Auto Bailout, yea or nea?

[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.


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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.

[MrLabGuy]

Originally Posted by Krimson X

That would be great if the Big 3 mfg's weren't losing money on just about every car sold.

http://www.leftlanenews.com/study-do...y-vehicle.html

A new study by the Harbour Felax Group indicates General Motors lost an average of $1,271 for every vehicle it sold in the United States and Canada last year. Ford, meanwhile, lost around $451 per vehicle, while Chrysler squeezed a narrow profit of $144.
Comparatively, Toyota profited $1,715 per vehicle and Honda made $1,259. Nissan’s profits were even stronger at an average of $2,135 per unit sold. Harbour Felax says U.S. automakers could greatly improve their profit margins by stabilizing pricing, cutting back on incentives, and reducing warranty costs. For example, the study shows Toyota’s warranty costs at $348 per vehicle versus GM at $512, Ford at $585 and the Chrysler Group at $595.

The Government gives the rebate, not the automaker to spur sales. The Unions pay the health-care costs with the money saved for a strike which won't matter much if they fold. Then the Unions sit down with automakers and some financial experts to come up with a negotiated reasonable wage and benefits which keep the company afloat. Congress instead wants to give them 25 Billion to pay the Unions with strings attached to meet what Congress wants which is Green technology and fails to address the problem.

[LeMansX5]

Originally Posted by blondboinsd

Is Erik totally blind or something? I mean c'mon Erik, I'd say UAW is 50% of the problem and then stubborn down right stupid companies are 50% of the problem.

You don't deserve 70.00 a F*cking hour to put on a bumper PLUS a golden parachute

Sorry, welcome to reality!

And that is minimum they get paid - $72/hour.

[Krimson X]

Originally Posted by MrLabGuy

The Government gives the rebate, not the automaker to spur sales.

Right. But what good is a govt rebate if the automakers will lose money on the sale anyway? It would be good for the consumer, but not necessarily good for the mfg's. The problem is much bigger than sales volume. I heard a report today that the mfg's would have to add an additional $1,500.00 to the price of each vehicle sold just to pay for the health insurance for former and current employees.

[Eric5273]

Originally Posted by FSETH

How can you seriously say that?

Originally Posted by blondboinsd

Is Erik totally blind or something? I mean c'mon Erik, I'd say UAW is 50% of the problem and then stubborn down right stupid companies are 50% of the problem.

You don't deserve 70.00 a F*cking hour to put on a bumper PLUS a golden parachute

Sorry, welcome to reality!

Originally Posted by blondboinsd

From The, OMG File....

ALL 3 CEO'S FLEW IN PRIVATE JETS!

Unless the union members are earning more than management (including the CEO), then they are not the problem. Management who make millions of dollars per year each have nerve to complain about the salaries of workers who build their product yet make less than 10% what they do.

[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.

[MrLabGuy]

Originally Posted by Krimson X

Right. But what good is a govt rebate if the automakers will lose money on the sale anyway? It would be good for the consumer, but not necessarily good for the mfg's. The problem is much bigger than sales volume. I heard a report today that the mfg's would have to add an additional $1,500.00 to the price of each vehicle sold just to pay for the health insurance for former and current employees.

That is why you can't save the big three without busting the Unions...Or at least coming up with a compromise to keep the three alive. What good is a Union autoworkers job if there are no auto manufacturers in the US?

[Krimson X]

Originally Posted by MrLabGuy

That is why you can't save the big three without busting the Unions...Or at least coming up with a compromise to keep the three alive. What good is a Union autoworkers job if there are no auto manufacturers in the US?

They'll just go work for a non-unioned Honda plant in Ohio, or a non-unioned Toyota plant in Canton, Mississippi.

http://www.cnn.com/2008/US/11/20/honda.town/index.html

This bailout will be more of a referendum on the future of the UAW than it is anything else.

[Eric5273]

The unions have a right to demand what they want, and the big three have a right to refuse those demands and find new workers. There should be no government involvement in these sort of negotiations.

But I agree that these companies have to show some sort of business plan of how they intend to make a profit if they are bailed out. As we see from Citibank, tens of billions in handouts has now resulted in 50,000 layoffs. I noticed that the CEOs of the automakers talked about how many jobs would be lost if they went belly up. But nobody asked the question of how many jobs would be lost if they were bailed out.