[dcmacdaddy]

Originally Posted by ebuddy 

They'll have their hats in their hands until we ask which ones flew commercial to the hearings. Uh... uh... uh...

Originally Posted by Wiskedjak 

Seriously. They're flying in their private jets to go beg for money. These people are completely out of touch with reality. If they're given government bailouts, there needs to be some evidence that they'll be more thrifty in their spending habits ... from the top down.

It's absurd. Did you see how someone on the House panel asked if they would reduce their salaries to $1 per year in a symbolic show of support for a bailout measure and they all deferred? I love how the GM guy said "I am comfortable with my current level of compensation" trying not to give a straight answer to the question. Lee Iacocca took a $1 per year salary after he got the bailout money, these guys better plan to do the same.

If you ask me, they're complete jackasses. The whole lot of them should be flogged live on TV.

[dcmacdaddy]

Oh, and after reading more material about the depth of the financial/managerial problems facing the Big 3, I have come to the conclusion that a bailout of any sort is not worth it. (I originally supported a forced-merger bailout of Chrysler and GM.)

For Chrysler, I think they need Chapter 7 (liquidation) bankruptcy.
For GM, I think they could get away with Chapter 11 (re-organization) bankruptcy if they got rid of a few of their car lines and shrunk their overall size.

[turtle777]

Originally Posted by OldManMac 

I'm not sure where you live, but here in metro Detroit diesel is 20% more than gas, not 50%.

I live in Northern Indiana, and commute a lot to Chicago.

Just came back from there. I've seen gas prices reg. between $ 1.91 - $ 1.98, diesel $ 2.99 and up.

About the same here in Indiana, just 20 cents lower overall.

-t

[Wiskedjak]

Here, diesel is $0.99/L and gas is $0.79/L

[turtle777]

Originally Posted by Wiskedjak 

Here, diesel is $0.99/L and gas is $0.79/L

Where is here ?

-t

[ShortcutToMoncton]

Ford Scion Looks Beyond Bailout to Green Agenda

This is a bit of an interesting look at Ford's current approach (i.e. promoting how "green" they will be), and perhaps some of the financial differences between it and GM/Chrysler.

greg

[OldManMac]

Ford's been promoting how green it's going to be for several years, but still pushed it's pickups.

[turtle777]

Originally Posted by OldManMac 

Ford's been promoting how green it's going to be for several years, but still pushed it's pickups.

You can have a Ford in any color you want, as long as it is green

-t

[Eug]

The Canadian Auto Workers Union (CAW) seems to be digging in its heels.

Well, they've at least said they're "willing to talk", but then again they've repeatedly said they won't make any concessions.

[Eug]

hah. One if the local CAW groups has voted to give their union reps the mandate to strike if necessary, if negotiations don't go well. Huh? WTF?

My guess is that the company would rather just close that site than negotiate with potential strikers, in this environment. And given current public sentiment, I wouldn't be surprised if the general public applauded such a move.

[turtle777]

Just one more piece of evidence that the unions at large don't get it. Their entitlement mentality has not changed.

-t

[OldManMac]

Nor has management's, and, no matter how you slice the cake, they're still the group charged with running the company.

[mattyb]

There is an extremely interesting article in the latest Fortune magazine from a journo who has covered GM for 30 years. After reading it, you'll be 100% convinced that throwing tax payers money at GM isn't worthwhile.

[turtle777]

Originally Posted by mattyb 

There is an extremely interesting article in the latest Fortune magazine from a journo who has covered GM for 30 years.

Linky.

-t

[osiris]

http://news.yahoo.com/s/ap/20081203/...tdown_autos_64

"Chrysler exec: Failure could spark depression"

ooh, now I'm scared.

[OldManMac]

Originally Posted by osiris 

http://news.yahoo.com/s/ap/20081203/...tdown_autos_64

"Chrysler exec: Failure could spark depression"

ooh, now I'm scared.

You should be. A depression may be coming whether or not the auto companies are bailed out.

