Big 3 put their hands out for our money

[Veritas]

http://money.cnn.com/2008/11/08/news/companies/automakers.aid.ap/index.htm

The Democrats talked lots of **** this election about McCain and the GOP being in the pockets of big business, but that doesn't stop the Democratic Majority Leaders from saying "how high" when Detroit asks them to jump. For the second time today, I'm asking of Democrats: what the hell? How can your party accuse the GOP of corporate welfare while your leadership is asking Bush to hand out billions to big business?

[Harry Beanbag]

Accuse your enemies of what you are guilty of. It's in their playbook.

[Tulsa_Fireman]

Well, they sure as hell aren't going to blame the unions, a large part of the problem. When the finger of accusation levels, it centers up on the whole stinkin' lot, from top management to Joe Wrenchslinger.

They dug their hole. Let 'em swim in it. It's high time the pendulum of strength swung back toward the corporate end of the spectrum. Toward profits.

[OUHOMER]

why not the big 3, Hell there bailing out the big mortgage company's, because of greed.

The mortgage companys screw the public. lets bail them out
the used car dealers screw the public. lets bail them out

Title of bail out money should be.

If you got greedy and screwed over the public. We will bail you out. It will help all Americans:mad: :eek:

[badger]

Accuse your enemies of what you are guilty of. It's in their playbook.

That's in everyone's playbook.

[Vaevictis]

Well, they sure as hell aren't going to blame the unions, a large part of the problem.

Yeah, a bailout of the auto industry is pointless without the unions accepting an 'adjustment' to their CBA. Everyone in Detroit needs to sit down at a table and come to an agreement where everyone cinches up their belts .

[tulsaoilerfan]

Maybe if the car companies would cut out their damn ads every 2 minutes on TV they might have some $ to operate on

[badger]

This almost reminds me of Tulsa tax increase propositions, where everyone needs to get a piece of the pie directly before they'll vote for a tax increase.

Vision 2025 passed because every little area of the county got SOMETHING.

The river tax failed miserably because the areas near the river but not next to the river felt screwed.

The Tulsa Questions 1/2 for road improvement passed overwhelmingly because everybody wants their roads improved.

So yeah, I think people will need to give and take, but everyone will always have their No. 1. priority in mind and emphasize the TAKE and thus, nobody will give... so what's left to take?

[royalfan5]

Chapter 11 would be better for GM as it would void the union and dealer contracts. They could dump every brand but Chevy and Caddy, and start moving forward with a new management team.

Chryslers can be broken up, and by broken up I mean Renault/Nissan can take Jeep and the truck building operations. The rest can go to the Chinese or just be fond memories.

Ford needs a better economy to bolster the strides they have been making. Killing Mercury probably wouldn't hurt either.

Auto's are due for a shakeout like Farm Equipment had, with the elimination of 60% of the independent operations. Trying to prolong the past isn't going to help anyone.

From a lobbying perspective people need to remember it isn't just the Democrat leaning UAW that stands to lose a ton, it's also the thousands of redundant car dealers that would likely disappear taking a lot of jobs with them, and that is a group that isn't near a likely to lean democrat.

[Tulsa_Fireman]

But if that's the natural correction, isn't it a poison pill that'd be best swallowed now instead of delayed at the expense of billions?

[royalfan5]

But if that's the natural correction, isn't it a poison pill that'd be best swallowed now instead of delayed at the expense of billions?
Well yes, but it has always been America's inclination to delay taking their medicine as long as possible.

[RUSH LIMBAUGH is my clone!]

That's in everyone's playbook.It's a plan most lawyers always employ.

[NYC Poke]

I've been working on a case involving a Tier 1 supplier to the OEMs (GM, Chrysler, Ford, etc.). The US automotive industry has been teetering on the brink for some years now. In 2005, a bunch of the Tier 1s went bankrupt, caught between downward pricing pressure from the OEMs and rising commodities costs for things like steel and plastic resin. The OEMs themselves survived this long based on high sales of higher margin SUVs. Between rising gasoline costs and the economic crisis, demand for those model lines just isn't there.

It takes several years for them to introduce model lines. Engineering & Design and tooling costs are astronomical, and significant cash outlays for these must be made in advance of production. They can't respond rapidly to rapidly changing environments, and the demand just isn't there for current model lines.

