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The nation’s top auto executives are on Capitol Hill this week begging for a lifeline, but the request is just a tad more desperate for General Motors Chief Executive Rick Wagoner.
While it is almost impossible to predict what Congress will do about the industry’s controversial request for another $25 billion in aid, without federal action it’s likely that GM would be forced to file for bankruptcy protection, analysts say. A move like that could have a slew of side-effects, not least of which would be undermining car-shoppers' confidence in GM.
Earlier this month, the nation’s leading automaker revealed it is going through cash at a rate of $2 billion a month and will run out of money next year unless it receives an urgent injection of cash from Congress. GM was down to about $16 billion in cash and other available assets at the end of September, and the company says it needs a minimum of $11 billion to $14 billion to survive.
As the days pass and GM’s money burns away, a bankruptcy filing is a distinct possibility. Many analysts, commentators and even lawmakers have suggested that a Chapter 11 bankruptcy filing is the best option for GM. Under Chapter 11, GM would gain protection from its creditors while it reorganizes its operations.
Harvard economics Professor Martin Feldstein said Wednesday that bankruptcy might be needed for GM to get out of its current union contracts and become more competitive.
Making U.S. automakers like GM viable to become competitive again “is going to require restructuring the wages and benefits they pay to auto workers,” he told CNBC. “Whether that happens in bankruptcy or it’s done in another managed program, that has to happen.”
Proponents of letting GM go into receivership suggest that a “prepackaged” bankruptcy — one in which a company prepares its reorganization in cooperation with its creditors and implements it as soon as it enters bankruptcy — would allow the automaker to keep operating while it gets relief from its obligations, including its contract with the United Auto Workers union.
But GM executives and advocates for the company warn that a bankruptcy could lead to a disastrous Chapter 7 liquidation, under which the company's assets would be sold off through the court.
“This idea of a 'prepack' bankruptcy is pure fantasy,” Wagoner said in Senate testimony this week. “You’ve been talking about a Chapter 7 liquidation, which would affect the supply base, affect the other two [automakers] and ripple across this economy like a tsunami that we haven’t seen, and it seems to me like a huge roll of the dice.”
For Wagoner, any bankruptcy filing could cost him his job. If GM were to file for Chapter 11, creditors would gain new power in bankruptcy court, and they probably would look long and hard at the management team, said Douglas Baird, a law professor at the University of Chicago’s Law School.
“There’s a distinct possibility [Wagoner] will lose his job, but not because he has to,” Baird said. “The company’s creditors are the ones that own the company, and they might decide he’s the cat’s pajamas, but you might also find a lender to finance the turnaround that says, ‘I’m willing to lend, but not if he’s the CEO.’”
A bankruptcy filing would not mean that GM immediately ceases operations. Typically, a Chapter 11 bankruptcy gives a company “breathing room” to work out its affairs and implement a new business plan, according to Baird. Workers can still go to work, consumers can still buy cars and get them serviced, and dealerships can continue to sell them, he said.
“You don’t just shut down and throw the asset away,” he said. “You continue to run it, but you tell the creditors they won’t get paid back in full for their investment, and you continue to operate the company as you restructure it and figure out its value.”
However, GM probably would face an extra dilemma in bankruptcy.
Typically, companies that go into bankruptcy need financing to continue their operations and meet customer needs, and GM would need a lot. Retailer Circuit City, for example, which recently filed for bankruptcy, successfully negotiated a $1.1 billion debtor-in-possession loan to keep stores open as it restructures. Lenders who provide debtor-in-possession financing to a bankrupt firm have priority over other creditors.
The concern is that in the current environment, few lenders would be willing to provide the $10 billion or more that GM would need, raising the risk of a “free-fall” bankruptcy, said Baird.
“It’s like jumping out of a plane without a parachute,” he said. “A company doesn’t have the cash to pay for its operations, and a bankruptcy judge just sells off all its assets. Companies usually do get the financing they need; even Circuit City was able to get a loan to continue operations. But there is some question about whether GM would be able to get the loan they’d need.”
