Automotive Bailout? are they friggin' kidding?

[L6Sguy]

You want to know what will happen if GM files bankruptcy? They will file Chapter 11, which means reorganization . They will bring in specialists that will look at what is being spent where, contracts with parts suppliers and the unions, etc. They will say this works, this is costing you money, this is causing you to fail, this is working, etc. Therefore, if they file, they will see what isn't working... Hmmmmm.......

 

 

well lord knows it'd certainly take chap 11/reorg to figure out whats wrong.

[spoonie g]

 

well lord knows it'd certainly take chap 11/reorg to figure out whats wrong.

 

 

Well, then we should let them do it. If they've made stupid decisions, they should learn from it. But my point is is that chapter 11 will highlight how stupid this deal with the unions is. The bailout is political.

[L6Sguy]

Well, then we should let them do it. If they've made stupid decisions, they should learn from it. But my point is is that chapter 11 will highlight how stupid this deal with the unions is. The bailout is political.

 

 

 

i'm on your side, i think, in that imho there should be no handholding, fallout be damned.

 

automobiles wont stop existing, and somebody will keep making, selling, shipping, buying, servicing, fueling, cleaning, repairing, etc. this something nobody cares to acknowledge, but an industry that large and crucial will not just lay down & die.

[spoonie g]

i'm on your side, i think, in that imho there should be no handholding, fallout be damned. automobiles wont stop existing, and somebody will keep making, selling, shipping, buying, servicing, fueling, cleaning, repairing, etc. this something nobody cares to acknowledge, but an industry that large and crucial will not just lay down & die.

 

 

Well, the bailout is a move to save the unions, which are a huge part of the problem. GM will still be around, but they will be smarter post ch. 11. If we bail them out, they will likely continue down the same doomed path, but with our money, which, as every one should very well know, we will never see returned.

[freeridstylee]

Also on the 50 mpg rabbit comment...........it's not possible in a us car anymore. The safety standards are WAY too high, adding too weight to every vehicle produced for the us market. The government's fault. If safety standards were relaxed we'd have much higher mpg cars all around the board.

 

Also this debate is useless, king Obama has already made up his mind, they'll follow through with the bailouts. It's more of a question of weather GM will have enough $$ to make it that long.

[freeridstylee]

 

i'm on your side, i think, in that imho there should be no handholding, fallout be damned. automobiles wont stop existing, and somebody will keep making, selling, shipping, buying, servicing, fueling, cleaning, repairing, etc. this something nobody cares to acknowledge, but an industry that large and crucial will not just lay down & die.

 

 

Very true, but do we want the 18.5 billion dollars a year spent on R&D in the US turning into $$ spent in Germany and Japan? That's going to turn out great in WW3.

[L6Sguy]

Very true, but do we want the 18.5 billion dollars a year spent on R&D in the US turning into $$ spent in Germany and Japan? That's going to turn out great in WW3.

 

 

i think a much more important question to follow would be: what is the return on investment?

 

 

its one of those biznessy questions the BF3 never seemed to do to well with, and even did worse with when time-frames were expanded past the 6-month mark.

[driverhasabomb]

These genius companies had a chance with the ev-1 but destroyed them all and pushed the hummer. now they are tanking. boo-hoo. i say give bail out money to Tesla and Zap (the cars not the bands) and let these crooks go spend their pensions and bonus's on some island somewhere while their companies go the way of 8 track tape (oh, sorry bout the semi-political thread)

 

 

I agree with you 100%.

 

I do see their point about using the bailout to insure the jobs of everyone dependent on the auto industry but some companies do become obsolete over time and we should let them die if they're really doing that bad.

[nwtsnma]

they must die

[L6Sguy]

skip the BF3, and take that money and dole it out only to those who dont wear suits to work, something like that. put the old, disease-ridden lying & dying dogs to rest.

[Jules-RM]

Wrong.

 

Toyota: $47/hr

GM: $73/hr

 

The average GM line worker makes $27/hour. So you are saying toyotas employees work for free? By the way: http://www.autoblog.com/2007/01/31/toyota-workers-in-us-made-more-than-uaw-members-for-first-time-l/

 

 

And what you don't understand, is this bailout would not be the last. GM does not have a sustainable business structure, until that is addressed this will happen again and again.

[amp_surgeon]

Ok, catalinbread responded to my post, and echodeluxe did the best he could to try to explain the meaning of what I said. I'm not going to address each point in the exchange, but just clarify my original statement.

I was NOT saying that the unions are "bad". In fact, the unions have been very good for the workers AND the auto companies. Unlike jobs at 7-11 or McDonalds, building cars requires skill and knowledge that takes time to acquire. Providing a living wage to workers helps ensure that the workers will devote their lives to developing those skills and acquiring that knowledge, which helps them produce better quality products with improved efficiency. Everybody wins.

