Auto Industry Bailout: Tell Us What you Really Think

Written by Clayton B. Cornell
Published on December 10th, 2008
22 Comments
Posted in Offbeat, Policy

auto industry bailout spoof poster

via TreeHugger via The Beast via Boing Boing

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22 Responses to “Auto Industry Bailout: Tell Us What you Really Think”

  1. Ryan Says:
    December 10th, 2008 at 7:22 pm

    Big Oil should bail out the Big 3, at least the big 2, who cares about Crystler? Here in the South, there are three types of people – those who drive chevy, those who drive ford, and communists lol

    But seriously, they probably do need to be bailed out. There just needs to be very strict conditions such as salary caps, no bonuses, increased fuel economy standards, etc

  2. Ryan Says:
    December 10th, 2008 at 7:24 pm

    Btw, I’m a communist :)

  3. drew Says:
    December 10th, 2008 at 8:11 pm

    How much is Honda , Toyota and Nissan asking for ?

    Oh wait they dont have a bunch of the ‘old’ boys club running the show

    - just awesome

  4. Doug Says:
    December 10th, 2008 at 8:16 pm

    I hate the fact that Congress is voting on bailing these guys out without any repercussions to the UAW. As long as they have a stranglehold on the big 3, nothing can truly be changed. Still need to get your facts straight before you post, the bailout is “only” 15 billion because Ford is not taking any money. Also if they truly create a car czar the industry is truly screwed. The Fed is the only thing that runs less efficiently than the automakers.

  5. Jim Rambo Says:
    December 10th, 2008 at 8:27 pm

    I have a family member who took the early retirement buyout from GM a couple of years ago. He was 50 years old at the time and had worked there for 30 yrs. They gave him 130K in cash and he draws 95% of his normal hourly pay monthly.

    It’s not the cars that they make or how crappy they are. The fact is that they are making better quality cars than they ever have. They (GM) also would have had to have a crystal ball to see the spike in energy prices that was entirely driven by speculators rather than shortages.

    It’s that the industry was strangled by labor. The really crappy news regarding this bailout is now I get to support my relative and his retirement. Talk about a golden parachute. The guy makes 100K a year at 52 for installing 4 bolts on an auto for 30 years. Damn, did I get into the wrong business.

  6. Christopher Says:
    December 10th, 2008 at 11:04 pm

    For years all we hear is “Let the Free Market compete without restrictions, and it will succeed.” Of all the industries in America, the auto industry has been given a very free reign for 50+ years. In fact they’ve done a lot of underhanded things and gotten away clean. Guess what? The free market -doesn’t- always work! The Big 3 have accumulated a big plate of FAIL and should have to pay the price for rigging the game for decades. Let them scale back, stop selling so many models that often end up competing within their own product line, and maybe sell their equipment to smaller manufacturers. This will give smaller companies like Kia and Hyundai a chance to move to the top; a lot of the smaller companies are doing fine and deserve to succeed where these so-called Big 3 have failed. NO BAILOUT FOR FAILURE

  7. Ryan Says:
    December 10th, 2008 at 11:10 pm

    Hmm, good points about the UAW, I haven’t really though about that factor until recently. I don’t buy from the Big 3 and never took notice to them until now when I’m forced to.

    I’ve seen it reported that the U.S. automakers could barely break even on their small cars. However, the Japs make a killing with their smaller cars. The biggest factor was the difference in the cost of human resources…

    What can the average person do?

  8. Tim Cleland Says:
    December 11th, 2008 at 1:04 am

    “It’s not the cars that they make or how crappy they are. The fact is that they are making better quality cars than they ever have. They (GM) also would have had to have a crystal ball to see the spike in energy prices that was entirely driven by speculators rather than shortages.”

    I’ve said this before, but I’ll say it again. Given their legacy/labor costs, it’s amazing that they’re able to compete at all. I mean, the big 3 still hold 48% of the market share, so they are competing rather well (just not as well as they used to be).

  9. Holger Danske Says:
    December 11th, 2008 at 4:37 am

    So where can I apply for my bail out????

    So whos next????

    Hilary Clinton????

  10. ChuckL Says:
    December 11th, 2008 at 5:28 am

    Jim Rambo’s story about his relative tells the whole story. the playing field was not level. congress supported the UAW as a single union to bargain with three automakers who were not allowed to form a single bargaining unit to represent all of them. The Congressional threat was treating the auto companies as an illegal cartel. The labor contracts were forced on the auto companies by the congress and now congress is blaming auto company executives who were, in some cases, not even in the industry when the labor agreements were signed.

    The congress should be the ones taking the pay cuts, and the UAW contracts should be voided with the labor bargaining starting again from zero.

  11. ChuckL Says:
    December 11th, 2008 at 5:35 am

    My “Shitty” Fiesta had almost no troubles while my sisters “Wonderful” Toyota always seemed to have something that just didn’t work.

    Fact was overcome by the fear to admit that the purchase of foreign cars was generally a purchase of a less reliable vehicle. The gas mileage argument simply ignores that the comparison was always apples and grapes.

  12. StevenB Says:
    December 11th, 2008 at 7:16 am

    Honestly why should we bail out inefficient companies whos profit margins during the good times of the 90s were 2 cents on every dollar sale they made? For instance during the 70s chrysler begged for cash and got its wish and it would appear they were bankrupt (congress forced creditors to take hits and stockholders were wiped out and lots of workers are laid off) They said it wouldn’t happen again… Guess what? It did, whats worse is why are even considering giving chrysler money without first opening its private books, how can we tell if their business plans are viable if we don’t see what structural damage is there? Also why isn’t there parent company (Private capital firm) not trying to save their “investment”? Why must uncle sam be the one to save these insolvent dinosaurs who cant adapt to the changing times? There were signs of automobile trends shifting by creeping up prices, but did any of the big 3 saw this? No!

