Should the US bailout the big three automakers?

[Jamo]

...and I surely wished you and Rick Lake would learn what sentences and paragraphs are all about.

Even unions use them.

[sparks]

i tAke tHAt cLaS tWo

[DAVID GAGNARD]

Read a report tonight that says the average UAW big 3 worker makes $81.18 per hour (benefits included), while the average non-union Toyota worker (in the US) makes about $48.00 per hour!!!!!!!!!!!!!!!!!!! the Toyota employees average $100,000.00+ a year with overtime pay.......that equates to about $1,000.00 per vehicle........and the UAW is NOT bleeding the big 3 dry?????????

Seems to me paying someone $81 bucks an hour to bolt on wheels or other parts is a "little" high, don't you???????

BTW: I'm a true blue Ford owner/driver...since 1976 my wife and I have owned 11 Ford cars and trucks....none have lasted 100,000 miles, a few lasted a lot less, like 75,000 miles.....on the other hand, my company car is a Toyota,10 years old now and as of today has 403,000+ miles on it......had to change the fan belt and valve cover gasket (at about 225,000 miles) other than routine mantanence....gee, they don't make em like they used to, do they????????????

Lets compare, my wife's present car, a Taurus had to have the catalytic converter replaced, 2 of the 6 fuel injectors replaced and needed new brake rotors (warped) all before it had 30,000 miles on it!!!!!!!!!!!!!!! It rides like a chuck wagon, seats are hard and uncomfortable and two of the four widows squeak when going up or down since brand new, has a lot less room in the front than my Toyota,but she had her heart set on a Taurus, so that's what she got......
My 05 Super Duty Crew Cab F-250 diesel had to have the turbo replaced at 4,200 miles and now at a whopping 27,000 miles has developed a nice little oil leak!!!!!!!!!

Guess what my next vehicle will be?????????????????

David

[sparks]

I cost my employer w/benies around $65hr. NO way in hell a uaw worker costs $81hr. My hourly wage is $39hr. UAW about $25 or so. My benies are rite up there w/ there's.
I know, the exec's get 20% of the 81???????? Dont believe all you read!! Thats another issue in itself.

[venum14]

The bailout is reward to all the CEO's or corporate leaders for running their organization into the ground, and taking every American taxpayer with them. This free meal ticket will open the floodgates for every large company on the verge of bankruptcy, to waste what assets they have remaining.

Can we all get loans and buy multiple Cobras? One for each season would be nice. Can I combine my last two cents with my neighbor's nickel and buy a foreclosure home? Let us get real; we (the taxpayers) are running out of money to give our government to loan out!

My $.02 now down to $.01

[snakebitekit]

Mr Sparks please remember that there are benefits the employer match's that are not recorded on the pay check.

[jhv48]

Everyone has great ideas and strong opinions. BUT,

HAVE ANY OF YOU TOLD YOUR SENATOR OR CONGRESSMAN HOW YOU FEEL?

Your complaints and concerns amount to a big NOTHING unless you make your concerns known to the people that will ultimately decide the fate of the big 3.

Write, call or email your representatives and tell them how you feel!

[Bobcat]

Sparks .... bitter ? No ... disillusioned , experienced , but like you , also tired of all the BS . However , when I made the comments about the unions , it`s all from first hand experience over the years .
I was involved on a project with a major Railroad to work on a hydraulic hopper car riveter . Riveting the stakes on the sides was a dirty and dangerous job that took 5 people 15 to 17 minutes/side .... riveter , bucker , catcher , pitcher and helper . Done hydraulically , it would be faster and a lot safer .... but the Unions fought us all the way .... and no one was going to be let go .
Another example ... same Railroad ... took three trades and 45 minutes to check the fluid level in a reservoir .... come on .
I also worked on vacuum arc furnaces in the steel industry . Spent a week at Wyman Gordon in Worster , MA on a startup that should have taken two days as I wasn`t allowed to touch anything on the equipment that I designed . I had to stand there and show a Union man everything single thing and pray it was done right .... and this guy made three times my salary ! But what did I know ... I was just a Southern boy .
Did a start up on a Plasma arc torch in Mountain View , CA ... all non union and was out of there in three days after arc strike on the second day . Same thing at another company in Albany , OR on a Titanium furnace except that we spent on day on the river
I remember working with a company that manufactured track maintenance equipment for the RR and seeing a piece of equipment sent to Conrail that showed in the photo about 18 men working it . Only problem was that it was designed to work with 10 to 12 .... but Union rules added the rest .
I have many other first hand examples .... but I`ll also agree that everyone`s hands are dirty . However the time has come to draw a line and stop rewarding poor performance , no matter from who .
A good post from RogerH on the Ford plant in South America ... and even more telling was the comment that the UAW would not allow a plant like that to be built in this Country . Really sad .
I`ve also spent some time in the Japanese auto plants and the big difference I see is that Management and the workers mostly work together and aren`t antagonists .
No offense intended , but maybe that`s why the South is on the way to becoming the new Detroit?

