American Auto Industry
Have any of you been keeping up with the news on the big 3? I'm personally torn on whether the government should bail them out or not. But I don't want to see millions of Jobs go down the drain, especially in times like this. The $15b didn't make it thru senate with only 52% of votes for it (needing at least 60). So now! the government may be forced to help the big 3 with the $700b TARP money. Here is a bit more info on it.
http://www.autoblog.com/2008/12/11/bailout-bill-likely-to-fail-in-the-senate/
http://www.autoblog.com/2008/12/11/senate-fails-to-approve-automaker-bailout/
http://www.leftlanenews.com/report-white-house-may-be-forced-to-rescue-big-three-with-tarp.html
Seems the news also affected many world markets, mostly countries supplying the raw materials
http://www.autoblog.com/2008/12/11/bailout-bill-likely-to-fail-in-the-senate/
http://www.autoblog.com/2008/12/11/senate-fails-to-approve-automaker-bailout/
http://www.leftlanenews.com/report-white-house-may-be-forced-to-rescue-big-three-with-tarp.html
Seems the news also affected many world markets, mostly countries supplying the raw materials
Replies
Spark
What do they pay them to do? They don't do anything, they just show up and get payed, without working, for four freakin' years!
The average cost of their workers is over $70/hour, whereas other successful auto manufacturers have an average of $40/hour. Unions served a purpose, but for the most part, they are an old tumor that needs to be removed.
As Jim Cramer said about a year ago, GM stopped making cars a long time ago, they now just provide healthcare.
:poly125:
What really pisses me off is seeing people online who want to see the CEOs suffer, so they don't want these LOANS to happen and for the Big 3 to go bankrupt. Why would you want to make the whole company and all the suppliers suffer because they have dumbasses in charge. I was fine with the suggestion of ousting Rick Wagoner from GM, but the company should still get the loan. It's very apparent here in Michigan how tightly the auto industry is tied to the economy.
The other irritation is this asshole from Alabama whose state has vested interest in protecting foreign manufacturers, like Honda and Hyundai. He is determined to stop this loan from happening.
And why is it that the big 3 have to jump through hoops for this money, while they just keep dropping dumptrucks of cash to the banking industry... who have continued to waste their money away? This is a LOAN not a bailout. It's not free cash. I could understand more anger about free cash, but not a loan.
Eidt: Damn, took too long to post.... I agree about the unions. What the news isn't stating is how the union has already taken concessions this year, so the number you guys are posting are slightly out of date. They still are unrealistic compared to other manufacturers, but the union has made adjustments. I agree that they need to do more though. The mindset of the union employee is a tough one to crack. The union today is not like the union from the beginning of unions
Im sorry but that hourly figure of $74 an hour is a lie,its utter bs. Average auto workers do not make that much an hour. That figure was put out there by a New York Times reporter with shit math skills and it was quickly picked up as a GOP talking point. Ill repeat it again,no auto worker makes that much an hour. The fact of the matter is that the UAW has already taken pay cuts in the past as well as benefits and why should these people suffer because of the the shit products their management have pushed into the U.S market.
http://mediamatters.org/items/200811220004?f=h_top
Blaming the auto workers for the shit desicions of the CEOs of the big three is a total canard. Instead of cheap little gimmicks like making $1 an hour how about these CEOs make plans to retool their companies to make cars people want to buy like electric and electric hybrids. THe UAW has made its mistakes mind you but thelions share of the blame needs to be placed squarely on where it deserves to be and thats with management.
Another one of those brilliant management decisisons. The big reason foreign auto carmakers are destroying U.S auto makers is because they are making better more fuel efficient cars.
If your going to bailout these big 3, then ask yourself one thing. How are they going to sell these new cars when more and more Americans are losing their jobs and cant afford to buy a car? So you will have less and less of the population buying cars. I just dont see the point when you wont have any buyers of this product?
Did people even think of that?
Now of course people think the CEOs deserve it and they should go bankrupt. Then there are those who say they deserve to get the bailout. For the ones who think they deserve the bailout is cause it is in your best interest cause itll keep you from going jobless. As for the others they dont care if it goes bankrupt they just dont want to give their tax dollars away.
