Pajamas Media

50 Comments

1. cedarford:

But even before Barack Obama takes office we have seen the begining of the end of bailout mania.
Jennifer Rubin

I think we have seen the end of such a bailout happening for the next 40 days due to the ability of soon to be gone Republican Senators to defy Dems, and a lame duck Bush Administration neither Republicans or Dems are willing to listen to on economic matters.

After Jan 20th, 8, possibly 9 Senate seats go to the Democrats and then you have to consider how Rep Senators in Big 3 States like Spector and Voinovich will vote given their constituents concerns. Georgia would also lose thousands of good automotive jobs. Then add in what Obama or Reid could do for the ever-treacherous McCain and Hagle to change their minds, and the Maine Ladies dissed so by the Southern Christian Base.

The bailout as it is conceived by Pelosi is more a subsidy to keep suicidal labor contracts going a bit longer than a 1st step to fix the cost disadvantage.

But another way to look at our economic catastrophe as it being the end of Reagan Voodoo economics, the notion that unfettered free markets and free trade with the lowest global labor bidder – is of any long-term benefit to the average American citizen.

Latin America and Africa have gone significantly left & socialist as the screwing of their workers by cheap, endless Asian labor has become obvious.
Mexico was a few vote percent away from becoming communist the last election as all the “Hecho en Mexico” products had moved under globalization to China, destroying Mexico’s hopes of modernization and good jobs and a large middle class. (Which also triggered a 10-year mass flood of unemployed Mexican illegals into the USA).

Dec 11, 2008 - 2:02 am 2. The Intellectual Redneck:

This isn’t a bailout of the auto companies. The best thing for GM and Chrysler is to enter chapter 11 bankruptcy. This bailout will save the UAW from making serious concessions, keep the same bad management team in place and protect the stockholders and bond holders from losses. There is no long term hope for the big three unless they can dump the UAW, get relief on their debt and change their leadership. Let’s hope the Senate Republicans can block this giveaway of our tax dollars.

Dec 11, 2008 - 3:31 am 3. mishu:

cedarford shows his ignorance of history again. The Smoot-Hawley route is the worst direction the nation could go. Change!

Dec 11, 2008 - 4:37 am 4. Magic:

This is not a bailout of the auto industry, it is a payback to the UAW. The UAW has been sucking the blood out of the automakers for decades, to gain political power. The democrats could not finance their campaigns without the labor unions, so now they must show they are ready to give the money back. The automakers best hope of being competitive again is thur bankruptcy and a reworking of the UAW contracts, the UAW knows this and they know they will have to give up a lot of power to keep the companies available. The UAW instead gets its pet politicians to offer rescue.

LET THEM SINK.

Dec 11, 2008 - 4:41 am 5. Reverse economy:

Companies like AIG, Chrysler, Citi group and others begging for bailouts have always treated employees as if the profits, wealth, comes from the top down.
When you get rid of good employees in a recession your stock always goes up.

They say: “We have great managers, that is why we are making so much money!”

Stupid Companies-
They don’t realize that the money comes from the bottom up.
Good employees and customer relations can make or break a company.

The idiots in Wash. treat this problem the same way.

Give billions to the top echelons and hope it will trickle down.

Well….. GE managers are buying banks in China, and other companies are enriching their upper managers.

In two more years we need to get rid of the upper management in Wash.
The Congressmen and Senators that voted for this stupid Trillions of dollars give away.

Bush and Obama believe these company managers are truthful and honest,
Or they have no idea,
you and I know these company managers are some of the biggest, stupidest idiot crooks walking the planet.

Dec 11, 2008 - 5:16 am 6. Jarhead91:

Why President Bush is cooperating with this is beyond me. Is he trying to alienate his very last supporters? The GOP hasn’t run a conservative in 24 years now. Maybe next time.

Reverse economy: You are wrong on the Big 3. The top management looks at the Union as co-conspirators. They help each other keep their bloated salaries while ripping off the stockholders and customers. Unfortunately for them, people have caught on to their game.

If you were correct and the Big 3 management had any guts, they would be doing the Chapter 11 option. That would allow them to dump vast numbers of workers (blue and white collar) and retirees at almost no cost. Instead they are trying to fix their problems by doing the same things that got them there/

Dec 11, 2008 - 5:49 am 7. Thinking Person:

Magic took the comment right out of my mouth! Couldn’t agree more! When will people realize that Pelosi, Reid and Obama are pushing for this because they owe a huge debt to the unions for funneling all of that PAC money into their campaigns? Lovely to see those union dues in action isn’t it?

