[turtle777]

Should the government give them money ?
Can they be fixed ?

-t

[Atheist]

I say no. Throwing money at them will just postpone the inevitable. Let them work it out on their own.

[turtle777]

My opinion: money won't fix the main problem: the UAW.

Unless the unions are broken up, the Big Three are toast.

-t

[RAILhead]

I voted for number TWO.

[OldManMac]

Originally Posted by turtle777 

My opinion: money won't fix the main problem: the UAW.

Unless the unions are broken up, the Big Three are toast.

-t

UAW membership, and power, have steadily declined for decades. The import brands that build their cars in the U. S. pay very similar wages and benefits as UAW workers. Management pay and benefits, OTOH, gave gone up vastly in the last few decades, while they've delivered poorer results. I'm not saying the union isn't partially the problem, but it is management's responsibility to get the job done at the end of the day; they're supposed to run the company, and that's why they get the big bucks. They've failed miserably, from the time fifty years ago when they laughed at the first Japanese imports, trumpeting how very few people would ever buy them, to today, when they're building better cars that no one still wants to buy. If you make a good product, and you market it properly, people will buy it. Apple is an excellent example; they're getting Windows users to switch because they make a better product. GM, Ford, and Chrysler also have too much model overlap. What's the difference between a Chevy Cobalt and a Pontiac G5; the grilles and some trim. They're all not focused on what they're producing, deluding themselves into thinking they can keep all their various brands and models, when they can't produce them at a reasonable price.

GM and Chrysler are not long for this world, and there's no reason my tax dollars should prop up a product I'm not going to buy. Ford is living on a little longer leash, but they're still history within five to ten years, as they made the unbelievably stupid mistake of signing everything over (even the Ford logo) to banks in exchange for working capital. What none of them has apparently realized is that the Chinese are getting closer and closer to building decent cars at a cheaper price, as the Indians will also, and when that happens, and those cars are imported into the U. S., as they will be, all the tax dollars in the world aren't going to help.

[turtle777]

Both, Ford and GM, have a very attractive and competitive line-up of small and mid-sized cars with their European daugthers (Ford, Opel).

Yet, the US laws (duties, safety regulations) and the UAW make it impossible for them to leverage those for the American market.

-t

[The Crook]

Originally Posted by turtle777 

Yet, the US laws (duties, safety regulations) and the UAW make it impossible for them to leverage those for the American market

That's the choice we make.

A business that can't survive by following safety regulations and in the face of an organized workforce doesn't deserve to survive.* It's similar to saying that police would search more effectively if they didn't have to deal with pesky fourth amendment issues. That may be true, but it's not what we want to do.

Yet, I hardly think those things make it "impossible" to succeed here. We can, for one, cut health care costs by moving to a universal system. The auto companies themselves can start making more fuel-efficient cars. Those two reasons alone are a gigantic part of the problem.

*(Yes, "we" as in the majority who elects Congress and the President to enact and enforce laws; who in turn appoint and confirm justices for the Supreme Court; who in turn make up the last word on what the Constitution means in terms of the authority of Congress to pass laws like the ones applicable to the auto industry -- before someone gets all "vmarks" on me.)

[villalobos]

Originally Posted by turtle777 

Both, Ford and GM, have a very attractive and competitive line-up of small and mid-sized cars with their European daugthers (Ford, Opel).

Yet, the US laws (duties, safety regulations) and the UAW make it impossible for them to leverage those for the American market.

-t

Actually it's more due to the fact that Americans believe they need and deserve a V6 or V8 sedan to go grocery shopping, if not a gas guzzler SUV. Ford has already imported european cars (mondeo anyone) and it was "too small" and "underpowered" for Americans. Honda's european accord is the Acura TSX. Again, too small and underpowered. This is why they don't leverage these cars. Honda does not sell its european civics here : when it tried (the last generation SI) it did not sell. Europeans builders which actually sell their european cars are marginal vendors at best (meaning they cater to a niche, not to mainstream).

[vmarks]

Originally Posted by The Crook 

That's the choice we make.

A business that can't survive by following safety regulations and in the face of an organized workforce doesn't deserve to survive.* It's similar to saying that police would search more effectively if they didn't have to deal with pesky fourth amendment issues. That may be true, but it's not what we want to do.

Incorrect.

The Fourth Amendment is clearly a part of the Constitution. Unions stem from the racist Davis-Bacon act, not the Constitution. Safety regulations are not in the Constitution either.

