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General Motors Chief Executive Officer Richard Wagoner; Chrysler Chief Executive Officer Robert Nardelli; Ford Chief Executive Officer Alan Mulally (pictured right to left), have all agreed to work for only $1 per year, to try to get a bailout. GM and Ford also announced plans to sell their private jets.   (Source: AP)
Opponents to bailout lost a major point of criticism based on Big Three's big new plan

When Ford, GM, and Chrysler, almost out of cash, flew their CEOs to Washington to beg lawmakers for financial aid, they made a major miscalculation.  They flew in private jets, leading to Senators mocking their requests, likening them to a beggar in a tuxedo. 

Now critics in the House of Representatives and the Senate have lost one of their sharpest arguments against the bailout of America's automakers.  A GM spokesman and a Ford spokesman have announced that GM's CEO Rick Wagoner and Ford's CEO Alan Mulally would accept a pay cut to a salary of $1/a year in order to try to convince Congress to adopt a bailout.  Chrysler LLC CEO Robert Nardelli already pledged to take such a pay cut in his testimony before Congress.

Last year Mr. Wagoner received a base salary of $1.6M USD and a total compensation of $14.4M USD, while Mr. Mulally received $2M USD and total compensation of $21.7M USD.  Chrysler did not reveal its pay for Nardelli.

GM and Ford aren't stopping there.  In remedying the most stinging point of criticism they received, Ford will sell all five of its private jets and switch over to commercial flights for its executives.  GM will likewise sell 4 of its fleet of 7 jets, and look into plans to lease its remaining three to an airline or another company.

Chrysler has not announced any similar initiative.

Mr. Wagoner and Mr. Mulaly hope to make a statement by driving to Washington in their company's respective hybrid vehicles.  Rumor has it that Mr. Wagoner will make part of the trip in an hybrid Chevy Malibu and switch cars midway and arrive in a production Chevy Volt.  They will arrive later this week and unveil their joint plans to cut costs in hopes of winning a bailout.  The companies hope for $25B USD in government support, a mere 3.3 percent of the total $700B USD bailout package Congress approved for the mismanaged banking and finance industry.

Ford became the first U.S. automaker to reveal its full recovery plan.  If Ford's plan is any indication of Chrysler and GM's the companies could still meet with stiff resistance in Congress.  Aside from the executive pay cuts and eliminating the private jets, Ford has announced few changes, aside from its already announced brand-slashing and share-selling initiatives and layoffs.

It is banking that its investment in hybrid vehicles will pay off.  Ford believes that fueled by these green cars, it will see sales of 12.5 million vehicles in 2009, 14.5 million vehicles in 2010 and 15.5 million vehicles in 2011, allowing it to return to profitability by 2011.  The company made a commitment to produce more small cars, as it already has indicated it would.

While Ford already sold the Jaguar, Aston-Martin and Land Rover brands and sold a controlling interest in Mazda last month, it is declining to take part in more brand slashing.  This means Ford will not sell Volvo as some have speculated.  It will also not close any more plants in addition to the 14 that are already closing.

DailyTech will continue to follow this developing story as GM and Chrysler announce their plans and the U.S. automakers plead their case before Congress.

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Still begging . . .
By Bateluer on 12/3/2008 8:13:07 AM , Rating: 3
It still does not change the fact that they should not get a tax payer bail out. The American automotive industry was run incompetently and it needs to be allowed to fail, going through Chapter 11 bankruptcy to restructure, so that competent executives can take over.

People must be allowed to fail, businesses must be allowed to fail. This is a crucial part of a free market economy. Americans will still want cars, that fact will not change. Honda, Toyota, Nissan, and others all have factories in the US, building vehicles using American labor.




RE: Still begging . . .
By JasonMick (blog) on 12/3/2008 8:27:11 AM , Rating: 5
The same could be said about many investment firms and banks that the government is bailing out. The whole "but people invested lots of money in them or have home mortgages with them" argument is weak. People invested lots of money in GM, Ford, and Chrysler, and many people depend on them for their monthly mortgage payments as well.

I might add that the Japanese government is considering bailing out or otherwise helping Honda, Toyota -- their sales are down more than Ford and almost as much as GM and Chrysler for the year. Europe is also considering measures to bail out its automakers. Where does that leave our auto makers, if we choose not to?

It'd be a shame to see the U.S. government throw money at corrupt and mismanaged financial institutions with little accountability, while letting U.S. automakers fail when they're asking for a mere 3 percent of the total bailout. This situation would be even more despicable considering that foreign competitors are being bailed out by their own countries. Especially when Ford, GM, Chrysler, and UAW are doing everything they can to survive. I guess it boils down to a choice of whether you want to support U.S. products, or see them overrun by competitors from countries willing to look out for their own.


RE: Still begging . . .
By Bateluer on 12/3/2008 8:32:00 AM , Rating: 5
The US has bailed out corporations before, and none of those companies has returned to profitability. They've all been leeches on the tax payer. Amtrak, for example, hasn't turned a profit since the rail companies were bailed out and merged by the government. In contrast, K-Mart filed for Chapter 11, restructured, and today is a profitable company again.

I haven't heard or read anything about European or Japanese automakers getting bail outs, but I know Japan has bailed out corporations before and they became zombie businesses that never regained profitability either. They just continue to exist, making widgets that nobody bought, leeching from the taxpayer wallet.


RE: Still begging . . .
By tehbiz on 12/3/2008 9:05:08 AM , Rating: 2
because 3rd party retail and the automotive industry are directly comparable?

remind me how much kmart has to spend in research and development in order to stay competitive with sears ect.


RE: Still begging . . .
By ebakke on 12/3/2008 11:52:28 AM , Rating: 3
Don't be so naive to think that competition among retailers is any less than that among auto manufacturers. Every company has competition, and areas where they must invest. These differ between industries, but they're always there.

Furthermore, Sears and Kmart are owned by the same company.


RE: Still begging . . .
By Nik00117 on 12/3/2008 3:39:42 PM , Rating: 3
I'll give you an example of where Chrysler came out on top.

In the 80s they got bailed out. They then came out with the Grand Caravan and paid off a 5 year loan WITH interset back to the governmnent in 9 months.

if the gov doesn't blame out Chrysler I go out of business and now am unemployeed. In my company alone there is 500 poeple who would be gone, there are also several branch of businesses which relay heavily on us such as the body works shop down the street from us makes 60% of their business from us, the restuartants surronding us make a large majoirty of their business as well. We rent out several different locations as well. Not only that we have a banka cross from our location which recieves about 40% of their business is our car sales.

We are just one location and one company directly 500 poeple woud be jobless who knows how many indirectly.


RE: Still begging . . .
By ebakke on 12/3/08, Rating: 0
RE: Still begging . . .
By TomZ on 12/3/2008 4:02:08 PM , Rating: 2
That's naive - you are assuming that the Big Three are in trouble because of their own choices, their own execution in a free and open market. Nothing could be further from the truth.

