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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.


By The0ne on 12/3/2008 2:19:19 PM , Rating: 2
No I not wrong lol. IT IS the CEO's fault. Whether it be this round of CEO's or the last it's the CEO's and top management (which I really mean when I say CEO's). They plan where the company should be doing and heading towards. It's already been stated further down the thread. Who's fault is to you then? You think it's the Engineers, the union workers, the bad economic crisis? And they have been driving the loss for the big 3 all these years while the top management, with all their power, couldn't make a sound decision?

You're still making the comment that if consumers want this type of vehicle the big 3 should continue to do so and forget about anything else. This is part of the problem! Consumers can change dramatically whereas manufacturers can't. Solely relying on the big margins has not work and look where we're at. Not investing too much resources in alternatives revenues or to try to generate an alternative revenue is not a sound decision. However, I think we have a small agreement about consumers buying to their desires, as they should.

When I say regulations I mean the vehicles might not meet safety regulations, emissions, etc. That and some of them run on diesel which isn't too popular here for reason I'm not going to argue about. Politics, well you never know why they can't just make changes to those vehicles to be able to sell them here when the consumers have been demanding them for at least a year now. This "lets wait and see" game is stupid. As a CEO (top management team) you don't just wait for others to take a huge chunk of the market before diving into it. Sure be cautious but not to the point they are at now. That's not just ridiculous, it's stupid. Oh and having the government decree a 30+mpg in the new few years isn't going to help, not when fuel efficient vehicles have been around for countless years already. Having Toyota agree to this is even more shameful imo.


By TomZ on 12/3/2008 2:33:24 PM , Rating: 2
Consumers were demanding more fuel-efficient cars north of $4.00/gallon, but with gas now getting down to $1.50/gallon, that problem has largely solved itself. People can go back to driving the cars they want to drive instead of cars they have to drive.


By callmeroy on 12/3/2008 2:52:32 PM , Rating: 1
I blame a great deal on the unions. But that aside I think what most people refer to when they say its the CEO's fault or top management, is because for many years (like the past decade) the car companies did very little in the grand scheme of things to produce more fuel efficient vehicles (and according to some groups -- more environmentally friendly) -- 30 mpg is crap btw. So if anyone thinks 30 mpg is great, its just showing our short sighted American ignorance to the rest of the world. Also the quality in American cars has still lagged, over all, to foreign cars -- yet the big three still keep prices high with all this stuff considered.

THAT's why people are mad at the CEO's now.


By TomZ on 12/3/2008 2:58:49 PM , Rating: 2
You speak as if small, fuel efficient cars are inherently moral. I do not agree with that view. I believe that people should be able to acquire whatever resources they can afford and use them how they will. That is called liberty, freedom, etc.

People have always been able to buy the kind of car they wanted - small and fuel efficient up through large and not fuel efficient. It makes no sense to blame CEOs for the choices that consumers make.

People are mad at CEOs because bad things are happening in our economy that they don't understand. Things beyond their control. It is all about fear, not about reason. Let's try to rise above that.


By clovell on 12/3/2008 3:19:09 PM , Rating: 2
quote:
People are mad at CEOs because bad things are happening in our economy that they don't understand. Things beyond their control. It is all about fear, not about reason. Let's try to rise above that.


Well said. It doesn't help that the evening news never seems to give the whole story.


By Dwayno on 12/3/2008 5:01:38 PM , Rating: 2
quote:
I blame a great deal on the unions.
quote:
Also the quality in American cars has still lagged, over all, to foreign cars -- yet the big three still keep prices high with all this stuff considered.

We need to get one thing straight: do you get paid overtime? Do you have any holidays off other than Xmas day? Do you get pay higher than the minimum wage? Then thank the unions. I'm not a fan, nor have I ever belonged to a union. But the government did not enact work, pay, and general welfare laws until they were pressured by the actions of unions.

Here's another question for you...if the American cars are overpriced because the UAW workers get $77/hr., then why does Toyota and Honda charge the same price for their respective vehicles when they only pay their workers $44/hr.? Also, why does Hyundai charge less for better equip cars than Toyota and Honda?


By Etsp on 12/3/2008 6:42:24 PM , Rating: 2
quote:
We need to get one thing straight: do you get paid overtime? Do you have any holidays off other than Xmas day? Do you get pay higher than the minimum wage? Then thank the unions.
Yes, the original purpose of Unions was to create these workers rights, and we should be thankful for the unions of the past. But, now that the government has enacted policy to protect the workers and the Unions have accomplished their original goals, they changed into a different entity entirely, dedicated to the preservation of themselves.
quote:
Here's another question for you...if the American cars are overpriced because the UAW workers get $77/hr., then why does Toyota and Honda charge the same price for their respective vehicles when they only pay their workers $44/hr.?
Because that's where market forces determined the price of what their vehicles should be? That's kinda how I thought that worked...Honda and Toyota profit there, whereas Ford and GM do not. Largely due to the difference in the cost of labor. Unions used to be something to be proud of, and many still are, but the UAW has become a bully beating up the big 3 Auto's for their lunch money.


By Dwayno on 12/3/2008 4:02:32 PM , Rating: 2
Damn, TomZ. There IS some common sense here.

Why are the idiots in Congress asking the execs to take $1 in pay (why not no pay?)? Because Lee Iacocca did it in the 80's and they want to show the public that they are keeping these big, bad, greedy auto execs, who make all of this money, under control. Why didn't they put forth the same request to the execs at Citicorp and AIG?

And you are also right about Congress trying to control the car market. I bought my last vehicle because I chose it...it meet the needs that I demanded. The Big 3 ARE selling vehicles (they still control ~25-30% of the market). The market has shruck to half it's size. Every manufacturer is feeling the pinch (rebates and low interest loans are being given by everyone).
People who need a truck or an SUV are STILL buying trucks and SUVs...people that only need a vehicle to commute to work don't need them, but they WERE buying them.


By clovell on 12/3/2008 3:44:20 PM , Rating: 3
If I blame it on regulations, the US gets screwed by its legislators, not its CEOs. gg.


By DASQ on 12/3/2008 1:56:42 PM , Rating: 2
It's laughable how they are willing to give up their $1-3m salaries, when their glaring $10-20m annual bonuses are not mentioned.


