$14B auto bailout dies in Senate

sucks2beme

If you added the union price cost to the price of every Toyota or Honda sold in
the U.S they still would be selling over most big three cars.
Union cost cuts would help a lot, but crappy management is crappy management. Other than the impact on economy, I would say let GM crash. Unless all parties at GM change, there would be no improvement.
Everyone that I know that likes the big three buy rear wheel drive.
Until very recently, front wheel drive small and mid sizes were crap. There have been some models that break this mold, but until they embrace that the future is FWD, dependable, and more fuel saving, then all is lost. We can't all go back to driving Caddies, Suburbans, and Hummers. That sales sector is dead. Even Toyota got burned by trying to go big, they lost a bundle on their full sized trunk venture.

treitz3

PhantomOG wrote: »

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

A lot of them do. Let again remind folks that it's not a hand out. It's a loan.

Like I have said before. Either we pay for their loan or we pay for the funeral. The funeral will cost you and I multiple times more money. I don't see why people don't get that. It's about as stupefied as the unions not realizing that they need to yield or they lose the jobs altogether. What is it with people today?

Airplay355

I don't really know a lot about economics so bare with me.

How does letting those people lose their jobs effect me? I'm not competing for jobs in the same market so it wouldn't be harder for me to get a job. What goes on when all those people lose their jobs?

Don't attack me, I'm not trying to say it's no big deal, I just don't know what happens.

PhantomOG

treitz3 wrote: »

A lot of them do. Let again remind folks that it's not a hand out. It's a loan.

Like I have said before. Either we pay for their loan or we pay for the funeral. The funeral will cost you and I multiple times more money. I don't see why people don't get that. It's about as stupefied as the unions not realizing that they need to yield or they lose the jobs altogether. What is it with people today?

And you don't think a "loan" now won't be called for again multiple times again the in the future? I think that kind of wishful thinking is "stupefied". They already know they'll be back for more money next year. And then the next year. And so on and so on.

markmarc

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.

Everybody better take a step back and ask at what cost will allowing GM and Chrysler to die will cost the taxpayers long term. I'm telling you right now it will be in the hundreds of billions. The gov't insures the pension plans, think of that cost over 20 years? then you have billions pouring into those area to try and bring in new businesses? Short term costs: Unemployment benefits, gov't sponsored works projects, increased crime and the associated costs of prisons.

I'd much rather give the big three 50 billion in LOANS and let them continue to create jobs, then have the gov't spend so many times more that will affect far fewer people positively.

People **** all the time about the loss of manufacturing jobs, well, here is a serious tipping point. Do we finally start to save ourselves, or continue to rescue the rest of the world and crumble economically from within?

I'd much rather role the dice with the big three now, then face the obvious financial sinkhole by doing nothing. $500 billion on Iraq versus $15 billion now and $35 billion later on America. I know how I'd vote.

ND13

You're my hero.

treitz3

Airplay355 wrote: »

How does letting those people lose their jobs effect me? I'm not competing for jobs in the same market so it wouldn't be harder for me to get a job. What goes on when all those people lose their jobs?

Having taxpayers to pay for millions of workers being unemployed. Lots of unemployment to go around that will give an "employers market", possibly causing the loss of your job due to being able to get someone else who is unemployed at a better rate. More expense with maintenance and loss of value if you own an American vehicle and all of the American dealerships in your town going belly up.

Not to mention your city, town and states loss of revenues due to less tax revenue from automobile sales, foreclosures and the like. Loss of public programs at all levels as a result and this is just the tip of the iceburg. There are are already towns, states and municipalities that are on the verge of going belly up. This would just seal the deal. If that happens, no ambulance services or cops to protect you would be available. The ripple effects will hit [I would say] an estimated 95% of American homes in one way or another. These are just a few of the examples right off the top of my head. Some are extreme, but then again some will be a reality.

ND13

You're right as rain treitz3, and that's just the tip of the iceberg. Like I said, it'll just take longer for certain areas to feel the affects than others.

treitz3

PhantomOG wrote: »

And you don't think a "loan" now won't be called for again multiple times again the in the future?

No and yes. It depends on the individual situation. The company my wife works for went to take out a 2 year loan to float all bills in case the economy got worse just as they did in '91. With the credit markets frozen, even with immaculate credit they could not get the loan.

