Here we go again. Good money for doomed companies

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krogoth's picture
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Here we go again. Good money for doomed companies

Here we go again. Good money for doomed companies


House will help automakers - Pelosi

House speaker says funds to rescue Detroit car companies should come from $700 billion bailout. Collision with Bush administration likely.

WASHINGTON (AP) -- House Speaker Nancy Pelosi said Saturday the House would provide aid to the ailing U.S. auto industry, requiring that the industry meet new fuel-efficiency standards, produce advanced vehicles and restructure "to ensure their long-term economic viability."

Pelosi, D-Calif., did not disclose the amount of funding House leaders intend to seek for the industry - automakers have been seeking $25 billion in loans to stabilize their sinking companies. But she said the funding should come from the $700 billion financial bailout approved by Congress in October.

"A restructured, competitive American automobile industry will continue to play a crucial role in our national economy and in the global marketplace," Pelosi said in a statement.

The move sets up a conflict with the White House, which has opposed using the bailout funds to help General Motors Corp. (GM, Fortune 500), Ford Motor Co. (F, Fortune 500) and Chrysler LLC. The Detroit companies have been battered by an economic meltdown that has choked their sales and frozen credit.

U.S. automakers are lobbying lawmakers furiously for an emergency infusion of cash. GM has warned it might not survive through year's end without a government lifeline.

President-elect Barack Obama said he believes that aid is needed but that it should be provided as part of a long-term plan for a "sustainable U.S. auto industry" - not simply as a blank check.

"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in an interview with CBS's "60 Minutes" that will air Sunday. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan - what does a sustainable U.S. auto industry look like?"

Pelosi said the plan would call for "immediate, targeted assistance" and must include several principles, including the restructuring of the companies "to ensure their long-term economic viability," new fuel-efficiency standards, and the development of advanced vehicles.

She said it would include "even stronger limits on executive compensation and assurances to protect the taxpayer." House aides said the legislation was still being developed and a specific funding level had not yet been reached.

Pelosi did not mention any plans for the UAW to make any concessions as part of the legislation. UAW president Ron Gettelfinger told reporters earlier Saturday the problem is not the union's contract with the auto companies.

"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger said. The union has said it made several concessions in its 2007 labor agreement, setting lower pay for new hires and placing retiree health care liability into a trust run by the UAW.

$25 billion is on the table

Facing an uphill battle in Congress and stiff opposition from President Bush, supporters of the government bailout have considered reducing its $25 billion size. A House aide said Saturday that $25 billion was still the amount being discussed.

"There's a need for immediate action," Alan Reuther, the United Auto Workers union's legislative director, said Friday. He said one option under consideration was a smaller, more targeted amount of funding "that would get the companies through to March."

Sen. Debbie Stabenow, D-Mich., said negotiations were taking place among senators on what the amount should be. "This is about getting enough votes to be able to solve the problem," she said.

Other auto suppliers and dealers with showrooms empty of customers plan to join the effort Monday when Congress returns following the Nov. 4 elections. The key Senate vote on preventing opponents from blocking the package could occur as early as Wednesday.

Democrats want to carve a portion of the $700 billion that the Bush administration is using to bail out banks, insurance companies and other financial institutions. The White House on Friday came out firmly against the approach.

White House press secretary Dana Perino said the administration would rather Congress expedite the release of a separate $25 billion loan program for the development of fuel-efficient vehicles and have the loans used for more urgent purposes as the companies struggle to stay afloat.

"Democrats are choosing a path that would only lead to partisan gridlock," Perino said.

Pelosi said Saturday that any attempt to divert money from the loan program would be a "step backward in assuring the viability and competitiveness of the U.S. auto industry."

Environmentalists and Pelosi have vehemently opposed using that money for anything other than designing and building vehicles that get higher gas mileage and produce less pollution. Democrats hold a 37-seat majority in the House and bailout supporters foresee little difficulty winning its passage there.

But the measure needs 60 votes to survive in the Senate, where Democrats will hold a razor-thin 50-49 majority when President-elect Barack Obama gives up his seat on Monday. A furious search was on for a dozen Republicans to break the anticipated filibuster from opponents.

Several Republicans have already lined up against it. "Like most Americans who are concerned about the direction of our economy and more federal spending, I must also ask - when is enough, enough?" said Sen. John Cornyn, R-Texas.

Two Republicans - Kit Bond of Missouri and George Voinovich of Ohio - said they will back the plan. Several other Republican senators have signaled they might accept a rescue if strict conditions are put on Detroit's Big Three companies, including management and salary changes, union concessions and a commitment to making more fuel-efficient vehicles.

Bond, whose home state of Missouri has several auto plants, said the concept of government mixing with the free market was "very troublesome." But he added, "We have to act in unique times of crisis when tens of thousands of Missouri workers are in danger of losing their jobs."