Everyone has their argument on this crap, and I personally dont see any bailouts helping anything here... America is just going to keep getting worse and worse and worse. Im not being negative I am just saying what will happen.
I personally didnt like the fact tho the CEOs all showed up the first time in separate private jets to talk about their needs.
I say help the people... we are the ones who bust our asses paying for every god to known tax. We pay for every single thing and yet we dont get the reward like these rich CEOs do. Its us the people who do all the work.... stop helping them and start helping the families of this country.... or else we will go bankrupt cause we wont have jobs to keep businesses running...
Sorry rant............
As the poster above me mentioned the fact they all flew in their private jets the first time shows you where management had their priorities.
Merge companies, and change how you do business and you might possibly stay around. That's what capitalism is about supply and demand, if the demand isn't there you don't get the right to continue to supply and overflow the channels and now you have a surplus and no demand and want our money? Big FU to that.
Spark
And to clear up those salary numbers, most line workers make around $20/hr, but when you add in their other compensations, like vacation, medical insurance, pensions, etc... Those same numbers could be calculated for anyone's job.
Again, bankruptcy will hurt this economy way more than you can even imagine. 4.5 million jobs are at stake here. It's not about teaching unions and CEOs a lesson.
DOW opens down sharply, President reconsiders tapping TARP funds
http://www.autoblog.com/2008/12/12/dow-opens-down-sharply-president-considers-tapping-tarp-funds/
Workers wages the straw that broke the automakers' backs
http://www.autoblog.com/2008/12/12/workers-wages-the-straw-that-broke-the-automakers-backs/
Well it isnt just fuel efficiency its also quality as well. American automobiles are not known for quality. Ive owned a used nissan i bought with 30k miles which ran better and required less repairs than the last new truck i bought which was a Ford ranger. The change you mention as well which they are undertaking is out of nescessity not choice,when it came to fuel usage standards in the U.S Detroit automakers have fought tooth and nail to keep mileage standards to 1970's levels as well as emission standards. In terms of fuel efficient cars their foreign competitors beat them to the punch.
I can agree that these jobs are important to the economy but i did not want to see them hand them over tons of taxpayer money without any sort of plan on how they were going to turn things around.
I see two ways they can do this first is fuel effcient/hybrid technology in cars and also manufacturing non auto related products. If President Elect Obama really intends to invest money in infrastructure to improve our roads,bridges,etc this will be a project massive in scale and will require alot of machinery to do so. Detroit can retool some of their factories to make these types of machinery to be used in this massive public works project that will hopefully come.
I think two of the automakers should go under, and take the consequences of bad business. Businesses end, and people lose jobs. That's life in a capitalist nation. Why should this situation be any different? If anything, give the money to the folks who lose their job, so they can comfortably find jobs elsewhere.
I hate watching TV. I hate it because of all the many commercials. Car commercials. Every 10 minutes. Buy this. BUY THIS! Look how awesome it is. Look how easily it does things you'll never do with it.
For decades, the automakers have been telling the people what they want, instead of giving them what they need. Only shifting to what is demanded when profit can be made. But still, they ignore long term goals. This is why they've fallen behind every other automaker in the world when it comes to efficiency.
There's a recent joke that starts with "The CEOs of the three major automakers drive to Washington in their company's best Hybrid vehicle...". The punchline is, they get less gas mileage than any Japanese hybrid. Knowing American CEOs, they were likely driving SUV hybrids. More realisticly, they took their jets. The questions is: why didn't they drive together. Why didn't they take the train? The answer is easy...and it's the reason why the failed automaker won't be changing their attitudes quickly enough if the government is throwing money at them. Is it likely that the companies will be using the funds to quickly restructure their plants, and boost production of "alternatives"?
I hate that the plan for selling more SUVs, is to make them Hybrids. They'll get an "amazingly fuel efficient" 20 to 25 miles per gallon.
