OK, let's say they do go down......

treitz3

The big three. Let's think about the impact that it would have on servicing the existing vehicles. Would this mean that parts are going to go up substantially? Or would this mean that parts would go down in price since the parts need to get out of inventory?

If they go down, how will this effect the resale value of any one of these manufactures?

Most importantly, where the hell are we gonna employ the millions of people who will lose their jobs? Will this bring down wages?

shack

treitz3 wrote: »

The big three. Let's think about the impact that it would have on servicing the existing vehicles. Would this mean that parts are going to go up substantially? Or would this mean that parts would go down in price since the parts need to get out of inventory?

If they go down, how will this effect the resale value of any one of these manufactures?

Most importantly, where the hell are we gonna employ the millions of people who will lose their jobs? Will this bring down wages?

They are probably not just going away. More than likely it will be a chapter 11 reorganization. Get rid of a lot of dead weight (overhead, R/E, contracts, etc..) and come back more streamlined, more efficient with less debt and better products. I may be the best thing to happen. Even if they do just do a Chapter 7 liquidation, someone will buy some of the infrastructure and hire some of the employees because even the Japanese do not have the capacity at present to fill the void if GM, Ford and Chrysler go away. It will work out IMO.

Mike Kozak

The old saying was if GM sneezed, the country caught a cold......not so much anymore

NotaSuv

If the Big 3 all went down now the effect would be devastating.....we are already going down the toliet...40% off last year.....there is no confidence in the economy and to put another ???? jobless on the streets and cause the closing of ????????? support companies...if you think the housing market is ruins now this would really take it to a new basement level....yeah we cant just give em money without a plan.. but can we afford not to at this point...........good points if they did go down ????? lessons learned??? but at what cost??at whos cost?? certainly not to any exec

wizzy

That's why a lot of people argue for Ch 11 instead of a loan. There would be much more area for the Big 3 to weasel out of contracts, agreements, labor deals, etc.

This is why Republicans don't want to do a loan - Ch 11 gives the Big3 the power to shaft the unions, toss out retirement plans, renegotiate labor deals, etc.

Conversely, the Democrats are more likely to argue *for* the loans as it keeps the thumb screws on them to maintain all the benefits (labor contracts, pensions, medical plans, etc)

W

wizzy

Given the above, you know what's odd ... is that here some of the same people that usually argue the conservative viewpoint ... seem to be arguing on the side of giving the loans to them, which is much more the liberal stance.

treitz3

Let's try not to make this a political thread, ok?

WilliamM2

As far as parts go, I imagine you could still get 99% of them at Autozone or similar parts outlets. I've never had to go to the dealer for parts for any car, unless it was the first year model run.

Resale value would probably drop quite a bit on newer used cars, as they will no longer have the transferable warranty. Probably no effect on older models.

The millions of unemployed will be the biggest issue, and there is no easy fix there.

Pablo

Why would giving money to an unprofitable company make the company profitable? The legacy expenses they have are ridiculously high, and more money to the company is not going to make that go away. Without a major reduction in these expenses, they will never turn a profit. And the only way to do that is through bankruptcy.

It would better to just take that 25b, buy cars and hand them out to the american people than to the company try to use it.

Mike Kozak

I agree with you Treitz. My dad put 33 years into GM as an Engineering Group Mgr and now all retirees will not get any health benefits as of Jan next year......nice way to thank all the hard work that has been done by dedicated employees!!!!

AsSiMiLaTeD

This bail out crap has got to stop. First the mortgage companies, now the automakers....what next?

wizzy

I think the automakers themselves will be fine.

Probably better off in Ch. 11

The big losers will be the workers. Retire-ees will probably lose at *least* 35% of their monthly income, plus some benefits.

Existing workers will end up making less, working more, and have less benefits.

The consumers will probably be fine. Someone will make parts. Most parts aren't made by the big 3 anyway, they come from 3rd part suppliers.

