I am beyond frustrated at this potential bailout of auto manufacturers.

[Colleen]

I'm not a complete non-interventionist. I do think there are times to "help" the free market along, so to speak. And I realize that the auto manufacturing industry is an important sector of our economy.

 

But.

 

I am sick at the thought of CEOs (or whomever) pleading their case with Congress, asking for handouts. And no, I didn't support the other, bigger bailout, either. This morning on NPR, Barney Frank ~ whose communication style, btw, grates on my nerves. a lot. ~ said that a bailout would "require" the companies to "come up with a better plan".

 

Yawn. What a meaningless statement. Really.

 

Aargh.

[TraceyS/FL]

:iagree:

[Renee in NC]

I share your frustration! I tried to talk about this the other day, but the consensus was that it was political, so I asked for it to be deleted.

 

My question is this - if we give/loan/whatever the $25 billion, then what? When that runs out, what then? Are they going to keep producing cars/trucks that no one can/will buy while they wait for the economic turn around?

 

I really don't get this. Why do they get to plead their case while other companies are simply forced into bankruptcy? I read that 25% of our manufacturing was based on the auto industry, but that seems to me like something is WAY out of balance (if that is true.)

[Another Lynn]

:iagree::iagree:

 

Yes, I heard someone (I think it was Peter ???? can't remember his last name, wrote a book about the coming economic collapse....) said that fear is what balances greed. The two (fear and greed) together are what make capitalism work. Now, our government is taking away all the fear.... we will be left with nothing to restrain the greed.... so why would they need to come up with a better plan? Now, if they failed I bet the other big companies would be coming up with better plans.... Come to think of it, there seem to be some other car companies that DID come up with better plans and that's why they're not failing right now....

[Parrothead]

:banghead: :banghead: :banghead:

Me about the bailout(s)

Anything else I could say would be considered political.

[Renee in NC]

:iagree::iagree:

 

Come to think of it, there seem to be some other car companies that DID come up with better plans and that's why they're not failing right now....

 

:iagree:

 

I keep hearing "The economy can't survive if we go under!" but I can't help but think that Toyota and Honda are already working on a plan for picking up the slack....:D

[Susan Wise Bauer]

This discussion is OK as long as it stays out of the realm of Republican vs. Democrat vs. independent. That's still off limits. Maybe permanently.

 

SWB

[Renee in NC]

This discussion is OK as long as it stays out of the realm of Republican vs. Democrat vs. independent. That's still off limits. Maybe permanently.

 

SWB

 

:party:

 

Glad to hear that!

[Plucky]

I share your frustration! I tried to talk about this the other day, but the consensus was that it was political, so I asked for it to be deleted.

 

My question is this - if we give/loan/whatever the $25 billion, then what? When that runs out, what then? Are they going to keep producing cars/trucks that no one can/will buy while they wait for the economic turn around?

 

I really don't get this. Why do they get to plead their case while other companies are simply forced into bankruptcy? I read that 25% of our manufacturing was based on the auto industry, but that seems to me like something is WAY out of balance (if that is true.)

 

I totally agree with you here. I think the auto industry may need to diminish. It's way too large an entity and is not keeping up with our changing society.

[Titus.Two.Five]

I'm not a complete non-interventionist. I do think there are times to "help" the free market along, so to speak. And I realize that the auto manufacturing industry is an important sector of our economy.

 

But.

 

I am sick at the thought of CEOs (or whomever) pleading their case with Congress, asking for handouts. And no, I didn't support the other, bigger bailout, either. This morning on NPR, Barney Frank ~ whose communication style, btw, grates on my nerves. a lot. ~ said that a bailout would "require" the companies to "come up with a better plan".

 

Yawn. What a meaningless statement. Really.

 

Aargh.

 

:iagree:

[laylamcb]

This morning on NPR, Barney Frank ~ whose communication style, btw, grates on my nerves. a lot. ~ said that a bailout would "require" the companies to "come up with a better plan".

 

 

That is precisely what a bailout will NOT do. Grrr.

[Jennifer in MI]

Okay - I'm going out on a limb here. I'm SO not politically minded (nor savy), so this is way beyond my comfort zone. I am from the Detroit area though, so I am hearing a LOT in favor of this loan.

 

First, I'm NOT in favor of this bailout.

 

But, from what I understand, this will be a loan. The auto companies need it because they do not have the cash to meet day to day expenses/creditors, even though they are cutting production. The unions have contracts right now that guarantee the workers a minimum number of hours of work. (But that's a whole other issue!)