Dec 11, 2008 - 6:34 am 8. joe buzz:

Should we not get those who lost their homes to Katrina back into houses before we bail out companies making products that few want to buy?

Dec 11, 2008 - 6:38 am 9. Thinking Person:

joe buzz….No silly. That would make too much sense. We’re talking about the government here.

Dec 11, 2008 - 7:02 am 10. BMoon:

Good summary – better than anything I’ve read or heard on the airwaves. Cedarford, I though had some good points. Several commenters here are echoing Dick Morris’ comments last night on Fox, that this is in reality a UAW bailout. I find no one more astute then he on TV.

Dec 11, 2008 - 7:25 am 11. The Historian:

OBAMA TAX PLAN KEEPS POOR IN POVERTY
Raising tax rates on those in a position to invest will further impoverish the poor:

http://greensrealworld.blogspot.com/2008/12/obama-on-taxes-doctrine-vs-fact.html

Dec 11, 2008 - 8:24 am 12. TS Alfabet:

As an attorney who deals in bankruptcy law all the time, a few points:

1. Just because a company files for Chapter 11 protection does not mean that millions of workers lose their jobs. In fact, the whole point of chapter 11 is “reorganization”: keeping the business alive and put it back on its feet in the hopes that creditors will eventually get paid back something when the company emerges. This means keeping employees working so the business can keep working. See, for example, the airline bankruptcies throughout the 90’s. For the most part, employees kept their jobs but had to take pay cuts or restructuring of benefits. By the same token, executives salaries were cut and top-heavy management was reduced.

2. Chapter 11 is the only way that the Big Three have a chance of getting competitive again. How? Because Chapter 11 brings in the creditors (and lots of attorneys, ahem…) to scrutinize and oversee and work with the reorganizing company to re-shape, re-structure and cut out the waste and inefficiencies that led to the bankruptcy in the first place. Does anyone think that anyone in Congress is going to exercise this same level of scrutiny? If not, then what sense does it make to give the Big Three billions of dollars? In Chapter 11, the aim is to assess whether the business CAN be profitable with the right changes and then set about creating a Plan to restructure and pay creditors.

3. In Chapter 11, the employees will get their say in how the company treats them going forward. So will stock holders and other investors. It is not a perfect system by any means, but it has plenty of safeguards and oversight by financially-motivated players to ensure that the company either turns the ship around and makes money again or it is sensibly liquidated. The bailout schemes completely short circuit any kind of restructuring by preserving the very errors that led to the financial crisis.

4. If only the federal government could be put into Chapter 11 and subjected to the same type of re-organization. Maybe that should be part of the 2012 Plank?

Dec 11, 2008 - 9:12 am 13. cedarford:

mishu:
cedarford shows his ignorance of history again. The Smoot-Hawley route is the worst direction the nation could go. Change!

On the contrary, Mishu, people who scream “Smoot-Hawley!!!” as some sort of magic talisman demanding the American people genuflect to the Globalists tend to come from a Right-Wing that also screams “Free Trade! Unfettered Free Markets! Freedom Lover Liberation! Wolverines!!”

Being of a certain mentality, they don’t recognize much out of complex history, besides slogans.

Or recognize that the present trillion-dollar trade deficit is unsustainable, losing our ability to make high tech products because 2 billion unemployed or underemployed Asians want them and will work for peanuts and undercut Americans is also unsustainable. And the notion that if we can’t compete with dirt cheap foreign labor we have NO CHOICE but to accept the destruction of our economy then our standard of living is fraudulent. The global economy is 67 trillion. The NAFTA Bloc is 20 trillion, and it is quite possible to have a self-sustaining economy and retain good jobs and critical skills without defaulting to China and the 3rd World.

Smoot-Hawley came in 1930. After the Depression was well underway, trade was already falling. Once the Depression was underway, there is some evidence that tariffs hindered some trade that would grow jobs without destroying jobs here. But with 28% unemployment, no one thought flooding America with cheap Japanese imports and gutting industries and jobs was advisable. The retention of shipping industry versus sending shipbuilding to Asia (present status) and Americans forced to develop high-tech domestic technology and infrastructure in chemicals, dyes, optics, mechanical computing devices, and specialty metals since they couldn’t just buy all the advanced stuff from Germany (then the leader in many fields of technology) proved rather fortuitous a short time later.