Democrats are modeling their bill on the bailout terms that the Bush administration has used for doling out $290 billion to banks and insurance companies. The government would get an ownership stake in the auto companies in exchange for the loans to ensure that taxpayers would get their money back if they return to profitability. 

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Re: Here we go again. Good money for doomed companies

I've mentioned before that these guys will NOT go down because the government would not let them.  The auto industry is the icon of the American Industrial Machine, and it will remain that way until everything collapses around it.  

What may be something to consider is where real wealth lies.  Perhaps the focus of wealth and strength needs to be shifted from the perspective of 'Stuff' to the perspective of 'Knowledge'.  I have grown in my career to more of a position that pays me far more for what I know, than it did for what I do.  Maybe it's time for our government to understand that dumbing up America with foolishly administered and disgustingly underfunded educational systems has finally proved itself as the wrong course to follow.

Wake up America, and start learning to save yourself.  First from your own greedy government, and then from the rest of the world that's standing by to pounce at it's first opportunity! 


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Re: Here we go again. Good money for doomed companies



krogoth's picture
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As much as I would love to save the Mustang and Corvette

The news about assistance for the Big Three is disturbing to say the least, because all I heard this weekend on the news or from friends etc. is how we CANNOT let the Corvette die, how we CANNOT let the Mustang go away and how we need or Cadillac's and the SUV's. Do the numbers and I think you will change your mind.

Let’s talk about GM as an example. General Motors is just purely an example of extremely bad executive management, incredible union demands way beyond the Japanese and Korean manufacturers in America (or assemblers I should say) and bleeding money away at an incredible pace. I equate any money being given to them as putting a band aid on arterial bleeding.

Does anyone here actually believe that throwing 25 billion and surely more in the future is going to do nothing but prolong the bleeding? The restructuring and retooling of these companies alone to produce a competitive economical car selection will take far more capital than that. It will also take grueling renegotiation's with greedy unions to come to the conclusion of lowering the pay and benefits of all the union workers. This can and will take multiple months if not longer.

Plus let's throw in the oversight issue. This weekend on CNN it was revealed that Paulson's bailout plan was actually conditional on an oversight committee made up of selected congressional members. The problem is the oversight committee has not been decided on yet, and the money is already going out unchecked. What? So now our government will go ahead and pony up the taxpayers money without oversight, put it in One overlords hands (Paulson) and THEN start picking away at it for other failures going on like spending a base of 25 billion and certainly more for the Big Three to somehow magically come out of this.
The problem also with the Big Three is that they missed the boat about 10 years ago, and GM has led the way and has been in trouble for a long time. They all should have learned a lesson in the 70's from the oil crisis and Japans example of economy cars coming on the market, but they didn't. They followed internal greed and consumer greed instead. This whole deal stinks again because it's good money going after bad. Our government is rewarding failure, plain and simple.

We lost the steel industry and should have learned a lesson from this, but we didn’t, We simply did what we always do, let another country do it cheaper, faster and better. The quality of the foreign steel was not the same as American steel in the beginning, but it was cheaper. Cheaper materials and goods will always win regardless of quality. Cars will soon be like hair dryers or microwaves, and that's cheap enough that if it breaks, it’s better to buy a new one than to fix the old one.
Is this plan going to save jobs? Yes, but only in the very short term. The end is inevitable, and it's a whole lot of unemployed Americans. No bailout will save this. Nothing can save this.

When I was in Florida I was amazed by the popularity of Nascar racing. Not that I care for the sport itself, but just how fast it was growing. It is a sport, like most sports, that celebrate covertly the illusion of greatness in America. It's very patriotic. It’s the God is on America’s side crowd and the proud to be an American types filling the stands. It requires loads of gas to drive your camper or SUV or land boat to the race, with some people coming from complete other states in these gargantuan behemoths. Lots of gas is also needed for the race and it's a sport where you basically bake in the sun,  drinking mass amounts of beer and watch cars go in a circle, occasionally seeing a crash for a break of watching cars go in a circle. Oh and as a bonus, you get to see some Americans in the crowd acting like some sort of sub-human species, with fine examples of a civilized society as urinating in a beer cup, or open drug usage with kids around.  

The Mustangs are in attendance, and the Cadillac’s and Corvettes. They are usually driven to the race with 1 person inside, celebrating our glutinous and ignorant attitude in America. Mind you this is a subconscious thing going on because driving a poorly designed gas guzzling land boat is a RIGHT in America. It's a right to also consume as much as possible. These are not RIGHTS, they are low level hypnotic mind conditioning techniques used since we were all born, that’s all. Try and take these rights away and you are attacking freedom. Try to pull America off the large illusion of what they think freedom is and you will run into a wall of resistance and ignorance.