[sparks]

:at least they wont have to pay for snow removal.
no matter what, alot will suffer from chity managemant and some lazy workers. They should learn from this instead of blameing everyone else. Like I said , I do see both sides.
Maybe the thread question should read( should the taxpayers LOAN the big3)

[Don]

Note the last two paragraphs:

Source: NY Times.com

November 19, 2008

" Facing a Slowdown, China’s Auto Industry Presses for a Bailout From Beijing "

By KEITH BRADSHER
GUANGZHOU, China — Do Chinese automakers need a bailout?

China’s car industry is quietly pressing Beijing for government help as it copes with a jarring slowdown, top Chinese auto executives said in interviews here on Tuesday.

This autumn, after six years of 20 percent or more annual growth, vehicle sales were flat or slightly negative, a shock to an industry that has borrowed heavily to build ever more factories for a market that had once seemed insatiable.

Citing the $25 billion in loans that Congress has already approved to help American automakers increase green research, and the additional $25 billion in loans the American industry is seeking this week to cope with a hobbled economy, Chinese executives are now telling the government here that they also need emergency measures. They are seeking lower taxes on new cars, lower fuel prices and increased grants for research into hybrid cars and new technology.

“The Chinese government will undoubtedly support us,” said She Cairong, the general manager of JAC Motors, adding that state-owned Chinese banks had already become more willing to lend money to Chinese automakers in recent weeks as bank regulators have eased restrictions on loans to heavy industry.

Still, Mr. She and other industry leaders said that while government officials have voiced concern to them about the industry’s deteriorating condition, Beijing has not committed to any specific help.

“They’re asking the questions but they haven’t said anything yet” on how aid might be structured, said Frank Zhao, vice president and chief technology officer of Geely Automobile Holdings. “We really hope the Chinese government will come and help us.”

Michael Dunne, the managing director for China at J. D. Power, said in a telephone interview from Shanghai that the executives’ remarks here represented a shift in the position of the Chinese auto industry.

“This is the first I’ve heard of it,” he said, adding that “as the market slows down, Chinese automakers are going to face competition as they never have before.”

Lots across China became increasingly crowded with unsold cars as sales were slightly lower in August and September than a year earlier. Yet manufacturers unexpectedly increased their shipments of new vehicles to dealerships last month by 10 percent compared with a year earlier, seeking to keep new factories busy and avoid layoffs.

Retail sales figures for October are due this week, and are likely to show a further decline that could set off another round of price cuts in a market where discounting is already becoming increasingly common.

Detroit has repeatedly found that raising production in the face of weak retail sales is a recipe for financial trouble, and there is little reason to think that will be different in China.

The Chinese auto industry faces several threats simultaneously. Weakening economic growth, falling real estate prices and a yearlong plunge in the stock market have made consumers leery of spending money. Fuel prices in China are still high despite the recent decline in world oil prices. And Chinese auto exports, mostly to developing countries in Eastern Europe, Southeast Asia, Africa and Latin America, are starting to crumble.

China’s car industry is already bigger than Japan’s, and is approaching in sales the industries of the United States and all of Europe. China is on track to sell 10 million vehicles this year, while demand in the United States is dropping toward 14 million vehicles.

Automobiles have played a central role in Beijing’s recent plans to move up the manufacturing chain, from making cheap goods that require unskilled or low-skilled workers to more advanced products.

To that end, the Chinese government has provided considerable help to China’s nascent auto industry with research and development spending, as well as loans from state-owned banks.

But there is some disagreement within the Chinese auto industry now about how the government can be most helpful.

Some companies, like Geely, are looking for more government grants to help them develop hybrid gasoline-electric cars and other cutting-edge technologies for which research spending may be cut if sales do not recover.

But Zheng Qinghong, the general manager of Guangzhou Auto, one of China’s largest and fastest-growing automakers, said that the Chinese industry needs the government to help consumers become enthusiastic again about buying cars. Retail sales have dipped a couple percentage points to 750,000 a month; sales were still rising at an annual pace of 24 percent a year ago. “The best way is to boost growth in demand” for cars, through steps like lower car taxes and lower fuel prices, he said in an interview.