The comparison is a bad one, these things are not similar at all.

Yet, I hardly think those things make it "impossible" to succeed here. We can, for one, cut health care costs by moving to a universal system.

No, we cannot. The federal government lacks the authority to pass such a thing without an amendment granting it the power to do so.

The auto companies themselves can start making more fuel-efficient cars. Those two reasons alone are a gigantic part of the problem.

And if they wanted to survive, they can choose to do so. That's one of the neat things about businesses, they can decide what products they want to make.

*(Yes, "we" as in the majority who elects Congress and the President to enact and enforce laws; who in turn appoint and confirm justices for the Supreme Court; who in turn make up the last word on what the Constitution means in terms of the authority of Congress to pass laws like the ones applicable to the auto industry -- before someone gets all "vmarks" on me.)

(A) invoking my name is unnecessary, particularly in a negative fashion. I'm sorry that you think it's unfortunate I adhere to the notion that the law has to be clear and consistent in application in order to be understood and obeyed.

(A)(1) We have a rule that cautions against making threads or posts about other members. It has a good effect. People have to write against arguments, not other people.

(B) The Supreme Court gets it wrong. The Supreme Court has been clearly mistaken on more than one occasion. After all, Jefferson thought the court got it wrong in Madison v Marbury, creating oligarchy-by-court. Plessy v Ferguson was wrong. And even recently, the Court gets it wrong. McConnell v F.E.C., Kelo v. New London, Hiibel v Sixth Judicial District Court of Nevada, Gonzalez v Raich, Grutter v. Bollinger et al. and Gratz v. Bollinger et al... there's a long list, much longer than this sampling.

We require our Congressional representatives and President to take an oath to uphold, protect and defend our Constitution. Too often, they write bills and pass laws which are in direct contradiction to the Constitution, and leave it to the court clean up the mess.

Which leads to my opinion on the topic of this thread: The Federal Government has no authority to bail out any private company, for any reason. It simply lacks the authority to spend money on that.

"To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may, at any time, be passed by those intended to be restrained?"

What is the point of having a written Constitution if Congress, the President, and the Court can ignore it whenever they deem convenient?

[hyteckit]

No bailout. How many times do you have to bailout the cars companies?

The UAW has grown too large for it's own good. All you get is high paying jobs and expensive cars that can't compete with foreign cars.

[OldManMac]

Originally Posted by hyteckit 

The UAW has grown too large for it's own good. All you get is high paying jobs and expensive cars that can't compete with foreign cars.

Once again, the facts are ignored. The UAW, as well as the vast majority of unions, have drastically shrunk in the last several decades.

[Helmling]

Originally Posted by turtle777 

My opinion: money won't fix the main problem: the UAW.

Unless the unions are broken up, the Big Three are toast.

-t

How will allowing the US auto industry to pay Americans as little as they do their employees in Mexico help the situation?

It's astounding that in the midst of a financial crisis created by reckless and runaway deregulation based on supply-sider thinking the solution you propose is more deregulation and supply-side thinking.

I don't want to see the economy go any further under and have all these people who work for GM or the many other firms dependent upon it go jobless. So if we have to bail them out, then fine. But I'm now thinking on quite the opposite side of the political spectrum. If we buy 'em, then dammit, we own 'em.

[vmarks]

Why is it a function of government to see that the autoworkers keep their jobs?

Where in the Constitution is that a role of Congress or the President?

[el chupacabra]

As some of our republican congressmen have pointed out GM is whining ferociously about bankruptcy yet is still paying management $250,000 xmas bonuses. These companies are too big, to bureaucratic, and need to die.

I say the same for the banks and wall street as well. I'm quite pissed that useless banks and wall street gambling were saved, I was looking forward to a reset button on the economy.

[The Crook]

Originally Posted by vmarks 

Incorrect.

The Fourth Amendment is clearly a part of the Constitution. Unions stem from the racist Davis-Bacon act, not the Constitution. Safety regulations are not in the Constitution either.

The comparison is a bad one, these things are not similar at all.

Did you really respond just to tell me that?

Of course the Fourth Amendment is in the Constitution. And of course the whole union shebang comes from statutes. That isn't relevant to my comparison at all. The point was that regardless of what authorizes or prohibits certain things, we as voters prefer not to give up certain things. Whether it's a prohibition on unreasonable searches and seizures or giving certain legal rights to workers. These are the choices that we make, and we're not going to sacrifice them in this context. Not even Republicans are clamoring for union busting.

