We almost have to bail them out after all the money we gave the banking industry. Every major nation
has it’s own auto industry. Passing medical care for everyone would free up Detroit from it’s huge output for medical care for it’s present workers and it’s retirees. The UAW has to do it’s part to pass
a medical bill too. We don’t have to break the unions , only get them to modify their demands.
If I ran the circus…
The highest paid person in ANY organization could make no more than, say, 40x what the lowest paid makes. This includes salary/wages, perks, benefits, insurance, stock and stock options, commissions, profit sharing; the whole nine yards. The 40x figure is roughly what successful foreign companies do. And don’t try to game the system by outsourcing your mail room, secretaries, and janitors – if the person works in or for your organization, their compensation counts, regardless of whose name is on the paycheck.
American CEOs and other brass are far overpaid for the value they deliver. And, speaking of overpaid, this should apply to EVERYONE in EVERY ORGANIZATION – wouldn’t you love to see a star professional jock make no more than 40x what the towel boy makes? After all, they’re being paid obscene amounts to play children’s games. Before you line up to take shots at me, remember that back when American industry was world competitive, the salary structure was much flatter than it is today – closer to 40x than the 400x or more that’s common today.
OK, flak jacket is on…
NO
It seems that i went to the gas station to fill my tank today and found that each time i do the gas goes down another 5 cents or so each time i fill up. the oil companys were gouging the price of gas only a couple months ago at over $4 a gallon. they made huge profits on this, it would be only approapiate for them to share there quick wealth with the car companys after all the car companys were making big suv gas guzzlers instead of hybreds, thus allowing the oil companys to sell more oil at higher prices and make twice the profit. in my opinion the oil companys owe the big 3 automakers for helping to make them rich.
Nobody has to break the unions. They break themselves. Look at all the healthy highly unionized industries in America today – the steel industry, the merchant marine, and let’s not forget the air traffic controllers of 1980. Where are they now? Okay, the Teachers’ unions are still strong. Which is why we rank so high internationally in our educational status. By their stance, the UAW will commit suicide without our help. So let’s not prolong the agony and give them OUR money. Let GM and Chrysler (and possibly Ford) follow the lead of Packard, DeSoto, Studebaker, American Motors, and the rest of the American auto industry.
MGB/MBGGT, I’m sure glad you have the only franchise on “crystal ball.” We can all rest easy now because you always get it right. HA! So how can you speak with such certainty that “it is NOT a bridge loan, there is no guarantee that it will ever be repaid, and, in fact, the Big 3 will probably be back with their hands out in a couple of months if we make this mistake now?”
First, it is NOT a bail out because they are not asking for a handout, but a loan. Ford isn’t even asking for that. They are requesting a line of credit IF AND ONLY IF they need it. My bets are the money stands a better chance of being repaid by the “Big 3” than the thieves on Wall Street and at a higher rate of interest to boot.
Allowing them to “crash and burn” might have been a viable option in a decent economy, but throwing 3 million MORE people (in manufacturing and supply) out of work (to all you Reaganite fools, THERE’S your “trickle down”) just pushes this country closer to an all out DEPRESSION rather than a recession.
Again, with the lies promoted by the right wing, logic exposes this as nothing more than a cheap shot attempt to get rid of unions (and the middle class) so we will be in such dire straits we will eventually be willing to work for $2.00 an hour. The emotionalism, fear, anger, and ignorance promoted by the right (the same routine they’ve used for YEARS) has people deciding against their own best interests yet again. In the right wing ignorance (and greed), they don’t realize if the majority of people don’t make enough income to spend on anything but rent, the wealthy can’t make money either because there is nobody to sell to.
LABOR and the manufacturing base must be preserved in this country, if for no other reason than national security. If we lose all manufacturing in this country, who will build our planes and tanks? China? Management needs to be taken out of “the quest for higher dividends to CEOs and stock holders” and applied to “building a better product.”
To those who say, “Let 'em fail,” your arguments are based on half truths, fear, and ignorance, and I see you as extremely myopic and out of touch with reality.
ABSOLUTELY NO let them pay the consequences. I refer to both the auto companies
and the union workers, their GREED has caused the problems
Both sides must make BIG CONCESSIONS.
I am a retired from U S Steel, and in 1968 contract discussions we the workers
agreed to a $100.000.000.000 CONCESSION, ONE BILLION AND IT PAID OFF.
U S STEEL at the Homestead Works TEMINIATED 1.000 management personel.
There was a big nation wide recession at the time.
WHAT GOES AROUND COMES AROUND.
No, we should not bail out Detroit. The reasons that we should not bail out Detroit is that we can not be rewarding failure, no matter how constant or colossal. It was their short-sightedness that put themselves in this position, just like it did back in the 1970s following the Arab Oil Embargo and the recession that followed there. The Big 3 failed to learn the lessons from the 1970s and instead, embarked on a wreckless policy first on undoing the regulations in place regarding fuel economy, then manufactured vehicles that failed to take into account that fuel prices are not steady but constantly change through time and can even rise radically. Further, they manufactured products of inferior quality that seemed to have a built-in obsolescence factor. This required the purchaser to basiscally replace this vehicle every 3 years. The Big 3 put themselves into this mess and they need to bail themselves out. And if they can not do that, then they need to fail to make room for the companies that can survive.
There will always be another industry in line if you don’t put out the sign saying this lane closed.We all know that energy is going to define our remaining time. The Prius,Tesla and the coming electric plug in Mini are great clues for detroit, The shameful behavior that GM demonstrated with the dimise of the EV1 is all the proof I need that a restructuring under chapter 11 is the first step in the right direction.