[osiris]

Originally Posted by OldManMac 

You should be. A depression may be coming whether or not the auto companies are bailed out.

I fear nothing except death.

[turtle777]

Originally Posted by osiris 

I fear nothing except death.

And infractions at 'NN

-t

[osiris]

Originally Posted by turtle777 

And infractions at 'NN

-t

oh snap!

[turtle777]

So congress is about to pass out $ 17B to the Troubled 3 (formerly known as the Big 3).
$ 17B is about half of what they asked for.

Since GM always claimed about 50% of the money, they're gonna get about $ 8.5B.

Since they need $ 4B just to survive December, it's a simple math exercise to calculate how soon they will be back asking for more money.

Awesome plan. This is like giving a junkie more crack.

-t

[mattyb]

This is a diabolic waste of money. $10 says that in 6 months - sorry if any of the 3 are still functioning in 6 months - they ask for more money.

Funny how I still see so many adverts and sponsorship still done by these companies. They'll never learn.

[SirCastor]

I do not support a bailout of any kind, for any industry. In a free market system, your success is proven by your earnings, your profit. The Big 3's trouble is a result of very poor management. It's essentially the housing bubble, same problem. The Auto industry (the economy as a whole) saw a period of growth, and significant profit, "Seven years of Plenty" to use the analogy. It was bound to fall apart somewhere, but people kept holding onto this dream of never-ending growth and success. Most people anyway. There were a few who pointed out the failure early on. The companies and groups who did not are now suffering through hard times due to poor preparation.
I think the companies that took the time to see what was going on, and adjust to compensate for it, are doing far better. I don't think we should be rewarding poor management.

[tie]

Analysts are saying that it will be hundreds of billions to bail them out. GM is after all losing $2 billion a month and has no plans for improving. If Obama truly wants change, he should start by letting the auto industry rejuvenate itself through bankruptcy.

[turtle777]

-t

[tie]

The NY Times is saying that the latest bailout plan has died. Thankfully there do appear to be a few "conservative" Republicans left. That fake ad is exactly correct.

(Well, except the latest plan was only for $14 billion, and only for GM and Chrysler, not Ford. Nobody has explained why Chrysler should get any money when its private owner, Cerberus capital management, has tons of money, but logic seems to have nothing to do with this bailout. Analysts predict that a successful bailout would cost over a hundred billion dollars, though.)

I find this whole thing pretty irritating. The CEOs fly out in their private jets to Washington to ask taxpayers to pay their multi-million-dollar salaries that they have earned while driving their companies into bankruptcy. There is predictable outrage. Two weeks later they come out again, and it is almost a done deal.

[CreepDogg]

[dcmacdaddy]

It's over. Senate Republicans voted against a bailout. Good for them.


It's going to be a long, hard winter in the American automobile industry but the manufacturers brought it upon themselves. They had a good two decades where they lived high-on-the-hog from mini-van and SUV sales while abandoning the small, fuel-efficient market to the Japanese (and later Korean) manufacturers. Although, with the contraction of the industry down to one big player (likely Ford) it should bring some much-needed stability to the American automobile industry and greater stability to the global market as other major nation's automobile industries can react and adjust to the newly shrunken American car market.

If they were smart, the folks at Cerberus Capital Management would start bankruptcy proceedings immediately (chapter 7, liquidation) in the hopes of getting ahead of GM in disposing of whatever assets remain in the company. Once GM announces their bankruptcy (they can probably get away with a chapter 11 if they eliminate many of their car lines) there will be no market left for them in which to sell their un-needed assets.

As for those folks worried about the economic effects this will have on our country as a whole and individual workers and consumers, I again say this is a good thing. Our country needs a major shock like this to realize that from an individual (personal) and collective (national) standpoint we have ben living way beyond our means. I think we *need* a good few years of dire financial circumstances in order for individuals and corporations to recognize the shortcomings of living a debt-financed lifestyle. I think it will take a good decade or more for individuals directly effected by this to recover (and probably a full generation for the collective societal effects to dissipate) but I hope the people come out of this learning to live a simpler life within one's means.

