RKMBs Forums .::Important::. Politics and Current Events Democrat Leaders Want Automaker Bailout

Congressional Leaders Want Bush to Help Automakers:

• Democratic leaders in Congress asked the Bush administration on Saturday to provide more aid to the struggling auto industry, which is bleeding cash and jobs as sales have dropped to their lowest level in a quarter-century.
  
  House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said in a letter to Treasury Secretary Henry Paulson that the administration should consider expanding the $700 billion bailout to include car companies.
  
  Automakers already want an additional $50 billion in loans from Congress to help them survive tough economic conditions and pay for health care obligations for retirees. The companies are seeking the loans as part of an economic aid plan that is now more likely to come together early next year rather than in a postelection session of Congress this month.
  
  Top executives of General Motors, Ford, Chrysler LLC and the president of the United Auto Workers met with congressional leaders Thursday to discuss the loans. The money would be on top of the $25 billion in loans that Congress passed in September to help retool auto plants to build more fuel-efficient vehicles.

Fuck 'em. We don't need any more bailouts or corporate welfare. It's their own fault they're in this mess.

Past Mistakes Haunt Automakers: As GM, Ford, Chrysler face looming demise, critics say they were unprepared for gas price hike, slow to confront unions.

It's not entirely a matter of just "fuck em" though. Like the other bail outs there are reasons for bailling these guys out.

I'm not sure I agree with any bailouts. Businesses have to start running themselves as if there isn't a bailout coming. Banks have no incentive to run their business in any responsible fashion and neither do automakers. Sink or swim this is America, if you can't run your business right, don;t tax me to support you. I don't see Toyota asking for any bailout.

Yeah, every time you come up with a bailout you are basically telling businesses that it's okay to fuck up. That runs contrary to the notion of a free and open market.

Furthermore, every time the government does this it makes it just that much easier to attach strings to how businesses operate and, sometimes, those strings can hurt the economy in the long run.

The Democrats are pushing this particular bailout simply as a sop to their well-heeled buddies in the UAW. If the Union really cares about its workers it would be trying to find ways to keep these companies competitive instead of just asking for more taxpayer money to put off a solution.

If it's a case of a bailout that saves the our country's auto making industry & they go on & be sucessful again I think it's worth it.

Are they really "successful" if they're only operating because of government subsidies?

i fully agree. this is also a bad side effect of companies being so massive that if they fall, they can really hurt a significant portion of the country.

Should we save businesses that don't know how to operate successfully? Or more importantly won't?

I worked for a Japanese electric manufacturer here in the states that supplied V-8 ignition coils for GM. They were very efficient and high quality, and GM wanted to expand the relationship. GM wanted to expand from 2 lines of V-8 coils to 6. The Japanese company counter offered and told GM they would like to contract for V-6 and 4 cylinder coils. The GM rep was perplexed. The coils cost the same to make in labor, labor hours, SF space, and utilities, but with a pack of 8 costs more than a pack of 6 or 4. The Japanese wanted to diversify so they wouldn't be caught with a product line to heavy towards one type of engine.


Today that plant has been able to lay off via attrition for the now idle V-8 lines, and the 4 cylinder lines are on overtime.

The moral is the Japanese company didn't take the quick buck, they planned for a day when things wouldn't be quite so vigorous in a class(the big trucks) that everyone but the big three saw was going to end.

The big three I would guess figured to ride the wave and if it crashed they would get bailed out. You don;t hear of execs in those companies being forced to resign do you? They'll stay on and continue to draw a hefty check thanks to our taxes.

Good example.

There's nothing wrong with SUVs for people who need them, due to geographic conditions or work requirements. But for years the big three auto makers made very little but gas guzzlers and never successfully diversified their product line when it was a matter of likelihood that, eventually, the price of gas would go back up.

At the same time, companies like Toyota and Honda had a diversified fleet. For example, Toyota made the Tundra pickup and the Land Cruiser SUV but it also made the Camry and Corolla.

The big three went for the quick buck and didn't plan ahead. Now we're supposed to reward their failure?

I remember Toyota reluctantly releasing the Tundra. They were constantly asked why they weren't introducing a full size and they said they would when it made sense but they didn't believe the market for full size would maintain the surge it was undergoing.