They had 16 employees and now are down to 6. One being him and another being his wife to handle the accounting. So actually he only has 4 "employees", luckily including my wife. I'll leave it to you to drum up what will happen next if it gets worse. Yeah, some of us do need help. My company included and I work in a previously recession proof industry. I'm quite sure I'm not getting paid due to the corporation that I have rendered my services too not being able to receive credit with the frozen credit markets as well. This has caused layoffs that I have had to do as well. The ripple effects of this down turned economy are staggering and yes, some of us could use some help. Including the automobile industry.

obieone

Would you buy an American car that got 50 mpg??? Well you can.......
IF you live in Europe!

http://sci.tech-archive.net/Archive/sci.energy/2008-07/msg00001.html

The reason they CAN'T make those cars over here & sell them is because of COST and govt. restrictions.
NOT trying to make a political statement, but, the SAME govt. oversight that caused these standards are gettin in the WAY!!!
AND the UAW are causing them too much COST to make these cars here.
Therefore, THEY can't have their cake and eat it too.

AsSiMiLaTeD

I'm with the Senate on this one. I'm all for the bailouts, given that things change. One of the things that has to change is in the hands of the UAW. if they're not willing to make a change, then tell me why would I put my money into something that I know is going to fail.?

madmax

I heard a good scenerio on the radio the other day. It was said the average union wage was 46/hr while the average non-union wage was 28/hr. (forgive me if I don't remember the exact figures). The question was asked, should the government (using taxpayer money) subsidize the 46/hr people with the money from the people who make 28/hr if they are not willing to take a wage cut? I thought that was a good way to look at it. Also, I do not think it is a loan. You only make a "loan" when you are confident it will be paid back.
madmax

sucks2beme

I just looked at this month's Hot Rod issue.
The only thing GM has to offer me in 2009 is the new Camaro.
Wow. Now that I might take a chance on.
The baseline 3.6L motor is rated for 300HP and 27 mpg on the highway.
Only now do they finally pull their head out of their arse.

Hawkeye

I also do not believe it is a loan. This money will never be repaid to us just like the first 700B. I would say the first 15 B is the first installment of many to come. The British tried this with British Leyland and it did not work then and it won't work now. Those who do not read history are doomed to repeat it.

Somebody asked if we could survive a 30-40% reduction in pay. I know I could. I'm from the old school of not overextending myself and living below my means to leave a cushion. I bought a house at the top of the bubble as I'm sure many did. However, I did not buy the 400K house that would have strangled me. Instead I bought a house for 125K for my cushion factor.

I also do not mind buying goods made in the USA and paying a premium for the labor. There just does not seem to be a lot made here anymore. I do not think the UAW should be the only goat in this fight. There is plenty of blame to go around. There has to be some give and take between management and labor. If labor needs to give up 25% then everybody needs to give up 25%. Then of course the big 3 actually need to build a car or truck that people will buy.

My last thought is if we give them the money, which we will, how is that going to stimulate people to buy a product that a lot of people do not want? If they do not sell cars, how are they going to repay the loan/bailout?

Gordon

PhantomOG

Hawkeye wrote: »

My last thought is if we give them the money, which we will, how is that going to stimulate people to buy a product that a lot of people do not want? If they do not sell cars, how are they going to repay the loan/bailout?

Gordon

That's the problem. No one seems to care that the bailout will in no way turn unprofitable businesses around. They only care about the doom and gloom scenarios about all 3 shutting down. I don't think they will shut down. But they need to go into bankruptcy to kill off stupid union contracts. Let the government take the hit on the pensions. But just by feeding the monster more money, we won't be doing anything but digging a bigger hole for ourselves in the future.

BeRad

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.

You are damn right. It takes 2 parties to sign a contract.

markmarc

Their is plenty of blame to go around, to target the UAW way beyond management is short-sided. Management agreed thru collective bargaining to the current contract.

The economic meltdown was caused by foolish political grandstanding on both sides, Dumbass financial policies i.e. Wall Street self regulation by Greenspan, failure to rid the loan system of outdated regulations, and general failure of americans as a whole to live fiscally responsible lives. All these factors has severely punished thousands of businesses across the country, placing over a million workers in financial hardship via unemployment. The fact that these same politicians can sit and blame Detroit for all the auto problems is a joke.

tommyboy

treitz3 wrote: »

Having taxpayers to pay for millions of workers being unemployed. Lots of unemployment to go around that will give an "employers market", possibly causing the loss of your job due to being able to get someone else who is unemployed at a better rate. More expense with maintenance and loss of value if you own an American vehicle and all of the American dealerships in your town going belly up.

Yes, thats understandable. But is the reason this is occuring is because of the economy or because of bad business. It just seems they are using the dwindling economy as an excuse for their incompetence . They should not get this money unless they do some major restructuring of their companies, including a rate cut of their employees.

