Big Three Bailout?

[dannyballs]

Dude it is not the Auto Industry that has failed. It is the management of the industry agreeing to the ridiculous wants of organized labor. They have constrained themselves with out of date work rules and benefits packages that have erroded their margins down to nothing. America loves SUV's. That is not the probelm. Let the little 3 all file for chp 11, reorganize with new work rules and crank out more SUV's. :rant:

 

[MarkP]

For those that believe that letting the US automakers go belly up is a good thing...

. . .

Nobody is proposing letting the US automakers go "belly up". The option on the table is bankruptcy to allow them to restructure. Fewer factories, new labor agreeements and fewer dealers would be a good thing.

A recent Autoblog article pointed out that GM, Ford and Chrysler have 15,000+ dealers while the Japanese carmakers have less than 4000. The excess dealers cost the big three $400+ per vehicle in extra cost.

 

[BDM]

I disagree. We do not make TVs VCRs etc. life goes on.

LET THEM SINK.

The gap will be filled here in the US by Toyota, Honda and others who make cars herein the US for less. There are 2 retirees for every one employee now for the big three, avg. $1500 more a car. They put all their energy into SUVs, it was a poor gamble.

I have not abought anything American other than my Jeep since high school, never seemed like a good purchase.


Let Honda and Toyota buy them, they should be profitable in 90 days or so.

Yeah, there is a part of me that feels this...screw the Big 3 for making shit cars, not adapting etc....however, this is based on emotion, not facts. GM/Ford/Chrysler do make competitive vehicles, but that's open for interpretation and personal opinion.

Look at the facts. We're talking more than just jobs here (which is a shit ton of jobs directly involved), we're talking about indirect companies, jobs, and industries...like, goodyear, bridgestone, napa, steel industry, plastic industry, oil industry, glass industry, rubber industry, aluminum industry.

Service industries include every dealer, auto shop, anyone tied to making money on autos. It will affect everything. How about sports like NASCAR...yeah, it will have a profound impact on that as well.

....NOT TO MENTION THE COMPLETE LOSS OF PRIDE AND ASSOCIATION WE AS AMERICANS HAVE WITH OUR VEHICLES.

That is priceless.

 

[BDM]

Nobody is proposing letting the US automakers go "belly up". The option on the table is bankruptcy to allow them to restructure. Fewer factories, new labor agreeements and fewer dealers would be a good thing.

A recent Autoblog article pointed out that GM, Ford and Chrysler have 15,000+ dealers while the Japanese carmakers have less than 4000. The excess dealers cost the big three $400+ per vehicle in extra cost.

That's good info. I'd def be in favor of this.

 

[noee]

If our auto's go under, we are all screwed. Wake the F up!!

C'mon, you're gonna rival me for "doom and gloom" champ if you're not careful. There's plenty of competition to fill the market, the business model that these guys operate under here in NA are in desperate need of change. Like I said before, just look at the numbers and you will see that there is just simply too much capacity. The data, in this case, doesn't lie.

What's next, you want to force everyone to buy a "big 3" SUV?

 

[BDM]

Dude it is not the Auto Industry that has failed. It is the management of the industry agreeing to the ridiculous wants of organized labor. They have constrained themselves with out of date work rules and benefits packages that have erroded their margins down to nothing. Ammerica loves SUV's. That is not the probelm. Let the little 3 all file for chp 11, reorganize with new work rules and crank out more SUV's. :rant:

Yeah, the unions have played a major part.

I'll get off my soap box now!!

Cheers,
Brendon

 

[MarkP]

. . .

What's next, you want to force everyone to buy a "big 3" SUV?

Don't laugh. The government is already telling banks to loan and consumers to consume. Obama is considering a "auto csar".

 

[BDM]

My biggest complaint is that a lot of this mess is not in the hands of the auto industry. Sure, they need to restructure. My problem is that we're not competing on level ground with companies like Toyota that get gov't subsidies and other countries who tariff the hell out of us, yet we do nothing when we import their goods. Address this issue, then we can argue "survival of the fittest."

 

[MarkP]

Money For Nothing
Wall Street Journal ^ | May 2006 | Jeffrey McCracken

In his 34 years working for General Motors, one of Jerry Mellon's toughest assignments came this January.

He spent a week in the "rubber room."

The room is a windowless old storage shed in Flint, Mich. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.

Their job: to do nothing.

