..along with the outright closure of Chrysler.. and strictly supervised financial assistance to Ford ....with the following conditions
Of the three I think Ford has the best heads at the top. Chrysler doesn't deserve to survive and Cerebus just needs to take a smack-in-the-nose for it's risk and lack of innovation.
GMNA has a lot of valuable parts but IMO it's beyond saving as GM the pillar of American industry. Those valuable parts include.. ..its full sized truck business, but not the SUVs ..its midsized lambda crossovers ..the Vue ..the Corvette ..the Malibu ..the Cadillac business ..its 2-mode hybrid and E-Flex R&D for the future ..apparently the Cruze as a replacement for the Cobalt.
What has little or no value and should be cut loose is .. ..the entire upper management team; two months severance, Cya. ..the entire midsized BOF business, TrailBlazer, Envoy, ColoCanyon; ..Saturn, Buick, Pontiac, GMC every part of all of them.; ..the legacy costs via VEBA; ..the UAW; if the workers want to keep their jobs they will be working in competitive non-union shops prolly located in the southern midwest and south. ..half the current Chevy and Cadillac dealers and all the dealerships related to the other brands.
The resulting GM Holding Company will be about 1/3 to half the size in volume as it is today but it will make money. It also saves an iconic name.
Fezo, Does Volcker have any automotive or manufacturing experience? I thought Volcker was an all-pro bean counter. if you care to take a look, here is Lee Iacocca's website> http://www.leeiacocca.com/
Maverick ??? You mean Palin's running mate ? Uh. NO ! 15 years as a headhunter tells me that McCain's strength is reaching across aisles in the relentless search of compromise.
The only person I would trust with $25 billion would be Lee Iacocca...a true car guy.. a track record of accomplishment, innovator behind Mustang and minivans, resurrected Chrysler from the grave. With a complete payback to the feds. Name another exec who paid back their bailout money. I can't think of anyone.
When Chrysler was giving Mr. Iacocca his swan song, ( aka. retirement party) he reminded them to get the quality up. Too bad they didn't listen to him.
I understand the batteries will be about 1/3rd of the cost of the VOLT. I am sure the electric drive motor will come from China. Does not leave many crumbs for the UAW to munch on. Or as this article along side yours Says:
Let the people eat cake
WASHINGTON (MarketWatch) -- The most powerful people in the world will dine on roasted rack of lamb, fruitwood-smoked quail and a chanterelle-jussed tomato, fennel and eggplant fondue, while millions of people around the world lose their jobs, their homes and their hopes. President George W. Bush will host 97 other delegates from the Group of 20 nations at a working dinner Friday at the White House. They'll discuss how to coordinate the emergency actions needed to prevent a severe global depression while they sip on three different wines, including a delightful Shafer Cabernet "Hillside Select" 2003. Bush has put himself into a tricky spot with this dinner. On the one hand, you can't invite people over and not feed them. On the other hand, the gourmet dinner being offered to the leaders may not send exactly the right signal to more than 100 million people who've been pushed back into poverty in the past year . Just last week, Bob Zoellick, head of the World Bank, concluded that "as always, it is the poorest and most vulnerable who are the hardest hit." Tonight at the White House, he'll be thinking of those words as he bites into a heavenly pear torte with huckleberry sauce. Here's the menu for Friday's dinner, as released by the White House:
* Fruitwood-smoked quail with quince gastrique and quinoa risotto * Landmark Chardonnay "Damaris Reserve" 2006 * Thyme-roasted rack of lamb and a tomato, fennel and eggplant fondue with chanterelle jus * Shafer Cabernet "Hillside Select" 2003 * Lolla rosa, red oak and endive with cider vinaigrette * Baked Vermont brie with walnut crostini * Pear torte with huckleberry sauce * Chandon Étoile Rosé.
Bon appetit! -- Rex Nutting, Washington bureau chief End of Story
That would be the E-flex system in the upper tier. I actually think that it has good long term prospects assuming GM stays afloat. The Volt itself won't save GM but it has to be keep in development for the next decade. It has to be on the streets for them to get solid long term feed back.
The bad thing about the little 3’s outstretched had is the unseemly haste with which the Democratic leadership has lined up to satisfy its unjustified demands and pay back the support of the unions at the expense of millions of “un-bailed-out” taxpayers.
The auto industry is no different to any other industry equally justified in seeking protection from the current economic realities.
This is an industry that is in dire need, not of more funds to hemorrhage through unsustainable employee & retired employee benefits, but rather of a rapid and unavoidably painful adjustment to reality.
DETROIT (AP) -- In recent months, General Motors has been burning through about $3.1 million an hour, or $52,000 -- the price of a well-equipped Chevy Tahoe SUV -- every minute.
How much longer can this go on? And perhaps more important, can GM hang on until Barack Obama and the new Congress can come to the rescue?
Hmm, let's see... at that mileage, GM's tank should last 336 days when Congress fills their tank with the $25B. Sorry, nothing left for C or F.
This gas mileage is worse than a H1 Hummer!
What a way to spend our tax dollars. I vote a HUGE no to this because another $50B is right around the corner.
