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Friday, December 05, 2008
Rich Galen :: Townhall.com Columnist
Get Back in Your Jets and Go Away
by Rich Galen
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It's really all about General Motors, this big three bailout.

Chrysler is done. Gone. Out of business. Hanging on because no one knows where the light switch is.

Ford is only showing up because of some misguided Detroit auto manufacturer nonsense. Ford is, actually, in pretty good shape.

GM is the Oliver Twist in this drama. "Please sir, I want some more."

Two weeks ago the CEOs of the car companies flew in to Washington on their private jets and expected the Congress to toss up about $25 billion.

It was the jets. Dopes.

The jets were the metaphor everyone had been searching for which would crystallize the anger in regular Americans' minds about all the bailouts to all the greedy thugs who made bad bets which taxpayers are going to have to cover.

Why. Why is there such a focused antipathy toward the auto companies?

Several reasons. The car companies were not the first ones in.

The big Wall Street firms were. And we didn't like them. We spent hundreds of billions of dollars so the slick-hair, Manhattan, Limo, East-Coast-Beautiful-People could maintain their houses in the Hamptons.

Then came AIG - the insurance giant - to get into our gruel and we were really unhappy with that. Especially when they kept holding their high-roller retreats using our money to pay for someone else's spa treatments and truffels.

Finally came the banks which had made us grovel for car and home and student loans and charged us every time we sneezed and pretended they were there to help build out communities but were really there to suck money out of every pore of our communal bodies.

We were really, REALLY tired of all that.

Then the car guys flew in on their private jets and wanted $25 billion … just because.

I know the automobile industry hires hundreds of lobbyists who provide them with excellent advice.

I'm certain that what the lobbyists told the car guys was something on the order of this: Members of Congress and United States Senators are very, VERY sensitive to what their constituents think.

According to a CNN poll "nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers."

That's two-to-one against. Two constituents are opposed to bailing out the car guys for every one constituent who is in favor.

Get it?

So, the car guys ditch the planes and decide to drive to Washington for their do-over with the Congress. Not regular old cars, but hybrid cars which don't use gasoline but use … arugula or asparagus or something other than gas.

That might have worked if they had done that two weeks ago, but after the private jet fiasco, even the dumbest car buyer could see this was just a stunt.

They take the keys out of the ignition, they walk into the Committee Hearing Room and tell us that they were wrong in asking for $25 billion last week. The real number they need is $34 billion. That means their needs are growing at $4.5 billion per week.

$642,857,142.86 a day. $26,785,714.28 an hour.

FOR GOD'S SAKE! GIVE THEM THE MONEY, ALREADY! I can't afford to wait another minute at $446,428.57 per.

What is astonishing to me is that the Chairman of General Motors, Rick Wagoner, still has his job. Chrysler has been the poor relation for decades. Ford has apparently taken the steps necessary to be able to survive this storm.

But GM is an absolute basket case and no one seems to want to ask the guy in charge how he let his company get into a situation where it needs an $18 billion dollar hand-out from the taxpayers to stay in business.

What about the GM Board of Directors. Where have they been. Taking turns flying around on the corporate jets? According to GM's web page the board is responsible for "increased stockholder value," and "has responsibility to GM's customers, employees, suppliers and to the communities where it operates."

Really? Last year on this date a share of GM stock was selling for $27.68. Yesterday it closed at $4.11. The GM board has "increase shareholder value" to the tune of MINUS 85% over the past 12 months.

According to Forbes Magazine, GMAC - the financing arm of GM - is also in the soup. Just before Thanksgiving GMAC petitioned to be declared a bank holding company so it could share in the $700 billion bank rescue plan.

But that's not the end of the car company in-breeding. Again, from Forbes:

GMAC is majority owned by New York-based private equity firm Cerberus Capital Management LP, which also owns most of Chrysler.

GM, GMAC, Chrysler all own pieces of each other and they are dipping into every piggy bank the federal government has on the shelf in an attempt to bail themselves out of the mess they put themselves in.

I've had enough. Last one out of Detroit, turn off the lights.

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About The Author

Rich Galen has been a press secretary to Dan Quayle and Newt Gingrich. Rich Galen currently works as a journalist and writes at Mullings.com

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(51 comments so Far)
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Reply # 1
Date: Dec 5, 2008 - 1:07 PM EST
MIXED THOUGHTS
On one hand, our government mandates the big three $85 billion for new CAFE standards plus many billions more in saftey mandates, so how can't we not feel they should be assisted.
On the other hand, even I could see them heading for trouble when I see my friends that work there making 6 figures assembling cars and then watching them retire at age 50 because they worked 30 years and now they have more wages and benifits than most working people.
I also think this is the perfect storm for our socialists out there that hate everything about large manufacturing companies. They make profits and put out carbons.
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Reply # 2
Date: Dec 5, 2008 - 2:59 PM EST
"...all the greedy thugs..."
Being one, I understand the regular American mind, and I would tend to think a phrase like "all the greedy thugs" does cross our minds at times like these.

Since mainstream columnists don't often resort to these terms, I often feel reluctant to do so myself when making these posts. But somtimes I do anyway.

It is a fact that many corporate leaders are all about greed, and
that corporations exist only to make money, and that both need outside force to prevent the excesses they are waiting to get away with. Anyone who thinks otherwise is either one of them, or one of the suckers who are born every minute upon whom they prey.