In a free-fall scenario, a bankruptcy judge would determine which parts of the company should be sold to pay its creditors, Baird said. Creditors are paid on a priority scale, and common shareholders are at the bottom of the list so they typically receive nothing. Creditors at the top of the list usually take a haircut, receiving, say, 50 cents on each dollar invested.
Most important for GM would be trying to hang on to its customers, Baird added.
“You need to put in place a system where car owners’ warranties are protected,” he said. “When people buy a car they like to think a warranty will still hold in four or five years’ time. It’s different than using an airline that’s bankrupt; as long as the flights get you to your destination and back, you tend not to care what happens to the airline after that.”
It’s quite feasible that another automaker — one in a stronger financial position, such as Honda or Nissan — would swoop in and buy parts of GM in a bankruptcy. Sales of subsidiaries often happen in bankruptcy, Baird said, but they typically represent a worst-case scenario.
The bankruptcy judge would gain enormous power, determining whether the company should be broken up and sold off or reorganized to emerge largely intact, said Baird.
GM executives say the company needs a bridge loan to get the company through the downturn until auto sales pick up. But others say GM, Ford and Chrysler have too many plants, their expenses are too high and they need fewer dealerships, said Baird.
“If you have a restaurant that serves bad food and no one comes to eat, that’s a business plan problem,” he said. “In that case, you need a day of reckoning, and that’s a particular story that some people think corresponds to GM and is consistent with what Chapter 11 bankruptcy can do; it creates an environment in which you can do the tough stuff of restructuring.”
A bankruptcy would also raise questions about the solvency of GM’s pension funds. In a bankruptcy, the government’s Pension Benefit Guaranty Corp. would be on the hook to fulfill GM’s promises to pay a monthly pension to its retired workers. GM and the PBGC are reportedly in discussions over the health of GM’s two pension programs to gauge the impact of a potential transfer to the federal agency.
“The question here is whether there is a shortfall in the funding GM has put aside for this, and the answer is we don’t know, but it would not shock me if the PBGC had to pick up shortfalls in their pensions,” said Baird.
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 | Bailout with a price: Chapter 11 bankruptcy | Associated Press | Wed Nov 19 | 6 |
 | A Practical Look at Chapter 11 For General Motors -- Analysis From Leading Economists | Voxeu.org | Thu Nov 20 | 1 |
| GOP's Bankrupcy law is makign this recession worse. | Business Week | Wed Nov 19 | 3 |
| More Americans slipping into bankruptcy - International Herald Tribune | International Herald Tribune | Wed Nov 19 | 0 |
| Detroit: If They Fail, Let Them | The Milwaukee Journal Sentinel | Tue Nov 18 | 0 |
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{"commentId":4131800,"authorDomain":"ocoeecabin"}
WOW, Somebody doesn't want this published. They keep deleting links and headlines; let's see if this one makes it to the posting.
Article title and Google search are: Refusing to be Muzzeld by LA AUTO SHOW, AFS Trinity pulls 150 mpg SUV..
{"commentId":4131800,"threadId":"423451","contentId":"2129044","authorDomain":"ocoeecabin"}
#51 - Wed Nov 19, 2008 8:03 PM EST{"commentId":4131837,"authorDomain":"ocoeecabin"}
150 mpg a working reality in two test vehicles right now, NOT a Concept Car.
Detroit simply doesn't want to pay royalties. There arrogance is, "NIH, Not Invented Here".
{"commentId":4131837,"threadId":"423451","contentId":"2129044","authorDomain":"ocoeecabin"}
- 1 vote
#52 - Wed Nov 19, 2008 8:06 PM EST{"commentId":4131989,"authorDomain":"Peter17"}
Time to let these guys go under. The biggest losers will be management with all their stock and options. Yes, there will be plant closings and layoffs, but those are going to happen anyway. Use the $25 Billion to provide support to the blue collar workers who will be impacted. Take out the meat ax and get rid of 50% of GM dealerships and restructure your deal with the UAW and you might be able to compete.