Like I said, use the money to support retraining the workers and give them health care transition and support while the new company is reorganized. Build only the new, successful models like Malibu, CTS, Corvette, Siverado and ONE of the Lambda CUV's. Then concentrate on beating Accord, Corolla, CR-V, Camry, Civic.
The problem is you are assuming that GM has a viable reorganization plan. GM thinks they are "re-structuring" now and simply need cash to complete their plan. I think they have only explored the tip of the iceberg. GM needs outside consultants to evaluate the company and recommend a plan. GM's management is not capable of coming up with a viable plan. If they could, they wouldn't be in this position begging for money. And please no government oversight committee.
The good thing is I'm reading more and more of our Congressmen either don't support a bail out of GM; want conditions applied to the bailout; or want to see a viable plan. Even Obama will have conditions that GM produce more green cars. I think by the time GM see this money (if they get the bail out) they may wish they hadn't taken it. The best option may be for the government to protect the suppliers while GM goes through bankruptcy re-structuring.
Either way, the days of the Big 3 are over. We will lose jobs in the auto industry no matter what happens. The days of auto sales over 16 million units may never come back.
Too late, the banks and the insurance industry already got their first bailout dibs. AIG is up over what, 150 billion?
The reason? "It is so interconnected with other financial firms that its problems have a jolting ripple effect both in the United States and abroad." AP
I believe it would be a mistake for the government to attempt to bail out the automotive sector without demanding concessions from labor that would essentially bring its costs in line with non-union ones. Some differences in the work rules could remain in place, so long as their economic impact is minor. This would be harsh for the auto industry workers, but anything less would be unfair to tax payers and workers in other industries. Also, anything less would ultimately fail since, in addition to manufacturing products that people choose to buy - a huge challenge, given current consumer preferences -the domestic auto industry must be cost competitive to survive.
A major argument for throwing a lifeline to the auto sector is that its demise would increase unemployment. The degree of the increase is arguable, but more jobs would be retained, even with a shrunken domestic auto sector than without one. In addition, for a variety of reasons that are unique to this industry, including the long lead times required to design and introduce new products, the volatility of fuel prices plus the impact of the credit crisis, a good case can be made that the perfect storm has impacted autos more severely than other industries.
This message supercedes my previous message, which is incomplete.
I favor government aid to the domestic auto makers, but with significant caveats.
I believe it would be a mistake for the government to attempt to bail out the automotive sector without demanding concessions from labor that would essentially bring its costs in line with non-union ones. Some differences in the work rules could remain in place, so long as their economic impact is minor. This would be harsh for the auto industry workers, but anything less would be unfair to tax payers and workers in other industries. Also, anything less would ultimately fail since, in addition to manufacturing products that people choose to buy - a huge challenge, given current consumer preferences - the domestic auto industry must be cost competitive to survive.
I think it would be very difficult, but perhaps not impossible in the current environment, for the Obama administration to demand the concessions from organized labor that are essential for the long-term viability of the domestic auto makers, but without them I believe any financial help would be doomed to fail. One could argue that it would have been easier for a McCain administration to play hardball with the unions, since they didn't enjoy much union support. On the other hand, there's the "it took a Nixon to go to China in the '70s" argument. It says that, because Obama had strong union support, he is in a better position to extract concessions than McCain would have been. He would have to use all of his considerable political skills to obtain the necessary compromises, though, and that's after he's persuaded Nancy Pelosi and others to side with him. At this point we don't even know if President elect Obama has the desire and will to demand major concessions from the unions, in exchange for government help.
A major argument for throwing a lifeline to the auto sector is that its demise would increase unemployment. The degree of the increase is arguable, but more jobs would be retained, even with a shrunken domestic auto sector than without one. In addition, for a variety of reasons that are unique to this industry, including the long lead times required to design and introduce new products, the volatility of fuel prices plus the impact of the credit crisis, a good case can be made that the perfect storm has impacted autos more severely than other industries.
Should Washington demand that the auto makers be forced to only produce green cars, as a condition for receiving aid? Absolutely not! Detroit has to produce cars that consumers want to buy, and despite a series of bad calls in the past, auto industry managers are more in tune with consumer needs and desires than politicians are. In addition to being bad strategy, it would be even a worse precedent to permit Washington to dictate auto design, beyond what it already does with safety, emissions and fuel economy standards.
The following two caveats should be added to the ones listed in my previous message:
First, management should be strongly encouraged, if not required, to reduce its compensation until the companies' viability is restored. For this effort to succeed, it's important that management lead by example, and there should be shared sacrifice.
Second, the demand for domestic vehicles needs to be stimulated. I would favor an appeal to patriotism in this time of need. To that end, the industry should mount a strong marketing campaign to encourage consumers to consider a domestic brand before they buy their next vehicle. It could be useful for the industry to appoint one or more respected, charismatic spokesperson to make its case with consumers.
That was all GM advertising and ended up a big fiasco. The 276 winners had to come up with about $7000 in taxes for the Federal Government. Oprah drives a G500 Mercedes last I read. Probably does the Limo thing most of the time. Oprah is no friend of the Domestics or UAW labor.
