Auto industry bailout, I vote no....

[Tim Liston]

OK so I know I’m gonna get some flak for this…

I think that GM and Ford (and Chrysler) should be allowed to fail. I don’t consider their bailout to be a bailout of the “auto industry.â€

[ryan costa]

America's big 3 are no match for for Japanese Industrial Nationalism.

Perhaps if anti-monopoly principles had been enforced to some degree the auto-unions wouldn't have gotten so powerful. At least 10 american automoakers with at least 5 percent of the domestic market. too late for that now! We don't even have AMC Gremlins and Matador Wagons anymore.

The Big 3 killed the Tucker Sedan before it got out the gate. It would be great to have some street legal 300 CC motorcycles on the market, but no American firm will ever manufacture them. something that combines the low speed and high mileage of a scooter, and the stability of a bicycle.

I don't know what exactly union autoworkers make in wages. or wages plus benefits. it is important to remember 15 dollars an hour is only about 30 grand a year. 20 dollars an hour is only about 40 grand a year. the big yearly earnings add up from working overtime. manufacturing jobs require endurance, dexterity, know-how, and team work. they are athletic jobs. I wonder what Volvo or BMW workers make.

Maybe an American making 30 grand could support a wife and 4 kids if they lived in some cheap house in Cleveland and the household only required one car. in todays climate the schools are where kids go to get ghettoed up. that requires moving to a suburb, which requires greater expenses.

The appeal of being a tenured college professor is spending a few hours a day giving lectures. generally you can use the same lectures for the same classes from year to year, tinkering with them as the need strikes. the rest of the time is spent talking shop or campus politics with co-workers, occasionally getting a grant for research that interests the professor and provides work for grad students and top student assistants. One of my hard right economics professors gave a great lecture about eliminating minimum wages. Later he gave a great nostalgic anecdote about a well paying research assistant job he had: parking outside a liquor store and noting the quantity and approximate age and gender of customers. An 11 year old could have done it for minimum wage.


The appeal of giganticism is that a giant company can offer some better benefits not directly paid as wages. Conveniently enough, the cost of health care has sky rocketed since the institutions of health insurance and MBAs took off, and the AMA succeeded in hyper-specializing so much. while computers should have eliminated the economies of scale of group health insurance plans 20 years ago, this has not happened: particular employers have more leverage for negotiating rates and policies.

[Jim O'Bryan]

OK so I know I’m gonna get some flak for this…

Tim

I would agree, Detroit's writing was on the wall as they produced larger and larger vehicles knowing that smaller, more fuel efficient was good for everyone including themselves.

They prayed on the vanity and greed of some Americans, while refusing to look towards the future. At the same time the government put up standards that kept other car companies out of America, that could have served us very well like the Peugeot 200 line of cars. Or the SMART car 5 years ago. So much for free enterprise.

HOWEVER

I would rather see them help the big 3 retool, and set up for the future then bailout the wall street bankers, who have already shown they do not really need it, will not use it for what it was designed, and really do not care about the rest of the country.

Maybe pull $200 billion out of that nightmare and put it towards the auto makers with very strong stipulations about size and energy efficiency.


FWIW


.

[Gary Rice]

I certainly do not wish to give anyone flak for their opinions, and that will not happen here.

Nor do I wish for any myself. Opinions should not be flamed.

Especially mine.

I certainly understand Tim's point about letting the auto giants fail, but that's a complicated issue. I'm not sure where I stand there.

It certainly does seem that American companies are starting to line up at the Government's door, hat-in-hand, for all the zillions that they can get these days.

Hey, after the recent, and not-so-recent bailouts of the financial industry, who can blame them?

And true, pensions do seem to represent a large part of the corporate bills of the domestic auto companies.

But let's just wait a minute here.

Those pensions represent the result of negotiated agreements to better the lot of the American worker's retirement over the years. True, many company pension plans went up in smoke over the last 20 years, but is this a road that we really want to continue going down? If people are deprived of what they were promised by private industry in their retirement years, then ultimately, it will all swing back again to social service expenses.

Businesses cannot have it both ways, and that might well have been the single biggest reason that the Repubbies took a drubbing this time around. You simply cannot, on the one hand, preach privatization, while on the other, sing "Rescue Me".

Just my opinion, and I may be wrong; but seldom am.

[Bill Call]

Those pensions represent the result of negotiated agreements to better the lot of the American worker's retirement over the years....

single biggest reason that the Repubbies took a drubbing this time around. You simply cannot, on the one hand, preach privatization, while on the other, sing "Rescue Me".

The unions and companies negotiated pension and retiree health care benefits that assumed that the 1960's monopolies would last forever. They planned on paying for those benefits with future profits. Once the profits evaporated the funding for those benefits dried up as well.

The pensions and health care benefits were never properly funded and the unions and companies knew it. They now want to send the bill to everyone else.

If the government is going to pay health care benefits and pensions for a bunch of 55 year old UAW members then I want a piece of that pie as well.