{"commentId":4131989,"threadId":"423451","contentId":"2129044","authorDomain":"Peter17"}
#53 - Wed Nov 19, 2008 8:19 PM EST{"commentId":4132003,"authorDomain":"eonaka"}
To all of you union labor chest thumpers,
I realize that there is a place for organized unions in businesses. They do, for the most part protect the employee. But don't tell me without them you would be making minimum wages or the money you now make helps the merchant, the farmer, and every else. You make your money for you and your family, that simple, we all do. Your stubborn stance in contract negotiations in reaching for everything and then some (unlimited pay scales and "everything under the sun" benefit package), you ended up shooting yourself in the foot. At this rate, your pay is rapidly approaching $100 an hour and then some (???). You may have won the battle, but you lost the war. If you think this has no bearing on the state of affairs for you and your company, look again. I realize that this is not THE problem (there are many, like your execs pay/bonus package, which is a whole other story) but is part of it, sorry to say. So instead of part of something, many of you are looking at all of nothing. For those not in the UAW, its really hard to feel sorry for you. Good luck, though
{"commentId":4132003,"threadId":"423451","contentId":"2129044","authorDomain":"eonaka"}
#54 - Wed Nov 19, 2008 8:20 PM EST{"commentId":4132082,"authorDomain":"mudfloper"}
Complain about the unions and how greedy they are. While you do this, you can give up your breaks in that 8 hour day which you will no longer get to work. You will give up your lunch that by law you get, because these "rights" were gotten on the blood and backs of union workers. There are also alot of other "perks" you cash in as well. When you have stripped yourself of these union gained "perks", then you will be able to cry that we need to do away with all unions. Including your minimum wage.
So anyone who wants to get all over the unions on how greedy they are, remember, what you take for granted, a union worker busted hump and went through ALOT to gain for you.
But since this society owes nothing to the past work done for them remember a few other things as well.
Since America had lost the majority of it's steel manufacturing the cost of everything has risen. Why? Because we import it stupies.
And while everyone who wants to bash the American car manufacturer and loves to promote the forgien car manufacturer, remember this. You are the demise of American car manufacturing because you never supported your own people.
This Walmart mentallity has to stop. We have imported ourselves into a depression. We send money all over the world to prop up puppet economies. We have focused on the GLOBAL ECONOMY so hard that we didn't notice that we were going broke, or didn't care. It's easy to mortgage something because it's future money....no treal.
Our government gives perks to forgien companies for importing to us and asks that we support it. This same government puts more regulations on our home made products that we do the imports. So, we can't be cost effective.
Then we have the CEO mentality that has been going on for some time. These guys truly believe that they are worth the money they get. They could also care less what happens to regular people because they don't know any. It's their own private world which we are not privy to. What we need to do is get rid of them. Easiest method to assist the economy.
A cap on Corporate pay. Also, any managment pay and this will include perks, will be taxed as income (so that $20,000 plane ride to DC would be taxed as income). So the golden parachute in stock, taxed. The bonus money, taxed. Tax the heck out of them as well as capping the top pay....say.....10 times what the highest paid employee gets?
As for these golden CEO's deciding to leave America and move over to Europe to rape and pillage their population. I say to them the same mentallity they have for the average worker, any monkey can do your job.
Banannas are a heck of alot cheaper.
{"commentId":4132082,"threadId":"423451","contentId":"2129044","authorDomain":"mudfloper"}
#55 - Wed Nov 19, 2008 8:26 PM EST{"commentId":4132214,"authorDomain":"RICKAR"}
As one who works for a company that makes parts for autos here in the US I am torn as to the correct move to be made. If GM goes down there are many more people that will be out of work than this economy can handle. We don't sell directly to any of the Big 3 but many of our customers do. Once GM falls all their suppliers will go chapter 11 also. Then those that supply to the suppliers will also fall. I personally don't want to be standing in the unemployment line along with my fellow workers. And trying to figure out how to pay my bills without filing for bankruptcy myself.
But due to the greed of the coprorate execs. and also the unions the best thing may be chapter 11, so they can get their current operating expenses in line along with their legacy costs.
Flip a coin and pray llike hell.
{"commentId":4132214,"threadId":"423451","contentId":"2129044","authorDomain":"RICKAR"}
#56 - Wed Nov 19, 2008 8:37 PM EST{"commentId":4132517,"authorDomain":"nchekwube"}
If the CEOs allowed the pension funds to go unfunded, they need to be personally held responsible, which means they get to put their personal spoils back where they came from. The laws are already in place to deal with that problem.
