Thread: The Auto Bailout

I don't start topics often here but this thing has me po'd. I mean its like Godzilla marching into Tokyo harbor begging for a handout and there are many issues the media hasn't addressed here. I'm just tired of the people coming to Washington and putting a gun to ur heads and saying if you don't give us what we want something terrible will happen.

1-This industry has fought the Gov't and resisted every attempt to improve gas mileage and put safety gear into cars since the 1970s. Who knows how many people have died because of defects they wouldn't fix because it was cheaper to pay the occasional lawsuit. Also the union isn't innocent here either. I'm a union guy and support unions to get better working conditions and get good pay and benefits but it's a different story when a union just tries to get what they can and the management caves in with disregard for what the future might bring.

2-They come and really don't talk about themselves. Its all about the economy and their workers. Talk to the people who have worked there for years and you'll see they never gave a rat's a** about their employees.But now they're real humanitarians.

3-So GM goes out of business. So when you go to buy a new car and go to Ford I guess they'll take your order and tell you to wait a year because of the manufacturing shortage. Not. Every other automaker will ramp up production, hire new employees, build new plants, get more suppliers and companies that don't have plants here will build them to meet the demand. In the end most of the economic impact would be a fraction of the dire predictions people present.

4-So the auto makers say its not their fault. Its the Economy. People can't get financing to buy cars. So the last time I looked each automaker has a financing arm. maybe if GMAC didn't require a minimum 700 credit score to finance a car they would sell more cars.But no they won't takes the credit risk to sell more cars when its easier to come to the taxpayer for a handout and force us to take the risk instead.

I would rather they come to Congress with real guns and rob us because thats more honest and you know where you stand. Trying to rob us with computers and calculators and deceit is not right.

Can't say whether or not I agree fully on every issue you brought up, but well said! I am also very tired of these corporations looking to someone else to fix the problems that they started and didn't fix. I would request someone post some literature (links) to good articles about the whole auto bailout so that I can actually find out more, but it doesn't look good.

Let me post some initial thoughts I also had when I first found out about this:

Seems to me that if the auto industry in America is in as much trouble as they make it out to be- then I don't see a bailout at this point as a problem solver. People don't buy US cars now. The manufacturers get some more money. Make somewhat better cars. The trust is STILL lost and not yet regained. I can't see a bailout instilling more trust in the companys. People will continue to buy as they have been. If people can't/won't buy a car now, WHY would they in another couple years if the economy is still down? Just looks like postponing the inevitable to me.

Originally Posted by thebigspendur

I don't start topics often here but this thing has me po'd. I mean its like Godzilla marching into Tokyo harbor begging for a handout and there are many issues the media hasn't addressed here. I'm just tired of the people coming to Washington and putting a gun to ur heads and saying if you don't give us what we want something terrible will happen.

1-This industry has fought the Gov't and resisted every attempt to improve gas mileage and put safety gear into cars since the 1970s. Who knows how many people have died because of defects they wouldn't fix because it was cheaper to pay the occasional lawsuit. Also the union isn't innocent here either. I'm a union guy and support unions to get better working conditions and get good pay and benefits but it's a different story when a union just tries to get what they can and the management caves in with disregard for what the future might bring.

Yea, "management just caves" , thats why there are strikes and plant shutdowns every time the contract is renewed because management just gives the workers anything they want.

Every raise in the mileage rate and every safety feature has greater effect upon the domestics than the foreign makers. They playing field is off kilter, and the law is slanted against companies who are based here.

Originally Posted by thebigspendur

2-They come and really don't talk about themselves. Its all about the economy and their workers. Talk to the people who have worked there for years and you'll see they never gave a rat's a** about their employees.But now they're real humanitarians.

This is a veiled threat. They are really saying that "fine you don't like the unemployment numbers this month, just wait till we go into receivership."

Originally Posted by thebigspendur

3-So GM goes out of business. So when you go to buy a new car and go to Ford I guess they'll take your order and tell you to wait a year because of the manufacturing shortage. Not. Every other automaker will ramp up production, hire new employees, build new plants, get more suppliers and companies that don't have plants here will build them to meet the demand. In the end most of the economic impact would be a fraction of the dire predictions people present.