Even taking the largest reasonable estimate of the impact of Smoot-Hawley, however, it could not by itself be responsible for the length or depth of the Great Depression. After all, the Fordney-McCumber Tariff of 1922 was as large as Smoot-Hawley without having any significant impact on economic growth. Also, Smoot-Hawley was substantially undercut by the Reciprocal Trade Agreements Act of 1934. The length and severity of the Great Depression, I believe, primarily resulted from a disastrous monetary policy by the Federal Reserve.

Smoot-Hawley is still trotted out by Globalists as the culprit and by Reagan worshippers who think if Reagan said something someone told him, it was rendered true in the process of him repeating it.

But the studies past Voodoo economics fans have generally pointed to tight money globally as the culprit, and we have dozens of case studies of serious economic downturns after the Depression that were cured with better monetary policy. (Many studies showing how wrong Reaganomics was).
And studies of formal tariff (Europeans) and informal tariffs (see Japan, Korea, China) that accelerated domestic growth, preserved industries and jobs through hard times that later became the seeds for massive GNP growth from those saved jobs and skills when recovery started.

We, I think, have gotten adult enough to understand that if you set up one section of the world as the low cost services and manufacturing center, they will naturally progress to wanting to take high value, more skilled jobs next. And adult enough to understand free traders assurances from 1980-2008 that “new miracle high tech jobs right around the corner” in computer making, software engineering, cell phones, clever financial instruments, service providers that would get calls from backward nations like India they could sell their expertise to has largely been hogwash. The new jobs don’t stay in America. More and more, VCs want to site 1st run in Asia of things we developed in the US like large screen plasma TVs rather than build factories here then transfer capacity to Asia once China selects from the 300 million, Malaysia their 20 million, SE Asia their 60 million quite trainable high tech worker still waiting for good factory jobs (without even getting into another 1.8 billion elsewhere that want those American jobs and a piece of the free for the taking American market.)

Dec 11, 2008 - 9:29 am 14. Jarhead91:

Holy crap! I’m reading a post defending Smoot-Hawley!

Smoot-Hawley didn’t cause the Depression but it sure helped make it Great. The shut-down of international trade, along with government interference in business, sky-high taxes, and unrestrained deficit spending were the tools Hoover and FDR used to turn a recession into a long depression that didn’t end until WWII came along.

Dec 11, 2008 - 10:24 am 15. Fred Beloit:

While the Dems are at it, there is a suggestion just waiting to be expressed. The Dems should not just lend our money to the very ill, they should bring back the dead to provide even more employment. Reopen Packard, Auburn, Hupmobile, Nash, Essex, Stutz, Cord, Hudson, Tucker, and Pierce-Arrow.

Dec 11, 2008 - 12:19 pm 16. Donna V.:

Holy crap! I’m reading a post defending Smoot-Hawley!

Took the words right out of my mouth, jarhead. Smoot-Hawley is the main reason the Depression dragged on throughout the ’30’s.

Of course, maybe cedarford misses the ’30’s. Certain people knew what to do with those pesky Jews cedarford is so obsessed with back in those days,…,

/sarc

Dec 11, 2008 - 12:37 pm 17. Pat:

Before the euphemisms destroy clarity, let’s pause for station identification:

“Car Czar” and government “warrants” = NATIONALIZATION of business = socialism or communism, not capitalism where government’s sole job is to PROTECT absolute rights of individuals like stockholders and creditors.

…and from yesterday’s Illinois scandal, but completely germane here:

“Pay to Play” = extortion = threatening loss with more loss in order to pay the parasites as they suck the remaining carcasses dry.

The parasites in today’s news are the inept directors, managers, unions, and their “bought/paid/owned/” politicians like Senators Levin and Stabenow….

Advocates of individual rights? Producers who expect to earn what they receive? Not a one.

The most laughably pathetic parasite in my view, however, is Chairman John Snow of Cerberus – the private equity firm that bought Chrysler. Snow was the one who as Treasury Secretary got much of the current global economic meltdown started by his determined weakening of the dollar – to help his buddies at places like big steel who couldn’t compete with foreign companies – by sacrificing the US producers and taxpayers!

History will record Snow and his boss Bush, along with the Fed, et al. as total fools. At least we get to see some justice now as Cerberus rightfully loses its $7+ Billion investment in Chrysler.