That said, I really think the Big Three really deserve some help from the government. It is part of the government's job to maintain a stable and supportive environment for business, and so when unfair competition could destroy our automotive industry, some helpful intervention is required.

Despite the "expert" economists who praise free trade to the skies, I am sure that none of their models and theories account for the legacy cost disparity between the Big Three and their foreign competition.

Almost no foreign car factory on US soil yet has many retirees to pay benefits to, and the UAW often represents their workers as well as the Big Three's. And many of the foreign car factories outside of the US are new as well, and so also have few retirees.

We all know the factories outside of the US often have the advantage of paying third world wages, which the economists are at least aware of and try to address dismissively, with their tortured logic, but they never
addressed the legacy cost disparity.

So the Big Three have a legitimate issue here, which could only be addressed by fairer trade practices, such as reasonable tariffs that protect the domestic car industry yet maintain a competive market and/or a government bailout until all companies have to pay their legacy costs.
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Reply # 3
Date: Dec 5, 2008 - 3:35 PM EST
Two and a Half Manufacturers
The Littler Two should file Chapter 11 and combine forces. Let them try to work their way out of the mess like most businesses would.

The logic of continuing to prop up the unprofitable and non-sustainable companies makes as much sense as selling goods below cost and planning to make up the difference on volume.

The best plan I've heard yet was the two-month payroll tax holiday suggested by Texas Rep. Gohmert.
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Reply # 4
Date: Dec 5, 2008 - 4:32 PM EST
Repeal CAFE and file for bankruptcy
Repeal CAFE and non-sensical regulations and laws, and let them file for bankruptcy.
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Reply # 5
Date: Dec 5, 2008 - 4:52 PM EST
I am just a smuckey taxpayer, but ......
I am just a smuckey taxpayer! However, I think I could have run the auto industry better than these dopes while holding down my full-time low level job. Why? I raised 2 great children, paid all my debts, bought a house, drove older paid-for cars (mostly American built foreign cars), put our 2 kids thru college with no debt, and retired with my house paid for. I have not been a burden on other taxpayers. Can the GREAT automakers say that? NAW! $34 billion! Never should happen! Let them fold or survive on their own!
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Reply # 6
Date: Dec 5, 2008 - 5:15 PM EST
Chip
You are brainless.

Almost every car and truck sold by Toyota in North America is built in North America. The Toyota factories in say Thailand aren't sending those cars to the US. And speaking of "Third World" wages, isn't Chrysler going to have Qirui build its economy cars inside China?

Toyota doesn't have the retirement issue not because of its age (and it has been building cars in the US since 1988), but because it has not signed murder-suicide pacts with the UAW. In addition, Toyota line workers in the US make 25-50% less than UAW workers in Detriot.

You going to put tarrifs on US produced cars too? How you going to pull that one off. Sorry, only idiots like you and Mike Savage are interested in UAW protective tarrifs, let them sink or swim on their own. No Welfare from the US Treasury.

Mossberg590A1:

Agree 100%
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Reply # 7
Date: Dec 5, 2008 - 5:19 PM EST
Amen. Preach it!
Seriously, this is business. Demand for their product is down, and they've done nothing to compensate for the reduced revenue. Of course, the UAW won't let them lay off unneeded workers without continuing their salaries, and they really need to maintain all their bennies, too.

Chapter 11. That's the solution for GM, period. Just do it. And if one goes, I certainly don't believe the others will fall like dominoes, as I've been told. The demand is down by 1/3, so if 1/3 of the Big3 are gone, the other 2/3rds can meet the existing 2/3rds of demand. Or they could all just downsize by 1/3 to match the demand... oh, oops, the UAW again.

So, why aren't Toyota, Honda, and Nissan in line? Because they've already cut their costs to match the current demand - to a level that will allow them to remain profitable.
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Reply # 8
Date: Dec 5, 2008 - 6:27 PM EST
No Stimulus Bailout Welfare
The Department of Treasury should enforce every protective authority that prohibit it from defrauding the United States or is that the real reason for the federal reserve and the FDIC.NO BAILOUTS, NO STIMULUS CHECKS, NO WELFARE
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Reply # 9
Date: Dec 5, 2008 - 6:42 PM EST
What a bunch of snarky malarky
Having studied the Japanese auto industry under Reagan's Japanese expert on his Council of Economic Advisors, I can say emphatically there are reasons why Reagan chose to help protect the industry in the 1980s, and as we all know Reagan was all for unions and protectionist policies, ahem.

Reagan knew that the true wealth of a nation is in a combination of having a strong manufacturing base and an efficient service industry. There is none bigger than autos. Every sizable nation on earth (other than ours) therefore has an industrial policy focused on autos that protects their industry, which is why they pay roughly 10-30% more for the same vehicle that we buy here.

Americans have been saving an aggregate of well over US$40B a year on vehicle purchases due to open markets here. This will disappear over night with a domestic failure.

Bankruptcy is not an option, all studies show that 80% of americans will not buy from a bankrupt maker.

Just as Galen laments above on how the Big Three own a piece of each other, there no longer is a supplier that supplies just one maker. The pressures on the supply base has resulted in consolidation. But since there is approx 10,000 parts in a vehicle, there are still roughly 400 to 1500 suppliers for a given vehicle.

