Big Three Bailout?

Blue

Well-known member
Mar 26, 2004
10,043
856
AZ
p m said:
This is how the steel mills disappeared from the Appalachians. The jobs haven't come back.

Yes, but should the jobs have been there in the first place? You can keep a patient on life support out of compassion but you can't keep an industry on it.
 

David Kronenfeld

Well-known member
May 27, 2004
344
1
Tampa, FL
Consider the following statistics from Larry Kudlow-


"Total compensation per hour for the big-three carmakers is $73.20. That?s a 52 percent differential from Toyota?s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59."


Until the Big Three are able to significantly reduce the wage differential between them and Toyota, etc., they will continue to be a losing proposition. A government bailout is most assuredly not the best way to accomplish this. Do you really think Nancy Pelosi and Harry Reid are going to hang their UAW cronies out to dry!?
 

SGaynor

Well-known member
Dec 6, 2006
7,148
162
52
Bristol, TN
p m said:
This is how the steel mills disappeared from the Appalachians. The jobs haven't come back.
Blue said:
Yes, but should the jobs have been there in the first place? You can keep a patient on life support out of compassion but you can't keep an industry on it.
Blueboy said:
Andrew Carnegie thought it was a good place to make steel.


Jaime

Y'all are right...

Yes, it was a good place to make steel because of the abundance of coal, iron ore and the river system access (Ohio to Mississippi), plus rail to the east.

But the steel companies got fat and lazy. They didn't innovate - new products, newer, more efficient production methods (See: NuCor). The labor contracts got bloated: too many benefits, too hard to fire workers. It eventually caught up to them in the 70s/80s, until the last steel mill in Pittsburgh went away in the mid-90s (there are still mini-mills in SW PA).

This decade, a businessman (can't remember the name) bought Betehhlem Steel and a few other steel companies, filled bankruptcy, dumped the union contracts and pension liabilities, and now has a profitable business. It's leaner, more efficient.

Sound familiar?

When I lived in Pittsburgh in the 90s, I heard all of the same complaints/sad stories/etc. that I now hear in MI. It's a painful transition, and it's going to hurt a lot of low/no-skilled workers.
 

Blue

Well-known member
Mar 26, 2004
10,043
856
AZ
Blueboy said:
Andrew Carnegie thought it was a good place to make steel.


Jaime

my point was that the jobs shouldn't have been there at that time, which is why they evaporated and never came back. The industry in that area ran its course and collapsed, just like the auto industry is.

edit: yeah, what gaynor said above....
 

Blue

Well-known member
Mar 26, 2004
10,043
856
AZ
What I mean is that there comes a point where the company or the industry can no longer function as it has previously. At that time they either need to adapt or die. Just because GM or Ford have been around for 100 years doesn't mean that they are immune to this. They have failed to adapt. They are going to die.
 

landrovered

Well-known member
Nov 28, 2006
4,289
0
Remember that more companies have failed than currently exist and there is nothing that says that any one company must survive.
 

Mike_Rupp

Well-known member
Mar 26, 2004
3,604
0
Mercer Island, WA
I spent the 90's selling plastics to tier 1 automotive suppliers in northern Indiana and Michigan. I was amazed at how brutal the big 3 were when negotiating with their outside vendors. They were absolutely ruthless. When there was a slowdown in the economy and the capacity utilization of the plastics companies dropped so that there was plenty of available press time, they would not honor contracts and pull molds and ship them to other companies in the area for a tiny saving in cost, leaving the original company with a $500,000 machine with nothing to run.

At the same time, these mighty auto companies were powerless when negotiating with the unions. They were pushovers. It amazed me that the same people who were so ruthless with outside vendors and their own labor issues to be so pitifully weak when it came to dealing with their own labor force.

They need to be left to die. Something is terribly wrong when a semi skilled laborer at an auto plant makes silly money compared to a semi skilled laborer at a small company.

