Thread: The Auto Bailout

But not as hilarious as the fact that they asked for 20 billion without any plan to turn things profitable again. They just ask for money to keep things going as they are. The best thing that could happen imo is that one of them went belly up. The same happens to every other company that cannot compete anymore. And it's not as if they didn't have enough years of opportunity to change things.

That's where the bail out needs to have conditions. They're just too big to let them go belly up. Same with the huge financial firms that are being bailed out. It's not easy though right? If the government just buys all the big industry we have socialism and that might not work.

The whole private airplane thing was just theatrics. Good or not, right or wrong, these guy's time is worth enough that the private jets are a drop in the bucket. If you're going to speak to congress with tens of BILLIONS on the line are you going to book a seat on SouthWest? You don't want guys like these burning a day or two to fly out early and wait in a hotel room to be sure. "Congressman, I won't make the morning hearing and might not be there in time for the evening hearing. They overbooked the flight, I got bumped, and I'm on standby for the afternoon flight". These guys aren't on the same par as the President but maybe in the very next ball park when it comes to their time.

Originally Posted by Quick

The whole private airplane thing was just theatrics. Good or not, right or wrong, these guy's time is worth enough that the private jets are a drop in the bucket.

Yes, it was theatrics of course, but I do not agree that these guys' time is so expensive.
The value of a CEO is measured by his visionary skills, and their ability to keep the company healthy and profitable. Apart from those qualities, a CEO is just an expensive ornament.

The US car industry is a rotten corpse that hasn't been able to adapt for the last 3 decades.
These CEOs have shown their utter incapability to anticipate the demand for efficiency and affordable quality, instead striving to sustain the 60s model based on size and horsepower.
They have fought against those things in favor of status quo, and have flushed their companies down the toilet despite decades of warnings and global trends.

The only thing they care about is their pocket, not the companies they represent.

EDIT: And if they really cared about being on time for that hearing, they could have
a) taken the same plane
b) done what I do if I have to be somewhere really on time: leave the evening before and spend the night in a hotel.

first off i worked for one of those parts makers that supplies the big three. i hated it as i can't stand doing the same thing day in day out. i was paid $24 per hour though and i got a lot of brake time. this to me was why our company was so inefficient. i don't think we should have been worked to death but if i was making a torsion bar (a suspension component with a hex head on each end) i literally worked 15 mins and then had a 15 min break all day long. our plant ran at about 65-70% efficiency, which is pathetic considering what we could have done. but our union wanted us to stay on one job so people would get hurt from doing the same things over and over, hence the constant breaks. if we had to rotate between jobs like in a Toyota plant people wouldn't have nearly the same problems. plus toyotas plants pay better and run at between 96-98% efficiency.

am i saying that the whole blame is on the workers? no. the management has been very greedy, but i will get to that. the workers are stuck back in the old days when profits were huge and fuel mileage and efficiency wasn't an issue. there are amaerican plants that are changing but it should have started a long time ago. the japanese manufacturers have an advantage because they are fairly new to the game as far as running a plant in north america so they don't have the old precedents or the old workers to deal with, plus they aren't paying nearly as many pensions. i think that if the workers really want it and the management is on board, then the bailout could be used to make big changes and update the way things work in some major plants, but this probably won't be what happens unfortunately.

as far as management goes why on earth does any one peerson deserve a $25 million bonus? they don't. the profits have been huge for a long time so the bonuses were big. well that to me was disgusting and greedy. how much money do they need? just enough so that if things go down they are set in they rich lifestyles for the rest of their lives. if anyone thinks those guys care about the workers they are kidding themselves. which to me is what is wrong here, things are too big and very removed from reality. things will change because they now have to. there is no other choice.

IMO a big moment was when a representative from GM finally admitted that getting rid of the saturn electric car was their biggest mistake. they had plenty of warning about where things were headed and they ignored it all.

In an interesting twist of ideas:
The retired workers pensions and health care are what is crushing GM. Instead of just giving them money, Government could look at taking over responsibility for that for awhile.