Please look at a few of my other posts, especially to the CNN article that will give you at least part of the background so that you can make a semi-informed decision.

Alternatively, you could consider running for Congress.


RE: Still begging . . .
By ebakke on 12/3/08, Rating: 0
RE: Still begging . . .
By Dwayno on 12/3/2008 5:40:13 PM , Rating: 3
quote:
They are in trouble because of their own choices (and the choices of the UAW), and their execution. I agree that the government has intervened where it shouldn't have, but it is still a free and open market at the core. Don't think for a minute that Detroit doesn't have enough lobbying power in DC to implement changes to benefit them. If they truly thought the government was intervening to their dismay, they would've done something about it.

The projected car market this year is 8-12M units (down from 14-17M units). How is that their fault? If it is, then why are the companies that are "selling" also experiencing a downturn in their markets as well (and they ARE making the cars that people want!). The Big 3 are selling cars, but in a recessive market were loans are hard to come by or people are worried about their jobs, no one buys big ticket items (witness homes, boats, and RVs).

Detroit does NOT have the lobbying power that you think they have...if they did, we would still be driving the cars of the early 70s. The safety, fuel economy, and low emissions that you enjoy in any car is all because of government regulations. These were not easy or inexpensive tasks...the reality is that it takes hundreds of million of dollars to enact some of the government mandated changes. And some of those regulations had to be meet before the technology was invented. I know...I worked 34 years in R&D.
quote:
They failed to fight the unions that demanded every last penny from the company and that failed to accept changing/improving technologies. They failed to produce products that consumers want to buy. For many years they failed to produce products with high quality/reliability. They failed to employ upper managers who could address these problems. And they failed to have a backup plan when the SUV/truck sales declined. They failed on many fronts, and floating them a loan won't fix their underlying problems.

I don't work or have ever belonged to a union, nor do I have any love for them. That being said, if you are paid for overtime, paid vacation, paid for any holiday besides Xmas, or are paid more than minimum wages, then thank someone from the union. The government only came up with any of these laws AFTER the unions had negotiated them and then got the government to back them.

People that need trucks or big SUVs are STILL buying them. The problem was the people who didn't. So the car companies were building the vehicles people were demanding. Don't forget, if this market didn't exist, then why did Toyota, Honda, and Nissan go into that market in a VERY big way?


RE: Still begging . . .
By ebakke on 12/3/2008 10:53:19 PM , Rating: 2
quote:
The projected car market this year is 8-12M units (down from 14-17M units). How is that their fault?
It isn't.
quote:
If it is, then why are the companies that are "selling" also experiencing a downturn in their markets as well (and they ARE making the cars that people want!).
The other companies are noticing lower sales, but they're running to Congress screaming "Without your help, we will cease to exist!"
quote:
The Big 3 are selling cars, but in a recessive market were (sic) loans are hard to come by or people are worried about their jobs, no one buys big ticket items (witness homes, boats, and RVs).
Again, down markets mean lower sales numbers. That makes sense. What doesn't make sense is a company losing over $2B per month. GM has been losing money (albeit, not at this rate) for YEARS. Their problems span beyond the current recession. On average, they spend ~$2400 more per car than Toyota or Honda. That translates to real dollars for consumers.
quote:
Detroit does NOT have the lobbying power that you think they have...if they did, we would still be driving the cars of the early 70s. The safety, fuel economy, and low emissions that you enjoy in any car is all because of government regulations. These were not easy or inexpensive tasks...the reality is that it takes hundreds of million of dollars to enact some of the government mandated changes.
And if you think the enacted regulations are anywhere near what their proponents were seeking, you're living in fantasy land. The auto industry (and every other large organization) has a huge lobbying force. And it has done an excellent job fighting for them.
quote:
That being said, if you are paid for overtime, paid vacation, paid for any holiday besides Xmas, or are paid more than minimum wages, then thank someone from the union. The government only came up with any of these laws AFTER the unions had negotiated them and then got the government to back them.
Agreed. Completely. Unions were incredibly useful at a point in time. However, their time has passed in the US. At this point, there are several other means for which an employee can write wrongs committed by an employer. Today people join the union because they don't want to get screwed by "the man", only to give their union dues to a different "man" who again, makes way more than they do, and makes his success on their backs. In my opinion, if someone told these people that they're not stupid, they're not incompetent, and they actually can negotiate compensation for themselves the world would be better off. But to add to my point that the UAW is not needed, there was a recent news article stating non-unionized Toyota (might have been Honda) employees were making as much, or more, as their UAW counterparts when salary, benefits, and bonuses were all tallied.


RE: Still begging . . .
By ebakke on 12/3/2008 10:54:05 PM , Rating: 2
*The other companies are noticing lower sales, but they're not running to Congress screaming "Without your help, we will cease to exist!"

BAH! No edit feature.


RE: Still begging . . .
By Dwayno on 12/3/2008 4:11:05 PM , Rating: 5
quote:
And now they're in front of Congress, begging for money so they don't go under again! Chrysler wasn't saved in the 80's; their demise was just prolonged for another 20 years. The exact same thing will happen again if we continue down this annoyingly irresponsible path.

Let's see. Someone got a loan and paid it off in less time than required, with interest. Twenty five years later, they are back asking for another loan. In the real world, that is called a good return on investment! Were you denied a 2nd loan because you paid the 1st back too quickly?


RE: Still begging . . .
By ebakke on 12/3/08, Rating: 0
RE: Still begging . . .
By Dwayno on 12/3/2008 6:09:30 PM , Rating: 2
Gee...so you never have received a 2nd loan (after all, you are a gambling addict)?

To use your analogy, if the gambling addict kicks the habit because you gave him the money to help in his rehab, was that a bad investment? You are equating past performance with the sweeping changes that are happening in the global market. The Big 3 are addressing those changes...they are just asking for the time and money to do so. I worked for 34 years in R&D...my small group was responsible for millions of dollars in test equipment. Our computer center to save us money in development cost, cost use more than $100M. This is NOT inefficient use of money...this is what it cost to stay competitive in a global market.

You must understand the size and scale of the Big 3. Ford alone has seen gross income figure as high as $180B...GM has to be far greater. What do you think they paid to the government during those years? A $34B LOAN to keep these businesses going is a cheap investment indeed (even for 5 years)!


RE: Still begging . . .
By ebakke on 12/3/2008 10:35:32 PM , Rating: 1
I guess this is where we'll just have to disagree. I absolutely have no faith whatsoever, that Chrysler or GM will use this money for any significant change. They will use it to limp along for another 6 months, and come back saying "we need more time!" Which, of course, equates to "we need more money!"

I think Ford's been a bit more proactive than the other two, but it's also said that it can survive longer than the others, and likely survive without any help if the markets turn around.


RE: Still begging . . .
By akdbs3710 on 12/4/2008 11:57:15 PM , Rating: 2
Sooo... we should NOT bail out, i.e. give loans to, companies anymore? I'm not sure how much you know about business, but there are a lot of companies out there that borrow money to make it through the slow times.