By chiadog on 12/3/2008 7:28:14 PM , Rating: 2
That is the first thought I had when I read the part about $1 salary. When I didn't see anything regarding reducing their compensations, I did exactly as you decribed: I laughed. It is such an empty gesture along with the sale of the jets. I personally wouldn't be satisfied until their compensations are dropped to correspond with their performance and they are riding coach until the companies return to profitable and loans repaid.


WTF!!
By HighWing on 12/3/2008 1:05:03 PM , Rating: 1
quote:
GM will likewise sell 4 of its fleet of 7 jets,


Fleet of jets!! Seriously why does an auto company even need a fleet of a jets in the first place? What, first class is not good enough for all your CEO's? IMHO that right there is a part of their money problems. I could understand maybe 2 or 3 jets, but not a whole fleet!! It's that kind of thinking/spending that has got them in the hole in the first place and bailing them out is NOT going to change that. Ooo so after being chastised for that ONE thing they are fixing it.... that is just ONE thing, your company is loosing money all around!! I would want to see company wide plans to cut costs, and not just the public things we see, but EVERYTHING!!




RE: WTF!!
By TomZ on 12/3/2008 1:18:54 PM , Rating: 2
The corporate jets are used not just by the CEOs, but they also fly (flew?) flights between their main headquarters, e.g., flights between Detroit and Germany. These flights are (were?) used by a lot of different workers within the company.

I don't know whether such flights are more or less cost-effective, but if you have workers who have to travel a lot for business, and you have a lot of them, I'll bet it could be cost effective.

Finally, if you want to have some say in how these companies run their businesses, I would suggest that you buy shares in the company. Maybe you can do a better job?


RE: WTF!!
By TomZ on 12/3/2008 1:25:02 PM , Rating: 2
One more comment...is it just me, or is our country turining into the world of Atlas Shrugged...?

I'll also have to say it is very UN-AMERICAN to run around telling other people what they CAN and CANNOT achieve and earn. Shame on you. I sure hope you don't live within our borders.

People who dreamed of endless possibility built a great nation. People like you who want to eliminate the potential to acheive greatness are destroying it.


RE: WTF!!
By FITCamaro on 12/3/2008 2:26:17 PM , Rating: 2
quote:
I'll also have to say it is very UN-AMERICAN to run around telling other people what they CAN and CANNOT achieve and earn. Shame on you. I sure hope you don't live within our borders. People who dreamed of endless possibility built a great nation. People like you who want to eliminate the potential to acheive greatness are destroying it.


Nothing truer than this right here.


RE: WTF!!
By seamonkey79 on 12/4/2008 1:31:13 AM , Rating: 3
People dreaming did not build this nation.

Digest that.

Now

People dreaming and then applying effort built this nation.

What we've had for the last 20 years or so is a group of people who have been 'climbing' onto the American Dream without having to put forth the effort people prior to them had to put forth.

Telling people what they can and cannot achieve and earn is not Un-American. Handing it to them and then telling them they did a good job is Un-American. Being told that they couldn't do it made people sit in the front of a bus. I think we need more people telling people they can't do something. That way they get pissed off and do it anyway!

I went to get a car loan the other day. I couldn't, I didn't have enough credit history. I didn't whine, I didn't complain, I went and read up on what I need to do to build credit history. I then started down that path.

I was told that I could not get a loan. It made me mad. I'm being punished because I have always paid for stuff cash? That's stupid, at least it was until I read up on the game, so now I'm working into the game.

More people need to be told they can't accomplish. Too many people are told they can have everything they've ever wanted, and they get it...

and then one day the bank comes and forecloses the home, you have to sell your bed on Craigslist to pay for the gas to drive back to your parent's place before the repo-man finds your car. THAT is what happened to a guy I know, all because he was shown through life that all he needed was a college degree and a line of credit and he could have everything he ever dreamed of. Someone forgot to tell him about the job part, the effort that his parents and my parents and their parents had put into things so that they could provide for their kids. My parents weren't told by their parents that they could have everything. Most of the 'kids' I went to school with were.

That is the problem in this country. That is the UN-AMERICAN, as you say, being done here. Telling people that everyone is ENTITLED to the 'American Dream' is the most Un-American thing I have ever heard.

You're not entitled to it.

You have the potential to earn it.

Goodnight.


RE: WTF!!
By TomZ on 12/4/2008 3:16:07 PM , Rating: 2
Imagine you work hard for a car, get one, and then someone comes along and tells you that you really don't need that car, because you don't meet some liberal criteria for having the privledge of owning a car. That's the kind of attitude that I'm taking about.


RE: WTF!!
By seamonkey79 on 12/4/2008 10:58:47 PM , Rating: 2
Ah, well, that I can agree with :-)

My point was that it seems that more and more, people are assuming that because they're born in a certain place, they deserve certain things, whether they've done anything to earn them or not. Certainly, after having earned them, not a single other person should have the right to come in and tell you that you don't get to have them, no matter how silly they think it may be.


RE: WTF!!
By HighWing on 12/4/2008 12:41:00 PM , Rating: 2
and you completely missed the point.

By all means if you've worked hard, you deserve the rewards... but in this case they are spending lots of cash on frivolous things, while at the same time asking for more money because they are not making enough on their own to support the spending. Would you want give money to a beggar whom you just saw purchase $100's of $$ of drugs and liquor? No, you would wonder why they didn't use that money to better their life. Well this is the same thing. The Auto makers hear about banks getting a handout because they were failing, and now they think they can come and get some money too because they are also having problems.


RE: WTF!!
By japlha on 12/3/2008 4:24:34 PM , Rating: 3
The corporate jets are not the problem. Sure it's an expense but not as expensive as say, laid off members of the UAW receiving 95% of their pay. Or the massive health and pension benefits. If corporate jets were going to break the auto industry I'm sure they wouldn't have them. Typical of people to consider $25,000.00 a waste. $25,000 grand is nothing at the level we're talking about.

Besides, the money they spend on corporate flights goes to the industry that supports the operation of these jets. So, they in turn can buy cars to get to their jobs to support the jets...