For a brand new Pontiac G-Six, the model given away on the show, the sticker price is $28,500. The $28,500 would need to be claimed as income so, depending on the individuals tax bracket, the tax could be as high as $7,000. And that was after Pontiac agreed to pay most of the local charges, including state sales tax and licensing fees.
The Harpo Spokeswomen said winners had three choices. They could keep the car and pay the tax, sell the car and pay the tax with the profits or forfeit the car.
I'm not assuming they have one. If there is none or the one they have doesn't pass muster, then no bailout.
Secondly, I WOULD take the money out of the $700 bil, as I assume that these banks and securities companies are the ones holding the notes on GM. So in essence, I'd see the Gov't becoming a quasi receiver for GM.
As far as the oversight committee, it could consist of people like Jobs or Buffet.
Also, I don't see the need to have wholesale firing of upper management. WHile you could ask Wagoner to fall on the sword, I think Lutz, LaNeve, and Peper have done a wonderful job revamping the lineup in the last 2 1/2 years.
I'm already with ya on the Lee Iacocca thing. I can't think of a better guy in the nation to watch over the spending of the $25B...umm...I mean the $50B. Could $100B be that far off? This one is right up Lee Iacocca's alley!
And I mean that with respect, after all, I have read Lee's autobiography. I was really impressed with his strategic vision, his intensity in following through on difficult projects, and his keen desire for the company he's working with to succeed. An incredible talent in the auto industry.
Way back in 1979 when Chrysler needed government help, there was a political cartoon that perfectly captured the situation. If featured an old Plymouth Fury with giant tail fins teetering halfway over a cliff, with a tow truck parked nearby. A bystander wearing a shirt labeled U.S. Taxpayer was staring at the car on the cliff. The tow truck driver was nonchalantly picking his teeth and telling the taxpayer, "I can tow it out, or push it over the cliff, but either way it's going to cost you."
but isn't that the auto industry for you? I mean, these vehicles are expensive creations and always have been. I'm talking about individual ownership, that desire to have one when you're young. But don't yet have much money. That's where they cause so much anxiety.
And when they reach the "feed me with parts" stage, things really get interesting. A lot of people have been hurt badly by them, yet, look at the wonderful freedom they provide you with. Not a right to have a car, it's a responsibility, eh? Isn't that how the lecture to the 16 year old kid goes down...pretty much?
I think it would be very difficult, but perhaps not impossible in the current environment, for the Obama administration to demand the concessions from organized labor that are essential for the long-term viability of the domestic auto makers, but without them I believe any financial help would be doomed to fail.
But why does government need to get involved at all? Think about this - if the government says "NO" to any loans or grants, then what are the options of GM and the unions? They then have to sitdown and figure out how to get their current costs = income. Instead of changes next year, they make them tomorrow. They could sit down tomorrow and decide to cut, cut, cut until costs = income. So they have a way out. But they would prefer to basically keep playing the NICER game of slow change/business as usual with the taxpayer subsidizing them.
If the government stays out of this, then the worst-off (GM) of the Big 3 and unions, need to decide whether to 1) stay in business through whatever cuts necessary tomorrow, or 2) die.
If the government intervenes then you're going to have a GM little-changed, full of bloat, with wages and benefits, and management systems that will continue to lose money.
COLUMBUS, Ohio – Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.
"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle. "We have made dramatic, dramatic changes and the UAW was applauded for that," he said.
"We cannot afford to allow to see this industry collapse. There is a real concern that could happen."
The extreme levels of both denial and arrogance in the senior management at this union are just incredible, especially given Gettelfinger's last statement there. They really will ignore reality until they have lost all their members their jobs.....
The Allergists voted to scratch it, and the Dermatologists advised not to make any rash moves. The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve, and the Obstetricians felt they were all laboring under a misconception. The Ophthalmologists considered the idea shortsighted; the Pathologists yelled,
'Over my dead body!' while the Pediatricians said, 'Oh, Grow up!' The Psychiatrists thought the whole idea was madness, the Radiologists could see
right through it, and the Surgeons decided to wash their hands of the whole thing. The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said,
'This puts a whole new face on the matter.' The Podiatrists thought it was a step forward, but the Urologists felt the scheme
wouldn't hold water. The Anesthesiologists thought the whole idea was a gas, and the Cardiologists
didn't have the heart to say no. In the end, the Proctologists left the decision up to some a--holes in Washington.
I would not believe a word Gettlefinger says. He thinks this is still bargaining with a company that is making money. I think any bailout should include dumping the top Union brass also. They are overpaid porkers in my book.
The American people are all getting the straight scoop on just how much more the UAW workers make than the average worker in the USA. I had a lady in Church say something about over paid auto workers making $75 per hour. I did explain that was the total package. I told her to hang onto her wallet as the Feds were going to extort the tax payers to keep their promises to Detroit.
The voters will remember who enabled the UAW to continue making the big bucks if a bailout is given.
Just had a disturbing flashback to a government-sponsored automotive black hole... British Leyland (MG,Triumph, MGB and the rest of garage) and their noteworthy Lucas "we don't need copper" Electrical systems.
President-elect Barack Obama said he believes that aid is needed but that it should be provided as part of a long-term plan for a "sustainable U.S. auto industry" — not simply as a blank check.
