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With GM headed towards bankruptcy, the all-electric Volt, arguably GM's hottest upcoming product, is likely headed for an early death. While Ford, Toyota, and Honda may be in better shape than GM and Chrysler, they will likely begin to slash jobs and plants in the U.S. as the supply chain fails.

After a hard-fought last stand in Washington, the U.S. automakers hopes of a bailout have died. GM, whose CEO Rick Wagoner is shown on the far right pleading with U.S. lawmakers, is expected to go out of business before the end of the month, barring intervention by the Bush administration.  (Source: AP)
America's automakers' last stand in Congress ends in defeat

The U.S. automakers knew they had dug themselves into a hole.  Years of poor management decisions, and failure to follow demand trends and other business faux pas coupled with a poor economy had pushed them to the brink, almost exhausting their operating cash supply to the point where they would go out of business in mere months.

The U.S. automakers' CEOs flying to Washington in private jets turned a crucial turning point in the debate among Congress and the U.S. people over whether a bailout should occur.  Infuriated by the display of excess, public opinion shifted from supporting a bailout to opposing it. 

Nonetheless, the automakers fought hard, promising dramatic changes to their business plans, promising to take CEO pay cuts to $1/year, to sell the private jets, to slash brands, and to accept government oversight.  The CEOs returned to Washington, this time in hybrid cars, which they felt embodied the future of U.S. leadership.  A deal seemed close, with Democrats in Congress and Bush having reached a basic agreement and only mulling over finer points.

Then it all fell apart. 

The automakers stand ended in disaster as a vote in the Senate last night failed to generate the 60 votes needed, falling 52-35, largely along party lines.  The vote essentially killed the prospect of a bailout bill, at least not until the new Congress arrives. 

One of the major sticking points was the United Auto Workers' refusal to accept, which would force the union to allow union plant employees to be paid at the same rate as employees at non-union Honda and Toyota plants.  Currently employees at the U.S. automakers' plants make $3 to $4 more per hour and enjoy greater benefits.

And the stand may be their last; the anticipated fallout of the collapse is described by some analysts as "possibly catastrophic" to the entire U.S. auto business.  For GM, which is almost out of cash already, it means almost certain bankruptcy.  However, GM may not be eligible for Chapter 11 bankruptcy, meaning the company may cease to exist and its assets would be liquidated.  A similar fate faces Chrysler, privately owned by Cerebus holding -- they already have gone bankrupt once.

Ford is the only U.S. automaker to still have a substantial cash stockpile.  Many criticized Ford's CEO Alan Mulally for saying that his company might be able to survive without a bailout, which some blamed for weakening the automakers' plea.  However Ford, as well as Honda and Toyota's U.S. holding may be in equally dire straits.

The supply chain, which keeps Ford, Honda, and Toyota's production alive, will likely in part collapse if GM and Chrysler go out of business.  The companies simply do not have enough assets, according to experts, to cover the debts to part suppliers which they have accrued.  The result is that many parts suppliers may go out of business, forcing Ford, Honda, and Toyota to possibly cut more jobs and close plants.

The automakers only remaining hope is to get funding from the Bush administration under the preexisting $700B USD bailout plan.  However, the Bush administration has thus-far steadfastly refused to allow these funds to be tapped.  A small hope may remain in that the Bush administration has also emphasized the importance of giving the automakers assistance, soon.  It said today that it will consider proposals to tap the fund, if they are appropriate.

The automakers are already bracing for what may be a final outcome.  News broke today that GM is hiring a team of bankruptcy lawyers to try to come up with options -- anything.

Meanwhile the stock market braces for a possible nosedive as investors panic at the prospect of the U.S. automotive industry collapsing.

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To all those suffering from Bush derangement syndrome...
By Faxs on 12/12/2008 10:38:00 AM , Rating: 3
The president has been lobbying HARD for this automaker bailout plan. The Republican senators, as well as some Democrats, are responding to their constituents who don't think this bailout makes sense.

In addition, it's clear that many of you do not understand what bankruptcy is. Many companies have gone into bankruptcy and come out of the process strong and profitable.

Bankruptcy doesn't mean a company goes 'out of business'. It simply means that many of their debts, including obligations under union contracts can be nullified and renegotiated.

The unions don't want their negotiating power diminished, and the CEO's don't want a bankruptcy judge (who will have oversight of the bankrupt company while it reorganizes) to dictate their pay and bonuses.

Anyone with even the slightest understanding of business knows that bankruptcy is the best chance the big 3 have to become successful in the long term.

Here's a simplified example:

Joe makes $50k a year.
Joe has $75,000 in debts and can't keep up with his payments.

Is it better to:

A) Lend him $10,000 (which keep him going got 1 more year before he starts to fall behind again.


B) Joe declares bankruptcy, his debts are reduced to $0, and he gets a 'fresh start'.

By Doormat on 12/12/2008 10:45:45 AM , Rating: 3
Your "simplified" example is too simple.

The idea might be that Joe (the assembly line worker?) is making $50K/yr now, but could be making 60K in 3 years, as well as reducing his expenses from 75K to 60K/yr. So do you give him a loan now to bridge him to that breakeven point or not?

By Faxs on 12/12/2008 10:50:15 AM , Rating: 3
The problem is that no one can predict if their will be a breakeven point. If they don't declare bankruptcy, they will still have the same problems that got them to this point.

The downside to bankruptcy is small compared to how much better off the companies will be after they shed its debt.

Or maybe they should get a bridge loan just in case they suddenly become extremely profitable under their current operating debts. <sarcasm off>

By Faxs on 12/12/2008 10:50:50 AM , Rating: 2

By Gzus666 on 12/12/2008 10:59:17 AM , Rating: 1
Nope, you were right the first time.

There- Look over there
Their- It was their problem

By Faxs on 12/12/2008 11:02:16 AM , Rating: 1
You're right. I shouldn't post while distracted :)

By Faxs on 12/12/2008 11:03:17 AM , Rating: 1
Actually, the correction was right the first time, I was referring to the first 'their', not the second.

By Gzus666 on 12/12/2008 11:13:49 AM , Rating: 1
You would be correct, I missed the first one, doh. I shouldn't read while distracted it appears, ha.

By Reclaimer77 on 12/12/2008 2:07:17 PM , Rating: 5
You are both being asshats. Stop wasting server space and bandwidth please.

By ebakke on 12/12/2008 2:55:13 PM , Rating: 2
As if your comment didn't just do the same?

By enlil242 on 12/12/2008 5:07:47 PM , Rating: 2

By Samus on 12/12/2008 6:41:30 PM , Rating: 1
Let GM/Crystler fail, Ford will buy up the assets they need to keep the supply chain going (AC Delco, Mopar, Delphi, Bosch, etc) and we'll have the USAC (United States Automobile Company)

It's more complex than that, but thats basically how this is all eventually ganna go down.

By ebakke on 12/12/2008 7:44:54 PM , Rating: 2
How much money do you think Ford is sitting on? You think they'll be able to purchase GM/Chrylser assets and increase production to utilize all of these assets. Well that costs money. And it also costs money to keep the business running while sales numbers reach the lowest point ever because people are buying GM/Chrysler vehicles at never-before-seen liquidation prices. And those that don't need vehicles are waiting because the economy is in a recession.

By Rodney McNaggerton on 12/12/2008 10:53:01 PM , Rating: 2
You aren't necessarily going to buy a vehicle from a company that doesn't exist anymore. It's like people won't buy a $900 LCD tv from a company that doesn't exist anymore because they wouldn't get the warrant. I doubt people would spend anywhere from 12k-25k on products that are from a company that is nonexistent. Future parts and labor? etc.

By ebakke on 12/14/2008 11:42:02 AM , Rating: 2
You might not, and I might not. But there are plenty of people who will. GM will need to liquidate its assets, which means pricing them low enough so that someone buys them.

By Cypherdude1 on 12/13/2008 5:28:51 AM , Rating: 4
What everyone here is missing is how the rich and powerful New York City Wall Street companies who give truckloads of money to Congress got hundreds of billions of dollars without hardly even breaking a sweat . Compare this to the essentially blue-collar auto companies who are getting all kinds of heat.

With the New York City Wall Street companies, there were virtually NO conditions. With the blue-collar auto companies, Congress now suddenly wants all kinds of conditions. NO ONE demanded that the executives of AIG, CitiGroup, Bank of America, Merrill Lynch, and dozens of others, quit their jobs. NO ONE! Now, suddenly, you have demands that GM and Chrysler execs quit and the unions cut their pay.

By jklauderdale on 12/16/2008 9:44:48 AM , Rating: 2
and precisely BECAUSE Wall Street screwed around with the funds given to them is why there are so many strings attached to this bill. If it were to have passed it I'd have hoped it were to have gone under a microscope rather than the general wave that the banks got. Yes, I know the argument that the banks could have failed in a day but it still irritates me to no end when I see the bonuses and spa trips that THAT particular bailout enabled.

It's going to be several years before the global ship rights itself. I doubt many people out there ever imagined the housing bubble would be the catalyst for this sort of chaos.

By JKflipflop98 on 12/12/2008 9:43:13 PM , Rating: 4
Internets are all dried up around here. Me and the family are gonna head down. . . Californy way. I hear they got all kinds of internet in that there silicon valley.

By Lmilr on 12/12/2008 11:06:11 AM , Rating: 4
You're a little off on the bankruptcy not being bad.
You're only thinking of Chapter 11 bankruptcy that just saves them from their debt.
There is also Chapter 7 bankrupty where all the companies assests are liquidated to pay off their creditors. In other words, bye bye company.
I do think though that they should have to stand on their own and take what's coming to them. I personally love GM but just tossing money at them doesn't fix the problem.

By psychobriggsy on 12/12/2008 11:52:37 AM , Rating: 2
The Volt might still come, as the design is an asset.

Whether it will be a Nissan Volt, or a BMW Volt, or a Citroen Volt ... that's the question. Someone will pick up all the design and research for a fraction of what it cost to do.

Well, we can but hope. Still, it's a car with a massive subsidy promised.

Maybe even the liquidation of GM will be enough to protect Ford - one less car maker means less choice for those buying cars means more car sales for each of the other auto makers. Assuming people are going to buy a car this year - the whole country could take a car-buying holiday at this rate.

By InsaneGain on 12/12/2008 2:54:04 PM , Rating: 2
What's Ford going to do when all of its parts suppliers dissapear because they are owed so much money from GM?

By ebakke on 12/12/2008 2:56:12 PM , Rating: 2
Start contacting Honda's suppliers?

By Mozee on 12/12/2008 4:29:48 PM , Rating: 2
Which are also GM's suppliers, and will likely also either be closed or bankrupt from the loss of income from GM orders...

By masher2 on 12/12/2008 4:38:14 PM , Rating: 2
There isn't a huge amount of overlap between suppliers for domestic and Japanese automakers. And even where there is, the notion that they'd all simply shut down is flat-out incorrect. If you're profitably supplying parts to Toyota or Honda, then, even if GM forces you to declare bankruptcy, operations from your foreign orders will still continue.

That's the very nature of bankruptcy. Your creditors want what they can get. An operation generating revenue is more valuable than an empty building.

By InsaneGain on 12/12/2008 5:15:53 PM , Rating: 2
It's not necessarily the loss of income, but the non payment of shipped parts orders that will put the suppliers out of business. GM owes billions to these suppliers and hasn't paid them for something like 120 days. In normal recessions, the suppliers could borrow money, but they can't this time because of the frozen credit markets.

By masher2 on 12/12/2008 8:31:10 PM , Rating: 2
Credit markets are far from "frozen". Corporate bonds are down close to 50% from their volume highs, but still hundreds of billions of dollars are being sold. That doesn't even include fixed loans or venture capital.

It's the revolving credit market, particularly without collateral, that is pretty close to frozen.

By Spectator on 12/14/2008 7:35:20 AM , Rating: 2
Same logic applies to Suppliers.

Market is messed up and companies owe you big time.

do you take the risk of still supplying parts for free and killing your business?

Stupid is as stupid does :P

Really would you trust your company's survival to others at a time like this?

By Faxs on 12/12/2008 10:46:10 AM , Rating: 3

A) Lend him $10,000 (which keeps him going for 1 more year before he starts to fall behind again.

By rudolphna on 12/12/2008 1:02:12 PM , Rating: 3
it was way too simplified. Because, as the article mentioned, GM may not be eligible for chapter 11 Bankruptcy, and so their assets are liquidated, meaning that GM ceases to exist completely

By masher2 on 12/12/2008 2:11:20 PM , Rating: 2
Firstly, the chance of a Chapter 7 is incredibly unlikely.
Secondly, you're forgetting that "the assets" include operating factories. Even though the entity of GM would cease to exist, those factories would be sold to other corporations, who would best realize their value by operating them and employing workers.

By dragonbif on 12/12/2008 2:52:51 PM , Rating: 4
If IF anyone could buy them why would any auto maker want to buy more when they are having problems themselves? People will be out of a job for a time. All they need to do is dump all the union workers and get nomal ones. Stop putting money into the 38 mile cars that the gov told them that they need have ready in the next few years and not worry about it. Also they need to go over seas where they can pay people $.50 per hour and not $35 just think of the savings!
For the most part we do not know what we are talking about, it could take them 2-3 months to know what they are talking about. It will also take more then a year to finish the Chapter 7 or 11.

By masher2 on 12/12/2008 3:13:59 PM , Rating: 3
> "why would any auto maker want to buy more when they are having problems themselves?"

It certainly won't be Chrysler that buys GMs assets. It would be a private group or consortium, looking to enter the auto industry.

The Big 3 are selling tens of billions of dollars worth of product every year. With new management and lower labor costs, any of them would be incredibly profitable entities.

By dragonbif on 12/12/2008 4:02:25 PM , Rating: 2
That is true, I do remember reading something 2-3 weeks about a investment group in Japan looking into buying Ford. If you dont know in Japan the Ford F150 is driven by people that are in the up and up.

By Mozee on 12/12/2008 4:32:56 PM , Rating: 2
Problem with that concept - the Ford Family still holds controlling interest in Ford Motor Company. I don't see them selling Henry's legacy to anyone, especially a foreign interest.

By masher2 on 12/12/2008 4:40:13 PM , Rating: 4
You fail to understand how a bankruptcy works. If Ford declares bankruptcy, then its creditors -- not its stockholders -- begin calling the shots.