America and most of the world are unknowingly nothing more than conditioned consumers, and Americans will celebrate and consume heavily over and over again until nothing is left to consume. I had a 400hp Pontiac GTO when I was a teen, and If I owned that now as a means of transportation, I would feel like a complete idiot. But yet these forms of cars are still on our roads just in a different shape or size. They are called GM Hummer's, or maybe Denali's or Excursions. These cars and trucks should become museum pieces to show our grand-kids someday and tell them how and why the world changed.

Save the Big Three? I say no. I say they set themselves up for failure, betrayed the workers by not taking them in the right direction since almost 40 years ago, and added to the consumption problem when they have the technology to do something good. Let them die and be remembered as a symbol of our glutinous past and how we conquered it.


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Re: Here we go again. Good money for doomed companies

Sens. Richard Shelby of Alabama and Jon Kyl of Arizona said it would
be a mistake to use any of the Wall Street rescue money to prop up the
automakers because a bailout would only postpone the industry's

"Companies fail everyday and others take their place. I think this is a road we
should not go down," said Shelby, the senior Republican on the Senate
Banking, Housing and Urban Affairs Committee. "They're not building the
right products," he said. "They've got good workers but I don't believe
they've got good management. They don't innovate. They're a dinosaur in
a sense.

"Added Kyl, the Senate's second-ranking Republican:
"Just giving them $25 billion doesn't change anything. It just puts off
for six months or so the day of reckoning.

"House Speaker Nancy
Pelosi, D-Calif., said over the weekend the House would aid the ailing
industry, though she did not put a price on her plan. "The House is
ready to do it," said Democratic Rep. Barney Frank of Massachusetts,
chairman of the House Financial Services Committee. "There's no
downside to trying."Frank's committee has scheduled a Wednesday hearing on an
auto bailout.It is a more difficult fight in the Senate, given the Democrats' slim edge
and President George W. Bush's opposition.

Bush wants to speed the release of $25 billion from a separate loan program intended to help
the automakers develop fuel-efficient vehicles and have that money go
toward more urgent purposes as the companies struggle to stay afloat.

The loan program was approved by Congress last year, but more
legislation would be necessary to change its purpose."That
should be done this week," Commerce Secretary Carlos Gutierrez said. He
said reopening the Wall Street bailout and including automakers could
attract other industries looking for bailouts."If you start
that, where do you stop?" he asked. "There's a line of companies of
industries waiting at Treasury just to see if they can get their hands
on those $700 billion."\

U.S. auto bailout support battle heats

krogoth's picture
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Auto Bailout

Barney Frank is a tool, and he one of the moron's who got us into this housing mess years ago. As for bailout funds, with AIG, Fannie and Freddie as examples of smart decisions so far made by our government, and the closures or takeovers coordinated by the government, I don't put much credit in anyone being smart at all in our government. Anything that is consumer spending based at any level right now should not have any bailout funds whatsoever, it's that easy. It's too late for retooling, remaking or redesigning. It's not fair for favoritism of some distress corporations, while others go down hard.




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Re: As much as I would love to save the Mustang and Corvette


I don't think we should save the mustang and corvette either. All govt bailouts just end up as a soup kitchen line for failed execs and any one who can make a case for a handout.. It is time for a reckoning.. let them fail. the prepared will survive.


The new administration will try to bail out everyone... that is the mantra of the social democrats. We could be looking at a 50% tax rate like sweden to fund the social programs.. spread the wealth.


The bashing of Nascar was not really necessary( I'm not a fan at all) anytime one observes a crowd of 200 thousand people, all levels of society will be present.   many americans have glutinous and ignorant attitudes but not all, that' s for sure. But many citizens use events to blow off steam, and consume massive amts of beer/drugs- so what - 

the real issue here is the government subservience to corporate america-

krogoth's picture
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I bashed Nascar

I bashed Nascar because it represents everything about excess, stupid Americans and large amounts of unnecessary fuel usage. I bash it because it's one of the things I hate immensely about America which is celebrating waste in a subconcious manner and basically not giving a shite. I am all for Beer and blowing off steam, but I don't drive a bus to the pub to drink.





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Re: Here we go again. Good money for doomed companies

I think it's okay to bash NASCAR and, in general, enjoy hearing and reading others do so.

But I wanted to say that I appreciate Larry questioning the bashing of NASCAR and that I wholeheartedly agree with his assertion that more or less in very large crowds all swaths of society end up being represented. Furthermore, because of this representation there inevitably seems to be present that especially loathsome type of individual who specializes in loudness and obnoxiousness -- regardless of the venue.

However, I do believe, based upon my own personal experience, that NASCAR events house a disproportionate percentage of these individuals when compared to society at large and comparable events, say, like an NBA game.

Finally, in isolation, removed from its fans, NASCAR as a phenomenon is especially egregious for the fantastically wasteful practices that are part and parcel of its shtick.

