Uh, hang on a second. What happens to YOUR business if the Big 3 go into Chapter 7...?

 

And the Toyota non union workers make $65520 a year according to the article's $31.50/hour rate, or about only $500 a year less than the Union workers that some people feel are paid too much.

It doesn't say so specifically, but those salary/benefits figures are probably an average; some probably make a little more or a little less; take for instance the the Toyota worker's wage figure of $31.50, somebody in this thread said:

 

The bail out in the '70s was a loan. They repayed the loan seven years early.

Yes they are back again after a "merger of equals" with Daimler (i.e. dump all of the US management, install German execs, use Chrysler's cash when Daimler was going through some hard times, then repay the favor by dumping Chrysler when it is in trouble.)


But airlines <> auto manufacturers. One provides a generic service transporting people from point a to point b, where as long as the plane doesn't crash and they don't lose your luggage, people really don't care who provides the service.

The other sells a product that is the second biggest purchase a person makes besides buying a house, a product that the purchaser lives with day in and day out for years and has a lot of prestige/image/status tied to it.

 

So it's cool that Alan flew on the corporate FMC jet . . . . the other two should have "been free to move about the country" on Southwest.

 

You know this is rather funny....you've bought into the whole "There is NO OTHER OPTION" ploy that they want you to buy into. While I agree with Shelby in the fact that this isn't a good idea I don't agree with his reasoning why....his perspective is different from my own. Union money is strong and it's what put a LOT of politicians into office and now they are calling in that favor in return for the backing money they have donated so much......No group gives money to a campaign out of the goodness of their hearts, they expect a return in the future and for the Teamsters that time is now. I'm sorry but maybe you have not had direct interaction with the Teamsters Union but I have and I have witnessed their corruption first hand and while not with the UAW it was still the Teamsters Union it was so bad that in the Javits center in New York City they had to bring in State Troopers for security when the Teamsters were forced out of that center. You will not get any good from that group so the only way to make progress is going to be to remove them from the picture because they will not concede anything for the greater good...they can't see past their own wallets.

I am already tired of the recent bailout bandwagon and I don't see this as any better. AIG got bailout money and look what they did....Paulson got control of the bailout money and then turns around and says "No, I'm not going to use it as you intended....I am going in a different direction"....A handout is a handout and the first bailout package we are paying for that was authorized has done nothing and Paulson is feeling his way through this just hoping to hit on something that will work....so you'll just have to forgive me if you can't understand why I don't agree with just giving handouts out to everyone who asks without first exploring other options. GM has obviously not explored other options if their Execs are flying on private jets....$20,000 goes a long way over a $400 public transport when you add a few of those up! I don't think any of us here could fathom the wasteful spending going on in that company. I know the upper management doesn't eat their lunch at McDonals or even pack their own.....or how about upper management sacrificing a portion of their own high salaries for a while for the greater good of the company?!? No matter how hard anyone tries they can't dispute that things can't be trimmed and the writing has been on the wall for some time now for GM which has obviously ignored the problem and now they are so big their arguement is "Bail us out or the whole country suffers"....nice scare tactic that is apparently working on a lot of people and while there may be truth to the consequences of a complete shutdown I cannot believe other options have not been explored....fact probably is that they don't want any other options, they just want a handout and unless things change in house they will come back for another when this one runs out.

 

They should have went Greyhound ! They would have gotten the loans for sure. Alan should have driven to Washington in an Escape Hybrid...

 

Very little.....I don't rely on Ford parts for restorations and don't have to and they abandoned many parts long ago. Most of my business is not new cars so I don't rely on the Big 3....sorry to disappoint you .

So my question to you is....Who are we going to bail out next? State Farm, Nationwide, Amtrak, Greyhound, UPS, Fedex, Old Dominion, etc, etc.....where will it end?

After all Hollywood...YOU don't have to pay for this!

 

What about the countless other manufacturing Industries this country has already let go and forgotten about.....There was no bailout for the Steel Industry which is now far smaller than it used to be....are we going to bail out what's left of the Steel industry next?!?

What about all the other manufacturing that no longer exist in the U.S. .....There is ONE SINGLE company left in this country that makes Coat hangers....seems like a trivial thing but its a product and we've been reduced to one single company making this item. What about Electronics...long gone....countless other things that the United States used to manufacture that no longer exist. Is the state of affairs so bad here that now we are going to try to save one of the last large companies after letting all the others just disappear?!? Think about it....regardless of the topic at hand on yes or no, why now....why has this country ignored the vast number of previously viable manufacturing that now no longer exists? How is this fair to all those that are now gone...some of those industries were as large or larger than the Big 3 before their demise(ie: Steel industry).