Those creditors will decide what gets sold and to whom, not the Ford family.

By cokbun on 12/14/2008 11:16:01 PM , Rating: 2
so it will be Forudo then? and if they buy volt it will come out as Forudo voruto ?

By Spectator on 12/14/2008 7:44:22 AM , Rating: 2
If I had the power of the Oil producers seeing as thier is not many alternatives atm.

It would perhaps be financially sound to invest now in your consumers before they all move from 15mpg to 40mpg motors.

After recent profit they have made they have cash to invest. And can allways mess with the market few years down the line to recoup any investment now plus profit ; win/win.

Reallity is. If you are not self surrficient, you will allways have exposure. :(

By cheetah2k on 12/14/2008 8:56:15 PM , Rating: 3
I'm sure that there is many a Chinese business man rubbing his hands together (right now) to get hold of Ford, GM or other car manufacturers assets.

Its a shame, a real shame, but thats what happens when the Fat Cats go to town in the good times, and cry Wolf! in the bad times..

I just feel sorry for the average Joe worker that will probably end up on his a$$ on the street....

By theoflow on 12/12/2008 11:02:04 AM , Rating: 2
Are you referring to Chapter 11 or Chapter 7 cause they are two very different things.

The assumption of going into bankrupcy is fine as long as you can get some sort of credit to restructure going forward. Credit simply isn't happening at the moment.

By theoflow on 12/12/2008 11:02:26 AM , Rating: 2
Are you referring to Chapter 11 or Chapter 7 cause they are two very different things.

The assumption of going into bankrupcy is fine as long as you can get some sort of credit to restructure going forward. Credit simply isn't happening at the moment.

By Faxs on 12/12/2008 11:10:56 AM , Rating: 2
Chapter 11. Credit is going to be available post bankruptcy because A) These companies would be reasonably profitable once legacy debts are off their backs and B) So many of their suppliers depend on the big 3 for survival that they are going to part of the solution, as opposed to creditors who will go 'for the throat'.

Besides, a laon from the government POST bankruptcy would do a heck of a lot more good than a loan in the absence of bankruptcy reorganization.

By the way, for you bankruptcy experts out there, my simplified 'joe' example was a Chapter 7, for ease of illustration.

By Ringold on 12/12/2008 12:25:29 PM , Rating: 2
Besides, a laon from the government POST bankruptcy would do a heck of a lot more good than a loan in the absence of bankruptcy reorganization.

Exactly, debtor in possession financing. Many have suggested the government provide it itself, because if the Big Three still couldn't be saved then the government would be first to recover its money, as I understand it, if the Ch 11 went to Ch 7. I doubt Congress would shy away from that, but I would think banks or a sovereign wealth fund, etc, would be willing to provide it.

I linked to it the other day, but I'll link to it again.

Thats horrible; your original example is right. The income statement is even more horrendous. A bailout, as economists testified before Congress, would just be a prelude to more down the road. They're so deep in debt they don't know which way is up.

By Suomynona on 12/12/2008 12:14:47 PM , Rating: 2
If credit would not be available in that case, maybe Congress could work on a compromise bill that would provide loans to GM or Chrysler if they were to enter Chapter 11 bankruptcy? That way they can still shed costs, but be guaranteed the money they need to survive. If they're truly in danger of Chapter 7, that might be a good option.

By masher2 on 12/12/2008 12:44:30 PM , Rating: 5
> "maybe Congress could work on a compromise bill that would provide loans to GM or Chrysler if they were to enter Chapter 11 bankruptcy"

If either files bankruptcy, there will be plenty of private institutions willing to throw bags of money at them. GM, without its massive debt and retireee obligations, is a profitable entity with extremely valuable assets.

By Faxs on 12/12/2008 12:55:14 PM , Rating: 2
Bingo. We have a winner.

Plain & simple
By wwwebsurfer on 12/12/2008 10:32:30 AM , Rating: 5
The plain & simple fact is that Unions kill capitalism. All the traditional options of cutting workforce, trimming severance and benefits and such are no longer options. Surely it makes sense that going to work making $3 less per hour is better than not going to work at all.

Unions also strip people of their desire to create a top-quality product. Who cares about doing your job to the best of your ability or putting in a little extra time when you know you can't be fired? With family living outside Detroit there have been some pretty incredible stories. For example, warehouse employees that drive fork-lifts are only required to work 45 minutes of every hour. Require something on rush and it may be 30+ minutes because the forklift driver is on his 30 minute break he gets every 2 hours.

I agree there has been some mismanagement of funds, and managerial problems - but every company has that. Nature of the beast. But we can CLEARLY see that when it comes to cost Toyota and Honda are killing US companies for one simple reason: Unions. And until they're gone or renegotiate something a LOT more competitive with the market US car companies will continue to drop like flies.

RE: Plain & simple
By uhgotnegum on 12/12/2008 10:47:49 AM , Rating: 1
Isn't a union an example of capitalism? Isn't a core belief of capitalism the concept of selling goods and services? If there is a service (e.g., union organizational structure) that can be sold (e.g., union "dues"), then wouldn't capitalism say that this is an acceptable service for the market? If it weren't, then the concept would die off, right?

I think your argument is that the laws that have been established protecting unions have killed capitalism. If a business contracts with a union, then it's the business' fault if it agrees not to "cut workforce", or agrees to "severance and benefits" packages. The laws the force unionization onto workers who don't want to unionize, or that prohibit a company from hiring outside labor when a union threatens to strike, or stopping a company from shutting down and moving to a cheaper area without having to also offer the "new" jobs to the same workers....I think those examples are what you mean.

But then again, that's what I think, so it would make sense that I'd think that you [should] think that.

RE: Plain & simple
By cparka23 on 12/12/2008 11:17:17 AM , Rating: 4
Unions aren't capitalist; they're hijackers. Unions CAN and USED TO do great things to rectify the wrongs of greedy employers, but their sole interest isn't the company. It's the employees, which is a significant cost in labor-intensive industries.

If you've invested billions into your infrastructure and have overhead to pay, a work stoppage is the last thing you want. Relocating is not an option and neither is finding an alternate source of semi-skilled labor. When a union threatens to walk off the factory floor, the company is held hostage (and the union knows it will inevitably get something for its troubles).

The capitalist way would be to let dissatisfied workers leave, then the demand for new, skilled workers would encourage people to fill those vacancies. When nobody submits a resume, you offer a little more. It's supply and demand.

RE: Plain & simple
By uhgotnegum on 12/12/2008 12:10:54 PM , Rating: 2
I respectfully disagree...

...just because a business "invests billions" and has "overhead to pay" doesn't mean that workers shouldn't be able to work together to improve their situation. A business must take into consideration these "costs" and develop a model that is sustainable. If the business can't compensate when workers threaten or do walk out, that doesn't mean that it's the union's fault...

I think that if the "next door" business offered more per hour, and all the workers left to work at that business, you wouldn't say that the next door business was wrong; you'd argue that the business that lost the workers needs to offer more, change how it operates, or get out. A union creates a competitor with the business..not in salary or products, but in an element of the business' concept of expenses. The fact that a union isn't a horizontal competitor doesn't mean that when a business has to decide whether to pay more expenses for ties with a union that it's somehow being taken advantage of.

Again, I think it goes back to the government's passage of laws that handicap businesses, forcing employees to join the union, and generally interfering with the market's ability to decide the "natural" course of things.

...and just so you/everyone know/s, I in no way support unions; they aren't a part of my industry, impacting me (directly), or otherwise something I'm gun ho about. But I'll defend their right to work the market as best as they can for their members.

RE: Plain & simple
By InsaneGain on 12/12/2008 3:04:51 PM , Rating: 5
A labor union should be recognized for what it is: sellers of a resource (labor) colluding together to prevent competition and artificially forcing their price higher than the market rate. This is conceptually no different than a group of companies colluding on price, which is illegal.
Going on strike is a form of extortion. I think unions should be outlawed.

RE: Plain & simple
By foolsgambit11 on 12/12/2008 8:23:37 PM , Rating: 2
I'll be describing my understanding of the basic principles of unions; in practice, laws may screw up the justice of the system.

A company enters into a contract with the union. They get access to the union's pool of workers, and the workers get better remuneration. If the company doesn't want the deal the union is offering, they can negotiate a better deal, or they can go non-union. Every time the contract comes up for renewal, the company gets the chance to decide if it's in the company's best interest to continue its relationship with the union. It's the same thing companies do when they enter into contracts with suppliers, only in this case, the company is supplying labor, not parts.

In practice, people do despicable things. But going on strike isn't one of them. Are you really telling me it should be illegal for a person to quit (assuming the contract has ended, and is being renegotiated, or something like that)? Because in principle, all a strike is is everybody deciding to 'quit', then being 'rehired' on new terms (or not). The early practices of unions of harassment and intimidation of people who cross the line is one of those despicable things people do. But likewise, threatening to fire people for trying to unionize is a despicable thing people do, as well.

RE: Plain & simple
By InsaneGain on 12/13/2008 4:34:48 PM , Rating: 2
So you are saying that GM right now can easily start hiring non-UAW workers that are just as qualified but are willing to work for less money and benefits? This just isn't the case. The purpose of a union's existence is to limit the choices an employer has. Basically this means the union forbids competition among workers in order to give themselves monopoly pricing power. If you don't see why this should be illegal in a free market, why it is damaging to an economy, and how it results in less employment, then you just don't understand the underlying economics. The result of unionization is that there is a strong incentive to outsource millions of jobs to non-unionized regions. In the long run, companies that exist in a competitive market place must either create excess value that compensates for the increased union costs, move production to non-union regions, or fail. Consumers will simply spend there money on cheaper non-union made products. Unions only survive in the long run in markets where the consumer has no choice, like government services. What is happening to GM is a perfect example of how unions are destroying American manufacturing.

RE: Plain & simple
By InsaneGain on 12/13/2008 4:38:41 PM , Rating: 2
I should stop proof read after I post something. I wish there was an edit function. Yes I know the difference between 'there' and 'their'.

RE: Plain & simple
By foolsgambit11 on 12/13/2008 7:16:55 PM , Rating: 2
Easily? Not necessarily. And the fact that you had to put 'just as qualified' in there is the caveat that throws your whole argument into the can. Don't you expect to have to pay more for better quality? Unions don't have a monopoly on labor, any more than Apple has a monopoly on computers. If you want a Macintosh, you'll have to go to Apple, and if you want UAW workers, you'll have to go to the UAW. They (again, in principle) offer a superior product and expect to be paid for that quality. A union has an exclusive contract to provide service to a company. This is no different than many other of GM's (for example) suppliers. GM gets the reassurance of a large supplier that they can rely on for a consistent product, and doesn't have to deal with a fragmented supply market.

Your argument about outsourcing falls victim to a twofold trap - first, the above, that the workers at the new location aren't as valuable because they don't have the training, expertise, or experience of the union workers, and that's why the union should get better pay. But additionally, you can't spend one sentence praising the virtues of the free market and in the next bemoan the fact that a company takes advantage of that freedom to move their operation.
In the long run, companies that exist in a competitive market place must either create excess value that compensates for the increased union costs, move production to non-union regions, or fail.
And companies can use unions to create that excess value. That's what GM is supposed to get from the UAW - skilled labor and a stable workforce. Look, there's no doubt that unions have to do their part of the job and provide a superior caliber of worker to justify their higher pay. That's why most union jobs are in technically difficult fields. The blame for the fact that GM couldn't leverage their superior workforce into a superior product doesn't fall on the union. Nor is it the union's fault that GM overpaid for their services. If I get a massage for $100, then find out I could have gotten one for $50, that's not the massage parlor's fault.

I don't deny that the current state of things has skewed the labor market, but I do think unions have a place. Unions should end up out of work for the same reasons as any business ends up going under - if they fail to provide a product worth the price they charge.

RE: Plain & simple
By InsaneGain on 12/15/2008 2:25:13 PM , Rating: 2
The UAW is a closed shop union, where union membership is required to work a labor job at GM, Ford or Chrysler. This means that the UAW has monopoly power over the supply of labor to these companies. These companies do not have any choice in this matter. This is the definition of a monopoly. Apple does not have a monopoly on computers because there are alternatives available that perform the same function. There is competition in this market. Therefore, Apple having exclusive rights to the Macintosh brand is not a monopoly in this case. The UAW labor monopoly gives it the ability to to shut down assembly plants. They use the threat of plant shutdowns in order to coerce higher wages and benefits from the Big 3. This would be called extortion in any other case. This wouldn't be extortion in a free labor market because the big 3 could just hire new non-union workers. There may be a risk that these new workers will not be as productive as UAW workers. It should be up to the Big 3 to decide whether or not it is worth it to take that risk, not the UAW.

RE: Plain & simple
By masher2 on 12/12/2008 12:40:32 PM , Rating: 5
> "the [unions] sole interest isn't the company. It's the employees..."

For many unions, their primary interest is no longer the employee, but the union itself. As example, many union contracts force a company to hire unneeded workers (which means a larger union, more dues paid, etc), rather than simply negotiating a larger raise for the preexisting workers. Or a strike may be called to demonstrate union power or to influence bargaining elsewhere, despite its effects on local members.

RE: Plain & simple
By uhgotnegum on 12/12/2008 12:57:31 PM , Rating: 4
I agree that many unions are more interested in the union itself, and your examples are good too (I might not've used the word "force" b/c the company did choose to sign the contract that requires the hiring of workers).

I still personally hold the view that this isn't because a union is a bad concept, but it's the members of the union that should realize that those examples aren't beneficial for them, and should not let them occur. Again, barriers prevent union members from leaving and keep companies from being able to defend themselves in a number of ways, which to me is more indicative of inappropriate government influence than a company/union problem...

RE: Plain & simple
By masher2 on 12/12/2008 11:32:57 AM , Rating: 4
> "Isn't a union an example of capitalism? Isn't a core belief of capitalism the concept of selling goods and services?"

A "pure" union perhaps. The problem is that unions aren't simply selling their labor to companies -- they're forcibly preventing any competitor from doing likewise. In non-right-to-work states, anyone who works for a unionized company is forced to join the union like it or not, the company can't hire permanent replacements even should the union strike and -- worst of all -- anyone who attempts to cross a picket line in a heavily unionized district often faces a beating or worse.