Here we are in a recession, where most business sectors are struggling, hard-working people are losing jobs to layoffs nationwide, our financial markets are reeling because investors need a psychiatrist, our housing market is crashing because owners need a psychiatrist, and you propose that we kill an industry that, if shut down over the next few months, would crush our economy (up to 2.5 million additional skilled workers without jobs), and have an incredibly negative domino effect in every other aspect of our society. Because you don't want to give them a loan.

People need to think things through once in a while before spouting off such destructive rhetoric.


RE: Still begging . . .
By bmheiar on 12/3/2008 9:09:36 AM , Rating: 3
K-Mart merged with Sears. My mom works for Sears, has for 17 years now. Every since the merger, she has noticed the decline of Sears and the quality of products that Sears sells. Since she is now selling more K-Mart branded products (Lands End & etc.) than Sears original products. K-Mart maybe profitable now, but at the cost of Sears, Sears employees, and Sears original product lines.


RE: Still begging . . .
By SteelyKen on 12/3/2008 8:40:59 PM , Rating: 2
Land's End is not a Kmart brand. They are a mail-order direct company (similar to Eddie Bauer and J.Crew) which struck a marketing deal with Sears before the Kmart merger.


RE: Still begging . . .
By omnicronx on 12/3/2008 10:16:18 AM , Rating: 3
quote:
but I know Japan has bailed out corporations before and they became zombie businesses that never regained profitability either.
Can you name a few? Because I can't..

Japan waited 7 years after their economic bubble burst in the early 90's to intervene, and it cost the tax payers far more money than if the government had just bit the bullet years before hand. Its funny you mention Japan because their crash was very similar to ours (pretty much the same financial crisis), they waited too long for a bailout that had to happen anyways and the public ended up paying for it.

While I do agree these companies need to restructure, restructuring alone is not going to save them, and if the government waits too long, they will risk far more of tax payer money than the feeble 25 billion they are asking for now.


RE: Still begging . . .
By TSS on 12/3/2008 4:10:07 PM , Rating: 2
their not asking for 25B, their asking for 34B. but congress did ask them for a worst case scenario this time around.

what should be mentioned in the article is the auto sales report released yesterday. the october auto sales where (adjusted annually) 10.8 million cars a year. in november they have fallen to 10.2 million per year. and all 3 company's expect to return to profit with atuo sales more then 5 million then they are now, in 2-3 years from now. cutting back down in size also costs money, and the cuts that they invision might not be enough.

i do agree on 1 thing: 25 or 34 billion is feeble. check this out:

http://money.cnn.com/2008/11/26/news/economy/where...

Obama plans to spend too. amidst this nobody wonders who will pay for all this, even economists are saying that "inflation and debt are secondairy concirns to this crisis".

it'll be the primairy concirn once this is over and it might turn out to be a much bigger one then this has already been. not to mention this crisis is slated to end around the time baby boomer retirement will be at it's highest.

i say give them the 34B. it might give a few more family's a few more good days before the coming storm. if this crash is so much like the japanese's, then america too will know a lost decade. no bailout will change that.


RE: Still begging . . .
By RoberTx on 12/4/2008 5:58:31 PM , Rating: 2
Your link goes to CNN. They have no credibility. I would be willing to bet the reporter never talked to anyone but the other reporter who wasn't doing anything either.


RE: Still begging . . .
By RoberTx on 12/4/2008 5:54:22 PM , Rating: 2
Harley-Davidson and Chrysler... both were bailed out, both returned to profitability. In Harley's case they went on to become the worlds premier supplier of over-priced, over-weight, under-powered fashion icons for wealthy and/or desperate exhibitionist. Chrysler gave us huge Ram pick-ups and cars made of tin foil.


RE: Still begging . . .
By Masospaghetti on 12/5/2008 10:16:20 AM , Rating: 2
Who is going to buy a car from a company in Ch 11? Would you? It's a little different buying a tube of toothpaste from a bankrupt retailer as opposed to buying a car, which you have to depend on the automaker for many years to come for parts and service.

The Japanese automakers don't get "bailouts", but they are getting financial assistance from the Japanese government in the form of R&D (Toyota's Prius development was funded entirely by the Japanese government, according to Jim Press) and market protection (they can sell vehicles here, but American companies cannot sell vehicles in the Japanese market).


RE: Still begging . . .
By carl0ski on 12/5/2008 10:42:38 PM , Rating: 2
quote:
they can sell vehicles here, but American companies cannot sell vehicles in the Japanese market).


That is purely the fault of the US car maker. Their products do not meet the very strict Saftey, environmental and economy regulations enforced by Japanese governments.
As a result the products they produce are only suitable to the US market, this market has sharply fallen and because the product they produce is unacceptable internationally cannot rely on international sales to bolster the fall in domestic sales.

US makers have been building a ridiculously large array of vehicles and brands to meet legal requirements in different countries.

US obviously has far less strict Emissions and fuel economy requirements than most countries.
US car makers arrogantly built cars to US minimum standards, but these can not be sold in countries with more strict standards. including Japan

The solution build another product or brand to flog into these other markets. Mazda purchase by Ford!

Toyota is lucky in that its home market has some of the most strict government environmental requirements around. So builds cars suitable to Japan and flogs the near identical product world wide.

Yaris, Prius, Corolla come to mind and are nearly identical world wide.

If these 3 had the sense to pick a lowest denominator for economy, safety and environmental guidelines
They would have chosen a nation with more strict requirements than US and
produced a vehicle that met these requirements (far exceeding US requirements) flogged this brand/product to as many countries as possible including USA then they wouldnt be in this mess.

This is all the fault of the big 3 and they must pay for it on their own.


RE: Still begging . . .
By Proteusza on 12/3/2008 8:38:33 AM , Rating: 3
True, true, they need bailing out and are worth bailing out.

But I hope you appreciate the irony in the fact that, although most Americans on this site are anti market regulation and interference, and anti Socialism (eg free healthcare), most of you seem to support intervening in a competitive industry to give a bail out to these companies. If this was a guy who lost the use of his arms and wanted the government to provide medical care so that he would work again, most of you would tell him to stick it.


RE: Still begging . . .
By tastyratz on 12/3/2008 8:59:33 AM , Rating: 5
Honda and Toyota are doing less business now because of a global economic crisis. They are not in need of bailing out, they just need to do what every other business has to do right now - restructure and resize. They are not going bankrupt, just selling less cars (while still significantly outpacing the competition)
That's like saying a millionaire needs to go on welfare because they make 100k less than they used to.

As far as American automakers - they have had 2 whopping key issues.

1. The auto they produced. For about 10 years they said around and got cocky. They didn't push hard enough to make a quality car, an innovative car, or an attractive car. They just made a cheap car - and reliability was the butt of all automotive jokes.

2. The unions. Right now the UAW contracts with American automakers are what their biggest cost is. Did you know that with benefits UAW members average $70 an hour in cost? That's almost DOUBLE Toyota.