As far as losing manufacturing - the lender for this bailout should call all the shots to make sure the new products are green, safe, well-priced, reliable,etc ... and that the profits stay onshore, mostly in the form of taxes, fair salaries, good benefits, and responsible corporate citizenship.
Our home-grown engineers are good, and, if the executives would stop fettering them, they could quickly engineer the cars we need instead of playing the planned obsolescence game, which results in parts that fail just after the warrenty ends.
{"commentId":4132517,"threadId":"423451","contentId":"2129044","authorDomain":"nchekwube"}
- 1 vote
#57 - Wed Nov 19, 2008 9:00 PM EST{"commentId":4132561,"authorDomain":"rokkitbrain"}
A great deal of debate has occurred recently regarding the proposed government bailout of General Motors Corp. and the supposed "bad decisions" which led that giant corporation into its present dilemma. We would do well to remember that this was not entirely the General's fault.
There was a time in this country when cars were designed in Detroit by people who felt passionately about them, and that passion showed up in their work. Then Washington made the mistake of listening to the insurance company bean-counters and the radical environmentalists.
Nowadays cars are designed in Washington by bureaucrats using Federal mandates. In light of the fact that bureaucrats can't run the country without making a mess, what in God's name made them think they could design a car?
{"commentId":4132561,"threadId":"423451","contentId":"2129044","authorDomain":"rokkitbrain"}
#58 - Wed Nov 19, 2008 9:03 PM EST{"commentId":4134921,"authorDomain":"2goldengrams"}
If radical environmentalists are at fault, how come there are no alternative fuel cars made by "The General." How come they are continuing to pump out gas-guzzlers which no one wants to purchase? How come states have to spend millions each year to keep their air clean? How come the only truly hybrid cars are made overseas. A car that gets 40-50 miles on a charge is certainly not a viable alternative for the American driver. It isn't even a viable alternative for a European driver. Who in heaven's name wants to plug their car in every night after it has only been used to visit a friend and go to the market? Perhaps the auto industry should have paid heed to the environmentalists. They were so beholden to the oil companies that they turned a blind eye to any sort of environmental revolution. Without EPA auto standards in place, our air would be like that of some of the Eastern Bloc nations and China. Is that what we want? I don't think so.
{"commentId":4134921,"threadId":"423451","contentId":"2129044","authorDomain":"2goldengrams"}
{"commentId":4132628,"authorDomain":"markesanchez-marke"}
What about the 25 billion already approved and budgeted for the auto industry. Bush says lets free this up and they can have this now. Then the Democrat side says no thats for them to redo their new product lines. Go figure that one out. More money can always be reapproved next year if it is warranted. SO here we have an issue over what should be a non issue.
{"commentId":4132628,"threadId":"423451","contentId":"2129044","authorDomain":"markesanchez-marke"}
#59 - Wed Nov 19, 2008 9:09 PM EST{"commentId":4132813,"authorDomain":"mudfloper"}
Actually Bush isn't interested. He and Paulson have their 700 billion to insure their futures. Since when would Bush care about anyone except Bush.
{"commentId":4132813,"threadId":"423451","contentId":"2129044","authorDomain":"mudfloper"}
{"commentId":4132637,"authorDomain":"j--rafol"}
The Big 3 will have a better chance of survival by filing bankruptcy. They will emerge smaller but profitable in the long run. Bailing them out and infusing money will not save them from the inevitable, it will just extend them by few months and who knows where else will that money end up with. With those golden parachutes tied to executive compensation, it's guaranteed they will take that along upon their exit. So no bailout and yes to bankruptcy.
{"commentId":4132637,"threadId":"423451","contentId":"2129044","authorDomain":"j--rafol"}
#60 - Wed Nov 19, 2008 9:10 PM EST{"commentId":4137317,"authorDomain":"susanhunter"}
But will they ever learn a lesson......I doubt it.
{"commentId":4137317,"threadId":"423451","contentId":"2129044","authorDomain":"susanhunter"}
{"commentId":4139949,"authorDomain":"j--rafol"}
Detroit never learn any lesson. Go back some 30 years, the oil crisis would have been clear message to them but they ignored all that. Bankruptcy is what is best for them.