 

I've also read that in the 70s, the government loaned Chrysler money (10 year note) to get them through a tough economic time. They were able to pay it back, with interest, within three years.

 

If they are allowed to claim bankruptcy, studies have found that companies are less likely to buy a car from a company in bankruptcy because they're afraid the warranties on the cars won't be covered. (I heard this on the radio today - the Center for Automobile Research did the studies - you can look them up yourselves if you'd like.) This would only worsen the problem.

 

Those are the arguements I'm hearing on the radio and reading in the newspaper here for now.

[Marie in Oh]

of buying out banks, mortgages, or corporations. Nuf said.

 

The new plan should be: make a better product.

 

I say this as the owner of 3 American made cars. We would rather own foreign makes and models, but our current vehicle purchase (last week) isn't made by a foreign auto maker (12 passenger van), and the other two vehicles were purchased becasue of budget restraints- the foreign counter parts were just too expensive. Dhis very handy at vehicle maintence so we had to weigh this against buying the more reliable makes. We own these vehicles fully knowing that there are better products out there.

[Grace is Sufficient]

The problem is their business/labor practices. Bailing them out now will encourage them to continue on basically the same course, which will eventually lead to whatever disaster the bailout is supposed to prevent. I think it's time to take the medicine, and any delaying will only make things worse in the long run.

 

My $.02 from one of the rust belt states...

[Jenny in Atl]

I don't see why we should keep an industry alive that has for years built crappy cars/truck/suvs. Both the management and unions are to blame. :auto:

[Parrothead]

:iagree::iagree:

 

Yes, I heard someone (I think it was Peter ???? can't remember his last name, wrote a book about the coming economic collapse....) said that fear is what balances greed. The two (fear and greed) together are what make capitalism work. Now, our government is taking away all the fear.... we will be left with nothing to restrain the greed.... so why would they need to come up with a better plan? Now, if they failed I bet the other big companies would be coming up with better plans.... Come to think of it, there seem to be some other car companies that DID come up with better plans and that's why they're not failing right now....

 

:iagree:

 

As much as I hate the idea of having to live through a Greater Depression I really think that is what it is going to come to. I may have an over simplistic view, but I think letting it happen sooner rather than later is a good thing. The more fixes the greater the final total will be.

[Renee in NC]

This is what the GM CEO said:

 

I can assure you...we don't like to be here asking for this," he said. "At this point without injections of liquidity, I think it's reasonably probable that some portion if not all of the domestic industry will not survive. The way I would explain it to your constituents is it's going to prevent the United States from entering into an economic depression in my view."

 

 

I don't like his way of persuasion.:glare:

 

Say they do give them the money and it means we don't have the economic depression that is coming if they fail (:tongue_smilie:) - at some point they have to pay this back. And if they can't pay their bills now, what are they going to do in the future? It seems that the CEO's are fast to blame the economy, but is that all it really is?

 

I think they have not changed with the times. And they want to mortgage the future of our children and grandchildren to keep going. I *like* American made cars - my dh and I both have Fords! However, I don't want my gov't owning any auto cpmpanies!

[Parrothead]

I can assure you...we don't like to be here asking for this," he said. "At this point without injections of liquidity, I think it's reasonably probable that some portion if not all of the domestic industry will not survive. The way I would explain it to your constituents is it's going to prevent the United States from entering into an economic depression in my view."

The domestic auto industry probably won't survive and IMHO it shouldn't. More of the same keeps innovation from gaining a foothold.

[Parrothead]

I keep posting late! Every time I say something someone else has just posted what I said in a different way. LOL

[Plucky]

I keep posting late! Every time I say something someone else has just posted what I said in a different way. LOL

 

That's okay. I'm nodding my head with every one of your posts. :grouphug:

[Renee in NC]

But, from what I understand, this will be a loan. The auto companies need it because they do not have the cash to meet day to day expenses/creditors, even though they are cutting production. The unions have contracts right now that guarantee the workers a minimum number of hours of work. (But that's a whole other issue!)

 

I've also read that in the 70s, the government loaned Chrysler money (10 year note) to get them through a tough economic time. They were able to pay it back, with interest, within three years.

 

 

 

Lee Iaccoca also took a $1 salary when this happened.;)

 

And the government guaranteed the loan - it didn't actually borrow money to loan to Chrysler.

 

I do see the reasoning for wanting to avoid bankruptcy, but I am not sure it will work. Are we looking at another AIG - they'll keep coming back for more and modifying the past agreements while changing nothing?