Originally Posted by vmarks 

No, we cannot. The federal government lacks the authority to pass such a thing without an amendment granting it the power to do so.

Originally Posted by vmarks 

(B) The Supreme Court gets it wrong. The Supreme Court has been clearly mistaken on more than one occasion. After all, Jefferson thought the court got it wrong in Madison v Marbury, creating oligarchy-by-court. Plessy v Ferguson was wrong. And even recently, the Court gets it wrong. McConnell v F.E.C., Kelo v. New London, Hiibel v Sixth Judicial District Court of Nevada, Gonzalez v Raich, Grutter v. Bollinger et al. and Gratz v. Bollinger et al... there's a long list, much longer than this sampling.

We require our Congressional representatives and President to take an oath to uphold, protect and defend our Constitution. Too often, they write bills and pass laws which are in direct contradiction to the Constitution, and leave it to the court clean up the mess.

Which leads to my opinion on the topic of this thread: The Federal Government has no authority to bail out any private company, for any reason. It simply lacks the authority to spend money on that.

"To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may, at any time, be passed by those intended to be restrained?"

What is the point of having a written Constitution if Congress, the President, and the Court can ignore it whenever they deem convenient?

I'm relieved that virtually no one else believes this.

[Wiskedjak]

Originally Posted by OldManMac 

Once again, the facts are ignored. The UAW, as well as the vast majority of unions, have drastically shrunk in the last several decades.

The UAW may have shrunk in size, but the UAW agreement (in Canada at least) requires the automakers to pay lifetime health insurance. Even as the UAW shrinks, the number of lifetime health insurance payments only continues to grow.

[turtle777]

Originally Posted by OldManMac 

Once again, the facts are ignored. The UAW, as well as the vast majority of unions, have drastically shrunk in the last several decades.

Shrunk as much as the Big 3's profits and sales ?

I doubt it.

-t

[OldManMac]

Originally Posted by turtle777 

Shrunk as much as the Big 3's profits and sales ?

I doubt it.

-t

Do some research before putting out generalities.

http://www.detnews.com/apps/pbcs.dll...TO01/604130375

http://64.233.169.104/search?q=cache...&client=safari

http://www.heritage.org/research/labor/wm1202.cfm

Here's another article that explains, correctly, that the auto execs have been clueless for decades, as I've pointed out many times. As usual, the unions are an easy target for the clueless, and I'm not saying they're blameless, but in the end, once again, management is charged with making the decision to run an effective and profitable company, not the unions (who are no different than you or I, in that we all want as much as we can get from our employer, and if they're stupid enough to give us things they can't afford, then they're not effective stewards of the organization). I don't understand why this is such a hard concept to grasp, but the facts are that if you build a car that people want, and run an organization with a view to the future, instead of just seeing the end of your nose, you have a vastly larger chance of success than the "Big Three" will. The bozos who run these companies go to Washington, hat in hand, beg for money, and then will misappropriate some that money nonetheless, including paying outrageous bonuses, while telling their employees that they have to sacrifice. People like Wagoner, the GM CEO, should be sacked without a golden parachute, and replaced with someone who can see past tomorrow.

http://www.usnews.com/blogs/flowchar...k-detroit.html

[tie]

No. Why should we give our tax dollars to companies whose products we don't want to buy? Who else should we bail out? I think Yahoo is looking pretty weak right now.

These companies will emerge from bankruptcy much stronger than any amount of government loans could make them. (An alternative to loans might be to place them in some sort of government receivership so that they don't have to declare formal bankruptcy. This might be acceptable to me.)

Their problem is that they believed their close ties to government meant that they could ignore the marketplace and not develop more efficient cars. Let's not prove them right on that.

[dcmacdaddy]

I voted other.

I think the only way government money should be used is to facilitate a merger between GM and Chrysler. The government should offer to buy $15B in preferred shares of a combined GM/Chrysler. The automakers get some much needed capital, the auto industry gets the reductions in production capacity it needs for long-term survival, and the taxpayers get some expectation/guarantee of a return on their investment.

[OldManMac]

Originally Posted by dcmacdaddy 

I voted other.

....... and the taxpayers get some expectation/guarantee of a return on their investment.

That's an enormous, and IMO, unjustified leap of faith.