Did you actually research this?
By Mozee on 12/3/2008 10:48:36 AM , Rating: 3
Jason, I'm disappointed as usual. Did you research any of this before you typed it up? You state that Ford, GM, and Chrysler are all almost out of money. If you've paid any attention, that's false. GM and Chrysler are in a situation where they are almost out of money. Ford currently has approximately $19B in cash reserves and another $10B in credit lines available. Mulally has stated that Ford can weather the storm without the aid. What Ford can't afford is for GM or Chrysler to go bankrupt or just fold. That would take out a large portion of the supplier base, which would affect every automotive company as they all rely on many of the same suppliers for vital parts. And that's everyone, not just the 3 US manufacturers.

You claim that the Ford plan presented to Congress did not have many changes. Again, where have you been for the past 3 years when the company started an aggressive plan to restructure and increase the quality of the products they offer, and is bringing over some of it's global platforms from Europe? Since that time they now show quality that is on par with Toyota and Honda according to Consumer Reports, JD Power, and other studies, and more 5-star and IIHS Top Safety Picks than any other manufacturer. Unlike the other two companies, Ford has already worked hard to fix what has been wrong, and it is starting to show. If it hadn't been for the downturn in the car market (down 33% from 2007) after the first quarter, Ford was in a position to be profitable by the end of 2008.

Also, you said that they have all agreed to accept the $1 pay cut. Again, wrong. Mulally stated that IF Ford were to access the Bridge Loans they are asking congress for, he would take the cut. Otherwise, business as usual and he'll keep his normal salary. Speaking of which, I saw someone ask if Ford already had an exec doing something similar. That's correct. William (Bill) Clay Ford, Executive Chairman of the Board of Directors at Ford, has not taken any salary for the past 4 years.




RE: Did you actually research this?
By tastyratz on 12/3/2008 11:13:09 AM , Rating: 2
While the numbers do seem to appear high to us, these companies are living off cash reserves. That money will be burned through unbelievably fast just staying afloat.
GM will burn through 25b in just a quarter.

And ford? At this rate it only has enough money to keep afloat for 8 months longer.

http://www.bloggingstocks.com/2008/11/07/ford-burn...

These numbers are all independent of each other company.


RE: Did you actually research this?
By The0ne on 12/3/08, Rating: 0
RE: Did you actually research this?
By TomZ on 12/3/2008 1:38:38 PM , Rating: 2
quote:
This comment isn't true as they are planning to bring some of the gas efficient vehicles currently selling in Europe over. And from the previous statement they have vehicles already achieving 30+, 40+ MPG. They're just not telling US customers!

That strategy only makes sense for $4/gallon gasoline. Last I checked, gas is approaching $1.50/gallon. With cheap gas, if history repeats itself, the American consumer will have little interest in small European designs. We'll be back to driving trucks and SUVs, especially once the economy picks up again.

And this illustrates a big problem that all automakers face - being able to accurately predict the price of gasoline years into the future. Because if you re-tool for small cars and gas is cheap, you are screwed. Similarly, if you are tooled for larger cars and gas becomes expensive, you are screwed. In Europe you don't have this problem since gas is always expensive, you can always count on being able to sell small cars.

Quality - don't get me started - yes, Toyota has good quality, but so do nearly all car manufacturers these days. And anecdotally, I can't even begin to tell you how many times I've had my Toyota back to the shop to fix recalls, design issues, things broken, etc. Toyota is not perfect either.


RE: Did you actually research this?
By The0ne on 12/3/2008 2:01:44 PM , Rating: 2
The strategy to produce small, fuel efficient or even clean vehicles is a good decision to make. And it doesn't have to be small to be efficient or clean btw. The market however is driven by the consumers. So does that mean the big 3 should continue to milk to consumers base on current conditions or plan for a more stable strategy that would be more or less dependent on the consumer or gas price? Apparently the latter is has been working to a great degree, whether for false pretense or not, and consumers are willing to shell out money for small efficient vehicles.

It's not just gas that is expensive in Europe. The vehicles themselves are expensive with everything added in. Same for other countries.

As for quality you are missing my point. You can't base quality alone on a few cars going into the shop. Talking about 1 care when dealing in PPM has no place. We're talking about culture changes within the company, supplier changes to align with our QA vision, QA for all departments and not just manufacturing, and so forth. The big 3 won't get near to what Toyota has done if they don't adopt or accept what Quality really means. And to some effect they can't because of the stupid Union. People get cozy and lazy and refuse to change.

Toyota is not perfect, no Quality environment is perfect. But they're done enough to save BILLIONS of dollars just from the quality changes alone and be able to pour those money into R&D, improvements, marketing and even buying a race track and creating/updating their F1 (I think) vehicle. That is something I think a company can live with and probably get them through a crisis like the world is seeing don't you think? I'm sure they can without much loss as the big 3 here.


RE: Did you actually research this?
By TomZ on 12/3/2008 2:22:12 PM , Rating: 2
So basically you're saying it is okay for you and/or the goverment to tell consumers what kinds of cars they can buy, based on the "morality" of efficiency? Sorry, but I think that is a load of crap.

I prefer the American approach, where we treat consumers as adults - not children - and allow them to make choices for themselves.

Also, I will remind you that your beloved Toyota, Honda, Nissan, etc. have all been developing larger, less fuel efficient cars for North America. Because of demand. Because of profit.

And your assesment of quality in the automotive industry is pretty far off. The whole point of measures like JD Power is to measure customer satisfaction. It's not about PPM. And when you look at those statistics, American car companies are certainly "world class," there's no arguing it. You may not personally like them for whatever reason, but the fact is that many people are pleased with them.


RE: Did you actually research this?
By The0ne on 12/3/2008 6:08:48 PM , Rating: 2
Tom, no offense but I think you might be too upset to read what I am saying carefully enough. You are putting words in my mouth that I've not said or even related to.

I don't disagree with you on the consumer having their way shaping the demand. What I like to see is that the big 3 have other plans besides relying solely on milking the demand on the consumer. It's a good idea to have plans other than just one. These plans are from the top management team, no from the lower teams.

I didn't say I like the government telling us what to do, all I stated was a 30mpg was agreed upon, even by Toyota. It's shameful, more so for foreign automakers, because we have vehicles that have been surpassing this limit for a few years now.

Sorry, but I am in the quality business. This is my daily job aside for design, manufacturing and test. I know what I am talking about and I'm pretty sure you don't know what I'm talking about base on what I've been reading. I don't disagree with you on how the companies are deemed good in quality base on the number of resources cited. They are citing quality base on specific criteria. One good vehicle does not make for a company with good quality system.