{"commentId":4139949,"threadId":"423451","contentId":"2129044","authorDomain":"j--rafol"}
{"commentId":4132781,"authorDomain":"michaelarnold-contact"}
These guys are directly responsible for where we are. They were quite willing to manufacture gas-guzzlers right up to the point that it killed themselves off. They could care less about doing the right thing and building gas/energy efficient cars. They should die and die now...just like the electric car GM killed-off in the nineties. People were BEGGING to buy their demo/leased cars, but GM chose to repo and squash them all...all 4000 of them--to itty-bitty pieces.
SCREW all of them. I'll never buy from them again.
TRAITORS TO AMERICA!
{"commentId":4132781,"threadId":"423451","contentId":"2129044","authorDomain":"michaelarnold-contact"}
#61 - Wed Nov 19, 2008 9:24 PM EST{"commentId":4132826,"authorDomain":"mudfloper"}
Who bought those gas guzzlers when we knew in 1970 that the oil problem existed?
{"commentId":4132826,"threadId":"423451","contentId":"2129044","authorDomain":"mudfloper"}
- 1 vote
{"commentId":4133044,"authorDomain":"markesanchez-marke"}
That was the beginning in the early 7o,s. I bought a used Blazer in '73. It got 8 and 12/mpg until I put on a Hayes electronic ignition , headers, and made a few other mods. Boosted it up to 13 and 18/mpg. It was a very reliable vehicle; but during the gas crunch I also bought a rotary Mazda for family use and it got20 to 27/mpg. Plus it handled like a sports car. However, there is no excuse for U.S. auto cos. to not see by the mid '80s that it was time to change their outlook for the future. I agree with chapter 11 for them. For financing they can still turn to govt. aid after they have filed and started reorganization.
{"commentId":4133044,"threadId":"423451","contentId":"2129044","authorDomain":"markesanchez-marke"}
{"commentId":4133091,"authorDomain":"mudfloper"}
I used to have a Chevy Corsica. It was a mid size 4 door family wagon. It got 30+ to the gallon. Why did they quit making them? I would have bought another.
{"commentId":4133091,"threadId":"423451","contentId":"2129044","authorDomain":"mudfloper"}
{"commentId":4133514,"authorDomain":"markesanchez-marke"}
Of course I used to get some comments about driving a foreign car, especially when I moved into the mountains. Most everyone there was a Ford family, a Chevy family, or a Dodge family. So American attitudes did have more of an impact back then.
{"commentId":4133514,"threadId":"423451","contentId":"2129044","authorDomain":"markesanchez-marke"}
{"commentId":4134859,"authorDomain":"dustydragon"}
Mudfloper the Corsica came in two models, a 2 dr and a 4 dr sedan. never a wagon. Its comparable car today is the Malibu. The Celebrity came in a wagon model and was a decent vehicle. I still see those things all over the place down here in Florida where for years they, and the their sisters the Buick Century, Olds Cutlass Ciera and to a lesser extent the Pontiac 6000 models swapped back and forth with the Ford Crown Vic as the number one number two sellers down here untill they were dropped by the manufacturers.
{"commentId":4134859,"threadId":"423451","contentId":"2129044","authorDomain":"dustydragon"}
{"commentId":4132804,"authorDomain":"dfasci"}
I wrote letters to CEO's of these so called Big 3 since the early part of 1990's because although they have billions at the time and claimed that they would never go down because of so much money on hand, guess what? It took almost 20 years for them to go down. Billions flushed away. To this day, they still think that they are so good they can turn the whole thing around with $25 BILLION taxpayers money. I was in Las Vegas last month and Chrysler was selling 2 vehicles for the price of one, I just smiled and throw the paper in the trash. Mismanagement, flush lifestyle? Good things always comes to an end...remember that! Foolish mismanagement that would cause millions of jobs. America what are we doing to our country?! Two wars, our soldiers are still dying out there, hated by foreign countries, bankrupt, corrupt government leaders going to prison, we bailed out AIG who in turn took their executives out for a good time, deregulations that really messed up our finances, people lost jobs, homes, sending jobs across the borders and ocean. If we have nothing now would mean a bleak future for our children?