"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in an interview with CBS's "60 Minutes" that will air Sunday. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan — what does a sustainable U.S. auto industry look like?"
The AUTO industry will not collapse. Maybe GM, maybe Chrysler and Maybe Ford. There are a lot more auto makers and good ones. This country needs automakers that build good vehicles and are profitable. I am glad to see Obama is not being stupid like Pelosi.
Absolutely agree! GM needs to figure this out on their own. It's in the UAW best interest to work with GM on a plan to return GM to profitability. Right now, the votes are not there to pass a bailout and the more the UAW talks the less support they are getitng from their fellow Americans. No one wants to hear about how important their jobs supposedly are, while they are standing in the unemployment line.
Please understand that I don't blame the UAW for GM's problems. I think GM could have overcome their high wages with better decisions over the years. But GM is on the verge of bankruptcy and everything is on the table.
Where I come from, they need to submit a business plan along the lines you submit or forfeit the bailout help.
Revolution or nothing. Evolution effort was gallant but failed. It's GO TIME now.
Structure the relieve in 3 stages with hurdle rates that must be achieved before the next wave of relief. You just do not blindly give cash out. Hopefully, they are doing this within the TARP framework.
Who wants to bet this union dies. I do not know when but the new automotive entity that has any future in the US must remove the weight of this anchor around the neck of this industry.
A wolf in sheep's clothing or a cancer. Slowly deceiving it's members right in front of their eyes and causing the very outcome they were born to prevent.
that's certainly the feeling on Edmunds' forums right now, that the UAW is a crisp, fried, road-kill entity that is done. Gone. Cyanara.
Cya, but certainly wouldn't want to b-ya. Later. Gone. Done. Old hat. Crappy, huge, ugly trucks forging their way down our roadways with big, caucasian dudes playing Toby Keith tunes.
how does it affect us individually if we're not buying GM, Ford, or Chrysler products?
By taxing us to pay for their mistakes? Or, socialism 101 in 2008? Oh, well, let them duke it out in Washington, D.C. Or, as Michael Reagan puts it, WasheeDC. He says Washington, D.C. so many times in his life that he kind of slurs it all together.
I wouldn't bet the farm with taxpayer's money to bail them out either. There's a whole heck of a lot of angry folks that are in worse shape that might have something to say about bailing out the UAW jobs!
U.S. jobless claims reach 7-year high Last Updated: Thursday, November 13, 2008 | 1:57 PM ET Comments6Recommend6 CBC News
U.S. initial jobless claims have hit their highest since the aftermath of the Sept. 11, 2001 terrorist attacks, according to figures released Thursday.
The U.S. Department of Labour said the number of Americans who asked for unemployment benefits spiked at 516,000 for the week ended Nov. 4. That level represented a jump of seven per cent, or 32,000, compared with a week earlier.
The jobless claims figures also was the highest since the last week of September 2001. Worse still, economists had expected the number to remain roughly stable at 484,000.
The jobless claims figures indicate a U.S. economy with its prospects heading south, experts said.
"This report provides little reason for optimism about any easing in the pace of jobs declines from the 240,000 drop in October and the risk of an even more pronounced drop," said RBC Economics assistant chief economist Paul Ferley in a commentary Thursday.
As a four-week average, 491,000 Americans asked for employment benefits in the most recent reading, up 13,000 from the 477,000 one week earlier.
Examining these figures as a monthly average reduces the economic effect of a single event, such as a hurricane, on employment.
Another measure of the weakening U.S. jobs situation — the number of workers who receive employment benefits on a continued basis — stayed at a five-year peak.
For the past three weeks, U.S. continuing jobless claims averaged 3.7 million, the highest figures since June 2003.
This is going to be a very interesting week. It's the best Reality TV you will ever see!
There could be a real good reason to hold back bailout cash...cause the price tag will definitely rise to much much higher than $50B...and I wouldn't bet these companies make it even with the bailout cash. I believe it's already too late. Might as well save it for unemployment support and PBGC funding.
Sure it'll be higher than $50B. What's the Iraq war costing? $12B a month last I checked. The economy has been able to absorb that dollar cost without blinking.
"But why does government need to get involved at all?"
The short answer is, it doesn't. There are major tradeoffs associated with no government aid and with throwing the industry a lifeline. Although I dislike the idea of bailouts, and the consequences, I think the negatives associated with not providing a bailout would be worse at this time. In other words, it's a matter of choosing the least undesirable course of action.
If these were more normal times, I would favor you approach. However, due largely to what began as a subprime mortgage crisis, and has quickly expanded into a general banking and credit crisis, and a worldwide recession, I believe that it's justifiable to take strong measures that would be inappropriate during a more typical recession.
It's too late, in terms of the auto makers' cash burn rate, and especially GM's, for your suggestion of management and the unions doing whatever they must to bring expenses into line with revenues to work. While I fully agree that this must be done ASAP, I believe Detroit needs a lifeline to buy some time.