All I can tell you is that for quality to truly work and for companies to see the BILLLIONS gain, as seen from Toyota and other companies, it has to be fully endorsed and implemented. Half hearted attempts may hurt the company more than leaving it as it is.

This is why I stated that the US automakers still have some hurdles to run over before they can achieve that. And when I stated "Blame it on regulations, politics, what have you but the end result is US gets screwed by their decisions. " it means for whatever reasons you can come up with. I don't have the all the answers. All I know is that with the Union, you sure not going to get a full six sigma, lean manufacturing, OR WHAT HAVE YOU quality system put to full use.


RE: Did you actually research this?
By Spuke on 12/3/2008 1:59:41 PM , Rating: 2
quote:
It's they logistic system, their Union, their CEO expectations and their dumb-ass comments, and so forth.
Sorry but quality isn't measured this way LOL!!!


RE: Did you actually research this?
By The0ne on 12/3/2008 2:02:52 PM , Rating: 2
You've misread, and it should be "their" :)


What american car companies?
By omgwtf8888 on 12/3/2008 11:21:06 AM , Rating: 2
The big three are not american car companies! Toyotas and Honda are more american then GM, Ford and Chrysler. The Big three lost the commitment of the US when they shipped huge blocks of their manufacturing north and south of the border. Wake up friends NAFTA killed the US. I didn't see the executives and stockholders of the Big Three lining up to do anything with the Billion$ of dollars they made by selling out the US worker when they shipped the jobs out. They had the opportunity to take the labor savings and reduce car prices but did they? NO! These guys have been lining their pockets with billions in profits for years, and not paying US taxes on their foreign income.

Every small business feeling this economic downturn has to pony up their savings to weather the storm. Let the fat cats reach into their savings and bail out their companies.

I think the key owners of any company that wants federal assistance should have to be able to come up with half the money on its own through private investment. If they aren't willing to put up their money it isn't worth investing our federal dollars.




RE: What american car companies?
By FITCamaro on 12/3/2008 12:02:39 PM , Rating: 5
They shipped the jobs out because the unions made it too expensive to do business here. We get rid of them, and GM will likely bring the plants back. But when you're paying $30-35 an hour more than the competition plus BILLIONS in health care costs, its hard to compete.

I agree with you that NAFTA is extremely bad for our economy, but it wasn't the sole reason the automakers have reduced their US work force.


RE: What american car companies?
By omgwtf8888 on 12/3/08, Rating: 0
RE: What american car companies?
By TomZ on 12/3/2008 1:02:49 PM , Rating: 2
quote:
It is apparent that the US can produce cars and pay fair wages, one only needs to look at toyota and honda to see this.
The Big Three have mostly unionized factories here in the US, whereas the transplants have mostly non-union labor. That is the major difference between the two.

If there were no unions, the wages would be about the same at all the different companies.
quote:
These companies consistently reinvent themselves and make products that people want.
That's marketing PR/fantasy. When has Toyota "reinvented itself" ever? You mean after WWII?

Toyota is a good company that produces good products - don't get me wrong - I also own a Toyota - but the same can be said about most of the car manufacturers.


RE: What american car companies?
By FITCamaro on 12/3/2008 1:23:35 PM , Rating: 2
Not only do the import manufacturers here not have union labor, many have received huge tax breaks from states in order to attract them to the states where their plants reside.


By Lord 666 on 12/3/2008 10:06:55 AM , Rating: 2
From what I have read over the past three days, there is still potential for Ford to part ways with Volvo.

In my opinion, the best fit to purchase Volvo would be Volkswagen group. There is enough market differentiation between the brands to prevent scavenging along with enough market share to keep sales going. Plus, would love to own a 3.0 TDI or 5.0 TDI XC90.

But for Saab and Hummer, there really doesn't appear to be an interested buyers.




By Bateluer on 12/3/2008 10:27:23 AM , Rating: 2
Nobody would be stupid enough to buy the Hummer brand in this day and age. Saab, maybe. Hummer, definitely not.


By Spuke on 12/3/2008 1:27:15 PM , Rating: 2
quote:
Nobody would be stupid enough to buy the Hummer brand in this day and age.
One can make the brand (which is what you're buying) work but it would take some restructuring to do so AND you'll have to honor the warranties and service of the "old" vehicles. It could be done with a different focus.


By UNCjigga on 12/3/2008 2:25:51 PM , Rating: 2
While they're at it, GM should dump Pontiac and Buick too. And get rid of either Chevy trucks -or- GMC (nostalgia be damned!) GM only needs the following core brands:

Chevy - the feel-good, mass-market American brand for cars and light trucks/CUVs/crossovers/minivans
Saturn - the performance brand for people who tend to prefer Japanese or European cars
GMC -or- Chevy Trucks - Full-size trucks and SUVs (stop selling badge-engineered versions!)
Cadillac - American luxury


It's a Start
By AntiM on 12/3/2008 8:16:31 AM , Rating: 1
With the millions they already have in the bank, I don't think they're going to starve. I'm still waiting to hear what the UAW is willing to do to help the situation. If they are willing to make a few concessions, I suppose we could LOAN them a few dollars to stay afloat for a while.

Maybe they could use the money to hire a few designers that know how to design vehicles that people will want to buy.




RE: It's a Start
By Znamya3 on 12/3/2008 8:34:42 AM , Rating: 2
Yes, how about agreeing to a $1.00 Golden Parachute...


RE: It's a Start
By Chernobyl68 on 12/3/2008 11:45:40 AM , Rating: 2
I was thinking the same thing...does their salary really make up a significant portion of their financial compensation? stock options? Bonuses?


RE: It's a Start
By TomZ on 12/3/2008 4:20:07 PM , Rating: 2
More importantly, does the CEO compensation have any material impact on the financials of the company in any case? Probably not.


DailyBusiness
By BruceLeet on 12/3/2008 8:29:15 AM , Rating: 2
Daily Tech is sure covering alot of different news topics lately.

quote:
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.


This is more political than technology, with the exception of the tidbit of the Volt. This should be in the blog section, not RSS?




RE: DailyBusiness
By InvertMe on 12/3/2008 10:27:28 AM , Rating: 2
Look at the tabs on the top of the page. Do you see the one that says "Auto"?

That's why DailyTECH will continue to follow the story.


