Helping Detroit will only prolong its incompetence
First published in print: Saturday, November 29, 2008
Chrysler, Ford and GM are completely unworthy of a government bailout and do not deserve a single cent of taxpayer money.
The last time an American automaker faced this sort of financial trouble was in 1979, when Chrysler received government assistance in order to become more competitive with Ford and GM. Today, all three are struggling to remain competitive in an era of shifting consumer demands and higher quality foreign imports. The difference, however, was that Chrysler and Lee Iacocca had a clear plan. Today, the Big Three seem as clueless as President Bush standing in front of his "Mission Accomplished" banner.
Propping up the financial sector may have been justified, given the stakes for nearly every American with investments. Detroit automakers, however, have been done in by poor business decisions and a blatant ignorance of shifting consumer demand and their better-quality foreign competition. Instead of focusing on small, fuel-efficient vehicles, Detroit kept upping the horsepower, size and number of cup holders.
A better alternative would be to let the Big Three go bankrupt, go through a financial restructuring and emerge with new labor agreements and reduced debt. Supporting this failing American oligopoly would only mean additional financial hardship and prolonged incompetence rather than providing the Big Three with the incentive to reorganize and become competitive again.
When auto firms fail, lots of folks will suffer BY ELLEN SLEZAK Los Angeles Times
We baby-booming native Detroiters grew up with a ranking system. On the playgrounds at recess, GM was No. 1, Ford was No. 2, Chrysler was No. 3 and American Motors wasn’t really worth the effort it took to insult the poor kid whose dad worked there (sorry Mitt Romney). My dad worked for GM — it all made sense to me. I didn’t own a car until I moved to Los Angeles 10 years ago. Before that, my husband and I had lived in Chicago and we rode the El and the buses, an option that wasn’t as viable here. He moved to L.A. nine months before I did, and just before I arrived, he bought us a used car. It wasn’t exactly a “little old lady from Pasadena” situation — it was a rusty, 1981 Chevy Citation — but its provenance was single owner, a friend’s mom, and it had only 81,000 miles on it. He picked me up at Los Angeles International Airport in it, explaining its virtues, which were not exactly apparent as we drove north to our new home in Hollywood. “You need a broomstick to prop open the hatchback, and be careful when you use it because if that thing falls, it will snap your neck. And the windshield wipers turn on of their own volition every few hours, but other than that, it’s a V-6, and it’s built like a tank.” SUMMER JOB Didn’t I know it. I’d helped build the prototype for that very car. This was back in 1976, when I worked for a summer at GM Plant 21 on the early version Citations (simply called the “X” car then) that would come out five years later. I was a runner. I moved up and down the line and looked at the list attached to the hood of the X-car where guys (it felt as if I were the only woman in the plant) made notes about missing pieces of chrome or molding. I ran to the central supply crib in the middle of the plant and fetched the missing pieces. For that I made $8 an hour — and earned enough for room and board at the University of Michigan the next year. My parents paid my tuition. Two years after he’d bought the Citation, my husband was driving it when a woman who was, in her own words, “high on yoga” ran a red light at 40 mph and crashed into him on the driver’s side. He, as the saying goes, walked away from the crash unscratched. The Citation, just a midsize car, did its job. Who needs a $50,000 Hummer? That’s part of the question, isn’t it? Who needed those Cadillac Escalades, those H2s, those Chevy Tahoes, gas guzzlers all, that never met a CAFE standard they wouldn’t rather miss by 5 miles per gallon? GM made cars and trucks whose engines almost seemed to hum, “Build ’em bigger! Gas is cheap!” But just because people will buy it, does that mean it should be built? Where does the responsibility for one’s product line come into play? DEVIOUS EXEC GM Chief Executive Richard Wagoner, in a “NewsHour” interview with Judy Woodruff recently, said GM built those SUVs and trucks because that’s what customers demanded. What he didn’t add was that GM was up on Capitol Hill lobbying hard against raising CAFE standards. That’s a hell of an omission. It’s as if the American Dental Association asked Congress to pass laws that required parents to feed children three square meals of candy every day and then insisted that it bore no responsibility for the decay that followed. But, of course, it’s still not that simple. The monster bad guy, GM, is really not all that evil. Not only does it directly employ 96,000 people, its 6,500 dealers employ another 340,000 people, and it does business with more than 2,000 suppliers in 46 states. It has provided blue-chip health care (including dental and vision) and modest pensions to its employees for the last 40-some years, meeting a responsibility that government has not yet stepped up to (and adding great cost to its cars). Who doesn’t want people to have decent wages and good health-care coverage? On Thursday, I called my parents, octogenarians now, to see what they thought about the hearings, the testimony of the Big Three CEOs, the bailout. My dad came on first and bellowed, “It’s all crap!” I didn’t quite know what he meant by that, so I asked a specific question. Should they lend the money to GM? He yelled, “Yes! Lend the money and let’s get going and fix this thing! We’ll have 70 million unemployed immediately if they let it go under! They say it’s less, but I say it’s 70 million!” My mom felt the same way, although she didn’t bellow and her numbers were sound, and then she lowered her voice and told me that she’d moved a chunk of money out of GMAC, the financial services arm of General Motors (although no longer wholly owned by the company), where it had been parked for decades. “I feel awful that I did it. The company has been good to us, but we couldn’t take the risk.” During the Senate hearings last week, more than one senator, and an economist from the University of Maryland, claimed that if GM, Ford and Chrysler declared bankruptcy, and accepted a Chapter 11 reorganization plan whose underpinnings were laid and supported by the federal government, people would still buy their cars and would trust that the cars would be serviced and under warranty. REALISTIC VIEW But let’s be realistic. My mom and dad, whose loyalty to GM could make Lou Gehrig look like a Yankee traitor for retiring too young, moved their money out of GMAC. Do you really think the average American is going to buy a car from a company in Chapter 11? Toyota and Honda aren’t going anywhere, after all. We’ll have options. When I asked my parents about the bailout, I didn’t expect an objective answer. I imagine they see GM in each of the six kids they raised, not to mention the grandkids who followed. .................................http://www.dailygazette.net/De.....amp;EntityId=Ar04302
Like I've said before, the auto industry has been declining for years. This will just be a very expensive bandaid for a huge problem.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
First published in print: Monday, December 1, 2008
The recent news about the Big Three looking for a federal bailout strikes me as too much rhetoric and too little action on the part of our country's carmakers.
