$14B auto bailout dies in Senate

Ricardo

http://news.yahoo.com/s/ap/20081212/ap_on_go_co/congress_autos

And all because the UAW refused to cut their wages in line with Japanese car plants in the U.S. There goes for the union :rolleyes:

NotaSuv

Well maybe they learned a little after the first financial bailout did very little to help out us commoners or small biz

ben62670

Idiots.
Time to find some replacements.

NotaSuv

UAW needs to be a little more realistic too

The way things are going a job with a pay cut is at least a job and much better than no job...plus the benefits are still there

Ricardo

NotaSuv wrote: »

UAW needs to be a little more realistic too

The way things are going a job with a pay cut is at least a job and much better than no job...plus the benefits are still there

Bingo.

PolkThug

I'm taking reduced benefits, why can't an auto worker do the same?

http://apnews.myway.com/article/20081212/D95106M80.html

WASHINGTON (AP) - A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year's end.

Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.

The breakdown left the fate of the auto industry - and the 3 million jobs it touches - in limbo at a time of growing economic turmoil. General Motors Corp. (GM) and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. (F) says it does not need federal help now, but its survival is far from certain.

Ricardo

PolkThug wrote: »

I'm taking reduced benefits, why can't an auto worker do the same?

The auto workers are most probably willing to do it. The problem is that the auto workers are not the ones participating in discussions...it's the UAW reps...

ben62670

The onion reps have to show how strong they are:(

NotaSuv

Ricardo wrote: »

The auto workers are most probably willing to do it. The problem is that the auto workers are not the ones participating in discussions...it's the UAW reps...

I agree here.. its the anal Union upper mgmt that wants to make no moves until current contract expires..I think most workers would be glad to take a cut to save their jobs, homes and families....the only other option here is a job melt down the likes of which we have yet to seen..on top of shakey to say the least econmy...the end result??????????scary....

wallstreet

I think it is an oversimplification of the problem to solely blame the union as the reason for this Big 3's financial woes.

treitz3

No loyalty. No common sense. Unbelievably a stupid move.

What a F'n shame. I hope that the ripple effect knocks on their door as well. Idiots.

Ricardo

wallstreet wrote: »

I think it is an oversimplification of the problem to solely blame the union as the reason for this Big 3's financial woes.

Couldn't agree more. Having said that, there is no possible recovery if the union doesn't contribute by coming closer to earth.

Early B.

Screw 'em. I got a business and I need a bailout, too. We're not talking billions. Just a million and change will do.

brettw22

The day...........the Unions die......

I wonder what the logic is when they have 3 million people not contributing because they all lost their jobs.......

pearsall001

Gotta love the unions...still in the burning house waiting for the fireman to show up, too damn stupid & stubborn to know what has to be done for survival. When labor costs are such a "hugh" & I mean "hugh" burden for the company to absorb & to remain profitable, then the whole process has to be revamped. Not a fun thought but it has to be done & in a hurry.

Hell, I'm a business owner myself, I think I'll only ask for $250K. That should be approved by tomorrow morning!!

treitz3

pearsall001 wrote: »

Gotta love the unions...still in the burning house waiting for the fireman to show up, too damn stupid & stubborn to know what has to be done for survival.

Ding, ding, ding!

They are outdated, they have been a HUGE part of what put the car companies in the position that they are in right now and still don't see the big picture. Damn shame. It's not like 3 million [plus] people's jobs are on the line or anything.....:rolleyes:

I wonder how the union workers feel about the "representatives" they pay good money too, how they feel about their actions for them? It seems that they are working against them at this point. I mean, would you rather make concessions now and keep your job or lose everything? I know what my choice would be.

An estimated 170,000 people just in NC and SC will lose their jobs and as far as I'm understanding it, none to not many of them even belong to a union. That's also an "estimated" figure. I live in NASCAR territory and I have many friends that work for the big 3 as well. Many NASCAR workers are being laid off as well as friends in the auto industry even before these recent developments. To them, this is not a joke. It's their livelihood, their credit and an immediate impact on the families that they have to support.