{"commentId":4132804,"threadId":"423451","contentId":"2129044","authorDomain":"dfasci"}
#62 - Wed Nov 19, 2008 9:25 PM EST{"commentId":4132893,"authorDomain":"Peter17"}
I heard a great suggestion on the news tonight. Let one or more of the Big 3 go into bankruptcy. Then they can sell off their assets. Perhaps Toyota, Honda and/or others will buy up some of their assembly plants and take on some of the UAW workers. Then we can get good quality cars we want at a reasonable price.
{"commentId":4132893,"threadId":"423451","contentId":"2129044","authorDomain":"Peter17"}
#63 - Wed Nov 19, 2008 9:32 PM EST{"commentId":4132911,"authorDomain":"mudfloper"}
Alright, we let the Beg 3 croak......they estimate that 1 in 10 jobs are related to the car industry. We are surviving the housing crash.....
Isn't it time to refocus and reevaluate what our priorities are?
Who is assisting that family with no home anymore. The bank owns it now.
Who is assisting that guy who is dying of cancer and took a baseball bat to get his cat back from the vet because he couldn't afford the bill.
Where is our humanity?
Or does it not matter when you're hungry?
{"commentId":4132911,"threadId":"423451","contentId":"2129044","authorDomain":"mudfloper"}
#64 - Wed Nov 19, 2008 9:34 PM EST{"commentId":4133215,"authorDomain":"iovinog"}
I am an Alabama transplant. I moved here 25 years ago when my husband transferred with GM. The locals resented us then and now. Three years ago the plant, then Delphi, bankrupted and my husband was forced to retire. Senators Shelby and Sessions are well aware of the fact that hundreds if not thousands of UAW retirees from GM/Chrysler and Ford reside in Alabama. Our pensions would be directly affected. We do not make exhorbitant salaries that are talked about in the news. The local newspaper touted how the collapse of the Big 3 would be to the betterment of the south. I was sick to my stomach. Is this not one America? Since when does one take pleasure at another's misery? Is this the Bible Belt? Do unto others? Shelby and Session think this is free market economy. They sold away everything they could to get a Toyota plant in Madison, Hyundai in Montgomery, Honda in Lincoln and their crown jewel, Mercedes in Vance. They have been cited for several work violations, including working off the clock. No, they don't like unions. They get everything for free. Free training. You train on your own time. No pay. The government pays for the trainers. Free land, free tax abatements, free infrastructure. In the meantime, the schools will be hard hit next year by financial shortfalls. They don't believe in helping auto companies. They need to say it right. DOMESTIC auto companies.
{"commentId":4133215,"threadId":"423451","contentId":"2129044","authorDomain":"iovinog"}
#65 - Wed Nov 19, 2008 10:00 PM EST{"commentId":4133288,"authorDomain":"ronyosh"}
LET THEM GO bankrupt. When they reorganize, they should impose strict restrictions on U.A.W. influence or maybe they can give the boot to the union all together.
{"commentId":4133288,"threadId":"423451","contentId":"2129044","authorDomain":"ronyosh"}
#66 - Wed Nov 19, 2008 10:07 PM EST{"commentId":4133555,"authorDomain":"markesanchez-marke"}
Thats the good side to chap 11. Those decisions are all overseen by a court appointed entity, including exec pay, perks and all financial outlays.
{"commentId":4133555,"threadId":"423451","contentId":"2129044","authorDomain":"markesanchez-marke"}
{"commentId":4133297,"authorDomain":"aircraftshop"}
Like many businesses that find themselves in trouble they get rid of the toys so, I suggest that the BIG THREE sell their fleets of Gulfstream Corporate Jets and at 50 million a crack that should buy some time.
I have a friend in MI and he told me that the management for GM is so out of touch of what's going on that within the last several weeks GM came out and mandated that no more overtime for wage workers.....well DUHHHHH, that's something Ford has been doing for the last 6 months. I have no need for the POOR QUALITY of a GM, FORD, Or Crysler product. At one time I was bullish about buying only products made in the USA however when those products are worse than what comes from China I snap my wallet shut....enough is enough....make a quality product and I'll buy it over anything made outside the US....and Yes I BOYCOTT any product made in CHINA and Wal-Mart!
