NO AUTO INDUSTRY BAILOUT....PERIOD!

[Talismen]

You want proof that the big three (GM, Ford & Chrysler) have put themselves in the bind they are in now? See the story linked and quoted below.

Combine the fact that the big three haven't been producing cars Americans want, but rather producing cars that they want to sell, along with the fact that big unions and their "gimmie" contracts have totally cut ANY profit the companies have been making....and you have the mess we see today in the auto industry in this country. If the big three management regimes had stood up to the unions and said "yes, we'll pay you a comfortable wage, but a line must be drawn somewhere", they might not find themselves in the mess they are in. And now they (and most democrats and a few RINO republicans) expect the U.S. taxpayers to bail them out?! I don't think so.

The best thing they could do is file for bankruptcy, which will then allow them to tear up the existing union contracts and start over.

There's a reason why the Toyota, BMW and Honda plants in the United States make more profit....
It's because they don't cow-tow to the unions.

Here's the link to that story, and here's a bit of quoted material:

Monday, November 17, 2008

$73/Hour Bailout

Posted by: Amanda Carpenter at 10:57 AM


Detroit hasn't been making cars people want to buy and was catering to Big Labor demands long before the mortgage crisis hit.  It's no wonder why they aren't competitive anymore. (I say this as a Flint, Michigan native.)

Mark Perry of the wonderful Carpe Diem blog put together this chart showing the inflated wages the Big Three automakers pay over their competitors. Big Three union workers, with their gold-plated health care plans, make about $73 an hour in total compensation.  And, now they're begging Washington for a bailout before they even think about negotiating with the UAW.

Read the rest in the next post....

[Talismen]

(continued)

http://townhall.com/blog/g/83dc41ae-dcbe-4c9f-b1d1-02643fbb1816

It's been said before, but it's worth repeating. GM and all the rest aren't car manufacturers anymore. They're health care providers who occasionally crank out a car down the assembly lines. It's unfair for them to shake down Washington for tax dollars to meet their unfunded liabilities. That means millions of American who can't afford health care themselves are going to be obligated to keep the $73 an hour union workers on their top-notch plans.

[Abigail Adams]

1. No bailout for Chrysler- they got theirs back in the 80s. If they want to borrow money, let's talk
.
2. Ford- if they want to borrow, that's fine. However the Ford family must pledge its personal assets as collateral as well as Ford Motor Company's assets. In fact the family assets probably have more value than FMC's do. The Fords are worth hundreds of millions of dollars. It's their company [IIRC they retain ownership of 60% of the stock] let them put up their own funds to help out.

3. General Motors- borrow. No bailout.

All three must pledge in writing [make it part of the loan agreement] to completely restructure along the lines of NissanUSA or ToyotaUSA. If the UAW doesn't agree in writing as well, no loan.

Otherwise, let 'em fail.

[dragonbutt]

Well i would have to disagree with one statement, that they arent making cars Americans want. Americans wanted SUV's and the return to muscle cars and minivans and pickups. Gas was cheap and the thought of it ever returning to the 70's wasnt even their. The car companys built what they wanted.

But, with no forsight, they ignored a large part of the buyer base, the buyers who were shopping japanese. These were the green people, the gas saver people, the cheaper but better quality people. That group kept growing and the US automakers didnt keep track. The Walmart crowd.

Should we bail them out? Im mixed. Bankruptcy is an option, one that would negate their union contracts and allow them to reorganize. Perhaps a loan with no stock option, dont like socialism, but under a loan they would have to continue with the UAW. UAW isnt much for negotiating and when wages decrease, union dues decrease. I think its time to break the union, forgive me uncle.

I do think we owe something to the auto industry. They closed down shop and went into aircraft and tank production along with jeeps and such during the war WWII. A handout, no. Perhaps a hand up.

[Talismen]

dragon, your last comment is a valid point...one I hadn't thought of before.

But - with that in mind...I still don't like the idea of bailing these guys out.
If for nothing else but giving them a way to get out of their union contracts. That chart I linked to in the OP says it all. These companies can't make a profit while the unions are busting the management for every dime they can get. It's simply uncalled for.