Now with point 1. They have really stepped up in recent years and I commend them for that. I personally have a bias to Japanese brands but can respect the American car much more now than I used to. They are actually getting to be fairly level with the competition. The stigma associated with their cars 10 years ago is still burning in consumers minds, but its finally starting to fade a little. I congratulate them on a job well done there.

on my 2nd point. This is probably the biggest problem they have, and it will result in the ultimate downfall of their companies. I don't think they have a way around it, and I think while the mortgage and financial industry can take the money to pick up the pieces... any bailout money to American car companies will do nothing but buy them a little more time.

Now - that $70 is not a direct cost per active employee, this includes retired ones. HOWEVER - as long as the retired employee continues to pay their union fee's the UAW will renegotiate their retirement. All of those retired employees with a pension continue to get more and more retirement benefits at every contract... it's OUTRAGEOUS! They have a very long standing relationship and a very large number of retired employee's so that's the majority of their fat.

They wont be shaking the uaw anytime soon, so sayonara big 3.


RE: Still begging . . .
By Bateluer on 12/3/2008 9:40:27 AM , Rating: 1
Well said, though with some grammatical errors.

Nobody ever said Chapter 11 was an easy process or a painless process. Its not supposed to be easy, but it is supposed to protect a company's profitable assets and employees from total liquidation. Chapter 11 is the right decision and the right thing to do in this situation.


RE: Still begging . . .
By TomZ on 12/3/2008 9:47:40 AM , Rating: 3
Chapter 11 for an automotive is corporate suicide. They lack to the on-hand cash to continue operations during such a reorganization, and consumers will flock to other brands, fearing their warranties might be worthless.

I also think that such a move would also force a large number of Tier 1 and Tier 2 suppliers also into Chapter 11.

The only ones to benefit from Chapter 11 of one or more of the Big Three would be Toyota, Honda, etc.


RE: Still begging . . .
By Bateluer on 12/3/2008 10:22:53 AM , Rating: 1
I respectfully disagree. No respectable economist supports a bail out of the auto industry because it does nothing to solve the under lying problem<s>, that people aren't buying GM/Ford/Chrysler vehicles. The only individuals who back the bail out are politicians from states the Big Three have factories in, such as Michigan, and the corporations themselves. Its free money for them. Their original 'bid' presented to Congress essentially asked for 25 billion without providing any plan on how the money would be used. As it turned out, nothing but supporting the status quo and bleeding out in UAW contracts.

Chapter 11 would mean the death of GM or Ford. Would the size and scope of their enterprise decrease? Definitely, but it would foster increased competition between GM, Ford, Chrysler, Honda, Toyota, VW, etc.

To quote an article from RealClearPolitics.com on bail outs,

Jim Rogers, the successful investor and author, puts it well: "Why are we bailing out Citibank? Why are 300 million Americans having to pay for Citibank's mistakes? The way the system is supposed to work [is this]: People fail. And then the competent people take over the assets from the failed people, and then you start again with a new stronger base. What we're doing this time is ... taking the assets from the competent people, giving them to the incompetent people, and saying, "OK, now you can compete with the competent people." So everybody's weakened: The whole nation is weakened, the whole economy is weakened. That's not the way it's supposed to work".


RE: Still begging . . .
By TomZ on 12/3/2008 10:36:49 AM , Rating: 2
I agree with you that bailouts are not a great option. I wasn't arguing in favor of bailouts - I'm just pointing out that Chapter 11 is not a reasonable alternative either. Evidence of this is the fact that none of the companies have chosen Chapter 11 to date.


RE: Still begging . . .
By 1078feba on 12/3/2008 1:26:58 PM , Rating: 2
Ridiculous.

Of course it's reasonable. The problem is that it's reasonable and scary as hell...but that doesn't mean it's not the right thing to do.


RE: Still begging . . .
By dever on 12/3/2008 2:46:50 PM , Rating: 2
It IS scary as hell.

My dad is retired from GM. I love my parents dearly and they benefit greatly from their GM retirement. That means I personally benefit from it as well.

That being said, I do NOT favor a bailout of the automakers. I want my children to live in a country that is not burdened by these impulsive, foolish mistakes.

How can anyone morally justify taking money from everyone and giving it to a few failing companies? The right and moral thing to do is let companies rise and fall by their merits.

It's sickening to think that companies can squirm their way out of years and years of bad decisions by pulling a few publicity pranks to woo a handful of politicians who determine the financial burden of us and our children for decades to come.


RE: Still begging . . .
By TomZ on 12/3/2008 3:09:12 PM , Rating: 2
Well, the government had a large role in causing the current situation, so I think it would be inappropriate for it to not help out when the industry needs a hand.

This guy summarizes the situation well: http://www.cnn.com/2008/POLITICS/12/02/nerad.auto/...


RE: Still begging . . .
By dever on 12/4/2008 1:40:48 PM , Rating: 2
"Helping" in this case would serve merely to post-pone the inevitable. Bailouts to not "help" the industry as a whole, it mere make additional inequality.

I agree that government had a large hand in causing this, so the logical move would be to remove government's interference. This "solution" only increased government's role and thus makes the problem worse.

To help, government could deregulate the industry and stop giving mandated assistance and enforcement to monopoly unions.


RE: Still begging . . .
By clovell on 12/3/2008 3:10:28 PM , Rating: 3
Easy. The people's intervention in the free-market via government helped put these companies here. Everybody caused the mess, everybody cleans it up.

Fair? No. Far-fetched? Not so much.


RE: Still begging . . .
By Dwayno on 12/3/2008 3:04:56 PM , Rating: 2
When you got your loan for your car or your mortgage for your home, was it called a loan or a "bail-out". The distinction is real simple. When you give monies and not expect a repayment, it's a bail-out. When you give monies and it is repaid, WITH interest, it's called a loan. Only when the loan is not repaid does the name change...as termed by the banking industries, its called "Bad Debt".

Also, when was the last time a bank TOLD you that they will loan you money only under the condition that you sell all of your "luxury" items?!


RE: Still begging . . .
By carl0ski on 12/5/2008 10:49:33 PM , Rating: 2
also a loan for a home is planned in advance, and if not achieved does not mean you go bankrupt.

I can't think of a housing occupant/renter example of a bailout?
A man looking for a home has a steady income but not bond for a rental property.
He can get a bailout for a bond or become homeless and lose his job and potentially broke?
Even then he would not need to file for bankruptcy.

These big 3 must be incompetent for things to come this far.


RE: Still begging . . .
By Dwayno on 12/3/2008 3:42:57 PM , Rating: 2
quote:
No respectable economist supports a bail out of the auto industry because it does nothing to solve the under lying problem<s>, that people aren't buying GM/Ford/Chrysler vehicles.