RE: DailyBusiness
By BruceLeet on 12/3/2008 1:41:57 PM , Rating: 2
There is no technology related to this story its ALL POLITICAL, now of the story included a revolutionary engine then it might by TECH WORTHY.

Thanks, missed the point entirely.


No money unless...
By Roy2001 on 12/3/2008 11:34:59 AM , Rating: 2
If someone really wants to give their money away, I have some suggestions. Actually some conditions:

1. First of all, bailout money is a loan, you cannot get rid of it even with Ch.11.
2. File Ch.11 and get rid of UAW. No Ch.11 no money.
3. Re-negotiate salary for all executives and workers.
4. No bonus for anyone, not 1 cent before bailout moeny (with interest) paid back.
5. No more union, layoff people when business is not good, just like many other companies.
6. Lastly and most important, they must hand out a REASONABLE plan to turn to profit and pay back money. If they are going to fail, why send more money to dead business?




RE: No money unless...
By HighWing on 12/3/2008 1:09:45 PM , Rating: 2
I would love to see that. If anything I definitely think it should come with the No Bonus stipulation and some sort of plan to show that the money really will help them turn a profit and is not just buying time before they go under.


RE: No money unless...
By Kary on 12/3/2008 5:35:42 PM , Rating: 2
That actually sounds reasonable (which pretty much means it won't be done :)

Not positive about the Ch.11 part (not sure how that works), but as a loan on those conditions it sounds good.

I wish if we are going to try to get the banking industry working capital for making new loans that the government would write every tax payer a check written out to pay toward PRINCIPLE on any bank loans.

This way the American tax payers are just getting their money back (with interest) and, if the banks want to keep making money, the banks HAVE to make new loans.


From their ashes something better will emerge
By lifeblood on 12/3/2008 9:45:41 AM , Rating: 1
The US automotive industry has been digging this grave for years. The auto executives were making short sighted decisions in order to get big bonuses. The unions felt slighted and demanded big benefits for their members. It's only fair, it takes both management and labor to make cars. Unfortunately they were focused on money and benefits rather than on making quality cars. They were letting their competition get the lead on them.

I bought a few of their cars. I want part of that bailout money to compensate me for all the money I spent keeping those slapped together pieces of junk they sold me working.

The line from star trek IV when Kirk was told the Klingon's were dying keeps rolling around in my head. "Let them Die" Kirk replied. Will it create some pain for people? Yes. Welcome to life in the 21st century.




RE: From their ashes something better will emerge
By TomZ on 12/3/2008 9:54:47 AM , Rating: 2
Your views and experience would be accurate if this was 1980, but if you look at recent quality statistics in the industry across all makes/brands, they are more or less all about at the same level. Start at J.D.Power if you want to see what's really been going on.


By lifeblood on 12/3/2008 3:04:47 PM , Rating: 2
Partially. The American cars I owned were from the 80's, but the problem is still present today. I am referring to the Consumer Reports evaluations, including the 5 year maintenance records. Only one US car, a Ford, rates in their top 10. Yes, the reliability of US cars has increased, but so has their competitors.


After years of
By JonnyDough on 12/3/2008 9:17:49 AM , Rating: 2
having union workers sitting around while getting paid, flying around in jumbo jets, making prototypes that never see the light of day, and failing to take into account rising gas prices...

how very noble of them.




RE: After years of
By TomZ on 12/3/2008 9:30:44 AM , Rating: 2
Ignorance is bliss, eh?


wait
By sprockkets on 12/3/2008 9:43:45 AM , Rating: 2
I thought:

1. Ford's CEO already declined a salary (not the bonuses) until the company turned a profit, long before this clusterf*** happened.
2. Mazda was sold to who? I was not aware of it being sold yet.




RE: wait
By DASQ on 12/3/2008 1:54:06 PM , Rating: 2
Ford is reselling the interest back to Mazda itself, as well as some not-named (AFAIK) investors, from 33% controlling interest to a 13%.

Land Rover and Jaguar to Tata Motors (Indian auto corp).


A day late and a dollar short.
By ZimZum on 12/3/2008 8:21:40 AM , Rating: 3
Why didn't they do this 6 months or a year ago when it could have done their respective companies some good? Why wait till your on the soup line to cut costs? Seems like a hollow gesture trying to rebuild PR after their public mocking at the hands of congress. I'd force them and the UAW to sit down and renegotiate their contracts to be more in line with what foreign automakers pay American workers. Put a $150k salary cap on EVERYONE and after they did that, maybe




Correct me if I'm wrong....
By blppt on 12/3/2008 8:26:10 AM , Rating: 3
...but what about that significantly higher "compensation" these CEOs received? There didnt appear to be any mention of that being downsized, just the comparatively small base salary.

In a sense, its like Lebron James playing for no NBA salary as a gesture of humility, while he continues to make 10 times that salary in endorsements.




The view from down here...
By Motoman on 12/3/2008 11:22:40 AM , Rating: 2
...you know, it's tempting to lay this on the unions, demanding ever higher pay and benefits for work that is steadily becoming more and more unskilled...but I don't think that's the whole story.

Look at Honda, Mitsubishi, and other Japanese-brand plants in the US...although Mick says Japan is considering bailing them out, I don't think they're in anywhere near the hot water the big 3 are. They pay good, competitive wages and benefits to their American workers...so that seems to be evidence that it's not just the cost of labor, union or otherwise, that's killing them. At least, not current labor costs...pensioners and upcoming pensioners are a different issue.

...but I think it's important to see that the foreign brands are doing much better with their plants in the US. Which if nothing else speaks to the viability of running a car business in America, following all the same rules of employment and paying acceptable wages and benefits. To me, that points the finger even more squarely at the big 3, regardless of whatever other shenanigans are going on.

For the record, all I ever buy are American vehicles (even when my Dodge truck was built in Mexico City, while a neighbor's Honda was built in Ohio). Just because.

However...I think you have to let them fail. And/or let them get gobbled up by investors/other manufacturers for pennies on the dollar. That's the way the market works and if our government keeps interjecting into our markets to artificially prop up American failures, then not only does the market not work, but the taxpayer is unfairly punished for the inadequacy of those who are bailed out.