Currently, when one supplier fails, assembly production comes to a halt as a team of engineers swoops in and launches the part somewhere else in a couple of weeks, unlike the 6 months or more it typically takes. If 20, 30 or 100 go under due to a Big3 bankruptcy the entire domestic industry, and some global production, will come to a halt for a year or so as everything is sorted out.

If this happens, since I speak Japanese and German I will be able to mint money. But I can't say I didn't warn you suckers!
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Reply # 10
Date: Dec 5, 2008 - 6:43 PM EST
What a bunch of snarky malarky
No wonder that 61% of Americans are against the auto bridge loan, when even in a sage forum such as this they are forced to read cherry-picked facts and figures with very little thought behind them other than vitriol.

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Reply # 11
Date: Dec 5, 2008 - 6:59 PM EST
Me thinks Akaqi works for Toyota
Akaqi:

I noticed your posts from the last week or so. I have been working with Toyota since the late 1980's, helping them to source parts over here. Its a bunch of BS that they build nearly all their cars here, they came here kicking and screaiming because of Reagan's policies, only Honda wanted to come here (they almost located their World HQ here in 1985 in recognition of the importance of the market).

Toyota assembles here, not "builds". They design some interiors and one truck exterior, but more than 80% of the vehicle, especially powertrain, is engineered in Japan. Toyota and their keiretsu suppliers are basicaly using the South as their thirld-world country source of cheap assembly labor. A US$50Million powertrain supplier has more engineers here than does Toyota. That's why I have to go to Japan all the time to try to put Americans to work.

In a nutshell. the Japanese in aggregate from 2006 to 2007 can be said to account for 40% of sales, 25% of production but just 10% of employment. And it is not because they are more efficient, GM and Ford have more efficient plants than them here according to the Harbour Report. It is because they engineer most parts in Japan, send over components that are "assembled" and then counted as domestic, and then transfer tooling from Japan to be used in the factories here for assembly.
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Reply # 12
Date: Dec 5, 2008 - 7:13 PM EST
Phanerosis
Believe me, if auto execs could file bankruptcy and change the union contracts and more importantly disregard various State lawas to eliminate dealers (and thus force overall prices up) they would do it. But studies show no one will buy from a bankrupt maker.

But more importantly, please note that the Big Three have not been allowed a captive domestic market, where many of their competitors have. This is the "Level-playing Field" that Reagan and his minions spoke of back in the 1980's.

Because of this the Big3 have been handicapped for decades. They have downsized and reduced union labor to just 10% of cost. They all could have protected against a loss of 30-40% of sales for nearly a year, which Ford has done since the voting shares are held by the Ford family, but since GM is beholden to the same Wall Street bozozs that pu them into the mess in the first place by demanding quarterly results and not long term reuslts there is no way they could have held onto so many billions of cash wwithout the wall street guys screaming bloody murder for a misuse of funds.

I'm giving Chrysler the benefit of the doubt a s after so many years of being mis-managed by Daimler Cerberus had no idea what they were getting into.
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Reply # 13
Date: Dec 5, 2008 - 9:20 PM EST
Re: Get Back in Your Jets and Go Away
"I've had enough. Last one out of Detroit, turn off the lights."

Wow...how original!!

Thought that one up all by yourself??

(((snicker)))

It appears that most of the rest of the country shares your opinion, not only about the automakers and their employees, but also the people who are struggling to survive and remain here, like me, who have never directly worked for any auto-related businesses.

Perhaps Michigan should no longer have to be one of the TOP FIVE donor states in the aftermath of the demise of our auto industry. In fact, perhaps we Michiganders should form a MIP, modeled after the AIP that your conservative heroine Sarah Palin's husband Todd was a card carrying menber of, and she enthusiastically endorsed.

Ironic how Detroit was called the Arsenal Of Democracy during WWII, and greatly helped successfully defend the freedoms that conservatives pundits like Mr. Galen now enjoy, and permit him to post his opinions.