Addtionally, they are hamstrung by healthcare costs. More cars are now manufactured in Ontario than in Michigan. The reason? It costs the OEMs (and their suppliers, for that matter) $6500/year for healthcare costs per American worker vs. only $900/year for Canadian workers. About $1500 goes into the price of a car manufactured in the US vs. only $186 for one manufactured in Japan.

To the extent this is permitted by NAFTA, I would reluctantly recommend a bailout (Chapter 11 would cripple their suppliers to the extent that the industry as a whole may never recover), but I would precondition anything on assurances of keeping more jobs in the US. This would be couple to winning concessions from the unions, which have become more savvy towards prevailing economic winds and more willing to compromise when they see the writing on the wall.

As for dealers, their caught between declining demand and a decreasing availability of inventory financing due to the banking crisis. They'll be hard hit by this. Frankly, though, it's easier to replace dealerships in the future than it is to rebuild a capital-intensive industry.

[Frozen Sooner]

It costs the OEMs (and their suppliers, for that matter) $6500/year for healthcare costs per American worker vs. only $900/year for Canadian workers.

Man, I can't imagine why that would be the case. ;)

[Veritas]

GD it, Obama, WTF? "Change," my ***.

Will SOMEBODY please take a stand against the use of taxpayer dollars to prop up inflated assets?


President-elect Barack Obama used his first post-election visit with President George W. Bush to raise the prospects of a rescue plan for the industry

http://www.freep.com/article/20081111/BUSINESS01/811110328

[NYC Poke]

Emanuel Calls For Auto Industry Bailout

Rahm Emanuel, the chief of staff for the president-elect, is calling for a more rapid response to help the struggling auto industry. What do you think?

http://www.theonion.com/content/files/images/wdyt_photo3.article.jpg
Rick Gunderson,
Delivery Driver
"Why don't they just cut back on costs? I never wear my seat belt."

http://www.theonion.com/content/files/images/wdyt_photo6.article.jpg
Jessica Kornbluth,
Dance Instructor
"Obama doesn't need to give government money to the auto industry. He just has to tell his disciples to go out and buy a Pontiac, and we'll do it."

http://www.theonion.com/content/files/images/wdyt_photo1.article.jpg
Tom Schuster,
EMT
"As a person who cares more about cars than people, this is very exciting news. Three cheers for Rahm Emanuel!"

http://www.theonion.com/content/amvo/emanuel_calls_for_auto_industry

[The Maestro]

Makes no sense. How about a big "Buy One, Get One Free!" sale???

[pergdaddy]

I am a Democrat. There's my caveat.

I was apalled that the financial industry got a bailout. I'll be apalled if the auto industry gets a bailout. Government is bailing out companies who are traded and operate on the free open capitalistic markets. Isn't that the point of capitalism? Take a chance and you could be rich, but you could also fail. Aren't companies failing like the circle of life? If one goes down, one will rise up. And how quickly would Toyota or Honda act to purchase one of the American auto manufacturers?

I just don't get it. Let's bailout companies ran by guys who aren't smart enough not to run their respective companies into the ground but not help out people who are struggling.

Then again, I don't know who contributed more money to campaigns. That might be a telling sign.

[mdklatt]

Makes no sense. How about a big "Buy One, Get One Free!" sale???

I wouldn't want a Big 3 product even if you gave it to me. Unless I could sell it for a profit. Which I couldn't. Because they suck.

[pergdaddy]

I could see it now:

Ford announces their first ever BOGO Extravaganza Sale.

[The Maestro]

I am a Democrat. There's my caveat.

I was apalled that the financial industry got a bailout. I'll be apalled if the auto industry gets a bailout. Government is bailing out companies who are traded and operate on the free open capitalistic markets. Isn't that the point of capitalism? Take a chance and you could be rich, but you could also fail. Aren't companies failing like the circle of life? If one goes down, one will rise up. And how quickly would Toyota or Honda act to purchase one of the American auto manufacturers?

I just don't get it. Let's bailout companies ran by guys who aren't smart enough not to run their respective companies into the ground but not help out people who are struggling.

Then again, I don't know who contributed more money to campaigns. That might be a telling sign.

Well said. Does it bother you that Obama's FIRST item of business was to suggest this to Bush? I think that is what is most frightening...that this is what was most near and dear to his heart? If so...beware!

[OklahomaTuba]

I hope to hell Bush doesn't bail out the Auto Industry. The best thing for them would be to get into chapter 11.