I remember back in the 80s, the US government bailed out Harley-Davidson by putting a tarriff on all imported motorcycles 750cc and over...nevermind the fact that at least half of those bikes sold to consumers with no interest in buying a Harley in the first place. Harley should have died...it had been sucking for so long, it was the poster child of utter failure - brand-new bikes leaking oil on the showroom floor and such. As a high school student, I really didn't get the point of the US government awarding a "get out of suck free card" to a company for being an utter failure. And I still don't get it.

If the US auto industry wants to stop failing, I suggest looking at the way foreign auto makers are running their businesses in the US. Seems to me they have a lot to learn. And if GM/Chrysler/Ford goes bankrupt...let Daimler buy them, or Toyota, or some huge investment firm. Let them fix them up, trim the crap, and put a reinvented company back on the map. Properly structured and managed, it seems clear that the auto making business is a viable one in this country.

...just not if you suck.




This isn't a plan....
By The0ne on 12/3/2008 1:15:10 PM , Rating: 2
Selling a few jets and reducing their pay. Ok. That's all good and should have been done if they truly care about the company and it's employees. I seen enough CEO's working with no bonuses and no pay to do what they can. These guys are not responsible enough.

However, my point is actually that these companies have no real strategy plan to do anything to fix what and how they got into this mess in the first place. Those jets and salary reduction isn't going to change how fast they're losing money every much. If the figures are correct, what's 5B going to do for each when they're losing close to that already? We need a real strategy here not some lame brain scheme that should have been consider, BY THEMSELVES, in the first place. As the CEO of JAL about this and see him laugh his ass off.




By aviaitondays on 12/3/2008 2:00:17 PM , Rating: 2
How sad for the members of Congress that their rides are going away! Politicians don't waste a second asking for the all mighty dollar and the all mighty jet ride. I hope with the latest comments against the Private Jet Industry that Congress too, will be driving instead of flying. Folks like GM and Ford have donated many hours of flying to causes like Angel Network, and Cancer Patients, and those Politicians that just dished them. No one seems to mention what great things the Aviation Department for the Nation.




$1 salary is just a PR stunt
By jimbojimbo on 12/3/2008 2:17:04 PM , Rating: 2
quote:
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.
Now this year I'm sure their bonuses will be much less but let's say they took $1 salaries last year. That would mean Wagoner got paid $12,800,001 total and Mulally got $19,700,001 total. That's still WAY too freaking much to be begging for a bailout. I want their annual compensation to total $1. I'll work for a $1 as well if all my bonuses + $1 added up to what it is now. This is all complete BS.




Wiki CEO...
By The0ne on 12/3/2008 2:28:07 PM , Rating: 2
Here's a quicky link to wiki CEO explanations for those that refuses to think CEO and top management have nothing to do with the crisis.

http://en.wikipedia.org/wiki/Chief_executive_offic...




By callmeroy on 12/3/2008 2:39:44 PM , Rating: 2
The significance to the big three automakers going under pales in comparison (even with an estimated 3 million jobs at stake if that happens) to even further collapse of our banks. My point here isn't to agree that bailouts are great, like most taxpayers there is no scenario that doesn't make me feel sick to my stomach at billions of dollars going to correct/support bad management at corporations. However my point is bailing out the financial system of the country is far and away more important than pouring money into the automotive industry -- let them file chapter 11.

As many have suggested (including experts) they could restructor and in a coupld years have a positive comeback. Will millions lose thier jobs, potentially yes. Guess what -- millions already have, and their are a LOT more folks (ie "jobs") tied to the US financial industry than to the automotive industry as well -- and yes I *AM* thinking of the suppliers involved.

We don't "NEED" for essential recovery of our economic system the three car companies, would it help a lot if they were booming -- of course, you'd be a moron to think otherwise. You do NEED the financial system though, like to admit it or not. We the people spending money to buy goods and services are the fuel of the US economy, but the banking system is the engine.




Great Article
By TomZ on 12/3/2008 2:53:04 PM , Rating: 2
Commentary: Can the Big Three survive a bailout?

http://www.cnn.com/2008/POLITICS/12/02/nerad.auto/...




The Government
By Zorlac on 12/3/2008 5:41:55 PM , Rating: 2
The Government does not exist without money. And the only source of this money is through taxing the people or borrowing from other countries (i.e. India, China,etc.), etc..

Another thing is The Government has consistently spent more money than they receive, so they have been in the red (severely) for years which means The People will need to pay this debt at some point (i.e. higher taxes, etc.)

Stating that the Government owes or should help the auto industry is like telling The People that they have to take a portion of their hard earned paychecks (no ifs, ands or buts) and give it to a few failing automobile manufacturers (even if you dont like their products). because a few politicians decided this is the way it must be (sorry you didnt have a choice in the matter).

Screw that! If I believed in these car makers, then I would be driving one of their cars!!!




What's the catch?
By osalcido on 12/4/2008 1:31:35 AM , Rating: 2
There is obviously some catch here or the 3 of them would simply resign.

I'm guessing theyre going to have to survive off their corporate accounts which dwarfs their annual salaries anyway




GM's Arrogance
By Rodney McNaggerton on 12/3/2008 5:15:30 PM , Rating: 1
What annoys me most is GM's arrogance. Ford can survive without a loan because they have already been cutting back for the past few years, which is why their restructuring plans require few changes. After having a few quarters of billion dollar losses Ford has almost turned itself around.
On the other hand GM has done nothing to change itself and was bound to run itself into the ground. It made few changes to it's production lineup and did not adjust to market conditions. The government should assess the risk benefit of giving each of these auto makers loans independantly because Ford is not in the same shitty boat as GM and Chrysler.




Sensible moves
By piroroadkill on 12/3/08, Rating: -1
RE: Sensible moves
By spread on 12/3/2008 8:30:05 AM , Rating: 5
The issue isn't the jet as much as the media wants to sensationalize. The cost of the jet is insignificant compared to the amount of money flowing through.

The real issue is that these CEOs are incompetent. Look what they did to such solid companies with almost a hundred years of operations. They put their companies in the position to beg for scraps in order to survive.

$1/day sounds like too generous a salary.


RE: Sensible moves
By TemjinGold on 12/3/2008 8:46:15 AM , Rating: 2
$1/day IS too generous. That's why the salary is $1/YEAR. Also, Dailytech doesn't seem to have all the current facts as:

1) The requested bailout will be more like $34 billion now.

2) Part of the deal Congress wants is for $1/year and NO additional compensation and NO Golden Parachutes. So all they will get is this dollar.

