Well the Big 3 automakers are back and they have a plan. They want to be financially bailed out, and they are willing to make concessions.
What do you think? Is it enough to warrant the huge loans they are asking for?
"[CEOs] both said they’d work for $1 per year if their firms took any government loan money, while Ford offered to cancel management bonuses and salaried employees’ merit raises next year, and GM said it would slash top executives’ pay. Both said they would sell their corporate aircraft.
…
The unions were preparing to make sacrifices as well. United Auto Workers leaders summoned local union leaders from across the country to an emergency meeting Wednesday in Detroit to discuss possible concessions. Up for discussion were the possibility of scrapping a much-maligned jobs bank in which laid-off workers keep receiving most of their pay and postponing the automakers’ payments into a multibillion-dollar union-administered health care fund. " http://www.cbsnews.com/stories/2008/12/02/business/main4642084.shtml?tag=topStory;topStoryHeadline
Let 'em fail. Protect the workers, if we feel we have to spend the money, but don’t prop up failing business. And if we do, I better get my fucking bailout money, too. I had lots of losses this year, even though I’m not as big as GM.
I say let them go into bankruptcy. Through the process of reorganization, a judge would have the power to gut the crippling UAW contracts into something more reasonable, while at the same time he could replace executives with people a little more competent and limit insane executive compensation packages. Win/win. This is the only way that that can be accomplished, without those steps the big 3 will never be healthy, no matter how much money DC might give them.
But, the CEO at CitiBank has a juicy fart because he is stressed that he might not get his 80 million dollar bonus, and all of a sudden 30 billion more dollars land on his doorstep to prop up his house of cards.
So, I figure if us taxpayers and consumers must pay for big business to get bailed out, I would rather see it go to companies that actually do something, actually produce something, not just float non-existent money around in cyber-space, money that never actually existed to begin with.
They don’t deserve to be bailed out, and I think as for manufacturers go, making them have a plan is a good thing, and they are saying its going to be a loan, with all the crap going on this is the least offensive to me.
What really bothered me, the article I read on Ford’s plan, they are going to cut their suppliers from 1600 to 750. How does this benefit anybody??? If they are going to cut out their over seas suppliers fine, but cutting out over 800 businesses here, I see a lot of very bad things in that. The article didn’t clarify much, but just doesn’t sound good to me. If part of their plan was to bring in 1000 new small suppliers here in the US, that sounds good to me.
I’d just rather see them go under, they’ve been asking for it for a long time.
If I owned a business that was failing, I’d have made cuts and compromises well before it became bailout-or-die, so it’s hard for me to sympathize with what I view as the natural, inevitable consequences of poor planning and greed. I don’t believe for a second these guys really care about their effect on the US economy.
As part of their plans, tens of thousands of people will lose jobs anyway. We’re going to feel an impact whether they’re bailed out or not. So let them fail. If there are dire consequences to the US economy, let’s deal with it now while everything’s in the toilet.
I’ve been going this way and that way about a government bailout. If I were to support a government bailout:
[ul]
[li]It must be a loan that is paid back, with interest. [/li][li]During the life of the loan, no employee of the Detroit Three (including the Board and company officers), may be paid more than the highest paid federal employee (that being POTUS @ $400,000/year, including a $50,000 expense account, a $100,000 nontaxable travel account, and $19,000 for entertainment.). [/li][li]During the life of the loan, no employee of the Detroit Three (including the Board and company officers), may be awarded any bonuses annually totaling no more than ten percent of their annual remuneration.[/li][li]During the life of the loan, no employee of the Detroit Three (including the Board and company officers) may receive a benefits package greater than that of a federal employee.[/li][li]During the life of the loan, no employee of the Detroit Three (including the Board and company officers) may travel on anything other than commercial travel for official company business. This shall not prevent an employee of the company from traveling using their own personal travel, however, the total annual reimbursement by the company to the employee cannot exceed $100,000 per year.[/li][li]During the life of the loan, and for ten years following, the vehicle fleet mileages must increase by at least one MPG per year. In other words the fleet average MPG for all autos produced by a company must increase on average one MPG per year. The same must apply separately to the passenger truck fleet, SUV fleet and commercial vehicle fleet, for each company.[/li][li] Congress shall have no authority to reduce these requirements unless any changes subsequently pass with a 3/4th majority of each House.[/li][/ul]
Yeah, it’s a hard ass list. But AIG has played games with bonuses and thumbed their noses at the American taxpayer. And Congress just sits there.
Even if a bailout goes through, thousands of people in the Detroit Three and their suppliers will lose their jobs. The flow on effect will hit America hard, but it’s a price we must pay. I say that because Americans by and large still won’t own up to their own bad economic decisions. Hey, united we stand and divided we fall.