They could have went for the quick buck and financed plants for capacity that may have(and did) dry up but they didn't.

No doubt the recession is hurting their bottom line but it isn't crippling them.

Yeah the foreign auto companies were smarter but is it in our best interest not helping our country's auto makers because they messed up?

But the foreign automakers are making vehicles in the US, if these badly run businesses dry up the production at these well run plants will increase.


This is another reason why I don't understand Obama. He opposes giving tax breaks to all American companies to help them retain jobs, but he wants to give 25 billion to just 3 American companies that have been run poorly for years.

It seems if small business is our engine for job creation tax breaks for all rather than subsidies for 3 would be the way to go. People work for small businesses in every state in the union. Granted the small business don;t contribute to Obama's campaign the way the UAW does, but in these economic times he should put his wallet to the side and do what's best for everyone, not just his financial machine.

Isn't it in "our" best interest to stop giving money to businesses that can't make money or compete?

Let's as a nation quit rewarding failure, and let success reap it's rewards. Is that such a bad concept?

allah forbids it!

Nissan has a plant in Mississippi. Toyota is building a plant in Mississippi (to build Priuses if I recall). These plants are employing Mississippians. The companies may be based out of Japan, but they're hiring and spending here in America.

I drive a Ford now because their quality has risen greatly in the past few years to be on par with Toyota and Honda as well as having decent gas mileage (nothing close to what I had with my Hyundai, but it's a four door that I can actually have friends ride in the back sear comfortably). Ford and Chrysler were two of the worst about not understanding that they needed to go for fuel efficiency. Ford was too concerned with their truck and SUV market to invest in smaller, more efficient cars. By the time they realized the problem, it was too late. Same with Chrysler. As gas prices rose, they kept throwing Hemi engines into their cars. GM was the only one with any foresight to look into alternative engines, though the Volt may come a little too late to make a difference.

Actually, in Ford's defense, I think their Escape hybrid is the closest thing to a successful American hybrid there is.

In yesterday's New York Times, Ben Stein (yeah, that Ben Stein) made the only decent point I've read so far in favor of a bailout. He argued that we wanted US automakers so that, if we needed to, we could convert them over to making tanks and military trucks in time of war.

That's not a bad point. However, even if we bail out the big three, there's nothing stopping them from selling to Toyota or Honda. Furthermore, I'm not sure why we couldn't build those vehicles in a US Toyota or Honda plant just as easily.

I look at it like this, a lot of the trouble is the labor issue. These guys are making $20, $30 and up per hour. Why do I take a pay cut(additional tax burden), so these guys maintain their lifestyle. It just doesn't make sense.

On the war conversion front, I'm sure the government would seize the Toyota plants if needed.

Well, it's probably a done deal now. Obama has come out in favor of the auto industry bailout.

Currently, Obama is asking Bush to do it and Bush is hesitating. However, one can easily surmise that, even if Bush doesn't agree, Obama will institute the bailout after he takes office.

I guess those big UAW donations are coming due already.

It was just announced: Pelosi is considering a special House session next week to consider aid to the auto industry. She has tapped Rep. Barney Frank (yes, the guy who destroyed the banking industry) to craft a bill giving "limited" assistance to the industry.

well considering all the enforced regulations to make the auto industry eco-friendly with these shitty alternate energy vehicles, and the fact that the auto industry was already hurting when they were forced to change their factories, shouldn't the government bail them out of this mess?

The Japanese automakers are under the same restrictions. They decided to build cheaper fuel efficient cars, and the big 3 sunk their money into big truck plants.

and crazy pension plans for their union that could never be sustained.

Will Auto Rescue Stall? Senate Democrats will take up $25B auto industry relief package next week, but are still trying to get GOP support

I hope it stalls. The more I think of it, the more it pisses me off. These guys are making 20, 30, 40 dollars an hour, great pension, great insurance, and they want me to spend my tax dollars to keep them in this cozy job. Isn't share the wealth supposed to go the other way? Or is that just for UAW jobs?

Fuck the UAW. Let them all go bankrupt and then they can renegotiate the union contracts. They will be better for it and we won't have to bail them out. Let them fail. NO MORE BAILOUTS!