[Maflynn]

I've gone back and forth regarding the auto bailout and to be honest, I don't disagree with the senate republicans from requiring the UAW for wage concessions which would bring them in line with their Japanese counterparts - at least their counterparts who make cars in the US.

the failure of the UAW on this point is surprising, would they rather of their members make less or many of themmake nothing since they'll be out of a job.

with that said, I fear how this could impact the economy if GM and Chrysler would slip into bankruptcy. I don't think the warnings the white house gave about the economy not withstanding the collapse of the the auto industry was hyperbole and I wonder how much the cost of unemployment and other benefits will cost the US if the auto industry drags the entire economy down to a severe recession or even a depression. Seems like it would be more expensive (but then I'm no economist).

[OldManMac]

Originally Posted by dcmacdaddy 

It's over. Senate Republicans voted against a bailout. Good for them.


It's going to be a long, hard winter in the American automobile industry but the manufacturers brought it upon themselves. They had a good two decades where they lived high-on-the-hog from mini-van and SUV sales while abandoning the small, fuel-efficient market to the Japanese (and later Korean) manufacturers. Although, with the contraction of the industry down to one big player (likely Ford) it should bring some much-needed stability to the American automobile industry and greater stability to the global market as other major nation's automobile industries can react and adjust to the newly shrunken American car market.

It isn't going to bring any stability to the American auto manufacturing scene, it's going to bring the end of it. Having said that, it doesn't matter anymore, as we have much bigger issues to worry about than the end of American automobile manufacturing dominance.

If they were smart, the folks at Cerberus Capital Management would start bankruptcy proceedings immediately (chapter 7, liquidation) in the hopes of getting ahead of GM in disposing of whatever assets remain in the company. Once GM announces their bankruptcy (they can probably get away with a chapter 11 if they eliminate many of their car lines) there will be no market left for them in which to sell their un-needed assets.

It would be a good thing for Cerebrus to start liquidating assets, but they're not going to get anything for them. America already has too many empty factories, too many small tool and die shops, too many prototype shops empty, and on and on the list goes. We are hanging off the end of a cliff, holding on with one hand, and our last few fingers are getting very weak.

As for those folks worried about the economic effects this will have on our country as a whole and individual workers and consumers, I again say this is a good thing. Our country needs a major shock like this to realize that from an individual (personal) and collective (national) standpoint we have ben living way beyond our means. I think we *need* a good few years of dire financial circumstances in order for individuals and corporations to recognize the shortcomings of living a debt-financed lifestyle. I think it will take a good decade or more for individuals directly effected by this to recover (and probably a full generation for the collective societal effects to dissipate) but I hope the people come out of this learning to live a simpler life within one's means.

It would be a good thing under normal circumstances, but these aren't normal times. I'm afraid this is the beginning of the end for the U. S. as a superpower in the world. We will now have to adjust our living standards severely. We are no longer competitive on the world stage, having lost our last major manufacturing assets. Wall Street is going to start laying off by the tens of thousands (it's already started), which will make New York just another large city with massive unemployment. Where does anyone think the auto workers are going to work, at Wal-Mart, making $10/hour (if that) with no benefits? The trickle-down from this is real, unlike the voodoo economics of Ronald Reagan and his ilk, who lied to us about wealth trickling down to working folk.

We owe China, Japan, and others tens of billions in debt, and we don't have it to pay. Japan is already sliding into a recession, China is next. The EU, which is the world's largest trading bloc, is next.

We will be living within our means, but those means are going to be far less than we can ever imagine.

[scottiB]

Very good, if sobering, analysis. Though I don't believe it is that dire, the world does need to start paying off its metaphorical credit cards, and with that there will be less spending.

It's amazing to see the preference Wall Street gets, though. The U.S. automakers come back to the table--doing all that was asked of them--and can't get $14B. While Bear Stearns gets $30B with a couple phone calls.