My wish list won’t happen. Congress will play their political games and put a bandaid on all of this mess (and Americans will do nothing about their Congress critters gutless inactions). The Detroit Three will get their bailout and the problems will be swept under the rug, until it all comes down hard.
That’s why I cannot support a bailout. Let them go under. We all need to take the pain now.
And what happens if they don’t? OK, if someone starts writing themselves too big a paycheck, you can confiscate the surplus money, but what about that milage requirement? If one of the auto companies fails to meet that, you can’t exactly confiscate greater efficiency into the cars.
I say this as the owner of a current GM product that I’m quite happy with ('07 Saturn Ion)…
Let 'em die, it’s survival of the fittest, the Big Three had their head in the sand far too long, shilling big, thyroidal gas-hogs and neglecting the small, fuel efficient vehicles that other makes have surpassed them
the Big Three are dinosaurs, time to let them go extinct…
So…you seem to be saying that Congress COULD just legislate innovation if only they had bigger balls? Or if only the people would make Congress make the auto manufacturers innovate better cars? Something like that?
The $1 salary and the canceling of the corporate jet is nice and all, but it’s really more marshmallow fluff than anything. I can understand the spirit in which Duckster mandated those cuts but in reality, if the government is going to dole out dollars they’re not the ones who should be giving the terms. Like any other savvy investor, they should ask for a pitch, a REAL pitch with real planning and real estimates.
If the big three came to me and i had 18 billion dollars itching to be invested, I would want to see reasons for me to give them money than just: they’ll cut workers, production, and salaries. Why are the big 3 in such dire straits when German and Japanese cars are kicking our arses up and down the market with their superior efficiency and style? Japanese cars have essentially cornered the economy car market whereas German cars have a firm footing in the luxury car market. American car companies have a niche market in trucks and SUV’s but even before the gas crunch, the Big 3 was in trouble and they knew it. Instead of begging, I would’ve been more impressed if they came in with designs and plans to change their MO and make cars that were more desirable by the public not just domestically but internationally as well. I want them to show me something that I would feel good INVESTING in rather than coming in with their tails tucked and crying me a river.
However, I do feel that the US automotive industry is a pretty essential component of the domestic manufacturing sector, and one that comes into great importance in terms of balance of trade which makes it more important in some aspects than banking or insurance which already received the benefits of federal funding. Also, IIRC the US once gave money to Lee Iacocca and made money off that investment deal? Anyway, I would reject the current offer and make the unions sweat a little, and also for them to come back with an actual business plan like an actual business would instead of stunts and charades.
Congress does what it does for itself, with a bit of window dressing for the electorate. In essence, Congress is its own bureaucracy and does what it does to remain in place. Yup, big cynic I am.
The American people in turn are a selfish lot, just like Congress. They want all the gain with no pain. I mean, the polls show Congress is at the bottom of the barrel in terms of effectiveness, support and likeability by the people. But ask of your local Congress critter, and people think he or she is great. That’s why Congress scum keep getting re-elected. Yup, double big cynic I am. (Yeah, I know about the last election. Bigger Democratic gains in Congress. A new president. Unless Obama really is wearing new clothes, nothing will change for the better.)
I have no problem if my taxes were to be raised to help pay for this mess, if my taxes actually went to pay for this mess and punish those responsible. Ain’t gonna happen on both counts. The $700 billion bailout is already a failure. But if you read the threads about it here, many Dopers already knew it would fail before the ink on the law was ever dry.
Everything is a deal these days so all concerned come out smelling good and reputations intact. It’s all about spin and not about reality.
There will be a Detroit Three “bailout.” Watch the hype. Watch the spin. Lots of promises made.
But nothing will get fixed. Just put off for others to do the same down the road. We’re leaking oil and taking on water, both at the same time. And still going down.
I honest to God don’t understand the flap re corporate jets. Typically the use of those jets is limited to the top management people; those who are so highly paid that private air craft provide a means to keep them working instead of standing around in airports or waiting in lines or being held on the ground for whatever reason. The cost of the private air craft is less than the loss of performance by these people; it makes sense to minimize their loss of time.
I have to agree with you here. It was a public relations nightmare they walked into – made for nice sound-bites, created a great recreational outrage vehicle, and acts as a decent metaphor for management practices, but I find it a truly superficial criticism.
This is the first I’ve heard of this “job bank.” Do you mean to tell me these companies actually pay people to not work? No wonder they’re going out of business!
As these people have been actively destroying their businesses I really don’t think you’ve thought this through.
The first condition should be that all the senior managers and directors, the people who have fucked up so badly (banks as well as the big three) should be dismissed without compensation - explicitly sacked - for gross negligence.
Until that time anything that keeps them from having time to fuck things up further is a good thing.