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View Full Version : The next government bailout?


RexDog1
11-11-2008, 10:01 AM
I have been thinking about the bank Bailout???And have been watching the US car manufacturers
And look who has their hand out :rolleyes:


http://www.npr.org/templates/story/story.php?storyId=96844977 (http://www.npr.org/templates/story/story.php?storyId=96844977)

coz
11-11-2008, 10:12 AM
I have been thinking about the bank Bailout???And have been watching the US car manufacturers
And look who has their hand out



Time for "change"
http://www.electionwatches.com/images/2008-Obama-silver-animation.gif

JimN
11-11-2008, 10:13 AM
I have a small business and I'm perfectly willing to accept a bailout of, oh, I don't know- I'd take half a billion. I could survive on that and it's a pittance compared with the others.

Cutting back and just doing my part.

Roonie's
11-11-2008, 10:22 AM
I say let em fail and let the market sort em out.

JimN
11-11-2008, 10:37 AM
The problem with letting them fail is all of the collateral damage. GM alone is a main customer for hundreds, if not thousands of other companies that supply parts, accessories and systems. If GM goes under, many of those companies will, too. That causes the problems to snowball. If more than one automaker goes under, it's really gonna be bad. They all got far too big by acquiring other companies and becoming conglomerates and should have kept some things separate, so one part doesn't take the whole down. Lean and mean is the way they need to be and an elephant won't stop on a dime.

Jesus_Freak
11-11-2008, 12:47 PM
The problem with letting them fail is all of the collateral damage.....

Absolutely, but which is worse....the short term wave of damage moving its way down or the long term problems associated with this rampant tax-based subsidizing of companies which cannot compete in the global marketplace. I am glad I dont have to make those decisions.:o

Dan K
11-11-2008, 01:00 PM
I have a hard time with this one. Why is it OK to bail out the financial institutions that employ few and take extraordinarily large bonus but not the bread and butter of the middle class the auto industry ? If we don't do it we are all economically sunk and will truly be on our way to third world status.

No other U.S. industry generates more employment, annual economic output, exports, R&D investment, or retail business than the U.S. auto industry. For Instance;


Directly employs nearly a quarter of a million people;
Supports another 5 million Americans at dealerships, parts suppliers and service providers;
Has invested nearly a quarter of a trillion dollars in U.S. over last two decades, including $10 billion alone last year;
Spends $12 billion annually in R&D in U.S., which exceeds aerospace, medical equipment and communications industries;
Purchased $156 billion in U.S. auto parts supporting jobs in all 50 states and is the largest purchaser of U.S. steel, aluminum, iron, copper, plastics, rubber and electronic and computer chips;
Provides healthcare benefits to two million Americans and supports nearly 800,000 retirees and spouses with pension benefits.

bigmac
11-11-2008, 01:12 PM
I agree that letting the US automakers fail is counterproductive to an economic recovery. It's just galling to have to have the taxpayer rescue them from their own stupidity.

RexDog1
11-11-2008, 01:28 PM
I fell better balling out the US auto Manufacturers, than the bank industry? but where do you draw the line?? If US Toyota and US Honda put their hand out, how would you feel? And would the tax payer change their buying habits, and only buy a GM, Ford…….. Over an“Import”? just a thought:confused:

clevan
11-11-2008, 01:40 PM
I work alot with small businesses. It seems that the executives and board members of the auto makers do not carry near the personal responsibility that my small business clients do. Letting them fail would be a big hit for the economy. Shoveling money into them is a band aid. Structure assistance as a loan with specific financial and operational conditions which would ensure that the money was utilized to move these dinosaurs to becoming more competitive. Most importantly require the top executives and board members to personally quarantee these loans to the extent of any benefit they have ever recieved or will recieve in the future from their ownership or employment with the company. Small business owners have to do it, why not these guys? If they don't like those terms, then they go it on their own. Short term it will hurt but in the long run it will work itself out and we will end up with a more competitive and healthier economy.

JimN
11-11-2008, 01:45 PM
Absolutely, but which is worse....the short term wave of damage moving its way down or the long term problems associated with this rampant tax-based subsidizing of companies which cannot compete in the global marketplace. I am glad I don't have to make those decisions.:o

If the Big Three fail, think about how many billions in real estate will be snatched up by foreign investors. Normally, limited foreign real estate investment isn't a problem but when they could buy at such deep discounts and "fire sale" prices, it will do no good for the country's economy. Daimler even raised their eyebrow when they found out how much Chrysler execs made. After they couldn't turn it around, they dumped it. All of the MBAs that graduated in the '80s are the cause of this global collapse, IMO. They're so busy looking at the small details that the large ones skated right past them. They're too busy making themselves seem important when the big picture is what really matters.