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Re: I bashed Nascar

I bashed Nascar because it represents everything about excess, stupid Americans and large amounts of unnecessary fuel usage. I bash it because it's one of the things I hate immensely about America which is celebrating waste in a subconcious manner and basically not giving a shite. I am all for Beer and blowing off steam, but I don't drive a bus to the pub to drink.


IMO, there could be no post that bashes nascar strongly enough. Nascar has become a privately held cash cow for the France Family .. period. There may have been a time (in the 1950's) when it could have been called a sport, but that ended long ago, most recently when Nextel became the sponsor to the tune of $700+ million for a 10-year contract (also the beginning of the end for Nextel). With the higher sponsor and team owner costs came the end of competition, especially the more creative (cheating) competition that always existed since1948. The constant rule changes each year have totally insured that all cars are now identical, with only decals to differentiate manufacturers.

So, what we have now is an "American Idol On Wheels", who pays off elected officials (not to mention large donations to charities by overpaid drivers) to look the other way to the destruction of the environment, and also the lungs of anyone present who happens to be breathing.


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Re: I bashed Nascar

hey krog

we have a "sport " with millionaires driving around in very expensive automobiles., burning vast amounts of fuel. going thru tires like there is no tomorrow, and crews of mechanics keeping it all together. they drive around making nothing but   one left turn after  the other for three hours or so. hundreds of thousands go watch and millions more watch on the tube........a few beers get drunk ............maybe a few doobies get burned what's the problem?

this is it or leave it ..........oh you already did. an extra room?

can the uncle miltie quote please i hate the guy. he is a big part of the reason we are here today.

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Re: I bashed Nascar

I always have room for you, bro. I will teach you some Chinese as well.









Damnthematrix's picture
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Re: I bashed Nascar
krogoth wrote:

I bashed Nascar because it represents everything about excess, stupid Americans and large amounts of unnecessary fuel usage. I bash it because it's one of the things I hate immensely about America which is celebrating waste in a subconcious manner and basically not giving a shite. I am all for Beer and blowing off steam, but I don't drive a bus to the pub to drink.

Actually, after reading your description of a NASCAR event, I now understand why Kunstler goes on and on about it...! 

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Re: Here we go again. Good money for doomed companies

Chances for a bailout of Detroit are now described as "slim to none"
with steady opposition from Republican Congressmen in this lame-duck
session. There are rational arguments for and against the bailout
idea. - DL

From the NY Times, November 17, 2008
If Detroit Falls, Foreign Makers Could Be Buffer

The failure of one or more of Detroit's Big Three automakers would
put a huge initial dent in American manufacturing, but in time
foreign car companies would pick up the slack by stepping up
production in their plants here, many industry experts and economists

Whether Washington should let that play out — risking hundreds of
thousands of jobs — is a central question Congress will weigh this
week as it hears testimony from Detroit leaders who are pushing for
immediate federal intervention, before the next administration takes
over in January.

"Barack Obama has made it clear he understands the importance of the
industry. The question is, do we get that far?" Ron Gettelfinger,
head of the United Auto Workers, said in an interview Friday, raising
the prospect of a General Motors bankruptcy. "At this juncture, we
are in a crisis that could have a major negative impact on this

But many industry experts say the big foreign makers are established
enough to take control of the industry and its vast supplier network
more quickly than is widely understood.

"You would have an auto industry in the United States more like that
of Mexico and Canada: foreign-owned," said Sean McAlinden, chief
economist at the Center for Automotive Research in Ann Arbor, Mich.,
which describes itself as a nonprofit organization that has "strong
relationships with industry, government agencies, universities,
research institutes, labor organizations" and other groups with an
interest in the auto business.

The transition to that new equilibrium would surely be painful. The
big American companies employ about 240,000 workers, and their
suppliers an additional 2.3 million, amounting to nearly 2 percent of
the nation's work force.


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Re: Here we go again. Good money for doomed companies
The no-think nation
The Crisis Has Hardly Begun
By Paul Craig Roberts
November 16, 2008 "Information Clearinghouse" -- “The
prospects of a government rescue for the foundering American automakers
dwindled Thursday as Democratic Congressional leaders conceded that
they would face potentially insurmountable Republican opposition,”
reported the NY Times last Friday.

The entire country is steamed up over the Republicans bailing out a
bunch of financial crooks who have paid themselves fortunes in bonuses
for destroying America’s pensions. Why do Democrats want to protect
Republicans from further ignominy by not giving them the opportunity to
vote down a bailout for workers?  Quick, someone enroll the Democratic
Party in Politics 101.

divisions in Canada and Germany are asking those governments for help. 
It will be something if Canada and Germany come through for the
American automaker and the American government doesn’t.  

talking heads are saying GM is a “failed business model” unworthy of a
$25 billion bailout.  These are the same talking heads who favored
pouring $700 billion into a failed financial model.