RE: Plain & simple
By bobcpg on 12/12/2008 11:35:18 AM , Rating: 5
Unions are labor price fixing.

RE: Plain & simple
By rcc on 12/12/2008 4:17:51 PM , Rating: 3

RE: Plain & simple
By uhgotnegum on 12/12/2008 11:51:47 AM , Rating: 3
I think that saying "[unions are] forcibly preventing any competitor from [selling their labor to companies]" has two components, which should be separated...

First, I think that the enacting of laws that "protect" unions (e.g., your non-right-to-work state example) is something a union would "want," but it's the fault of the government, by passing legislation, that they get it.

Second, I think that the union's bargaining power (which is pretty much the major reason for their existence, right?) and the company's willingness to contract with those restrictions is the fault of the company.

Now, I don't argue that physical intimidation/violence is inappropriate, but I think that criminal/illegal acts aren't relevant to this discussion, except as a footnote.

I guess I'm wondering if you agree with me; a union isn't anti-capitalism, but external factors (e.g., government"regulation") create the appearance of a union being anti-capitalistic?

RE: Plain & simple
By masher2 on 12/12/2008 12:30:04 PM , Rating: 2
> "I guess I'm wondering if you agree with me; a union isn't anti-capitalism"

In the absence of protectionist laws that favor unions and force workers into them, along with the violence and intimidation often engaged in by unions -- yes, they are not inherently anti-capitalist.

RE: Plain & simple
By InsaneGain on 12/12/2008 3:25:18 PM , Rating: 3
If you abstract every participant in an economy to entities of various sizes and organization that both supply and demand resources, then it is obvious that unions are simply 'suppliers' of a resource (labor) that collude in order to prevent competition and force those that 'demand' their service to pay a higher price. This is illegal when the entity is a company. Why is it legal for individuals to collude? As far as I know, price collusion and the prevention of competition is not among the tenets of capitalism.

RE: Plain & simple
By Ringold on 12/12/2008 12:36:21 PM , Rating: 4
Find clear support for unions in An Inquiry into the Nature and Causes of the Wealth of Nations and get back to us. :p

Beyond that, look across the nation. Where ever you see weakness and failure (education, auto sector) you also tend to find the last vestiges of unionization. The more free-market oriented South, like Texas, has done relatively well. Connection?

RE: Plain & simple
By uhgotnegum on 12/12/2008 1:08:19 PM , Rating: 2
Don't own a copy, and the best I could do from (the ever-accurate) Wikipedia is that:

---When labourers bid against one another for limited opportunities for employment, the wages of labour collectively fall, whereas when employers compete against one another for limited supplies of labour, the wages of labour collectively rise. However, this process of competition is often circumvented by combinations among labourers and among masters. When labourers combine and no longer bid against one another, their wages rise, whereas when masters combine, wages fall.---

...It didn't say that unions (organized labor) were wrong, though! :D

And, just because you "tend to find" more democrats in the US's highest revenue states (CA, NY, etc.), doesn't mean that a democrat philosophy is right or will produce the most money. Correlation, yes, but causation...only maybe, and even then, there are likely many other factors that contribute too.

One last thing, counter-example: actors' union(s?)...I don't see much weakness and failure in the movie/entertainment industry, despite having significant union involvement

RE: Plain & simple
By Screwballl on 12/12/2008 3:29:32 PM , Rating: 3
I don't see much weakness and failure in the movie/entertainment industry, despite having significant union involvement

aha but that proves the point perfectly... with all these crap movies out, it is due to the requirement of certain studios to only hire within the union for key positions.
Look up some independent low budget films and there are actually a decent number of good independent non-unionized movies and shows out there. Not like this commercialized billion dollar movie crap that does well for the first week because of the thousands of commercials and ads we are bombarded with but as soon as word spreads it drops like a fly and is released to DVD/BluRay faster to try to get a faster return on their money.

The actors union and guild has only one purpose, to keep big names employed regardless of actual talent or ability.

RE: Plain & simple
By Ringold on 12/12/2008 6:25:40 PM , Rating: 2
Interesting; I said unions, you said Democrats. Synonymous in my mind, too. ;)

As for the entertainment industry, I have read that Hollywood's high cost is why now many shows and actors come from non-union (or weaker union?) Canada. I only really watch a few shows regularly, but Battlestar Galactica and Stargate Atlantis are both shot in Canada. Easiy to see too what happened, for example, to steel companies who couldn't break their unions. Or what happened to Caterpillar after it broke its union. Or what is currently happening to Boeing. Also the education system, as I mentioned before, and of course the domestic auto's vs. non-union foreign auto plants. Where there are unions, there is lack of competitiveness.

Also, easier to find probably a labor econ text book than a copy of Wealth of Nations. Therein, you'll find a short list of pro's for unions (weak members benefit greatly due to the difficulty in firing underperforming workers), and a long list of negatives, particularly now that many of the original goals are now enshrined in law and government (like OSHA). More and more often, workers complain about not corporate bosses but union bosses, and unions have a long history of corruption, internally and trying to corrupt the political process as well. They slow the implementation of advanced technology that would replace unskilled labor with machinery any time they can, and often have the net effect of higher unemployment. And, of course, unless an entire industry globally is unionized, unionized firms within an industry are permanently hobbled compared to those that are not, leading in the long run to their being forced out of the market by stronger competitors, which is why unions are so stridently against free trade.

Defending unionism is really, in the end, an emotional argument. The facts have long since turned against them. Hell, I've got a union uncle who had to take some class as part of college training on unions. He sent me the text book, and pointed me to a page where the union textbook itself admitted they'd outlived their usefulness. :P I think I tossed it in storage rather than tarnish my book shelf with a book that still managed to be mostly union propaganda, but if I find it later I'll cite the name and author.

RE: Plain & simple
By lagomorpha on 12/12/2008 5:43:50 PM , Rating: 2
"Isn't a union an example of capitalism? Isn't a core belief of capitalism the concept of selling goods and services? If there is a service (e.g., union organizational structure) that can be sold (e.g., union "dues"), then wouldn't capitalism say that this is an acceptable service for the market? If it weren't, then the concept would die off, right?"

Unions are examples of capitalism in the same sense that price fixing is an example of capitalism. If people can collude to increase profits and there are no laws against it then it is natural that collusion will happen. Unfortunately for some reason labor has been spared the same oversight that bars businesses from the practice.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." - Adam Smith

RE: Plain & simple
By Rodney McNaggerton on 12/12/2008 11:00:49 PM , Rating: 2
UNION'S ARE THE PROBLEM LOLOLOL. That's an oversimplification of the problems. When GM and Chrysler started to lose money they made no effort to restructure. Chrysler stuck to it's primary product line: trucks, and GM did little in the efforts of cost cutting. They have both seen this coming. It's not like earliest you can see your company running out of money is one month before it happens. This was obvious to GM and Chrysler at least a year ago if they had done any sort of speculation and projections.
Anyways you can blame the unions but the fact of the matter is that while these companies were making profit their management agreed to outrageous union contracts. Unions only get what management is going to give them. So we can blame unions or we could actually address the issue that these companies were mismanaged.
Unions have brought a lot of good including the rise of the middle class. Certainly in some cases they have gotten too much power, but their power should be kept in check by management. A large part of the reason all of us are better off today that we were thirty years ago is because of unions. They're not all bad, so you can go on thinking that, or you could be a bit more realistic. Your move Mr. Gorbachev

RE: Plain & simple
By BZDTemp on 12/13/2008 10:38:19 AM , Rating: 2
Funny. More than 80% are in unions where I live and we are doing fine. High wages, low unemployment....

Take a look at the automakers which make money fx. Porsche and BMW. Their workers are all in unions and the unions may even own part of the company. Actually Porsche is making so much money the hold a very big just about controlling share in Volkswagen so in really they run Volkswagen, Seat, Audi, Lamborghini, Bugatti and Skoda. Not bad for a company which workers you claim unable to make to quality products.

Sure unions may play a part in the big threes problems but then it's the US idea of unions or perhaps really the US way of making business which does not work anymore.

If the big three had moved with the times and had the right product they would not be going under. But no - the big three have been clinging to the past only really catering for the US market and the current crisis has only accelerated the outcome.

this is the end...
By MPE on 12/12/2008 10:12:30 AM , Rating: 2
Of the American car manufacturing industry. I don't think Detroit will ever be in the same level as pre bankruptcy. It will be a '2nd industry'.
The American economy and living standards have changed.

Good run, but nothing lasts forever.

RE: this is the end...
By Hiawa23 on 12/12/2008 10:45:47 AM , Rating: 2
I am at the point where there should be no bailout, loan, whatever you want to call it. These companies need to file Chapter 11, reorganize, get rid of, or reduce the power of the unions, hopefully come out much stronger.

I have always been a Honda, Toyota, Mitsubishi kind of guy cause the American cars just did not appeal to my tastes, & I am sure it wouldn't be good for the economy but we need to start looking long term, & while the economy is already in shambles, why not put forth policies now that will help these companies become profitable in the future.

RE: this is the end...
By MPE on 12/12/2008 1:35:12 PM , Rating: 2
There is this misinformation around the wages and salary of the auto workers being much higher than the American non union workers in Japanese car plants. Something like $45 vs $72.
This is actually incorrect or misleading. The actual salary is closer to $45 vs $52. The $72 number is derived from labor cost. But that includes retirement. Am car companies are paying $72 because they have a much larger retirement force. Japanese companies here in the US have a much smaller retirement force.

So basically it will comedown to union agreeing to reduce retirement benefits. But even then, the reduction in price per car is only about $800. I doubt that is big enough to make our buying habits.

It is very complicated and difficult.

RE: this is the end...
By masher2 on 12/12/2008 1:50:39 PM , Rating: 4
> "But even then, the reduction in price per car is only about $800"

Misleading and incorrect. That figure comes from an assumption of a $10/hr direct cut in compensation, plus $10/hr in benefits. If the cuts were larger, the drop will be more.

Secondly, that assumes no reduction in workforce. If the Big 3 renegotiate with the UAW to allow intelligent reductions here, the figure is larger. This is why the Big 3 can't weather downturns -- their costs to cut production are far too high.

Thirdly, if the Big 3 force concessions from the UAW, then their major suppliers likely will also. That'll reduce parts costs, which will further lower prices.

Fourthly, even an $800 reduction in production costs would translate to about a $1200 cut off the retail price. That's a substantial reduction that would instantly make domestic makers more competitive.

RE: this is the end...
By Gzus666 on 12/12/2008 2:49:50 PM , Rating: 2
While I agree with most of this, honestly it still wouldn't make their vehicles better. No one is sitting on the fence between a Toyota or a GM about price, they look at long term resale, quality, gas mileage. All these things and Toyota mops the floor with them.

RE: this is the end...
By TheSpaniard on 12/12/2008 3:12:36 PM , Rating: 2
we aren't concerned with whether or not they are better but whether or not with reduced costs those $13 000 Cobalts can lower their prices and compete with Kia (I think we can all agree which would be the better purchase at that point)

RE: this is the end...
By HinderedHindsight on 12/12/2008 3:52:21 PM , Rating: 2
Fourthly, even an $800 reduction in production costs would translate to about a $1200 cut off the retail price.

Would the price cut really happen? We have seen that interest rate cuts from the fed led to lower savings rates, yet many banks chose not to lower interest rates on personal loans. The tumble in the cost of producing energy has not curtailed prices of basic necessities (electricity) in many markets as well.

Reduction in prices do not always follow cuts in production cost, especially when people are desparate (such as in a recession) to maximize profits and capital.

RE: this is the end...
By masher2 on 12/12/2008 4:04:21 PM , Rating: 2
> "Would the price cut really happen?"

Some would undoubtable be reserved for higher margins for the automakers. That's a good thing though, isn't it -- it means a return to profitability.

Some, though, would assuredly trickle down. My only point was that $800 in production costs translates to a far larger difference at the retail level.

> "The tumble in the cost of producing energy has not curtailed prices of basic necessities (electricity) "

Most of our electricity is produced from coal, nuclear and hydro-- sources not impacted by the tumble in oil markets.

RE: this is the end...
By Kenenniah on 12/12/2008 4:32:43 PM , Rating: 2
Exactly. Let's assume 155,000 cars sold per month at current prices. If they keep prices the same, but are able to make vehicles for $800 less each, they gain $124,000,000 extra profit per month. If they lower prices and sell more cars...who knows what the exact increase in profit would be. $800 per car may not sound like much, but $124 million or higher per month adds up pretty quick.

RE: this is the end...
By HinderedHindsight on 12/12/2008 4:38:02 PM , Rating: 2
That's a good thing though, isn't it -- it means a return to profitability.

While a return to profitability is definitely a good thing, no customer wants to finance it by paying an inflated price for a product that costs less to produce.

Plus, you are now beginning to make assumptions that the auto companies would lower prices just because production costs are lowered. Yet companies like Ford are still investing in the release of specialty, low volume, high production cost vehicles like the F-150 Raptor in a time where there is little demand for it- I understand the production cycles are long (especially for specialty vehicles), but the fact is, this kind of behavior does not equate to a company that is willing to produce the efficient vehicles, cost effective that are needed for consumers to drive and for manufacturers to stay afloat during severe sales declines.

Most of our electricity is produced from coal, nuclear and hydro-- sources not impacted by the tumble in oil markets.

Touche`, but you're failing to realize that the average commodity prices for coal has been dropping steadily since August in most markets. I wasn't necessarily talking about oil prices, but again, the cost of producing energy. Granted, they haven't dropped as dramatically as petroleum, but spot price drops amount to as much as 15-20% are fairly substantial.

RE: this is the end...
By masher2 on 12/12/2008 4:47:17 PM , Rating: 2
> "While a return to profitability is definitely a good thing, no customer wants to finance it by paying an inflated price for a product that costs less to produce"

Customers are buying GM cars now. They'll certainly still buy them if GM produces them $800/unit cheaper. If GM passes on at least some of that as a price cut -- they'll buy even more.

> "Touche`, but you're failing to realize that the average commodity prices for coal has been dropping steadily "

Electricity production is a government-sponsored monopoly, a market that moves very slowly. It usually takes close to a year for fuel cost changes to fully percolate through the system. In some highly-regulated states, the price may *never* equalize -- there's too many regulations on what the utilities can and cannot charge.

RE: this is the end...
By HinderedHindsight on 12/15/2008 12:01:29 AM , Rating: 2
If GM passes on at least some of that as a price cut -- they'll buy even more.