[dcmacdaddy]

Originally Posted by OldManMac 

That's an enormous, and IMO, unjustified leap of faith.

Preferred shares of stock in a company usually come with a guaranteed minimum return. All that needs to be done is structure the federal investment such that the government gets a guaranteed minimum part of its investment back over 5-10 years and then can take a chance on recouping the rest when the merged company becomes profitable and the government can sell its shares.


Just to be clear on what I am advocating, I will state my view as explicitly as possible. I think partial nationalization of the auto industry on a time-limited basis with specific terms for repayment and specific business goals in mind (returning a combined GM/Chrysler to profitability as part of a permanently smaller US auto industry) is a totally acceptable use of our federal tax dollars.

[CreepDogg]

No, most certainly not without a viable business plan that would lead investors (taxpayers) to believe they can recover and compete. I don't expect to see that plan any time soon.

Maybe the oil companies should bail them out? After all, the oil companies need something to do with their record profits. I'm sure their investors would look at the past symbiotic relationship with the Big 3 and realize keeping them afloat is a good investment.

I will say this - a lot of what the Big 3 complain about is the increasing medical costs, especially for retirees. In this respect, it's true that they can't compete with the Japanese and European automakers. Those companies benefit from various forms of universal health care and, in some cases, much lower per capita health care costs. Of course, that is tempered a bit to the extent those companies employ and manufacture in the US.

[CreepDogg]

Originally Posted by vmarks 

No, we cannot. The federal government lacks the authority to pass such a thing without an amendment granting it the power to do so.
...

"To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may, at any time, be passed by those intended to be restrained?"

What is the point of having a written Constitution if Congress, the President, and the Court can ignore it whenever they deem convenient?

Well, you may not agree, but I think a case can be made that the Constitution supports this type of behavior.

Originally Posted by Article I, Section 8

The Congress shall have power
...
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
...
—And
To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.

As I said in my above post, I don't think we should do this in this case as it's not a good investment for the people, but I don't think it's fair to unilaterally say such action would be unconstitutional. After all, I think the crux of the argument in favor of this is that it is 'necessary and proper' to preserve the industry, and thus interstate commerce.

You may not agree, but I think one can make a pretty compelling case that this is a valid interpretation.

[OldManMac]

Originally Posted by dcmacdaddy 

Just to be clear on what I am advocating, I will state my view as explicitly as possible. I think partial nationalization of the auto industry on a time-limited basis with specific terms for repayment and specific business goals in mind (returning a combined GM/Chrysler to profitability as part of a permanently smaller US auto industry) is a totally acceptable use of our federal tax dollars.

I understand what you're saying. I believe that there is no way that the 3 can return to profitability. It's over. They needed competitive product in the pipeline yesterday, and that's no longer here. If we bail them out (which we probably will in some fashion), we're throwing good money after bad. We've spent way too many of our tax dollars giving large corporations advantages, in a falsely named free market, to just keep throwing money around, as if we can keep printing and not affecting the value of it.

[OreoCookie]

There is no point in putting money into a dying entity. And the problem is not auto unions, it's that Americans buy less cars and different cars that the Americans don't currently have in their portfolio. Add a banking crisis to that and you have recipe for disaster.

IMO the profitable pieces (e. g. Opel in case of GM) should be cut out and everything that's losing money has to be cut away.

[Sayf-Allah]

Originally Posted by OreoCookie 

There is no point in putting money into a dying entity. And the problem is not auto unions, it's that Americans buy less cars and different cars that the Americans don't currently have in their portfolio. Add a banking crisis to that and you have recipe for disaster.

IMO the profitable pieces (e. g. Opel in case of GM) should be cut out and everything that's losing money has to be cut away.

Wasn't Opel just today asking the German government to help it out?

[turtle777]

Originally Posted by OldManMac 

Do some research before putting out generalities.

You don't get it, do you ?

The *size* doesn't matter, it's the power and influence they still hold, and their hand-out mentality.

-t

[turtle777]

Originally Posted by dcmacdaddy 

I think the only way government money should be used is to facilitate a merger between GM and Chrysler.

A merger between those to is not a great idea.

Where are the synergies between two equally badly managed companies, of which Chrysler hasn't even gotten any significant concessions from the UAW ?

-t

[The Crook]

Where is anyone talking about the UAW?

This insane focus on labor is right out of the 1980's. It's a solution in search of a problem.