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Reply # 14
Date: Dec 5, 2008 - 10:03 PM EST
UAW-They have overplayed their hands
10-20 dollar per hour slugs that are smart enough to buy foreign autos, are now being asked to fork over for 30-50 dollar an hour union hacks- errr, workers. I've got news for the Michigan contingent posting here- The good will that they enjoyed as a US auto mfg. for years has been slipping for many years and this lastest fiasco will drive many more into the hands of Honda and Toyota regardless or a bailout or a bankruptcy is the end result. I bought 7 new US autos (4 Fords- 3 GMs) before my first Honda Odyssey. 120,000 miles later, it still handles like a dream and I bought another 2 years ago. I cannot imagine buying a GM ever again. I am sure that they are toast and that we will never miss them if they cannot correct on their own through bankruptcy and restructuring a very bad union contract. The UAW has sealed their own fate. That is where the real greed is-aside from the detestable politicians from both parties that think that they should be in charge of picking winners and losers;
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Reply # 15
Date: Dec 5, 2008 - 10:08 PM EST
Firing squad
Let’s all form a circle and shoot at each others economic interest. I know that congress forced the Wall Street bankers to stand out front of the Jerry Springer show and loan money to people that made less then $30,000 year to buy a home and lost 1 trillion dollars in the process.
And that’s the point. People that make less then $30,000 a year can’t pay back big loans they don’t buy stocks or have the money to invest in a pension fund.
People that live in China, Mexico, and India can’t either and they also don’t pay U.S. taxes and neither does that guy from N.Y. living on S.S. and saves money to buy stuff made in china he pays no taxes and we workers pay his medical cost and on top of his S.S. he’s getting his bail out from the tax payers already. lol
So I guess the point I’m trying to make is as the real jobs leave the country and all Americains start losing their jobs this whole country could collapse.
I don’t have the answers to this problem but I see the dominos falling and no one knows who’s next. That's how life works so unless you have a cyrstal ball and can see into the future we are all interlocked in this economy.
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Reply # 16
Date: Dec 5, 2008 - 11:27 PM EST
Pirate Rob
I sure don't have all of the answers, but we should be demanding of the politicians that they stop putting their hands into the cookie batter. Especially as filthy as those hands are after picking their probiscus' for years and screwing them with CAFE and anti-energy policies. For crying out loud, the people pushing the unproven global warming (hoax)and killing the domestic production of the greatest, most widely used and valuable product on earth-oil-, Now we are to allow them to micro manage even further something outside their areas of expertise? Wait a minute, scratch that, there is NO expertise in political office anymore. How about letting the free market decide the winners and losers? If 1/2 of the UAW cannot find work with the leftover, better run companies, they need to do something else. Like many of us are being forced to-or soon will be forced to. Can't we just let the market sort it out? My point is, some say people will not buy from GM if they file Chapter 11. I say that just as many will NEVER buy from them IF their is a bailout. I just wish we could trust those thieves Rangle, Waxman, Frank and Dodd to have real hearings with real input from real consumer advocates. Who cares what the auto execs think? They have already proven to be horrible business people or they would not be here with their hands out.
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Reply # 17
Date: Dec 5, 2008 - 11:50 PM EST
Keep the Change while one is ignorant..?
Hey Keep the Change

I'm sure you don't know that the UAW has been minimized to just 10% of a real american car's cost, from more than 60% three decades ago. You also seem to be buying into the main street media's sage calculations that wage rates are ridiculously high. They aren't. The UAW wage maxs at roughly 25 an hour. The rest are legacy costs, costs which actually are less per worker than the typical retired municipal worker...even though the only "public" occupation that has a higher risk of death is the military (currently) and firefighters (police don't even come close).

It kind of sucks working around molten metal and machines opening and closing with the force to crush your skull every second. But like most people, unless you've been there you really won't understand, as you will think your typical job pushing insurance paperwork around or flipping burgers or slapping paint on a wall is the same.

Congrats on actualy having two engineered-in-Japan Honda Odysseys, as the 18 million who bought Chrysler minivans versus the 1.1 million who bought Honda's must not have been as smart as you...especially if you didn't mind having to open the conventional doors in a tight parking spot on your first one....
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Reply # 18
Date: Dec 6, 2008 - 12:29 AM EST
Bailouts the people can understand
If Congress can bailout the auto companies, then the auto companies should wipe any outstanding car loans. The money the auto companies wants covers the outstanding car loans. In other words their getting twice what the car is worth that is still being paid for by the consumer. If Congress bails them out, then the car is paid off. Why should the consumer pay a dime more for what has been paid off with a bailout. If that is unacceptable, then the auto companies who gets a bailout should reduce the outstanding car loans in half. Fair is fair.
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Reply # 19
Date: Dec 6, 2008 - 1:14 AM EST
Martin??? Snarkey? malarkey?
"It kind of sucks working around molten metal and machines opening and closing with the force to crush your skull every second. But like most people, unless you've been there you really won't understand, as you will think your typical job pushing insurance paperwork around or flipping burgers or slapping paint on a wall is the same." --Martin

Talk about snarkey malarkey. You know nothing about me but post that condescending tripe? What gall. Stuck a union nerve?

I have been around dangerous machines for 30 years and been in a union (was forced to join while in the Vampire state to work on an airport project.

BTW, What does any of that have to do with the unions making them uncompetitive and their vehicles less desirable? Mark my words, the backlash from consumers after a bailout would rival any negative influence of Chapter 11 that your "study" shows. And at least more market forces would be in play with a potential for a lot less involvement from people that have proven they are crooks in DC...
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Reply # 20
Date: Dec 6, 2008 - 7:01 AM EST
Martin and Molten Metal
Hey, Martin, where were you when Billy Clinton let thirty American steel companies go belly-up? Where was their bailout? You wanna see some "molten metal" try working in a blast furnace.
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Reply # 21
Date: Dec 6, 2008 - 7:36 AM EST
To all of UAW...
Y'all make bad products, you don't work hard since unions put caps on production, and are overpaid! Please quit expecting to dip into my and every american's pocket to bail out your sorry companies!
Get real jobs where it doesn't matter how many years you've worked somewhere, but how well you do your job. If you didn't have union thuggery behind you, most of you would probably work harder and more effectively thus producing better cars!

As for me and my family I will never buy american vehicles especially if we, the taxpayers, bail y'all's sorry butts out!