The point I was making, and which echodeluxe tried to emphasize, is that the foreign automakers have an economic advantage over the US automakers primarily because they don't employ union workers, don't pay the same wages, and don't provide the same benefits. The US automakers are bound by contracts with the unions, so they can't reduce their labor costs to compete with the foreign automakers. On top of that, the subassemblies for those foreign cars are produced in Asia with dirt cheap labor. Only the final assembly is done in the US in order to avoid import duties. So, they pay their US workers less per hour, and require fewer hours from them to assemble a car.

No amount of money from Washington is going to change the simple economics of this situation. Detroit cannot compete with Japan, and must struggle to compete with Europe. Unless this simple fact is addressed, any bailout money from the taxpayers is going to be wasted, and the US automakers are going to end up bankrupt anyway.

[freeridstylee]

 

No amount of money from Washington is going to change the simple economics of this situation. Detroit cannot compete with Japan, and must struggle to compete with Europe. Unless this simple fact is addressed, any bailout money from the taxpayers is going to be wasted, and the US automakers are going to end up bankrupt anyway.

 

 

 

So does this hold true for every manufacturing company? What if the Ford started to outsource manufactoring, like say dell does?

 

Will the same fate hold true for farming? Are all forms of manual labor dead in the US? Are we destined to be a country of lawyers and accountants?

 

Also what happens if the Japanese people decided to stop subsidizing their auto companies?

[The Great Waldo Pepper]

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." (often shortened to "Labor precedes capital").
Abraham Lincoln, First Annual Message to Congress, December 3, 1861


And

The regularity and intensity of recessions & depressions are linked to the separation of wealth and those who actually create wealth.

And

If worker pay kept up with the rate of productivity they'd be earning over $150/hr. GM existed 40 years ago, without hybrids, with unions, at lower rates of production.

Lets blame workers.

[The Great Waldo Pepper]

Also what happens if the Japanese people decided to stop subsidizing their auto companies?

Keeping your currency artificially low is a backdoor subsidy to prop up domestic manufacturers who export.

[freeridstylee]

Keeping your currency artificially low is a backdoor subsidy to prop up domestic manufacturers who export.

 

I know, if the b3 fall, then the yen will probably go up, taking that subsidy away. We'll be forced to purchase more expensive cars. Or Korean, probably Chinese by then.

[amp_surgeon]

Lets blame workers.

Who's blaming the workers? It's not their fault. American workers are some of the most productive and hard working in the world. They're also the most expensive. You can't blame them for this. Living in America is expensive.

[The Great Waldo Pepper]

I know, if the b3 fall, then the yen will probably go up, taking that subsidy away. We'll be forced to purchase more expensive cars. Or Korean, probably Chinese by then.

 

 

Pay workers less and less when they produce more and more we're creating an imbalance. They no longer have the ability to buy the things they produce. The owners are not stupid enough to sell them for less than they cost, but they still prefer a lopsided system. So they came up with the clever idea of financing.

 

They also embraced free trade principles that says any country can dump cars in the USA for 2% tariff but if the US wants to ship cars elsewhere often times they are faced with 30% tariffs. THAT has tied US automaker's hands for decades, thus stifling development. Capital does only what earns the most capital in return for it's actions. For the Big 3 unfortunately that has meant making pickup trucks. Yes yes EV1, I've seen the movie.

[The Great Waldo Pepper]

The reality which the US has to come to grips with is that we are competing in a world market where most of the world has a far lower standard and cost of living. Manufacturing is not dead in America, but some balancing of costs is inevitable. Wages in countries we compete with will have to rise, and wages in America will have to fall, until there is some balance. This happened in Japan, and they now find themselves in the same boat as the US. They have to outsource manufacturing because their own labor force is expensive compared to China and Taiwan. I don't really see how Lincoln's comments apply to the current situation. The automaker's problem is one of simple economics. Lincoln was a self-taught lawyer. The productivity of their foreign competitors rose at the same time, but prices did not. Anybody want to pay $100K for a new GM pickup truck? 40 years ago GM was not competing with Japanese companies that used robotic assembly lines for their large assemblies, and dirt cheap labor in other Asian countries for their smaller assemblies. Most of their competitors were right here in the US, and they were using the same manufacturing methods that GM was using. GM's answer to competition back then was the buy their competitors. Do you propose that GM buy Toyota and Honda? Who's blaming the workers? It's not their fault. American workers are some of the most productive and hard working in the world. They're also the most expensive. You can't blame them for this. Living in America is expensive.

THINK. If employees were paid a compensation closer to that of the wealth they actually create we wouldn't have these radical ebbs and flows in the market. If they were actually paid a compensation closer to that of the wealth they create they'd have a chance to save up and BUY the stuff they produce... Instead we headed down the lopsided path. Automakers had to sell cars to these people so they recognized FINANCING as the means doing that. What domestic automakers are dealing with is coming to head NOW due to CREDIT, not because of the UAW or making {censored}ty products.