Unfortunately it doesn't work that way. If GM goes under so do many of their suppliers, who also supply Ford so now Ford has a problem getting parts to make any cars. The auto suppliers are all one interconnected web of companies making parts for all of the big three, and even some of the foreign companies too. Its like a circle of dominoes topple any one and they all tip over

Originally Posted by thebigspendur

4-So the auto makers say its not their fault. Its the Economy. People can't get financing to buy cars. So the last time I looked each automaker has a financing arm. maybe if GMAC didn't require a minimum 700 credit score to finance a car they would sell more cars.But no they won't takes the credit risk to sell more cars when its easier to come to the taxpayer for a handout and force us to take the risk instead.

You do realize that there was a 30% drop in car sales over the past year. That a third of the business the auto makers were expecting just gone, in one year. That so far off the radar I don't think anyone predicted it. I wonder if any business could survive that.

Here's a question for you: How many Voters/taxpayers work for the Automotive company's and their suppliers? I ask because GM isn't going to close its doors. It will just liquidate enough plants and workers to keep going if it can. The question is how much will that cost the country in lost revenue.

Personally I think that if they were willing to dump 700 billion plus into the financial system with no strings attached they should be willing to loan a mere 35 billion to the manufacturing sector to be returned with interest.

If they bail out one sector of the economy I just can't see how they won't give a leg up to another equally important one. Though I think any bail-outs was a bad idea, but once you have started down that road it doesn't work to try and turn around.

The other hard part is that most of the other country's in the world have already loaned their manufacturing sectors cash, because they are smart enough to realize that there is no way for any business to survive a one year drop in sales of over 30% which is what has happened to ALL of the auto makers this past year both domestic and foreign.

One thing I found very funny was that one of the commission members said

'you come here, asking for money, yet each of you flew here individually in a private jet. If I ask you if you care enough to sell your plane right now, would you agree?
...
Let the record show that none of them responded'

That was hilarious imo.
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.

Originally Posted by thebigspendur

I'm just tired of the people coming to Washington and putting a gun to ur heads and saying if you don't give us what we want something terrible will happen.

In this case it will. But Washington shouldn't give it unconditionally and I don't believe they will.

2-They come and really don't talk about themselves. Its all about the economy and their workers. Talk to the people who have worked there for years and you'll see they never gave a rat's a** about their employees.But now they're real humanitarians.

They're the highest paid auto workers in the world right? That's not really the point though. It's the effect on the economy if they're all out on the street. And even more, as above, the ripple effect through the supply industries.

4-So the auto makers say its not their fault. Its the Economy. People can't get financing to buy cars. So the last time I looked each automaker has a financing arm. maybe if GMAC didn't require a minimum 700 credit score to finance a car they would sell more cars.But no they won't takes the credit risk to sell more cars when its easier to come to the taxpayer for a handout and force us to take the risk instead.

It was the credit collapse that predicated all of this. If you could fog a mirror you could get a loan. GM could be in the worst shape because of their GMAC arm.

I will be up front that I do not know a ton on this subject, but I think it is important to know that if the auto companies close it is not just the auto plants that close it is all the other plants that make parts for the companies.

I disagreed with the first bail out, but this one seems a little bigger than that. I think if they didnt go with the first bail out things would have happend like Bruno said, but you haev to remember about all the companies other than the big detroit guys that are involved, not to mention what would happen with all the cars already out there.

Do i think the companies need to get thier duck in a row and get back to american inovation and compete wth the other car comanies? YES. I believe that if they start creating the cars to compete with over seas companies then the public would buy them.

Originally Posted by Quick

They're the highest paid auto workers in the world right? That's not really the point though. It's the effect on the economy if they're all out on the street. And even more, as above, the ripple effect through the supply industries.

This is from back when Ford first started the assembly line, he had a very high turn over rate because mechanics did not want to just put one part on every day, so he had to pay them more to stop them from quitting.

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.