Let GM and Chrysler, and their shitty cars, die. Let the suppliers of expensive, easily broken parts, wise up to a new model for business. Let the designers create engines that are easier to fix, or fail less. Let Ford keep doing what they do. Open the market to alternatives. And shift the countries backbone to something that's more beneficial in the long run. Hopefully the oil companies will soon follow GM and Chrysler.
I recently sold my Dodge car. I don't regret it. My gf's Dodge just died. Shitty cars. Not one of them makes the consumer report on reliability and satisfaction. I want a Honda. Until then, I have a motorcycle, or I take a train. And I carpool all the time! How un-American of me.
EDIT:Elysium worded it pretty well
I'm really a GM fan, even though I'm driving a foreign car right now (just renewed my Jetta lease with an '09). My wife's vehicle is a Pontiac Montana and it has 90k miles. It's just starting to have small issues. Prior to my last Jetta, I had a 92 Pontiac Bonneville, and when I sold it, there were over 150k miles on it. It still ran great, but the Michigan weather had taken it's toll on the body... plus I needed better gas mileage.
Dodge has been working on this:
About the issue of salaries and the $73/hour number, that's kind of correct. In terms of salaries and benefits, union autoworkers make about $55/hour. that compares to about $45/hour from non-union workers (employees as Japanese firms are all non-union.) The extra cost is what the Big 3 owe to their legions of UAW retirees. Every union man who retired from GM, Ford or Chrysler is entitled to a very good retirement package, way better than even current members will get, and far superior to the non-union crowd. Things is, those retirees from the 70s, 80s, 90s, etc keep piling up, while sales keep going down. In paying for the retirees as well as the current labor force, the Big 3 end up paying what amounts to about $73/hour.
I appreciate the concept of unions in principle, and they were certainly necessary once upon a time, I think it's clear the UAW is currently doing its members more harm than good. Eventually, the issue will be to make concessions or find new jobs when the American auto industry goes under.
On the other hand, those salaries aren't the reason the companies are going under. Basically, no one wants to buy American. While things are allegedly getting better, the Big 3 have earned the rep for selling an inferior product. Even if it's just a perception issue, it's putting car-buying dollars in foreign companies' pockets. The American companies really do need to get their shit together in terms of restructuring.
This also leads to the issue of why the bailout may be 'necessary.' In general, if a company goes bankrupt, they can restructure, get back on their feet and return to profitability sooner or later. Happens all the time in different industries and no one thinks anything of it. But the American auto industries have that giant perception issue to deal with as well, making bankruptcy survival that much harder. Say you're already not inclined to buy a Chevy. Now imagine how you'd feel about buying a Chevy when you know the company is going bankrupt. Doesn't matter what kind of sale they have, no one wants to buy a car that might not be able to get parts and service or lose it's warranty because the manufacturer went under. So where most industries can navigate a bankruptcy with success, the Big 3 might never recover.
I'm of two minds on how this should be handled. On the one side, I'm a big fan of capitalism - the cream rises, as they say. On the other, putting more hundreds of thousands of Americans out of work in the middle of the worst recession in a generation is not ideal.
Chrysler has a big pocket of cash that is Cerberus.
GM is the only one circling the drain.
Isn't giving money to people who can't pay it back what started this whole mess? If people who's job it is to loan money, won't loan themselves money why in the hell should we be expected to make the loan?
Yes its a loan, but a loan is only as good as the chance that it will be repaid. Otherwise its just money down the tubes. If we actually had the money and didn't have to ratchet up the national debt some more AND they had a clear path to profitability we should do it.
I consider the TARP money as good as gone, so it might as well come from that. Too bad they don't get to put strings on it... oh well.
Well, at least the cream that really gets off on money and status.
Yay, another hybrid for rich fuckers. Like the average american can afford a standard viper let alone a hybrid ffs.. this is the problem
If they can get the top end working great, then the tech should trickle down and it should be possible to convert it to cheaper forms for the masses. Tesla is planning on a geared down fully electric version for roughly 30k, well within the reach of most new car buyers.
If that happens you can count the Volt as antiquated technology along with the other hybrids.
Not that they need it but I'd rather see the money go to companies with a clean slate and very clear plan for success, like Tesla.