An assumption not supported by the current state of the industry- GM has been cutting prices as well as using their finance wing to lower interest rates, and sales continue to decline. This is not to say that GM cars are completely undesirable, but it shows that substantial price reductions do not always lead to better sales. GM (as well as Chrysler) has had to kill a slew of brands/vehicles that have shown poor sales in spite of desperate price reduction attempts to revive them, and these predate the current market issues. There is a reason Oldsmobile doesn't exist anymore.

The unfortunate sticking point is that the issue at hand has to do with a combination of existing product offerings combined with unfavorable market conditions.

Electricity production is a government-sponsored monopoly, a market that moves very slowly.

Which is why I chose them as an example to contrast with my example of what the banking industry has done in spite of lowered interest rates. The auto industry tends to have slow movement, and it does suffer from regulation. The bailout would increase the amount of intervention by the government.

My point is this- if a fast moving industry doesn't pass on the savings to its customers, and a slow moving industry doesn't change because of the influence of regulations- how quickly do you think the auto industry would move to pass on savings to customers?

RE: this is the end...
By MPE on 12/12/2008 4:26:48 PM , Rating: 2
Misleading and incorrect. That figure comes from an assumption of a $10/hr direct cut in compensation, plus $10/hr in benefits. If the cuts were larger, the drop will be more.

Yes $10/$10 is used because that is what the bailout numbers being asked. Simplistically, that is what the bailout is paying for (emphasize on simplistically).

If the big 3, achieves those numbers without the bailout, and even increase it, then the saving would be bigger.

Secondly, that assumes no reduction in workforce.

Of course there is assumption no reduction as we are comparing apples to apples.

Reduction in workforce ALSO changes the $72/h number that is thrown out there. that number would be irrelevant.

Thirdly, if the Big 3 force concessions from the UAW, then their major suppliers likely will also. That'll reduce parts costs, which will further lower prices.

But that is not what is being compared. We are talking about the labor cost. Material cost, R&D, etc is part of the overall cost, but the discussion and point being made is the $72/h number. That number have no bearing within this context.

Fourthly, even an $800 reduction in production costs would translate to about a $1200 cut off the retail price. That's a substantial reduction that would instantly make domestic makers more competitive.

Even at $1200, the big 3 would still be losing around $800 per car.
So they would still be losing money.

RE: this is the end...
By masher2 on 12/12/2008 4:34:30 PM , Rating: 2
Even at $1200, the big 3 would still be losing around $800 per car.
So they would still be losing money.
By your own admission, reducing labor costs by just the $10/$10 figure quoted would, at one whack, solve over half of the Big 3's problem. All by itself.

If the labor cost reduction was larger, and/or coupled with actual headcount reduction (impossible now with the UAW contracts), it would solve nearly everything. More efficient management (which a Ch. 11 reorg would facilitate) would complete the picture.

Mixed feelings here
By uhgotnegum on 12/12/2008 9:50:54 AM , Rating: 5
Libertarian here...

So, I'm glad that this failed, b/c I do not want our government meddling in private businesses. If our government officials are more interested in getting in their media soundbite by criticizing the CEOs for taking their jets than trying to wrap their political brains around a massively complex business industry (i.e., auto manufacturing), how on earth could we expect them to create a meaningful, appropriate funding package?

That being said, I feel bad for all the families, towns, etc. that will end up being hit hard by lost jobs, closed factories, etc.

In a really over-simplified example of why it'll be OK, take a look at the now extinct milkman (at least I think they're extinct). My Grandfather-in-law was a milkman "back in the day" and when milk no longer needed to be delivered, he was out of a job...So, he took the necessary steps and became a very successful State Farm agent. Now, he's retired and has plenty of money.

RE: Mixed feelings here
By Bateluer on 12/12/2008 10:28:40 AM , Rating: 5
Part of the reason why I voted Libertarian in the last elections. I'm disgusted with both the GOP and the Dems spending taxpayer money frivilously and interfering in the lives of private citizens with which they have no business.

RE: Mixed feelings here
By lagomorpha on 12/12/2008 6:44:13 PM , Rating: 3
If anything the government is responsible for this in the first place by passing the Clayton Antitrust Act in 1914 which exempted Unions from the Sherman Antitrust Act. Unfortunately it does not look like the government will resolve this problem and so industries will have to continue to adapt to a less than idea environment in order to survive.

Need a job?
By Bruneauinfo on 12/12/2008 10:22:36 AM , Rating: 2
for those of you looking for a job it's going to be a good bit tougher finding one when the labor forces from the Big 3 flood the jobless market.

RE: Need a job?
By Big Texas Phil on 12/12/2008 11:12:40 AM , Rating: 3
Yeah well somehow I think someone who gets payed $30+ an hour to put lugnuts on a tire is going to have to be retrained before they're a legitimate threat to compete in the job market. Not to mention the fact that they'll actually have to learn how to compete, because it won't matter how long "Uncle Joe" has been a member of the union.

RE: Need a job?
By psychobriggsy on 12/12/2008 12:05:38 PM , Rating: 3
If that's how much they're getting paid to do semi-skilled labour then I'm starting to feel a lot less sorry for even the workers here.

Chapter 11 all the way. Kill off the unions. Get the companies operating with wages that reflect the difficulty / trainability of the job. I.e., if your job can be replaced by *anyone* off the street with a few days training, then you seriously ain't worth $30 an hour. $15 might be pushing it.

What about people here, who went through years of training and work experience to get where they are - software development say, and get the same per hour, or less when pensions are factored in.


RE: Need a job?
By wempa on 12/12/2008 3:49:08 PM , Rating: 3
Amen to that. Unions need to die out. As long as we've got good laws protecting basic employee rights, there is no need for unions. If I don't stay on top of my skills to make myself competitive in the job market, then I am forced to accept a less desirable job. Why should auto workers be any different ? While years of experience add value, they are only 1 factor and should not automatically make you safer than another worker.

Didn't see that coming
By TxJeepers on 12/12/2008 10:11:48 AM , Rating: 5
One of the major sticking points was the United Auto Workers' refusal to accept...

Let them file 11. NO BAIL OUT!
I hope they take the union down with them.
I wish nothing bad on people supporting their families, but give me a break. The union is not needed.
Let's see some changes of management too.

RE: Didn't see that coming
By cparka23 on 12/12/2008 10:53:50 AM , Rating: 3
I agree. For the last 10 years, I've been hearing in the news about UAW strikes, picket lines, and negotiations for more money. The amount of compensation that is paid to these idiots is beyond belief. When people take their livelihood for granted, it's time to show them how the world really works.

UAW, you asked for this. Your lawyers and lobbyists were too good for your own well-being.

Finally, Congress does something right
By Bateluer on 12/12/2008 10:24:38 AM , Rating: 2
I know everyone here is too young to remember, but half a century ago, GM ran nearly all its competitors out of business or simply bought them out. Studebaker, Packard, etc, all fell before the mighty GM giant and not a single one of them received a bailout from the government. Now that years of inept management and ultra greed from the UAW have pushed GM to the brink, they have only once choice left. The choice they should have made in the beginning: Chapter 11 Bankruptcy. Chapter 11 is designed to protect a company's profitable assets and to protect as many jobs as possible.

Americans are not simply going to stop buying cars, our love affair with the automobile hasn't froze over. To say that millions of jobs will vanish because of GM going into Chapter 11 is ludicrous. Toyota and Honda both operate factories making vehicles in the US employing US workers, and they still turn a profit. Even if the US automakers were to go Chapter 7 just to spite Congress, there is one fundamental thing that would happen.

Creative Destruction. A titan falls, a dozen spawn to vie for the title. Competition is fostered and the consumer wins out with a better product. We've seen this time and time again in just the history of the United States, not counting other market economies. When there are just a few lumbering giant corporations, everybody suffers as competition stagnates.

Bye bye GM, we won't miss you.

RE: Finally, Congress does something right
By Radnor on 12/12/2008 11:23:48 AM , Rating: 1
While i agree with you in general, i need to add one thing.
The financial markets should have meltdown also and a new order would come.

Banking wouldn't fall. Commercial banks are in pretty good shape.

But no. Bush's Friends had to be rescued.

But don't have several judgments for the same case.

By masher2 on 12/12/2008 1:59:52 PM , Rating: 3
> "But no. Bush's Friends had to be rescued."

Eh? The Financial industry gave considerably more to Democrats this cycle than they did Republicans. Correspondingly, Democrats voted for the bailout in far larger numbers (Republicans killed the first bailout vote, and nearly killed the second).

Casting this as a bailout for "Bush's friends" is so far off base as to be laughable.

By bobcpg on 12/12/2008 11:40:44 AM , Rating: 2
Well said Bateluer

Washington to the rescue
By Bruneauinfo on 12/12/2008 9:42:10 AM , Rating: 1
Don't worry, Bush has their back!

RE: Washington to the rescue
By Ringold on 12/12/2008 12:47:33 PM , Rating: 4
Don't worry, next month Obama will illuminate the world his smile. "The sky will open, the light will come down, celestial choirs will be signing, and everyone will know we should do the right thing and the world will be perfect!"

RE: Washington to the rescue
By dragonbif on 12/12/2008 2:36:29 PM , Rating: 2
Obama will give them 16 billion.

Younger generation does not buy American Cars
By mac2j on 12/12/2008 3:02:08 PM , Rating: 4
One thing I wanted to point out that I havent heard much of... a big problem is the American car companies trashed their credibility with the under 35 generation and now theyre paying the price for it.

My 1st car was a Ford Taurus - It cost ~15,000, cost me over 10,000 in repairs over its 5yr life and I was lucky to be able to get 3000 for it after that even w/ only 65k miles.

My 2nd car was a Honda Civic - cost me ~17,000, cost me <1000 in repairs over the 7yrs I had it and I sold it - after 7 years - for 6500.

Think I'll ever buy an American car again? I know 0 people under 35 w/American cars... a few with Ford SUVs.

And I totally agree with not giving them a bailout unless the Unions match wages .... if you're paying an extra 4$ to your employees you're going to have to cut the money out somewhere else and its going to be quality.

By Spuke on 12/12/2008 4:05:37 PM , Rating: 2
Think I'll ever buy an American car again? I know 0 people under 35 w/American cars... a few with Ford SUVs.
Purely anecdotal. I know a bunch of under 35 year olds that own American cars. But nevermind that. If the younger generations didn't own these cars, companies like GM wouldn't continue to dominate the sales charts even now in this crappy economy and the bad rep they have, GM STILL sells more cars than ANY other car company. And that includes the PC favorite and media darling, Toyota. This coming from a two time Toyota owner (who would buy a diesel Toyota pickup TODAY if they made one).

Coming soon...
By flydian on 12/12/2008 6:48:48 PM , Rating: 3
The new and improved "Will work for food" sign!

Will do less work
for more money
to produce an inferior product
Government funds welcome

RE: Coming soon...
By flydian on 12/12/2008 6:56:06 PM , Rating: 3
P.S. In general, I'm in favor of Unions. However, the UAW is a big steaming pile of....

From the UAW Site

"In 2006 a typical UAW-represented assembler at GM earned $27.81 per hour of straight-time labor. A typical UAW-represented skilled-trades worker at GM earned $32.32 per hour of straight-time labor."

I know plenty of college educated professionals with experience and/or certifications who are struggling to find jobs at a fraction of that pay, with little or no benefits, and that's in 2006 dollars.

I feel bad for the workers and their families, who could be on tough times with bills and debts they've incurred based on what they were getting paid. Yet for some reason, it doesn't last very long...

By Spivonious on 12/12/2008 9:43:54 AM , Rating: 3
I guess some people in Congress still know what their job description is.

While this may be the end for Chrysler, I think GM would pull through bankruptcy just fine. And is Ford even in trouble? It's seems like they only went along with this to provide moral support for the other two.

I can see an easy way for GM to cut costs: kick out the UAW and pay the CEO $1/year until they pay off their debts. They don't need the taxpayers' help, and they don't deserve it either.

RE: Good!
By Doormat on 12/12/2008 9:51:42 AM , Rating: 2
After reading more details on the whole UAW thing, it seems that what GM and Ford need to do is go into ch 11 and turn over the pensions to the government (like the airlines did when they went into bankruptcy).

Only then will you see Ford and GM reduce their costs from $70 to $50/hr. Right now between $15-20/hr per worker go to pay for pensions.

Of 2 Minds..
By whirabomber on 12/12/2008 1:06:14 PM , Rating: 2
I am of 2 minds on the "bailout." The first mind say it is a good idea as it will help keep US dollars domestic in the long run. The first mind says we need the big 3 in the US as having domestic production lines during times of large scale war is really nice to have. The first mind says that if congress adds stipulations (to an extent) and curtails the concessions big 3 made to UAW (that, yes I know, the big 3 agreed to but under duress of loosing market share and millions a day during a strike). The first mind believes congress by law instigated bailout for the big 3 would be better than a presidential mandate to the US Treasury to throw money at the big 3. The first mind says that media no longer makes any effort to do investigative reporting as no media has noted how the Japanese car companies import goods into the US or bother to really see if US car companies are making an effort to change.

The second mind say the big 3 needs a spanking. The second mind says a big pain and threat of extinction is good for companies who need motivated to become more adaptable. The second mind says the big 3 and UAW should prove effort before congress should float them a loan. The second mind says the big 3 need more protections against strikes from uaw as a strike can derail any restructuring efforts. The second mind thinks the big 3 should also be required to move 70% of domestic vehicle and parts production back into the US for a period of 10 years, or until the loans are paid back.

Both minds agree that I am a Ford fanboy because Ford has the appearance of making the most effort to adapting to a better business model. Both minds agree that congressmen representing foreign interests should be removed from office as those congressmen are blatantly anti-American.

RE: Of 2 Minds..
By masher2 on 12/12/2008 1:37:01 PM , Rating: 3
> "we need the big 3 in the US as having domestic production lines during times of large scale war is really nice to have."

This isn't 1940. The heavily specialized production lines of today aren't going to easily convert over to producing tanks and guns.

Far more critical to wartime production are things like the steel and petrochemicals industry. . . and we've seen those die off in recent decades with little or nothing done to prevent it.

Why do you keep saying this Jason?
By masher2 on 12/12/2008 11:25:55 AM , Rating: 2
> "... to the point where they would go out of business in mere months."