And yes, you're right....Americans did want (and still want THE OPTION of) bigger cars. However, as you noted, the big three did ignore a good portion of the market that was seeking autos with the foreign companies. Right now, I'm a prime example:

I own a Hyundai Elantra (made in South Korea) that gets excellent gas mileage. Their warranty is nearly the best in the biz, and the car wears like iron. The engine still kicks butt, and it's three years old already. It's a decent sized "sedan" style vehicle.

I also own a Chevy Aveo5. This is the first batch of smaller vehicles GM started producing when gas prices started to go up, over a year ago. I've gotten more compliments on this car, and more people walking up to me asking if I like it, because those folks wanted to buy one too, to save gas. I don't know how many people told me that they were keeping their larger vehicle, but also wanted something that was good quality, and affordable, to get them around town and on short-distance trips.

What the big three have never really been good at, is going with the flow. As gas prices go up and down, they should have plans all ready to go to produce vehicles with the changing economic times. They've done a fair job at that, but, now that they have serious competition from Toyota, Honda and others, they need to get their heads out of their collective ass and get a move on.

[oldcoastie]

We havent owned an American car in 30 years. No reason to go back; Toyota, Nissan and Honda make much better products.

[diane]

I live in the metro-Detroit area.  My husband has a few years left to retirement and his whole career has been with an automotive supplier.  Only 1 in 5 of the original suppliers have survived...the rest either merged or went belly up.  There's not a supplier left that isn't on shakey ground, his company included.  They've been sold twice and last week fired four more salaried people and laid off the second shift.  On one hand I think a bailout might personally be good for us because it might just save my husband's job and our income for a few years til he retires.  On the other hand, I just can't embrace a bailout as I just see it as pouring more money down a hole with no long term good results.  General Motors has lost 50 billion dollars in the last three years...and they want to give them 25 billion more?  To do what with?  Continue on the same path...and they will because they are hamstrung by the unions and the state laws that protect all their dealerships.  All those dealerships is the reason they make so many different models that no one wants.  It would cost them a small fortune to eliminate those models and the number of franchises.  The union has already said they are not willing to give up any more.  The democrats are talking of a bailout with strings attached...higher CAFE regulations and putting bureaucrats on the board of directors for oversight.  We don't need the government meddling in business like this.  Do you want a government automotive company?  What will be next?  There are just two many negatives attached to this whole mess and I don't see what is going to change to turn these companies around.   I am more inclined to say, let them just file Chapter 11, go before the bankruptcy judge and all union contracts, dealer agreements, and golden parachutes for their executives are null and void and start over and reorganize.  Then let the market determine their survival.  It might be costly for us in the beginning...and for us here more on a personal level then we would like...but a bailout would only be a temporary solution and we'd be back in the same spot in a few years.  As much as it personally will affect me, I have to say no to the bailout

[oldcoastie]

Diane, I'm sorry to hear that your family is so tied into the big 3 in Detroit,

BUT - The automakers LOST money all during the time that the economy was booming for other businesses.

They need to go belly up so the UAW contract can be voided by an entirely NEW leadership. No one's worth more than $70/hour to assemble a damned car. AND to get paid for NOT working.

[Talismen]

This is an excellent read posted over at RedState(dot)com.
Take the time to read it all, if you've got it, but I'll post a good snip here:

http://www.redstate.com/diaries/blackhedd/2008/nov/18/what-lies-ahead-for-general-motors/

(snip)

The issue comes down fundamentally to this: should the taxpayers throw an enormous of money that is unlikely ever to be repaid into General Motors, to keep them operating in their current bloated state? They have far too much production capacity, their labor costs are far too high, and they have far too many dealers.

GM needs to shut down some capacity, renegotiate with the UAW, and change their production mix to more fuel-efficient vehicles. And in all candor, they’ve known this for decades. Rather than complete these reforms over time (which would have exposed them to market risk), they instead very effectively negotiated with Congress for an endless parade of market-distorting regulations that shielded them from competition.

Now that the string has run out, they’re looking for a direct input of taxpayer cash to keep operating more or less as they always have.

[diane]

It is true that they produced the vehicles people wanted.  Chrysler made their money on the minivans.  Trucks were in big demand too so these companies made what people bought.  It's not like you can just automatically switch the line over to produce small, gas saving cars.  A lot of money must be spent on engineering and retooling. 