In the articles I've read about the U.S. auto industry, what contributed the most to its decline were: (1) the global credit crunch; and (2) its reluctance to build smaller, more fuel-efficient vehicles compared to its foreign competitors.

[OldManMac]

Originally Posted by turtle777 

You don't get it, do you ?

The *size* doesn't matter, it's the power and influence they still hold, and their hand-out mentality.

-t

I quite easily get it; you don't. They have far less sway than they used to, and you ignore reality. You're biased against unions, for whatever reasons, when it is in fact management's fault for giving them what they wanted. There's no escaping that. I'll say it again; if I go to my boss and ask for something the company can't afford, and he gives it to me, it's his fault. You also ignore the reality that, for many years, management and the unions both got fat and happy together, so management wasn't too concerned with handing out fat contracts, because they knew they were going to sell more cars than the year before. That isn't the case anymore, and management now has to actually watch their expenditures. As to your allegations that size is not somehow tied to influence, that's just not true. Why do you think the unions gave so many concessions in their last few contract negotiations, because they were just being nice? No, they gave them because the knew their power is waning, and in order to keep membership, they had to concede severe wage and benefit cuts to new hires. New hires today at the auto plants make less than half what long-time union members do. To suggest that the unions still hold some strong clout ignores economic reality. Please do some research on what's happening with unions today, before you make all manner of claim that you can't substantiate. Also please note that I said they're not entirely blameless, but they are not the main factor in America's dominance in the auto industry. That lies squarely with management's inability to properly run their companies.

[OldManMac]

Originally Posted by The Crook 

Where is anyone talking about the UAW?

This insane focus on labor is right out of the 1980's. It's a solution in search of a problem.

In the articles I've read about the U.S. auto industry, what contributed the most to its decline were: (1) the global credit crunch; and (2) its reluctance to build smaller, more fuel-efficient vehicles compared to its foreign competitors.

How dare you bring facts into this? Some people need to find an easy scapegoat, even when the evidence is clear that there are other issues.

[vmarks]

Originally Posted by CreepDogg 

Well, you may not agree, but I think a case can be made that the Constitution supports this type of behavior.

I don't think that case can successfully be made. You quoted Article 1 Section 8 which lays out exactly why that case cannot be made.

The Article lays out the things on which federal money may only be spent on, even as the commerce clause gets its teeth from the necessary and proper clause.

Regulating commerce does not mean propping up industries. It means ensuring that roads and waterways are able to be used equitably so that some commerce is not favored while another impeded. It is the power to regulate trade. That's it.

Can Honda and Subaru and Isuzu and Toyota and all the other manufacturers who operate in America still trade, still sell cars and financing? Yes? Then by what right does Congress have to spend money it has no authority to spend (Article I section 8) on regulating the success or failure of a business?

The commerce clause does not allow Congress to regulate that which might affect commerce indirectly.

As I said in my above post, I don't think we should do this in this case as it's not a good investment for the people, but I don't think it's fair to unilaterally say such action would be unconstitutional. After all, I think the crux of the argument in favor of this is that it is 'necessary and proper' to preserve the industry, and thus interstate commerce.

You may not agree, but I think one can make a pretty compelling case that this is a valid interpretation.

[OreoCookie]

Originally Posted by Sayf-Allah 

Wasn't Opel just today asking the German government to help it out?

Yes, they have.
The thing is that the Opel division is profitable, it is making money, but that money is transferred to GM. Obviously Opel is much smaller than GM, so the money they make with it is not going to compensate the big losses on the other side of the pond.

In any case, I'm against bail outs, especially bail outs of dying patients.

[PB2K]

I'm not american but I think these giant car builders have met their ultimate fate. Mainly because of their generously provided pensions and healthcare they have become too expensive to ever become profitable. It's insane to try fund a company that is losing 100.000.000,00 US$ on a monthly basis. And regarding their reputation to be slow to recognize trends (too late with SUV, too late with small cars) I don't see them invent a new wonder car that will change their situation.
It has to end somewhere.

[CreepDogg]

Originally Posted by vmarks 

Regulating commerce does not mean propping up industries. It means ensuring that roads and waterways are able to be used equitably so that some commerce is not favored while another impeded. It is the power to regulate trade. That's it.

Exactly. Regulating commerce means ensuring the playing field is even for all in the market. If the people were to deem it 'necessary and proper' to invest in the Big 3 to do this (because they deem others have some other unfair advantage), then it's in the bounds of what Article I, Section 8 specifies.