I'll bet you any sum of money you wish to wager that none of the Big 3 will cease operation in "mere months" -- with or without any bailout or government loan.

Ford isn't even facing immediate bankruptcy, and even if GM and Chrysler go through Chapter 11, they will either recover as smaller automakers, or take many years (if not decades) to shut down.

By BruceLeet on 12/14/2008 3:33:25 PM , Rating: 2
You're a tool

By ebakke on 12/12/2008 3:01:45 PM , Rating: 2
I don't say this often, but Congress finally did something right. I tip my hat to the Legislative branch today.

By Dreifort on 12/12/2008 3:28:16 PM , Rating: 2
the republicans had a large part in stopping this. the filibuster threat among other constituents.

while BOTH sides of the political ilse had their hand in either creating or letting this fiasco happen to our economy - some of those in the legislation realize what must be done.

sometimes the pill can be hard to swallow - no need to take the kid on a $100 shopping spree in the toy store, just to get him to take the pill. either way he's going to have to swallow the pill - why waste $100? so he can feel good about it?

What was that union thinking?
By Nighteye2 on 12/12/2008 10:20:28 AM , Rating: 1
Sure, the workers on the factory floor may not be to blame for the crisis, but lower wages could have helped solve it.

Instead, the union would prefer to have everyone without a job over having everyone keep their jobs with lower wages. O.O

RE: What was that union thinking?
By rsasp on 12/15/2008 9:08:57 AM , Rating: 2
I agree.

With lower wages, it will definitely save the company a lot of money.

By superflex on 12/12/2008 12:50:53 PM , Rating: 3
Hahahaha. Put that in your pipe and smoke it Goettlefinger, you greedy ass bastard. Hope the unions die a painful death. You can now reap the rewards of the seeds you and the UAW have sewn. Stoopid Unions.

The Depression is coming
By Mithan on 12/13/2008 7:30:24 AM , Rating: 3
The Greater Depression is coming and there will be food riots, tent cities and other horrific things in the nations.

The US is going down, and most of you will be unemployed with it.

Within 3 years there will Concentration Camps set up to process (ie-kill) American Citizens.

It will be bad.

By svenkesd on 12/12/2008 10:17:15 AM , Rating: 2
There will be a hit to the economy for sure but I wish people would think long term instead of immediate effects.

Even if all 3 go out of business, liquidate and are no longer companies people are not going to stop buying cars.

The recession will not last forever, even a depression will not last forever.

A couple more years and we will have new companies that are much more cost/quality competitive than the big 3 in order to fill that demand.

Even if foreign companies pick up the slack, they produce cars in the US, employ people in the US, and profits benefit shareholders worldwide.

I am excited to see what new companies are born out of the void of the big 3.

Bottom line: people won't stop buying cars long term.

Keyword: longterm , think ahead more than a few months.

I Bet
By rudolphna on 12/12/2008 1:04:41 PM , Rating: 2
that if it was toyota or honda needing a bailout, people would not hesite

Food for thought
By icemansims on 12/12/2008 2:11:26 PM , Rating: 2
Y'know, I have a question, and it might sound rather strange?

Why are we bailing these companies out if we're willing to cut their workers' throats?

To help their high paid executives?

To bail out their investors?

I thought the whole idea was to save jobs, but what's the point in saving jobs if you're going to gut those jobs anyway and make it no better than going to work for Wal-Mart?

By rocky1234 on 12/12/2008 3:15:49 PM , Rating: 2
Screw that bankruptcy is bad no matter how you look at it. They biggest ones to lose are the ones that are owed money too. It is not fair that the smaller companies have to lose their shirts just so the bigger companies can shed their debt.

Our company went through this 2 years ago twice because we sub contract our shop to much bigger companies in our local area 2 of these bigger companies declared bankruptcy to do restructuring & we lost nearly 45K from it & it almost killed our company so yes I am dead against this idea after having to go through it ourselves. When we tried to get our money we were pretty much told to go to hell because they now did not have to pay us then after about 6 months we get a call from one of the companies saying they want us to do work for them again...the answer I gave was ummm nope not until you pay the thousands of money you owe us their response was we are under knew ownership & because of that they no longer owe any said given money to us any longer.

My answer was well then Go straight to hell don't call again & our laywers will be in contact with you & I hung up.
our laywer is still trying to help us & he is doing it for free because he finds this very distrubing as well.

UAW = union of arrogant workers
By tallredeye on 12/12/2008 4:54:01 PM , Rating: 2
Auto companies are on the brink and UAW refuses to take a cut which will bring them to parity with non-union auto workers. Their sense of entitlement is amazing. They don't get my sympathy.

CEO Thief
By toyotabedzrock on 12/12/2008 8:30:12 PM , Rating: 2
There is a simple solution here, raid the ceo's bank accounts. They need to be made personally liable for there debt.

Check out these links about how much these thieves get paid.
Rick Wagner:

Alan Mulally:

1 Thing we all must remember
By Jcollector1 on 12/13/2008 1:09:43 PM , Rating: 2
The Industrial Might of the United States in the 1940's is the ONLY reason, we live free, safe, and proud.

Alot of you do NOT remember your history and without history there is no present.

The complete industrial might of the US is GONE, wiped out, doesnt exist. This is the same might that allow the Allies and the US to defeat the Germans and Japanese in WW2 there in keeping the whole world a semi safe place.

You all wonder who contributed to this industrial might........The US Steel industry and auto industry......Yup not the Mexicans, Not the canadians, not the Chinese.......Your Fathers, Grandfathers, and their families.

Greed, Mis management, and Corruption has played it tool in all of this and the Union's power did go way too far, but alot of you miss the bigger picture and that is a shame.

I for one dont want to see the US Auto industry destroyed, but if it falls, many many other aspects will fall along with it. God help us if there ever is another evil power that rises because we wont be able to build equipment, ON OUR OWN, to protect us........

By teckytech9 on 12/13/2008 3:09:27 PM , Rating: 2
Auto manufacturing will not disappear from the US economy. What does change overtime are names of companies like AMC (American Motors Corporation), and the Hudson Motor Car Company. These companies have either merged or been retooled to produce military vehicles like the Humvee (Jeep).

Historically, fate seems to repeat itself for the auto industry. Factors like mismanagement, oversupply, labor laws, wage concessions, competition, and economic downturns have led to changes. This time GM seems to be the most vulnerable as its failure to adapt to swift market forces, unlike the Japanese competition, is leading to their current predicament.

For many years, the US automakers cranked out their products through their assembly lines as fast as they could, overlooking minor quality checkpoints in the process. The phrase - "The problem is good leaving here" - seems to have been the motto. Future profits were being realized on repair revenue and additional maintenance on the vehicles produced.

The Japanese had it right from the start. They would pull the red lever and stop the assembly line to fix the problem (However small it may be, like a tiny connector or fastener). Once repaired, the line would commence again. They also led the hybrid vehicles to market first.

Perhaps what will happen is that better and cheaper products will emerge in the future. The $10 billion that they need to keep the lights on till the end of the year is just wasted money.

Bush Derangement
By FPP on 12/13/2008 8:34:52 PM , Rating: 2
You really have to ask what Bush really wants here: He's on record years ago as not wanting to help these chuckleheads, either the Big Three and/or the Unions.

So now, he feigns helping, while the GOP is adamant about forcing them into Chapter 11. Doing so frees them from UAW contracts, and it does not cost the American taxpayer a dime. They can reorganize and go forward on their own.

Sounds a lot like Bush derangement is good for the rest of us all.

By rsasp on 12/15/2008 9:05:46 AM , Rating: 2
Why pay $30/hrs + just for a guy to put on a bolt/windshield etc...and that work is not even technical, even an average Joe with some basic equipment training can do it.

Unions are the problem! ALWAYS!
By crafty on 12/16/2008 4:38:57 AM , Rating: 2
I, like you, can't wait for the day that American labor goes back to its roots. Instead of cumbersome industrial unions we will have labor free to work for a non-living wage in grinding poverty. Hey, you wouldn't want people that build the cars to actually be able to afford them would you?

I, like you, can't stand the idea of someone having a factory job that he or she is able to support a family with. I mean we can't have ordinary people that work the assembly line actually make real money from their full-time job. Our nation's wealthy have been crying in agony over the possible trillions of dollars they have lost in the last seventy years of unionization. I realize that our greatest time of economic prosperity for the ordinary American was also the time of greatest unionization, but when Ronald Reagan came into office we got to see what it looks for our economy to double without raising an average person's real wages. Now that all that capital is being sucked backed into the financial cesspool, we get to see what is looks like when wealthy people take capital from the poor, just like the good old days.

I've come to realize through this forum that labor unions are only for suckers that think working people should share in prosperity.

By reader1 on 12/12/2008 9:43:37 AM , Rating: 1
That's what they deserve for their greed, arrogance, laziness and stupidity. Associating their cars with stupid people was suicidal.

Devistating but necessary
By DemolitionInc on 12/12/2008 9:59:05 AM , Rating: 1
I know it is bad for the workers, but these companies are not due to survive. Burn them and rebuild something good on the ashes.
When you think about GM I always remember GM telling on of our customers a wheel manufacturer - Stop making AL-alloys in the USA, make them in China it will be cheaper labor cost -. Imagine the stupidity, they are making the buyers of their own cars unemployed so that these people cannot afford the cars anymore - great American Spirit....
By the way americans, help yourselves, when I came to the states for my exchange year in 1994, Wal-Mart still promoted US-products but hey, you the customer forced to get China scrap into your country (yes 60% of Chinas export goes to the US) because it did not matter to you where it was made, only the price had to be right. Damn, Change YES YOU CAN
Excuse my grammar, is not may native language

Too late
By wvh on 12/12/2008 12:23:57 PM , Rating: 1
[...] this time in hybrid cars, which they felt embodied the future of U.S. leadership.

If they would truly have believed that, they wouldn't be as deep in trouble as they are now. It's kind of ironical they show up in a car that embodies one of the main reasons of their demise.

Too late now, I guess.

Please tell me
By BruceLeet on 12/12/2008 1:49:57 PM , Rating: 1
What the fuck does this have to do with Technology, the only thing this is slightly related to is a picture of the VOLT but what kind of coverage does that provide. Just a fucking link to another article half assed.

This post is purely political and when the fuck did DailyTECH become a political discussion board.

"It generates page clicks hits yes it does mehamehmehamhahemheh" Shut the fuck up I use Adblock I get no ads so fuck you I win. Jason you are a piece of shit writer.

/*Sigh* Constructive Venting.

By jeb328 on 12/12/2008 11:08:04 PM , Rating: 1
Anyone that thinks we should not help the auto industry out are idiots. If Both GM and Chrysler file bankruptcy so will most of the vendors that supply parts to them. I understand the crap they have done in the past. Hell tell me what cooperation in American has been operating efficient. I have been in the industry all my life. I'm so tired of the BS. Have some f&*^ing pride. Let them fail (screw you). By the way who ever says that the congress is doing what the people of there states want them to do. Your mistaken, there all self serving bastards. It is a very sad day in America. Go by your fing Import and shut the hell up.

By Beenthere on 12/15/2008 10:24:13 AM , Rating: 1
Part 2.

"Is there any other country fortunate enough to have an automotive industry that does not support, protect and nourish it in every possible way? We are the only nation on earth too blind and stupid to recognize and treasure the enormous economic and national security advantages of having its own healthy, prosperous auto industry and manufacturing base.

"Now you have passed an enormously expensive new regulation requiring 40 percent higher corporate average fuel economy in hopes of someday reducing the less than 0.2 percent of global human-sourced CO2 attributable to US light vehicles. That will cost us an estimated $100 billion, and even if you believe that is really worth doing at such a cost, where are we going to get that kind of money? Talk about unfunded mandates!

"With recent resizings and restructurings and our new labor contracts, we were well on our ways to full financial competitiveness and profitability. We could have survived and the sudden $4 gas explosion - not our fault - that shifted buyer demand overnight from larger, more profitable vehicles to small unprofitable ones. We have millions of highly desirable, much more fuel-efficient small cars and engines in the pipeline for 2010 and beyond.

"Then came your mortgage meltdown and fast-frozen credit crisis, which no one in this credit-driven business can survive unaided for long: not us, not our suppliers, not our many thousands of independent dealers, not even our most cash-rich foreign competitors. They, too, are asking their governments for assistance. Will they get it? Of course! No other nation will stand idly by and watch its auto industry die.

"There was no end of election rhetoric about creating new jobs. How about saving several million of the ones we have? Can any of you begin to understand how this industry is a huge, fragile, interdependent house of cards? If GM should fail, or declare Chapter 11, so will most of its 3,690 suppliers, beginning with the 2,000 in the US that operate 4,550 facilities in 46 states. Since most also supply key components to everyone else, that will bring down all of us, including US transplant production. Don't believe us? Ask Toyota.

"Vehicle assembly, engine, transmission and parts plants nationwide will shut down. Have you seen a plant town whose plant has died? It's a jobless ghost town whose out-of-work residents, including owners and employees of the small businesses that depended on plant workers' incomes, can't afford to move because their homes – like their hopes and dreams – are worthless. How many of those communities will be in your states and districts? US dealers of all brands, with no new cars, credit or credit-worthy customers, will drop like flies. Without once lucrative auto advertising, many media will shrink and some will die? The predicted initial loss of 3 million jobs will be just the beginning. Can you spell depression?

"Yes, we have lost a lot of market share. Where did you think all those millions of cars and trucks our foreign competitors import and assemble here in taxpayer-subsidized plants in cheap-labor states would be sold, and out of whose hides did you think they would come?

"Yes, we have made mistakes, some bad products and bad business decisions in the past. And so has every one of our competitors. We are entirely different companies today with new leadership and new priorities. We have wide varieties of high quality, high fuel efficiency, highly desirable new products that Americans, as they get to know them, absolutely do want to buy. Why continue to punish us, and the millions of incredibly dedicated, hard-working people at all levels who still depend on us to feed their families, for the sins of our predecessors?

"Why punish the entire country and millions in other countries as well? If you can think of any good reason, we would like to hear it. And don't come back at us with your usual name-calling, finger-pointing, blame-shifting, uninformed opinions, decades-old perceptions and self-serving, grandstanding rhetoric. We have offered our business plans and all the facts behind how we got here and why we need and deserve to survive and prosper for the good of this country and every citizen in it.