Personally as a fan of NASCAR and the professional racing circuit, I think that NASCAR as a whole is in jeopardy as well because of the fact that it has been an AMERICAN sport. I wouldn't want to go see Toyota's, Honda's, Suzuki's and Nissan's racing for the cup. F that. It won't be an American sport anymore. :mad:

treitz3

The first of a wave of things to happen.........

http://money.cnn.com/2008/12/12/autos/gm_cuts.ap/?postversion=2008121212

21 factories will be temporarily shut down in North America - GM
"The move affects most plants in the United States, Canada and Mexico. Many will be shut down for the whole month of January." Chrysler is rumored to announce similar actions later today. Merry Christmas workers! :rolleyes: :mad:

polkatese

If everyone agrees that this is a crisis, how come they can't unified their perspectives to agree on one solution? let's shutdown the COUNTRY!.:rolleyes:

mhardy6647

I am no fan of the UAW, but the primary problem is that those three US automakers (begging for money to keep the doors open, not to compete) just plain don't build products that (even!) the US market wants to buy. That isn't the UAW's fault. It is the fault of the sedentary management of the "Big 3". The price premium of US union labor wouldn't be an issue if the product were desireable.

I say this as owner of three "US brand" vehicles... products of the one US car company who started selling off their assets soon enough that they don't (yet) have to go to the US government (i.e., the US taxpayers) begging for methadone to get them by while they think about kicking their heroin habits.

I think it is a damn shame that the US car industry (like the US hifi industry in the 1960s!) is crumbling.

mhardy6647

Thomas Friedman crystallized the fundamental issue of the bailout rather nicely in the NYT earlier this week...

As I think about our bailing out Detroit, I can’t help but reflect on what, in my view, is the most important rule of business in today’s integrated and digitized global market, where knowledge and innovation tools are so widely distributed. It’s this: Whatever can be done, will be done. The only question is will it be done by you or to you. Just don’t think it won’t be done. If you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, because someone in Denmark or Tel Aviv will do so a second later.

Because someone in the mobility business in Denmark and Tel Aviv is already developing a real-world alternative to Detroit’s business model. I don’t know if this alternative to gasoline-powered cars will work, but I do know that it can be done — and Detroit isn’t doing it. And therefore it will be done, and eventually, I bet, it will be done profitably...

Do not expect this innovation to come out of Detroit. Remember, in 1908, the Ford Model-T got better mileage — 25 miles per gallon — than many Ford, G.M. and Chrysler models made in 2008. But don’t be surprised when it comes out of somewhere else. It can be done. It will be done. If we miss the chance to win the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there will be no one to blame more than Detroit’s new shareholders: we the taxpayers.

treitz3

They have made their share of mistakes and in the past two years they have been restructuring within their means to compensate. That said, let me quote something I said in a discussion earlier on,

"Also, I'd like to point out that while some of the automakers have made mistakes, was it their fault that the economy tanked so quickly? No, it was the action and inaction of our elected officials that led to the housing collapse and consequent credit freeze that has shot sales down dramatically. It's not funny at all to me that our elected officials are now taking the high road and dangling a steak to the same companies that if they had done their job and prevented our current economic status, probably wouldn't be looking at the steak to begin with. At least that's how I see it, you may think otherwise."

The GM CEO even pointed this out on the hill hearings. He said that if you had come to the big 3 and said that the amount of loans given and the amount of sales affected would total the reality of the past couple of months that there would be a 1% chance of that happening. Based upon the last 50, 60, 70 years? He was right. Were they prepared for something like this to happen? No. Have they made mistakes? Yes. Is it ALL their fault? No.

Let me ask you this. Are you currently prepared to take on a 40% drop in income due to things that you have no control over? If you are, bless your heart you have done good. If you aren't, then while you have made your mistakes and were previously doing well, should we blame you? Due to this economic downturn that seemingly happened overnight [in a manner of speaking] many people, corporations and even previously sustainable businesses all got caught with their pants down. Even the foreign manufactures are getting hurt.

