WASHINGTON — A bipartisan group of auto-state senators reached a last-ditch compromise Thursday to throw Detroit's Big Three a government lifeline worth billions, but the plan faces an uphill battle in a reluctant Senate.
I suggest the auto industry file for Chapter 11. That will allow them to desolve the union and start fresh. There should be NO bail-out of the auto industry itself. If the government MUST get involved in private businesses, than bail out the pensions 'temporarily' only! But the unions have go to go!!!!
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Auto Workers Union Rules Out Concessions To Help Detroit Bailout November 16, 2008 11:17 PM
With the House of Representatives pledging an aid package for the auto industry, the United Auto Workers (UWA) union fanned the flames a bit by refusing to grant any concessions in a bailout of the big 3 Detroit automakers. UAW president Ron Gettelfinger adamantly stated that the auto industry's woes could be laid at the feet of the stumbling U.S. economy overall:
The US United Auto Workers (UAW) union has ruled out concessions - at least for the time being - to help rescue the ailing Detroit-based car industry.
Ron Gettelfinger, the union president, said at the weekend that "the focus has to be on the economy as a whole as opposed to a UAW contract"...
..."We're here not because of what the auto industry has done", Mr Gettelfinger said during a rare press conference. "We're here because of what has happened to the economy." The union represents blue-collar workers at assembly plants, as well as several parts suppliers.
High labour costs are seen by many outside the UAW as part of the reason for the carmakers' distress. UAW members' generous pay and benefits have gained them a reputation as the aristocracy of the US labour movement. Much of GM's debt was taken on in the early part of the decade to finance its blue-collar pension plan.
President-elect Barack Obama reiterated his support for some kind of bailout for the auto industry in an interview tonight with 60 Minutes. Top Republicans have heaped scorn on a Detroit bailout as nothing more than "put[ting] off for six months or so the day of reckoning."
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
It's really hilarious to hear the Democrats talk about car making. Lifelong hot air politicians. Same same Sen Dodd, Sen Shumer and Barney Frank who caused the bank collapse. Today they are auto experts.
Let the auto unions invest their pension plan billions in car makers. Of course, US automakers must file bankruptcy to right the ship. The problem has been too much government interference not too little. The taxpayers can't afford and don't support any more bailouts. This includes Downtown Schenectady. The idiotic auto bailout will pass next year with the President-elect and fewer to stop him.
November 19, 2008 OP-ED CONTRIBUTOR Let Detroit Go Bankrupt
By MITT ROMNEY Boston
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet........... http://www.nytimes.com/2008/11/19/opinion/19romney.html
I say that the only way there should be a bailout is not using federal funds (that would be unconstitutional, but I bring up a piece of paper most people know nothing about), but let the UAW bail out their constituents' employer. Maybe they should stop taking their cut of the union member's paychecks for a while, let the company hold on to it instead.
Auto rescue plan falls apart BY JULIE HIRSCHFELD DAVIS The Associated Press
WASHINGTON — The $25 billion rescue plan for the auto industry, desperately sought by Detroit’s beleaguered Big Three, collapsed Thursday as Congress drew the line at one more bailout and Democrats said they wouldn’t even consider it until the companies produced a convincing plan for rebuilding their once-mighty industry.
The demise of the rescue — at least for now — left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC and sent Wall Street spiraling to its lowest level in years. The Dow Jones industrials dropped 445 points, the second straight plunge of more than 400, and hit the lowest point in nearly six years.
The carmakers have been clobbered by lackluster sales and choked credit and are battling to stay afloat through year’s end. Failure of one or more of the Big Three would be a severe further blow to the floundering economy — and to many Americans’ view of the nation’s industrial strength — and throw a million or more additional workers off the job.
Just Thursday, the government reported that laid-off workers’ new claims for unemployment aid had reached a 16-year high and the number of Americans searching for work had soared past 10 million.
Rejection of the latest bailout plan by House leaders postponed until next month a politically tricky decision for the Democratic Congress on whether to approve yet another unpopular emergency plan at a time of economic peril or risk being blamed for the implosion of an industry that employs millions and has broad reach into all aspects of the U.S. economy.
“Until they show us the plan, we cannot show them the money,” Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.
GM and Ford quickly issued statements promising to submit the blueprint the Democrats demanded.
Pelosi and Senate Majority Leader Harry Reid, D-Nev., said Congress might return to work in early December for a vote on aid to the carmakers — but only if they show Congress they could use the funds to transform their struggling industry into a viable one.
For now, however, the Democrats said the aid plan lacked the support to pass Congress and be signed by President Bush.
Bush and congressional Republicans had balked at Democrats’ suggestion to draw emergency auto industry loans from the $700 billion Wall Street rescue fund. And most Democrats were unwilling to go along with a separate, bipartisan effort backed by the White House to temporarily divert funds for an existing program to help carmakers produce vehicles that burn less gasoline to cover the companies’ immediate financial needs.