Bush will direct Paulson to release $14B from TARP, and let the new administration deal with it again next spring.

[olePigeon]

Originally Posted by dcmacdaddy 

It's over. Senate Republicans voted against a bailout. Good for them.

Slight correction. They voted against the bailout to get rid of the union. If the companies didn't have union workers, you can bet your ass they would vote for the bailout. Their vote had nothing to with forcing the Big 3 to be responsible.

[ebuddy]

Originally Posted by olePigeon 

Slight correction. They voted against the bailout to get rid of the union. If the companies didn't have union workers, you can bet your ass they would vote for the bailout. Their vote had nothing to with forcing the Big 3 to be responsible.

Another slight correction. Unfortunately, they're not proposing the automakers get rid of the unions for the bailout money. They're advocating a more reasonable and responsible compensation package for the workers and the UAW agreed; beginning 2011. Not good enough. Besides it's actually the other way around. No automakers, no UAW. Campaign recipients are well aware of this, make no mistake.

[The Crook]

It's a show.

The price difference between UAW workers and foreign-maker workers is something like $800 per car. An $800 price difference is simply not enough to make a difference in the health of the company. It's one very small piece of why the automakers are in this situation now.

[turtle777]

If it was such a small thing, why wouldn't the unions give in, in order to "safe" the Big 3 ?

-t

[The Crook]

It's not a small thing for workers.

They did give in (just not in the time frame of the GOP)

And regardless of whether it was framed as "saving" the automakers, $800 per car is not going to do it.

[turtle777]

Well, the unions definitely did NOT contribute to saving the Bug 3.

-t

[ebuddy]

Originally Posted by The Crook 

It's a show.

The price difference between UAW workers and foreign-maker workers is something like $800 per car. An $800 price difference is simply not enough to make a difference in the health of the company. It's one very small piece of why the automakers are in this situation now.

Do you have a link for this?

[OldManMac]

Originally Posted by ebuddy 

Do you have a link for this?

As many others have said, it isn't mostly about the difference in wages and benefits. There are a large number of people who simply have given up on buying Big Three cars, because they don't see the value in them that they do in imports. But some will nonetheless continue to pound on their chests, and say "It's the unions, it's the unions!"

http://www.nytimes.com/2008/12/10/bu...nhardt.html?em

[turtle777]

Originally Posted by OldManMac 

As many others have said, it isn't mostly about the difference in wages and benefits. There are a large number of people who simply have given up on buying Big Three cars, because they don't see the value in them that they do in imports. But some will nonetheless continue to pound on their chests, and say "It's the unions, it's the unions!"]

If this is the case, there should DEFINITELY be no bailout.

Why would anyone buy cars from a bailed out company, if they didn't buy them BEFORE the bailout ?

-t

[turtle777]

The poll looks nice so far.

Hey Detroit, here is what 'NN thinks about the bailout:





-t

[ebuddy]

Originally Posted by OldManMac 

As many others have said, it isn't mostly about the difference in wages and benefits.

They do so by misinterpreting the financial statements of the Detroit three. The differences in wages and benefits are much greater when you actually use the premise of Bob Casey in your cited link. The accurate calculations Casey is arguing against are comprised of future retiree payouts for current workers because they are obligated to account for this future expense. This does not include current retiree payouts for workers past.
corrections

There are a large number of people who simply have given up on buying Big Three cars, because they don't see the value in them that they do in imports. But some will nonetheless continue to pound on their chests, and say "It's the unions, it's the unions!"

It's the unions! Sales declined across the board. I will concede that domestic automakers were slow in adopting better fuel economy, but they are certainly competitive. Did they hold on to their larger lines perhaps longer than they should have? Sure, but you can't argue the historical success of SUVs in the US, evidenced by the number of import makers that jumped on this market. One other thing that has hurt domestic sales is fleet sales. They are sold well below retail and eventually flood the market with low-mileage used vehicles. Your cited reference would use his grandfather as anecdotal evidence of what you're saying and I'd cite my personal experience of buying an American "ex-rental" with low mileage for a very good price. I might add that I've owned two Audis, a Subaru, and two VW Vanagons and by far the most reliable vehicle I've ever owned is my wife's 2001 Chrysler Town and Country minivan and we're pretty hard on it. Why the decline in domestic sales? Gas prices. Period.