Dec 11, 2008 - 12:57 pm 18. Pat:

To TS Alfabet at #12: great post!

Reorganizing the federal government should start by abolishing the Fed, and backing the dollar with the approximately $11B in gold now in the government/Fed valuts.

This move alone would almost completely end the needless business cycle of artificial booms and busts.

Dec 11, 2008 - 1:09 pm 19. Saltherring:

No bailout without major concessions from the UAW! Perhaps the workers themselves will see the handwriting on the wall and vote to de-certify the union, in effect choosing a re-capitalized and re-vitalized assembly line to a guaranteed place the bread line.

Dec 11, 2008 - 2:07 pm 20. Rashputin:

Donna V – “Of course, maybe cedarford misses the ’30’s. Certain people knew what to do with those pesky Jews cedarford is so obsessed with back in those days,…,”

True believers like cedarford think bringing on another great depression is just fine. To them it’s simply a recreation of the situation that gave them the maximum opportunity to expand government and demand that the masses obey. They see the 30s as the great missed opportunity of the past century, so they want to go back and do it right this time.

What impact that has on the masses is of no concern to them. After all, these people destroyed the economy by forcing Fannie and Freddie to make unrealistic loans to people who had a real desire to move up and own a home, then turned around and laughed at them for buying, “McMansions”. Destroying the hopes and opportunities of as many people as possible as rapidly as possible is the way cedarford and company get to act like the great saviors they see themselves as. Why, they’re absolutely overjoyed at having the opportunity to recreate a huge depression.

Why else would democrats (who never met a regulation they didn’t like) have resisted repeated calls to regulate Freddie and Fannie over the past six years? Simple, because they had bigger fish to fry, they were focused on bringing the economy to the point of collapse and those two entities were their chosen mechanisms. The so-called bailout proves it, too. It was stated as a way to buy up the mortgages that shouldn’t have been made in the first place, but instead it’s being used to take ownership positions in the financial instutions. That means, the same people who chose to ignore the existing laws and regulations can now do the same with any and all financial institutions, not just those primarly in the mortage industry.

If they don’t like a specific type of vehicle, well, you won’t be able to finance one. If they don’t like single family dwellings, you won’t be able to finance one. The same goes for anything they want to control. No regulations or laws required. They just vote their ownership shares and suddenly, whole classes of loans cease to exist. All they have to do is ignore the laws and regulations that don’t allow discrimnation, and they can even decide that “evil” groups like the Jews should never be allowed to finance anything. They’ll have to watch those stupid Christians, too, and probably need to give careful oversight to any black folks who might stray from the plantation, or someone who wants to be a plumber but didn’t shuck and jive just right. It’s all very easy since you can enforce lending law or not depending on your mood.

Regards

Dec 11, 2008 - 3:03 pm 21. Kirk:

The bailout is reduced, for me, to a personal problem. I am a conservative. My conservative ideals tell me no bailout for anyone: banks, pretend banks like American Express, borrowers, criminals and whomever. Then my Mom tells me in our next phone call (Michigan resident, father is retired white color non-union GM) GM just cancelled their Blue Cross arbitraily. Gm is threatening to cancel (i.e. stop entirely) his retirement payments in January. UNLESS it gets the bailout. I asked , wasn’t any of this in writing? I hear no, for management they can back out or cancel on any promise without a word.

I guess the bottom line is : sucks to be a United States resident. LOL. Every other countries government looks out for their people but ours. Our government is basically traitors and profiteers grabbing as much as they can while our middle class is raped and subverted. Ok. Ya, Maybe the old man should have invested smarter, maybe no one in Michigan should have believed the car companies as they told lie after lie and then it all came undone. But it is the function of government to help work these issues out. Yes, I know it’s not in the constitution or in the founding principles, but it is the way things are NOW. I am not sure I can call myself a conservative again after failing to hold this line in the sand; perhaps a conservative is a liberal who just got mugged, and a liberal is a conservative who just lost his retirement. I need to reflect more I suppose.

Dec 11, 2008 - 8:21 pm 22. Rashputin:

Kirk – “But it is the function of government to help work these issues out. Yes, I know it’s not in the constitution or in the founding principles, but it is the way things are NOW.”