My husband came home from work yesterday and they all got letters from corporate urging them all to write their representatives encouraging them to vote for the bailout.  Oh man, between a rock and a hard place here.  Sure wouldn't mind saving my husband's job for a few years but still see no proof a bailout is a permanent solution

Geez, things are bad here.  You know they are bad when even one of the casinos is in bankruptcy.  Not my fault because I've done my best to keep them afloat.  Matter of fact the casino bankruptcy is one my son's firm is handling.  When that one came up my son said he couldn't take it because of a conflict of interest since his mother goes there...lol.   Another thing I was wondering is when a company is put into bankruptcy all their assets and other properties they own can be used as collateral to secure financing.  Maybe somebody should suggest to the Ford family that they sell Ford Field and the Detroit Lions and put that money back into the business.  I'd do it myself but Ford is one of my husband's customers and I don't want to get him in trouble.  There's probably not many people waiting in line to buy a losing football team either.  we're screwed 

[Talismen]

*shaking head

I'll make sure to say some prayers for you diane.
Hang in there kiddo.


Is there another car company your hubby can go work for? One of the non-"big three" companies...if they are in the area, that is.

[diane]

Nope, my husband is stuck.  He is 61 years old.  There are no jobs available for someone at his level.  Our house is paid for, our kids gone, educated and very successful, so we have no debt and are in a much better place than many others because our responsibilities and big financial drains (kids...lol) are behind us.  What will be will be.  I've seen things happen to other people I know who had different plans like my friend who had the stroke and brain aneurysim that completely changed any plans they ever had.  I figure it doesn't pay to worry about things that are out of your control and you just deal with what you get.  I'm just glad that I don't have to worry about raising and educating kids in this kind of economic climate.  Could be worse

[Talismen]

Well...with all that going for you, you are ahead of the game....thank the heavens.
My dad lost his job at Swift years ago when they were closed due to hiring illegals, so I know what this can do to shake your mind-set.

Rest assured...God is watching over you

[diane]

I know it is particularly stressful for my husband.  He's already survived several shakeups and massive firings.  He wants to leave on his own terms and not be forced out.  He has so much experience and expertize and such a solid work ethic and I'm sure it is demoralizing for him to realize because of his age/salary they probably would like to get rid of him and he has no other options out there.  The company did face a couple of age discrimination suits from people with the same amount of senority and they ended up settling out of court.  They axed a bunch of people last week but he survived that so maybe they don't want to deal with any more lawsuits

[oldcoastie]

Welcome to my world........

No one wants you any more if you're over 50. Been there, got the t-shirt.

[dragonbutt]

What they should be asking for is congress to relax their restrictions on the companies, such as the fuel milage deal, let them have the 25 billion that was set awside for that and then voluntarily shutdown until the UAW agrees to renegotiate those contracts to get them closer to what toyota and the others have. Even with more money, they just cant compete with the union running the company.

[Talismen]

A two-pronged approach is necessary (IMO):

1. Shut down and/or file for bankruptcy - which ever will allow them to "tear up" the UAW contracts and start over. You cannot tell me that there aren't non-union people (yeah, call 'em "scabs") that wouldn't work at one of the big three for half of what the unionized people are making.

2. MANDATORY re-tooling of the lines they are offering to the market. Shift more resources into making the smaller vehicles, to keep up with the demand of what consumers are NOW buying from the U.S. based foreign factories. Offer people a choice...big or small...but don't just offer them a "flex fuel" vehicle the size of Wyoming.

[Talismen]

Neil nails it:

http://www.foxnews.com/story/0,2933,454925,00.html

Big Three, Take Note: You Can't Threaten Your Way to Help
Wednesday, November 19, 2008

By Neil Cavuto

Bail us out... or you die. That pretty much sums up the threat — I mean position — of U.S. automakers scrambling for a bailout.

Only they refuse to call it a bailout. They say it's a loan.

Trust me, if taxpayer dollars are involved, it's a bailout.

And until it's repaid — if it's ever repaid — because so few of these things are repaid, it certainly ain't a loan.

But back to my point: You can't threaten your way to help.

You can't say, either give us the money or we all feel the pain, when we haven't given you the money and we already are feeling the pain.

You can't say bankruptcy isn't an option because people don't buy cars from bankrupt companies, when you know full well they quite happily fly bankrupt airlines.