Boycott the Big 3 and let them go bankrupt!
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Reply # 22
Date: Dec 6, 2008 - 8:01 AM EST
Union Thugs Can Get Good Results
I think the UAW is on the right track. We all know that private enterprise can't afford union costs. The only place that still survives with unions is the government (deep pockets). Take a look at the teachers unions. Great pay, great benefits and a rapidly declining product. It seems like a great model for the UAW. You should welcome government ownership. You could keep producing cars that fewer and fewer people want and keep coming back to we deep pocket taxpayers.
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Reply # 23
Date: Dec 6, 2008 - 8:08 AM EST
Ponzi, the UAW, and the USA
Debt and Ponzi scheme financing have put the American car makers down the tubes. My GI insurance is a real "lockbox" fund of real assets. A recent AFL carpenter mentioned his pension is a real fund, financed by working men, so they have something when they retire. Its called saving for future needs. But UAW pensions were never funded. They were merely promises sold by management who knew they would be long gone before the chickens came to roost. The Ponzi scheme relied on future income to fulfill current promises. The real lookout is that the United States is in the same boat as GM for the same reason. Unfunded entitlements. The gtovt calls it social security and Medicade, but its the same thing. Just as 60 years of demographics has crushed GM, the same demographics which increase the number of those entitled to those paying in threatens the whole US. Stimulus, bailout, government solution are all just buzzwords for postponing paying the piper. And the longer the tune plays, the higher the eventual cost. Its CYA time. No one is going to do it for you.
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Reply # 24
Date: Dec 6, 2008 - 8:09 AM EST
my 2 cents
I have a 2001 Buick Century. It had 78K when I bought it in 2006. It has 155K now. It is paid for, I take good care of it and I expect to get 200K out of it. A few years ago when I drove to Indiana I gassed up in eastern Pa, got out on Interstate 90, got in the right hand lane, got up to 60 mph, put the car on cruise control and drove the 400 miles to Knox. When I got to Knox I gassed up again - 41+ mph.
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Reply # 25
Date: Dec 6, 2008 - 8:28 AM EST
Great Idea Maverick!
Why should the consumer pay a dime more for what has been paid off with a bailout. If that is unacceptable, then the auto companies who gets a bailout should reduce the outstanding car loans in half. Fair is fair.

The banks need to give us back something valuable for their bailouts too.
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Reply # 26
Date: Dec 6, 2008 - 9:04 AM EST
Bailout
I laugh everytime I get into my 1991 Buick Century. I also put my cruise control on at 60mph and I get an honest 31mpg. The big three can take a dump with their so-called new high milage vehicles, hell we had them back in the early 90's.

If they cannot control their oun business affairs, let them go under. There'll be someone else that will rise from the ashes to make cars that will not cost an arm and a leg.

Screw the unions and their high demands. Let them live like the rest of us $25,000 a year citizens.

I blame the union bosses and the ceo's for the big threes problems.

Watch out for hilliry, noboma, your playing right into clintons hands.
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Reply # 27
Date: Dec 6, 2008 - 9:34 AM EST
"free trade" . . .
is NOT "free" but MANAGED trade. If trade were truly "free", we could sell our products in other countries.
The corporations (and government) engineered this "free trade" fiasco to allow corporations to cross-border components, assemblies and completed products without tariffs.
The so-called MBA "business" schools foster a false concept of business for conveniently forgetting that the CONSUMER with a JOB is part of the equation that is REQUIRED for "capitalism" to work. We have a "three-legged stool" (producer, stockholder and consumer/employee). The consumer/employee is being knocked out of the equation.
It is hard to believe that all these "well educated" types running the show cannot see what is happening.
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Reply # 28
Date: Dec 6, 2008 - 9:37 AM EST
Help the Autoworkers?
The average UAW worker gets $73 dollars in total compensation compared to $43 in total compensation paid to the non union autoworkers in the Honda,Toyota,Nissan and other foreign automobile manufactures in the US. BUT WHAT you never see on the main stream media is how much that works out to annually. $73 X 40 hours per week = $2,920 weekly X 52 weeks is $151,840 annually. Now that includes the value of benefits of course but why should the average American who makes $48,000/year or less be asked to support these radically overpaid autoworkers and their political hack friends?
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Reply # 29
Date: Dec 6, 2008 - 9:50 AM EST
Maverick-cutting the car loans in half
Interesting idea, but I don't think it can work. I pay cash for my cars, buy cars I can easily afford, and keep them for about 6-7 years. I have done the same with my houses, the mortgages are paid off. Just because I did not take out a loan to buy the car, should those who did reap a windfall? Should I go buy an expensive car and finance it to the hilt to get a piece of the action? Sort of like the folks who bought homes they couldn't really afford and now, when things have gone sour, want help with the mortgages. And what about the folks who lease, do they get their lease terms forgiven?

Many people are leasing $90K Mercedes and re-leasing every three years, and could never really afford to buy one. Many of these same people are living in $1M houses with $6000/month payments and have huge mortgages that seemed like a great deal at the time, but are now crushing burdens with the loan balance worth more than the house.

The FNMA debacle is bad enough, and I can't stomach any more subsidizing people's personal financing and borrowing decisions. Sorry, I'm done.
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Reply # 30
Date: Dec 6, 2008 - 10:50 AM EST
"Rush in a hurry"
showed a video about the most efficient auto factory in the world, built in Brazil by Ford. It is union-free, uses more robots and is more efficiently arranged than any other auto plant. They could not build this plant in the US because of the UAW.