Ya know, I’ve been downright physically miserable most days ever since I returned from a little walking tour LBJ sent me on, but I managed to work from then until ’99 anyway. During that time, I employed several folks, kept my parents and my wife’s parents up, raised my children, and paid one hell of a lot of taxes, all without donating millions of dollars to the damocrat party to protect me from good business decisions. The UAW, however, had congress keep them from having to make a realistic deal way back in the seventies. Too bad it killed the golden goose that was laying eggs for the UAW and the damocrat party.

So, now I hear about you da, and he’s a wee bit worried about the future. I have an idea, I and my friends will all gladly bend over and assume the role the automakers can no longer play, just for your dad. I should be able to force myself back to work two or three days a week if I triple up on the expensive medicines I take, so sure, it’s not a problem. I’ll find a way to pay for the medications, but I’ll need your address first. That way I can mug you, steal your car, steal your identity, and sell everything you own. Then I should be secure in the knowledge that I can get my medicine for a while and maybe I can work and pay taxes by the ton again, just for your dad.

I await your address; a schedule and google map would be handy as well

Dec 11, 2008 - 9:43 pm 23. Donna V.:

Kirk: My sympathies – well, my sympathies to a certain extent. My sister worked in the medical department of a GM plant for 10 years until 2006, when the plant closed. For most of the decade, she regaled us with stories of GM workers asking for medical leave for very minor injuries. When my sister first started in that position (a non-union one) she would say, no, are you kidding, you can work – and the union rep would turn up in her office and scream in her face 10 minutes later. She soon learned to OK all requests for paid medical leave, even if they were for the most trivial complaints. She told us the most outrageous stories of people showing up to work drunk or stoned and not getting fired – because NOBODY got fired there! She told us of how GM workers bitterly complained when they had to start paying small co-pays for their medical insurance, completely oblivious to the fact that they were blessed compared to most Americans. This might be more information than you want to know, but my sister did not have to buy tampons for 10 years. She, and every other woman in the plant, stuffed their purses with them – because GM provided them gratis. It was in the union contract.

These were people with high school educations, earning much more than they would have earned anywhere else, and yet they had developed an entitlement mentality that was beyond belief.

And now the bailout has stalled because the UAW won’t make concessions. I’m sorry, I can’t help but think that that the piper is now demanding his pay. I am sorry your parents are worried about their retirement (but, gee, aren’t we all? Should the government bail us all out?) but to expect that the GM gravy train would continue to roll indefinitely – well, something called reality has finally come around to bite them in the butt.

It’s an argument that CAFE standards are largely to blame for the pretty pass the Big 3 find themselves in. But the UAW hasn’t helped one bit. I can understand your laudable concern for your parents – but having heard countless stories of people who were unbelievably pampered for many years, the present debacle comes as no surprise to me at all.

Dec 11, 2008 - 10:45 pm 24. Daedalus:

# 19 is absolutely correct – Yes, without a doubt, the UAW needs to be retired, put out to pasture or whatever you do to something that no longer works and needs to be replaced. However, a decertification election as suggested would most likely have severe consequences to the health of anyone who proposed it, participated in it, or voted for it. Unions are not forgiving creatures. They like to assume power, rattle sabers, and generally break kneecaps or whatever else comes into their myopic vision. They do not make concessions even when faced with extinction. They will stand there like a deer in the headlights repeating their mantra as they slowly sink into oblivion…..

Dec 11, 2008 - 10:46 pm 25. Donna V.:

Rashputin: Hey, bud, I hear you and I also thank you for your service.

Kirk: I reread your post and now I realize your dad was non-union. However, it looks like he’s paying for the past excesses of GM and the UAW. My question is: why should I pay for it? When you say:

Every other countries government looks out for their people but ours.

Remember, that it isn’t “the government” that pays the check, it’s the taxpayers. I think there should be a safety net for people, but god almighty, where do you draw the line on that? European countries have a safety net all right – and unemployment rates in the double digits.

Dec 11, 2008 - 10:57 pm 26. Rashputin:

kirk – If your dad is non-union, then he hasn’t a worry in the world. Obama and the damnocrats will nationalize all 401k accounts, and then he’ll be guranteed the same as everyone else. See?

have a nice day

Dec 11, 2008 - 11:10 pm 27. Kirk:

I understand this is the internet, and with it comes a general lack of human compassion as it is all in the abstract. I can work with that. I can’t say I completely understand the financial events that have happened since the Freddie/fannie/Democrat disaster that was supposedly 30 years in the making. I do understand that right now the federal reserve has already handed out hundreds of billions if not a trillion dollars to well connected friends that run well connected risky financial firms. What the heck is all THAT money? Was it printed just for the occasion? It was enough to solve the “impending social security disaster” that we’ve been warned about for decades three times over. But a 14 billion dollar loan to companies that actually make things is tabboo? I understand they’ve managed themselves into the ground. But a trillion dollars for wall street suits who produce nothing vrs a 14 billion dollar loan to the big 2.5 doesn’t seem that far of a stretch to jusify ridiculious vitriol from the likes of Rashputin.