I would say from what I am seeing here. A big share of that 3 million lost jobs are already lost. Car dealers are down on sales by as much as 80% here. They have laid off mechanics, sales, customer service. I would be afraid to walk into a dealership for fear of getting smothered by those that are left. I talked to an engineer this morning that was part of the team that developed some laser surgery equipment. He had 17 years and was handed a pink slip on Friday. He had just gotten married 3 months ago and looking at buying a home.
The government cannot bail out every entity that is hurting. So why the automakers that have foolishly wasted money over the last 15 years?
nippononly wrote : "Its not like GM didn't see this coming. They've been hemorrhaging money for a LONG time and have done nothing to correct the situation. How is giving them more money to waste going to help anyone in the end? It will only delay the inevitable and take money out of my pocket in the meantime. Rip off the band-aid already. It'll be painful, but at least it will be over. "
Unemployment benefits paid out, help no one, they are merely non recoverable govenment expenditures. Batting 1000.
"His name was George F. Babbitt. He was 46 years old now, in April 1920, and he made nothing in particular, neither butter nor shoes nor poetry, but he was nimble in the calling of selling houses for more than people could afford to pay.
The economy has been able to absorb that dollar cost without blinking.
So if you're household budget is that you spend $300 more/month than you're bringing in, you suggest to your wife that you ought to get a time-share?
The economy has been able to absorb the exceptional spending of Washington, but the national is now at $10 trillion, and accelerating. Maybe our social security promises won't be able to absorb that sort of spending?
Instead why don't we all try to spend less, rather than be jealous and try to grab a share! Maybe we need to stop spending $ on Iraq, Big3, oil and farmer subsidies, foreign aid (after everyone in US is fed and has healthcare) ...
Comments
Of the three I think Ford has the best heads at the top. Chrysler doesn't deserve to survive and Cerebus just needs to take a smack-in-the-nose for it's risk and lack of innovation.
GMNA has a lot of valuable parts but IMO it's beyond saving as GM the pillar of American industry. Those valuable parts include..
..its full sized truck business, but not the SUVs
..its midsized lambda crossovers
..the Vue
..the Corvette
..the Malibu
..the Cadillac business
..its 2-mode hybrid and E-Flex R&D for the future
..apparently the Cruze as a replacement for the Cobalt.
What has little or no value and should be cut loose is ..
..the entire upper management team; two months severance, Cya.
..the entire midsized BOF business, TrailBlazer, Envoy, ColoCanyon;
..Saturn, Buick, Pontiac, GMC every part of all of them.;
..the legacy costs via VEBA;
..the UAW; if the workers want to keep their jobs they will be working in competitive non-union shops prolly located in the southern midwest and south.
..half the current Chevy and Cadillac dealers and all the dealerships related to the other brands.
The resulting GM Holding Company will be about 1/3 to half the size in volume as it is today but it will make money. It also saves an iconic name.
WheelMan
Lee seems to still have a grasp there.
The only person I would trust with $25 billion would be Lee Iacocca...a true car guy..
a track record of accomplishment, innovator behind Mustang and minivans, resurrected Chrysler from the grave. With a complete payback to the feds. Name another exec who paid back their bailout money. I can't think of anyone.
When Chrysler was giving Mr. Iacocca his swan song, ( aka. retirement party) he reminded them to get the quality up. Too bad they didn't listen to him.
For your review here is Iacocca's website : http://www.leeiacocca.com/
WheelMan
http://www.marketwatch.com/news/story/gm-orders-more-100000-hitachi/story.aspx?g- uid=%7B86EEDA99-8D0F-4981-883C-84993A84088F%7D
WheelMan
Let the people eat cake
WASHINGTON (MarketWatch) -- The most powerful people in the world will dine on roasted rack of lamb, fruitwood-smoked quail and a chanterelle-jussed tomato, fennel and eggplant fondue, while millions of people around the world lose their jobs, their homes and their hopes.
President George W. Bush will host 97 other delegates from the Group of 20 nations at a working dinner Friday at the White House. They'll discuss how to coordinate the emergency actions needed to prevent a severe global depression while they sip on three different wines, including a delightful Shafer Cabernet "Hillside Select" 2003.
Bush has put himself into a tricky spot with this dinner. On the one hand, you can't invite people over and not feed them. On the other hand, the gourmet dinner being offered to the leaders may not send exactly the right signal to more than 100 million people who've been pushed back into poverty in the past year .
Just last week, Bob Zoellick, head of the World Bank, concluded that "as always, it is the poorest and most vulnerable who are the hardest hit." Tonight at the White House, he'll be thinking of those words as he bites into a heavenly pear torte with huckleberry sauce.
Here's the menu for Friday's dinner, as released by the White House:
*
Fruitwood-smoked quail with quince gastrique and quinoa risotto
*
Landmark Chardonnay "Damaris Reserve" 2006
*
Thyme-roasted rack of lamb and a tomato, fennel and eggplant fondue with chanterelle jus
*
Shafer Cabernet "Hillside Select" 2003
*
Lolla rosa, red oak and endive with cider vinaigrette
*
Baked Vermont brie with walnut crostini
*
Pear torte with huckleberry sauce
*
Chandon Étoile Rosé.
Bon appetit!
-- Rex Nutting, Washington bureau chief End of Story
This is a good use of Federal funds IMO.
