’)No money for these Detroit schmucks. They’ve already upped how much money they need and it isn’t going to work. They don’t know how to run their business, and don’t even know how to ask for money properly – they go from private jets to the cross-country driving stung – gimme a break.
Yeah–the CEOs are schmucks–but having many autoworkers in my family, WE are devastated.
OW,
You need to educate yourself a bit more before you start to make statements about the auto industry. To co-sign on Leota, yea the CEOs are schumucks but I too earn a living in the auto industry, and if we can provide the auto industry with loans at a fraction of the amount that is provided to financial industry I do not see what the problem is.
Oliver, you are making a huge mistake here. Don’t you realize that you are suggesting that several million people should be put out of work. Most of those people are democrats as well if you don’t realize it. Why don’t you spend a few minutes reading this blog http://emptywheel.firedoglake.com/
Most of the reports I’ve seen have said Congress had to ask the CEOs for a plan as to what they were going to do with the money, which I find astounding. If I ask someone to loan me a substantial sum of money the first thing I’m going to expect to have to show them is my plan for what I’m going to do with it and how I’ll manage to pay it back. I certainly don’t expect to be able to just say “I need it” and have it handed to me.
So they come to DC on the private jets and say they don’t think dropping their salaries to $1 would be a good idea. Then they come back driving hybrids, agreeing to the $1 and ask for 136% of what they wanted just two weeks ago. As if the hybrids and low salary (all options, bonuses and perks still in effect, of course) shows they “get it”.
Yeah, the CEOs are schmucks and shouldn’t get anything out of the deal. Not a dime. If their businesses are failing let them declare bankruptcy and work to turn it around.
Yeah, if they fail the autoworkers and dependent businesses are going to go, too, and the consequences will be felt far and wide. “tens if not hundreds of thousands of workers effected”.
Hey, if that is the real concern, if the money needs to be spent to
ensure the workers aren’t hurt then give the money to the workers. Enough with the trickle-down let’s-give-money-to-the-big-guys-and-that-will-eventually-help-the-little-guys ideas.
$25 billion is $125,000 for each of 200,000 people. If someone is struggling because they lost their job in the auto company failures $125,000 should be far more than enough to tide them over until they find a new auto job or retrain for a different career.
Bingo. Why give money to morons who can’t run a business? Let them fall apart and we’ll pick up the pieces.
Most of the reports I’ve seen have said Congress had to ask the CEOs for a plan as to what they were going to do with the money, which I find astounding.
That’s what I don’t get. ALL of these guys are going to the Feds and claiming desperation, but do any of them have a balance sheet or anything to back it up, or do they just go in cold and say “Yeah, can we get in on that?”
I know accountability is low on the list of attributes in government or in business of late, but how low is accounting in general?
I understand Ford is considering selling Volvo.
Well, yeah, that would be a start, wouldn’t it?
It is not 200,000 workers who will be out of work, but 2 to 5 million workers. Wake up and do some reading before you say things like that. And it won’t be just the auto workers. It will be auto parts workers, restaurant workers, and on and on. entire states will be destitute. This is not a game. This is a repeat of the 1930’s.
Yes, so we should let the Big 3 bleed our reserves dry to be squandered? Bigger companies than they have died and been reborn. Your argument seems to be that propping these companies up will help the connected industries. Yet, based on the skill of these CEOs we’re delaying the inevitable. The best bet is probably to let them crash before the economy gets worse.
You guys do understand that they’ve announced they’re canning a large number of workers even if they get their booty, right?
Ray Rl: It is not 200,000 workers who will be out of work, but 2 to 5 million workers. Wake up and do some reading before you say things like that. And it won’t be just the auto workers. It will be auto parts workers, restaurant workers, and on and on. entire states will be destitute
First, you should read more carefully yourself. I said “Yeah, if they fail the autoworkers and dependent businesses are going to go, too, and the consequences will be felt far and wide.” So I’m not saying it’s just the auto workers.
Second, you wanna show me what reading you did that said up to 5 million people jobless and entire states destitute?
Seam. I already gave you the reading ref. in my first comment.
Here is what you said in your first comment:
“Yeah, if they fail the autoworkers and dependent businesses are going to go, too, and the consequences will be felt far and wide. “tens if not hundreds of thousands of workers effected”.”
You say far and wide and then conclude with hundreds of thousands. But it will be many more than that.
I don’t give a damn about the CEO’s or the other top management, but we are talking here about working families. They will be SOL for years just like in the 1930’s.
should they continue doing business as companies that have been substantially anti worker from the beginning?
Plenty of people are going to be SOL either way – I’d like to see a worker bailout. Or bailout plans that include new management with no severance packages for the assholes that drive companies into holes hoping for a golden parachute.
Ray Rl: Seam. I already gave you the reading ref. in my first comment.
Yes, and I had gone there. Unfortunately, your link was to the entire emptywheel site and not to a particular posting or category. So the latest post at the time I looked had to do with Alberto Gonzales and Rachel Paulose, something not related to the auto companies at all.