[Stacy in NJ]

Awwww, but it's tradition!

 

At least once a decade some auto exec or another comes, hat in hand, to beg for money. Our beloved congress then conducts a show trial, first admonishing them for their irresponsibility, poor management, excessive pay and bonuses, then promptly pays up (least they lose the union and corporatist campaign contributions).

 

It's like the Running of the Bulls or Hailey's Comet.

 

Meanwhile....Atlas Shrugs.

[Julie in CA]

...but the topic of exhorbitant wages paid to unionized workers has been brought up as a major contributing factor in the decline of domestic auto manufacturers. Do you (all of us in general) view that as a real problem?

[Murphy101]

if they want to offer an auto bailout - the gov't is more than welcome to pay off my van and dh's car!

 

I'm so bloomin' sick and tired of the rich CEO/company being made richer at tax payer expense while they continue to show a lack of fiscal responsiblity while taxpayers are loosing homes, jobs, and their cars despite doing their best to live within budgets (and yes, not everyone sufferring these days is due to over spending!) and doing without health insurance/care.

 

Aside from all of that, I'm still fuming over the last bailout that was approved. And doesn't appear to be helping anyone much. Heaven help those car companies if they go to disney! :glare:

[laylamcb]

Awwww, but it's tradition!

 

At least once a decade some auto exec or another comes, hat in hand, to beg for money. Our beloved congress then conducts a show trial, first admonishing them for their irresponsibility, poor management, excessive pay and bonuses, then promptly pays up (least they lose the union and corporatist campaign contributions).

 

It's like the Running of the Bulls or Hailey's Comet.

 

Meanwhile....Atlas Shrugs.

 

 

I was trying to put my finger on WHY I had a sense of deja vu about all this.... You nailed it, Stacy.

[RoughCollie]

I'm against this bailout, too. I wrote to my senators and congressman and told them my views, not that it will do any good.

 

RC

[Renee in NC]

...but the topic of exhorbitant wages paid to unionized workers has been brought up as a major contributing factor in the decline of domestic auto manufacturers. Do you (all of us in general) view that as a real problem?

 

Part of it is that. The companies (due to contracts) cannot cut hours (they have to pay something like 95% even when idle.) The health benefits are AMAZING - no co-pays, no deductibles.

 

It can't be all of it, though, as Honda and Toyota pay very well and have good benfits as well, and they aren't looking for a bailout.

[Murphy101]

...but the topic of exhorbitant wages paid to unionized workers has been brought up as a major contributing factor in the decline of domestic auto manufacturers. Do you (all of us in general) view that as a real problem?

 

I honestly don't know. What is an "exhorbitant wage"? We've never been in a union job, so I don't know. Also, is it the wage itself or the other demands? Like not being able to fire someone for comming in drunk let's say? (just as an example)

 

When I hear terms like that, I need to know the real dollar amount.

 

For example "minimum wage" is not anywhere near a living wage, so I don't know that I'd call it a realistic minimum wage, kwim? If you need 2 jobs paying that wage, then obviously neither of them are a minimum wage. I don't think that made any sense, but I can't think at the moment how to write it better.:)

[cathmom]

I think I am going to find out which of my senators and congressman voted for each of these bailouts and never vote for any of them again. What else can I do?

 

I still don't understand why we don't give the money to the American people, like somebody posted before. We can pay off our mortgages and credit cards and that will help the banks. We can pay off or buy new cars and that will help the car companies (well, unless we all buy Toyotas or Hondas, which we probably would! :D)

[Parrothead]

...but the topic of exhorbitant wages paid to unionized workers has been brought up as a major contributing factor in the decline of domestic auto manufacturers. Do you (all of us in general) view that as a real problem?

I think it is a vicious Catch-22. The wages are high, which causes the price of the finished product to be high. The consumer is paying the wages. But when the consumer pays the wages, the consumer's buying power is diminished, which causes the wages to be driven up again at the end of the current contract to start the cycle over again.

 

But if not for the unions, companies have the ability to go back to shoddy/dangerous workplace practices. Even the companies that aren't unionized are kept to a certain standard for fear of the union coming in.

 

I don't want to see the end of the unions for just that reason, but the unions extorting high wages from companies is not a good thing.

[Renee in NC]

But if not for the unions, companies have the ability to go back to shoddy/dangerous workplace practices. Even the companies that aren't unionized are kept to a certain standard for fear of the union coming in.