Isn't it something like Mogul who supplies a major number of parts - haven't they been in Chapter 11 for a while now?

W

markmarc

I posted this in the "Romney thread:

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.

Now I would like to add:

A year ago had we faced faced down the mortgage mess when the warnings were first being sounded, it would have cost us an estimated $200 billion, not including the trillions lost from the stock market implosion.

I can see the death of even just GM as costing some $300 billion when all is said a done. That includes taking over the pension fund, covering unemployment, creating public works projects, etc..

I'd rather spend some now with tough conditions and Lee Iacocca as a czar to make sure they follow the guidelines, then have the gov't try and create jobs later.

I have a hard time understanding why it's ok to bail out Wall Street for foolishly gambling our money, yet say no to companies that are the base of our manufacturing economy and that actually create wealth.

disneyjoe7

Part's must part's IMHO are best if brought outside of the GM. Use Napa parts. As far as reseal value unknown, would a home builders house be worth less tomorrow if tomorrow he was gone?

shadowofnight

AsSiMiLaTeD wrote: »

This bail out crap has got to stop. First the mortgage companies, now the automakers....what next?

+1 .....I heard the entire **** industry ( Movies...magazines...even paid online content...everything ) was in limp mode from all of the free internet adult content available nowadays....Vivid is on the phone with Obama now :rolleyes:

" The pornography industry is larger than the revenues of the top technology companies combined: Microsoft, Google, Amazon, eBay, Yahoo!, Apple, Netflix and EarthLink "

http://www.familysafemedia.com/pornography_statistics.html

PhantomOG

Only in America could a bunch of millionairs fly to the capitol in private jets begging for billions of tax payer dollars and get taken seriously.

shadowofnight

PhantomOG wrote: »

Only in America could a bunch of millionairs fly to the capitol in private jets begging for billions of tax payer dollars and get taken seriously.

Thats a fact.....absolutely ridiculous.

bobman1235

PhantomOG wrote: »

Only in America could a bunch of millionairs fly to the capitol in private jets begging for billions of tax payer dollars and get taken seriously.

Not to mention flying around the world in those same jets telling Americans to cut back on fuel usage. Unrelated, but still ridiculous and infuriating to me.

bobman1235

shadowofnight wrote: »

" The pornography industry is larger than the revenues of the top technology companies combined: Microsoft, Google, Amazon, eBay, Yahoo!, Apple, Netflix and EarthLink "

That was kinda out of left field, no?

Also, by your own website : total **** revenue 2006 : 13.3 billion.

You don't think any of those top technology companies (let alone combined) made 13 billion last year? Microsoft makes something close to that every QUARTER.

treitz3

bobman1235 wrote: »

That was kinda out of left field, no?

Ya' think? :eek:

ND13

markmarc wrote: »

I posted this in the "Romney thread:

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.

Now I would like to add:

A year ago had we faced faced down the mortgage mess when the warnings were first being sounded, it would have cost us an estimated $200 billion, not including the trillions lost from the stock market implosion.

I can see the death of even just GM as costing some $300 billion when all is said a done. That includes taking over the pension fund, covering unemployment, creating public works projects, etc..

I'd rather spend some now with tough conditions and Lee Iacocca as a czar to make sure they follow the guidelines, then have the gov't try and create jobs later.

I have a hard time understanding why it's ok to bail out Wall Street for foolishly gambling our money, yet say no to companies that are the base of our manufacturing economy and that actually create wealth.

Bravo!!!

brettw22

I remember hearing a report somewhere that the avg worker makes something like $60-80/hr assembling cars........can anyone confirm that?

If that's accurate, they should expect to get their pay cut in half to put it more in line with their competition........it's asinine that they could be making that much IMO........

markmarc

Brett:
The longest term workers WITH benefits including retirement of 20+ years, economists calculate that number as a cost to GM. It looks amazing, but it's a bit misleading.