I read a story today that the average Big 3 worker costs $74 an hr vs $38 for Toyota's US plants, these Dems want to spread the wealth, let these guys take a pay cut and save my taxes.

I don't understand why some people get more angry at the guy earning 20 bucks an hour who actually produces a product than the CEO's who make millions of dollars while their companies fail. There were some comments here & there when the previous bailout was happening but really compared to what the union people are getting on this thread, CEO's got more of a pass.

Bailouts are a bad idea. These companies don't change any bad business practices if they keep getting bailed out.

The bigger, bloated, badly run companies will fail, and smaller, hungrier companies will fill the void within a few years, which will be better for the consumer. Sure, there will be pain in the short run, but workers can learn other jobs.

I don't see anyone here, other than you, supporting this bailout which would, by its very nature, support CEOs as well as union bosses.

True, some of us have commented that the only reason that the Democrats are pushing this particular bailout is as a sop to the UAW. Some of us have even opined that the UAW may do its workers, and the industry, more harm than good. However, that's not the same thing as saying that we're angry at the individual workers.

As TTT mentions, bailouts in general are a bad idea. They reward incompetence and often serve only to make the economy weaker in the long run.

I'm upset t the CEO's as well, but the conversation the Dems are projecting is about the blue collar Big 3 workers so I was responding to that. The numbers on the CEO's aren't available but I'm sure they are artificially high compared to Toyota USA and I shouldn't be expected to pay theirs either.

Toyota obviously has a sound business model, why are we going to prop up an unsound one?

If we are going to continue having a free market as Bush lobbied for the other day, then you can't bail out these banks, car makers ect. For a free market to work sound business survives and unsound does not.

I guess I'm sort of in the same boat that I was when it was Bush pushing for a bailout. Not being automatically against it or for it isn't really being supportive IMHO. And I am aware that this industry also has the same type of CEO's that the banking does. While I'm sure nobody here really likes the overpayed CEO they just seem to get more of a pass then the union worker here.

No, I think both groups are being criticized for being short-sighted, for doing a poor job and for then expecting a government handout which rewards their own failures. You're accusing us of giving CEOs a pass when, pretty much to a poster, we've all blasted them, on both this thread and the thread about the original bailout.

At the same time, however, we're not into the whole 'class warfare' mentality so we're not giving the unions a pass for their screw-ups.

Actually CEO's haven't been blasted in this thread as you say. Besides BSAMS response to my post that specifically brought it up, any of the anger has been mostly aimed at the union worker.

From my very first post in this thread:


From BSAMS' very first post in this thread:



There are others, including thedoctor, pointing out how the executives made bad business decisions. You might try taking off the class war blinders and re-reading the thread before trying to play the gotcha game.

Those are an example of blasting CEO's? Seems rather indirect compared to other posts on this thread that directly go after the union workers.

Do you ever stop & think when you quickly accuse the other side about having blinders on or drinking kool aid that your also guilty of that to?

When I refer to "top executives" at the auto companies who do you think I'm referring to? It should be obvious I'm referring to people like the CEOs.

Furthermore, BSAMS referred to "automakers" who "run [the] business." Again, that's obviously the heads of the companies, not the line workers.

You're right that we didn't use the "magic" three letter abbreviation "CEO." However, I fail to see how any fair minded person could think we weren't discussing CEOs.

I think all CEOs of all mojor fortune 500 companies and especially our shit little auto companies that suck should be getting shit in compensation this year. There is no reason for anyone to be getting bonuses in the 10s of millions now or ever. That money should be going back into the company and to the shareholders. I have no love for CEOs so take the blinders off MEM.

The reason the UAW guys were blasted so much is we were discussing why the Dems were now pro giving tax breaks to businesses and why it is just these specific businesses. Whether you admit it or not if these low interest loans go through to the Big 3 it's more class welfare by giving unionized business a specific break with our taxes.

From what I understand, Pelosi was talking about using part of the original bailout money to include the auto industry so it's really a case of spreading out the relief. There are some valid concerns when it comes to the auto industry. I saw an estimated loss of 150 billion in tax revenues over 3 years if the big 3 go away. It's not as simple as what I think some of you are making it out to be IMHO.