Auto Bailout, yea or nea?

[realchef]

Originally Posted by Wagner

Multiple and similar brands are 10% of the problem, the other 90% is spelled United Auto Workers.

Mitt Romney had the best comments I heard so far:

"Chapter 11 would allow them to restructure their labor deals"


Brand reduction is definitely a step in the right direction, but until build costs are lowered the "Big 3" can not compete. It is impossible. It simply costs them more to build a car than it does a foreign company. And you don't have to graduate from "Warren Buffet's Econ Course 101" to understand that is a major problem.

The Union's had their day. They have become a parasite and the hosts are almost dead(auto maker's incompetence aside). UAW, UFCW and even the teacher's union is ruining our educational system.

We have maintained an overall high standard of living. When our corporations are allowed to offshore manufacturing the only logical result is the inevitable reduction of our own standards.

The global economy is going to find a level amongst it's players. We delved in whole heartedly in search of immediate higher profits without consideration of the long term effect. For instance, our trade imbalance with China is absurb. We export the trash from our once booming industries to fuel their industries and import back the final goods ("now with free mercury") It's stripping our economy of the basic engine needed to grow, production and workers with earings to spend. How much garbage can we really buy from Wal-Mart? Their negative returns are now well documented. The auto industry should be a wake up call for us on all economic fronts. Buy American should be our goal not our shame.

The auto industry needs to bankrupt and re-organise, but the gubment needs to begin looking at our overall trade deficit and offshoring of business. We derive only a top tier profit from the out of country jobs and lose the benefits of workers participating in the economic engine. For once, a little isolationism might not be bad.

[blondboinsd]

Michael Moore On The Issue At Hand: I typically dislike him but I think he has many great points in this interview.


(CNN) -- Senate Majority Leader Harry Reid reversed plans Wednesday to hold a test vote on an automakers' bailout bill on Thursday. Reid had planned to move on legislation that would have taken $25 billion from the $700 billion already approved for Wall Street and diverted it to the big three automakers.


Filmmaker Michael Moore says the collapse of General Motors could mean the loss of millions of jobs.

CNN's Larry King talked Wednesday with Michael Moore, a filmmaker with deep ties to the auto industry. Moore's father worked for General Motors for 35 years.

In 1989, Moore became an international figure for his film, "Roger and Me," which centered on the declining auto industry in his hometown of Flint, Michigan and the ripple effect on the town's residents.

The following is an edited version of the interview.

Larry King: Michael, was (the movie) prophetic?

Michael Moore: When I made that film, there were still 50,000 people working at General Motors in Flint. I mean they had eliminated 30,000 jobs, but there were still some jobs there.

Today, I think there's less than 12,000 working in the area, so it has devastated Flint. Flint was one of the first towns to go. When I made that movie almost 20 years ago, I hoped that the film would be a warning to other cities that this corporation was intent upon removing jobs from this country and taking them to Mexico and Brazil and other places.

When I made that movie that year, General Motors made a profit of over $4 billion, and they were still laying off people simply to make a bit more money, the people who helped to build the company, the workers in their hometown of Flint, Michigan, they just forgot about them and took the money and ran.

King: Since the principle was, 'We'll have the cars built elsewhere and many of the cars are built elsewhere now,' what went wrong if they were paying less out of the country to build them?


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Moore: Well, what really went wrong is that General Motors has had this philosophy from the beginning that what's good for General Motors is good for the country. So, their attitude was we'll build it and you buy it. We'll tell you what to buy. You just buy it.

Eventually, the consumer got smart and said, 'You know what, I'd like a car that gets a little better gas mileage. I'd like a car that's safer on the road,' so they started to buy other cars. General Motors still wouldn't change. They still kept building the wrong cars, and more and more people stopped buying them. Watch how Moore feels about auto bailout »

At a certain point, you know, General Motors lost such a large part of the market share that there probably was a point of no return.

Now, here we are on the verge of this collapse. If General Motors collapses, then there goes hundreds of thousands of jobs, if not millions of jobs of the ripple effect of this.

King: And the same is true of Ford and Chrysler?

Moore: Absolutely. I'll tell you, it was hilarious just watching these CEOs there (Tuesday) and (Wednesday) testifying in Congress, saying that, you know, that the problem wasn't theirs, you know, the cars they were building. It was the financial situation that we're in now. Watch automakers get grilled on Capitol Hill »

The problem is the cars they've been building. They've never listened to the consumers. They've just gone about it their own wrong way. I'll tell you, you know, I'm of mixed mind about this bailout, Larry, because I don't think these companies, with these management people, should be given a dime, because that's just going to be money going up in smoke or off to other countries.

