Romney's Solution to the Big 3

ohskigod

Let me tell you, I didnt like Romney during the election cycle, but this idea migth actually be frikkin genius. It would knock all the obstacles out of the box if done right. aint easy, but it might actually be the only solution that makes sense

http://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=2

zingo

Romney is a smart guy, and really smart with money. This is the reason I would have voted for him for President. I don't care that he's Morman or whatever else, I smart, businees person would be good for this country.

obieone

The president of the UAW has repeatedly stated 'NO more concessions'.
I say let them go bankrupt. BUT, the president-elect, signed an AWFUL lot of IOU's to get elected, so, I think the bailout will happen.

markmarc

Romney does make some very solid points, but we need to recognize ONE basic fact:
In normal economic times their would be 20-30 companies/groups willing to finance a bankruptcy restructuring. Right now, only two or three are capable. On top of that, would they be willing to risk funding? Doubtful.

Therefore, the gov't would need to be the funding arm for the bankruptcy reorganization. Think what that says, save the company, but screw the union workers of their promised retirement. Gov't cares more for corporations than the individual. That's a hard sell right now. Unless, the gov't says they'll cover such a monster. The UAW must be a part of the solution and accept that they must give, in order to continue to receive.

Things MUST change with the Big 3, no doubt about it. But we all must recognize that these three are the heart of American industry, and their impact goes well beyond those they directly employ and support thru retirement. Parts suppliers alone employ far more people. If all three crumble, you will see unemployment top 10%. Mass public works projects will need to be started that create only temporary jobs.

In addition, auto manufacturing by USA companies is a National Security Issue, especially if a major war was to break out, considering how depleted our current military vehicle situation is in due to Iraq and Afghanistan. The Big 3, in some form must be saved.

Therefore, with SERIOUS/SPECIFIC conditions, I feel the money should be loaned, and some of Romney's ideas should be front and center.

dkg999

Markmarc - good points! We've had kind of a perfect storm with regards to the economy! If I were the CEO of one of the big 3, I would of probably thought to drive or fly commercial to beg for a bailout, not take the Gulfstream! That's bad juju in this social/economic environment.

MillerLiteScott

The Big 3 execs. flew on private jets to Washington to plead for money. What kind o message does that send?:mad: I also heard one of the big 3 execs. say they are doing everything humanly possible to survive. I guess flying commercial is not humanly possible:eek::rolleyes:


I just saw dkg999 post sorry for the double post.

Scott

dkg999

MillerLiteScott wrote: »

What kind o message does that send?:mad:

I think it says their vehicles weren't reliable enough to risk taking to get to the bailout meeting :eek:

shack

The big 3 need to retool and get away from making the Big American Iron they relied on for the past decade. They claim they had to do that because that is what the American public wanted and they had to have the big markups to cover the high labor and retiree costs associated with every vehicle. First of all we need to make fuel efficient vehicles so that we can get off of the oil ****. I firmly believe that the soaring oil prices which led to soaring food prices, etc, etc, was at least a catalyst for the current economic issues. They would have probably happened anyway, but oil was a trigger and probably made things worse. Second Ford and GM need to start selling their vehicles they sell in Europe and Asia here in the US. Instead of selling the really well made and popular European Focus here, they opted to sell the awful US version. They are bringing the new Fiesta here (it is nice!) in 2010 but it may be too little too late. It will just get a couple of drive trains...which does not include the 65 mpg diesel available in Europe. GM has started in the right direction with a couple of Opels badged as Saturns but also only with a limited choice of drive trains. Historically Ford and GM sell better cars in Europe than they do in the US. Either we are too stupid (or uninformed) as consumers to demand them or the automakers believe we only want the big gas guzzling stuff. Either way they can build better and they could sell them here but we evidently won't buy them and they won't sell them.

Speaking of the unions...the head of UAW testified before Congress today basically saying they had no part in the problem and while they were enjoying the blasting the auto makers were getting (and of course the UAW had told the automakers about the error of their ways)...they wanted congress to give the Big 3 the money to SAVE the industry...but don't ask the unions to give anything. **** them. I hope the Big 3 go into chapter 11 (reorganization) if for no other reason than to break the unions - or at least allow the courts to void the contracts and set wages and benefits where they can be competitive. The Japanese and European mfgs are doing much better here in the south with their non union plants. They are making good vehicles that sell and they can make a profit doing so.

At this stage of the game I really don't care if they go under. Something will fill the void. I would rather they reorganize with a leaner mindset, making better vehicles...but if all the parties involved fail to realize that is what has to take place...they can just fail. It is what they will deserve.

F1nut

You're right Lou, it is genius.

TroyD

Spot on shack, I've been saying that about the UAW for ages. I've seen the European/Asian Ford/GM vehicles and wonder the same thing, why the hell don't we have them in the US.

BDT

jdhdiggs

I was reading an article yesterday that the UAW contract add $2K to the price of every car they make over the US made, non-union Toyota and Honda plants. Having to make up $2K in quality, parts, engineering, etc is a lot for a 20-30K vehicle. When I read that, I thought that the big three must have the R&D and engineers to succeed, they just need to destroy that crippling union.

Anyone thinking $78/hr (including beni's and on average) is reasonable for vehicle assembly needs to get their head examined.

treitz3

shack wrote: »

I firmly believe that the soaring oil prices which led to soaring food prices, etc, etc, was at least a catalyst for the current economic issues.

You too? Cool, I have been told that this is not the case by many people. I agree with you, strongly.

If you have something that holds generally the same price for what 20+ years and then all of a sudden it doubles in price and holds at that price for what? 2 years or so and folks still need the same amount [generally], of course it's gonna effect the economy.

Out of my pocket came an additional $800.00 on average in monthly gas costs and that's with the least amount of driving that I could get away with. That kind of unexpected jump in gas prices since Hurricane Katrina has cost my household close to 20K so yeah, I believe that it was a catalyst.

Sorry for the derail...........now back to our regularly scheduled program.......

MLZ

Auto companies have 3 problems:

1. Bad Management which accepted bad UAW contracts because there was a time they could pass the costs on to car buyers.

2. Bad union contracts that pay UAW members $29 / hour more than the Japanese transplants in the US.

3: Our Government:

"It is difficult to overstate the damage that CAFE has done to GM over the years. The entire purpose of CAFE is to force companies like GM to do something other than build and sell the vehicles that would earn them the greatest profit. . . . CAFE has bled GM of tens of billions of dollars in profits over the years. If they had all of those dollars in the bank today, they would not be on the brink of bankruptcy. CAFE forced GM to build millions of small cars and sell them at a loss. To make matters worse, CAFE made it illegal for GM to exploit its single most profitable brand, Cadillac" -- the Club for Growth's Louis Woodhill, writing about Washington's 30-year-old "Corporate Average Fuel Economy" rules at RealClearPolitics.com.