If all the taxes were removed from the cost of cars and everything else, the cost of everything - including government - would be reduced by one-third (1/3). WE THE PEOPLE PAY ALL TAXES. We the people are the only ultimate source of all tax revenue. Since there is only one source of all tax revenue, THERE SHOULD BE ONLY ONE TAX TO COLLECT ALL REVENUE. It should be a single, simple, fair, direct, individual tax levied on living persons.

Get rid of all existing taxes and the unions and see how the economy soars!!!

The problem with Social Security is that the Democrats controlling Congress stole the money from it, replaced the money with worthless IOU's, and spent the money. Now there is no money there, just paper. Government doesn't generate money, business does and government takes it with destuctive taxation. To pay off the IOU's in SS, the government will have to take more money with more destructive taxation.
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Reply # 31
Date: Dec 6, 2008 - 12:32 PM EST
Martin
Taiwan has one of the most robust economies on earth. Like to tell me about its auto industry? Not too many even in Taiwan drive Yue Lungs do they? Ever seen one in the US?

Toyota built 1.5 million vehicles last year in North America, how many did it sell there? You'll find that a vast majority of of those sold in the US are produced in the US.

If Michigan wants to leave the Union, great. Only 160 years too late. There is no right to live in a particular state. Labor is mobile. U-Hual and Delta don't serve Michigan?

So, Michigan plants (and Georgia plants as far as that goes) produced military equipment during WWII. So what? Is this 1942? I think not. Will something like WWII ever happen again. Sure, about as likely as South Carolina firing on Sumter again.
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Reply # 32
Date: Dec 6, 2008 - 12:53 PM EST
Martin
Who did those studies? UAW GM? Some other wed to the so-called American auto industry? Is kia still around? Do people still buy from Kia? Didn't it go bankrupt? Mitsubishi? Which faced serious pressure during the 1997 Asian economic crisis? Aren't people buying homes from bankrupt builders? The warranties would have to be guranteed by an outside source in case the bankrupt firm was liquidated and you'd have to discount product or offer incentives for people to take a risk, but saying people won't buy isn't supported by Kia's experience. Just propaganda by the management of the Big Three and UAW among others who want welfare from the US Treasury.
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Reply # 33
Date: Dec 6, 2008 - 1:20 PM EST
Rob
"People that live in China, Mexico, and India can’t either..."

See the savings rate in China. Guess who has the second most # of billionaires in the world? China. Believe me, plenty of people in China can afford to invest.
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Reply # 34
Date: Dec 6, 2008 - 1:21 PM EST
HELP IS ON THE WAY


Reagan said (I paraphrase) the most feared words are, “I’m from the government, and I came to help.”

Let’s not forget that the same money managing experts (Congress) that have bankrupted our children are now critical or the CEOs of some companies (Big 3) that have actually produced something. So what if they flew to Washington in private jets? As anyone considered that the 54 hours, 18 for each CEO, of round trip driving time should have been spent on their corporate duties? Let me point out that that the egotistical, narcissistic, liberal idiots conducting the hearing could not hold down a job as a private sector travel agent.

Having said that, we can all be glad that the Congress didn’t bail out the buggy whip industry when horseless buggies rendered the whip obsolete. If the UAW had been in existence at that time buggy whips would still be in production. The Big 3 needs to file under Chapter 11, that’s the only hope there is of revising the UAW contracts, i.e., the real life example of killing the goose that laid the golden egg.
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Reply # 35
Date: Dec 6, 2008 - 1:43 PM EST
You really don't get it do you!
Our government and many states, greedy for business 'opportunity' propped up the foreign manufacturers of cars while they vilified our own industry. This vilification does not apparently rely on facts!

Many, many citizens of this country do drive American cars; they like them, even love them. On a recent outing I could not help but notice how many trucks and SUVS were in the parking lots. Seems like the reality is that people need them and want them.

This is not the 70's and 80's and so far all I see (from you and others of your ilk)is your facts that no longer apply.

The Unions have made concessions. Healthcare benefits for both union and salaried employees have been greatly reduced and retirees, 65 or older (who put in 30 to 40 years), lose their healthcare benefits in January 2009. Every person who is part of the auto industry has felt the crunch and made sacrifices.

As for the planes..so what? How many of our congress people hitch a ride on privately or company owned jets when they do their business.

It only makes sense to travel in a way that is fast, plus it enables them to work while they travel and get home to get back to work ASAP. I don't have a jet, but I am not hopping on the envy bus.

Read the plan that GM has submitted. Read something new and realistic. Get your nose out of the old news and find some real facts.

And while you are at it give some thought to the millions of people who will be struggling to heat their homes and to put food on the table once their jobs disappear.

If the auto companies go down it won't be a happy America.