It’s good to hear from another follower of this fiasco. From dumping the battery (NiMH) to destroying the car, auto manufacturers are doing everything they can to stay on the oil diet. The problem is all the “little people” left hanging out to dry. GM didn’t care about them then and the govt. does care about them now. I say…bail out the workers stick it to GM. But then my suggestion of bailing out the mortgage holders first didn’t seem to hold water either. The mortgage lenders took the money and partied and gave bonuses to themselves.
I would say no as a knee-jerk reaction,but if we tied any bailout help to forward thinking emergence plans that have a chance to move these companies into this century I am all for it.
I think we should let the market deal with the situation. In other words, NO, our government should keep its cotton-picking hands off this socialistic idea of bailouts.
I have driven Ford Rangers for years. After my 2004 model (4L, 4WD, manual) is ready for trading in, I won’t trade it in. I’m going to sell it myself and buy a Niassan Frontier, or something comparable, a make and model that can offer me a manual transmission.
You see, just in time for the current oil “crisis,” Ford decided no one should be able to buy a Ranger or F-150 truck with a manual transmission; they are gone, probably forever. I don’t care how much you argue about automatic transmissions being at least as good as, if not better, than manual… Damn It! I Want A Manual Transmission! If my old freinds at Ford jilt me, I’m gone to the Japs.
Yes, the Nissan trucks sold in the USA are probably made in this country, so big deal, huh?
My point is: The American Car Companies are STUPID, STUPID, STUPID and do NOT deserve taxpayer dollars to perpetuate this stupidity.
That’s my stand, and I’m sticking to it.
Being a high-paid union member in a very diversified company, it bothers me to say this, but I’ve faced the reality of what’s in store for these companies unless the government forces Americans to pay high tariffs on foreign vehicles. I’m totally against such protectionism, incidentally. Domestic vehicles haven’t interested me in almost 4 decades!
Domestic makers and the UAW should have seen this coming and should have reacted accordingly a couple decades ago. For example, the jobs bank should have never been allowed. How do you expect to compete when you’re paying a waiting-room full of people their average wages for producing nothing year after year? Add to that the early retirement plans, generous medical benefits for retirees, too many high-paid executives, a weak, redundant product line, and you can see why streamlined competitors like Honda, Toyota, Nissan, and Hyundai have been able to blow your doors off for decades. Things will only get worse with China in the mix.
I would be all for a strict loan if these dinosaurs had an upcoming product capable of producing a profit despite huge labor costs. Where is that product? It ain’t the Chevy Volt! Who’s going to dish out 35 grand for a plug-in hybrid that gets similar gas mileage to the upcoming 2010 Insight, which will command half the Volt’s retail price? And then there’s the improved 2010 Prius… Soon there will be a plug-in electric job from China. Japan and South Korea have many inexpensive gas sippers and hybrids under development. Add the upcoming Chinese invasion and a few popular European vehicles to the mix and you can see why Detroit can’t possibly survive without massive help from the government.
As a taxpayer, I’m opposed to throwing hundreds of billions more down the drain to prop up dinosaurs who make products fewer and fewer people want. Realistically, that’s how much it’ll cost! And then they’ll STILL go bankrupt! Sorry, UAW, but you just didn’t know when to punt. The game appears to be over for your members.
As far as parts manufacturing goes, I can’t believe foreign auto companies won’t take advantage of the skills of workers affected by the transition, should we allow the chips to fall where they may.
The UAW is not the problem, nor is CEO compensation. For Chrysler at least, only 1% of the cost of the car is wages–the vast majority of cost is in components and machinery.
the Big3 can well reorganize under bankruptcy laws, but with a real incentive to reorganize and radically improve.<
No they can’t. If the economy were stronger they would be able to, but the credit crunch and the moneys owed to their suppliers will mandate liquidation under chapter 7, not restructuring under chapter 11.
Every major car manufacturer in the world are getting guaranteed during this crisis from their respective governments except The US manufacturers. Do you think we should ask them to dissolve as well? Honda sells fewer cars in the US then Chrysler–are they “simply not viable on their own?”
finally someone talks sense!
Let the market deal with it–yeah why not? Afterall, the market did so well with regulating the financial industry didn’t it?
Good post! Even with tariffs, foreign comanies will continue to expand their non union manufacturing presence in the US, eventually putting UAW plants out of business. US companies are moving more and more work to Mexico, where the much lower overall wage rates allow them to be competitive. The Ford Fusion and the new Fiesta will be manufctured there. Volkswagen has done this for years; at one time they had a plant in Westmoreland, Pennsylvania, and closed it because they could get neither the cost or the quality right.
In other words, I think union car plants in the US and Canada are doomed.
Let me suggest that there are two questions here rather than one.
The first and most often discussed is whether taxpayers should be exposed to any form of government bailout or loan for the Big Three. I’d contend that asking this question and demand very specific answers isn’t at all a critique of the the domestic industry but rather a healthy debate about the roll of Government. In fact, there should have been a more rigorous debate on this point before we tossed a trillion dollars at the financial services industry with almost no planning and oversight. I would personally contend that there are times when a “deft touch” by the Government is a good thing, but I would also suggest that we need to do this only ocassionally and then with great trepidation.
Presuming we do choose to walk over this line of Government engagement in private commerce, you should then always ask the second question: Do we understand the true cost of NOT interfering?
In the case of the Big Three, it’s not clear to me that we understand the price of success or the price of failure, but I have a gut feeling that the sum of all the direct and indirect costs associated with allowing them to fail may be higher then the costs of propping them up.
That’s hardly a scientific analysis, mind you, and it’s probably a very bad idea to spend billions on a gut feel, but there it is.
Yes, this is going to cost a LOT of money, but do we understand the costs of we don’t do it?
Just a short feedback. YES we should… but ensure the conditions are set to improve the overall position of these manufacturers. The US should preserve their manufacturing capability…