    No more Corporate socialism, if capitalism can hammer the average tax payer, then capitalism can hammer these inefficient companies that are being bleed to death by retarded unions and poor management decisions with lack of hindsight.

  13. Tammy Says:
    December 11th, 2008 at 3:21 pm

    The problem isn’t with a free market. The problem is in propping up failed business and/or overinflated labor. In a true free market failure means failure and makes room for success.

  14. Chuchundra Says:
    December 11th, 2008 at 3:46 pm

    http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=2

    So here’s a little experiment. Imagine that a Congressional bailout effectively pays for $10 an hour of the retiree benefits. That’s roughly the gap between the Big Three’s retiree costs and those of the Japanese-owned plants in this country. Imagine, also, that the U.A.W. agrees to reduce pay and benefits for current workers to $45 an hour — the same as at Honda and Toyota.

    Do you know how much that would reduce the cost of producing a Big Three vehicle? Only about $800.

    That’s because labor costs, for all the attention they have been receiving, make up only about 10 percent of the cost of making a vehicle. An extra $800 per vehicle would certainly help Detroit, but the Big Three already often sell their cars for about $2,500 less than equivalent cars from Japanese companies, analysts at the International Motor Vehicle Program say. Even so, many Americans no longer want to own the cars being made by General Motors, Ford and Chrysler.

  15. Doug Says:
    December 11th, 2008 at 5:20 pm

    All the figures are a little skewed, but the quality issue is also completely union related. It is almost impossible to fire a union worker. They know this and use it to their advantage. They do as little as they have to and heaven forbid another employee work to their potential. Then the other employees file a grievance and get free money for “lost” hours of work. It is a huge scam and the UAW is going to cost millions of Americans their jobs and possibly kill the American auto industry.

  16. Tim Cleland Says:
    December 11th, 2008 at 6:20 pm

    If we’re pointing fingers, I have to say it’s 20% managements’ fault, 20% government’s fault, and 60% UAW’s fault. Even now, in the eleventh hour, the UAW’s “concessions” are token ones.
    For example, getting rid of the job bank (that was scheduled to go away anyway), and allowing GM to miss the VEBA payment (as if not allowing them were an option). Until I see “Our union workers will take a $10/hour cut in pay and (perhaps most importantly) agree to medical benefits that are commensurate with the current market,” the UAW will continue to hold the majority of the blame for this catastrophe.

    (For my family of four, to get coverage, we have to pay $280/month (pretax because it’s an employer plan…employer pays the rest) and the coverage requires $20 doctor copays, $15 prescription copays, $500 deductible per year and 80-90% coverage of the rest (it’s a little more complicated that that, but that’s roughly speaking).) As I understand it, the UAW plan is much more generous than that.

  17. Doug Says:
    December 11th, 2008 at 7:58 pm

    True that Tim!

  18. JoeTheAutoworker Says:
    December 16th, 2008 at 1:41 am

    Bail em out now – or later

    If 3 million displaced workers were to claim only the minimum $200 weekly benefit in unemployment compensation (due to a collapse of the automotive industry), in 26 weeks the amount would total $15.6 billion; an amount much more than what was approved by the house for the auto bailout and scuttled by the infamous republican senators.

  19. JoeTheAutoworker Says:
    December 16th, 2008 at 1:44 am

    Consequences if auto bailout fails
    • 3 million lost jobs; 2.5 million to follow over the next two years

    • The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance

    • pension and health care benefits cut for 1 million retirees, spouses and dependents

    • thousands of other businesses — dealers, suppliers and others — would be threatened

    • huge pension and health care costs shifted to the federal government

    • negative impact on the entire economy, making the current recession much worse

    GET THE FACTS ON THE AUTO BAILOUT THRU THE EYES OF AN AUTOWORKER

    ww.JoeTheAutoworker.com

  20. Bob Says:
    December 30th, 2008 at 10:30 pm

    I think its time to let the Big3 go down & re-structure without ALL these morons making $35+ an hour to do what a robot or an UNSKILLED person can do. Its a JOKE, they’ve had it to good for to long, WAKE UP, we’re just throwing GOOD money at BAD money, this nothing more than a band-aid, the Big 3 are going bankrupt whether you like or not & I like it !!!!!!!!!!!!

  21. ronron Says:
    March 24th, 2009 at 12:13 pm

    unions are not as evil as the conservative ideals
    ask the guy who died because the company would spend 249 dollars for a guard rail til after the union shop went thru
    the man who crashed into a tree because he was forced to work 1n18 hour day after a 12 hour day the day before he
    or the man named lefty because he lost a hand because his boss told him to ignore safety procedures or find a new job
    once you spend some time in manufacturing without unions don’t speak and I hope you have to work in an non union site and experience the truth for your self
    and oh yeah ive been around a long time and these are just a few of the cases I have personal knowledge of and the gvmnt doesnt regulate the industries the unions do

  22. susan Says:
    March 24th, 2009 at 11:13 pm

    Sam Walton said that eventually cars would be sold at Walmart. Why not buy GM? The price is right. Walmart has supply chain management and logistics down to a science. Walmart has developed a clientelle to purchase GM cars. Walmart is one of few businesses that made money during this economic temper tantrum (18%). Make Uncle Sam’s dream come true!