The real shame here is that when you should be applauding the efforts of the US Auto Industry, which for a century has been a part of a proud American workforce,,,,YOU are instead seeking ways to finish them off.
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Reply # 36
Date: Dec 6, 2008 - 2:44 PM EST
Where is the switch?
Good article. One question,Where is the Switch. I will pull it.
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Reply # 37
Date: Dec 6, 2008 - 3:00 PM EST
Still waiting...
...for the government to bail out Packard ("ask the man who owns one"), Henry J-Kaiser, Studebaker and American Motors (Rambler & Gremlin). Let GM and Chrys Corp. eat cake, one thin slice at a time. Ford will become the Bank of America of the American auto business.
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Reply # 38
Date: Dec 6, 2008 - 3:04 PM EST
Diane
No, I believe you have it wrong.
Back in the sixties/seventies there were two auto manufacturers in Fremont Ca. Two of my cousins worked for Ford. The parking lot at the ford plant held approx. 500 cars. Driving by the facility, you could see how much the workers at the plant loved Ford. A good majority of the workers drove foreign made cars. These workers were making top wage with the best benefits, however would not purchase the very cars they produced. Duh!
I purchased a 1974 Chevy four wheel drive truck. I went to the Chevy plant in Fremont and watched the truck come off the assembly line. Beautiful truck, special ordered.
Was planning to take a trip back to Arkansas, so put my camper on the truck and took a shake down spin to northern Ca. Had to have the truck towed back to the dealership in Mt. View. The transfer case blew up. Was told it would be four weeks before they could replace it. None in stock was the retort. Told them to take one off one of the other trucks on the lot, finally persuading them to do so. After another shake down trip to northern Ca., all appeared to be fine, however could not keep the exhaust pipes from breaking at the manifold. Also, this truck had a 400 cu in engine. It would not pull Donner Summmit at more than 40 miles per hr. Also gas mileage was somewhere between six and eight miles per gal.
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Reply # 39
Date: Dec 6, 2008 - 3:05 PM EST
Diane (continued)
I had prior purchased a Pontiac GTO 1964 in which the engine burned one pint of oil per 100 miles. After many months and calling Pontiac Mich. the dealer finally pulled the engine apart. There were no oil rings on the right bank and the cylinders on the left bank were oval. After that I purchased a small Chevy station wagon. You could not keep fluid in the transmission, going uphill it would blow it all out the dip stick tube.
Guess what? I have not purchased another "good" american made auto/truck.
Let these auto companies file chapter 11, and maybe, just maybe they will hire people with a decent wage who want to work and produce an auto/truck that will be the best they can make. The government should stay out of private business. They have so screwed up the nation as it is.
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Reply # 40
Date: Dec 6, 2008 - 5:09 PM EST
CHAPTER 11
I HAVE ALOT OF CUSTOMERS WHO WORK AT ALL THREE OF BIGGEST USA MANUFACTURES.HAVE 4 WHO WORK AT FOREIGN MANUFACTURING PLANT.THIS WAS THANKSGIVING(IS THAT STILL P.C TO SAY????)WHILE THE USA CAR WORKERS "BRAGGED" ABOUT SLEEPING UNDER CONVEYOR BELTS,OR HAVING THEIR"BUDDY PUNCH THEN IN AND OUT,SO THEY COULD GO TO THE BAR.THE FOREIGN CAR WORKERS WERE BRAGGING ABOUT THEIR PRODUCTION NUMBERS AND SALES FOR THE MONTH.CHAPTER 11 GET RID OF THE UNIONS,RID ALL COMPANIES OF CAFE STANDARDS RETRAIN NEW WORKFORCE(WOULD BE LINENED UP FOR MILES APPS.)USA AUTO COMPANIES WOULD BE OUT OF DEBT AND PROFITABLE IN 5-7 YEARS)GIVE THEM THE MONEY,BUT TAKE THE FREAKING HANDCUFFS OFF THEM.LIKE IT OR NOT RICH GALEN THESE ARE NOT STUPID PEOPLE RUNNING THE CAR COMPANIES.IT IS THE STUPID CONGRESS THAT PUT THE HANDCUFFS ON,THEY OWE IT TO THEM.WE NEED OUR INDUSTRIAL MIGHT BACK,AND NOW!!!5TH GRADE EDUCATED PEOPLE MAKING 6 FIGURE INCOMES WHILE SITTING AT BARS,HOW CAN BOB MARNELLI SEE THIS?CAN'T CAUSE UNIONS WOULD SCREAM BLOODY MURDER.UNIONS GONE,CAFE STANDARDS GONE PROBLEMS FIXED.FACT!!!!!!!!!!!
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Reply # 41
Date: Dec 6, 2008 - 6:48 PM EST
Diane- C'mon! Please!
I must respectfully disagree. WE owe them nothing. It is a shame that they seem to be incapable of making profits now that they are finally making vehicles that are worthy of purchase. What took them so long? If the Toyotas and Hondas enjoy enough market appeal that they can sell it for more after producing it for less and it lasts longer and has higher RESALE VALUE, the problem should be obvious. The big 3 should learn what they are doing wrong and fix it, or just go away-one of them or all of them. I really don't care. We would never miss them. Reality bites.