Originally Posted by Ditch Doc

In an interesting twist of ideas:
The retired workers pensions and health care are what is crushing GM.
.

Once a person is retired, doesn't the company stop paying?
When someone gets a paycheck, part of it is deducted by the state and kept in a pension fund, to be payed out as pension when you retire.
So once you retire, the company says goobye, and that's it, no?

Originally Posted by Ditch Doc

Instead of just giving them money, Government could look at taking over responsibility for that for awhile.

That would mitigate the problem 'right now' but unless the big 3 (and their unions) are forced to change their ways and become efficient or die, it won't matter and in another 2 years they need another 20 billion to support a failed business model.

Its bad enough that banks have been allowed to be so cavalier with your money. It is incomprehensible to me that they get bailed out and the totally irresponsible management is left in control and not in prison. But if the banks crash so does everything including "money".

Now motor cars are different. If your industry closes, don't worry there are plenty of other global manufacturers will fill the vacancy. It will cost you nothing and improve your quality of life as well.

Yes I feel sorry for those who work in the industry, but I felt sorry for the English coal miners and steel makers and ship builders and car manufacturers. I felt sorry for myself when my industry was outsourced.
Bail them out now and you are buying time. The industry is unproductive and just doesn't stand up to global competition. You can not stop the inevitable. The managers are not going to give up their planes and the workers are not going to take the sort of pay cut that would allow their products to compete in global markets. It is a credit to the industry that it has survived as long as it has. It's not my money but if it was, I wouldn't put it into the US automotive industry and expect to ever see it again. I'd rather see it put into a fund to retrain those who loose their work and to move onto a more secure way of making a living.

Originally Posted by Bruno

Once a person is retired, doesn't the company stop paying?
When someone gets a paycheck, part of it is deducted by the state and kept in a pension fund, to be payed out as pension when you retire.
So once you retire, the company says goobye, and that's it, no?



That would mitigate the problem 'right now' but unless the big 3 (and their unions) are forced to change their ways and become efficient or die, it won't matter and in another 2 years they need another 20 billion to support a failed business model.

Some companies maybe, but GM as a very comprehensive retirement and healthcare plan for retired employees, It is their largest expense.

Originally Posted by Bruno

EDIT: And if they really cared about being on time for that hearing, they could have
a) taken the same plane
b) done what I do if I have to be somewhere really on time: leave the evening before and spend the night in a hotel.

Your other points may be valid. but again the airplane thing is not that simple.

a) Last thing you do is put all those guys on the same plane. Companies that size don't even put more than a couple of key executives on the same plane. ...Plane goes down, company is toast or takes a huge hit. Then there is security.

b) Security, and time again. It's not just time shifting the flight. With the private jet you can work up until 15 minutes before you have to leave (and departure time is whenever you're ready). When you get there you go straight from the plane into the meeting.

There is something to it but it's just not that cut and dried.

(haha, not really related but a couple of years ago the President came to talk to John Chambers at Cisco Systems. They didn't even land at at the airforce base 15 minutes away. They landed in the parking lot next to the friggin building where the meeting was at.)

Really important people. Doing such a good job. Yes.

The problem with the auto industry is that everyone from the assembly line to the private offices are being payed way too much. We can thank greed for this. It's insane for me to think that 50 dollars an hour is a fair wage to virtually stand in one place. Also like others have allready said does doing your job like your supposed to warrant bonuses in the millions? Isn't that what their salary is for? The auto industry wants to blame the decline in sales as the problem. Well here's a solution. Instead of loaning them the money and losing it anyway through bad business practices. We should buy their products. Only models that get 30 miles per gal or better. This will give them the money their asking for through sales. What to do with all these cars the government just purchased. I say hold a lottery with eligibility requirements. Those being an annual income of single tax filers making 20,000 a year or less. And married filers making 50,000 a year or less. Will there be enough autos to go around? No but at least taxpayers as a whole would get something for their money. Not just flushing it down the toilet like we are doing on wallstreet.