I run a small but profitable manufacturing business. We are careful with our resources — people and money — and don't make products our customers don't need or want. A simple principle everyone in business learns either in the classroom or in the school of reality. Make something or try to sell something customers don't want and you eventually go out of business.
Unlike GM, Chrysler and Ford, my company can't go to Washington and look for a bailout. So we stay in touch with our customers. We actually talk to them.
As a consumer, I am still scratching my head over why the Big Three have not gotten the message that there is a demand for hybrid and other fuel-efficient medium-to-large cars, and why they have not aggressively developed and marketed these vehicles at a time when they are losing market share to their European and Asian competitors.
As a business person, I am a moderate free-market capitalist who understands that Chapter 11 bankruptcy would allow the Big Three to reorganize, regroup, retool and regain their competitive edge by building and selling vehicles customers want. Some jobs would be lost, but most likely not as many as from the bloated and toxic financial sector. Certainly not the two million jobs that have been seen as at-risk on the nightly TV news.
Bailing out businesses that have fulfilled a failing destiny based on focusing too much on supplying products most customers don't want would be ill-advised if not downright foolish.
Randy Putnam Ballston Spa The writer is president of Specialty Silicone Products, Inc.
Is this what the auto manufacturers want us to subsidize in Brazil and other countries with 25 billion in loans, or is this a campaign to undermine or obtain union concessions in the US so they can rebuild manufacturing here in the US?
Pick one of the Big 3.....I choose Ford.....the model T represents innovation and future.......dump the unions.....and might I add......
LAID OFF AND 95% OF PAY RECIEVED......OH BOY WERE WE GETTING well, you know what.........Greed covers all kinds and grows everywhere......
BEG YOUR UNION OFFICIALS......Remember,,,,you cant afford them and they cant afford you....only they can raise the dues or atleast give 'less service' until payment received.......sounds 'organized' doesn't it.......ORGANIZED FOR WHOM???????
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Rep. Louie Gohmert (R-TX), a member of the Republican Study Committee, has had enough of Congressional bailouts.
Right now there is $350 billion left of he $700 billion Congressional bailout funds. He has an alternative to more bailouts: a two month tax holiday. {http://www.humanevents.com/article.php?id=29700}
Quoted Text
Gohmert’s tax holiday plan is elegant in its simplicity: every American taxpayer would pay no federal income or FICA taxes for the first two months of 2009. For the typical American family -- earning about $50,000 a year -- that would mean they would keep about $2000 that would otherwise be paid to the government.
Gohmert’s plan doesn’t pay for Wall Street bonuses or let banks use bailout money to buy other banks or pay dividends. It doesn’t rely on bureaucrats to pay money out to the right people at the right time or try to stimulate the economy with token payments to people who don’t pay taxes.
Gohmert would like to hold the holiday in January or February of next year. It would cost approximately $332 billion, still cheaper than using the rest of the bailout money for a bailout.
Quoted Text
Freeing individuals from two months of federal taxation would be a substantial benefit to families and the economy. “Those who can’t catch up on their mortgage get one-third of their money back each month and then they’ll be able to catch up on their mortgages. They’ll be able to refinance their mortgages, they’ll be able to buy stock that they can’t currently buy,” Gohmert said.
He added, “Somebody earning $72,000 would get a couple of thousand dollars back a month if we allow them to get back both income tax and FICA.”
You can sign our petition to support Congressman Gohmert. As events unfold and the legislation is drafted, we will email petition signers with the names and phone numbers of Congressmen to call to support the Gohmert plan.