The auto industry is no different to any other industry equally justified in seeking protection from the current economic realities.
This is an industry that is in dire need, not of more funds to hemorrhage through unsustainable employee & retired employee benefits, but rather of a rapid and unavoidably painful adjustment to reality.
DETROIT (AP) -- In recent months, General Motors has been burning through about $3.1 million an hour, or $52,000 -- the price of a well-equipped Chevy Tahoe SUV -- every minute.
How much longer can this go on? And perhaps more important, can GM hang on until Barack Obama and the new Congress can come to the rescue?
$3.1MM per Hour Burn Rate
Hmm, let's see... at that mileage, GM's tank should last 336 days when Congress fills their tank with the $25B. Sorry, nothing left for C or F.
This gas mileage is worse than a H1 Hummer!
What a way to spend our tax dollars. I vote a HUGE no to this because another $50B is right around the corner.
Like I said, use the money to support retraining the workers and give them health care transition and support while the new company is reorganized. Build only the new, successful models like Malibu, CTS, Corvette, Siverado and ONE of the Lambda CUV's. Then concentrate on beating Accord, Corolla, CR-V, Camry, Civic.
Regards,
OW
Giving "us" preferred stock equivalent to 10% ownership in each.
A comprehensive reorganization plan (hold the UAW's feet to the fire on this one too)
3% interest on the loans, no payments due for 24 months, but interest accrues from day 1
Bi-partisan govenment oversight. What they say goes!!
Gov't owned stock can't be sold until loans are paid in full.
The good thing is I'm reading more and more of our Congressmen either don't support a bail out of GM; want conditions applied to the bailout; or want to see a viable plan. Even Obama will have conditions that GM produce more green cars. I think by the time GM see this money (if they get the bail out) they may wish they hadn't taken it. The best option may be for the government to protect the suppliers while GM goes through bankruptcy re-structuring.
Either way, the days of the Big 3 are over. We will lose jobs in the auto industry no matter what happens. The days of auto sales over 16 million units may never come back.
There are 100's of insurance companies out there to pick up the pieces of AIG after bankruptcy saves the taxpayers from bailing it out.
Same is true for the banking industry. Let the financial buzards who can still fly get a good buy.
If pension benefits stop for the UAW, it wouldn't be the first time in manufacturing history. Remember Alcoa and the aluminum workers of Reynolds?
The reason? "It is so interconnected with other financial firms that its problems have a jolting ripple effect both in the United States and abroad." AP
Sounds a lot like the auto industry to me.
A major argument for throwing a lifeline to the auto sector is that its demise would increase unemployment. The degree of the increase is arguable, but more jobs would be retained, even with a shrunken domestic auto sector than without one. In addition, for a variety of reasons that are unique to this industry, including the long lead times required to design and introduce new products, the volatility of fuel prices plus the impact of the credit crisis, a good case can be made that the perfect storm has impacted autos more severely than other industries.
I favor government aid to the domestic auto makers, but with significant caveats.
I believe it would be a mistake for the government to attempt to bail out the automotive sector without demanding concessions from labor that would essentially bring its costs in line with non-union ones. Some differences in the work rules could remain in place, so long as their economic impact is minor. This would be harsh for the auto industry workers, but anything less would be unfair to tax payers and workers in other industries. Also, anything less would ultimately fail since, in addition to manufacturing products that people choose to buy - a huge challenge, given current consumer preferences - the domestic auto industry must be cost competitive to survive.
I think it would be very difficult, but perhaps not impossible in the current environment, for the Obama administration to demand the concessions from organized labor that are essential for the long-term viability of the domestic auto makers, but without them I believe any financial help would be doomed to fail. One could argue that it would have been easier for a McCain administration to play hardball with the unions, since they didn't enjoy much union support. On the other hand, there's the "it took a Nixon to go to China in the '70s" argument. It says that, because Obama had strong union support, he is in a better position to extract concessions than McCain would have been. He would have to use all of his considerable political skills to obtain the necessary compromises, though, and that's after he's persuaded Nancy Pelosi and others to side with him. At this point we don't even know if President elect Obama has the desire and will to demand major concessions from the unions, in exchange for government help.
A major argument for throwing a lifeline to the auto sector is that its demise would increase unemployment. The degree of the increase is arguable, but more jobs would be retained, even with a shrunken domestic auto sector than without one. In addition, for a variety of reasons that are unique to this industry, including the long lead times required to design and introduce new products, the volatility of fuel prices plus the impact of the credit crisis, a good case can be made that the perfect storm has impacted autos more severely than other industries.
Should Washington demand that the auto makers be forced to only produce green cars, as a condition for receiving aid? Absolutely not! Detroit has to produce cars that consumers want to buy, and despite a series of bad calls in the past, auto industry managers are more in tune with consumer needs and desires than politicians are. In addition to being bad strategy, it would be even a worse precedent to permit Washington to dictate auto design, beyond what it already does with safety, emissions and fuel economy standards.
First, management should be strongly encouraged, if not required, to reduce its compensation until the companies' viability is restored. For this effort to succeed, it's important that management lead by example, and there should be shared sacrifice.