You can't inflate your case, stating 3 million will lose their jobs at factories, when you include car wash operators and food vendors, simply because they're near those factories.

I know, the more dire the pitch, the more compelling the pitch. But you auto guys are just spouting like sons of pitches. Tired and worn arguments for money you say you need, but offer no accounting for how you'll spend.

Your workers deserve better than to be propped up by us as they're dragged down by asinine judgments by you.

Americans are remarkably flexible. If their bosses can't cut it, they find a way they can.

Not with jobs that placate the status quo, but into jobs that raise them above it.

Don't use these fine folks to fill your pockets. Honor their skills to fill their potential.

You callously say jobs will be lost if you don't get your way. Let me be the first to offer your jobs, even if you do.

[diane]

Excellent points in that article.  You know it is even possible more people would be inclined to buy from the American car companies if they were in bankruptcy...they might find the incentive of keeping their relative, their friend, their neighbor working.  If they were to cut the wages in half I think people would be lining up for those jobs.  Delphi and other companies that went chapter 11 reduced their pay and didn't have a problem getting workers.  The truth is that kind of labor does not merit pay and bennies totalling 65-70 bucks an hour.  Before they recently went to a two tiered pay scale, the guy that swept the floor received the same pay that everyone else did.  His sweeping skills couldn't possibly have any more merit than the guy sweeping the floor at McDonalds.  When they were selling cars they caved to the unions just so they didn't have to shut the line down.  Even where my husband works they caved and the union got away with crap.  They don't even have to work a 40 hour week to qualify for overtime there.  If they scheduled overtime for the weekend it didn't matter how many hours they worked during the week they still got overtime pay.  Hence, they'd end up with a lot of absentees on Monday when times were busy.  This bailout is probably going to go thru.  We just need to be really wary about all these stipulations the dems are trying to hang on this one with the increased fuel standards and all.  The banks got their bailout passed real quick without all these strings.  I have a real problem with the government calling the shots on commerce.  What industry are they going to get their hands on next?  I also thought it was really crass of those auto execs to go begging for money via use of private jet.  First class not good enough? 

[Talismen]

I'm for stipluations, but not the ones the dems want.

Raising CAFE standards isn't going to help.
They've done that for years now, and look where we are now.

No...I'm for "you get the money if you re-negotiate your union contracts".
That's it.

[diane]

I think it's GM that has a couple dozen models that will get you 30mph.  The problem is nobody bought them.  They bought what they wanted when gas was cheap.  They should have been buying them to get off the dependency of foreign oil.  Some people need bigger vehicles that aren't good on gas, but I've seen women with one kid in the car driving one of those stupid hummers.  It's not just the union contracts that need to be reopened.  They need to get rid of these golden parachuttes and ridiculous salaries for the execs and get ride of all the state laws that protect the dealerships so they can cut the number of vehicles they produce.

[Talismen]

That too. Those salaries are insane...especially for someone who takes credit for running a company when times are good, and does everything they can to detach from it when times are bad.

And yes...people were buying gas hogs.
Sure, the couple with ump-teen kids needs a vehicle that can handle the load. But, like you mentioned, we have idiots around here who drive hummers with one kid in the back.

I see that and think...'geez lady, you know you're not in Colorado in the mountains, right?'
This is Iowa. We can have snow on the ground as early as late September, and as late as April. But, we don't have mountains, and those big vehicles may be nice to drive, but that kind of power just isn't needed around here.

[oldcoastie]

No...I'm for "you get the money if you re-negotiate your union contracts".
That's it.

I disagree. The same jerks who negotiated the current contracts would renegotiate the newer ones? Why bother? Pocket pieces are pocket pieces.

Go bankrupt. Then an entirely new management team enters the fray.

[Talismen]

Ok...there's another mandate.
No one who negotiated the current UAW contracts could re-negotiate the new ones.

I'd say...bring in the people who negotiate the contracts for the other car companies...the ones actually making money right now, instead of asking for a handout to throw money at a problem they aren't willing to fix.

[oldcoastie]

Ok...there's another mandate.
No one who negotiated the current UAW contracts could re-negotiate the new ones.

I'd say...bring in the people who negotiate the contracts for the other car companies...the ones actually making money right now, instead of asking for a handout to throw money at a problem they aren't willing to fix.

The other car companies making money are, I believe, non-union.