While I don't agree with the principle behind this bailout, I can certainly see that they (the autos) are finally making the kind of concessions they should be and now deserve this loan (to anyone who thinks otherwise, all of these bailouts are loans with interest; no one is handing out free money.)


RE: Sensible moves
By TomZ on 12/3/2008 8:55:46 AM , Rating: 3
So basically you're in favor of a double standard. Please let me know the name of a single CEO in the banking industry and/or insurance industry that had their salary cut to basically zero.

The children that are our Congress should be ashamed of themselves for playing these kinds of political games.

The domestic car industry is important to our country - many jobs depend on it. It is not a toy to be played with.


RE: Sensible moves
By Ashrac on 12/3/2008 9:15:51 AM , Rating: 3
AIG's current CEO has accepted a 1/yr salary, agreed to no bonuses for the next two years, and if he leaves, will take no severence. If he manages to turn AIG around, he has the option for benefits and bonuses in the future.


RE: Sensible moves
By strikeback03 on 12/3/2008 9:17:06 AM , Rating: 2
He also received an undisclosed amount of stock options.


RE: Sensible moves
By therealnickdanger on 12/3/2008 9:34:26 AM , Rating: 2
Ultimately, most of you are placing blame on the wrong people. This is arguably the WORST Congress we have ever had. Rather than do what's best for our country and for us, they sat around playing partisan games to manipulate voters... and it worked! This bullsh*t loser Congress gained even more Democratic seats! You suckers!


RE: Sensible moves
By TomZ on 12/3/2008 9:59:14 AM , Rating: 2
I agree - we have a useless Congress. People need to look at what is being accomplished in Congress, which quite frankly, amounts to nothing over the past 5 years. What are they doing there in DC - it's like they've all lost their minds!

But to be fair, I think it was a reasonable request to ask the Big Three to present some form of a plan of how they would use the loaned money. They didn't do that with the banking industry, and so you see a lot of the bailout money being used for other things like mergers and acquisitions rather than opening up commercial and bank-to-bank lending, which was what it was intended for.


RE: Sensible moves
By ebakke on 12/3/2008 10:10:28 AM , Rating: 2
quote:
But to be fair, I think it was a reasonable request to ask the Big Three to present some form of a plan of how they would use the loaned money.
My complaint is that now Congress gets to decide whether a private company's operational plans are acceptable, and whether they believe the company will succeed. And by using this as rationale for federal money, in essence, the feds are deciding who will succeed (or continue to live) and who will fail. The prior decision belongs in the hands of shareholders, and board members. The latter should rest in the hands of consumers, and the market as a whole.

While I think it's better that Congress asked for some kind of plan, this whole situation brings to mind a certain xkcd comic: http://xkcd.com/463/


RE: Sensible moves
By bhieb on 12/3/2008 10:20:12 AM , Rating: 2
Every lender puts some covenants in place to control their investment. Why should this money be given without some sort of stipulations? The fact that little or no stipulations were put on the AIG's of the world is asinine to me.


RE: Sensible moves
By ebakke on 12/3/2008 10:33:00 AM , Rating: 3
You're missing my argument entirely. The government shouldn't be a lender. The government shouldn't be in the business of helping business. AIG shouldn't have received my tax dollars, and neither should the Big 3.


RE: Sensible moves
By TomZ on 12/3/2008 10:40:25 AM , Rating: 2
I disagree. The goverment has a crucial role in ensuring the stability of our economy. Thoughtful lending towards that purpose is justified.

If the government were to turn a blind eye towards these types of large-scale economic problems, then we citizens would pay a very high price indeed.


RE: Sensible moves
By ebakke on 12/3/2008 10:59:06 AM , Rating: 2
Short term, yes. Long term, I wholeheartedly disagree. Failure of a business isn't bad for the economy. It's part of capitalism. When someone fails, someone else succeeds. The best product, or the best run company wins. It's what allows/entices new companies and new products. If there was no chance for success, why would anyone take on the risk? Success and failure are the two logical outcomes from risk, and both are natural and expected. It isn't the government's job to remove or reduce this risk for certain businesses and not others. It's the government's job to get out of businesses' way, and to ensure corruption doesn't pollute everything. (And we can argue until we're blue in the face whether they do that effectively, or whether the fox can guard the henhouse, so to speak.) If the feds would let the Big 3 fail, better run companies like Nissan, Honda, and Toyota would absorb much of the automobile demand. In the process, they'd have to hire new employees, buy new capital, get new factories/tooling, etc. These 'positives' would counter the 'negatives' of the Big 3's failures.


RE: Sensible moves
By TomZ on 12/3/2008 11:16:01 AM , Rating: 2
Of course you're right in general. But what you're neglecting to consider is that there is not a level playing field in the automotive industry - companies like Nissan, Honda, and Toyota have a significant competitive advantage. The advantage I mean is that they have union-free factories here in the US, they have stiff import tariffs that protect them in their own markets/industries, and they have government-funded healthcare and retirement in many cases back at home. Same for the European manufacturers.

So in summary, governments have already manipulated the markets strongly in favor of "foreign" manufacturers at the expense of the Big Three. That is not a fair market operating in a healthy way.


RE: Sensible moves
By ebakke on 12/3/2008 11:38:15 AM , Rating: 2
Union-free factories in the US is something any of the Big 3 could do. At this point, the UAW has them by the balls, but if they filed Chapter 11 they'd be able to get free. If the import tariffs are so high that US companies can't compete elsewhere, why are GM's Asia Pacific operations profitable? And their European operations are doing better than their US operations (albeit not great, but no Euro company is doing great right now). And health care. Health care is not a right of any employee, at any company. The company can choose if it wants to provide this benefit, or not. No one, other than the UAW, says the Big 3 must provide health care for the employees. Furthermore, GM has several plants outside of the US, and those employees surely aren't getting the pay/benefits of their US, unionized counterparts.

I'll concede that the government has already stuck it's nose where it doesn't belong, and has played with the auto industry too much. But poor decisions of the past don't justify poor decisions in the future.