Second, the demand for domestic vehicles needs to be stimulated. I would favor an appeal to patriotism in this time of need. To that end, the industry should mount a strong marketing campaign to encourage consumers to consider a domestic brand before they buy their next vehicle. It could be useful for the industry to appoint one or more respected, charismatic spokesperson to make its case with consumers.
Like Oprah Winfrey! Hey , she gave away Pontiac's on her show a few years back. Why not?
Regards,
OW
For a brand new Pontiac G-Six, the model given away on the show, the sticker price is $28,500. The $28,500 would need to be claimed as income so, depending on the individuals tax bracket, the tax could be as high as $7,000. And that was after Pontiac agreed to pay most of the local charges, including state sales tax and licensing fees.
The Harpo Spokeswomen said winners had three choices. They could keep the car and pay the tax, sell the car and pay the tax with the profits or forfeit the car.
http://money.cnn.com/2004/09/22/news/newsmakers/oprah_car_tax/index.htm
Secondly, I WOULD take the money out of the $700 bil, as I assume that these banks and securities companies are the ones holding the notes on GM. So in essence, I'd see the Gov't becoming a quasi receiver for GM.
As far as the oversight committee, it could consist of people like Jobs or Buffet.
Also, I don't see the need to have wholesale firing of upper management. WHile you could ask Wagoner to fall on the sword, I think Lutz, LaNeve, and Peper have done a wonderful job revamping the lineup in the last 2 1/2 years.
And I mean that with respect, after all, I have read Lee's autobiography. I was really impressed with his strategic vision, his intensity in following through on difficult projects, and his keen desire for the company he's working with to succeed. An incredible talent in the auto industry.
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Way back in 1979 when Chrysler needed government help, there was a political cartoon that perfectly captured the situation. If featured an old Plymouth Fury with giant tail fins teetering halfway over a cliff, with a tow truck parked nearby. A bystander wearing a shirt labeled U.S. Taxpayer was staring at the car on the cliff. The tow truck driver was nonchalantly picking his teeth and telling the taxpayer, "I can tow it out, or push it over the cliff, but either way it's going to cost you."
Nuf Ced.
And when they reach the "feed me with parts" stage, things really get interesting. A lot of people have been hurt badly by them, yet, look at the wonderful freedom they provide you with. Not a right to have a car, it's a responsibility, eh? Isn't that how the lecture to the 16 year old kid goes down...pretty much?
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But why does government need to get involved at all? Think about this - if the government says "NO" to any loans or grants, then what are the options of GM and the unions? They then have to sitdown and figure out how to get their current costs = income. Instead of changes next year, they make them tomorrow. They could sit down tomorrow and decide to cut, cut, cut until costs = income. So they have a way out. But they would prefer to basically keep playing the NICER game of slow change/business as usual with the taxpayer subsidizing them.
If the government stays out of this, then the worst-off (GM) of the Big 3 and unions, need to decide whether to 1) stay in business through whatever cuts necessary tomorrow, or 2) die.
If the government intervenes then you're going to have a GM little-changed, full of bloat, with wages and benefits, and management systems that will continue to lose money.
COLUMBUS, Ohio – Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.
"The focus has to be on the economy as a whole as opposed to a UAW contract," Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle.
"We have made dramatic, dramatic changes and the UAW was applauded for that," he said.
"We cannot afford to allow to see this industry collapse. There is a real concern that could happen."
The extreme levels of both denial and arrogance in the senior management at this union are just incredible, especially given Gettelfinger's last statement there. They really will ignore reality until they have lost all their members their jobs.....
http://news.yahoo.com/s/ap/20081115/ap_on_bi_ge/auto_bailout_gettelfinger
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
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The Allergists voted to scratch it, and the Dermatologists advised not to make any rash moves.
The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve, and the Obstetricians felt they were all laboring under a misconception.
The Ophthalmologists considered the idea shortsighted; the Pathologists yelled,
'Over my dead body!' while the Pediatricians said, 'Oh, Grow up!'
The Psychiatrists thought the whole idea was madness, the Radiologists could see
right through it, and the Surgeons decided to wash their hands of the whole thing.
The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said,
'This puts a whole new face on the matter.'
The Podiatrists thought it was a step forward, but the Urologists felt the scheme
wouldn't hold water.
The Anesthesiologists thought the whole idea was a gas, and the Cardiologists
didn't have the heart to say no.
In the end, the Proctologists left the decision up to some a--holes in Washington.
The American people are all getting the straight scoop on just how much more the UAW workers make than the average worker in the USA. I had a lady in Church say something about over paid auto workers making $75 per hour. I did explain that was the total package. I told her to hang onto her wallet as the Feds were going to extort the tax payers to keep their promises to Detroit.
The voters will remember who enabled the UAW to continue making the big bucks if a bailout is given.
WheelMan
British Leyland (MG,Triumph, MGB and the rest of garage) and their noteworthy Lucas "we don't need copper" Electrical systems.
WheelMan
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President-elect Barack Obama said he believes that aid is needed but that it should be provided as part of a long-term plan for a "sustainable U.S. auto industry" — not simply as a blank check.