But with GM warning it could go under before year’s end, Democratic leaders were unwilling to close up shop for the year and appear to turn a deaf ear to the industry. They scheduled hearings the week of Dec. 2 on the automakers’ viability plans and said a vote on a bailout could come the week of Dec. 8. http://www.dailygazette.net/Re.....=Ar00602&Locale=
Who Killed Detroit? by Patrick J. Buchanan Posted 11/21/2008 ET
Who killed the U.S. auto industry?
To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future.
I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.
As far back as the 1950s, an intellectual elite that produces mostly methane had its knives out for the auto industry of which Ike's treasury secretary, ex-GM chief Charles Wilson, had boasted, "What's good for America is good for General Motors, and vice versa."
"Engine Charlie" was relentlessly mocked, even in Al Capp's L'il Abner cartoon strip, where a bloviating "General Bullmoose" had as his motto, "What's good for Bullmoose is good for America!"
How did Big Government do in the U.S. auto industry?
Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.
It then clamped fuel efficiency standards on the entire U.S. car fleet.
Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers' wages in Social Security payroll taxes
State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.
The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth -- vacations, holidays, work breaks, health care, pensions -- for workers and their families, and retirees.
Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners.
That is the dream, what we all wanted for America.
And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates. Outside the United States, however, there was and is no equality of standards or taxes.
Thus when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.
All three nations built "export-driven" economies.
The Beetle and early Japanese imports were made in factories where wages were far beneath U.S. wages and working conditions would have gotten U.S. auto executives sent to prison.
The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.
Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our "trading partners." To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition -- as the Japanese did to our TV industry by dumping Sonys here until they killed it.
While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.
Like Alexander Hamilton, they understand that manufacturing is the key to national power. And they manipulate currencies, grant tax rebates to their exporters and thieve our technology to win. Last year, as trade expert Bill Hawkins writes, South Korea exported 700,000 cars to us, while importing 5,000 cars from us.
That's Asia's idea of free trade.
How has this Global Economy profited or prospered America?
In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.
Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?
We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.
Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.
Big 3 ordered to apply for loan Democrats attach list of conditions to lifeline money BY KEN THOMAS The Associated Press
WASHINGTON — Democratic leaders ordered Detroit’s Big Three automakers Friday to submit what amounts to a detailed loan application to Congress so lawmakers can decide whether to give the beleaguered industry an emergency $25 billion lifeline.
In a letter to the auto executives released Friday afternoon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid demanded a detailed accounting by Dec. 2 of the companies’ financial conditions and short-term cash needs, as well as how they would achieve long-term viability.
“The auto companies’ shareholders, business partners and prospective benefactors — the American people — deserve to see a plan that is accountable to taxpayers and that is viable for the long-term,” Pelosi, D-Calif., and Reid, D-Nev., wrote.
The Democrats also called on the automakers to show how they would ensure that the government would be reimbursed and share in future profits, eliminate dividends and lavish executive pay packages, meet fuel-efficiency standards, and address their health care and pension obligations to workers if they got the federal help.
The Bush administration sharply criticized the Democrats for departing Washington for a congressional recess without acting on a rescue for the carmakers.
“How could they leave town when the auto companies were just here [this] week saying some of them were on the verge of running out of cash?” Commerce Secretary Carlos Gutierrez said in an interview. “I think it’s a very irresponsible attitude toward a very serious matter.”
White House press secretary Dana Perino said it was “appalling that Congress decided to leave town without addressing a problem that they themselves said needed to be addressed.”
And President George W. Bush himself went on the offensive — although with more reserved language — to press the point that leaders failed to grab onto a bipartisan proposal.
“Unfortunately, the leadership in Congress adjourned without even allowing this measure to come up for a vote,” Bush said in his Saturday radio address, taped Friday and released early by the White House. “My position is clear: If the automakers are willing to make the hard decisions needed to become viable, they should be able to receive the funds Congress already allotted to them for other purposes.”
After making an auto bailout a top priority of this week’s brief postelection session, Democrats scrapped planned votes on a rescue plan they said lacked support — or a clear justification. They said their request for a plan from the Big Three was designed to give General Motors Corp., Ford Motor Co., and Chrysler LLC another chance — after a disastrous pair of hearings this week on Capitol Hill — to make their case to lawmakers and the public, Pelosi said.
“It’s another opportunity for them to say to the American people, ‘Give us your money, because we will put it to good use,’ ” Pelosi told reporters.
Hearings are expected the week of Dec. 1 and lawmakers could consider legislation the following week, but only if the industry shows that taxpayers and auto workers would be protected, congressional leaders said.
Automakers have promised to submit the blueprint Democrats have demanded.
GM spokesman Greg Martin said they would meet Congress’ deadline and were “ready to work through their concerns and to deliver the accountability the taxpayers deserve before committing support to the domestic auto industry.”
U.S. automakers are struggling to stay afloat heading into 2009 amid an economic meltdown, a precipitous drop in sales and a tight credit market. The three companies burned through nearly $18 billion in cash reserves during the last quarter and GM and Chrysler have said they could collapse in weeks.