The head of the FDIC is trying to get $25 billion--a measly 3.5 percent of the $700 billion for the banksters--with
which to refinance the mortgages of 2 million of the banksters’
victims, and Bush’s Secretary of the Treasury Paulson says no.   Why
aren’t the Democrats all over this, too?

the Democrats still think they are the minority party or else their aim
is to supplant the Republicans as the party of the rich.

bailout has its downsides.  But if America loses its auto industry, it
will lose the suppliers as well and will cease to have a manufacturing
sector. For years no-think economists have been writing off America’s
manufacturing jobs, while deluding themselves and the public with
propaganda about a New Economy based on finance.

A country that doesn’t make anything doesn’t need a financial sector as there is nothing to finance.
financial crisis has had one good effect.  It has cured Democratic
economists like Robert Reich and Paul Krugman of their fear of budget
deficits.  During the Reagan years these two economists saw doom in the
“Reagan deficits” despite the fact that OECD data showed that the US at
that time had one of the lowest ratios of general government debt to
GDP in the industrialized world. 

Today Reich and Krugman are unfazed by their recommendations
of budget deficits that are many multiples of Reagan’s.  Moreover,
neither economist has given the slightest thought as to how the massive
budget deficit that they recommend can be financed.

recommend large public spending programs.  Krugman puts a price tag of
$600 billion on his program.  If it takes $700 billion to save the
banks and only $600 billion to save the economy, it sounds like a good
deal.  But this $600 billion is on top of the $700 billion for the
banks, the $200 billion for Fannie Mae and Freddie Mac, and the $85
billion for AIG.  These figures add to one trillion five hundred
eighty-five billion dollars, a sum that must be added to the budget
deficit due to war and recession (or worse).  

we are talking about here is a minimum budget deficit of $2 trillion. 
The US has never had to finance a deficit of this magnitude.  Where is
the money coming from?

US Treasury doesn’t have any money, and neither do Americans, who have
lost up to half of their savings and retirement funds and are up to
their eyeballs in mortgage and consumer debt.  And unemployment is

There are only two sources of financing: foreign creditors and the printing press.
doubt that foreigners have $2 trillion to lend to the US.  Thanks to
the toxic US financial instruments, they have their own bailouts to
finance and economies to stimulate.  Moreover, I doubt that foreigners
think the US can service a public debt that suddenly jumps by $2
trillion.  At 5 percent interest, the additional debt would add $100
billion to the annual budget deficit.  In order to pay interest to
creditors, the US would have to borrow more money from them.

and policy-makers are not thinking.  This enormous financing need comes
not to a well-managed economy that can take the additional debt in its
stride. Instead, it comes to an economy so badly managed that there are
no reserves. 

US trade deficits have been financed by giving up US assets to
foreigners, who now own the income flows as well.  Budget deficits from
6 years of pointless wars and from unsustainable levels of military
spending have helped to flood the world with dollars and to drive down
the dollar’s exchange value. Consumers themselves are drowning in debt
and can provide no lift to the economy.  Millions of the best jobs have
been moved offshore, and research, design, and innovation have followed
them.  Considering America’s dependency on imports, part of any
stimulus package that reaches the consumer will bleed off to foreign

when countries acquire more debt than they can service, they inflate
away the debt. If foreign creditors do not save the Obama
administration, the Treasury will print bonds and give them to the Federal Reserve, which will issue money. 

inflation will be severe, particularly as Americans will not be able to
pay for the imports of manufactured goods from abroad on which they
have become dependent.  The exchange value of the dollar will decline
with the domestic inflation.  Once inflation is off and running, the
printing press dollars will only have goods made in America to chase
after. The real crisis has not yet begun.

should rethink the automakers’ and FDIC’s proposals.  A bank produces
nothing but paper.  Automakers produce real things that can be sold. 
Occupied homes are worth more then empty ones.  

inability to see this is the logical outcome of Wall Street thinking
that highly values deals made over pieces of paper at the expense of
the real economy.
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Re: Here we go again. Good money for doomed companies

I am of two minds on this issue and I wish there were a better alternative.  Back in the '60's, I had friends working at Ford and Chrysler plants.  They both told me there was a limit to how much work they were allowed to do on their shift.  If your job was to make so many jibbets during your shift, when you reached that quota, you were to stop and spend the rest of your shift playing cards.  One of my friends said he spent as much time in the break room playing chess as he did making parts.  And if you thought about making more parts than your quota, some of your "friends in the union" would meet you in the parking lot and explain why this wasn't a good idea.  The amount of persuasion needed depended on your ability to accept their suggestions. Wink

I sold GM trucks at a local chevy dealership.  I watched trucks roll off the transport with the doors misaligned so badly they needed to go to the body shop before they could be put on the lot to be sold.