"For the auto industry to completely collapse would be a disaster in this kind of environment," Obama said in an interview with CBS's "60 Minutes" that will air Sunday. "So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan — what does a sustainable U.S. auto industry look like?"
The AUTO industry will not collapse. Maybe GM, maybe Chrysler and Maybe Ford. There are a lot more auto makers and good ones. This country needs automakers that build good vehicles and are profitable. I am glad to see Obama is not being stupid like Pelosi.
Please understand that I don't blame the UAW for GM's problems. I think GM could have overcome their high wages with better decisions over the years. But GM is on the verge of bankruptcy and everything is on the table.
Revolution or nothing. Evolution effort was gallant but failed. It's GO TIME now.
Structure the relieve in 3 stages with hurdle rates that must be achieved before the next wave of relief. You just do not blindly give cash out. Hopefully, they are doing this within the TARP framework.
Regards,
OW
A wolf in sheep's clothing or a cancer. Slowly deceiving it's members right in front of their eyes and causing the very outcome they were born to prevent.
Regards,
OW
Cya, but certainly wouldn't want to b-ya. Later. Gone. Done. Old hat. Crappy, huge, ugly trucks forging their way down our roadways with big, caucasian dudes playing Toby Keith tunes.
Yuk. :sick:
Be gone with you. Like, umm, yesterday.
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Can you bail out a union? Let's ask Nancy. :P
By taxing us to pay for their mistakes? Or, socialism 101 in 2008? Oh, well, let them duke it out in Washington, D.C. Or, as Michael Reagan puts it, WasheeDC. He says Washington, D.C. so many times in his life that he kind of slurs it all together.
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U.S. jobless claims reach 7-year high
Last Updated: Thursday, November 13, 2008 | 1:57 PM ET Comments6Recommend6
CBC News
U.S. initial jobless claims have hit their highest since the aftermath of the Sept. 11, 2001 terrorist attacks, according to figures released Thursday.
The U.S. Department of Labour said the number of Americans who asked for unemployment benefits spiked at 516,000 for the week ended Nov. 4. That level represented a jump of seven per cent, or 32,000, compared with a week earlier.
The jobless claims figures also was the highest since the last week of September 2001. Worse still, economists had expected the number to remain roughly stable at 484,000.
The jobless claims figures indicate a U.S. economy with its prospects heading south, experts said.
"This report provides little reason for optimism about any easing in the pace of jobs declines from the 240,000 drop in October and the risk of an even more pronounced drop," said RBC Economics assistant chief economist Paul Ferley in a commentary Thursday.
As a four-week average, 491,000 Americans asked for employment benefits in the most recent reading, up 13,000 from the 477,000 one week earlier.
Examining these figures as a monthly average reduces the economic effect of a single event, such as a hurricane, on employment.
Another measure of the weakening U.S. jobs situation — the number of workers who receive employment benefits on a continued basis — stayed at a five-year peak.
For the past three weeks, U.S. continuing jobless claims averaged 3.7 million, the highest figures since June 2003.
This is going to be a very interesting week. It's the best Reality TV you will ever see!
Regards,
OW
Supplier Failures
Regards,
OW
Regards,
OW
The short answer is, it doesn't. There are major tradeoffs associated with no government aid and with throwing the industry a lifeline. Although I dislike the idea of bailouts, and the consequences, I think the negatives associated with not providing a bailout would be worse at this time. In other words, it's a matter of choosing the least undesirable course of action.
If these were more normal times, I would favor you approach. However, due largely to what began as a subprime mortgage crisis, and has quickly expanded into a general banking and credit crisis, and a worldwide recession, I believe that it's justifiable to take strong measures that would be inappropriate during a more typical recession.
It's too late, in terms of the auto makers' cash burn rate, and especially GM's, for your suggestion of management and the unions doing whatever they must to bring expenses into line with revenues to work. While I fully agree that this must be done ASAP, I believe Detroit needs a lifeline to buy some time.
The government cannot bail out every entity that is hurting. So why the automakers that have foolishly wasted money over the last 15 years?
"Its not like GM didn't see this coming. They've been hemorrhaging money for a LONG time and have done nothing to correct the situation. How is giving them more money to waste going to help anyone in the end? It will only delay the inevitable and take money out of my pocket in the meantime. Rip off the band-aid already. It'll be painful, but at least it will be over. "
Unemployment benefits paid out, help no one, they are merely non recoverable govenment expenditures. Batting 1000.
"His name was George F. Babbitt. He was 46 years old now, in April 1920, and he made nothing in particular, neither butter nor shoes nor poetry, but he was nimble in the calling of selling houses for more than people could afford to pay.
“Babbitt”
SINCLAIR LEWIS (1922) "
So if you're household budget is that you spend $300 more/month than you're bringing in, you suggest to your wife that you ought to get a time-share?
The economy has been able to absorb the exceptional spending of Washington, but the national is now at $10 trillion, and accelerating. Maybe our social security promises won't be able to absorb that sort of spending?
Instead why don't we all try to spend less, rather than be jealous and try to grab a share! Maybe we need to stop spending $ on Iraq, Big3, oil and farmer subsidies, foreign aid (after everyone in US is fed and has healthcare) ...