I will not sit here and apologize for the ultra wealthy saying oh Americans have to get used to lower standards of living...

"Lincoln was a selftaught lawyer." BRILLIANT ad hominem!

[echodeluxe]

 

haha, wow. You arm chair analysts are going to be chewing your words and stale bread if your "burn baby burn" bull{censored} comes true. A lot of you are basically advocating the suffering of millions of Americans because you're bitter that tax dollars might go towards our country instead of building military bases in Iraq. clue: our economy can't really handle this many job losses. We can't pay the unemployment claims. We can't handle the uninsured health issues. Do you guys realize how much {censored}ING TAX REVENUE a corporation like GM pays and how much their employees pay? Do you realize how much tax revenue comes from the suppliers, the dealers, and their employees? Do you realize how much tax revenue is generated by the goods and services their employees purchase? Do you realize how much juice they put into our economy? Do you even realize how much tax revenue comes from the sale of the cars? Do you have any idea how LITTLE the spending to keep from losing all this tax revenue is compared to what we dump into defense contractors yearly?

 

hmm, okay. i see what you are saying. i agree, having all these jobs taken from americans is terrible.

 

however, you are ignorant to suggest that because i accept the reality that GM is going under whether we throw cash at them or not i am then a supporter of building military bases in iraq and hating the idea that the US economy move towards an upswing? what? are you serious?

i understand that it is ridiculous that there will be so many people out of jobs but when a company cant sell their product, should the government always step in to save them? how many small companies have tanked because they didnt have anyone to sell to or a competitive product? {censored}, my dad's company just went by the wayside, and he employed hundreds of americans. why? because he cant make a better cheaper product than a lab in japan can. did the government bail him out? no, they sent him a bill. they collected taxes. they took all his {censored}ing money.

 

so now, not only is my dad suffering, all of his employee's are jobless, and companies he had large standing orders with (TAP plastics, machine shops, etc) are without his business. well {censored}, that effects even more people now doesnt it?

 

hmmmmmmm. interesting.

[spoonie g]

THINK. If employees were paid a compensation closer to that of the wealth they actually create we wouldn't have these radical ebbs and flows in the market. If they were actually paid a compensation closer to that of the wealth they create they'd have a chance to save up and BUY the stuff they produce... Instead we headed down the lopsided path. Automakers had to sell cars to these people so they recognized FINANCING as the means doing that. What domestic automakers are dealing with is coming to head NOW due to CREDIT, not because of the UAW or making {censored}ty products. I will not sit here and apologize for the ultra wealthy saying oh Americans have to get used to lower standards of living... "Lincoln was a selftaught lawyer." BRILLIANT ad hominem!

So, if the workers were paid closer to the amount of the wealth you say they create, there would be no poor, right? So this would effectively change the structure of our economy, a redistribution, as it may be? How would you gauge what wealth a particular worker makes? The guy that puts door handles on an F-150? What is he "entitled" to?

[spoonie g]

Pay workers less and less when they produce more and more we're creating an imbalance. They no longer have the ability to buy the things they produce. The owners are not stupid enough to sell them for less than they cost, but they still prefer a lopsided system. So they came up with the clever idea of financing. They also embraced free trade principles that says any country can dump cars in the USA for 2% tariff but if the US wants to ship cars elsewhere often times they are faced with 30% tariffs. THAT has tied US automaker's hands for decades, thus stifling development. Capital does only what earns the most capital in return for it's actions. For the Big 3 unfortunately that has meant making pickup trucks. Yes yes EV1, I've seen the movie.

 

 

The workers are basically guaranteed what they make through the unions- so there is NO incentive for doing their job better, or in some cases moving from their position in the company.

[hecticone]

And yet theres been no mention of the 1000's of people who have already retired that will loose everything.I have had my own business for 22 years and have never seen it like this. If you think letting them fail is good for the economy and our nation,all I can say is good luck. A year from now when 1 in4 isn't working don't say I didn't warn you.

[The Great Waldo Pepper]

 

So, if the workers were paid closer to the amount of the wealth you say they create, there would be no poor, right? So this would effectively change the structure of our economy, a redistribution, as it may be? How would you gauge what wealth a particular worker makes? The guy that puts door handles on an F-150? What is he "entitled" to?

 

 

And the alternative? Oh yes, staying the course which has gotten us into the mess we are all in.

[The Great Waldo Pepper]

And yet theres been no mention of the 1000's of people who have already retired that will loose everything.I have had my own business for 22 years and have never seen it like this. If you think letting them fail is good for the economy and our nation,all I can say is good luck. A year from now when 1 in4 isn't working don't say I didn't warn you.

 

 

Amen