Jstas

obieone wrote: »

Would you buy an American car that got 50 mpg??? Well you can.......
IF you live in Europe!

****.

http://www.autoblog.com/2008/12/09/autobloggreen-gets-43-1-mpg-in-the-2010-ford-fusion-hybrid/

We're in the City of Angels this week to drive a bunch of new Fords, including the new 2010 Mustang and Fusion. We started off Monday afternoon with a mileage challenge in the new 2010 Fusion Hybrid. We can't share our driving impressions until Saturday, but we can tell you the results of the mileage contest. Ford hybrid applications manager Gil Portalatin used his intimate knowledge of the car to set some benchmarks the day before. Ford claims the Fusion will get at least 39 mpg city/ 37 mpg highway when the EPA numbers are calculated in the coming weeks. Portalatin got 46 mpg on the first segment of the drive route and 43.5 mpg on the hillier second part. Among the journalists on hand, Car and Driver's Steve Siler recorded a 43.6 mpg result on the first part. After Drew Phillips and I switched places for the second segment, I achieved 43.1 mpg, which is a very impressive number for Ford's new mid-size sedan.

That's a mid-sized sedan from Ford getting 43.6 MPG and you can buy it next year as a 2010 model. If Ford has the money to get it to market that is. If Chrysler and GM go under, Ford will likely fall from the fallout.

But, again, this is just more evidence that most people who oppose the bailout LOANS have no clue what they are actually talking about. I'm tired of repeating myself and quoting actual experts. Let the mis-informed naysayers and media pundits with no clue keep at the game. It's obvious that the collective intelligence in this country has fallen below "impressionable teenager" level. I'm done. No matter how many actual facts get thrown in to the mix, the same ill-formed arguments based on broken logic and myths keep resurfacing. I don't have the energy anymore. I gotta go worry about my own financial future when these companies **** the bed. Y'all have fun arguing about it.

treitz3

Hawkeye wrote: »

Those who do not read history are doomed to repeat it.

Just a thought to throw out. I seem to recall the same things being said about Chrysler shortly before Lee took over. That loan was paid back way before it's terms dictated that it be payed back.

IMO, the lawmakers should just make it law that unions can not be involved if a taxpayer loan is to be made. That won't happen but I'm surprised that it hasn't been proposed as part of the loan/bailout package.

Besides, less than half of the TARP funds have been allocated with 85 billion [out of the 700 billion "spent"] just sitting there in limbo as reserved funds. All of the rest of the TARP money is still untouched. It's not like we have blown it all with nothing coming back. Investing in the stability of the American financial market is obviously a good thing and a necessary thing. Investing in American manufacturing IMO is also a good thing and it's not like they would need to tap into another program other than what has been allocated for TARP. The $$$ are available, they just need to be spent wisely.

I'd also like to point out that WAY more money than what the automobile manufactures are asking for was given to financial companies such as CitiCorp when they didn't even ask for it. Where is the logic in that? IIRC didn't they get 200 billion? They didn't even NEED it, but they got it anyway. Follow the $$$ trail to find out the real answer to that one.

I would rather see tax dollars go to preventing the collapse of automobile manufactures than financial markets that have CEO's receiving tens of millions of dollars or more in parachute schemes or bonuses when the performance of the institutions have been horrible. We are faced with some difficult decisions and it's a shame that we are in this situation but I never thought I'd see the day when I wouldn't see a Chevy Corvette. A Ford or Chevy truck, the loss of Saturn [which DOES make fuel efficient vehicles] along with NASCAR racing nothing but ricers.

That day is creeping closer with every move the "elected" makes and with everyday that passes by with inaction.

inspiredsports

Market forces really need to be allowed to work. The whole crash was caused by politicians (can you say Barney) attempting to buy votes by mandating bad loans be extended to those absolutely unable to repay. At least Wall Street types work 80 hour weeks with no overtime and get fired when they f up. I've seen unions hold up 100K per hour testing by breaking a $1 light bulb. An hour to find union maint guy to bring the ladder so a union electrician (who is not allowed to get the ladder) could change the bulb. How can we possibly build competitively with that kind of monkey business going on. I knew other URW workers who played cards, watched **** or slept about 38 of 40 per week. Non union simply can't get away with that.

Absolutely the lawmakers should get out of this and make decent laws to protect overall business in this country.