Now your original comment here could be taken as suggesting one visit emptywheel to get some additional general knowledge so perhaps a link to the entire site was appropriate. So I did spend some time looking thru the previous entries reading several of those related to auto companies to get a sense of what you may have read that lead you to your views. (I would have read more but emptywheel doesn’t categorize it’s posts so I had to pick and choose from everything.) And in none of the recent half dozen or so I looked into was there a mention of 5 million unemployed and entire states destitute.
So I’ve considered your comments far more than you’ve given mine.
If you’re going to claim the sky will fall over the entire country and the unemployment rate with show a 50-60% increase (currently around 9 million are unemployed) you’re going to have to cite something a bit more specific than the equivalent of “It’s in Wikipedia over there, go find it.”
For example, Ray Rl, as clearly explained in this article the number of jobs that would be affected by failure of “the big 3″ is considerably less than people like to claim.
Oliver:
You’re being a schmuck. The only thing preventing Detroit auto companies from being profitable – extravagantly profitable — are healthcare and retirement costs, costs that are fully nationalized in Europe and Japan.
Every car coming out of Detroit carries $2K worth of health costs for present and retired employees. Institute national health care, and those costs disappear from the automakers, and voila, the US starts selling cars at home and overseas again.
If the banks hadn’t fucked up so bad, the automakers would have borrowed the money from them. Instead, congress has shelled out trillions to guarantee the bonuses of bank executives, with no oversight. Now they balk at $34 billion with millions of jobs at stake.
Chapter 11 is not viable due to credit being frozen. The only credit that would be available would be tax payer funded credit through the government. I think that we create an oversight committee and help them to retool. We can also help them to enter the commuter transportation business making fuel efficient buses and vans for cities. The SUV lines can easily be converted to make mid size buses for little money. We already allocated 25 billion to help them to retool. Why can we not help to fund new batteries and R&D for the future cars? The foreign companies get R&D funding from their governments. The foreign car companies will get loans from their governments- why can we not support the last bit of manufacturing in this nation? We buy all of the tech we used to manufacture here in the USA from Japan and China. If we buy the foreign cars assembled here the profits go out of the country. We give huge tax breaks to get these foreign plants to operate here and the profits do not stay here. At the same time we are not allowed to sell as many of our cars in these foreign countries.
We need manufacturing in this country.
Remember the last loan to Chrysler? A 1 billion loan. We made over 300 million in interest on that loan.
Sean, Here are more clearly directed urls:
http://tinyurl.com/6c6d99
http://tinyurl.com/63m2bb
http://tinyurl.com/649qtd
I really hope that your numbers are right and mine are wrong, but hope is not a plan.
First of all, OW routinely makes statements about things he has few if any facts about. That’s part of the charm of the site. Secondly, anbody who thinks that you will buy a car from a bankrupt company is an idiot. Any bankruptcy by one of the big 3 would be tied up in court for years. The reorganization would change to a liquidation fairly fast according to the legal beagles. Some people are even stupid enough to say “Let Honda and Toyota make all the cars”. The plants of the big 3 would take decades to retrofit for transplant production. Likewise building new capacity would take many years. In the meantime demand would well outstrip capacity and now you can pay double for that new car for the next many years.
If you look into the result of the airlines that filed bankruptcy you will find that the only effect that it had was to leave all their former employees without their pensions, and their current workers without a union. They are just as inefficient and their CEO’s are just as highly paid. Many thousands of retired people slipped into poverty living on Social Security alone when they lost their pension. Many workers now do the same job they did before for lower wages, no benefits, and no job security.
So the people who pass the pieces of money cake around with sticky fingers get billions to prop up their criminal enterprise, but the sad shell of what is left of the manufacturing base in this country gets no help at all. That is terminally stupid.
chuck: First of all, OW routinely makes statements about things he has few if any facts about. That’s part of the charm of the site.
…
The plants of the big 3 would take decades to retrofit for transplant production.
You’ve got a certain amount of charm yourself, don’t'cha?
I have no doubt about it, there will be a bailout of the auto industry just as there was for the financials. The alternative would be a significant shutdown of productive domestic economy and the consequence of that is a prolonged recession or a real depression (which is being held back by continued productivity).
What’s going to be tricky will be the implementation of the so- called bailout plan. My current feeling is the underlying political objective is to bust the unions once and for all, using the dying auto industry as the WMD of this economic war.
The bailout-plan will probably stipulate that the big three, under the guise of cutting costs, be “mandated” to setup operations in right-to-work states. As time passes, the industry will posture a complete shift of production to right-to-work states unless the unions completely cooperate.
It has been, as it always will be, about the money. I’m not talking about the bailout money here, I’m talking about real wealth generated from production and sales. The real question is who stands to benefit from that piece of the pie.
BTW, Oliver, in one of your posts you mentioned the idea of “bleeding our reserves dry.”
The truth is, this money is coming from the Federal Reserve and is created money, not banked money; it’s not coming out of anybody’s pocket and there’s no end to it. It is debt as currency in the purest of forms. In the short term, it will patch up the leaks for the borrower, but in the long term it means devaluation and inflation for the currency.
