Why Bailout US Auto Manufacturers?

[naked gent]

Democrats were the primary push behind the $700 Billion bailout that hasn't helped the middle class and, as I've said from the beginning, won't (though they'll be paying for it for years to come).

How do you figure the dems were the primary push behind the $700 billion when the plan was born in the executive branch?

I'm not saying their hands are clean I just object to your incorrect use of the word "primary"

 

[NickCole]

How do you figure the dems were the primary push behind the $700 billion when the plan was born in the executive branch?

I'm not saying their hands are clean I just object to your incorrect use of the word "primary"

Because by and large Congressional Democrats, including Obama, were the ones pushing for it while Congressional Republicans resisted.

If you look at the context you'll notice I was responding to Alfie's comment about the Democratically controlled Congress since 2006 and my mention of the bailout was to illustrate economic decision making by the Democratic Congress and Obama, which is our future. Bush is, thankfully, soon out of the equation.

 

[NickCole]

^^ Agreed on all counts.

As for people actually in the middle class adding their voices to the Rubins and Buffetts, they're all over America. What's an "expert" but someone who knows a lot about the subject, so have someone do a little research and find smart analytically-minded middle class entrepreneurs functioning within the middle class in, say, half a dozen or a dozen different places across the country. It's not that difficult. Local papers or Chambers of Commerce could easily point where to start.

It's the same way I think about Prop 8 and African Americans. While blacks vote against us, most of the promo, the face, of same sex marriage is white gay couples, and now all the energy is focused on the Mormon Church, who'll never change their minds. I think gay leaders who want to get these referendums passed should make a concerted effort to invite in black gays, those who know the black community that's resistant to us, to brainstorm and figure out how to get our message to African American Democrats.

Go to the source, you know?

 

[Centexfarmer]

Imagine if that 700+ BILLIONS dollars was somehow divied up and a check was sent to every single American over the age of 18; regardless of income, or tax status.

Imagine how many mortgage payments, loans, and credit card debts would be paid in full.

Imagine how many new jobs would be created, not so much where there's profit, but where there's a need.

Imagine the interest earned on saving accounts, and the money that banks would have to no longer worry about the financial crisis, but that they would have within their member's accounts to loan.

Imagine for a few weeks, months, or years what the middle class could do with our own money.



Nah, but that would be "sharing the wealth" socialism.

 

[gvlatinboi]

I'm against the 'bailout' unless the auto companies/unions are willing to make large concessions, if not the bailout will be money thrown into a blackhole.

I agree 100%. Generous motors (GM) sure has been very reckless with the use of their money in the past. They have a history of overpaying their employees (factory and office alike) and giving bonuses even when they are at a loss for the year.

Their solution is to pay what the appropriate amount should be for whatever someone is doing (based on average national pay), which will more than likely reduce their payroll expense. Also, make more fuel efficient cars. They are still lagging quite a bit in that department i believe. Sure, this month we've had really low fuel (1.86/gal today in MI), but that's only a short term price decrease.

 

[Kulindahr]

This is a place Obama could do well to take a page from FDR's playbook: his advisors shouldn't be CEO's, but economists, business owners who built their own companies from the ground up, maybe even some union leaders with economics training. If he wants a CEO or two, find some who've fought off a hostile takeover, rescued a failing company, or kept their companies' sticks strong when the rest of the market was stumbling.

 

[JayHawk]

Yeah but who wants to rub elbows with Joe the plumber?

Stand by for many more of these companies going tits up.

Getrag Puts Plant In Chapter 11, Blames Chrysler Dispute

And yet amongst all of this shitty press for the auto makers one auto maker is dedicating its newest indiana plant.

Honda Dedicates Indiana Auto Plant

I wonder what is different at those silly foreign car companies???? Oh yeah they dont gots dem no stinkin unions. AND get this people like workin for them.

 

[naked gent]

^^ mazda unions are hardly the only difference between the american auto companies and foreign car companies with production facilities in this country.

To point out a couple the big three have extensive dealer networks which various state laws prevent them from reducing and they have legacy costs associated with their longer history of producing cars in this country.

I think the price of a bailout should certainly include union givebacks, particularity in the area of workplace rules, but if you think unions are the only reason the big three are in trouble then you need to be better informed.

 

[JayHawk]

Oh I agree that there are many variables however i also understand that the reason many of the dealership rules are based upon Union political manipulation.

In addition while they are building very well made cars now they were not for a while so people dont want to trust them

 

[JayHawk]

I heard an interesting plan today on CNBC.
Government Sponsored Bankruptcy. (GSB)

Elements would include Chrysler and GM being forced to merge prior to bankruptcy. That would reduce overhead which does mean jobs but not as many. Then in GSB they could legally get out of the dealership requirements they are currently bound by in many places. They can also shed brands which again means closing specific plants and lost jobs but not all jobs. Finally they would be able to change some of the constraints they have based off of the million they sponsor in retirement.

Essentially these companies cant make money building small cars because of their overhead. So it returns to our lack (as a nation) of retiree benefits.