Detroit’s carmakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million. ............http://www.dailygazette.net/Re.....=Ar00100&Locale=
The auto industry sees other industries getting government bailouts, and wonders why not? Others hear the pleas of the Big Three carmakers and wonder, why?
Democratic leaders in Congress crafted a plan to fork over $25 billion to Detroit, above and beyond the $25 billion in loans the government already committed to help the Big Three make more fuel-efficient cars.
But a majority in Congress, along with the Bush administration, balked at the idea. Critics of the bailout plan argue that the real problem for General Motors, Ford, and Chrysler is that their cost structures are bloated, their management doesn’t work, and they can’t make cars of high enough quality to attract American buyers.
Throwing money at the same people who couldn’t get it right wouldn't solve any of that.
Following are 10 top reasons why a bailout is not a good idea:
1. A bailout would provide money only for short-term survival. It wouldn't alter carmakers' flawed business models. GM is running through cash at the rate of $2 billion a month. So $10 billion from the government would give it only five months’ breathing room. Can they turn over their business practices in that period? Please. The temptation would be simply to come back to taxpayers for more.
2. A government handout would allow the Big Three to avoid necessary cost cutting. Because of a strong union, the average GM employee received $70 an hour in combined pay and benefits last year. And it’s not just line workers who are making too much. GM chief executive Richard Wagoner garnered about $24 million a year in 2006 and 2007, while leading his company toward oblivion.
3. Bankruptcy isn’t all bad. It doesn’t mean liquidation. It means taking the painful steps the companies have been unwilling to contemplate to date. The real losers in such a deal are carmakers, equity shareholders and creditors. Bankruptcy would give the automakers the chance to throw out existing employee contracts with their onerous health and pension systems. The unions would be forced to temper their demands if they want the car companies to survive. In the case of GM, it could also dump some of its uncompetitive product lines such as Pontiac and Saturn. Discontinuing five of GM’s eight domestic brands would save the company $5 billion annually.
4. Taxpayer money won’t change the fact that many foreign cars are made better than their U.S. counterparts. Kelley Blue Book announced its top 10 brands for resale value this week, and not one of the Big Three was on the list. Chryslers, for example, keep only 24.2 percent of their sticker price on average after five years. By contrast, Hondas retain 44.5 percent of their value.
5. Bailout funds would help automakers continue their outsourcing of auto jobs to foreign countries, where costs are lower. All of the Big Three have increased the percentage of manufacturing and assembly done overseas in the past year, especially in China and Mexico. In May, Ford agreed to build $3 billion auto plant in suburban Mexico City and upgrade two other Mexican plants, the largest foreign investment in Mexican history.
6. Big Three bankruptcies wouldn’t mean the end of auto industry in the United States. Foreign companies, which already have plants here, could pick up the slack and open new factories. Some 78,000 Americans already work for foreign carmakers, a number likely to rise in the wake of any U.S. automaker demise. The depressed South could benefit particularly from increased production of foreign auto companies.
7. Other industries have survived bankruptcy just fine. Most of the major airlines have spent time in bankruptcy, including United, Continental, Delta, Northwest, and US Airways. Their predicament looked particularly dire after 9/11. But the major carriers made it through. And to the extent that they suffered, low-fare competitors such as Southwest and JetBlue picked up the slack, often offering superior service in addition to cheaper prices.
8. Bailing out the auto industry would only encourage other sectors to beg for government handouts. Remember that the $750 Billion Troubled Assets Relief Program was designed only to assist banks, but now insurance companies and even credit card giant American Express are trying to get in on the action. Homebuilders, who arguably are as strapped as the automakers, could lobby for some of the action.
9. Stockholders deserve no mercy. Some argue that they should be compensated for the fact that GM and Ford’s share prices have hit their lowest levels in decades. But in a free market, stock prices go down as well as up. The automakers’ problems have been clear for years, so investors had plenty of time to get out. As for Chrysler, it’s owned by private equity firm Cerberus, no innocent victim itself.
10. Bailouts have been tried in the auto industry, and they don’t work. In the 1970s, Britain’s Leyland hit the skids, hurt by slipping quality in its vehicles and imports from Germany and Japan. Sound familiar? Leyland, which made MGs, Jaguars and mass-market cars, accounted for 36 percent of the UK market. So the government sunk in $16.5 billion to keep it afloat. The result? Unless you’re a car buff, you’ve probably never heard of Leyland, because it no longer exists.........................http://www.newsmax.com/headlines/auto_bailout/2008/11/20/153588.html?s=al&promo_code=71C6-1
Let's see. Nardelli was at GE ... destroyed that. Then he went to HomeDepot ... stocks tanked, he took his bonus and went on to Chrysler. Now he's looking for a bailout. When will people realize that Nardelli is part of the problem - not part of the solution?
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It's really hilarious to hear the Democrats talk about car making. Lifelong hot air politicians. Same same Sen Dodd, Sen Shumer and Barney Frank who caused the bank collapse. Today they are auto experts. 