{"commentId":4133297,"threadId":"423451","contentId":"2129044","authorDomain":"aircraftshop"}
#67 - Wed Nov 19, 2008 10:07 PM EST{"commentId":4133375,"authorDomain":"aircraftshop"}
We are now talking about gross mismanagement with the US Auto makers, well let me say this.....they learned real good from the current political admin....yes the CEO's of the Big 3 thought the same as King Bush WAY Out Of Touch.....and look at results.....way to go folks.....flush the American Dream down the toilet!
{"commentId":4133375,"threadId":"423451","contentId":"2129044","authorDomain":"aircraftshop"}
#68 - Wed Nov 19, 2008 10:15 PM EST{"commentId":4133436,"authorDomain":"akre-peanut"}
Those who believe that Unions HAVEN'T been a big reason for the problems of auto manufacturing in the US are delusional and believe in fairy tails and Cinderella's golden slipper. We do need to maintain manufacturing in the US. If there is a bail out, then there needs to be some real stiff rules including the elimination of the union, union dues and changes in the health plans. Another point that I did not see presented is that if the auto mfgs go bankrupt, the retirements of all retirees will be placed upon the taxpayer. When the government takes over retirements, the amount to each retiree is decreased. I suggest that, if there is a bail out, the same formula be used as if the companies took chapter ll or 7 bankruptcy so that the taxpayer is not gouged. The positions of many of the high paid execs that helped to cause the problems including the Union execs, should be fired. Those that are retained should be restricted in the amount of salary and no bonuses until the company has paid the taxpayer back and the company is fiscally sound again. Those who work for these auto mfgs should be very happy because the alternative is NO JOB.
{"commentId":4133436,"threadId":"423451","contentId":"2129044","authorDomain":"akre-peanut"}
#69 - Wed Nov 19, 2008 10:21 PM EST{"commentId":4133535,"authorDomain":"akre-peanut"}
Dear dragonheartxp: This administration has nothing to do with the auto mfg problems. Neary every industry that has been under Unions has left the US moving their manufacturing to another country. Textiles are gone. Steel industry left. Auto industry in shambles. Airline industry in constant trouble. Railroads in trouble. Professional athletes have had a strong Union which when people are not working will result in fewer people in attendance and the advertisers and sponsors will have to cut out funding.
{"commentId":4133535,"threadId":"423451","contentId":"2129044","authorDomain":"akre-peanut"}
#70 - Wed Nov 19, 2008 10:29 PM EST{"commentId":4133740,"authorDomain":"markesanchez-marke"}
Thats the same as people who credit Clinton with the boom of the '90s, when the truth is the growth of technology sparked that. Donald Duck could have been president and the economy was still going to boom. As for unions one of their main problems was some of those within who cheated the people they worked for through lack of work and in some other ways. Those people also cheated other union members by their actions, as businesses grew tired of being screwed and picked up and left.
{"commentId":4133740,"threadId":"423451","contentId":"2129044","authorDomain":"markesanchez-marke"}
{"commentId":4133544,"authorDomain":"bcass1947"}
Detroit should take lessons from the people who sell their vehicles. The two largest auto sales people in Massachusetts have become billionaires along with the consolidation of dealerships for every vehicle out there. Japanese, German, or American. These two men have almost monopolized the industry. That's right people. The owners of Boch Motors and Herb Connolly have become billionaires.
{"commentId":4133544,"threadId":"423451","contentId":"2129044","authorDomain":"bcass1947"}
#71 - Wed Nov 19, 2008 10:30 PM EST{"commentId":4133938,"authorDomain":"loujoy1"}
Weird - businesses fail every day and no one bails them out. Millions of people in the US can not pay their bills but no one bails them out. Mismanage & steal from a mega-corporation and the Government will bail you out! How about letting them fall on their ------ and giving the bailout money to the layed-off employees in the form of unemployment compensation. I'd rather they get it than the corporate biggies. I'm sure no one has thought of this because it would be common sense - something that seems to be lacking lately in this country.