GM has made so many bad executive decisions it boggles the mind.  Trying to take the GM 350 gas engine and convert it to a diesel engine comes to mind.  It was incredibly stupid and the money spent on warranties to try to keep this engine viable was astronomical. Another debacle comes to mind,  the "rear engine" Corvair, an accident waiting to happen. Ralph Nader made his mark battling GM over this car and finally made GM take it off the market.  

I have a relative that worked at a GM plant until retirement, driving a fork lift.  Fork lift drivers worked one hour on and one hour off during their shift.  I asked him how tiring it was to drive a fork lift, pull a lever to lower the tines, pull another lever to lift the load, steer the fork lift to the desired location, pull a lever to lower or raise the load, pull a lever to set it down and back up.  Undecided  When parts were delivered to the plant, the load could only be taken off the truck by a union employee.  If that employee was on his/her lunch break, you waited for him/her to finish the break and take the load off your truck. 

This is too much wasted man power in the union contracts and GM and Ford can't compete with the imports.  In addition there are the retirement benefits and the health care benefits.  Last I heard, GM has around 30 billion in unfunded retirement/health care benefits.

As Tevya would say, on the other hand, there are 355,000 union employees in the GM, Ford and Chrysler plants.  There are 455,000 employees in related services, making starters, batteries, exhaust systems, wiring harness's, bumpers, chassis, transmissions, headlights, carpet, upholstery, wheels, tires, sheet metal for cars and truck bodies, etc.

Added to these are the 1,000's of dealerships throughout the nation employing thousands of mechanics, service writers, office personnel, sales people, paint shop personnel, body shop personnel, finance personnel, clean up workers.  

Putting together all these numbers, can the Govt allow GM and Ford  to fail?

If the GM and Ford plants close, who makes the tanks, armored vehicles, trucks, etc?

The executive mgmt. at GM and Ford need to be replaced.  The business model they have created has failed. 

The power of the unions must be broken if Detroit is ever to become competitive with the imports. The retirement benefits for retired employees must be preserved but the health care benefits will have to be renegotiated and reduced substantially.

How can you remove mgmt and re-negotiate contracts with the union employees without letting them fail?  

This is a problem that either gets solved or the GM and Ford brands probably won't exist much longer.  Throwing 25 Billion dollars at GM is rediculous.  They will lose 20 billion in December. 

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Re: Here we go again. Good money for doomed companies

You might be able to blame the Unions for GM's inefficiencies, but not their stoopid product lines.

NOW, the problem is exponential growth of debt.  It's not the Unions' fault either.

It's easy to go blaming 'whoever'.  What we need are solutions, a new system that doesn't involve growth, and doesn't involve debt, or at least debt repayable with interest.....

GM's factories should be converted to building the sustainable future we are going to urgently require, meaning the manufacture of rail infrastructure, wind turbines, and solar concentrator equipment.

Cars are finished.  It's time to move on..... 

krogoth's picture
Status: Platinum Member (Offline)
Joined: Aug 18 2008
Posts: 576
How the unions get broken

If GM or Ford file Chapter 11 bankruptcy, the union contracts are broken automatically. All of them. More than likely this will be the scenario, with a combination of bailout money. Then if or when they emerge from Chapter 11, the union contracts will still be void. This is how to break a union.





krogoth's picture
Status: Platinum Member (Offline)
Joined: Aug 18 2008
Posts: 576
Here we go again with debt forgiveness and debt growth

You are joking again, right? You want a highly mismanaged, unionized, greedy, non-efficient 3 companies that employ up to 3 million people if not more directly and indirectly to suddenly switch to building rail infrastructure, wind turbines and solar concentrators? What the hell do you grow on your farm? Is it a Green plant that you can smoke?

Do you have a car? Because statements like cars are finished are simply unrealistic. Maybe in 20-30 years, but its not going to happen anytime soon.

I do BLAME these idiot executives, over-demanding unions, and very pampered UAW workers. If we don't learn from our mistakes, how are we going to grow as a society, and these companies are mistakes now. They were mistakes 40 years ago. Do you know how stupid the UAW is for demanding the same treatment and the bailout plan at the same time?

But it's not an easy thing to lay off 3 million plus people directly and indirectly. Considering your country only has a little over 21 million, I doubt you can even fathom this many people losing jobs.

I live in the United States, China and Taiwan. I work in all 3 countries, and am an American born citizen. You are an Australian. Have you been to the United States? Have you traveled outside your country at all?

It's extremely easy for you to make these bold, unrealistic and continuously delusional statements or opinions because you will not be cleaning up the mess, you will not be paying the taxes, and you will not be suffering. Your children and grandchildren will not be paying for this, mine and ours will.