Funny how the foreign automakers building cars in the USA seem to be doing ok.

I wonder why??

[Vaevictis]

They're having trouble too.

They just don't have legacy costs associated with decades of horrible management.

[Scott D]

Yeah, a bailout of the auto industry is pointless without the unions accepting an 'adjustment' to their CBA. Everyone in Detroit needs to sit down at a table and come to an agreement where everyone cinches up their belts .

Well the factories are being shut down or shift cuts at a steady pace right now. Buyouts have been the thing dujour for the last 3 years. All 3 have been steadily downsizing for the last 5 years. They've been cinching up their belts, but perception has been against them for so long that people's bias is as bad as political bias these days.

The bigger issue is that The Big 3 employ 10% of the ENTIRE US workforce. Be it directly working for one of them, or for one of the smaller companies that they buy components from for their vehicles.

They have been admant about any money they get from the government being "loans". Unlike the banking industry, they have every intention of paying that money back.

That being said, I'm sure everyone is totally against these loans. Afterall, why support companies that are accountable to a bottom line when it's more fun to bailout the AIG's of the world so they can have those fancy $400k spa trips for select executives on the tit of the taxpayer.

[Scott D]

And for the record, The Canadian Prime Minister is looking into the same situation for the auto industry in Canada, because they employ about 2% of their populace.

[tommieharris91]

I hope to hell Bush doesn't bail out the Auto Industry. The best thing for them would be to get into chapter 11.

Funny how the foreign automakers building cars in the USA seem to be doing ok.

I wonder why??

Toyota is taking a beating right now too.

[Scott D]

everyone but Honda is taking a beating right now. And even Honda's numbers are down.

[mdklatt]

The bigger issue is that The Big 3 employ 10% of the ENTIRE US workforce.

Yikes. "Too big to fail" indeed. Would Detroit completely implode if even one of the Big 3 went under?

[pergdaddy]

From what I was told/understand, the problem with the American auto companies is the unions retirement plans along with employees benefits such as vacation/sick time and buyout/early retirement type stuff are all a big drain on the company. There are plants currently that are paying almost fully salary out at plants that have been closed because of the plush retirements and buyout/early retirement payments and stuff.

Take it FWIW. THat's just what I was told.

[tommieharris91]

Yikes. "Too big to fail" indeed. Would Detroit completely implode if even one of the Big 3 went under?

Pretty much.

I've heard that something like 2.5M jobs will be destroyed if one of the Big 3 automakers cease operations. :eek:

[NYC Poke]

It's not just Detroit, or even limited to the Rust Belt states. A lot of the places that supply, say, fabrics to the Tier 1s for carpeting and seat covers are located in places like North Carolina and El Paso.

And what someone wrote earlier about this being a loan is actually a pretty good point to keep in mind about the bailout. The Big 3 are facing a liquidity crisis, i.e., they need cash. It isn't necessarily that their businesses have been going under (though they definitely will without a cash infusion).

[Scott D]

Yikes. "Too big to fail" indeed. Would Detroit completely implode if even one of the Big 3 went under?

The United States would be closer to imploding. It's not even the end product part (which people seem to focus on) that is having the problem. It's the suppliers part that is where the focus should be. In some parts of the country there are entire small towns or counties that are supported by the parts/components manufacturing plants in their areas. How much more of "small America" should we "kill" just to "prove a point" to the Auto Industry?

Also, keep in mind, that should the Big 3 end up failing, Boeing would be the next on the chopping block to fail. Because they're going to have the same problems in regards to components suppliers.

[mdklatt]

It's not just Detroit, or even limited to the Rust Belt states. A lot of the places that supply, say, fabrics to the Tier 1s for carpeting and seat covers are located in places like North Carolina and El Paso.


But outside of Detroit, it's a lot more spread out. For example, it didn't destroy OKC when the GM plant here got shut down. It hurt, but it wasn't a mortal wound.

[OklahomaTuba]

They're having trouble too.

They just don't have legacy costs associated with decades of horrible management.
Not to the degree that the big 3 are. Not even close actually.

While I don't doubt that their numbers are down, I doubt we will hear that Toyota needs a cash infusion from the japanese gubment in a matter of weeks or "else".

[OklahomaTuba]

Tulsa has a large auto glass plant for Ford.

[Harry Beanbag]

Yikes. "Too big to fail" indeed. Would Detroit completely implode if even one of the Big 3 went under?