The other thing that I remember from my college days was my operations class. There was case after case about Toyota and their operations practices. They were doing the innovative things when the Big 3 was doing the status quo. Why should taxpayers reward this kind of laziness and failure?
 

SGaynor

Well-known member
Dec 6, 2006
7,148
162
52
Bristol, TN
landrovered said:
Remember that more companies have failed than currently exist and there is nothing that says that any one company must survive.

Amen, brother! Change is constant.

It was illuminating to me when someone pointed out to me that most of the companies in the Fortune 100/Dow Jones a century ago, don't exist anymore, or are shells of their former selves.
 

MarkP

Well-known member
Apr 23, 2004
6,672
0
Colorado
Is it over?

Insurers Pull Cover (Credit Insurance) From GM and Ford Suppliers
Financial Times ^ | 11-13-08 | Kiran Stacey, John Reed and Jonathan Guthrie in London

Troubled US carmakers General Motors and Ford Motor have been given a potentially devastating vote of no confidence by three big European credit insurers, which have removed cover from their suppliers.

The withdrawal of credit insurance – which covered suppliers against the risk of the car companies’ failing – has previously hastened the demise of a string of European companies, with suppliers to retailers and construction companies finding cover increasingly hard to come by.

Euler Hermes, Atradius or Coface, which control more than 80 per cent of the world’s credit insurance market, are refusing to write policies for suppliers trading with GM or Ford on credit. GM and Ford are two of the biggest groups ever to be blacklisted. . . .​
 

F18Guy

Well-known member
Mar 30, 2004
2,185
0
54
Down by the big rock
Bannon88 said:
Yeah, because we can't go buy cars that don't come from the big three?

The big 3 screwed themselves with their arrogance years ago by refusing to change, shit happens. It's not like the oil companies are going to care if the gas is purchased for a chevy or a honda, as long as it's purchased. America isn't going to stop driving any time soon.

Toyota will be the largest auto manufacturer earlier than projected.

Toyota followed by VW.

If GM fails, that is sure to affect over 2000 suppliers over and above all the UAW peeps. A lot of people say the UAW is to blame...I believe the lack of leadership by the Detroit three holds equal responsibility in their current failures. Personally, I say let them fail...capitalism = darwinism for business.

I heard something yesterday about some bill floating around D.C. involving people have the right or better access to union membership. Apparently Detroit's lobbyists are getting to the D.C. libs because of how well the right-to-work states are booming...aka Honda, Hyundai, Nissan, Toyota, Bimmer, and MB. Go figure.
 

az_max

1
Apr 22, 2005
7,463
2
F18Guy said:
Toyota followed by VW.

If GM fails, that is sure to affect over 2000 suppliers over and above all the UAW peeps. A lot of people say the UAW is to blame...I believe the lack of leadership by the Detroit three holds equal responsibility in their current failures. Personally, I say let them fail...capitalism = darwinism for business.

I heard something yesterday about some bill floating around D.C. involving people have the right or better access to union membership. Apparently Detroit's lobbyists are getting to the D.C. libs because of how well the right-to-work states are booming...aka Honda, Hyundai, Nissan, Toyota, Bimmer, and MB. Go figure.


Something about eliminating the secret vote. so the union bosses would know who voted against unionization and show up at your door with baseball bats.
 

F18Guy

Well-known member
Mar 30, 2004
2,185
0
54
Down by the big rock
JohnK said:
For designing crappy cars and not standing behind them?

The UAW does not design...their blame involves bending over the Detroit 3 for crazy wages and benefits. The design blame falls under the leadership...especially the loser who approved the Aztek :rofl:
 

noee

Well-known member
Apr 20, 2004
1,887
0
Free Union, VA
So, who ever really believed $25 or even $75B was enough?

Bloomberg - The $200B bailout

What does it mean when every bank and every large company in the country is insovlent?

Oh, and now we're finding out that public agencies (city, county, state) have borrowed money to invest and the investments are now worthless and they still have to pay back the loans, but they have no money.

This is a good weekend to get ready. ;)