This is the Jobs Bank, a two-decade-old program in which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many volunteer or go back to school. The rest clock time in the rubber room or something like it.

It is called the rubber room, Mr. Mellon says, because "a few days in there makes you go crazy."

The Jobs Bank at GM and other U.S. auto companies including Ford Motor is likely to cost around $1.4 billion to $2 billion this year. The programs, which are up for renewal next year when union contracts expire, have become a symbol of why Detroit struggles even as Japanese auto makers with big U.S. operations prosper.​

Bankruptcy is the only effective option.

 

[noee]

^^

LOL. THat's frickin' hilarious! Sounds like gov't to me.

I can't think of a better way to destroy a human being's soul.

 

[BDM]

Guy's, great posts. I def can see things a little diff now.

CNBC is having a great piece on GM and US auto makers. Friedman's makes an excellent case on funding new projects for new innovative auto makers and letting bankcruptcy take action.

 

[cptyarderho]

you will not lose all the jobs, you will get a shift of workers from one company to another. Americans will still need new cars, they will just have fewer options. If a bigger company sees value in them, they are free to buy them for about $2 a share, GM maybe even less right now.

 

[SGaynor]

LOL. THat's frickin' hilarious! Sounds like gov't to me.

I can't think of a better way to destroy a human being's soul.

Actually, it's not really funny. It shows how limited the US automakers are in their ability to reduce headcount. They've been reduced to offering line workers $100K buyouts to get them to leave. In a lot of cases, it's been cheaper for GM/Ford/Chrysler to keep a plant running and make excess inventory and sell those at a loss (see: 0% financing) than shut the plant down and "layoff" the workers (they go into the jobs bank).

The last round of labor talks didn't change this system significantly. They are in a similar boat with autodealers. Most states have laws that effectively prevent an automaker from closing (ie, not selling to) a dealer. The number of dealers needss to go down, but the dealers are demanding multimillion $ buyouts.

The only way to break these types of practices are bankruptcy court (See my rant above).

 

[Blue]

For those that believe that letting the US automakers go belly up is a good thing...

No one is letting them or making them or wanting them to go belly up. They are doing it to themselves. Their entire business model, their entire culture, has led them to this point. Infusing them with $25B or even $250B or whatever is only going to serve to pay the Grim Reaper to take a walk around the block and come back in a few months. If (or should I say when) we the taxpayers hand them a few dumptrucks full of cash in exchange for an interest in their corporations, we'll be buying empty air. Wait, that's not true, we'll be financing their last hurrah and a few undeserved golden parachutes. There will just be no ROI for the taxpayers.

 

[GotRovr]

If the Big 3 are so valuable, why doesn't the UAW buy them?

I've read somewhere that GM and Ford have been mostly profitable overseas and their cars get astounding mileage compared to US cousins, why so?

 

[landrovered]

Nationalization has created some great cars...

Fiat
Yugo
Lada

Why worry?

 

[p m]

I've read somewhere that GM and Ford have been mostly profitable overseas and their cars get astounding mileage compared to US cousins, why so?

Have you driven any of these tin cans?
And the only valid comparison (for the models that are present on the U.S. market and overseas), the only difference is in diesel engines - the absence of which in the U.S. lays squarely with infinite wisdom of California lawmakers, who set NOx emission levels at 1/10 of those in Europe.

So the Big Three have dumbass legislation on one side, and UAW - on the other.

 

[az_max]

At first I was like "yeah, we should bail out the big 2.5", but after thinking, why not let them fail? If I owned a business and my contracts with my employees union screwed me to the point where I couldn't make money, the US Gov't would do nothing to save me. Maybe it's time for the companies to be sold off and new companies started with reasonable labor rates and union contracts. Or maybe without unions. Maybe their union bosses should take a look at what they did to both the employees and the business. You can bet the worker will think twice about joining a union if they're getting a decent wage from the company.
The companies may fail, but there will be someone there to pick up the pieces; as long as they can make a competitive product at a competitive price.

 

[p m]

Maybe it's time for the companies to be sold off and new companies started with reasonable labor rates and union contracts. Or maybe without unions. Maybe their union bosses should take a look at what they did to both the employees and the business. You can bet the worker will think twice about joining a union if they're getting a decent wage from the company.

This is how the steel mills disappeared from the Appalachians. The jobs haven't come back.

 

[JohnK]

Nationalization has created some great cars...

Fiat
Yugo
Lada

Why worry?

British Leyland

So, how is TATA doing?