Yes, its just magic money. Come on.
I don’t think any of these bailouts are a good idea. I’m more interested in propping up people and not badly run companies.
And yes I clearly have no idea what I’m talking about, because unlike auto industry CEOs I don’t think 1+1=3 plus a bailout.
Giving money to the Big 3 does _not_ guarantee that anybody’s job is safe, not in the long run at least.
The government needs to set up a national program to extend unemployment benefits, provide educational grants, and provide some relocation money for people who will be hurt by the inevitable fall of the US auto industry. Giving money to the top-end of any of these companies ensures nothing for the workers. Give some incentives to the workers to learn a new trade and move somewhere where their labor is needed instead, and incrase their unemployment so they can stay on their feet until they get a new job in another industry.
After that, if I was king, I’d make cheap offers to Honda, Toyota, and Hyundai to buy up the Big 3’s infrastructure/buildings/equipment, etc. There _are_profitable car-makers in America, and they happen to be Asian companies that know how to design and make a car people want. GM, Ford, and Chrysler haven’t managed to do this since the 1960’s.
phein: The only thing preventing Detroit auto companies from being profitable – extravagantly profitable — are healthcare and retirement costs,
Yeah. Concentrating on non-sustainable lines like gas-guzzling SUVs over longer term strategies has nothing to do with it. The only thing stopping car companies from printing money is medical costs.
Riiight.
Ray Rl: I really hope that your numbers are right and mine are wrong, but hope is not a plan.
And hysteria is not a supportable argument. So thanks for calming down.
OK, the only one of those three postings that specifically mentions the number of people who might become unemployed is the third:
Trecek is a GM car dealer which gives him some insight into how that aspect of the auto industry works, but I wouldn’t rely on him for an expert view of the larger economy. Especially since he’s using the “one out of every 10 people” statistic which I pointed out is bogus in an earlier comment.
Jaim: Giving money to the top-end of any of these companies ensures nothing for the workers. Give some incentives to the workers to learn a new trade and move somewhere where their labor is needed instead, and incrase their unemployment so they can stay on their feet until they get a new job in another industry.
Exactly. How many times do we have to try trickle-down before everyone acknowledges the obvious that it just doesn’t work?
The big concern is “oh, the workers will lose their jobs”. Fine, then focus any efforts on specifically helping the workers keep or find/train for new jobs.
First, they are not schmucks, a schmuck has a head.
Second, what do you think of Michael Moore’s solution, nationalize the auto industry, whose market cap is like 4 magic beans right now, fire the upper management, and tell them what to do like we did in WWII?
They are not schmucks….A Schmuck has a head.
Also, this amount is less than Wall Street bonuses this year.
Do what Michael Moore says, buy a controlling interest (their market caps are next to nothing), throw out the upper management, and tell them what to build, like FDR did in 1942 to the auto makers (no more cars, Sherman tanks)
Just the lost income-tax revenue from laid off blue-collar folks would dwarf the amount of money they want for their loans. The auto companies can’t get credit and the buying public can’t get credit to buy cars. To let the auto companies fail due to Wal*Street’s implosion would be a fucking disaster.
It’s becoming clear to me that the bigwigs at the top have figured out that the USS Free-market disaster capitalist complex ship is sinking. The rats are looting before they jump ship, and we (and Congress) seems pretty much powerless to stop them.
Just a thought, here; What if the government, instead of just handing over a blank check to the auto makers, took over the employees health benefits and pensions? Universal health care Lite? That would free up more capital for the manufacturer, wouldn’t it?
Yeah, I know, SOCIALISM BAD!!!! AHHHH!! Tough shit. Want my money? Make it work.
Bye the time we pick up the pieces, America will be in a Depression that will last over a decade. If we let these companies fail right now, there will be no economy for a very, very long time and American will suffer a precipitous. One of these companies will fail, which will cause all of their suppliers to fail. That will cause all of the other car companies to fail. Most businesses in Michigan will fail. Then every business those businesses cater to will fail. Then all of the businesses those businesses either supply or rely on will fail. Picking up the pieces of that mess will take decades.
duros, you buy into too much right wing spin. These companies aren’t in danger because of pensions or salaries. These companies are in danger because a year long recession coupled with a bank-initiated credit freeze caused a 40% across the board drop in sales. The non-American car companies aren’t doing so hot either,
soullite, you’ve been taking lessons from Ray Rl, right?
Yeah, things are going to get tough and folks will have to go thru some hard times. Nobody is denying that or really wanting to minimize it. But the sky won’t fall, the states won’t be destitute and every business that caters to every business that has some connection to the auto industry won’t fail.
And the cause for GM et al’s distress isn’t just because of the current recession and credit freeze. Those certainly don’t help but this has been a long time coming and stems largely (but not solely, let’s try not to take the simplistic view that there was a single cause) from teh auto companies taking a very short-term view of their businesses and getting kicked in the marketplace by competitors who are better at running a company.