"You know full well that this life-threatening position you have put us into is entirely your fault, not ours, and that our future viability depends completely on you. We're anxiously awaiting your business plan for guiding this country out of the economic morass you have created, beginning with the bridge loans we desperately need."

Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 21 years. A former auto engineer, race driver and advanced technology vehicle development manager, his work has appeared in a wide variety of national magazines including The Robb Report, Playboy, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently contributing regularly to Kelley Blue Book (,, Ward's Auto World and Motor Trend's Truck Trend and is a North American Car and Truck of the Year juror.

By Beenthere on 12/15/2008 10:31:26 AM , Rating: 1
Due to limitations on word length this article is split into two parts. This is Part 2.

What Auto CEOs Should Have Said
Posted Dec 1st 2008 at 12:01PM by Gary Witzenburg

Shouldn't those auto/government hearings have been reversed?

Did it occur to anyone else that those oh-so-painful auto CEO/government hearings should have been the other way around?

Instead of the heads of America's three remaining automakers groveling, begging and enduring live public floggings trying to sell their case for government loans to get them past the global economic crisis and credit freeze that government greed, corruption and incompetence has created, shouldn't they have been vein-popping outraged and angry? Shouldn't they have pointed accusatory fingers at that sorry collection of arrogant, auto-ignorant Senators and Congressmen who got them into this mess and demanded their assistance?

Shouldn't they have looked those pompous public-trough pinheads straight in the face and demanded to know why investment firms, banks and big insurance get hundreds of billions of taxpayer bailout dollars no questions asked while what's left of America's once-mighty manufacturing muscle begs for loans totaling 1/28 of that initial $700 billion Wall Street bailout? Where were the public humiliation hearings and newly viable business plans for those guys?

Here is what I'll bet those long-suffering auto CEOs wanted to say, but couldn't:

"You ignorant morons! How dare you accuse us of building cars nobody wants? We sold 8.5 million vehicles in the US last year and millions more around the world. GM still handily outsells Toyota here, Ford outsells Honda and Nissan, and Chrysler sells more than Nissan and Hyundai combined. How many of our new cars have you driven lately? How many quality surveys and plant productivity reports have you reviewed? Have you bothered to check your own EPA's fuel economy ratings?

"Have you paid any attention in the last several years as we've turned our companies upside down, closed dozens of plants, shed hundreds of thousands of hard-working people who did nothing to deserve it, canceled slow-selling models and spent billions of hard-earned dollars redesigning the rest? Are you idiots even aware that we renegotiated our union contracts last year to make our US labor and health-care costs fully competitive by 2010?

"Would you recognize a good business plan if one smacked you upside the head? Have any of you ever run a business, made a business decision or even held a real job? Is there any more dysfunctional organization on the planet, any that more desperately needs a new business plan, than the US Congress? Let's compare our public approval ratings to yours.

"You scold us for using private aircraft? We run global companies flying people, parts and equipment all over the world every day. We use private planes for security and productivity and cost savings over commercial alternatives. If it were not cost effective, we would not do it, and we've been doing a lot less of it lately. Tell us, Ms. Pelosi, how much does that big private 757-200 of yours cost taxpayers to fly you home and back between your tough 3-day weeks?

"For decades, your national energy policy has been summed up by two words: 'cheap gas.' Now you want to punish us for building the big, capable, comfortable vehicles Americans wanted to take advantage of that policy...and for not building millions more smaller, more fuel-efficient cars that, until recently, almost no one wanted, and that we can't make a buck on if we build them here thanks to the high business costs you've imposed upon us through the years.

"You have blocked every avenue of domestic exploration and construction that could lead to eventual energy independence, preferring instead to pump hundreds of billions of dollars overseas to purchase the energy Americans need, much of it from countries that are not our friends. You have piled billions of dollars of unrecoverable costs on us with excessive taxation, overkill regulation and relentless litigation that our off-shore competitors do not have to bear. Then you have rolled out the red carpet to predatory, low-cost foreign competitors who come here to take our market and pump hundreds of millions more dollars out of this country.

This is wrong
By corduroygt on 12/12/08, Rating: -1
RE: This is wrong
By uhgotnegum on 12/12/2008 10:24:41 AM , Rating: 3
I would argue that it's each American's job to get his/her own job, and if that job is gone b/c of one factor or another (my milkman example from my post), then he/she has to get another job.

Our government is NOT responsible for creating or keeping its citizens jobs, and I would not want a politician artificially sustaining a job that the industry can no longer support.

I do WISH that we could have everyone employed and have a stable source of income, but that's not reality. I feel bad for those that will lose their jobs, but maybe they can become the employee base for the NEXT innovation, or maybe they'll go back to school and enter into another industry. In any event, I would disagree that we are actually "stimulating" the economy by lending huge amounts of taxpayer dollars to a private industry...

And let's not then take it a step further by having our government "force" another private (or used to, before the government meddled)industry (i.e., banking) to do something they wouldn't be economically likely to do.

RE: This is wrong
By Reclaimer77 on 12/12/2008 2:35:05 PM , Rating: 2
Providing Americans with jobs is the best way to stimulate economy instead of those fat cats at wall st. Force Citibank or AIG to give loans to big 3 at reduced rates or no bailout for them.

Jobs to make what ? Cars for a company that has a prooven track record of mismanaging the profits. That bleeds money. That needs bailout after bailout.

That is NOT the best way to stimulate our economy. A continuous cycle of failure ? No thank you.

You know I have never before remembered a time where suddenly everyone had the attitude that nobody could lose a job. Almost a stark panic over the prospect that it would be the end of the world somehow if people were laid off. When did this happen ? This belief that we must do whatever it takes, at all costs, to prevent a business from closing cause people will be laid off ?

Do you realize what GM would have done with that money ? They would have taken it, FIRED a ton of people, and restructured. You and anyone else who thinks a bailout would have prevented job loss are idiots.

This is great news! I wish i could...
By on 12/12/08, Rating: -1
RE: This is great news! I wish i could...
By Big Texas Phil on 12/12/2008 11:15:16 AM , Rating: 1
Turn off your PS3 the power plant burns coal..

RE: This is great news! I wish i could...
By on 12/12/08, Rating: -1
By Gzus666 on 12/12/2008 2:46:04 PM , Rating: 1
I wish i had PS3...but im waiting for 1nm version of it, power consumption less 1 watt

GOTCHA! I knew he was acting. OK guys, he is not retarded, he is just screwing with everyone.

By Ordr on 12/12/2008 12:46:48 PM , Rating: 1
I've come to the conclusion that your posts can't possibly be serious and therefore I'm really getting a kick out of them. :)

This is absolutely devistating...
By thorr2 on 12/12/08, Rating: -1
RE: This is absolutely devistating...
By mherlund on 12/12/2008 10:04:26 AM , Rating: 4
I completely disagree with your statement. It is not the governments job to keep businesses alive. A business is there to make money, once they stop making money they can no longer stay in business. Just because the auto makers became so large does not mean it is the governments job to keep them alive. I think the republicans are doing the right thing here. The democratic answer is to just throw money at things. While that may help a bit right away it will hurt in the long run. We can't keep on giving money we don't have.

Republicans/Bush were extremely criticized for the amount of spending on the war on how they were attributing to the national debt, but now when they didn't give a billions of $'s to automakers they are criticized again.

By Gzus666 on 12/12/2008 10:07:42 AM , Rating: 2
Republicans/Bush were extremely criticized for the amount of spending on the war on how they were attributing to the national debt, but now when they didn't give a billions of $'s to automakers they are criticized again.

I do find this odd, both sides are equally retarded in general, but it seems there are still some level headed people in the senate that realize we cannot bail out every dying company.

RE: This is absolutely devistating...
By Meinolf on 12/12/2008 10:19:41 AM , Rating: 2
I do agree with you on some points but the large bailout for AIG and other companies was also BS and if we are handing out a crap load of money already why not help US companies stay alive. It I is my money your money I don’t mind giving to a US company, we should have a choice. That WAR thing I wonder if we didn't get lied to the extra money we would have. The many lives that have been destroyed for nothing.

By Gzus666 on 12/12/2008 10:33:38 AM , Rating: 2
So if they make one mistake, they should keep making that mistake? Why not help Office Max, Circuit City, Comp USA, K-Mart when they have problems? You can't bail out companies and call yourself a capitalism, it just doesn't work.

By theoflow on 12/12/2008 10:54:42 AM , Rating: 2
The difference in spending money on a war is VERY different than spending money to revitalize an economy.

It is the responsibility of this government to give us the opportunity to live peaceful and prosperous lives if we choose to do so with in the confines of the laws in place.

By Gzus666 on 12/12/2008 10:05:09 AM , Rating: 5
They will file Chapter 11 and retool the company, this will relieve them from the UAW pensions. You are a moron if you think that them not getting a bailout spells the end for sure.

It all comes down to them running the business properly. If they don't want to fix, they will die, someone will buy them or just move in with business to fill the gap, the cycle continues. This is how economies work, stop playing all doom and gloom like they will just disappear and the world will end.

By blaster5k on 12/12/2008 10:07:52 AM , Rating: 3
The sky isn't falling. As long as there's demand for cars, it will be filled -- whether by Honda, Toyota, a completely new player, or more likely, a combination of them. When DHL exited the US market, FedEx and UPS picked up a larger share of the market. It's no different. Parts suppliers are also likely to pick up business from other manufactures.

Yes, there will be short term pain and people will lose their jobs. They'll find new ones -- maybe in the auto industry as it recovers. When it does recover, it'll be stronger and more efficient than before. If we bail them out, inefficiencies will continue and be a drag on the economy moving forward.

By uhgotnegum on 12/12/2008 10:14:34 AM , Rating: 2
Sorry, but I'm going to need more information than your assertion that "it will affect everything...b/c nobody will be buying anything and without sales, there is no money"

What makes people think that a politician, or worse, a bunch of politicians, can take a bunch of our money and with whatever restrictions they can think up hand it over to a company and have THAT somehow make it so people will be buying everything again?

Businesses can go out of business, and a huge corp. isn't immune from the decisions that it makes. In the end, the best will survive, adapt, and innovate and that will push our country forward...It sucks that people will lose their jobs, and I feel bad for them, but don't tell me that politicians passing a bailout will magically keep everyone employed, restore the competitiveness of the US auto industry, and make everything warm and fuzzy. Our legislature makes laws, not business decisions for our private industries.

Sorry to rant...I don't want you to think I'm attacking you, but please reconsider your thoughts about what our government's job description is. I think too many people think it includes "making everything OK"...that's our job, not theirs

RE: This is absolutely devistating...
By AlexWade on 12/12/08, Rating: 0
RE: This is absolutely devistating...
By masher2 on 12/12/2008 12:49:37 PM , Rating: 3
While I agree with your other points, the Big 3 aren't in this crisis because of SUV production. Truck/SUV sales are still profit leaders.

The companies were simply moribund, top-heavy debt-ridden companies with massive retiree obligations (GM is paying benefits to 4X as many retirees as they have actual workers), along with union obligations that don't allow them to cut costs by cutting production, which makes it essentially impossible to weather a downturn in sales.

RE: This is absolutely devistating...
By AlexWade on 12/12/2008 1:17:18 PM , Rating: 2
All good points. But those things have nothing to do with how much inventory you sell. Everybody knew high gas prices where coming. Why didn't GM decide to make a transition to more fuel efficient vehicles and be ready when the inevitable arrived? Yes, the union makes them ridged and unflexible short-term, so that does not allow them to make the changes needed to survive. But the fact still remains that they should have been ready to survive high gas prices because it was blindingly obvious it was coming.

RE: This is absolutely devistating...
By thorr2 on 12/12/2008 1:36:42 PM , Rating: 2
I appreciate everyone's opinion and I don't feel personally attacked. I also may not get all of my facts straight because I am not into politics. This is just my opinion. I am painting a kind of worst case picture, but it could happen at least at some level and hopefully not too large of a level.

I don't agree that this is no big deal. Just about everyone who lives in and around Southeast Michigan either works in the auto industry or has family members that work in the auto industry. If the big 3 are allowed to fail, just about all of these people will be out of work. If they are lucky enough to keep their jobs, they won't be spending any money in case they lose their jobs. Since the majority of people in Southeast Michigan will not be spending their money, the local businesses will suffer and may eventually have to close their doors. So basically everyone will be out of work and have to look for work elsewhere. If you have ever flown into Detroit, you can see from the air that there are tons and tons of buildings and therefore people. Now all of these people will not be purchasing anything from the rest of the country because they won't have any money. This will be a huge hit to the bottom line of everything that used to be bought. All of these people will be flocking to the rest of the country fighting for any jobs that may be out there which will bring down the job opportunities for the locals, and Southeast Michigan will be a ghost town.

Also, it is not only the big 3 affected. It is also their suppliers, and their suppliers, etc. There are plants all around the U.S. that are also affected. Some brought up the war. I am glad they did because I find it very distasteful that we can just throw billions into Iraq without batting an eye, but can't spend any on ourselves to keep ourselves afloat. American's developed the auto industry and the foreign car companies are taking it over. It is true for many industries as we keep outsourcing everything. Pretty soon we will all have to move to India, China, or Mexico if we want to find a job.

I definitely agree with the need to oversee how the money is spent so that we don't keep going down the same road. Big changes need to happen in order to correct the problem. I don't necessarily agree that the government are the right people to dictate the changes because they obviously can't manange their money either. It is sickening that $700 billion or whatever is just given away freely to save the banks and they still won't extend anyone credit, and there is no accountability to the money that was given and no questions asked. They are feeding the debt, not the money makers. Oweing more money to the banks is not going to help anyone. Keeping the workers employed so they can produce products and make money so they can spend money and grow the economy is the smarter and MUCH cheaper move.

And keep buying foreign, that may save you a little money up front, while you still have money...

RE: This is absolutely devistating...
By Beenthere on 12/12/2008 1:57:34 PM , Rating: 1
People need to get the facts instead of posting baseless opinions like the FOOLS in the Senate are so good at spouting to the media...

For the record, GM produces more models for sale in the U.S. that get 30 mpg than either Honda or Toyota. That's right, GM has more 30+ mpg models for sale than Honda or Toyota.