MillerLiteScott

The Big 3 also got into the money loaning business. Ford Credit, GMAC and whatever Chrysler calls their credit department. Now they have A LOT of people defaulting on their car loans/leases for cars they probably should not have bought in the first place and now they are turning in or having their cars/SUV/trucks repossessed that in todays world are not worth much.

The big 3 credit companies were not banks and did not have to work under the regulations that a normal bank had to work under and now all three are scrambling to convert their credit companies to be a classified as banks to get the governmental protection that the government offers.

This is similar to the housing market collapse. They should have stuck to building cars if you ask me.

By the way. I have a British Leyland produced vehicle in my garage and 9 out of 10 people of college age and under do not even know who made my car. I have had people ask me. What kind of car is that? I reply Triumph.
And they ask me. Who made it? That is after thirty years. So take that for what it is worth.

Enough Blah Blah Blah from me.

Scott

Hawkeye

treitz3 wrote: »

Just a thought to throw out. I seem to recall the same things being said about Chrysler shortly before Lee took over. That loan was paid back way before it's terms dictated that it be payed back.

And here they are back asking for more. Maybe we should budget bailing/loaning them all out again in another 20 years. Did anybody learn anything over the past 20 years? Obviously not.

Gordon

Hawkeye

MillerLiteScott wrote: »

By the way. I have a British Leyland produced vehicle in my garage and 9 out of 10 people of college age and under do not even know who made my car. I have had people ask me. What kind of car is that? I reply Triumph.
And they ask me. Who made it? That is after thirty years. So take that for what it is worth.

Scott

Scott, I've got a 76 TR6 in the garage with 32000 miles on it and a 59 TR3 in 1000 pieces. Ever hear "Is that a MG" or "never heard of Triumph"?

Gordon

hockeyboy

The Union needs to be broken at some point for this to get fixed. Congress finally got something right. We can send the Car Czar in and expect him to work with a Union who is unwilling to realize the wolf is at the door. I believe all of those people can be offered very good jobs building car 2.0.

MillerLiteScott

Hawkeye,

I either hear what kind of car is that or I have not seen one of those in 20-30 years.

My point is how (relatively) quickly a manufacturer is forgotten.

I seem to remember you being in MD?

As far as the unions. I don't think they are needed anymore because we are to PC of a country to do the things that used to be done by employers that caused the need for labor to form unions for their protection. Screw the unions and let the big 3 hire the people in the union as non union employees. They can chose between having a job or not themselves. That's all I have to say about that.

Scott

mrbigbluelight

By Julie Hirschfeld and Ken Thomas, Associated Press:

"Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs. GM says its total hourly labor costs are now $69, including wages, pensions, and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.

So, apparently, the average Toyota worker and the average UAW worker are paid approximately the same hourly wage.
The killer ? Apparently the pension and health care costs.

From what I understand from my S-I-L who is still employed at the Chrysler plant in Fenton, Missouri, Chrysler picks up the entire health care tab for employees.
This, apparently, is not the case for the Toyota worker.

My last paycheck:
My contributions for health care: $179.84
Employer contrib for health care: $463.66
TOTAL HEALTHCARE PREMIUM : $643.50.

That's per pay period (2-weeks).
That's $5.80 per hour cost on the employer.
That's $2.25 per hour cost on the employee.
That's a total cost of $8.05 per hour.

Assuming the local UAW healthcare costs are approximately the same, than the average hourly UAW worker making $29.78 per hour + $8.05 healthcare cost per hour = $37.83.

That leaves $31.17 per hour difference that apparently covers the pension costs of active and 432,000 retirees and spouses.

I'm no mathematician, but that's a pretty hefty figure: a charge of $31.17 per hour for every working hourly UAW employee to cover costs.

shadowofnight

Why doesnt the government give US the money as a stimulus check cashable only at the car dealership during the purchase of a new automobile from the companies included in the bailout ?

Can you imagine how much per person that would be after they decide on a final bailout amount :eek: If you dont use your car purchase stimulus check in a designated timeframe , the check is voided and the funds go straight to the auto company.

With all these **** bailout handouts ( So called loans :rolleyes: ) going on lately, its not so far fetched...talk about a win/win.

obieone

Does anybody remember the years right after the loan to Chrysler? The govt. bought Chrysler vehicles almost EXCLUSIVELY.

ND13

I was in the Air Force at that time, and those Chrysler vehicles seemed to get the job done quite nicely(at least where I was stationed). They were also bought at DEEP discount, not for some huge profit as your typing tone might suggest.

It was funny to see a 4-star General being driven around in a 600 or Diplomat.