You took the words out of my mouth.
My Dad's a Buick Technician, so I feel for the workers, at the same time, is this money even going to make a difference in the long run?
It would be a massive hit to our economy if even one of the big three went out of business. If more than that, it would be catastrophic. Local dealers, part suppliers, various manufacturing and other peripheral smaller industries who are already struggling due to the credit crunch would be in deep shit.
So, allow them to keep afloat with some stipulations and oversight.
its a wonder that theyve been able to compete as long as they have saddled with the ridiculous fucking unions. every single car they make has an unseen $2000 extra cost included in production to take care of union pensions. plus this:
is fucking bullshit. seriously. what the fuck are they doing that they think they should earn over 123% more than people doing the same exact work in another sector? just me or does it seem like the unions have basically fucked the big 3 almost out of existence?
in case you couldnt tell im anti union. they had theyre time and place, but the government (in the US anyways) guarantees all the things that the union had to fight tooth and nail for. so if the government guarantees all the basic workers rights, and you have nothing to fight for....i guess you fight for more money, whether you need it or not. and essentialy sink your entire industry.
Honestly though, GM has been wanting to control their own dealerships. They don't own any of the current dealerships, and have contracts with those dealerships, preventing them from starting their own. I think GM realized a long time ago that the dealerships are part of their negative sales. Most American dealerships in my area treat you like shit, but the manufacturer can't do much about that.
BTW, I knew that Viper was unrealistic for most of us. I just thought it was a cool vehicle they were developing
http://www.leftlanenews.com/canada-to-pitch-in-20-percent-on-top-of-detroit-three-bailout.html
ps. making sport car hybrids is fukn retarted. They need to be making electric festivas or something ugly and dirt cheap.
I hope they know it's money down the wood chipper, but its for a good cause... so thanks.
And iirc the failed bailout has some concessions that the UAW didn't agree to, like taking a pay cut or facing a chapter 11 restructuring (which has the potential to kill off the union which they think is bad). The alternative they imposed was to take a minor pay cut in 2011 or 2013, years down the line with no real changes involved. This is one of those damned if you do damned if you don't type of situations because of how intertwined the auto industry is with the economy, but I'd rather just see that money given out to help people in more direct ways across the country than blindly throwing money at a market that has a botched and bloated business model.
Oh, wait. 56 trillion? no way!
Yep. That includes medicare/medicaid, Social Security checks and such, and all those other things along with our Debt to other countries (I think only 11 trillion.. haha, only)
But yeah, as you can see, we owe OUR OWN PEOPLE more than we owe other countries, so our country will really go to shit when those Baby Boomers start to cash in those social security checks... Fun stuff!
Check this out to learn where our debts all come from:
http://www.youtube.com/watch?v=O_TjBNjc9Bo&eurl=http://truthoffering.squarespace.com/economics/&feature=player_embedded
It's amazing how our country let it get this bad, and yet willingly continues to make it worse.
This Bailout is just another example of why our Country, at this point in time, does suck.
-Andy
Non-english people represent! Longscale numbers for life.
For those who don't know: English-speaking countries (mostly) apparantly don't like words ending in 'illiard', so they just made billion etc... scoot ahead.
(I'm talking about the media and the people who generated those numbers, not anyone here in particular)
It's also important to note that figure also includes benefits to 1st, 2nd, 3rd generation retirees. So it even factors in benefits the workers of today have. I'm not sticking up for the unions, because they are partly to blame, but really as a company they shouldn't make promises they can't keep, or deals they know will drive them under, just like they shouldn't design cars no one will buy.
When their ad campaigns are really nothing more then:
"Buy American, or the commies win" (feel free update commies with whatever)."
&
"Buy American our pick-ups haul TONS of groceries. Literally 3.2 metric TONS of bananas, or a TON of dog food, or a TON of fertilizer, because the only thing bigger then your truck, is your lawn!"
&
"Because pavement DEMANDS 4WD, BIG TIRES & 2MPG!"
&
"Remember its not American unless it needs to be filled up 3x a week"
Cap their salaries at $1 million a year.. problem solved.