The reason that Detroit auto makers are in a financial crisis is NOT because they didn't respond to high gas prices. It is because the U.S. economy has CRASHED due to $4/gal. gas prices. If you haven't heard the housing industry crashed, the banking industry crashed, Wall Street crashed.

The U.S. FOOLS in DC just got the memo last week that we have been in a RECESSION for over 12 months. The government just confirmed we have lost 1.9 Million jobs in the past 12 months. In fact we lost over a 1/2 Million jobs last month and it is getting worse by the day!

Wake up people. The Detroit auto makers are the manufacturing backbone of the U.S. They directly and indirectly employ over 3 Million people. We can not afford to allow them to go under due to political grandstanding in Congress by a butch of illiterate BUMS who have no clue what is happening in the U.S. economy or auto industry.

Honda and Toyota U.S. sales were down 30% last month - exactly the same as the Detroit auto makers - BECAUSE WE ARE IN A RECESSION bordering a DEPRESSION.

Get the Facts!

The job you save or lose though inaction - will be your own.

No job = No money = No purchase = A economic depression and eventually a DEPRESSION

By Reclaimer77 on 12/12/2008 2:14:14 PM , Rating: 2
That's right, GM has more 30+ mpg models for sale than Honda or Toyota.

Isn't that just because they take the same car and put 5 different brand stickers on it ? Gm,Chevy,Cadillac,Buick, etc etc ?

By masher2 on 12/12/2008 2:19:43 PM , Rating: 3
> " They directly and indirectly employ over 3 Million people"

The idea that bankruptcy for the Big 3 will result in 3 million lost jobs is irresponsible fearmongering, not supported by the facts.

Furthermore, the entire premise is false -- you cannot keep jobs long-term by propping them up with government dollars. Long-term, the only thing that works is for those workers to produce what people actually want to buy, at a price they're willing to pay. And that will only happen if the Big 3 are forced to drastically reorganize. A bailout postpones that judgement.

> "Honda and Toyota U.S. sales were down 30% last month - exactly the same as the Detroit auto makers"

Eh? GM was down 41%, Chrysler 47%. Toyota 34%. Nissan and Ford 31%. Clearly domestic makers (other than Ford, which isn't teetering on bankruptcy like the other 3) were hit harder.

By Hiawa23 on 12/12/2008 2:47:48 PM , Rating: 2
Honda and Toyota U.S. sales were down 30% last month - exactly the same as the Detroit auto makers - BECAUSE WE ARE IN A RECESSION bordering a DEPRESSION.

you bring up some good points & I think most know we are in a global recession, but Honda & Toyota are not going under. I think we all agree something should be done, my only concern is if you give em the loan, if restructuring is not in place, then the ship is going to sink anyways, it may happen in 3 4 5 6 months instead of now, but if the US Auto industry keeps doing what they have been doing this one is sinking, & another thing, how are they supposed to pay back the loans if their sales are not what they are supposed to be due to the recession. They will be in bankrupt ct anyways.

By masher2 on 12/12/2008 2:04:16 PM , Rating: 2
> "But the fact still remains that they should have been ready to survive high gas prices "

If you haven't noticed, those "high gas prices" are long gone...and yet GM's sales continue to dive. Gas isn't the culprit here.

And even high gas prices existed, SUVs, trucks, and large cars will still outselling small cars by several hundred percent. In fact, this June (during the height of high gas prices) GM still sold more vehicles than Toyota.
More importantly, the *profit* from each SUV and large car was many times what a small car would have generated.

In short, casting this crisis as GM not "being ready for high gas prices" is entirely off the mark.

By Reclaimer77 on 12/12/2008 2:12:05 PM , Rating: 1
I understand your frustration. But its misplaced.

You sound like a young American, and I mean that in no offense. I know, because of other people in the media and government, that you are coming from a false premise.

The roll of Congress, both parties, isn't always to do whats right or whats smart. Congress, in theory, are supposed to REPRESENT the states and people who elected them.

The people DID NOT want the federal bailout. And congress, for once this year, did their jobs and carried out the will of the people.

At least the Republicans let it go to a vote. Know what happens everytime the Democrats don't like a bill ? They fillabuster it for so long it doesn't even get to SEE a vote.

By Mastershake256 on 12/12/08, Rating: -1
By Mastershake256 on 12/12/2008 9:47:03 AM , Rating: 4
Maybe the bankers should file for bankruptsy so we wouldn't have to pay for their bailout.

By Fanon on 12/12/2008 9:49:08 AM , Rating: 4
That's what needed to happen.

By Hiawa23 on 12/12/2008 10:10:36 AM , Rating: 5
I feel for the UAW, but they are going to have to make concessions, even more concessions than they have suggested in the past, & they need to get everyone at the table making more concessions.

One worker they interviewed today said they were asked to take a pay cut of up to 1/2, & he went on about not being able to pay his bills or home if his pay is cut, & I feel for him, but if the company goes in the Chapter 11, isn't this going to happen anyways or much worse?

I think the years of the UAW bilking the Auto companies are about to end so they better get ready for some much needed changes. I run a business & it seems to me that there is a bad business model which doesn't allow our companies to compete with the foreign auto makers & it seems to me that the UAW really is only thinking about their own interests, & not so much the auto companies. This is a bad model along with the governmental restrictions placed on the companies, & it needs to be fixed.

I see no point in giving them the loan then 3 months down the road they are back needing more money, cause the way things are their root problem is not solved.

Please don't start with the financial sector got billions with no strings attached, cause it's clear they used scare tactics to push that through & did not help the tax payer at all as banks or hoarding the money & buying other banks. That was clearly a bad deal, & the govt needs to make sure not to repeat this for the Auto companies, so I am all for the loan being stopped. I think we are just postponing what is going to happen anyways, whether it be 3 4 5 6 months. If the wheels are going to come off, they might well come off now while everything else is going to hell.

By Entropy42 on 12/12/2008 11:01:05 AM , Rating: 4
Not to really defend the UAW, but a lot of the numbers that are thrown around with regard to compensation are either wrong or misleading. According to this article in the NYTimes, cutting UAW pay/benefits to match Honda/Toyota would only shave $800 off the cost of a vehicle.

By masher2 on 12/12/2008 11:23:38 AM , Rating: 4
Pay and benefits of actual workers is just the tip of the iceberg. GM alone owes $50B in benefits to retirees, a sum far larger than what they owe actual workers.

There's also the fact that UAW requires the Big 3 to hire more workers than actually needed, as well as prevents them from furloughing workers when necessary, factors which tend to force the automakers into overproduction.

By RU482 on 12/12/2008 12:44:07 PM , Rating: 3
well, consider the finacial disaster if GM won't or can't fulfill their obligations to their retirees. There are a lot...A LOT...of grey haird folks that have a standard of living that is going to collapse, and guess who picks up the tab when it and me, Mr. Working American.

Anyone else considered this 800lb gorilla before?

By quiksilvr on 12/12/2008 12:53:38 PM , Rating: 5
Yet ANOTHER reason why Social Security should NOT be a requirement, but a choice. I'm 21 years old and already save 10% of my check in savings. Why in fcuk hell do I have to give damn near 20% of my check for Social Security? I know I'm not going to see that money ever again, so why am I paying it? ITS BULLSH!T

By mcnabney on 12/12/2008 1:08:44 PM , Rating: 1
Social security is not a retirement plan, it is a social contract to transfer some wealth from the working majority to the retired minority. This is what keeps grandma from moving-in with the kids.
And even if you did treat it as such, I am sure the Boomers would be just thrilled if their SS benefits dropped with the rest of the market.

By quiksilvr on 12/12/2008 2:49:14 PM , Rating: 2
And that leads me to another point: SHAME ON YOU FOR NOT LETTING THE ELDERLY LIVE WITH YOU UNTIL THEY DIE! Seriously, what the hell?! They spend 60 years of their life raising a family and making sure the future generations are safe and as a reward they get their asses pushed into a retirement home? Either get them a home nearby so they can at least be close to family and visit their grandchildren or let them live with you and let them enjoy the end of their life.

Social security was useful during the earlier 20th century because it gave people the mentality that this money is being saved to help you out in the future. But it SHOULDN'T in any way, shape or form be a REQUIREMENT. Either grow a brain and realize that a portion of your check should be saved or enjoy the effects of economic Darwinism bite you in the ass.

By superflex on 12/12/2008 12:56:44 PM , Rating: 4
What about those who lost their retirment money with the collapse of the market. Nobody paying for them and nobody should pay for these losers either.

By masher2 on 12/12/2008 12:58:22 PM , Rating: 2
"Disaster" is certainly an overstatement. A lot of retirees will have to reduce their standard of living, certainly, and negotiate a lower payment from GM.

That's definitely going to be cheaper, though, than the federal government simply agreeing to pay that $50B. . . which is ultimately what a bailout means. Anyone who thinks this initial $15B will be all the Big 3 wind up asking for hasn't looked very deeply at their finance statements.

By Spuke on 12/12/2008 1:39:12 PM , Rating: 2
From what I've read, the 15B is just to hold them over until the new administration is in office and can hammer out a game plan.

By InsaneGain on 12/12/2008 2:49:39 PM , Rating: 2
How will they negotiate a lower payment from GM if GM is liquidated? Apparently that is the most likely outcome of a bankruptcy, as nobody will take the risk of buying a relatively long term asset from a bankrupt company. Sales will quickly fall, scaring off other potential buyers, and it will cascade into a complete failure. Obviously the power of unions must be dealt with, but I think bankruptcy may not be the best solution.

By masher2 on 12/12/2008 3:20:18 PM , Rating: 2
> "nobody will take the risk of buying a relatively long term asset from a bankrupt company."

Nonsense. People are still buying hundreds of thousands of cars from GM a month, even though its now public knowledge they're only weeks away from bankruptcy. An actual filing won't impact many people's decision to buy. And even if GM did go belly up entirely, it would take another 5 years at least...a length of time as long as your average new car warranty.

By wookie1 on 12/12/2008 11:32:54 AM , Rating: 5
"Only $800"? That's pretty big. That could mean more competitive features in the car to better compete with the imports (I guess I should say foreign brands since some are made in the US), or 2-3% more profits. It may not sound like much, but 2-3% just for some labor concessions is a pretty big deal.

By Chaser on 12/12/2008 1:44:00 PM , Rating: 5
The UAW pays people that do not work. Its called the gen pool. It consists of employees at plants that cut production schedules so they tell their employees not to come to work. It also includes plants that are shut down for re-tolling or shut down permanently, and employee related absences: medical issues, rehab, etc.

These employees get paid from the "gen pool". Some of them haven't gone to work in 2 years: The Ford plant in Atlanta for instance.

I have a friend that works the line at the F150 plant in Louisville who has has substance abuse issues. Between plant cuts, failed rehab attempts, he hasn't been to work in almost a year. But has been paid, consistently the entire time. He's always home.

The big three have thousands of unworking employees on the books being paid through the gen pool.

The unions ask, "what concessions are the other companies taking that received a bailout?"

Well Mr Gettelfinger most these companies didn't have anything even close to the lavish health care benefits and ridiculous pay abuses that your union has imposed upon the Detroit 3.

Let all three enter Chapter 11, be freed from these insane union contracts and emerge a leaner more efficient and competitive manufacturer than can compete globally.

By dragonbif on 12/12/2008 2:02:08 PM , Rating: 3
Unions are like the Mofia, they force people to bend to their will and greed. There is this guy I know who gets $22/hr and only has a High School diploma and 7 months of training. He drives a truck and is part of a union and so gets a lot of benefits. I am not saying driving a garbage truck is a pleasant job but this year they are going to raise the price for getting your garbage picked up by $8 per month. They are doing this because the union workers are getting 4.5% raise on top of their 3% per year and cost of living to keep them from going on strike. Hay at one time the Moafia had control over most of the industrial unions; they liked the dues people have to pay.
Anyway I can see 1 million people loosing their jobs from GM going under. Not just those that are part of GM but, suppliers, shipping (truck drivers), sales reps, and anyone else that has a contract with GM (such as cell phones).

By reader1 on 12/12/08, Rating: -1
By MPE on 12/12/2008 10:06:14 AM , Rating: 5
I don't think you fully understand how the derivatives speculation took down the market.

By theoflow on 12/12/2008 10:56:06 AM , Rating: 2

Greed is greed unless your smart as the devil.

By mmntech on 12/12/2008 10:33:20 AM , Rating: 4
Because the banks hold everybody's money from you right up to huge corporations. If they fail, there would be mass business bankruptcies of businesses since they'd loose all their cash assets. Deposit insurance I think only covers up to $100,000 tops and even small businesses will have more than that in the bank.

The auto industry has been an absolute mess for years too, and they've already received countless federal loans in both the US and Canada. They've been poorly managed since at least the mid-90s. It would be for the best in the long run if one was allowed to die to make an example to the others. Looks like it's going to be GM. Without a solid restructuring plan, which the automakers failed to provide, bailing them out is like bailing out the Titanic with a shot glass. Plus you have the unions on the other side refusing to temporarily reduce their exorbitant benefits until the industry stabilizes. That's irresponsible too. You can't blame the Senate for not wanting to bail them out when it likely will only be a bandaid at best. Failure of at least one of the Big Three is inevitable at this point.

By Spuke on 12/12/2008 11:55:59 AM , Rating: 2
Ford said earlier that they might have to file C11 if GM does. Chrysler will more than like file regardless. Prepare for a stock market free fall. I wouldn't be surprised if we hit the 5000 point range after all is said and done.

By rudolphna on 12/12/2008 12:48:21 PM , Rating: 2
unfortunately, as the article said, GM may not be eligible for chapter 11, meaning GM effectively disappears.

By Spuke on 12/12/2008 1:40:42 PM , Rating: 3
How would they not be eligible?

By rudolphna on 12/12/2008 5:29:05 PM , Rating: 2
I dont know, but according to GM themselves, the would be unable to file ch11, not to mention how many people will buy cars from a company in bankruptcy

By Gzus666 on 12/12/2008 5:30:57 PM , Rating: 2
If GM execs say it while asking for a handout with something clearly to gain by not going to Chapter 11, clearly they are telling the truth.

By Ringold on 12/12/2008 12:56:12 PM , Rating: 2
The market just turned positive, and is up 51. Either the market doesn't care, or it thinks the bailout is still coming. I don't know which it is myself.. maybe part of both, since even with a bailout tens of thousands of jobs and hundreds of suppliers in the supply chain of the industry will be shed.