So essentially we use money now to keep them afloat with all their fucking baggage and then pay again later.
OR we force them to push off some of their baggage so they can then focus on smaller fuel efficienct vehicles. Of course that puts the onus of all of those retirees back on uncle sam and some 64000 are not yet medicare eligible.

What a fucking shit biscuit.

 

[broadwayboi]

I have been going back and forth on this issue. My father works for a car part supplier -- and Chrysler is one of their buyers. But I honestly believe it will be for the betterment of the US economy if the Big 3 are forced to work themselves out if that means going through Chapter 11 and restructuring. While I understand thousands of workers will be displaced by this initially, the Big 3 will then be restructured or bought out and start producing better quality, better looking cars. If, God forbid, the Congress decides to bail out the Big 3, I do hope it is not with the $25 billion from the TARP program, and used from the initiatives to produce higher gas-mileage and hybrid cars. Just my two cents.

 

[HenryReardon]

Anyone who complains about Unions, are those who've forgotten what unions have done for the American workers.

.

Yeah, right. Unions have driven the steel industry out of the country, along with several other industries, and have very nearly killed the auto industry with their greed.

Time for a new paradigm that would include abolishing labor unions once and for all.

 

[naked gent]

^^ How about we get rid of all employment contracts that way CEO's who drive their companies into the ground won't be able to fall back on contracts to collect boodles of money on their way out the door.

Or is that paradigm a little more than you can accept?

 

[HenryReardon]

^^ How about we get rid of all employment contracts that way CEO's who drive their companies into the ground won't be able to fall back on contracts to collect boodles of money on their way out the door.

Or is that paradigm a little more than you can accept?

Not at all - it sounds like a very good idea. If a CEO is hired and runs the company effectively and extremely profitably, he deserves to be compensated accordingly. On the other hand, if a CEO is hired and runs the company into the ground, then he should get zip for his time and effort.

The Boards of Directors who enter into contracts with CEOs in the latter case weren't very smart - the stockholders should boot them out as well.

Pay should be based on merit, ie performance - from the bottom to the top of any company.

 

[JayHawk]

How about this: Keep the contracts but require that the Prospective CEO put ALL of his or her worth into the business where they want to take the helm. So if they trash it they trash their own worth.

Of course that means all CEOs would be rich people but what's new?

 

[Kulindahr]

Yeah, right. Unions have driven the steel industry out of the country, along with several other industries, and have very nearly killed the auto industry with their greed.

Time for a new paradigm that would include abolishing labor unions once and for all.

That's easy for someone on easy street to say.
How about something simpler: just make it so any time a company with union labor is in trouble, it can slash pay to five times minimum wage without asking anyone's opinion. Unions would be allowed to appeal/sue, of course, but the burden of proof would be on them to show that the company wasn't actually in trouble.

Not at all - it sounds like a very good idea. If a CEO is hired and runs the company effectively and extremely profitably, he deserves to be compensated accordingly. On the other hand, if a CEO is hired and runs the company into the ground, then he should get zip for his time and effort.

The Boards of Directors who enter into contracts with CEOs in the latter case weren't very smart - the stockholders should boot them out as well.

Pay should be based on merit, ie performance - from the bottom to the top of any company.

"Bottom to top" should also be the way things are handled when a company bites it: the small creditors and stockholders get their money first, and the wealthier ones have to stand in line till last.

 

[Kulindahr]

How about this: Keep the contracts but require that the Prospective CEO put ALL of his or her worth into the business where they want to take the helm. So if they trash it they trash their own worth.

Of course that means all CEOs would be rich people but what's new?

Why would that mean all CEOs would be rich people? Someone who wasn't rich to begin with but who managed a company fairly well would prosper, but not necessarily become "rich".
It would just make being a CEO like everything else is: the richer you are, the easier it is to get even richer.

 

[HenryReardon]

That's easy for someone on easy street to say.
How about something simpler: just make it so any time a company with union labor is in trouble, it can slash pay to five times minimum wage without asking anyone's opinion. Unions would be allowed to appeal/sue, of course, but the burden of proof would be on them to show that the company wasn't actually in trouble.



"Bottom to top" should also be the way things are handled when a company bites it: the small creditors and stockholders get their money first, and the wealthier ones have to stand in line till last.

Hmm - I don't know anyone on easy street.
As for the rest of what you said, I quite agree.

 

[JayHawk]

Why would that mean all CEOs would be rich people? Someone who wasn't rich to begin with but who managed a company fairly well would prosper, but not necessarily become "rich".
It would just make being a CEO like everything else is: the richer you are, the easier it is to get even richer.

Well of course nothing is absolute. However, if the stick is losing all of your money and the carrot is profitability then the CEO must have something to put in or the stick doesnt have very much deterent effect.

For instance if I were to take over ATT and I had 5.6 million in net worth so I used all of that as my equity to put in 5.6 million to ATT so I could take over, I would then be very concerned that ATT prosper. If I only had a 100K then the stick isnt quite as painful.

 

[JayHawk]

BTW. It appears to have cleared one hurdle. Although with the Democrat majority it was a low hurdle.

House OKs $14B auto bill, but it's still in peril