When I remarked about how other countries look out for their interests, but ours is selling us out, I did not mean a comparison of socialism vrs capitalism. I’m not implying we need taking care of like old Europeans do. It was illustrating the betrayal of the US people by their ruling class. If you need that enumerated it’s a complete extra post, but if you read these comments much you don’t need to hear the particulars from me.

Dec 12, 2008 - 1:24 am 28. Dale:

I bought General Motors until the dealer and top managers ignored me totally. All I wanted to do is thank them for their fine product and they said they were busy “is there anything else we can do for you, Mr.???.
A neighbor brags and brags and brags how much he makes for NOT working and sneers at us dumb people that don’t belong to their union.
Most of all? I WAS a supplier of parts for GM Ford and Chrysler until they ran us out of business driving our prices down to the cellar while demanding us to world source our builds for their parts. Their reps laughed at us and said “we can always find another supplier.ha ha ha.
I think we all feel sorry for the kids, wives, parents, spouses affected by the collective greed and arrogance of the big three. Too bad we can’t help those innocents affected by the arrogant people.

Dale in Milwaukee

Dec 12, 2008 - 1:27 am 29. Jarhead91:

Donna v. – I worked on the line at GM plant for a few summers while I was in school. Your sister’s story is sadly familiar. The union, and management’s unwillingness to stand up to them, just destroyed that company.

Dec 12, 2008 - 4:14 am 30. Mike:

Lee Iaccoca said it best when he said that the auto makers got into trouble when they stopped making cars and started making money. In other words, when the bean counters took over the product guys took a back seat. The best way for the US auto makers to come out of this is to do Chapter 11’s, get reorganized on a sound financial footing and most importantly, make cars that people want to buy and can afford!

21. Kirk: you make a good point when you say that it is the responsibility of the government to help work things like this out. I can’t believe the rudeness certain people here have shown you. I too am a staunch conservative but there are times that a government needs to protect it’s citizens and for those that think it’s not in the Constitution here is the preamble.
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
Sometimes it pays to actually read the document. Hope your dad comes out ok.
———————————————-
You liberals need to pay lots of taxes cause someone needs to pay for all the free stuff Obama promised me!

Dec 12, 2008 - 5:09 am 31. Jim:

Yeah…finally, a congressional decision I can tolerate. See? Their approval rating just jumped from 11% to 12%!

No nationalization of business…it will ruin our nation and destroy or currency for years to come!

Dec 12, 2008 - 5:19 am 32. Jarhead91:

Kirk, it’s easy to understand. The FM’s were ill-conceived businesses run by Congress that screwed up so spectacularly it affected the entire economy. The solution, have the government buy into the financial firms and now the auto companies so they can run them with that same skill and wisdom.

Why won’t Bush make it stop?

Dec 12, 2008 - 6:03 am 33. Thinking Person:

The people have spoken…no bailout for the auto industry/unions!! Well, until President Bush hands over some of the leftovers from the first round of bailouts. Sheesh! I used to be one of his staunchest supporters too. So disappointing.

Dec 12, 2008 - 7:10 am 34. AnninCA:

Obviously, labor refused to negotiate on wages, which is why the big 3 are in this pickle. The next obvious step is bankruptcy, which will uncuff the auto companies from unsupportable contracts.

This has been interesting to watch. The UAW may be surprised when they lose their next big “payoff,” too…the union bill coming up.

58% of Americans did NOT like this bailout bill. That’s a very clear message.

Dec 12, 2008 - 7:11 am 35. nobozons:

Never buy a car from the big three if they take a bailout. Never! We have been overpaying for all these years so that the UAW members could have salaries and benefits that we don’t have. Now we get to pay twice if you buy a car from the big three.