What's next...Boeing, Lockheed or the others mentioned above. Are we going to reward poor judgement, mismanagement and corrupt Unions by simply giving them a handout without changing what caused the problem to begin with?!?

 

Well, you may be "sitting pretty" if the american auto industry goes belly up, but I'm NOT!! How do you think I feel about all this? People don't want to buy anything right now, and if I don't sell, I DON'T MAKE ANY MONEY!!! I'm not salary/hourly like alot of people are in this country. I want the bailout to happen. If not, and the suppliers go out of business, Ford will have trouble building cars, and that will affect my life! NO JOB, NO HOME, and definitely no STANG! I'll be in line for my check at the unemployment office if GM packs up, as GM is HUGE and if they go under, it will have a ripple effect that will be ENORMOUS!!! TRUST ME!!!

 

I didn't say I wouldn't be upset about it but Hollywoods point was to try to "Scare me into submission" to thinking this was a good idea and that is not the way to get someone to agree to a point of view.

I feel badly for those in the car sales business right now....it's a bad place to be....but cars are expensive and we can also trace the higher cost of cars back to the Unions and the higher costs incurred by the Big 3 as a result. I used to be in the car business in a dealership so I understand how you feel but I don't think a handout is appropriate without the necessary changes needed to keep it from being required again in the future and that for the most part is the sticking point of the current issue for me. I will not blindly just say "OK" and support this unless I can see some clear and adhered to points of change that can be taken to promise us that we won't be at this same point in another 6 months(with the way GM is bleeding money!) or 2 years.

Sales is not a car only talent so it would not necessarily be the end of the world for you personally....yes you would have to find another job but if you are good at sales then there are options out there. Again, I understand how this affects you but my sticking point above is my "hurdle" that I need to be shown before I'll support a bailout. They obviously proceeded down a road that got them where they are....no change means the same destination again in the future.

 

I wasn't trying to scare you into anything. Fact is, I agree with your core argument. But I think you may be overlooking some VERY serious facts, namely >>

- I agree that one way to ordinarily reorganize more efficiently is Chapter 11; it happens all the time. These are not ordinary times, however. Most economists believe that Chapter 11 is quite possibly untenable. GM, for example, would never re-emerge as a solvent company. GM can't build cars without parts, and it can't get parts without credit. Yes, Chapter 11 companies typically get that sort of credit from Debtor-in-Possession (DIP) loans. But the same Wall Street meltdown that has dragged down the economy and GM sales has also dried up the DIP money GM would need to operate. That's why many analysts and scholars believe GM would likely end up in Chapter 7 bankruptcy, which would entail total liquidation. Those are among the reasons most analysts and economists, however reluctantly, have concluded that a better solution would be another government bailout. Moreover, the danger for parts makers is that if a customer goes into bankruptcy protection under Chapter 11 of the U.S. bankruptcy code or the Companies' Creditors Arrangement Act in Canada, their receivables turn them into unsecured creditors. Also, how many consumers are going to buy a product from a company in Chapter 11? So expect sales to worsen further in that scenario.

- The economic shockwaves will be palpable for everyone - without re-quoting all the figures that I and others have brought up before, suffice to say it will impact the country in a very negative way if two or more of these companies file for Chapter 7.

- America [or any nation] cannot be a superpower if it no longer manufactures anything. Think about all the manufacturing industries that America has lost since WWII. Four MILLION manufacturing jobs have disappeared in the past 10 years alone. I won't go through all the industries that have disappeared, I would only say go into any retailer and try to find an item that is made in America; they're few and far between.

- Most economists believe that world governments are going to have to take a more active role in their country's economies to avert a massive global recession that could otherwise last for four years (not a good thing). America's deficit is around $500B. It's been postulated that it may have to be run up twice that high in order to kickstart the economy to the point where GDP is at acceptable levels again...and worry about the deficit later (that's how serious things are), otherwise prepare to face a very long and painful recession.

- NATIONAL SECURITY: I heard one member of Congress quip that if the auto industry goes down, then if and when America finds itself in a conflict with Communist China over, for example, Taiwan, it will need to borrow the money from China to wage its war, and also buy its military vehicles from China, too. While it was a joke, the implications are serious >> does anyone believe that American armed forces should be fully supplied from - and dependent upon - foreign manufacturers? That's just a whole barrel full of wrong, right there.