 

 

 

I think this was true in the past, but I think OSHA has this more than under control. I don't think it is the fear of unions coming in but rather the stiff fines of OSHA that keeps workers safe.

[Margaret in GA]

...but the topic of exhorbitant wages paid to unionized workers has been brought up as a major contributing factor in the decline of domestic auto manufacturers. Do you (all of us in general) view that as a real problem?

 

I am not an expert. I have heard, however, that the two main factors are

 

1.) too many dealers... "The challenges facing Detroit automakers are being felt in auto dealerships throughout the United States through lower sales. But the dealers say it’s not union wages and benefits that are hurting their bottom lines, it’s too many dealerships competing for fewer customers in an outdated dealer system constructed during the Big Three’s sales heyday" I found that quote online, but this is my dh's opinion also and he's worked for 15 years in the car business both at new and used car dealers.

 

and 2.) too much money paid to retirees' benefits and retirement. It's not the guys on the line that make too much, it's the guys that are retired that are sucking the company dry. According to MSNBC yesterday, it adds $2000 to the retail cost of every car they sell. They guys on the line at Chrysler make about what they do at Toyota or Nissan.

 

I do not support a bailout. I think they need to go through chapter 11 and restructure. That will give them the ability to go to the retirees and say, "hey, look, we just can't do this any more" and to close some dealerships. Oh, and fire some CEOs ;)

 

 

Margaret

[Joanne]

What a terrific, non partisan, contemporary issues thread! :lurk5:

 

 

 

Awwww, but it's tradition!

 

At least once a decade some auto exec or another comes, hat in hand, to beg for money. Our beloved congress then conducts a show trial, first admonishing them for their irresponsibility, poor management, excessive pay and bonuses, then promptly pays up (least they lose the union and corporatist campaign contributions).

 

It's like the Running of the Bulls or Hailey's Comet.

 

Meanwhile....Atlas Shrugs.

 

Would you be my mentor? I want to be able to say I completely understand this brilliant post. :D

[Parrothead]

I think this was true in the past, but I think OSHA has this more than under control. I don't think it is the fear of unions coming in but rather the stiff fines of OSHA that keeps workers safe.

 

D'oh! I forgot all about OSHA.

[Renee in NC]

My ds and I were just commenting about so many dealerships last night. The very small town near me (2500 people) has FIVE dealerships - Ford, Chevrolet, and 3 used car places. Ford and Chevy are struggling (and they BOTH owe us money!) It would make sense if there were no other dealerships nearby, but you can drive 15-20 miles in any direction from this small town and find more!

[Renee in NC]

D'oh! I forgot all about OSHA.

 

I had actually just discussed that very thing with someone here, so it was fresh in my mind.

 

Didn't unions come about at a time when there weren't any workplace safety rules or labor rules (overtime, minimum wage, etc.?)

[laylamcb]

2.) too much money paid to retirees' benefits and retirement. It's not the guys on the line that make too much, it's the guys that are retired that are sucking the company dry. According to MSNBC yesterday, it adds $2000 to the retail cost of every car they sell. They guys on the line at Chrysler make about what they do at Toyota or Nissan.

 

I do not support a bailout. I think they need to go through chapter 11 and restructure. That will give them the ability to go to the retirees and say, "hey, look, we just can't do this any more" and to close some dealerships. Oh, and fire some CEOs ;)

 

 

Margaret

 

A good point here, BUT--there's always a "but," isn't there?--there's not much you can do about pensions paid to workers who have ALREADY retired. Many of them live entirely off of those pensions, I'm sure. However, they definitely need to restructure pensions for those who have not YET retired. In fact, they MUST do this.

[Jugglin'5]

Lee Iaccoca also took a $1 salary when this happened.;)

 

And the government guaranteed the loan - it didn't actually borrow money to loan to Chrysler.

 

I do see the reasoning for wanting to avoid bankruptcy, but I am not sure it will work. Are we looking at another AIG - they'll keep coming back for more and modifying the past agreements while changing nothing?

 

 

Ah, yes..Lee Iacocca's $1 salary vs this...

 

http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1

 

But let's give them lots of taxpayer money, please...:glare:

 

It makes it hard to believe they are serious. I do not begrudge CEOs a high salary for very high pressure work. But when you want MY money, please don't fly a private jet at $20,000 a flight to beg for it.

[Renee in NC]

A good point here, BUT--there's always a "but," isn't there?--there's not much you can do about pensions paid to workers who have ALREADY retired. Many of them live entirely off of those pensions, I'm sure. However, they definitely need to restructure pensions for those who have not YET retired. In fact, they MUST do this.