It's a LOAN! People ARE buying GM/Ford/Chrysler vehicles (they still control ~25-30% of the market), just not as much as they use to. The problem is that the current vehicle sales market has shrunk from a projected 14-17M vehicles to a 8-12M vehicles market.
quote:
Chapter 11 would mean the death of GM or Ford. Would the size and scope of their enterprise decrease? Definitely, but it would foster increased competition between GM, Ford, Chrysler, Honda, Toyota, VW, etc.

If you think that should GM or Chrysler fail, and all that that will happen is that everyone left will get a bigger piece of the pie, then you do not understand the ramifications of a deeping recession. One car can be a necessity, but two cars will be consider a luxury...a luxury that will probably fall to the repo man. People will not flock to the dealers to buy a new car in that "competitive" market when they can go to their local auction house, or used car lot and pick up on a great deal...they were already doing that when times were good.


RE: Still begging . . .
By DASQ on 12/3/2008 1:46:59 PM , Rating: 3
The American automotive sector was a death march over a decade in the making. The overunionized industry was bloated to the point of implosion. And lo-and-behold, the fatted calf can't sustain itself. Big surprise?

If it costs anywhere from about $2-4bn to design a platform (a car, or a line of cars based on one carriage) from the ground up for profitable resale, and they plan for a 2-4 year runtime until a return to profitability, per company, all within a $25bn fold? That's $8-12bn on redesign costs for the 3 automakers alone. I highly doubt they can survive 3 years on approximately $3-5bn annually at the rate they are bleeding. Unless they've all got ridiculously competitive cars right around the corner, this 'injection' is a morphine drip on a patient circling the drain.

Also, I dislike how they (and others) compare themselves to the financial system. It is entirely unlike the financial sector. It is not everyone going down in flames (mild exaggeration), it is the frail and inefficient dying off where others can take it's place.

Let 'em burn. It's been a long time coming.


RE: Still begging . . .
By JasonMick (blog) on 12/3/2008 10:01:18 AM , Rating: 3
Well if you're comparing the Big Three/UAW to Japan's automakers one important difference is healthcare.

Japan and much of Europe have universal healthcare which gives citizens cheap insurance and access to numerous free treatments. For those quick to jump on the "government healthcare = poor service" bandwagon, Japan's geriatic (elderly) care is among the best in the world.

Sure you can say the UAW is awful, but how much of that $70/hr goes to providing healthcare for employees and retirees??? I'm guessing a substantial portion, and that's a burden our automakers have to shoulder, but foreign ones don't. It's kinda hard to be competitive unless we adopt similar policies, or somehow get our foreign competitors to drop them (or somehow artificially inflate their prices to compensate).


RE: Still begging . . .
By Gideonic on 12/3/2008 10:33:43 AM , Rating: 3
Well yeah, but it isn't quite that black and white as you stipulate, as the money for healthcare doesn't magically appear from thin air, it still needs to come from somewhere.

Because of that the income tax and other taxes subtracted from one's income are more numerous and vastly higher in Europe/Japan than in the US. It's quite easy to see that because of that the salaries of European/Japanese workers also have to be that much higher to compensate.

For instance in one of the most socialist countries, Denmark, the Income tax alone is from 42.9% to 63%. That means you automatically give away half of your gross income ! And as that weren't enough, there is a horde of other socailistic taxes (that are also subtracted from the salary). Therefore one actually receives only about 20% of his/hers gross income in Denmark.

In the less socialist countries (Estonia for instance) it's somewhat better. People actually receive a little more than half of their gross salary (and can get 18% of the lost money back, through tax return).


RE: Still begging . . .
By tastyratz on 12/3/2008 10:40:45 AM , Rating: 3
This is not an industry requirement though, this is a stipulation of the UAW.
38 bux of that 70 goes towards current employees, just like Toyota has 40 going towards theirs.

Why is it, the auto industry is suddenly given the burden of making up for American shortcomings in comparison to Japan? Don't hold them responsible for retiree healthcare when that's a Fringe rarely seen (if at all anywhere else). That specifically is the UAW's doing. They constantly ask for more money and just don't see that they will have NONE when their employers go bankrupt.

This is not their responsibility - it's just part of their contract.


RE: Still begging . . .
By tastyratz on 12/3/2008 2:02:01 PM , Rating: 2
WOW
talk about timing
http://www.msnbc.msn.com/id/28030726
"Auto union says it will restart contract talks
UAW will eliminate ‘jobs bank’ where laid-off workers receive pay"

Guess someone might have been paying attention after all!


RE: Still begging . . .
By Entropy42 on 12/3/2008 12:37:18 PM , Rating: 4
US employees of Honda and Toyota don't get free health care from Japan. A significant portion of their vehicles are made in the US, by US citizens without universal healthcare.


RE: Still begging . . .
By TomZ on 12/3/2008 12:51:08 PM , Rating: 3
Agreed, but a lot of the adminstrative and design work is done in Japan, and a lot of the parts they use to build the cars are imported from Japan and other parts of Asia.

Besides, the real problem is that the Big Three are stuck with union workers here in the US, whereas Honda and Toyota have been able to build factories where there is little or no union labor.

Uneven playing field.


RE: Still begging . . .
By The0ne on 12/3/2008 1:17:02 PM , Rating: 2
That's why Chapter 11 and hope that someone can start the business from ground up with NO UNIONS! :)


RE: Still begging . . .
By kc77 on 12/4/2008 9:37:38 AM , Rating: 1
quote:
2. The unions. Right now the UAW contracts with American automakers are what their biggest cost is.


That's not correct. 10 - 15% of the cost to manufacture a car goes to the union workers the rest is everything else. The average car sold costs 30k in the US. Feel free to run the numbers yourself.

Even if GM payed the union workers $0 they still would be in this mess.

Here's an example of decisions that have absolutely nothing to do with labor costs.

The "Nova" being sold in Mexico.
The Pinto, a death trap of a car. (The same problem resurfaced with police vehicles in 2000.)
The Ford Explorer fiasco. And on and on and on.

The problems they are having are systemic, and probably have a large part to do with management making the wrong decisions over and over again. Look at what Ford did recently. They came out with a supposed minivan competitor (Ford Flex) which looks like it's built for the Beach Boys. Who in their right mind is going to buy that car??? No family of 5 is going to get that car, so sales are suffering. Who could have known??


RE: Still begging . . .
By Reclaimer77 on 12/3/2008 12:34:42 PM , Rating: 2
Jason, poor lib.

They don't need a huge pile of money. They need to RESTRUCTURE, which is what chapter 11 will allow them to do. Shed debt, be protected, and RESTRUCTURE.

Nobody is talking about them closing their doors forever. Thats not going to happen, period. Bailout or no.

And you bringing up what Japan is doing is just shallow. So because they are doing it we should too ?

quote:
I guess it boils down to a choice of whether you want to support U.S. products, or see them overrun by competitors from countries willing to look out for their own.


Oh here we go. The typical emotional liberal catch line. Support the bailout or you don't support American products ? Good one. I'm surprised you didn't find a way to bring children into the argument while you were at it.