You're making one interpretation of what 'regulating commerce' means. There are others that are valid, regardless of whether or not you agree with them.

[finboy]

not no but hell no.

I blame all of them, UAW and management and everybody. And folks who BOUGHT GM cars given their service history, design history, and lack of fuel economy deserve what they get. All those lefties who say "go union" and vote that way, get what they deserve.

Comparing this to bailing out the banks is the same as saying that we have to repave our parking lots before we rebuild the interstate system. They are apples and oranges.

[Shaddim]

**** no. Give them a shovel (let them merge), but they can dig themselves out.

[turtle777]

Originally Posted by OldManMac 

They have far less sway than they used to, and you ignore reality. You're biased against unions, for whatever reasons, when it is in fact management's fault for giving them what they wanted. There's no escaping that. I'll say it again; if I go to my boss and ask for something the company can't afford, and he gives it to me, it's his fault.

BS.

Are you telling me GM and Ford could just go out and replace unionized workers with non-unionized ones ?

Until that happens, the unions have too much power.

Btw, I don't say it's not management's fault either. I blame the UAW, the management and the US consumers alike.

-t

[OldManMac]

Ok, you win. It's the unions' fault the management gave them too much power.

[bearcatrp]

No way. Let them go down the drain. Maybe lutz could sell his 3 jets he owns to help gm out. They got themselves into this by not building fuel efficient cars like toyota did.

[OldManMac]

Lutz owns three jets? How could he; he's not a union member.

And don't go bringing any facts into this, like how they got themselves into this mess.

[CreepDogg]

Originally Posted by turtle777 

BS.

Are you telling me GM and Ford could just go out and replace unionized workers with non-unionized ones ?

Until that happens, the unions have too much power.

Btw, I don't say it's not management's fault either. I blame the UAW, the management and the US consumers alike.

-t

Why so anti-union? Do you oppose all checks against corporate power? I think checks on corporate behavior are critical to a free market. Has the UAW taken it too far? Yeah. Do they have culpability in this mess? Sure.

But why would the solution be to replace union workers with non-union workers? Wouldn't another possible solution be for management and the UAW to renegotiate terms to make the Big 3 competitive with the Toyotas and Hondas of the world? Besides, that's only part of the problem. They could get rid of the UAW and continue to build cars that people don't want, even with exploited labor, and they'd still be in trouble. They need a business plan that demonstrates a product strategy, a recovery strategy, a production strategy, a long-term revenue strategy, and a long-term cost reduction strategy that will make them viable and competitive in the global market. If they had that, maybe they could convince the UAW that the terms they demand are reasonable, because that's what they'd need to survive. Until they have that, both sides of the bargaining table will just be pissing in the wind...

[turtle777]

Originally Posted by CreepDogg 

Why so anti-union? Do you oppose all checks against corporate power? I think checks on corporate behavior are critical to a free market.

I come from Germany, and have experienced strong unions. However, as far as the unions go, Germany has gotten it "righter" than the UAW model. The German social-market model is geared towards unions and management (& shareholders) working stuff out together. The goal is always to find a good compromise. The relationship between unions and management (& shareholders) can be described as a friendly competition with the intent of co-operation.

Unfortunately, not so the UAW. They always just looked for their own good, and the good of their members, without caring the good of the whole society and economy.

Don't get me wrong, I think that even the German model goes to far in many aspects, and I'm more a free-market guy than social-market guy.

Originally Posted by CreepDogg 

Besides, that's only part of the problem. They could get rid of the UAW and continue to build cars that people don't want, even with exploited labor, and they'd still be in trouble. They need a business plan that demonstrates a product strategy, a recovery strategy, a production strategy, a long-term revenue strategy, and a long-term cost reduction strategy that will make them viable and competitive in the global market. If they had that, maybe they could convince the UAW that the terms they demand are reasonable, because that's what they'd need to survive. Until they have that, both sides of the bargaining table will just be pissing in the wind...

I completely agree about the business side, and I never said that the unions are the ONLY problem.

But financially, they ruined the Big Three in the last 20 years. The problem is that the unions had such a stronghold on the automotive OEMs (and many Tier 1s), that there were no checks and balances anymore. I also believe that some stupid management decisions were only made because they had limited options due to the union power.

Let me put it like this: all the right management can't fix the Big 3's issues w/o a drastic change relating to the unions.