I'm in a suburb of Milwaukee and within 1/2 mile of my house, I have three companies that have already been affected- Johnson Controls (global HQ) makes seats/ sub-assemblies and more car batteries than any company in the world, and two that I can't recall. Delphi is just about closed and they're on the South Side of Milwaukee.

States are already running out of unemployment compensation funds, the state budget of WI is $3B in the red (after the Governor said he would cut spending and then turned around to say that he didn't know exactly how bad the condition was when he ran- he did not enjoy that interview) and the Federal Gov't doesn't have enough credit to borrow what it will take to save the country if everything happens in a short time.

We already have a $3+Trillion deficit, depending on how you do the accounting and if we lose the automakers, look out. My guess is that we would have about 20% unemployment. The only real jobs that would be needed at that point would be in government because there's no way we would have enough police or courthouse/correctional facility staff. OTOH, prison food service, prison guard equipment and uniform and construction industries would take off.

I wonder how many resident and illegal aliens lost their houses due to foreclosure and sent a lot of money to relatives in other countries. They were sending roughly $50 Billion per year and in ten years, that's 75% of the bailout.

Now, how is it that illegals aren't a burden on the US?

Jorski
11-11-2008, 02:01 PM
Provides healthcare benefits to two million Americans and supports nearly 800,000 retirees and spouses with pension benefits.


What do you think is bankrupting them ?

kycat2007
11-11-2008, 04:41 PM
I just hate the total mismanagement of them. I read this in one of the articles
"executives from GM, Ford and Chrysler LLC and officials in the United Autoworkers union have called for more than that to avert a possible collapse of one of the nation's most basic industries, including $50 million more to help cover future health care payments for about 780,000 retirees and their dependents."

These plans are for them to retool and try to be competitive not cover future healthcare for retirees. The executives take big bonuses, the unions are screwed up, and the health plans are mismanaged.

I wonder if a Kia can pull my boat?

JimN
11-11-2008, 05:44 PM
What do you think is bankrupting them ?

The UAW's stranglehold. Too many members to have off of work when they strike and that alone costs the automakers tens of millions every day. It's a helluva system and if the Big Three go under, all of the union members will be screaming about not being to maintain their lifestyles which, when you consider factory floor workers making over $100K, it's true. The health benefit costs for GM is in the $1500/vehicle range because the unions demanded it and the companies had no real choice but to accept.

Slinkyredfoot
11-11-2008, 06:03 PM
Here is the answer to your question Rex. your California Senator has the answer....

http://news.yahoo.com/s/ap/20081111/ap_on_go_co/auto_bailout

Dan K
11-11-2008, 09:13 PM
What do you think is bankrupting them ?

If The Auto industry didn't provide it the government would end up providing health care.
For the record there are no bonuses paid to GM executives this year or next year. No raises for salary workers either. Auto executives have much smaller over all compensation packages than the Freddy teams or the AIG teams.

Workin' 4 Toys
11-11-2008, 09:34 PM
Just curious, will I still have to hear about NASCAR??
I'm still trying to figure out which part is the "Stock Car" :confused: .

j2nh
11-11-2008, 10:02 PM
If The Auto industry didn't provide it the government would end up providing health care.
For the record there are no bonuses paid to GM executives this year or next year. No raises for salary workers either. Auto executives have much smaller over all compensation packages than the Freddy teams or the AIG teams.

Should the American Taxpayer be asked to foot the bill for pension and healthcare obligations GM or Ford have to their retirees? This was a contractual arrangement between GM and it's employees through their bargaining unit the UAW. GM screwed up because they didn't adequately fund these obligations and the UAW screwed up because they didn't ensure that they were.
So at what point does this become our/my problem?
If Congress ends up creating a package, and I suspect they will, then they should demand HUGE concessions from both GM/Ford management/labor. How about everybody makes 15 bucks an hour until they start paying us back for these "loans".
What a freaking mess!

Dan K
11-11-2008, 10:10 PM
Pension and Retiree health care plans are fully funded. operating cash due to low sales volumes is what is needed currently.

j2nh
11-11-2008, 10:30 PM
Pension and Retiree health care plans are fully funded. operating cash due to low sales volumes is what is needed currently.

Are you sure?