RE: Still begging . . .
By FITCamaro on 12/3/2008 12:59:44 PM , Rating: 1
If you don't bail out US automakers, the children of current GM, Ford, and Chrysler employees will be sold off to become Chinese slave laborers.


RE: Still begging . . .
By tastyratz on 12/3/2008 1:11:24 PM , Rating: 3
and goliath will never fall...

The doors being closed forever is a VERY realistic future in a VERY short time. They might dig themselves out of their hole, thy might not. Don't be so naive as to believe that it can't ever happen - that's what got them where they are in the first place.


RE: Still begging . . .
By Reclaimer77 on 12/3/2008 5:29:17 PM , Rating: 2
And yet, as conservatives and responsible adults we have to ask the question, who's problem and who's fault is that in the first place ?

These people are NOT stupid. You are basically handing out blank checks of TAXPAYER money and expecting everyone to NOT line up for it. Once we go down this road of bailouts it will NEVER end !


RE: Still begging . . .
By Topweasel on 12/3/2008 3:25:43 PM , Rating: 3
Chapter 11 Means death to American Manufacturing

This is acrosse the board. You start holding off on debt to suppliers from the big 3, those suppliers go into Chapter 11. This continues till the point where even alluminum and steel processing plants have to go into Chapter 11 or shut down. How long and is it even possible for you to have 300-400 companies all going into chapter 11 and coming out. What if these companies start shutting down before GM is finished going through its restructuring? All of a sudden GM still can't make a profit because it has to use other suppliers (re more expensive and the more this happens the more likely they have to import supply's). Because the supplier and their suppliers won't be able to last a restructuring of the Big 3, those 3 can't restructure.

One last point.

How much tax payers money will be lost when a chain reaction hits? None because we didn't pay? Nah almost 5% of this nations workforce is supported or effected by the big 3. That is about 10 million employees, how much do you think they pay in taxes?


RE: Still begging . . .
By Topweasel on 12/3/2008 3:25:44 PM , Rating: 2
Chapter 11 Means death to American Manufacturing

This is acrosse the board. You start holding off on debt to suppliers from the big 3, those suppliers go into Chapter 11. This continues till the point where even alluminum and steel processing plants have to go into Chapter 11 or shut down. How long and is it even possible for you to have 300-400 companies all going into chapter 11 and coming out. What if these companies start shutting down before GM is finished going through its restructuring? All of a sudden GM still can't make a profit because it has to use other suppliers (re more expensive and the more this happens the more likely they have to import supply's). Because the supplier and their suppliers won't be able to last a restructuring of the Big 3, those 3 can't restructure.

One last point.

How much tax payers money will be lost when a chain reaction hits? None because we didn't pay? Nah almost 5% of this nations workforce is supported or effected by the big 3. That is about 10 million employees, how much do you think they pay in taxes?


RE: Still begging . . .
By Topweasel on 12/3/2008 3:26:20 PM , Rating: 2
sorry about the double post.


RE: Still begging . . .
By tastyratz on 12/3/2008 4:09:14 PM , Rating: 2
Most of this is paranoid conspiracy theory though.
The assets wont go un-purchased, someone else will step up.

People don't stop driving cars because a carmaker goes out of business -they just start driving other cars. This isn't going to be the apocalypse for the economy, just a short term unsettlement while the other manufacturers pick up the slack.

Yes it will be bad, but throwing money at a problem doesn't fix it only delay it.


RE: Still begging . . .
By Dwayno on 12/3/2008 4:40:34 PM , Rating: 2
quote:
Most of this is paranoid conspiracy theory though. The assets wont go un-purchased, someone else will step up.

There has NOT been a single import car company that has bought an abandoned American auto factory, except VW who they bought an old Chrysler factory in Westmoreland, PA, back in the 70s. Show me a old factory that Toyota, Honda, Nissan, or even Hyundai have bought.
quote:
People don't stop driving cars because a carmaker goes out of business -they just start driving other cars. This isn't going to be the apocalypse for the economy, just a short term unsettlement while the other manufacturers pick up the slack.

People stop buying cars when they don't know if they will have a job tomorrow. Short term!! You have no idea how long this will be...the reprecussion will stretch out for years. Car companies buy parts from every major manufacturer in the US. These car companies buy cloth and clothes, TV and audio equipment, concrete and steel, computers and electronics, buildings and real estate...this list goes much further on.

The employees of the Big 3, as well as their vendors and dealers, also have tremendous buying power that has a hugh impact on EVERY business...as everyone is quick to point out, that $77/hr. pay makes them big comsumers.

If LOANING them $34B is what it takes to keeps them afloat for another 20+ years, then that's a damn good investment!


RE: Still begging . . .
By tastyratz on 12/3/2008 11:04:30 PM , Rating: 2
What makes you think they will last 20 years on that? Is this going to turn around soon? This money wouldn't even last them much more than 3 months at their current costs. The economy is hardly going to improve by then, and as a result their situation will be worse as well.

I would love to see them turn themselves around but futile foolish investments of that quantity is novelty to the situation.


RE: Still begging . . .
By rudolphna on 12/3/2008 10:33:16 AM , Rating: 3
Hey you know what? All of them, honda and toyota included, reported dismal sales for november, something like 30-40% drop in sales. Its not just the big 3. Also, the author (ahem) neglected to mention that ford does not want to touch the bailout money if possible. They just want it as a backstop in case the economy gets worse, or for longer than planned.


RE: Still begging . . .
By clovell on 12/3/2008 11:09:05 AM , Rating: 5
Let's look at this for all of you non-interventionalists. CAFE standards were passed by the government (not the free market), which mandated higher efficiency. Whether you think that is a good thing or not is irrelevant.

This legislation required a significant outlay of funds on the part of these companies so that they could be in compliance. Congress has already approved $25 billion back in the summer in loans to these companies once they hit their mark.

The problem is they need the money now. Why? Not because gas is $4 a gallon, but because we're in a recession and sales have dropped off a cliff for most automakers. Now, whether or not you agree with ho we got here, the fact is that we're here. This money for this 'Bailout' is money that was already appropriated to these guys. We're just giving it to them sooner rather than later and mandating that they still hit the goals they agreed to.

This isn't a bailout so much as an advance. For the record, GM wants ~$17 billion, Chrysler wants $7 billion, and Ford wants a line of credit available that it probably won't use.

This isn't really a stretch folks. I didn't see everyone so pissed in August when the original legislation was passed.


RE: Still begging . . .
By Bateluer on 12/3/08, Rating: -1
RE: Still begging . . .
By clovell on 12/3/2008 11:28:00 AM , Rating: 2
I suppose I wasn't clear - I was referring to the $25 billion appropriated for when these automakers hit their marks, not THE bailout.


