure that we aren't pouring that money down a hole in the ground. Regardless of who we believe to be at fault for it, it remains the truth, that a business model of paying more to produce a product than the product can be sold for is DOOMED! Until the big 3 can figure out a way to change that business model, I am categorically against spending a penny to bail them out. Doing so is wasting money that could be spent bailing out industries that DO have a successful business model that simply need some help to make it through tough times. Detroit was losing money and losing market share BEFORE the economy turned south. Even a return to prosperity will not bring them back on their current path, because the era of the huge expensive SUV has come and gone, and that was the only thing detroit could make money building.

We don't have unlimited cash to hand out, and we should be handing it out to companies that are likely to be successful and employing people 3-5 years from now WITHOUT further government assistance. As I saw elsewhere, giving Detroit a bailout right now without dictating changes is like giving a "loan" to a friend who is a cocaine addict without asking him to go to rehab. You know it isn't really a loan...it is just the first of what will become a series of installment payments on an accumulation of poor lifestyle choices.

They need to downsize from cocaine to the less expensive crack :D

I agree that it is a combination of the big business lack of vision & failure to plan ahead, and the unions that caused the auto industries this problem.

They are stuck in a same old business as usual and not looking to the future.

Just today on a news/talk radio show I heard this-
I heard they lose $1500 per vehicle because of the "union" benefits.
I also heard that one of the CEO's make 2.3 mil a year!! {might have that $$ wrong}
and probably stock options and the company jet on top of that.
He mentioned the 71.00 per her@ Big 3 vs $41 per hr @ foreign automakers.

I also heard the 25 bil, would most likely come out of part of the 700 bailout moneys. Not a separate thing.

You mean $25 billion? You know...it is D.C...take a billion here, a billion there, and sooner or later you start talking about real money...

2.2 million base salary and the rest is stock options, etc. That's my understanding.

Well, if they don't bail out the auto industry and put the money they WOULD have used into health and human services programs and job retraining and small business loan incentives there might be less fallout. And we really NEED more money in health and human services and other programs like job retraining. Plus, there have been studies that have shown that entrepreneurship is high in a market where people get laid off (maybe not the exact right words, but that's the concept anyway).

What gets me is all the focus on the airlines and now automakers. Whatever happened to competition and market driven forces? If you can't make it, you can't make it. And there ARE bankruptcy options available. Restructuring isn't so bad. It really isn't.

If we would mandate higher mpg requirements and smaller car size to assist development of higher mpg cars, then we'd be in front of the 8 ball rather than behind it right now. But no..... we can't do squat. It's like trying to force a ban on sales of cigarettes. We know it causes cancer and look at other products that cause cancer--they're mostly all off the market or regulated heavily, but because of Big Tobacco we still have people coming down with tobacco caused cancer.

I get torqued up because the auto industry blocked higher mpg requirements and has known how to produce cars for quite some time that are more efficient in many ways but doesn't. We won't invest in alternate energy development in the same fashion that we offer bailout.

And the banks? So we've done all these things--cut interest rates and given $$ to them, and they're still not lending. Um duh.... but if you don't put MANDATORY stuff in there requiring things then hardly anyone is going to do what you "suggest."

Look at the total bailout $$ that we had available in the beginning and then divide the US population into that and see how much $$ we could all get if it was divided up. Fun exercise. Then take out the population under 18 and do it again.

No one's going to bail out the job sector in which I work. I'm in health/human services. In fact, my organization suffered an almost $1,000,000 funding loss at a time when demand for services is increasing due to the economy. It's looking bad for next fiscal year's budget too. We haven't laid off yet, but it may be coming, which means that we'll have to cut services and demand will still increase. I'm at the bottom end of the trickle down and seeing its effects every day. But I'll end up in the unemployment line too because they won't put the money where it can make an actual difference.

<sigh>

i think we should stop with the bailouts.
let the chips fall where they may.

let these companies fall and let them start again, from scratch.
let these big execs go. we need to reorganize our systems.

bailing out and letting these companies go along their merry way is no long term solution. IMHO.

Would it not be great if we just walked to work or telecommuted?

Heck, we could use the freeways as scooter tracks for the great "US Scooter 500" sponsored by Pride Scooter Corporation every year!:D

The problem with walking to work is that there are many of us that live in rural areas with no public transportation, and things are spread out. I live 3 miles to work, and since I walk about that every morning for exercise, I'd have to leave for work about 45 minutes early, then be sweaty when I get there.

I actually travel all over our school district, which is 10 miles from one end to the other north and south, and probably another 10 east to west.

But I'm all for doing my work from home!

Actually, in our school district, we have some very innovative technology dudes, that have made it so we don't have to physically touch a computer for a lot of problems. We can just remote in and fix it. That has helped a bunch as far as mileage.

Um VIC :rolleyes: We live in LA, people don't walk here :p. Maybe I should get a segway :D