Dec 12, 2008 - 9:16 am 36. Rubicon:

Eventually, the “Big Three” auto makers will have to file for bankruptcy. Its in the cards. The truth is, the money they want now will only forestall the inevitable. This money will save the union until they can get the members of Congress that they own, to vote for “card check.” Once that is in place, every auto maker will be unionized as will almost every other business in America. Then the union will have all the power they want & all the money through dues, to do & say what they want. In fact, once card check is law & they can force people to unionize, the unions may be even more powerful than Congress.
Ron Gettlefinger of the UAW argues “Republicans” killed the bailout. he forgets there were Democrats who opposed the plan as well. He also forgets there were at least 15 Senators who did not vote at all. Wonder what party they were from? The “concessions” (sic) the UAW offered, were pathetic at best. Deferral of benefits means eventually the company, (read” Taxpayers), will have to cough up the money to catch up on bribes… I mean payments. The UAW offers nothing in the way of real concessions. They want to demand only management suffer & they want to demand taxpayers save the auto industry, or the sky will fall. The same was said when the airline industry went through its troubles, but Chapter 11 allowed them to reorganize & recover as profitable companies, with more reasonable union contracts. The unions do not want to lose their contracts so they demand taxpayers finance the operations so they can keep collecting their dues & exerting their undue influence over politicians who have sold their souls for the campaign contributions.
Studies of union wages show that UAW workers really do cost those companies nearly $70.00 an hour, versus “foreign” manufacturers who produce here in America who pay out around $35.00 an hour. No company can pay that kind of a premium and survive. In addition, management of those companies failed abysmally as bean counters caused them to work toward a quarterly profit point rather than look to the very long term. Suddenly the auto makers were in the money business & not the auto business. That cost them dearly & will now cost all Americans to keep their gravy train alive.
Chapter 11 would be the best alternative for all involved & NO, the nation will not fall apart. There will be suffering, but that is going to happen no matter what! If we stall the inevitable, the costs then will be significantly greater then than if it is done now. The UAW is trying to protect their outrageously lucrative contracts & could care less about anyone else. Its time the UAW & numerous other unions actually try to represent the best interests of their members or go out of business. These kinds of unions & their demands, are why unions have the bad name they have & why Americans are not voting for unions. That is why the unions want card check so they can use intimidation to gain members, rather than letting honest votes take place. If we allow card check, attacks on any who oppose unions will be common place & worse, many attacks will go unreported as employees retreat in fear their families will also be attacked. And yes folks, it does happen. been there, done that!

Dec 12, 2008 - 9:35 am 37. TS Alfabet:

Kirk: it’s a very tough thing for you and your parents. Suffering sucks. But it is time that all of us realize that the only one we can rely upon to help us in our “hour of need” (whether that be cancelled health insurance, lay off, foreclosure, unexpected illness) is OURSELVES, our own flesh and blood family. The Big Govt. people (Dems and Republicans, unfortunately) have brainwashed us into thinking that it’s not our job to support our family but GOVT. will do it for us. I hate to say it, but, Kirk, if your parents are hurting, who are the first people that should look after them? You, and any siblings you have. Maybe that means they sell their place and move in with you. I don’t know; you will know that best. But whatever happens, if we keep going down this road of looking to the GOVERNMENT to provide for us and bail us out, liberty will be a distant memory. Remember, the government that is big enough to give you everything is big enough to take away everything.

Scary times for us all. God help us.

Dec 12, 2008 - 9:37 am 38. Jim:

Hey anyone…what if this bad economy was just a ploy by some really crafty democrats to nail republicans for 8 years? What if we all just start having confidence in American ingenuity? What if we all just start saying great things about our United States? Do you think it would help?

Dec 12, 2008 - 12:00 pm 39. Jim:

Reason I’m saying this is because you all seem to have an internet connection and time to blog…seems you must be employeed of at least fed!

Dec 12, 2008 - 12:01 pm 40. Pat J:

What bothers me is the pandering and the union-bashing. The Republicans who voted against the “bailout” are more concerned about breaking unions like UAW and ignoring the catastrophic effect the big three failure would have on other industries. Three million jobs depend on the auto industry. Everything from auto parts companies to advertisers! Instead Mitch McConnell and company would rather pander to the foreign automakers that have plants in their states. Whatever happended to “prome the general Welfare?”