[quote="Tim Liston"]Bankruptcy “reorganizationâ€

[Jim O'Bryan]

Maybe pull $200 billion out of that nightmare and put it towards the auto makers with very strong stipulations about size and energy efficiency.

So the government can spend $50 billion a year forever so car companies can be in the business of selling cars that people don't want. Welcome to the Obamanation. Where is my subsidy?

Bill


Go back and read my post. It bears nothing like what you said.

I might be wrong but I believe that they are not building cars we want now, so the money should only go towards retooling.

Far better that than the bank bailout.

Let's be honest the lower prices in oil have nothing to do with anyone finding any more oil. Nor was it really connected to the thought of drilling. ANWAR, the Gulf, the west coast, the oil shale of Colorado, will all be drained in good time.


FWIW


.

[Tim Liston]

I just don’t see how anyone can assert that Detroit automakers don’t build the cars that Americans want to drive. Look around. Americans want to drive mid-size and large cars. Heck didn’t I just read that GM is slowing production of the Cobalt? So much for all that unmet demand for small cars….

So let’s suppose I accept the argument that auto industry management is inept, and labor costs are not a factor in its demise. Fine, let’s replace management. But let’s not tie their hands in any way. Let’s give new management a clean slate onto which to fashion a new business model for the domestic auto industry. One that can make a profit. A bailout won’t do that. A bailout will just perpetuate a business model that is not working, and will cost the American taxpayers $50 billion every two or three years, like Bill says. Bankruptcy cleans the slate. Then, if labor costs are reasonable, they will survive the transformation. But I really have my doubts. I suspect there are millions of folks who would like those jobs for half of what is paid now.

And Gary, as regards the pensions, what I hear you saying is that because those pensions were fairly negotiated, if the plan fails, the American taxpayer should be required to make that plan whole? Tell that to my Dad. His pension failed and he took a giant haircut. And in fact now I read that 40% of all pension plans are substantially underfunded. I think it would take a tax rate approaching 100% to bail them all out.

Lastly, to say that we should bail out the auto industry because we bailed out the financial industry, that is a classic “red herringâ€

[Jim DeVito]

I say let them fail. However that is not a realist view. The government will not let them fail. It is unfortunate but that is just they way it is.

Anyway I say if we are going to bail them out it should be done in such a way to ensure future problems like this do not happen again. We need to help them re tool to build more small cars and hold them and the entire auto industry to much higher fuel economy standers. We also need to make sure that once they are on there feet they are forced to invest in green technology. It sounds harsh but that is the price you pay for not having the incite at top management to see that the oil bubble will on day come to and end.

[Jim DeVito]

Also Tim I would say the future of "domestic" auto manufacturing is already starting with the big Japanese auto maker setting up shop in america. They are building new plants here all the time and employing american workers.

[Stephen Eisel]

Also Tim I would say the future of "domestic" auto manufacturing is already starting with the big Japanese auto maker setting up shop in america. They are building new plants here all the time and employing american workers.

yep

[David Lay]

I say let them fail. However that is not a realist view. The government will not let them fail. It is unfortunate but that is just they way it is.

You're right, the government won't let them fail. Being enslaved to a car is the American Way.

[dl meckes]

What happens to all the pensions that GM is paying?

[Jim DeVito]

What happens to all the pensions that GM is paying?

Not sure. Some would say that that is the reason they are in this mess. The big 3 have been producing cars here for many years. They have had quite a long time to build up pension rolls and health care debt. The Japanese are relativity new to producing cars in the US. So they do not have the enormous burdens put on the big 3 by doing work here for such a long time.

In the end even if the car maker fail there will be some sort of government bail of the pension funds.

[Gary Rice]

As regards pensions, let's face it.

Domestic old-school auto makers face the pension issue much moreso than the recent foreign auto plants. That playing field needs to be leveled in some fashion, but pensions need to be protected one way or another.

The central point, to me, is that if we continue to let more and more pension plans collapse, then we more and more will need the government to take up the slack of their failures anyway, whether that would be done directly, or indirectly. It may be cheaper in the long run for a government to subsidize pensions, than to assume the resulting social issue in its entirety.

To expect people to go on working forever is neither realistic, nor kind.

People get sick, need help from time to time, and above all, need a bit of security in their later years.

Granted, there is a philosophical/political face on this issue, but more and more, people are learning that they do indeed have to share things in the American sandbox.

We just had an election that confirmed that perspective very well.

Either share some, or risk losing all.

Jack Kennedy said: "If a free society cannot help the many who are poor, it cannot save the few who are rich."

Amen.

[sharon kinsella]

Not going to get into a lot of political gobbledeegook here people, but a couple of points.

Unions have built this country, people have died for workers rights established by unions, child labor laws, time and a half for overtime, vacations, healthcare, sick time, helped us win the Civil Rights amendment of 1990, Family Medical Leave Act, Dept. of Labor.

Think twice before bashing unions. Think twice about helping working stiffs as opposed to Wall Street Fat Cats.

Think twice about who you're fighting against.

Think twice about the devastated economic base in Cuyahoga County.

Think twice about future working conditions for your children.