If you are going to offer up any constructive advice, methods or ideas, please do so. But harping on debt forgiveness, the Matrix,  new systems that don't involve growth (whatever that means). Do you know what year it is? We are not batteries for the machines yet, eating off each other to provide power. Please rent some other movies, and come back to earth with some realistic solutions.

propamanda's picture
Status: Bronze Member (Offline)
Joined: Sep 17 2008
Posts: 61
They think inflation is over?


From NY Times today:

"The Consumer Price Index, a key measure of how much Americans spend on groceries, clothing, entertainment and other goods and services, fell by 1 percent in October compared with prices in the previous month, the Labor Department reported Wednesday morning. It was the steepest single-month drop in the 61-year history of the pricing survey, and raised concerns about deflation or a prolonged decline in prices.

'It’s funny that just a few months ago everyone was wringing their hands over inflation,” said Nariman Behravesh, chief economist at Global Insight. “It’s gone. It’s over.' "


Inflation is over?  And we're "creating" how much money every day for these bailouts?

And this guy is the chief economist of something?  No wonder out leaders are screwing up so badly.

rlee's picture
Status: Silver Member (Offline)
Joined: Sep 18 2008
Posts: 148
Blame where blame belongs

Not only do I blame the unions, but I blame the managers, the greedy idiot workers, and the total lack of vision that they all had / have in relation to the big picture.  If it weren't for the huge influence the unions had on reducing capitol reinvestment, this country would still have a steel industry!  These are all people of the "entitlement age" and they not only don't understand the monster they created, but they're actually PO'd that the gravy train has to pull into the station!  The belief that growth is forever, and we can print the money we need for eternity is what this whole mess is made out of.  What's really needed is a return to a legitimate lifestyle with goods and services offered at legitimate prices.  This will NOT happen in any real and meaningful timeframe.

Now, you would like to think that all these people will 'see the light' and work together for a more harmonious hugs and kisses existence once the rest of the tax paying public pays off their credit cards and wipes out the mortgage on the family farm.  Or better yet, just forget all about the debt, and tell everybody who works in the finance industry to just get over it and find something new to do for food money!  What you're failing to understand is that the entitlement complex is stronger than that, and the debt cycle will not only start back up, but it will do so at a rate that will make your head spin.  I know, just pass a law that says 'no more credit' right?  Please!  Your suggestion that debt can be repaid without interest is absurd.  If you think for one minute that anybody is going to give away their money so somebody else can catch-up, and get nothing in return - then you really need to 'smoke-up'.

Damnthematrix's picture
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Michael Moore finally sees the light...?

Saving the Big 3 for You and Me ...a message from Michael Moore

Wednesday, December 3rd, 2008


I drive an American car. It's a Chrysler. That's not an endorsement. It's more like a cry for pity. And
now for a decades-old story, retold ad infinitum by tens of millions of
Americans, a third of whom have had to desert their country to simply
find a damn way to get to work in something that won't break down

My Chrysler is four years old. I bought it because of its smooth and
comfortable ride. Daimler-Benz owned the company then and had the good
grace to place the Chrysler chassis on a Mercedes axle and, man, was
that a sweet ride!

When it would start.

More than a dozen times in these years, the car has simply died.
Batteries have been replaced, but that wasn't the problem. My dad
drives the same model. His car has died many times, too. Just won't
start, for no reason at all.

A few weeks ago, I took my Chrysler in to the Chrysler dealer here
in northern Michigan -- and the latest fixes cost me $1,400. The next
day, the vehicle wouldn't start. When I got it going, the brake warning
light came on. And on and on.

You might assume from this that I couldn't give a rat's ass about
these miserably inept crapmobile makers down the road in Detroit city.
But I do care. I care about the millions whose lives and livelihoods
depend on these car companies. I care about the security and defense of
this country because the world is running out of oil -- and when it
runs out, the calamity and collapse that will take place will make the
current recession/depression look like a Tommy Tune musical.

And I care about what happens with the Big 3 because they are more
responsible than almost anyone for the destruction of our fragile
atmosphere and the daily melting of our polar ice caps.

Congress must save the industrial infrastructure that these
companies control and the jobs they create. And it must save the world
from the internal combustion engine. This great, vast manufacturing
network can redeem itself by building mass transit and electric/hybrid
cars, and the kind of transportation we need for the 21st century.

And Congress must do all this by NOT giving GM, Ford and Chrysler
the $34 billion they are asking for in "loans" (a few days ago they
only wanted $25 billion; that's how stupid they are -- they don't even
know how much they really need to make this month's payroll. If you or
I tried to get a loan from the bank this way, not only would we be
thrown out on our ear, the bank would place us on some sort of credit
rating blacklist).