According to an article in Detroit Free press; GM, Ford, and Chrysler 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 about 560,000 as of November 2008. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide; approximately 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 in the US than Nissan and Hyundai combined in 2007 and so far this year.

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 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.

I've heard the argument that no one wants to buy vehicles from a company that files for bankruptcy, but is there anyone who would know this that doesn't already know they are essentially bankrupt??? This is a UAW bail-out plain and simple.

[ebuddy]

Originally Posted by turtle777 

The poll looks nice so far.

Hey Detroit, here is what 'NN thinks about the bailout:





-t

[tooki]

I voted "Hell no" for a very simple reason: a bailout means taking money from the successful, and giving it to the failures. It takes money from those who have shown that they can manage it soundly, and gives the money to entities that have demonstrated their incompetence. WTF kind of sense does that make?

I say let the Big 3 go bankrupt. It will force them to restructure, get rid of deadwood, and hopefully bring in competent management. And it'll rid them of at least some of those pesky leeching UAW mooches. (Sorry, auto making has been unskilled labor for decades, it does not merit $40/h or more wages.) The UAW is like a virus, so greedy it's willing to kill the hand that feeds it.

If 3 million (yeah, right, but whatever) people do get laid off, the bailout money would be FAR better given directly to the unemployed, to spend, than to companies that have proven, time and time again, their incompetence. Some will spend it to live, some on stuff, and some will start businesses of their own. Either way, the money would find its way back into the economy, not pissed away at a corpse of an industry.

[OldManMac]

A different view, makes some sense.

http://www.freep.com/article/20081213/COL01/81213055

[OldManMac]

For you, turtle 777;

http://www.commondreams.org/view/2008/12/13-2

[turtle777]

Originally Posted by OldManMac 

For you, turtle 777;

http://www.commondreams.org/view/2008/12/13-2

The usual Detroit propaganda, what else is new.

Kill the car, kill the country.

So, Michigan = the USA ?

-t

[turtle777]

Originally Posted by OldManMac 

A different view, makes some sense.

http://www.freep.com/article/20081213/COL01/81213055

What Doesn't make any sense at all.

If healthcare is to blame, why are so many other industries in the US not broke ?

-t

[OldManMac]

Originally Posted by turtle777 

The usual Detroit propaganda, what else is new.




So, Michigan = the USA ?

-t

In the case of the auto industry, it is quite possibly so. It isn't just people in Michigan who benefit from the U. S. auto industry. There are thousands of dealers around the country who carry GM, Ford, and Chrysler products. There are tens of thousands of suppliers, both large and small, who manufacture parts (approximately 16,000 that go into a vehicle) for these cars. There are thousands of truckers, and rail employees, who move these cars around, and on and on it goes. Of course, I should know better than to expect you to have a grasp of enormity of this situation.

[OldManMac]

Originally Posted by turtle777 

What Doesn't make any sense at all.

If healthcare is to blame, why are so many other industries in the US not broke ?

-t

Had you been paying attention, many of them are going broke, and/or they're dropping benefits to their employees, or drastically reducing them. Health care costs have risen over 10% annually for at least the last decade; compounding that annually easily equals a 150% increase in costs! Who do you think is paying for that? Oh, I forgot; it's the dwindling unions' fault!

[turtle777]

Originally Posted by OldManMac 

Of course, I should know better than to expect you to have a grasp of enormity of this situation.

Dude, WTF

What do you know about me ? Nothing.

I work for one of the largest Tier 1 in the world, and we are equally affected.

Most colleagues of mine in the industry share my opinion that only a bankruptcy / reorganization could save the Bad 3.

-t