Dec 12, 2008 - 2:08 pm 41. Watching from below:

38. I kind of wonder about that myself. How come the economy came crashing down just so terribly suddenly? I mean why now? About the Detroit 3 not making vehicles people want to buy–of the top 10 selling models, 5 are traditional US brands, Ford and Chevrolet. If you were to combine models off the same platform, like Ford Fusion and Mercury Milan, and the things made off Chevy Impala, you’d find that 9 of the top 15 are from the Detroit 3.Why did Toyota make $17 Billion off the same number of vehicles world wide that GM lost $38 Billion? Yeah, WHY?

Dec 12, 2008 - 2:37 pm 42. Thinking Person:

Pat J…You might enjoy knowing your taxes go to subsidize union workers who make a tidy sum, cushy healthcare and a fat retirement, but I’d like to keep that for my own family’s needs. Causing the big 3 to file Chapter 11 will not automatically close their doors. It hasn’t for any other industry has it (ie airlines, steel factories, etc). They will be FORCED to streamline and rewrite contracts which will benefit them AND us.

Dec 12, 2008 - 3:35 pm 43. myth buster:

Besides Pat, what makes you think that the bailout would even cause them to avert bankruptcy? If we end up in the same place six months from now, it’s a total loss for America.

Dec 12, 2008 - 9:31 pm 44. Debbie:

MARK PHELAN

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are seven myths about the companies and their vehicles, and the reality in each case.

Myth No. 1: Nobody buys their vehicles

Reality: General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of nearly 700,000 so far this year. Globally, GM in 2007 remained the world’s largest automaker, selling 9,369,524 vehicles worldwide — about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2: They build unreliable junk

Reality: The creaky, leaky vehicles of the 1980s and ’90s are long gone. Consumer Reports recently found that “Ford’s reliability is now on par with good Japanese automakers.”

The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands’ overall quality as high as or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

J.D. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

Myth No. 3: They build gas-guzzlers

Reality: All of the Detroit Three build midsize sedans that the Environmental Protection Agency rates at 29-33 miles per gallon on the highway.

The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic.

A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.

Myth No. 4: They already got a $25-billion bailout

Reality: None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that’s killing them now.

Myth No. 5: GM, Ford and Chrysler are idiots for investing in pickups and SUVs

Reality: The domestics’ lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry.

The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel-economy ratings than Toyota and Nissan’s full-size pickups.

Myth No. 6: They don’t build hybrids

Reality: The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

Myth No. 7: Their union workers are lazy and overpaid

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That’s like assuming you get your parents’ retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There’s no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they’re working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis

Dec 12, 2008 - 11:47 pm 45. vivo:

44. Debbie:

Very impressive Myths and Realities.

So, what’s the problem and the solutions?

Dec 13, 2008 - 3:17 am 46. Thinking Person:

If you’ve ever wanted to know what a labor contract REALLY looks like, here you go……… http://laborpains.org/2008/12/12/22-pounds-uaw-rules-and-regulations/

Dec 13, 2008 - 6:06 am 47. lance:

All gonna say is. I will not purchase another Detroit based vehicle. NO matter how good they claim to be now.

All do is support the union. I dont really care about the poor automaker employee. Tough they had it good for

many years. Finally over.. they UAW are not being reasonable. My lexus is a great car and looking forward

to the next one. My Corvette is crap, and so is the Ford F250……..

Dec 13, 2008 - 8:28 am 48. Pat J:

I’m not in favor of any sort of bailout. I for one want to see my share of the $700 million TARP going to good use. If that means giving Detroit a loan, so be it. I’d rather see that happen than have one of our core industries fall apart and cause a nasty ripple in our already fragile economy.

But why don’t some of our elected officials get that? Why can’t they put pandering and partisanship aside for the greater good, if just temporarily? Let’s work things out for the greater good before we create more hardship on ordinary folks.

Dec 13, 2008 - 4:41 pm 49. vivo:

I lost track of the auto industry. Are they using Just-in-Time technology? Are they using Total Quality systems? If every plant uses these, they’ll be in good shape.

The problem with these systems is that the WHITE COLLAR employees resent the fact that when some mistakes (or laziness) are detected, they point straight at them and not at the assembly lines. So they go back to outdated systems.

That’s why Japanese cars can be better.

Dec 13, 2008 - 10:08 pm 50. The Historian:

BIG THREE & UAW: CHANGE BEHAVIOR OR DISAPPEAR
The answer is not bailouts or bridge loans. Without drastic change, the auto industry is a cause without a future:

http://greensrealworld.blogspot.com/2008/12/us-auto-industry-cause-without-future.html

Dec 14, 2008 - 4:20 pm

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