RE: Still begging . . .
By homebredcorgi on 12/3/2008 2:26:19 PM , Rating: 3
Unfortunately, you need to have adequate funding to stay afloat while you restructure to qualify for Chapter 11. Otherwise you go to Chapter 7 and get everything liquidated overnight. It appears GM does not have enough money to stay afloat during this restructuring and would need a bridge loan in this scenario. Apparently, there is some banking crisis right now and no bank wants to give them this loan (who'd have thought). Principles be damned, but GM being liquidated would be a disaster.

I fully agree that just giving them a loan would be pointless (how would keeping them afloat get people to buy more of their cars?). But a "Government Sponsored" Chapter 11 restructuring that guarantees the company would not be liquidated sounds like the best of the worst of our solutions.

As an aside, what the hell is with this Congress? They give the Treasury Secretary free reign of 700 billion dollars, but give these CEO's hell for asking for 24 billion. What a joke!


RE: Still begging . . .
By Dwayno on 12/3/2008 2:49:35 PM , Rating: 3
First things first: it is NOT a "bail-out" if you pay it back...it is called a loan, especially if you are paying it back with interest! I paid off my car and my house with a loan...the bank I got my money from didn't tell me that I was getting a "bail-out".

Chapter 11 Bankruptcy IS a bail-out...you are allowed to restructure will protected from your creditors. If the banruptcy fails, who picks up that tab? NOT the bankrupt company!

As far as restructuring, EACH of the Big 3 car companies have gotten rid of more employees than Toyota and Honda employ COMBINED (Toyota employs 36,600, Honda 25,000)!
Should the Big 3 go under, do you think there is going to be a mass exodus to Toyota and Honda to buy new cars?! What will happen is that there will be a glut of repossessed cars on the market. People may flock to auction houses, but they won't go into a car market that will see the closing of 20,000 dealers overnight!


RE: Still begging . . .
By clovell on 12/3/2008 3:14:03 PM , Rating: 2
Damn - I hadn't thought of that. Imagine the mortgage mess playing out in the auto sector. Residual values of domestic vehicles dropping 30-40% within a month...


RE: Still begging . . .
By Dwayno on 12/3/2008 3:22:15 PM , Rating: 2
Actually, have you seen how much the mortgage "residual" values HAVE dropped without the buoyancy of market speculation and access to cheap loan?


RE: Still begging . . .
By clovell on 12/4/2008 11:11:42 AM , Rating: 2
Oh yeah, my house is actually on the market right now (divorce). For most of the year I got to see how that played out as my area was insulated from the free fall a lot of places are in.

Now I've got over a dozen people in my neighborhood selling comparables at ~80% or less of FMV because they're defaulting and the banks need to dump the porperties. Buyers out there are all looking for a deal, so guess who's house they buy? Not mine. I'll be happy to get out with my shirt. This stuff has affected everyone.


RE: Still begging . . .
By derwin on 12/3/2008 3:41:25 PM , Rating: 2
you forget that these automotive industries (indirectly - through parts manufacturers, marketing agencies, and the likes) employ a large share of the american work force (something on the scale of a couple million I believe). I am not saying this warrants a buyout, but remember that there is more at stake than just the rich Ford family and the owners of GM. A large portion of their mismanagment is through CAFE standards and labour unions, adding something like 1500 to the price of every care sold. Labor unions are not unfair, and CAFE is important, but let us not just point the finger soley at these companies. To say they should sink at this moment because they have drownd themselves is absurd. They are sinking down, and we are going down with them, and this attitude of nonchalance feels a little absurd to me. They are no more evil than anybody else trying to make a business profitable. They are not asking for FREE money. They are asking for loans. Perhaps they should get less on account of their apparent inability to repay them. Perhaps more dirastic measures should be taken to ensure the workforce proped up by these companies is saved. I don't know. I am no economist, nor business man. Just think about it though before you decide that they should be punished for their sins.


RE: Still begging . . .
By Myg on 12/4/2008 6:27:54 AM , Rating: 2
It also doesnt point out that this is a completely pointless gesture, because they arnt really giving up anything. They have all the money they could ever need!

Its kind of like AMD and Intel; it doesnt matter if Intel stopped anti-competetive behaviour or not, because the damage is done and they already gained as much advantage as they could from it.

If I was someone in that body who is considering this deal I would expect them to offer 75% of their last years earnings (bonus/etc) to Charity (AT LEAST) as a peace offering.


RE: Still begging . . .
By Tsuwamono on 12/4/2008 10:18:37 AM , Rating: 2
Its not a bail out.. its a Loan... Like the one you get from a bank but i dont know if you noticed all the banks right now? They seem to be in a bit of a rough spot...


Hypocrits
By FITCamaro on 12/3/2008 10:01:58 AM , Rating: 5
I love it how Pelosi blasted the auto executives for coming to Washington in private jets. Pelosi flies around in a giant 757 for her trips between DC and Commifornia. Because god forbid she have to stop to refuel. The cost to fly that thing is at least around $100,000 each way. Out of yours and my pockets.

But she has the balls to say the auto execs are being wasteful?




RE: Hypocrits
By sprockkets on 12/3/2008 10:14:05 AM , Rating: 5
I don't think California is a communist place - it is:

Cali - as in spanish for hot or spicy and
fornia - where we get fornication

Therefore, California is the place of hot sex. More like that and sex in every dimension.

Btw, why blast Pelosi when Bush and Cheney do the same thing, and never ride the same airplane to make sure the President and Vice President do not die at the same time? I'm sure Airforce One with its ability to deter missiles and such require a lot of money too. And that size aircraft only transporting a handful of people is wasteful as well.

This is not a partisan issue buddy, at least when dealing with who flies an expensive aircraft.


RE: Hypocrits
By FITCamaro on 12/3/2008 10:23:58 AM , Rating: 2
I didn't see Bush or Cheney blasting the auto execs for flying down in private jets either.


RE: Hypocrits
By Bateluer on 12/3/2008 10:26:22 AM , Rating: 5
Maybe my sarcasm detector is broken, but are you insulting the US President for Air Force One being wasteful? The VP and POTUS shouldn't be on Air Force One at the same time, and usually the Speaker of the House won't be either.

Odd situation though, normally the POTUS and VP getting assassinated would result in the Speaker assuming the role of POTUS, Nancy Pelosi. Not exactly an improvement.


RE: Hypocrits
By rudolphna on 12/3/2008 10:39:34 AM , Rating: 2
he isnt being sarcastic. I dont think he is insulting them, it is important to keep the president and VP safe at almost any cost.


RE: Hypocrits
By sprockkets on 12/3/2008 3:34:26 PM , Rating: 3
Nope, I'm not being sarcastic. And in Obama's case security is even that much more important.

I find it ironic/sad that the KKK people are perfectly fine getting screwed over by white men and company like D!ick Cheney (used the ! to not be rated down by using the Vice presidents name) and David Addington, yet are ready to kill Obama for being black, while his efforts so far seem sincere (time will tell for sure).

Besides, at least from a salary perspecitve, the president makes $400k a year. Of course he gets a lot of perks, like after being the president, he gets benefits for life. Still, what's $400k a year being a President and the work involved when someone like Disney fires a CEO after about a year and pays him $128 million to leave?