There will always be plenty of new vehicles available for sale in the marketplace and the big 3 have not earned any special right or priveledge to a spot in the market place. As I said previously, bankrupty restructuring or bailout, either way they have driven away more market share with all of this news. If the DC crooks give them our money, they will just make it worse, ensure a backlash and perhaps produce the last straw before the national revolt that seems inevitable.
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Reply # 42
Date: Dec 6, 2008 - 7:20 PM EST
Absolutely Great Article
Last one out turn off the lights! No doubt. Michigan is a craphole anyway. We're done with all of you. From Wall St. to California, no more bailout free money no strings attached. Better start pulling on your bootstraps.
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Reply # 43
Date: Dec 6, 2008 - 7:21 PM EST
California, Philadelphia
You aren't getting any either. Find a way to cut spending.
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Reply # 44
Date: Dec 6, 2008 - 7:22 PM EST
Akagi
Ahh, you again. Akagi, the Jap aircraft carrier that led the attack on Pearl Harbor. And there you go again calling me names ("brainless", "Idiots like you") and flaunting your same screen name.
And throwing unsubstantiated "facts" at me.

Yeah, right. Toyota started building plants in the US in 1988, and so should have comparable legacy costs to the Big Three. 1988 was 20 years ago. That means hardly any retirees yet.

Line workers there make 25 to 50% less than in Detroit? Hm hm. Look, asnoggy, I think nothing you say is reliable. So don't post any facts or figures without naming your source, because I won't buy it.
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Reply # 45
Date: Dec 6, 2008 - 7:35 PM EST
Get Rid of the Rust
Let nature take its course and may the strong survive. Let them not eat cake.
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Reply # 46
Date: Dec 6, 2008 - 7:50 PM EST
Big 3 and a Big Swindle

I did read all of the comments above mine. What I found lacking is something very simple so that I cannot explain why it is not there.

You see, they already secured 25 billion for "retooling" for more fuel efficient vehicles. Where are those vehicles? Oh, I know, all of you are going to say "Well, you cannot retool the factory in 4 weeks." Correct, you can't.

So, why am I not hearing ANYBODY from Big 3 saying to Congress something like this "Look, guys, how about you stand down from your grandstand and listen for a minute. If it weren't for YOUR bull**it, we would import as in NOW 200 boats of our European products and bring it here to sell at profit. So, either you give us money or you stand down on BS regulations with 2 years moratorium(and tell your electorate what you have done) so we can start shipping tomorrow cars we had to promise only for 2011 model year - because of YOUR regulations."

Unfortunately, I didn't hear that. That means only one thing - they don't want to EARN money, they want to be GIVEN money.

So just you know, both GM and Ford can have here in 4 weeks (time to cross the ocean and clear the border inspection) cars we will see only in autumn of 2010 and then go oooohh and aaaahhh over considering their 40 - 50 mpg obtained in STYLE. If we are not seeing them is because BOTH Government and Big 3 don't want to do that. Why, it's total unknown - at least for me.

Considering above said, it's all a Big Swindle and we should consider it such.
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Reply # 47
Date: Dec 6, 2008 - 8:37 PM EST
Talk about "snarky malarky"

Me thinks old Martin is working awfully hard to save hos own job with that load of manure he's dishing out.

Part of the competitive disparity with the foreign markets is the pitiful state of the dollar on the international market.

And that "10% labor cost" is simply a bait & switch tactic.

If I have a "supplier" assemble a part I used to assemble - then the "labor cost" I USED to pay becomes part of the "material cost" I pay the supplier.

I say if we HAVE to do something to bail out these idiots - we put all the retirees above 65 years old on the government employee retirement program; those under 65 need to go back to work; and let the Big 3 re-negotiate all aspects of the contract - including pay scales, benefits, paid time off, etc. to be competitive with their foreign-owned competitors.

Otherwise, all we're doing is throwing good money into a hand we can't win.
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Reply # 48
Date: Dec 6, 2008 - 10:40 PM EST
These guys will ...
probably get the money and do well for themselves and Barny and the rest of the gang will have another trough to grab campaign funding from.

What man would go to congress and kiss the butt of a bunch of criminals if he weren't also criminally minded?
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Reply # 49
Date: Dec 6, 2008 - 11:42 PM EST
Kabuki Theatre
I think this whole thing is theatre. I think the Detroit Three are pretending to want a bailout, when actually they hope to go home empty-handed. At that point one of two things can happen. Either the UAW backs down so the Detroit Three can stay afloat, or the UAW refuses and the automakers go Chapter 11, in which case a judge will decide the terms that the UAW will take.

Why else would they roll in for the first round so poorly prepared and in such an ostentatious manner only to get sent home, and then upon their return ask for more money once it looks like congress might actually hear them out?

They don't want the money; they want to appear to be doing due diligence while the end game is killing off the UAW. I hope it works.
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Reply # 50
Date: Dec 8, 2008 - 10:52 AM EST
Chip
The average Toyota worker makes $48 an hour (pay+benefits) and a Big Three worker $73.20, which is 65%, so a Big Three worker makes 35% more which is well in the range of my 25-50% claim.

Chip, what you buy or don't buy is none of my concern.
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Reply # 51
Date: Dec 8, 2008 - 10:58 AM EST
Diane
Chrsyler still builds pretty crappy vehicles and GM only so-so. Only Ford compares to Japanese quality. They still pay more in benefits and pay than their non-Union peers at Toyota and Kia, etc. And it is not the role of government to use the taxpayers money to save private entities. There are avenues for that and it is called bankruptcy court.

I am not for finishing them off, but I am not for welfare for them either. Huckeabee the other night talked about a reporter who lost his job in SC, where is his bailout? He won't get one and neither should any of the so-called "Big Three."

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