But still, the UAW will need to give in order for their ranks to have anything at all.

I still wonder what clueless stupidity was going on when the the big three leaders each chose their own lear jets to bring them to DC. The positive press they could have been given showing up on a commercial flight.

AsSiMiLaTeD

A friend of mine was working in the GM plant a few years back, all he did was put the wheels on the car, literally.

He was making 60K a year.

treitz3

Could they not just close up the factories up north and then open up new factories down south, losing the Union and let go of some of the legacy costs? It is my understanding that the legacy costs are a big part of what's bringing them down. Over a grand per car just for legacy costs? Just thinking out loud here.......don't rip me a new one.

You can't be competitive with those kinds of costs, let alone the cost of 60K a year for someone to put on tires.

ND13

AsSiMiLaTeD wrote: »

A friend of mine was working in the GM plant a few years back, all he did was put the wheels on the car, literally.

He was making 60K a year.

Hell, that's nothing...at the Chrysler plant(now Metaldyne), there were three custodians with over 30 yrs in that made over $130k/yr after working holidays and unnecessary overtime. Not kidding.

My brother-in-law still works for Chrysler, is a millwright and makes about $130k.yr, but at least he's skilled trades and drives 2 1/2 hrs one-way to work. If he works holidays, which he ALWAYS does, he makes over $90 an hour and the plant is shut down.

Roy Munson

I have no love lost for the Big 3 and I 'm on the fence about bailing them out or not, but one thing I can't seem to come to grips with is what would happen if the Big 3 are left to go under..and that is, the Japanese would then OWN the entire auto industry! Do we really want that to happen? And how long would it take for a new and viable American auto maker to compete with the foreign companies?

sucks2beme

My pension and medical bennies went pfft. Pay raises, pfft.
ETc. Why should Detroit do any better than any other industry?
You don't get a choice when the industry is on the line.
If they want to hold out for a better offer,they'll be waiting a long time.
There's no magic money tree. We're all in the **** together.
You come complaining to me, I'm going to tell you to get in line.
Now's the time to set the tone for the next 20 years. Either work
together with management, or go down the tubes together.
That means the suits better cut back too. If the union gives up
pay and bennies, the suits better do it too. None of that "I'll cut my
pay but set myself up with a big bonus". That shouldn't of happened
with the banks. Don't let it happen here.

petrym

Roy Munson wrote: »

I have no love lost for the Big 3 and I 'm on the fence about bailing them out or not, but one thing I can't seem to come to grips with is what would happen if the Big 3 are left to go under..and that is, the Japanese would then OWN the entire auto industry! Do we really want that to happen? And how long would it take for a new and viable American auto maker to compete with the foreign companies?

We helped rebuild the Japanese industrial capacity after WWII, they were then free to develop their economy unencumbered by previous business models. They took it and turned into a world industrial powerhouse; Detroit could use the same medicine.

These proposed bailouts are a small bandaid trying to stop the flow on a severed and spurting artery. It's not going to work. The big 3 need to go under bankrupcy protection to rework their business models into a comparable situation with current industry norms. Anything less is a waste of time and our taxpaying dollars. :mad:

How long to fix? A long time... start now.

That's all I have to say about that.

John30_30

PhantomOG wrote: »

Only in America could a bunch of millionairs fly to the capitol in private jets begging for billions of tax payer dollars and get taken seriously.

Actually, they were mocked out by some Senators for just that- i.e. not taken seriously

schwarcw

Mike Kozak wrote: »

I agree with you Treitz. My dad put 33 years into GM as an Engineering Group Mgr and now all retirees will not get any health benefits as of Jan next year......nice way to thank all the hard work that has been done by dedicated employees!!!!

Mike, your father will have the same healthcare that the majority of Americans have. Metacare/Metacaid, Social Security, etc. Why should Americans pay for premium pension and healthcare benefits? That is truly unfair.