Western multinationals would probably benefit at least indirectly from any government initiative to help China’s auto industry, because Western companies are required to do business through joint ventures with Chinese automakers, most of which are partly or entirely government owned.

Jeffrey Shen, the chief executive and president of one of these joint ventures, the Changan Ford Mazda Automobile Company, said that he did not know how the government would help, but that some steps were inevitable. “I’m sure it will come,” he said, with both extra assistance for research and greater availability of loans.

The renewed willingness of state-owned banks to lend money to the auto industry this autumn is in contrast with the United States, where General Motors, Ford and Chrysler have found banks and other investors leery of lending to them.

Government-mandated lending quotas, not interest rates, tend to be the most important limit on bank lending in China. Regulators have begun easing the quotas this fall after four years of fairly tight quotas imposed in an effort to control the growth of the money supply and limit inflation.

Direct loans from the government of the sort under discussion in Washington are not needed in China, Mr. Zheng said. “For now, the Chinese auto industry doesn’t need saving” in the same way as the American industry, he said.

Chinese automakers began facing real difficulties only in the third quarter, and have not yet released results for that period; many release their results only twice a year.

Gas prices have not fallen in China because the government pushed up regulated retail gasoline and diesel prices at service stations to more than $3 a gallon over the last year, but has not lowered retail prices as oil prices have plunged.

The government is trying to encourage energy conservation and allow oil refiners to recover financially from sometimes being forced to sell gasoline and diesel below cost earlier this year during the spike in oil prices.

China’s top three export markets for fully assembled vehicles are Russia, Ukraine and Vietnam, all of which are struggling with the global financial crisis.

Great Wall Motor has had a 40 percent plunge in its monthly exports to Russia in the last three months, said Steven Wang, the deputy manager of the company’s international trade division. But Great Wall Motor has still managed to avoid any layoffs because domestic sales remain strong enough to maintain employment, Mr. Wang said.

With China’s largest automakers involved in joint ventures with American automakers, and with the entire Chinese auto industry now seeking its own forms of government help as well, criticism of any bailout for Detroit has been muted. Producers elsewhere in Asia, facing declining markets at home as well, have also been hesitant to criticize.

“We support vigorous competition in the automotive market place and recognize there may be extraordinary situations when such a vital sector of the American economy may require unprecedented actions to assure its long-term viability and a healthy American economy which benefits everyone,” said Jake Jang, a spokesman for Hyundai Motor in South Korea.

But managers at some of the smaller Chinese manufacturers, especially those with hopes of entering the American market some day, are unhappy about the prospect of assistance for Detroit from Washington.

“If G.M., Ford and Chrysler get a lot of support from their government, it’s not fair,” said Gordon Chen, the international business manager of Changfeng Motor, which has displayed cars at the last two Detroit auto shows in preparation for entering the American market in 2011 or 2012.

[mr bruce]

Love it, If the US gov. helps US companys, it's unfair to Chinese companys. Hey, maybe we will win the race to the bottom.

[RedBarchetta]

I will wind up rubber bands under the hood before I buy a Chinese car.

[bobcowan]

Interesting thread. I read every post, and noticed a few things.

Despite stats to the contrary, people insist the big three only make crappy vehicles that nobody wants. And yet, GM outsells every other car maker on the planet.

People insist that their toyato is better than anything made in the US. And yet, JDP, CR, etc, all point out data to the contrary.

More griping about the unions than anything else. Which has little - if anything to do with the actual bail out money.

"Don't give them my hard earned dollar" is a common theme. The bail out is in the form of Gov't loans and loan guarantees. These loans could end up being lost money, but that's not the intention.

When loans are provided, they are for specific purposes. Not $10M for an exec bonus. Some of that money will find it's way into the wrong pockets, it always does. But, didn't that also happen with the the Katrina money? Nobody rallied against that bail out.

Lets look at what will happen if Chrysler fails. tens of thousands of workers will be unemployed. Not paying their rent, or paying of their debts. They will file for bankruptcy, and millions of dollars will be lost to the economy. Credit card interest rates will rise, so the banks can make their profits. More people will go under because they can't afford 25% interest every month.

All the companies that support the workers will go under. Frome the company that makes brake pads, all the way down to the guy who runs a hot dog stand outside the gate. Remember the Peace Dividend of the early 90's? Same thing will happen on a much larger scale.

15 manufacturing plants will close. Now, out of all the BS, rhetoric, stats, and numbers, this is the most important. We will lose manufacturing capability. Once the world economy picks up again (and it will), what will happen? We will be unable to manufacture cars, brake pads, engines, washing machines, etc. We will have to purchase our manufactured goods from Korea. Our economy will be so bad, the dollar will be almost worthless. We can't build our own stuff, and we can't afford to buy imported stuff. We'll al be driving a Pravda.