GM is currently building a $300 million factory in Russia right now to build SUVs, right outside of St. Petersburg. That's where your money's going to go, no matter what they say.

King: Why (do you have) mixed feelings?

Moore: Well, because we can't let all these people lose their jobs because of the bad decisions, the stupid decisions made by the management of these auto companies. I think what has to happen here is that Congress needs to pass some legislation, and our president-elect needs to do what Roosevelt did.

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When Roosevelt came in and when World War II faced the country, Roosevelt said to General Motors and Ford, you're not going to build cars anymore. You're going to build airplanes and tanks and guns and the things that we need for this war because we have a national crisis. General Motors had to do what Roosevelt told them they had to do.

King: What do you want them to do now?

Moore: President-Elect Obama has to say to them, yes, we're going to use this money to save these jobs, but we're not going to build these gas-guzzling, unsafe vehicles any longer.

We're going to put the companies into some sort of receivership and we, the government, are going to hold the reigns on these companies. They're to build mass transit. They're to build hybrid cars. They're to build cars that use little or no gasoline. iReport.com: New emissions standards, other improvements needed



We're facing a national crisis, not just an economic crisis, but a crisis of the polar ice caps are melting. There's only so much oil left under the Earth. We're going to run out of that, if not in our children's time, our grandchildren's time.

There's got to be a plan set out to find other ways to transport ourselves in other ways than using fossil fuels

[blondboinsd]

From The, OMG File....

ALL 3 CEO'S FLEW IN PRIVATE JETS!

(CNN) -- Some lawmakers lashed out at the CEOs of the Big Three auto companies Wednesday for flying private jets to Washington to request taxpayer bailout money.


Chrysler CEO Robert Nardelli, left, and Ford CEO Alan Mulally testify on Capitol Hill on Wednesday.

"There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses," Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

"It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious."

He added, "couldn't you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it."

The executives -- Alan Mulally of Ford, Robert Nardelli of Chrysler and Richard Wagoner of GM -- were seeking support for a $25 billion loan package. Later Wednesday, Senate Majority Leader Harry Reid reversed plans to hold a test vote on the measure.

An aide told CNN that Reid decided to cancel the test vote when it became clear the measure would fall well short of the 60 votes needed. Reid did, however, make a procedural move that could allow a vote on a compromise, which several senators from auto-producing states were feverishly trying to craft.

At Wednesday's hearing, Rep. Brad Sherman, D-California, pressed the private-jet issue, asking the three CEOs to "raise their hand if they flew here commercial."

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"Let the record show, no hands went up," Sherman said. "Second, I'm going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up."

The executives did not specifically respond to those remarks. In their testimony, they said they are streamlining business operations in general. Watch Nardelli ask for help »

When contacted by CNN, the three auto companies defended the CEOs' travel as standard procedure.

Like many other major corporations, all three have policies requiring their CEOs to travel in private jets for safety reasons.

"Making a big to-do about this when issues vital to the jobs of millions of Americans are being discussed in Washington is diverting attention away from a critical debate that will determine the future health of the auto industry and the American economy," GM spokesman Tom Wilkinson said in a statement.

Chrysler spokeswoman Lori McTavish said in a statement, "while always being mindful of company costs, all business travel requires the highest standard of safety for all employees."

Ford spokeswoman Kelli Felker pointed to the company's travel policy and did not provide a statement elaborating.


Michael Moore on Bailout

He confronted GM in "Roger and Me," hear how he feels about the possible bailout.
Tonight, 9 ET on CNN

see full schedule »

But those statements did little to mollify the critics.

"If it is simply the company's money at stake, then only the shareholders can be upset or feel as it might be excessive," said Thomas Schatz, president of the watchdog group Citizens Against Government Waste.

But in this case, he said, "it's outrageous."

"They're coming to Washington to beg the taxpayers to help them. It's unseemly to be running around on a $20,000 flight versus a $500 round trip," Schatz added. iReport.com: Should the Big Three be bailed out?

The companies did not disclose how much the flights cost.

Analysts contacted by CNN noted that the prices vary with the size of the plane and the crew, and whether the aircraft is leased or owned by the company.