If you took 30-40% of your household income out within 3 months time frame, would you not be asking for help? I thought so. Now, how would you feel if you were asking for the same steak that Uncle Sam is dangling in front of the US automakers and they took it away saying that it was YOUR fault?

PhantomOG

treitz3 wrote: »

If you took 30-40% of your household income out within 3 months time frame, would you not be asking for help? I thought so. Now, how would you feel if you were asking for the same steak that Uncle Sam is dangling in front of the US automakers and they took it away saying that it was YOUR fault?

The same bad economy that's hurting auto sales is affecting every other business sector as well. Why don't they need handouts?

And no, I would not be asking for help. I'd be busting my **** finding work to make whatever amount of income I feel is necessary.

ND13

They are not **** handouts. They are LOANS. Which the gov can revoke at anytime. Most, if not all, the foreign car companies are subsidized by their nations.

mhardy6647

The UK pumped a lot of their taxpayers money into what was then British Leyland.

http://www.nytimes.com/2008/11/18/business/economy/18car.html?scp=1&sq=british%20leyland&st=cse

British Leyland, a car company that went through £11 billion of inflation-adjusted British taxpayer money, or $16.5 billion, in the ’70s and ’80s before going out of business. All that is left of the company now are memories of cars like the Triumph, and a painful lesson in the limited effectiveness of bailouts...

“The British Leyland experience is a relevant and cautionary one,” said John Casesa, a principal in the automotive consulting firm Casesa Shapiro Group in New York. “The government got in the business of trying to make a winner out of a structurally flawed company. That’s the risk in the U.S. as well.”

In contrast (as the above-referenced article notes), government/industry ties in Europe (the Continent) have been more productive and successful.

Face

Paycut vs. Jobless...tough call.

Those UAW reps better hire some private security.

tcrossma

GM and Chrysler have been losing a lot of money for an awful long time. This recent crisis might have pushed them over the edge, or it might just have been the prime time to hold out their hand and ask for money and blame their fall on someone else, I don't know.

There have been downturns before, and bad times before, and a well-established GM or Chrysler that had been making good cars and good money over the years would have been able to survive this. But they haven't been making any money, and they haven't been making good cars, and therefore they can't survive.

I'm somewhat torn on the auto bailout. From a business perspective I think they should be allowed to die. But $15 billion, while a ton of money, is small if it allows their death to be timed so that the country can recover from the other economic crisis' first.

Just my 2c.

ND13

Unions suck, but if we let them go under, it WILL eventually affect everyone that's not independently wealthy. It'll just take longer to reach some homes than others.

If it had hit you at home like it has in the area where I live, you'd be singing a different tune.

ND13

Early B. wrote: »

Screw 'em. I got a business and I need a bailout, too. We're not talking billions. Just a million and change will do.

Does you business affect millions of jobs and families and will cause a major fallout on the economy as a whole?

mhardy6647

tcrossma wrote: »

But $15 billion, while a ton of money, is small if it allows their death to be timed so that the country can recover from the other economic crisis' first.

That's a good point.

maggiefan

There has been car manufacturing here for over a hundred years, now this....Lansing, MI.

UPDATED 1:35 PM - GM will shut down all Lansing-area production in January as it battles deteriorating market conditions

Thanks UAW

tommyboy

mhardy6647 wrote: »

That's a good point.

Yes, 15B is not that much for the government to hand over, but thats not the point. Why should the government give them money if they aren't going to change and throw that 15B down the tubes. I'm no economist, but the fact is, consumer perception and union stubborness are just a few reasons for the big threes downfall. I don't want to seem them fold, no one does, but they can't just blame the bad economy for their troubles. They are still a business and if they are struggling to make money, they need to look at themselves to find incentive to succeed, not just take money from others.