By Spuke on 12/12/2008 1:43:36 PM , Rating: 2
I think it's still up because the President's people said they might give them some of the bank bailout money. Even though that was said, I expected a drop anyways. The fact that relatively nothing happened makes me wonder if the market is expecting their failure or it just might as low as it's going to get. The tech sector (NASDAQ) is doing ok. Might be enough to keep us up.

By Mojo the Monkey on 12/12/2008 10:48:23 AM , Rating: 5
Great, NPR just reported that the treasury might be playing ball with Detroit now instead of congress directly.

Just let them fail. I don't care about the repercussions. I think they are overstated, for starters, and it needs to happen. Just like the inflated home prices need to be brought back down (even more) by continued foreclosures. Quit whining, dim-witted purchasers. You treated your house like an investment instead of a place where you pay for what you think its worth to live there... and got exposed to the risk? Boo-hoo. If I see another crying family whining about the bank not helping them I'm going to vomit. Life happens. Go get an apartment.

By theoflow on 12/12/2008 10:59:52 AM , Rating: 1
2 things...

1. You have little compassion for people in distress.
2. Your opinions were heard by the Senate that it was struck down, and are being ignored by the executive branch. So stop whining, cause I think I'm going to vomit. Life happens

By Gzus666 on 12/12/08, Rating: 0
By bebesito21 on 12/12/2008 11:38:17 AM , Rating: 4
Do you somehow consider an ape of a person who puts a car together as valuable as a tech sector job?

dude you are an absolute jerk. every job, from the cashier at 7-11 to the president is important and necessary for all of us to have the best possible quality of life. i bet that ape of a person is smarter than you, you would probably be stumped staring at an engine wondering where the headlight fluid goes.

jobs will be lost and that is no laughing matter. however, this has been in the makings for quite some time. yes, i agree the car companies need to face the music, but don't belittle the losses that are going to happen to people who's lives will be affected. its not an easy position for anyone involved - well maybe its easy for the millionaires who screwed up in the first place, but they will never be held accountable anyways /rant

By Gzus666 on 12/12/2008 11:43:22 AM , Rating: 2
i bet that ape of a person is smarter than you, you would probably be stumped staring at an engine wondering where the headlight fluid goes.

Boy will your face be red when you learn that I was a mechanic and hold ASE Master certification. I have since moved on because of market shift years ago. But nice assumption my friend.

The average line worker is a knuckle dragger at best, even the worst of mechanic I ran into in my time (and trust me, they were bad) were more intelligent than your average auto assembly line worker.

Jobs disappear, get over it. Once again, they need to renegotiate or find a new job. I'm sure Toyota, Honda and others will be hiring when Detroit falters, time to do what is required to survive and get over it.

By Spuke on 12/12/2008 11:59:44 AM , Rating: 3
I'm sure Toyota, Honda and others will be hiring when Detroit falters, time to do what is required to survive and get over it.
No one will be hiring anyone anytime soon as they're all down significantly. It would be irresponsible for the other car makers to do so in this market. YOU need to face the reality that these jobs will be gone for a while and some of these people will never recover without a career change. Prepare to pony up for more unemployment benefits. Also, prepare for a couple of states to file BK's too.

By Gzus666 on 12/12/2008 12:01:44 PM , Rating: 2
Oh well? What magic do you propose they pull to fix this? Let it take it's course. If you try to control a free market, you only mess it up further. Sounds to me like they need to start farming again if they can't make it in the car business.

By Spuke on 12/12/2008 12:45:10 PM , Rating: 3
Just because disagree with you doesn't automatically mean I agree with someone else, it just means I disagree with YOU. I really feel for those that will lose their jobs. It's horrible to go through. I've been there but I was lucky that the market was MUCH better than it is now and I found another job in the same field somewhere else. Well, after a year of being out of a job and having to go to school to be more competitive with others and racking up a ton of debts that took me a few years to pay off but other than that, I was lucky.

I don't wish the loss of a job and the uncertainty that comes with it on anyone's family. You don't seem to care much about these people from your words. And I'm not proposing that we bail out the automakers because I say this. Maybe have a little compassion for your fellow man?

By Gzus666 on 12/12/2008 2:20:07 PM , Rating: 2
You didn't disagree with me, you just decided I'm somehow for people losing their jobs. I'm for people getting over it, as complaining about something never fixes it, doing something does. That is life, people lose their jobs and no amount of compassion changes that.

You are correct though, I honestly could care less about other people, does that mean I want them to lose their job? No, it just means I really don't care either way.

By Spuke on 12/12/2008 3:23:36 PM , Rating: 2
I honestly could care less about other people
I just wasted my time then. Thanks.

By Gzus666 on 12/12/2008 3:30:33 PM , Rating: 2
I just wasted my time then.

And mine as well, but it was fun.

By The0ne on 12/12/2008 4:20:21 PM , Rating: 2
Gzus666, if you "honestly" don't care about the people please don't ever respond. There's no point for you, no point for Spuke, no point for anyone reading the two of you going at it all the while you "honestly" don't care about anything.

Do us a favor and only respond if you have a point to make or a side to argue for/against. Otherwise, it's pointless chit-chatter with you. Obviously there are plenty of people who do care one way, second way or another way about the situation.

By Gzus666 on 12/12/2008 4:29:02 PM , Rating: 2
Gzus666, if you "honestly" don't care about the people please don't ever respond.

No? Why would I suddenly give a damn about what you say and just never respond again? I don't care about other people, I care about my tax money going to union fat cats, brain dead CEOs and knuckle dragging plant worker's pensions. If it affects me I'm in, if it is someone else only, don't really care.

If you didn't derive an argument from what I said, I have a feeling you glanced at one post and made an emotion based post cause you're feelings got all hurt. You do not matter to me, your emotions don't matter to me, I matter to me.

By InsaneGain on 12/12/2008 6:38:27 PM , Rating: 2
I bet you have a lot of good close friends that care about your well being.
Yeah that was sarcasm.

By Gzus666 on 12/12/2008 8:11:30 PM , Rating: 2
I bet you have a lot of good close friends that care about your well being. Yeah that was sarcasm.

Unlike you and others like you, I don't need constant reassurance someone cares about my well being. I worry about myself, no need for others to do it for me.

But I'm sure you got some self indulgent satisfaction from hoping that I am somehow not common. We all are like this, I'm one of the few that tells the truth about it. When it all comes down to it, you will look out for #1 every time.

By InsaneGain on 12/13/2008 3:54:37 PM , Rating: 2
Actually a recent study by the New York State Psychiatric Institute concluded that up to 1 in 5 Americans adults have a personality disorder. I am well aware that there are many people out there with anti-social personality disorder. So no, you are not alone in being concerned only about your own self interest. You are mistaken though in thinking everyone is like this, and that is actually a very common misconception among people with this disorder. They just can't comprehend altruism, and think they are perfectly normal.

By bebesito21 on 12/12/2008 12:00:52 PM , Rating: 1
i didnt disagree that it was necessary at all. i am a big proponent of allowing companies to fail so the strongest may survive. but my face isnt red at all....point is you are still a jerk for calling people apes and knuckle draggers - that was unnecessary. nevermind the fact that i get a 10 year warranty from the ape's work....good luck finding a mechanic who's work is good enough to get you home, forget 10 years. when you lose your job, hope someone tells you to get over it. maybe your ase certification can get you a job at mcdonalds

By Gzus666 on 12/12/2008 12:08:49 PM , Rating: 4
I find it hilarious that you tell me I'm a jerk for insulting auto assemblers, but in the same statement you call mechanics terrible. Not that I care, I haven't worked on cars professionally for over 3 years and never plan to do so again, but it is funny none the less.

If I lose my job, I will do something else. That is the circle my friend. I have welding, machining and heavy mechanical experience obviously. I also hold A+, Net+ and CCNA IT certs and will be working on my CCNP. I have worked clerical jobs and could easily roll with the punches to do something even less related to my experience if needed to survive.

The gist of this is, I adapt, these knuckle dragging idiots do not. If I had to start farming tomorrow, I will farm tomorrow, I will not sit and blame other people for my "peril". I have worked for a living and used my brain for a living, I am not worried. Can you say the same?

By bebesito21 on 12/12/2008 12:28:40 PM , Rating: 2
i feel like we both have the same basic understanding of the situation but are arguing the wrong point. let me explain what i mean. should the auto companies face their fate? yes. can you use a blanket statment demeaning auto workers? no. im sure there are very bright assembly line workers just as there are bright mechanincs. the same can be said for the opposite spectrum. although in my experience, a good mechanic is hard to find - in yours a smart assembly worker is hard to find. these workers have to share some of the responsibility in whats happening as they are part of the unions which are causing many of the problems. and while i applaud your determination and self confidence ( i feel the same way about myself), you are underestimating how hard it is to find a new job, especially in this current economic enviroment. nevermind that your and my taxes will go to these worker's unemployment checks. you also forget that there are at least hundreds of thousands of people who share your same perspective and who would be competing for the very same farmland you plan to work off - or clerical job, or welding job etc, should they also lose their jobs. my point in all this is that while their fate is their own, it is not an easy situation to face and should not be brushed off as "ah well, deal with it" its easy to banter on the internet about how you would be ok, but when you find yourself in those shoes, you may feel differently.

By Gzus666 on 12/12/2008 2:15:08 PM , Rating: 2
That is survival, always a fight. The weak die, the strong survive. If I am the weak one, so be it, but I will do my best to not be. Enjoy your idealist playground, I will live in the real world, harsh as it may be.

By The0ne on 12/12/2008 4:25:37 PM , Rating: 2
You're not going to win discussing this with Guzz apparently. He's using the same arguments over and over. He doesn't care and yet he's here voicing his view. He doesn't care if he gets screwed by the company or the boss. He's a cool guy you know. What does it matter if the CEO or top management screws you and all the rest of the employees over. I have to say that's a pretty good outlook on life as it would exclude the person from ever having to deal with anyone or anything :) Ain't that a nice argument? O.o

Here's a really disturbing thought, maybe someone should stab him right now and see if he really can just move on with life; because really that's just someone else screwing you over and you're able to get over it :)

By Gzus666 on 12/12/2008 4:36:59 PM , Rating: 2
Someone is fueled with emotion aren't we? You make brash, bold statements without really understanding what I'm saying. Your arguments are clearly fueled with your emotional response, not or logical response. I care about me, sure, I just don't care about other people's problems.

If it affects me, I will do what I have the ability to do to fix it. If it doesn't affect me, oh well.

I find it hilarious you are trying to say that the union workers have been screwed, even though they make more money than most skilled and high technology and education jobs. Unskilled labor is not a high paying field most of the time for a reason, cause it is unskilled.

But stand up for your monkey brethren, as I'm sure it makes you feel better to beat your chest and think you are somehow entitled to the world for putting some over sized Legos together.

By rudolphna on 12/12/2008 12:53:00 PM , Rating: 2
You are an asshole, I was in a perfectly good mood till I read your post you jacka$$. I have family members that work for ford, they arent "stupid, lazy apes". I want to see your certification! I want to know how you think honda and toyota will be hiring when THEY are posting 30-40% sales losses as well! They are cutting BACK on production! I want you to lose your job, and then not be able to get another one because the market is so bad. You will lose your house, your car, everything you have, forcing you to live in a poor persons home, because pri**s like you are too snobbish to buy a perfectly good car, like a ford. So take your snob attitude, and shove it up your behind!

By masher2 on 12/12/2008 1:55:29 PM , Rating: 2
> "I want to know how you think honda and toyota will be hiring when THEY are posting 30-40% sales losses as well!"

Easy one. If one assumes the (incredibly unlikely) scenario of the Big 3 shutting down operations, then Honda and Toyota will instantly go from a 30-40% decline to a 30-40% sales *increase*.

GM alone is still selling a couple hundred thousand cars a month. If they don't sell those vehicles, someone else will.

By Spuke on 12/12/2008 3:32:18 PM , Rating: 2
GM alone is still selling a couple hundred thousand cars a month. If they don't sell those vehicles, someone else will.
It's actually around 155k units but it's still more than anyone else (Toyota - 130,307). They had a bump in trucks sales (still in the negative compared to last year) in the last two months or so too.

By Gzus666 on 12/12/2008 2:43:21 PM , Rating: 2
I find it funny that you somehow think because you happen to be related to these monkeys, I would somehow care more. I have an uncle that is a jailbird, does that suddenly mean I should stand up for all jailbirds? I, unlike you, realize that just cause someone happens to be related to me, doesn't mean they are perfect or even smart.

I'd be happy to show you my certification, hell, for a fee, I will fix your crappy Ford or GM that I'm sure you own cause you blindly follow a company that will openly screw it's customers just to have the vehicle from the manufacturer your family member happens to work for.

I've owned GM products my entire life up until my most recent purchase. Do you want to guess why I chose to buy a Toyota? Maybe because every GM vehicle I have owned, every GM, Chrysler and Ford vehicle my parents have owned as well have been steadily breaking.

My years as a Toyota and Lexus tech, I drove GM vehicles yet realized the quality of Toyota. I really started to realize it when I was going broke cause there was no work and mechanics get paid on flat rate commission. Do you want to know some of the highest paid mechanics? GM and Ford. Do you want to know why? Cause their cars break constantly. A Ford front end guy can easily clear 80-100k a year.

When a major industry leader falls, do you think the demand for cars is suddenly going to disappear? All the people who bought Ford or GM vehicles will now be buying Toyotas and Hondas and will be happier for it, I promise. This will spike their sales and they will need more employees to meet this demand.

You seem to confuse being snobbish with being confident and realistic.

Also, I see why you are the family member to one of the apes and why you are so angry. I would recommend you tell your apish kin to look into furthering their learning to make sure when they go under, they can find a new job (you might want to look into it yourself with your atrocious post, just lazy). Of course it won't be as cushy as getting paid too much for doing something anyone can do, but I promise it is much more rewarding to actually work for what you get.

By rudolphna on 12/12/2008 3:49:36 PM , Rating: 2
well you know what, you can take your toyota, and go drive in a ditch. I have never had any problems with my fords, and neither has my family, who have pretty much owned fords and GMs for many years. I know just as many people who have their japan/toyta break down, as I do people that have fords break down, amybe more. And by the way, I am perfectly capable of fixing my own car, thank you very much.