I heard talk a couple of weeks ago about GM merging with Chrysler. Result would be 200,000+ layoffs. That would leave a mark.

[BlondeSoonerGirl]

2000+ employees at the Goodyear plant in Lawton. One of the biggest tire manufacturing facilities in the world. They build for Ford and maybe another automaker...I'm not sure which one.

[Scott D]

I heard talk a couple of weeks ago about GM merging with Chrysler. Result would be 200,000+ layoffs. That would leave a mark.

That may still happen. Cerebus definitely wants to offload Chrysler. The sad thing is, that Daimler drove Chrysler into the ground, then blamed everything on Chrysler when it was German mismanagement that created the problems.

[crawfish]

"Meet the new boss
Same as the old boss"

[Frozen Sooner]

That may still happen. Cerebus definitely wants to offload Chrysler. The sad thing is, that Daimler drove Chrysler into the ground, then blamed everything on Chrysler when it was German mismanagement that created the problems.

Yeah, Chrysler was a model of a well-managed company when Daimler bought it.

:rolleyes:

[NYC Poke]

Cerberus also owns a 51% (I think) stake in GMAC, which is in trouble.

[Scott D]

Yeah, Chrysler was a model of a well-managed company when Daimler bought it.

:rolleyes:

Chrysler was in the black when Daimler bought it. Guess where that profit margin went? That's right, to Daimler products.

[picasso]

http://money.cnn.com/2008/11/08/news/companies/automakers.aid.ap/index.htm

The Democrats talked lots of **** this election about McCain and the GOP being in the pockets of big business, but that doesn't stop the Democratic Majority Leaders from saying "how high" when Detroit asks them to jump. For the second time today, I'm asking of Democrats: what the hell? How can your party accuse the GOP of corporate welfare while your leadership is asking Bush to hand out billions to big business?

I wonder if those environmental regulations put any kind of chink in said business. or was it those union contracts?

pfffft.

[Scott D]

I wonder if those environmental regulations put any kind of chink in said business. or was it those union contracts?

pfffft.

actually sounds like dealership protection seems to be a big problem also.

[KingBarry]

Maybe if the car companies would cut out their damn ads every 2 minutes on TV they might have some $ to operate on

Yeah, abolish "Chevy Player of the Game" and save the thousand bucks donated to the "general scholarship fund".

Actually, since those car commercials are supposed to make us want to buy a car we don't badly we can't resist the urge, the answer to the automakers troubles may be to place even more ads.

[KingBarry]

removed due to double post

[KingBarry]

Well yes, but it has always been America's inclination to delay taking their medicine as long as possible.

To borrow from badj, "That's in everone's playbook."

The Japanese suffered a 15 year recession/stagnation because they just couldn't accept that there banking system was built on a house of cards and clean up the mess.

They finally begin growing out of the doldrums, and a worldwide financial crisis strikes. Ooops. Sucks to be them.

[Scott D]

To borrow from badj, "That's in everone's playbook."

The Japanese suffered a 15 year recession/stagnation because they just couldn't accept that there banking system was built on a house of cards and clean up the mess.

They finally begin growing out of the doldrums, and a worldwide financial crisis strikes. Ooops. Sucks to be them.

was that before or after we rebuilt their industry, and brought their people over here to learn automotive engineering?

[badger]

To borrow from badj, "That's in everone's playbook."

The Japanese suffered a 15 year recession/stagnation because they just couldn't accept that there banking system was built on a house of cards and clean up the mess.
WHO OPENED THE DOOR TO GET FRESH AIR?! You doomed us all! Now our bank built on a house of cards has blown over! How selfish of you! Why couldn't you just open the back windows like the rest of us have for years?

:rolleyes:

[KingBarry]

was that before or after we rebuilt their industry, and brought their people over here to learn automotive engineering?

After.

[Scott D]

so in other words we need Iraq to rebuild us so that we can be dominant on the world mark...oh wait.

[Curly Bill]

so in other words we need Iraq to rebuild us so that we can be dominant on the world mark...oh wait.

They could give us lots of free oil. :D

I mean really, they could. ;)

[def_lazer_fc]

i just want someone to pull those saved by zero commercials.

and i agree with the person that said they wouldn't take a car from the big three. they just make ****ty cars plain and simple. maybe ford can make an excursion supersize edition. that should sell pretty well.