RE: Hypocrits
By callmeroy on 12/3/2008 11:37:11 AM , Rating: 2
If you are comparing the President and the Vice President of our nation flying habits on Air Force One and other private jets as wasteful spending as say....CEO's of auto companies you are way out of touch with logic, reason and reality.

The security and structure of the nations government should be preserved by use of those travel methods, there is however no similar important need or reason for the CEO's to NOT fly commercial.


RE: Hypocrits
By TomZ on 12/3/2008 12:56:27 PM , Rating: 4
quote:
there is however no similar important need or reason for the CEO's to NOT fly commercial

That's very short-sighted of you.

First of all, what is the value-per-hour of the CEO of a multi-billion corporation? What is the opportunity cost of having a CEO waiting around in airports and in and around planes?

Secondly, don't you think that these companies want to do everything they can to attract and retain the best people to take these kinds of leadership positions? The value of having a great CEO to a large company far outweighs the cost of private jets or other such expenses. It's not even close.


RE: Hypocrits
By Dwayno on 12/3/2008 7:20:11 PM , Rating: 4
quote:
If you are comparing the President and the Vice President of our nation flying habits on Air Force One and other private jets as wasteful spending as say....CEO's of auto companies you are way out of touch with logic, reason and reality.

Actually, you are the one out of touch with reality. The presidents and CEOs of the car companies are responsible for companies that are worth more that $100B each, employing hundreds of thousands employees producing millions of vehicles per YEAR! And these are brick-and-mortar buildings, not a bunch of wired together servers in some storage building.

They may have to travel on a moment notice to any place in the world (not just the US). Also, you, like Congress, has swallowed the bait whole by buying into ABC "exposure" of the Big 3 president flying all alone in their big expensive corporate jet. Here's the reality: all of them were travel with an entourage of people, including lawyers, body guards, and even speech writers. They WERE going before Congress! Also, knowing that they rarely travel alone, and knowing how the airlines have reduced flights to save on fuel and cost, how likely are they going to get a seat on a commercial flight in any section in a moments notice, let alone a party of more than 5 people? Try to get that many 1st class seats anytime you want. Remember, Congress set the meeting dates and times. Imagine the field day Congress and the news media would have had if someone came to that meeting late because of airline scheduling conflicts?!


RE: Hypocrits
By paperfist on 12/3/2008 11:41:20 AM , Rating: 2
That's because her balls eclipses everyone else's :)

Bail them out if for no other reason then to preserve American manufacturing jobs. Bail them out if for no other reason they are at least willing to attempt to pay the debt back.

Sorry but the money we've already spent on the suits who deal in untraceable transactions, whom are not held accountable for their actions or the ways they spend tax payer money was a lost cause. It's time to spend it where it will do some good.


RE: Hypocrits
By Reclaimer77 on 12/3/2008 5:36:57 PM , Rating: 2
Hell thats not the first time. I remember her blasting Bush for some " crisis " not being resolved fast enough, then jumping on her private jet to do a book tour while congress was in session ! Basically totally neglecting her job.


RE: Hypocrits
By Andrwken on 12/3/2008 6:56:09 PM , Rating: 3
Exactly.

I believe any member of congress having "the balls" (or pretending to have them) that can straightfaced blast any ceo of any corporation for being inefficient, should be immmediately taken outside of the halls of congress and whipped in public.

Inefficient? Bloated? These are trademarks of our government and congress that they have perfected to the highest level. Decide if you must if they deserve the money. But don't do a great disservice to the tax payers of this country by coming off as if your any better than the ones you are scolding.

Amazed.


By FranksAndBeans on 12/3/2008 10:23:57 AM , Rating: 2
The media coverage and general opinions being tossed around about the auto bailouts is just insane to me.

Frankly, I don't agree with the concept of the 700 billion dollar bailout plan regardless of application to the auto or finance industries. But I think to approve 700 billion in support solutions and not consider less than 5% of it to support our automotive industry... well, that is just insane.

My problem is more with selective hypocrisy than any particular solution. You think the auto companies deserve to fail and should get no help? Fine. Just make sure you apply that same logic to the financial sector. I don't think people are reacting logically to this entire situation and the media is having a heyday with selective coverage. By my math 95% of the harsh criticism should be applied to areas outside of the automakers, but I don't see that happening.

I know where I stand, but the best solution is not clear to me. I just wish there was consistency in the solution, media coverage, and people's logic.

Do I think people who bit off too much in their home financing should be put out and forced to rent because they can't pay their variable mortgage? Yes. They signed a contract. They should deal with it.

Do I think retired big 3 autoworkers should have their pensions or healthcare agreements modified? No. They signed a contract and fulfilled their end of it.

Do I think current big 3 autoworkers should realize big changes are needed, like lower wages or reduced benefits? Yes. It's a harsh reality, but it is necessary. Quite simply as a worker your employment terms are either ok or not. If things change, you are always free to find a new job.

My last point that if anyone thinks the $1 base salary gesture means anything you just fail at life. They're going to get their compensation regardless of salary claims.

Basically, I don't want my tax money going towards making up for people that made dumb decisions or these that were greedy. But I also realize I don't have much choice in the matter, and just hope that the plan be used in a fashion to help stabilize our economy as best as possible. A huge chunk of that is our automotive industry and anyone who thinks otherwise is pretty out of touch.




By yaju on 12/3/2008 10:29:18 AM , Rating: 2
I don't know how badly GM & Ford are suffering in US, but here in India they are doing pretty well, in fact GM just started there 2nd plant here.


By The0ne on 12/3/2008 1:32:22 PM , Rating: 1
They are suffering because the CEO's are making dumb-ass decisions for the US marketplace. Some fuel efficient, small vehicles there do not exist in US. Even now when many consumers are voicing for them they refuse to bring them over. Blame it on regulations, politics, what have you but the end result is US gets screwed by their decisions.


By TomZ on 12/3/2008 1:49:05 PM , Rating: 2
With all due respect, your perceptions are all wrong.

First, the current CEOs had little or nothing to do with the predicaments that the companies find them selves in. Read my other posts here about the uneven playing field.

Second, there is no conspiracy among car makers to withhold small cars here in the US. Small cars are exactly as popular as consumers want them to be. That is to say, that segment of the market is pretty competitive and has small profit margins. The small margins tell you that supply is pretty plentiful, except in some one-off cases like Prius.

Larger cars, at least until recently, held up a higher profit margin because of consumers' preference to spend more money on them because of their higher perceived value.

In fact - you blame regulations and politics - but exactly the opposite you say is true. Congress is in effect mandating that Americans buy smaller cars by raising CAFE standards. They are manipulating the market in a way that is contrary to the desires of consumers. If consumers actually wanted smaller, more MPG-efficient cars, they would simply buy them on their own. But they don't, in reality. They want just as much efficiency as they can afford - no more, no less.