Two weeks ago, the CEOs of the Big 3 were tarred and feathered
before a Congressional committee who sneered at them in a way far
different than when the heads of the financial industry showed up two
months earlier. At that time, the politicians tripped over each other
in their swoon for Wall Street and its Ponzi schemers who had concocted
Byzantine ways to bet other people's money on unregulated credit
default swaps, known in the common vernacular as unicorns and fairies.

But the Detroit boys were from the Midwest, the Rust (yuk!) Belt,
where they made real things that consumers needed and could touch and
buy, and that continually recycled money into the economy (shocking!),
produced unions that created the middle class, and fixed my teeth for
free when I was ten.

For all of that, the auto heads had to sit there in November and be
ridiculed about how they traveled to D.C. Yes, they flew on their
corporate jets, just like the bankers and Wall Street thieves did in
October. But, hey, THAT was OK! They're the Masters of the Universe!
Nothing but the best chariots for Big Finance as they set about to loot
our nation's treasury.

Of course, the auto magnates used be the Masters who ruled the
world. They were the pulsating hub that all other industries -- steel,
oil, cement contractors -- served. Fifty-five years ago, the president
of GM sat on that same Capitol Hill and bluntly told Congress, what's
good for General Motors is good for the country. Because, you see, in
their minds, GM WAS the country.

What a long, sad fall from grace we witnessed on November 19th when
the three blind mice had their knuckles slapped and then were sent back
home to write an essay called, "Why You Should Give Me Billions of
Dollars of Free Cash." They were also asked if they would work for a
dollar a year. Take that! What a big, brave Congress they are!
Requesting indentured servitude from (still) three of the most powerful
men in the world. This from a spineless body that won't dare stand up
to a disgraced president nor turn down a single funding request for a
war that neither they nor the American public support. Amazing.

Let me just state the obvious: Every single dollar Congress gives
these three companies will be flushed right down the toilet. There is
nothing the management teams of the Big 3 are going to do to convince
people to go out during a recession and buy their big, gas-guzzling,
inferior products. Just forget it. And, as sure as I am that the Ford
family-owned Detroit Lions are not going to the Super Bowl -- ever -- I
can guarantee you, after they burn through this $34 billion, they'll be
back for another $34 billion next summer.

So what to do? Members of Congress, here's what I propose:

1. Transporting Americans is and should be one of the most important
functions our government must address. And because we are facing a
massive economic, energy and environmental crisis, the new president
and Congress must do what Franklin Roosevelt did when he was faced with
a crisis (and ordered the auto industry to stop building cars and
instead build tanks and planes): The Big 3 are, from this point
forward, to build only cars that are not primarily dependent on oil
and, more importantly to build trains, buses, subways and light rail (a
corresponding public works project across the country will build the
rail lines and tracks). This will not only save jobs, but create
millions of new ones.

2. You could buy ALL the common shares of stock in General Motors
for less than $3 billion. Why should we give GM $18 billion or $25
billion or anything? Take the money and buy the company! (You're going
to demand collateral anyway if you give them the "loan," and because we
know they will default on that loan, you're going to own the company in
the end as it is. So why wait? Just buy them out now.)

3. None of us want government officials running a car company, but
there are some very smart transportation geniuses who could be hired to
do this. We need a Marshall Plan to switch us off oil-dependent
vehicles and get us into the 21st century.

This proposal is not radical or rocket science. It just takes one of
the smartest people ever to run for the presidency to pull it off. What
I'm proposing has worked before. The national rail system was in
shambles in the '70s. The government took it over. A decade later it
was turning a profit, so the government returned it to private/public
hands, and got a couple billion dollars put back in the treasury.

This proposal will save our industrial infrastructure -- and
millions of jobs. More importantly, it will create millions more. It
literally could pull us out of this recession.

In contrast, yesterday General Motors presented its restructuring
proposal to Congress. They promised, if Congress gave them $18 billion
now, they would, in turn, eliminate around 20,000 jobs. You read that
right. We give them billions so they can throw more Americans out of
work. That's been their Big Idea for the last 30 years -- layoff
thousands in order to protect profits. But no one ever stopped to ask
this question: If you throw everyone out of work, who's going to have
the money to go out and buy a car?

These idiots don't deserve a dime. Fire all of them, and take over
the industry for the good of the workers, the country and the planet.

What's good for General Motors IS good for the country. Once the country is calling the shots.

Michael Moore
[email protected]

gloria g's picture
gloria g
Status: Member (Offline)
Joined: Dec 3 2008
Posts: 1
Re: Here we go again. Good money for doomed companies

Great song about the bailout:

Bailout Blues

Put your hands up
in the air
wave 'em round
like you just don't care
you're being robbed
Welcome to the bailout blues

So let's assume that it's true
what is Main St. to do
when the talking heads for 10 years
they've been lying to you
you either are or ain't stupid
that's up to you to prove
they cried wolf (blitzer)
one too many times
with their bailout blues..

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