{"commentId":4133938,"threadId":"423451","contentId":"2129044","authorDomain":"loujoy1"}
#72 - Wed Nov 19, 2008 11:05 PM EST{"commentId":4134203,"authorDomain":"dsemprevivo"}
It is ironic that the execs that have been so out of touch with what the American people want are now telling us what the American people want or do not want. To say that people would not buy a car from a bankrupt company for fear of no parts, service or repair is ridiculous. There is a huge after market industry and many cars bought and sold everyday; for which, the big three no longer produce parts, i.e. aftermarket. The free market will recognize a need and produce for that need.
The execs have been creatively bankrupt and have stifled progress for years and it is time to move on and allow companies that can succeed take their places. It is called the free market. It may sting but it is better for the US in the long term.
{"commentId":4134203,"threadId":"423451","contentId":"2129044","authorDomain":"dsemprevivo"}
#73 - Wed Nov 19, 2008 11:36 PM EST{"commentId":4134265,"authorDomain":"iceman582"}
Let's face it, the salaries and benefits in the auto industry are absurd. Yes, the execs at the top should certainly be taking some big pay cuts. But, if people don't think the UAW are a big part of the problem they're absolutely nuts.
Consider this. I'm a Registered Nurse, an occupation which requires a college degree and that you pass rigorous state board examinations to obtain your license. Additionally, I am required to maintain a certain number of continuing education hours every year to maintain my license. The competency with which I do my job and the daily decisions I make can mean the difference of life or death for many people. Pretty big responsibility wouldn't you agree? Not to mention the fact that being a nurse is often dirty back breaking work.
Yet, there are people working in the Big 3 auto plants with less than a high school education doing work a trained monkey can do, and they make far more money than me. I mean seriously, what's wrong with this world. Someone in an earlier post mentioned the average wage in thes plants is $ plus health benefits. I'd say that $ is a pretty conservative estimate. They also fail to mention that these people have far better pension plans than most Americans. Even still, $ is more than I make. I wonder, with the education and skill level of many of these people, how much money they would be making in the real world if not employed by the big 3. I can guarantee you it wouldn't be anywhere near even $
{"commentId":4134265,"threadId":"423451","contentId":"2129044","authorDomain":"iceman582"}
#74 - Wed Nov 19, 2008 11:42 PM EST{"commentId":4150637,"authorDomain":"kaydeecom"}
Careful, your snobbery is showing.
Unless you have worked on an auto assembly line, I don't think you are qualified to judge others or their capabilities. Just because it does not require a college degree does not make it menial.
By the way, I work in a professional occupation that also requires me to have advanced training. However, I can appreciate the knowledge and skill of people who work with their hands.
If you are an RN, good for you. But remember that if it was not for those people assembling and maintaing those machines you work with every day, your work would be a lot harder.
{"commentId":4150637,"threadId":"423451","contentId":"2129044","authorDomain":"kaydeecom"}
{"commentId":4134391,"authorDomain":"ciutrata"}
Having been collectively drunk on oil, and lacking the foresight to plan for market contingencies, such as the lessons they should have learned from the early 1970's oil embargo, or the more recent peak in the oil price at $150 per barrel, or the success of Honda, Toyota or Hyundai, the big 3 auto makers have continued the practice of designing and foisting onto the market impractical gas-guzzling urban assault vehicles and other oversized, inefficient infernal combustion vehicles with minimal customer appeal. Now we are witnessing desperate manuevering: First there was a GM attempt to buy and/or to merge with Chrysler, which would have been tantamount to two very ill pneumonia patients huddling together to die. Now there is a brazenly desperate attempt by the "big 3" to suck $25 billion from the pockets of us taxpayers. Now, let the big 3 take a lesson from what has happened in the steel industry during the past 15-20 years: bankruptcies, shutdowns and subsequent restructuring as necessitated by an emerging global economy. Let them look closely at what transpired with well known producers, such as Bethlehem Steel, Republic Steel, LTV Steel and a host of others. There were no "government bailouts" in the steel industry, and there should be no bailouts of the three major US automakers.
{"commentId":4134391,"threadId":"423451","contentId":"2129044","authorDomain":"ciutrata"}
#75 - Wed Nov 19, 2008 11:54 PM EST{"canLink":false,"threadId":"423451","isPrivate":false}
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