In related news, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) on Saturday sent a formal letter to Treasury Secretary Henry Paulson requesting "temporary assistance to the auto industry" using a portion of the recent $700 billion bailout for Wall Street firms, the Wall Street Journal reports (Hitt/Stoll, Wall Street Journal, 11/10). On Thursday, executives from United Auto Workers, GM, Chrysler and Ford met with Pelosi, Reid and other congressional leaders to ask for $25 billion in additional federal loans for health care payments for retirees. The money from the loans would help cover the companies' contributions to a health benefit trust, or a voluntary employees' beneficiary association, for union retirees (Kaiser Daily Health Policy Report, 11/7).

UAW President Ron Gettelfinger said the union would not make additional concessions to automakers. Alan Reuther, legislative director for UAW, on Friday said that the union "already stepped up" in 2007 by making concessions on workers' pay and benefits and retiree health care. He said UAW wants assurances that federal funding would help members maintain retirement and health care benefits (Wall Street Journal, 11/10).

tommcat
11-13-2008, 10:21 PM
get rid of the UAW and i might be able to back a bailout for the auto makers, but as long as those thieves are still around i dont support helping any US automaker with a single dollar. they got themselves into the hole, they can get themselves out if they really wanted to.

coz
11-14-2008, 06:41 AM
No bailout for Lehman Bros. :D They're going after Salaries, Bonuses, Houses & Art Work, this is good :D

San Mateo County Sues Lehman Bros. Execs http://www.ktvu.com/news/17974550/detail.html

djhuff
11-14-2008, 07:55 AM
The financial bailout was needed to keep our country's financial system working, I don't have time to go totally into this, but without it, there are several more businesses that would cease to exist (GE couldn't get funding to make short term obligations)

The auto bailout on the other hand is pure politics. GM, Ford, and Chrysler won't "fail" and take a whole industry with it, they'll file for Ch. 11, and everyone in the industry will feel some pain. the best thing that can happen to Detroit is these companies getting the union contracts voided under Ch. 11, and re negotiate them so that they can compete with the Japanese automakers here in the US. THIS RIGHT HERE IS WHY PELOSI AND REID ARE PUSHING FOR A BAILOUT. Unions pay BIG BUCKS to these campaigns, and if the big three don't get a "bailout" then they will most likely lose their contracts and actually have to work at a competitive wage.

The world is a changin' Unions need to get with this and change, or no one will have automotive jobs.

bcampbe7
11-14-2008, 08:04 AM
The financial bailout was needed to keep our country's financial system working, I don't have time to go totally into this, but without it, there are several more businesses that would cease to exist (GE couldn't get funding to make short term obligations)

The auto bailout on the other hand is pure politics. GM, Ford, and Chrysler won't "fail" and take a whole industry with it, they'll file for Ch. 11, and everyone in the industry will feel some pain. the best thing that can happen to Detroit is these companies getting the union contracts voided under Ch. 11, and re negotiate them so that they can compete with the Japanese automakers here in the US. THIS RIGHT HERE IS WHY PELOSI AND REID ARE PUSHING FOR A BAILOUT. Unions pay BIG BUCKS to these campaigns, and if the big three don't get a "bailout" then they will most likely lose their contracts and actually have to work at a competitive wage.

The world is a changin' Unions need to get with this and change, or no one will have automotive jobs.


Good post!

TMCNo1
11-14-2008, 09:23 AM
NASCAR! http://www.mastercraft.com/teamtalk/showpost.php?p=557064&postcount=235

bbymgr
11-14-2008, 09:49 AM
The financial bailout was needed to keep our country's financial system working, I don't have time to go totally into this, but without it, there are several more businesses that would cease to exist (GE couldn't get funding to make short term obligations)

The auto bailout on the other hand is pure politics. GM, Ford, and Chrysler won't "fail" and take a whole industry with it, they'll file for Ch. 11, and everyone in the industry will feel some pain. the best thing that can happen to Detroit is these companies getting the union contracts voided under Ch. 11, and re negotiate them so that they can compete with the Japanese automakers here in the US. THIS RIGHT HERE IS WHY PELOSI AND REID ARE PUSHING FOR A BAILOUT. Unions pay BIG BUCKS to these campaigns, and if the big three don't get a "bailout" then they will most likely lose their contracts and actually have to work at a competitive wage.

The world is a changin' Unions need to get with this and change, or no one will have automotive jobs.

Hit the nail on the head!!!!!!

fletch_n_me
11-14-2008, 10:20 AM
The financial bailout was needed to keep our country's financial system working, I don't have time to go totally into this, but without it, there are several more businesses that would cease to exist (GE couldn't get funding to make short term obligations)

The auto bailout on the other hand is pure politics. GM, Ford, and Chrysler won't "fail" and take a whole industry with it, they'll file for Ch. 11, and everyone in the industry will feel some pain. the best thing that can happen to Detroit is these companies getting the union contracts voided under Ch. 11, and re negotiate them so that they can compete with the Japanese automakers here in the US. THIS RIGHT HERE IS WHY PELOSI AND REID ARE PUSHING FOR A BAILOUT. Unions pay BIG BUCKS to these campaigns, and if the big three don't get a "bailout" then they will most likely lose their contracts and actually have to work at a competitive wage.