Analyst Richard Aboulafia of the Teal Group said that $20,000 is a legitimate ballpark figure for a round trip corporate jet flight between Detroit, Michigan, and Washington.

When asked whether they plan to change their travel policies as part of the restructuring needed to shore up their finances, none of the companies answered directly. But they said they have cut back on travel in general as revenues have fallen.

[Krimson X]

Democrats to Automakers:

Slow your roll! Come up with a business plan to show how the bailout will transform the industry, and we'll see you in December.

http://www.cnn.com/2008/POLITICS/11/...out/index.html

[StanF18]

As a pretty smart guy once said: "Everything's relative"

Which brings us back to Wagner's original point. $25 Bln is some serious coin, but in the context of a $700 Bln bailout for irresponsible behemoth-investment-banks, $25 bln is chump change. It basically goes to show that the investment bank lobby has a lot more clout on Capitol Hill than the automakers...

I'm no fan of the American auto industry or the UAW. Ask any lawyer and they'll tell you that half the case law they learned in Law School was "Mr. xxxxx vs. Ford Motor Company". Ford executives going back to the 1960s have more blood on their hands than the Sicilian mafia. Time and again they have been shown to put profits ahead of safety, whether it's exploding gas tanks on pick-ups, or Ford Explorers flipping over on a whim.
But even with all that, I'd rather see Washington put $$$ towards something that you can see and touch and drive, instead of the speculative black hole Investment Banks that deal in papers, wire transfers, and loansharking.

[Wagner]

Point of view:

First off Chrysler to me, is out of any "bailout" plan. They were purchased by a private investor..now a private problem.

Ford is worth 3.3B, GM is worth 2B. Ford should be favored more for bailout funds (think Iacocca 1980s).

GM....ask yourself this do you know someone that owns a:

GM Corvette, GM Impala, GM GTO, GM Silverado?

No..but maybe a Chevrolet or Pontiac vehicle. GM made a power move over the last 70 years, buying up small companies and acting as an umbrella. Well sadly, the umbrella has fallen apart. It made sense, get smaller companies working together with common goals (more importantly common parts and labor) and move from there. But, what they didn't anticipate was the global market.

It's simple really, if you had a football team and you decided to bring on a really good player that had a small injury, but was still very good, you'd be in good shape. Now over the next weeks you bring on another 9 guys with the same small injury but serious potential. But over the season the injury gets worse, on all players, and now it is no longer minor but major. And with the major injury to the majority of your players you are now losing games. Fans stop showing up, you stop winning. What do you do next season? CUT PLAYERS. (you can substitute "UAW" for "injury")

GM is dead, needs to be buried. Any bailout talk should be like this:

- Which companies (Chevrolet, Pontiac, GMC, etc) could survive on their own possibly not being part of a group?
- Help get those individuals up and running with "bailout money" or "loan" same as Lee Iacocca did.

As far as UAW goes, they can use their own trust funds now to pay retirees instead of waiting to 2010 as they negotiated.

[NC_X5_Guy]

Here is my take........biggest failure with GM is the UAW contract. A guy on an assembly line is not worth $70 an hour. Paint him as the best headlight installer in the world, its still a job a high school drop-out can do with success. This is GMs weak point, the union has killed them. File under some bankrupt clause, and do away with the union and pay decent wages, problem solved. There is more workers than top mngmt jobs, so you can't blame the mngmt for breaking GM. Sure, they may need to kill some bonus money and incentives for mngmt, but the hourly paid union worker and lack of sellable products is what has killed GM over the past 5 years. No mid range sports cars, an ugly mid sized truck, no decent 4 door sedans......it pushed folks to honda, toyota, that were usually GM owners. Finally this year they redesigned the malibu, best it has ever looked since it came back into production. The only thing GM has going for them in the sales market is the silverado and suburban platforms, outside of that, they are doomed.

[Wagner]

Chevrolet should slice off from "GM". It is probably the only portion with a real ability to survive.

[Eric5273]

Originally Posted by Wagner

Chevrolet should slice off from "GM". It is probably the only portion with a real ability to survive.

I would bet Saturn probably does ok as well. They seem to have a nice following.

[AzX5]

Interesting that Ford's most advanced assembly plant is apparently in rural Brazil instead of in Detroit:

http://info.detnews.com/video/index.cfm?id=1189