RE: Sensible moves
By TomZ on 12/3/2008 1:11:57 PM , Rating: 2
quote:
the import tariffs are so high that US companies can't compete elsewhere, why are GM's Asia Pacific operations profitable?
Because GM produces the cars locally there. In effect, they are forced by the tariffs to employ local labor instead of importing. That protects local jobs, and it is widely done in Asia and Europe.
quote:
I'll concede that the government has already stuck it's nose where it doesn't belong, and has played with the auto industry too much. But poor decisions of the past don't justify poor decisions in the future.
That's correct, but really it isn't the US goverment that has meddled in that market - it's mainly stayed out while significant competitive advantages developed for "foreign" automakers. It sat off to the side while other countries protected their own local industries from the kinds of market penetration that foreign companies have had here in the US over the past few decades.

I'm not saying that the US government should necessarily intervene, but it would be helpful if some approach could be found to create a level playing field within that industry. For example, develop a plan for the government to buy out some of the legacy UAW-related commitments.


RE: Sensible moves
By ebakke on 12/3/2008 4:07:12 PM , Rating: 2
quote:
Because GM produces the cars locally there. In effect, they are forced by the tariffs to employ local labor instead of importing. That protects local jobs, and it is widely done in Asia and Europe.
Just like Honda and Toyota produce their cars here. I don't see how GM is in any worse of a situation than Honda or Toyota in this regard.

quote:
That's correct, but really it isn't the US goverment that has meddled in that market
False. The US government has mandated fuel efficiency standards that consumers didn't care about, which forced the Big 3 to change the cars they were known for (and that people wanted). Consumers didn't like the new vehicles, and chose the foreign competition instead.

The US government pressured the Japanese to export fewer vehicles, and let the US companies catch up. This pushed the Japanese car makers to come out with new luxury lines that purchases of original Hondas/Toyotas would upgrade to as their incomes increased. The tight supply of Japanese cars also increased the costs, and thus dealer profits. As a result, the dealers were more enticed to sell Japanese vehicles, and more inclined to do so in the future. And to top all of that, it gave the Japanese makers an incentive to produce the cars in the US. And after doing that, the "Buy American" reason for purchasing a car faded.

Don't even get me started on Chrysler.

The US government has had its hand in the auto industry for years. The time has come for the government to get out of the way, and let the market run its course.


RE: Sensible moves
By JAB on 12/3/2008 11:24:51 AM , Rating: 2
You dont reward failure if you want a strong economy. This is just rewarding company that turn their back on sound business practices and on people that wanted quality fuel efficient cars.

They made good land cruisers but that cant be the only quality cars and trucks you make.

I love how GM is talking about dumping Saturn and Saab the only two sections that are anywhere close to being want people really want in a less healthy economy.


RE: Sensible moves
By TomZ on 12/3/2008 1:31:03 PM , Rating: 2
quote:
I love how GM is talking about dumping Saturn and Saab the only two sections that are anywhere close to being want people really want in a less healthy economy.

If what you said is true, then these brands would be more profitable than they are, right? After all, the consumer ultimately decides what brands succeed and fail.

No, the reality is that consumers are willing to pay a premium for certain types of vehicles, e.g., luxury cars, SUVs, trucks. Consumers paying a premium means profit. Cars like Saturn are a commodity and hence have smaller and sometimes non-existant profit margins.


RE: Sensible moves
By Spuke on 12/3/2008 3:19:12 PM , Rating: 2
quote:
I love how GM is talking about dumping Saturn and Saab the only two sections that are anywhere close to being want people really want in a less healthy economy.
GM wants to dump those brands because they are not profitable. Which means, no one is buying them. If they were truly what people wanted, they would be profitable. But the reality is that no one wanted them so they're on the chopping block.


RE: Sensible moves
By jimbojimbo on 12/3/2008 2:25:25 PM , Rating: 3
We have a useless Congress because these are their job priorities:
1.) Raise enough money for the next election
2.) See what you can do to play for the presidency next time
3.) Blame everything on the other party
4.) Say yay or nay to something once in a while, whatever my party seat tells me to do.


RE: Sensible moves
By FITCamaro on 12/3/2008 2:28:16 PM , Rating: 2
5) Say you support whatever your constituency wants 6 months before election time so you'll get re-elected.


RE: Sensible moves
By Gzus666 on 12/3/2008 10:08:14 AM , Rating: 3
Ultimately you are a jerk off that thinks that the Republicans are somehow better. Democrats and Republicans are worthless and so similar anymore there is almost not a reason for them to be separate. They are both a group of pandering idiots that do this to get rich and powerful and don't care about the country. Vote for the man, not the party. Party systems were feared by the founding fathers for a reason, cause this garbage would happen.

The fact that anyone can squeeze all their beliefs into one party or another makes it clear most of the people in this country are fucking monkeys. Also the fact that they think the government should be involved in social issues reinforces this even further. Government should be there to uphold laws and security, that is about it.

People like you are the reason I have grown to hate this country and I honestly hope there is another revolution to fix it back to its former glory that it was meant for. You sir are the sucker, cause you fall for party bullshit.


RE: Sensible moves
By ebakke on 12/3/2008 10:15:39 AM , Rating: 2
Someone needs to start a national petition to abolish political parties. I'm sure it would get a lot of signatures.


RE: Sensible moves
By Gzus666 on 12/3/2008 10:19:47 AM , Rating: 2
I'd sign it in blood my friend.


RE: Sensible moves
By clovell on 12/3/2008 10:57:48 AM , Rating: 2
Sure, feel free to sign away your right to assembly.


RE: Sensible moves
By ebakke on 12/3/2008 11:02:56 AM , Rating: 2
I must not have been clear. I wanted the petition to remove political parties, not the assembly clause of the first amendment. You can still assemble all you want, but when people voted, they'd have to vote on individuals, not parties.

Thanks for taking the argument to the extreme. ::eyeroll::


RE: Sensible moves
By clovell on 12/3/2008 11:26:29 AM , Rating: 2
I don't know what state you live in, but I voted for individuals. They belonged to a party, but they were individuals. And, I wasn't talking about your right to assemble, but the right of those individuals in the party to assemble.

What makes you think that by eroding the rights of other you're going to remain protected somehow?


RE: Sensible moves
By ebakke on 12/3/2008 11:47:42 AM , Rating: 2
Ugh. So what I really want, is a either a system with no parties, or a system with more than 2 parties. Our current arrangement benefits politicians, and not citizens. If the people signed a petition stating their disgust, we might actually be able to make some meaningful changes.


RE: Sensible moves