-t

[vmarks]

Originally Posted by CreepDogg 

Exactly. Regulating commerce means ensuring the playing field is even for all in the market. If the people were to deem it 'necessary and proper' to invest in the Big 3 to do this (because they deem others have some other unfair advantage), then it's in the bounds of what Article I, Section 8 specifies.

You're making one interpretation of what 'regulating commerce' means. There are others that are valid, regardless of whether or not you agree with them.

I disagree.

Fair doesn't enter into it at all. Government has no business ensuring an even playing field, just that no barriers are placed to protect one to the detriment of another.

[Maflynn]

I'm not sure to be honest. I think that having the government continually bailing out corporations is bad, and buying an equity stake into the business is a step away from capitalism. Yet when you read some of the statistics such as 1 in 7 workers have jobs connected in some form to the auto industry, If Chrysler and GM fail outright this will have a devastating effect on the economy.

I suppose support some help to this sector but not to the extent that GM wants and what the democrats are trying to push through.

Given that both congress and the president are lame ducks I also believe that pushing such radical and wide reaching legislature is a bad idea. Obama supports a bail out of the auto industry well then his administration should take the credit/blame and these bills really should wait till he takes office.

[vmarks]

What was so wrong with bankruptcy?

[Maflynn]

Nothing but if you're concern about trying to mitigate or lesson a recession then a bail out may help.

Consider the fact (costs and toll) of having GM and Chrysler basically close up shop. A huge number of people will lose there jobs and will be getting unemployment and other "entitlements". The drag on the economy will be such that it will likely cause the recession to be much more severe and its not like the government will be saving money since now the cost of umemployment will skyrocket.

bankruptcy may be the answer but also consider the emotional effects and the effects on wall street to letting these fail. People's 401ks are taking a beating as it is, this will likely wipe out many people's retirements since the stock market will be hammered.

We're not talking about letting executives keep their multimillion dollar salaries but rather the blue collar worker drawing a paycheck and and keeping his home (no job = no mortgage payment)

Should the government stand by and not do anything when people lose their jobs and their retirement savings?

[OreoCookie]

@Maflynn
The problem is that the Big Three's substance is so rotten that I don't see what good a rescue plan will do: GM is losing about $100 million a month and it doesn't look like the car market will pick up within the next 1 or 2 years.

IMO it's likely that a (foreign) investor will buy the remnants, cut out the good pieces and discard the rest.

[CreepDogg]

Originally Posted by turtle777 

I come from Germany, and have experienced strong unions. However, as far as the unions go, Germany has gotten it "righter" than the UAW model. The German social-market model is geared towards unions and management (& shareholders) working stuff out together. The goal is always to find a good compromise. The relationship between unions and management (& shareholders) can be described as a friendly competition with the intent of co-operation.

Unfortunately, not so the UAW. They always just looked for their own good, and the good of their members, without caring the good of the whole society and economy.

Don't get me wrong, I think that even the German model goes to far in many aspects, and I'm more a free-market guy than social-market guy.

I agree and think that to be successful, the automakers and unions would have to find that effective middle ground. Both sides have responsibilities in making that happen - management's is to demonstrate a viable business plan and convince the union to make concessions to support it. Believe me, I've seen some silly union rules, and they often go too far, but I will defend workers' right to organize to use their collective strength to check that of the company. A 'free' market would do just that.

I have to say - I find it interesting that you imply the German 'social market' solution is more effective in this instance, but then say you prefer a 'free market' solution anyway. To me, they don't sound all that different, except that maybe Germany implemented the rules 'better'.

Nobody has a true 'free market', but I assure you that if someone did, unions would be a part of it. By definition, there would be no mechanism in a 'free market' to prevent unions from forming.

I completely agree about the business side, and I never said that the unions are the ONLY problem.

But financially, they ruined the Big Three in the last 20 years. The problem is that the unions had such a stronghold on the automotive OEMs (and many Tier 1s), that there were no checks and balances anymore. I also believe that some stupid management decisions were only made because they had limited options due to the union power.

Let me put it like this: all the right management can't fix the Big 3's issues w/o a drastic change relating to the unions.

-t

Yes - as I stated above, they had a hand in it, and clearly they have the power to influence some management decisions. But it's still management's responsibility to run the company in a viable way, so I think at best you can say blame is shared. They're going to have to convince the UAW to accept some major concessions for both the Big 3 and the UAW to survive.