- Government culpability: Yeah, we all know the Big 3 have made major mistakes; I've chastised them for a long time around here myself. But there is plenty of blame to go around everywhere. While I think the Big 3 execs made a huge PR mistake showing up in Washington in three private jets (incredibly stupid, actually), Congress and previous administrations are also to blame for passing unfair trade legislation that enables foreign countries to place stiff tariffs on American goods (including cars) while those same countries are able to dump their goods (including cars) on our shores. Pure genius. Then there's the fact that vehicles made in those other countries are also subsidized because the governments there pay for healthcare benefits for their citizens. So the playing field hasn't been level, either. So blame government for faulty trade policies that have worsened Detroit's legacy costs, the Big 3 for three decades of shortsighted business decisions, and the UAW for a history of crippling labor demands.

So while I generally agree with you and am against bailouts in general, this situation is simply too enormous and critical to start taking chances with it. Remember, too, that Ford is already well into its turnaround plan under Mulally - we're starting to see the results of that plan now. What a shame it would be if they didn't have a chance to come to fruition.

 

Regardless of the Bankruptcy discussion and I agree these are not normal times what I am about to bring up brings my arguement home.

It was reported yesterday that while GM went home empty handed from Washington that Congress asked them to put together a plan of how and where they were going to spend the money they asked for.

Now this is my point.....They went to Washington with their hands out and they had NO PLAN to offer as to how they were going to spend the money?!?!?!?!!!!!!! This is ABSURD!!!! NO BUSINESS EVER goes asking for money without a Business plan!!!...PERIOD!!!! This is straight from College Business 101!!!! This is the MOST basic principle for a Business to do when asking for a substantial amount of money and this PROVES that GM was only looking for a no strings attached handout!!!

If anyone supporting the bailout without conditions or a PLAN still supports such a deal then I cannot fathom why!!!

My point of contention all along is that without a plan and without changes to the path they are on this money is nothing more than a handout and only delays the inevitable!

It is ABSOLUTLY ABSURD that an Executive got on a Coporate Jet($20K) and flew to D.C. to ask for a LARGE sum of money without so much as a clue to offer Congress as to how they planned to spend that money!!!!

I can support a "Bailout" given current conditions of the Economy provided there is a plan that shows us they intend to remove themselves from this path and change things to keep it from happening again but I maintain that I will NOT support a "Handout" just because they asked and used fear mongering having no plan on how they planned to use the money.

 

I think everybody here can agree with that. I personally don't want to throw my tax money away, I want it to help them survive and complete the changes needed to get back to profitability and save the US Auto industry. I do not want to see the last major manufacturing industry in the US disappear.

Ford seems to be in the best position is the midst of turning the ship around as they have lots of changes happening now (retooling truck plants for smaller cars, global platforms, etc), but if GM goes, it will likely take Ford and the progress they have been making down too.

 

It looks as if GM got the message, at least in part. The company is getting rid of two corporate jets.

 

Now if Congress could only follow their own advice and tighten the purse strings. Do as I say not as I do.

I'd love to go in front of Congress one day and tell them where to stick it on National TV. I'd love to see one of these grandstanding Congressmen put in their place by a witness, but no one has ever had the ***** or lack of brains to do it. It would be suicide but worth it. I don't care Democrat or Republican the whole lot of them needs to be sent home.

 

The upper management only cares for themselves. It's the same on many companies and yet they complain that costs have to be reduced, but they say "don't touch our stuff"

 

You missed a critical point. People are putting their lives in the hands of a "bankrupt" airline.

The fact of the matter is that the UAW will need to take huge concessions. Here is a good article:
http://www.heritage.org/Research/Economy/wm2135.cfm

A lot of great business minds are now leaning towards a pre-packaged bankruptcy.

If we simply give the automakers bridge loans, it's not enough incentive for them to change their business model.

 

That might not be a bad idea, actually, if it works. But I do wonder what will happen to sales during the reorganization. And let's be clear: I don't want to see Congress telling the automakers what they should be building (beyond broad generalizations); it's up to the automakers to determine that...and perhaps simply accelerate efficiency plans that were already in the works.

True. Although I would argue that to a tangible extent, they had already begun changing their business model. They're certainly building better quality cars than before. And I think Ford's business model is already on track. GM, on the other hand, needs to jettison a couple of North American marques.

What ALL the companies need are new labor and cost models.

 

The hard part is that the UAW has stated they are reluctant to open the contract. The UAW needs to take HUGE pay cuts overall. I can make a strong arguement that unions are killing America. Look at all the industries that are continuously in trouble....they all have a common factor.

 

Yeah, one good thing about a prepackaged Chapter 11 would be the death of the UAW.

We'll see how 'smart' they think they are then.