A country that can't make stuff has nothing to offer the world economy. Ask Viet Nam about that. We will be a third world nation, unable to pull itself out of a depression. Countries like Japan, Korea, Germany will be running the show here.

And, finally, think about defense. Remember WWII? What allowed us to win that war? Numbers. War is a numbers game. Whoever has the greatest numbers of planes, ships, tanks, and men, will win the war. In the 40's, manufacturing plants all over the US were converted to wartime use. Singer made tens of thousands of rifles. Chrysler made tanks. Ford made jeeps.

If we can't make stuff, we can't defend ourselves.

If we lose our manufacturing capability, it will be the end of the US as we know it.

[RedBarchetta]

Bob, we still make the BEST laser-guided bomb/missile on the freakin' planet. And we don't need a vehicle production facility to manufacture that. I hear what you're saying, but since you've taken this thread toward more of a war-preparedness angle, allow me to share a quote:

"I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones." - Albert Einstein

If our borders were ever breached, no amount of amory is going to matter. It will be a different war theater, much bleaker than your worst fears could ever imagine. I personally don't see the cause/effect of reducing our manufacturing capabilities in a 21st century global economy. It's too fluid...resources will be deployed where it's most economical.

And whether we choose to accept it or not, this debate over saving the Big 3 has EVERYTHING to do with protecting the unions. That's what the Democrats support, and now that they have the power they will enforce their will. It's the only economic card they have to play right now. The UAW, over decades, has brought the Big 3 to this very day. Chrysler's mis-steps in the '80s' were merely a distance early warning.

The Big 3 make decent cars...not world class but decent. Their business models are all flecked up though and they haven't re-charted their collective courses fast enough. Now that they are on the edge of the abyss, they start being more public about how they are doing this and doing that. It's too little, too late.

Let the BKs happen, give the dust a chance to settle. A python can't digest a pig quickly...it takes time. Patience is running thin and that is what is causing many at the top to make poor decisions. We have lost our ability to take the LT view and stick to the plan. Everyone wants the quick fix and is afraid to swallow the medicine (no matter how awful it's going to be). I don't care about the rest of my life...God has a plan and will take care of me. I'm worried how it's going to be for my kids. We (our country) are simply not thinking in those terms at the moment.

[tool time George]

I say NO to all forms of bailouts. Isn't GREED a nasty vehicle.
Everyone from the top of the chain to the bottom is guilty of it on some level.
Unfortunately our families will suffer for it for generations to come.
Spend the money on health care.Charging 387 thousand for surgery to someone who makes 10$/hr is utterly ridiculous.

[ng8264723]

That $400,000 surgery costs $400,000 b/c you have people whospend 15 years training for the job. It's interesting that people don't wat to pay MD's but will pay a baseball player millions. Health care is not a right it's a privilege.
ED Doc

[G.R.]

No one came to bail me out 20+ years ago when I was sitting on a custom built spec home. Every freeking dime I had was tied up in this property, my business assets, my personal home, my investment properties and what cash I had, Yes I was like any other young builder hoping to "cash in"(greed) ... I started the home when construction notes were easy, interest rates low...fast forward 9 mos later ,the economy was tanking, faster than it is now and we had double digit interest rates, the home building/construction industry was in the toilet here in Colorado.

I was damn close to considering filing a Chapter11 and suck up bad credit reports for years after. Thankfully, Tim Nelson, my banker(Bless him!), worked with me extending my construction note for another 9mos and by a quirk I managed to sell my personal home at a small profit. I got a CO(certificate of occupancy) on the spec home and moved into it myself. 6mos or so later the house sold, actually for more than I'd hoped, I paid off my loans and debts....but I never expected the Gov't to help me out...all they wanted was my business and payroll taxes paid.




Maybe large corporations(like the Big 3) should try to work it out on their own and if they can't they fail...like myraids of other businesses. The only reason it has become as bad as it has with these companies is because of mis-management and knowing that ol' Uncle Sam is there with his(our)checkbook....I say NO More...No bailout, (hi-risk) loan or whatever you want to call it....they made their bed let them lie in it and figure a way to make it more comfortable

[Great Asp]

Originally Posted by RedBarchetta

I will wind up rubber bands under the hood before I buy a Chinese car.

Amen Brother!

[Cobrabill]

As of 1722 mountain time the Senate told Detroit to piss off.

[sparks]

get back on there private jet and go home !