The world is a changin' Unions need to get with this and change, or no one will have automotive jobs.

Amen brother - UAW has trashed this industry for decades. To be profitable, they have had to produce some pretty substandard cars. I like american trucks but I searched in vain for an american car that I would like but ended up going with a BMW. Tried the cadillac CTS and it just felt like i was driving a coffin...it felt cheesy to me.

Anyway, we can build the most advanced aircraft, weapons, computers, ships and spacecraft and yet we struggle with producing a car that can compete in a world market. I dunno. Times they are a changing.

Jesus_Freak
11-14-2008, 12:20 PM
...Anyway, we can build the most advanced aircraft, weapons, computers, ships and spacecraft and yet we struggle with producing a car that can compete in a world market. I dunno. Times they are a changing.

Yes....agreed. Remember, we do not compete in the world market with our production of spacecraft, weapons, etc. Those costs are out of control and will take the auto makers with them if we allow govt. control.

j2nh
11-14-2008, 12:49 PM
Total Compensation Per Hour, 2007-2008 (includes wages and all benefits):
Big Three automakers — $73.08
Toyota — $48.00
All workers — $28.48
Source: http://mjperry.blogspot.com/2008/11/50b-bailout-would-only-be-down-payment.html

A vast majority of the big three compensation/hr is retiree pension and benefits. It is an awful lot to ask the guy making 28.48 to subsidize pension and retiree benefits when they themselves don't have any.

Sodar
11-14-2008, 12:52 PM
I say let em fail and let the market sort em out.

X2 .

justinlkgb
11-14-2008, 02:24 PM
The financial bailout was needed to keep our country's financial system working, I don't have time to go totally into this, but without it, there are several more businesses that would cease to exist (GE couldn't get funding to make short term obligations)

The auto bailout on the other hand is pure politics. GM, Ford, and Chrysler won't "fail" and take a whole industry with it, they'll file for Ch. 11, and everyone in the industry will feel some pain. the best thing that can happen to Detroit is these companies getting the union contracts voided under Ch. 11, and re negotiate them so that they can compete with the Japanese automakers here in the US. THIS RIGHT HERE IS WHY PELOSI AND REID ARE PUSHING FOR A BAILOUT. Unions pay BIG BUCKS to these campaigns, and if the big three don't get a "bailout" then they will most likely lose their contracts and actually have to work at a competitive wage.

The world is a changin' Unions need to get with this and change, or no one will have automotive jobs.


Yep I should have written you in for Prez:D Seriously though...well put!

ProTour X9
11-14-2008, 06:28 PM
All I can say is Michigan is hurting right now, none of my family is in the auto industry, but I'd hate to see the big 3 go under (if thats what would happen). I won't feel comfortable with a Toyota engine in my MasterCraft!

coz
11-14-2008, 06:33 PM
I won't feel comfortable with a Toyota engine in my MasterCraft!

But if they're like the auto engines you'll get more hours/miles from the toyota engine :rolleyes:

Gonzo
11-14-2008, 08:54 PM
But if they're like the auto engines you'll get more hours/miles from the toyota engine :rolleyes:

Plus it runs on Rice!!! A renewable resource! wait thats just the rockets!


Seriously, I have a 93 honda with around 300 k on it. Its just now burning a quart of oil a week. thats pretty good.

Gonzo
11-14-2008, 08:54 PM
I also have a yukon and a 71 Chevy C10.... just for the record.

cbryan70
11-14-2008, 09:14 PM
But if they're like the auto engines you'll get more hours/miles from the toyota engine :rolleyes:

they already have a motor in a boat

03 35th Anniversary
11-14-2008, 09:17 PM
they already have a motor in a boat

Didn't Toyota build a boat for a little while???

Toyota Epic or something???

cbryan70
11-14-2008, 09:21 PM
Yeah, guy i know has one. He used to be big in toyota corp. It is a pretty nice boat. his isnt an epic tho...it says toyota

coz
11-14-2008, 09:21 PM
Didn't Toyota build a boat for a little while???

Toyota Epic or something???

Yes, Epic was it, here's the history http://www.epicmarine.com/history.html

Here's today's version http://www.epicboats.com/ not Toyota