I believe the Gohmert Plan for a two month tax holiday is preferable to more government bailouts. We value your privacy.
You can post this petition too by embedding this code in your site:
I apologize, as I couldn't get the form to copy directly over, but if you follow the links provided at the top and/or bottom, it will lead you to the article and the form.
I think the auto industry is essential to our national and global economic health. I think, however, auto companies shouldn’t be holding out the beggar’s cup to taxpayers, but rather should go to the big oil companies and their phenomenal profits. Exxon/Mobil alone could make about one-third of the requested bailout/ loan package with just the profits from one quarter this year. The symbiotic relationship between the Big Three automakers and the big oil companies should make this handout a no-brainer.
pro·tect Pronunciation: \prə-ˈtekt\ Function: verb Etymology: Middle English, from Latin protectus, past participle of protegere, from pro- in front + tegere to cover — more at pro-, thatch Date: 15th century transitive verb 1 a: to cover or shield from exposure, injury, damage, or destruction : guard b: defend 1c 2: to maintain the status or integrity of esp. through financial or legal guarantees: as a: to save from contingent financial loss b: to foster or shield from infringement or restriction ; specifically : to restrict competition for (as domestic industries) by means of tariffs or trade controls 3: defend 5 intransitive verb : to provide a guard or shield
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
Congress works on a deal to save automakers Automakers running out of cash as Congress works at crafting bailout for ailing industry
Associated Press Last updated: 6:36 a.m., Sunday, December 7, 2008
WASHINGTON -- Supporters of an emergency rescue for the Detroit auto industry face an uncertain outcome in their effort to craft a $15 billion aid package for the troubled and nearly broke carmakers.
Democratic congressional leaders dispatched aides Saturday to draft a measure to pull the Big Three automakers from the brink of collapse while Capitol Hill leaders prepared to sell yet another bailout to a skeptical Congress.
The emerging measure would speed short-term help to General Motors Corp., Ford Motor Co. and Chrysler LLC, while empowering the government to order a wholesale restructuring of the industry and imposing tight restrictions, according to congressional officials and others close to the talks. They described the developing plan on condition of anonymity because the details were not final.
It is designed to tide over the companies -- particularly GM and Chrysler, which have warned they are just weeks from going bust -- through March, when Barack Obama is president and a new Congress could consider a longer-term solution.
A breakthrough came Friday when House Speaker Nancy Pelosi, D-Calif, yielded to President George W. Bush on a key point: allowing the ..............................................................http://timesunion.com/AspStories/story.asp?storyID=746442
Senator: GM chief should resign As bailout is honed, Wagoner singled out The Associated Press
CHICAGO — An influential senator drafting a multibillion-dollar bailout for Detroit’s Big Three automakers said Sunday that the head of General Motors should step down, while Presidentelect Barack Obama accused car industry executives of a persistent “head-in-the sand approach” to long-festering problems. Sen. Chris Dodd, D-Conn., chairman of the Banking Committee, said GM CEO Rick Wagoner “has to move on” as part of a government-run restructuring that should be a condition of financial life support for the auto industry. “I think you have got to consider new leadership,” Dodd said on CBS’ “Face the Nation.” Criticized for staying on the sidelines until now, Obama for the first time voiced support for bailout legislation being drafted in Congress. The sharp criticism from Obama and Dodd reflects deep frustration on Capitol Hill at what many lawmakers regard as years of missteps, mistakes and arrogance by the Big Three automakers. At the same time, Washington is deeply worried about soaring unemployment — 533,000 jobs were lost in November alone — and the impact of an auto industry collapse on a nation already deep in recession. Obama said Sunday the economy will get worse before it gets better, pledged a recovery plan “equal to the task” and warned lawmakers that the days of pork barrel spending are over. Less than six weeks before his inauguration, Obama said his blueprint for recovery will include help for homeowners facing foreclosure on their mortgages if President George W. Bush has not acted by Inauguration Day, Jan. 20. “We’ve got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can’t worry short term about the deficit. We’ve got to make sure that the economic stimulus plan is large enough to get the economy moving,” he said. Obama made his comments on NBC’s “Meet the Press,” in his most extensive interview since winning the White House more than a month ago, and later at a news conference in Chicago. The president-elect said it is important that domestic carmakers survive the current crisis, although he accused the industry’s executives of taking an approach that has prevented their companies from becoming more competitive. “Congress is doing the exact right thing by asking for a conditions-based assistance package that holds the industry’s feet to the fi re and gives the industry some shortterm assistance,” he said. Behind the scenes, House and Senate aides were hammering out legislation that would dole out billions of dollars to automakers within a week — but yank back the money if a government-run board and overseer named by President Bush decided the companies weren’t taking steps to overhaul themselves and become viable. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed. The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said. It would create an oversight board comprised of key Cabinet secretaries — from the departments of Treasury, Energy, Labor, Commerce and Transportation — plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring. In return for the money, the carmakers would have to agree to terms similar to those placed on banks .......................................http://www.dailygazette.net/De.....amp;EntityId=Ar00102
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