 

From what I understand, if the company goes bankrupt, there is a gov't backed pension guarantee (like the FDIC for pensions.) Yes, that would still cost the gov't money, but if it has to be spent I'd rather it be there than to keep trying to float the sinking ship.

[laylamcb]

From what I understand, if the company goes bankrupt, there is a gov't backed pension guarantee (like the FDIC for pensions.) Yes, that would still cost the gov't money, but if it has to be spent I'd rather it be there than to keep trying to float the sinking ship.

 

Precisely.

[Renee in NC]

Ah' date=' yes..Lee Iacocca's $1 salary vs this...

 

http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1

 

But let's give them lots of taxpayer money, please...:glare:

 

It makes it hard to believe they are serious. I do not begrudge CEOs a high salary for very high pressure work. But when you want MY money, please don't fly a private jet at $20,000 a flight to beg for it.[/quote']

 

That's IT! Sell the jet and fly coach - you've got a good start on breaking your "log jam."

 

Maybe they need Dave Ramsey!:lol:

[Surfside Academy]

Don't you think that another big part of the problem is the American automakers refusal to change with the times? They have known for over 30 years that they need to change yet they continue on the same path while Toyota and Honda and others have evolved and are making a profit. I have a very difficult time giving a bailout when one of the biggest issues is pitiful management.

[qfbrenda]

Colleen, you and I are on opposite ends of the political spectrum and I agree with you completely on this one. If the automakers are going to fail, then they need to fail. Keeping a failing business going is not the gov't job.

 

Don't you think that another big part of the problem is the American automakers refusal to change with the times? They have known for over 30 years that they need to change yet they continue on the same path while Toyota and Honda and others have evolved and are making a profit. I have a very difficult time giving a bailout when one of the biggest issues is pitiful management.

 

Yes, this exactly.

[Just Another Jen]

That's IT! Sell the jet and fly coach - you've got a good start on breaking your "log jam."

 

Yeah, Fly United - because when the government gave out money to the airlines- United didn't get any.

 

just sayin.

[Margaret in GA]

Don't you think that another big part of the problem is the American automakers refusal to change with the times? They have known for over 30 years that they need to change yet they continue on the same path while Toyota and Honda and others have evolved and are making a profit. I have a very difficult time giving a bailout when one of the biggest issues is pitiful management.

 

No doubt. It now seems so silly how hard they fought against CAFE standards. They might not be in such a bad spot if they'd been *forced* to join the 21st century. :rolleyes: Having said that, they were making some of the best SUVs out there and there was a definite demand for that.

 

Margaret

[Parrothead]

I had actually just discussed that very thing with someone here, so it was fresh in my mind.

 

Didn't unions come about at a time when there weren't any workplace safety rules or labor rules (overtime, minimum wage, etc.?)

Here is a timeline: http://en.wikipedia.org/wiki/Timeline_of_labor_unions_in_the_United_States

 

I had no idea that it went back so far. I was thinking mid-1800's

[Julie in CA]

Part of it is that. The companies (due to contracts) cannot cut hours (they have to pay something like 95% even when idle.) The health benefits are AMAZING - no co-pays, no deductibles.

 

It can't be all of it, though, as Honda and Toyota pay very well and have good benfits as well, and they aren't looking for a bailout.

I read somewhere (It may have been LA Times, you can probably google it) that the average wage is $73 per hour for GM as compared to about $48 for Toyota.

[Firefly]

Yes yes and YES. I agree wholeheartedly with what everyone is saying. I find it extremely frustrating. It seems to me that virtually everyone I know-- on either end of the political spectrum-- are against this bailout, and yet I feel certain it WILL happen, despite what most people want. I know my little bubble of existence is not exactly scientific political polling :D, but still, it would appear that lobbyist have more of a say than the average citizen. Whatever happened to "the will of the people"? These days I believe I have less and less of a voice, even here at the local level with various issues we've been dealing with.

 

:rant:

[Parrothead]

I read somewhere (It may have been LA Times, you can probably google it) that the average wage is $73 per hour for GM as compared to about $48 for Toyota.

 

Is that figure only hourly wages or is it hourly wages and all benefits?

[Julie in CA]

Is that figure only hourly wages or is it hourly wages and all benefits?

Yeah, I dunno! I was hoping someone who knows more than I do would chip in their opinion. :001_smile: