auto bailout

[Kramer]

WASHINGTON – A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.

Majority Leader Harry Reid said he hoped President George W. Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

The White House said it was evaluating its options in light of the breakdown.

"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."

The Senate rejected the bailout 52-35 on a procedural vote — well short of the 60 required — after the talks fell apart.

The implosion followed an unprecedented marathon negotiations at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

The group came close to agreement, but it stalled over the UAW's refusal to agree to wage cuts before their current contract expires in 2011. Republicans, in turn, balked at giving the automakers federal aid.

Reid called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."

"In the midst of already deep and troubling economic times, we are about to add to that by walking away," said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package.

Alan Reuther, the UAW's legislative director, declined comment to reporters as he left a meeting room during the negotiations. Messages were left with Reuther and UAW spokesman Roger Kerson.

The stunning disintegration was eerily reminiscent of the defeat of the $700 billion Wall Street bailout in the House, which sent the Dow tumbling and lawmakers back to the drawing board to draft a new agreement to rescue financial institutions and halt a broader economic meltdown. That measure ultimately passed and was signed by Bush.

It wasn't immediately clear, however, how the auto aid measure might be resurrected in a bailout-fatigued postelection Congress, with Bush's influence at a low ebb.

Congressional Republicans were already in open revolt against Bush over an auto bailout deal the White House negotiated with congressional Democrats, passed by the House passed on Wednesday.

The momentum flagged even amid evidence of deepening economic meltdown. The government reported last week that the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.

[Harrison]

Fucking union...seriously, are they that fucking dumb?

[KaiineTN]

Unions help to drive the cost of labor in Detroit to nearly double what it is in southern states. Clearly, the solution is everyone else in the country paying for the excessive union bureaucracy that is crippling these companies financially! We couldn't possibly let a business like that go bankrupt! All the cars on the road would magically disappear and the plants would shut down, never to be turned on again!

Oh please >_<

[brinstar]

pfeh this whole "bailout" business makes me mad

you can't live in a capitalist society without allowing poorly-managed companies to fail, and you can't demonize socialism and then turn right around and practice it.

well

obviously you CAN, but it makes people hate you

[ClakarEQ]

You union bashers don't have a fucking clue. I find it comical the first thing folks say is "fucking unions, they suck, they're wrong" , yadda yadda yadda. Pull your fucking heads out of the sand.

Not fucking one of us would be getting paid what we get paid if not for unions, you should be thanking them. I realize they have problems just like any large organization however they are not the cause of this and it frustrates me to see how they are always used as a scape goat, the few that fuck up are made to appear as the norm, etc. You should know that Toyata is closing plants in Japan, China is closing plants, you know these are not unionized plants, you know these guys are getting paid shit, yet here, in our country, it isn't the economy that is pulling down the autos, it's unions, yeah, sure. It isn't the shitty choices made 10 years back by officers of these auto companies, no, it's the unions.

Look, why don't they take all the white collar guys who the big 3 pay for things like, gas, cars, insurance, etc and tell these white collar execs, fuck off guys, pay for your own shit. You realize if you make (iirc) around 150k at the big 3, you get a free car, you get free gas (sometimes), you get free car insurance, many have 2 cars, etc.

The tone was set with the 700B to the finance sector, the GOV can go suck a dick for I've not seen worse hypocrisy than this (as of late anyway). See where this huge fuck up will get us. I know the whole loan thing (this is not a bailout btw) troubles folks but if something isn't done, the ripple effect of this will make the finance bailout (and if you didn't hear, is tanking) look like a walk through a rose garden.

700B to finance = huge losses of my money, no strategy to use my money, have failed in every meeting in front of congress

14-30B to the Autos = have requirements set by GOV, potential car czar in control of industry, etc.

At least the auto's won't take your money and run like the finance folks have. For fucks sake, they didn't even have requirements on how to use 700B, now the GOV wants to know where every penny of 14B is going, give me a break.

/rant off

RL experience re: this-
I work 5 miles from the Chrysler Tech Center, 100 yards from Oakland University. I've had to reduce my staff already because of this auto-downturn. We are getting forced unpaid time off (not bitching btw). However this is the ripple, the cleaning crew of 5 ladies that clean our building, guess what, they're not cleaning our building now. The dozen restaurants here, parking lots that were full at lunch are now empty. These are the things I can see. Good friend working for a company for 12 years, let go on Tuesday, guess what, he may have 6 months before he forecloses on his home, has stay at home wife with 2 kids, he's a bit fucked hard core now. He is in IT, he's a CCIE (for those that know, that isn't a cert to laugh at), an industry that has no binding to auto's yet can't get a job because the market is saturated by high talent people. He can't move because he can't sell his house, has negative equity because the market has tanked so the 70k he put down on his house is now a -20k he'll owe the bank, etc. This is just one guy that "I" know

Sorry for this post being all over the place and I don't know how much I'd be on board with this auto loan had the tone not been set by the finance sector. I agree that companies should die in the graves they dig but if the GOV gives you hand up out of your grave, then they better have a lot of hands out because very few large companys in this country aren't at least 3 feet in the ground already.

good golly /ramble off LOL

[Tuggan]

Depending on who you go to to for sources, unions workers are making less than Toyota and Honda laborers here in the states. I honestly have no fucking clue where the media is coming up with this $72 an hour bullshit when benefits and time off blah blah is factored in, but that's all it is... bulllllshit. The average starting wage for an assembly line worker for any of the big 3 is roughly $12-14 dollars an hour, if you feel that is some kind of ridiculous grossly overpaid job... feel free to promptly choke on my dick. The UAW has made enourmous concessions already. They have been for the last 15 years. It's impossible to "compete" with a company that is based in a country that abuses our free trade system, and does not allow the same trade practices.

The biggest money dump is paying pensions, and healthcare for retired employees. The men and women that invested 25-50 years in a single company. Your moms and dads, your grandfathers. To hear the US Congress say "why not file for bankruptcy?" made me sick to my stomach. Senators, making 180,000 a year with the best benefits anyone could imagine, who work 6 months a year, saying fuck the American workers. File for bankruptcy, destroy everyones pensions, fuck their healthcare, we already have an entire generation of wasted youth, lets fuck the babyboomers too. I pray to fucking god someone offs a couple of these douchebags when half the country is unemployed and has nothin better to do.

All this really is is an attempt by the Republican party to finally crush organized labor in this country. I for the life of me can't understand why anyone would support that. I guess you look forward to major regression in workplace standards, and wages, and quality of life in general.

If, or more likely when one or all 3 of the big American auto makers collapse, the cost of that will be 10-20x what Chrysler and GM are asking for. Not to mention there are no small auto companies looking to step in and attempt to fill the spots. We are talking well over 3million job losses throughout the country, not just "Detroit". The number in reality is much much higher, it's impossible to really put a marker on every single job that is around simply because of the auto industry. I've been saying it for the last 15 years, and it's going to be a really satisfying "I told ya so" when this country goes into a depression to make the "great depression" look like a fucking vacation.

You all did it to yourselves. You believed the media bias about foreign manufacturers making a superior product, when that hasn't been the case for at least 10 years. You went for the cheaper product with no consideration for your neighbors, and their well being. You supported unfair "free" trade. Don't blame American workers. Blame your own selfish stupidity. If you think this is a Detroit problem, or rustbelt problem, you're all in for the surprise of your life.

[Evermore]

that $73 an hr figure is what the companies spending per employee this doesnt mean they are pocketing this cash.

[Eziekial]

Why don't we hear about non-union companies folding up their tents and firing their workers? Who else has/is laid/laying off employees and was/is non-union? This has nothing to do with union or non-union. These are poorly run companies and they need to be dismantled are let other companies take up the reigns and pick up the pieces.

[Tuggan]

It's a bullshit fluffed up figure to demonize the union and it's workers. If you take the highest senority, highest paid workers, then add benefits and pensions... not only their own, but ALL retired and laid off employees. Then you can get a 72 dollar figure.

Then people try to compare that to the foreign manufacturing plants in the South and Southeast, most of which haven't even been around for more than 10 years. Nor do they offer the same benefits, or have the same cost of living that you find in the great lakes states or the rustbelt states in general.

Also for those of you jackasses that keep insisting this is all on the union: By 2010, the end of the current labor contract. The average compensation for a UAW worker will be LESS than what nonunion workers make at the foreign company plants. Yeah, stupid Unions that won't make any consessions.

Blow it out your ass Harrison.

[Tuggan]

Why don't we hear about non-union companies folding up their tents and firing their workers? Who else has/is laid/laying off employees and was/is non-union? This has nothing to do with union or non-union. These are poorly run companies and they need to be dismantled are let other companies take up the reigns and pick up the pieces.

They have been. Haven't you heard about the billions that every other country has given their auto and manufacturing industry to keep them afloat during the global credit crunch?

[ClakarEQ]

No shit, we've closed a few plants and they were all non-union. I'm talking about roughly 700 people in north america alone, for a division that only employs roughly 6500, that is a pretty large chunk. Oddly enough the few union plants we do have, made concessions to stay open. Again, I get frustrated at this union hate from folks that really don't know what they're talking about.

[Evermore]

hmm att is laying off 8000 workers is the latest I heard.

the issue here is that the U.A.W. has been successful in negotiating favorable contracts for its members for decades while non-union auto companies have seen their economic advantage increase. The Big 3 failed to address this cost disadvantage even though they outsourced parts and jobs to foreign manufacturers. The American content of the Big 3's products has steadily declined; who would have thought that the Honda Accord would become the most American-made car in the U.S.? I don't believe that anyone should blame individual autoworkers but there is a case to be made against collective bargaining excesses which gave the Big 3 no real choice, i.e. accept the higher costs of a new contract or face an even costlier strike and that isn't to place all of the blame for the current mess solely on organized labor. The Big 3's management is also responsible for failing to keep pace with product quality and failure to gage consumer's buying preferences. There have been stories about the dealers telling the big 3 what the public is asking for and being ignored.

I don't believe that a taxpayer rescue of the auto industry will be effective. It will help out for awhile but that is only temporary. The probglem is it fails to address the fundamnetal root causes that led to the failure. American car manufacturers will continue to lose market share and suffer from a growing competitive disadvantage unless they reorganize, get a lot smaller, and offer better cars. they shoudl probably seek protection from the bankruptcy court. either that or this is going to be the most expensive government subsidy in history...

[Arlos]

I don't remember the details, but there are significant problems with them going into bankruptcy that don't exist for normal companies. Part of it is that the car companies apparently issued a lot of bonds, from which wall street created derivatives, etc. of the kind that are now at the center of the whole banking meltdown. As a result, if the automakers go tits up, suddenly there's hundreds of billions more in bad debt in the financial system, which might drag down the financial system as well.

So, it's not a simple problem, by any means.

-Arlos

[Eziekial]

Bullshit. Nothing is simple when it comes to government. Bonds are not 100% secure but they are ahead of stockholders so that's a little net but not much. I lost $300 in Vegas last summer on what was better bets than someone investing in US automakers. Where is my bailout?

[ClakarEQ]

Nothing is simple when it comes to big business either. I don't get the "where is my bailout" line. Go bitch to your bank about your 300, that isn't anyones problem but yours.

You really sound stupid and disconnected if you think this is a bailout.

When has the auto industry borrowed money and not given it back (serious question, i couldn't find any info via google)?

Why is it ok do GIVE 700B to an industry of whitecollars but not to loan 34b to the blue?

[Nusk]

[Gaazy]

My beef with the Unions isnt a money side of it with them wanting more and more blah blah blah. Most of those union workers are completely lazy fucking dipshits. Sure, I cant picture what would happen without them, other than the companies actually making good production for a change because the guys will work and not cry and file grievances over stupid horse shit to get paid for a shift, but, at least here, theres so many people just in it to take advantage of the system its unreal. Im around the UMWA every fucking day just about. Hell, a guy that used to work for me who is now a good friend of mine, is over top of one of the local unions and he admits it. Bunch of horseshit. Most of them are fucking stupid and make no sense. In fact, they sound a lot like clakar sometimes on a variety of subjects


And I dont see why these big companies get to be bailed out for mismanaging themselves into the godamn ground. What about me when I make a bad decision, or when money gets tight, does my company get a bailout? Bail them out, the crooked fuckers should bail out everyone


Oh, and gogo Tuggan on your last statement in the big post about the media and America's 'shitty' cars, if my reading comp ftw was right. Ive seen much less bullshit out of fords and chevy (not chrysler, ill give the that, most of those are POS) than out of all these fucking hondas and shit. My sisters got one of the newer honda civics and I swear it doesnt get the gas mileage they say it does. Been in the shop twice too already with random engine problems.

[Kramer]

dig the ad.

we are about as capitalist as we are democratic.

[Eziekial]

[quote="ClakarEQ"]Nothing is simple when it comes to big business either. I don't get the "where is my bailout" line. Go bitch to your bank about your 300, that isn't anyones problem but yours.

You really sound stupid and disconnected if you think this is a bailout.

When has the auto industry borrowed money and not given it back (serious question, i couldn't find any info via google)?

Why is it ok do GIVE 700B to an industry of whitecollars but not to loan 34b to the blue?[/quote]

I'm sorry. I and any lesser citizen is not entitled to the benefits of running a legacy company into the ground. Curiously, I was never and still am not, in favor of the 700B financial bailout. Casino's are down big this past year; many on the verge of going under. They employ (directly and indirectly) almost as many people as the auto industry. Should they get a "government loan"????

[KaiineTN]

It wasn't okay to give 700 billion away. I'm with you there.

If auto companies need money, they need to go to banks, sell stocks, or issue bonds.

If those don't work, there are good reasons why people are not willing to invest their money into the company. This is why it is considered a "bailout," because they have no where else to turn. Who says that they'll be able to pay it back anyways? You think it's just the current economic climate that is causing them to hurt this much? You think the problem with them is new?

I'm certainly not planning on buying any shitty new American cars in the next few years, if not my entire lifetime. Are you?

[Tuggan]

You won't be buying any shitty import in the next few years either. I can't see many banks willing to throw a loan towards some dipshit 20 something that wastes all his time and resources on get rich quick schemes.

It is the current economic climate that is causing them to hurt this much. They can't get credit or loans. We can't get credit or loans. 700billion gone to waste. Nobody is able to buy anything, that includes your precious imports. If you don't think Toyota, Honda, and Nissan aren't feeling the pinch, you're an idiot.

Of course there needs to be a huge number of layoffs. The big 3 have too many people making too many cars. They need to restructure to better represent the demand. Everyone in Michigan is already familiar with the term downsizing, we've been dealing with this recession alot fucking longer than the rest of you. There are no quick fixes, there are too many things tied to everything else. Ford especially has been adressing these issues, but the only reason they don't have to be up there begging for assistance is because they got credit before the crunch.

Maybe once Chrysler files for bankruptcy, and are no longer shoveling cash to suppliers and dealerships and several hundred thousand people lose their jobs things will become a little more clear to the rest of the country. Too many greedy idiots with the "I got mine" mentality. Once in awhile you have to help one another, I guess everyone is determined to let things get so bad we run out of options.

[Gaazy]

You won't be buying any shitty import in the next few years either. I can't see many banks willing to throw a loan towards some dipshit 20 something that wastes all his time and resources on get rich quick schemes.

Haha Tuggan beat me too it. Get a real job. The time to face the realization that we are at the age to do that is...well...actually, a couple years ago. Aren't you the same age as me? 23? You posted your little business plans here didnt you a while back?




Speaking of stuff like that, on a side note, the banks around here are giving out shit left and right it seems like. I just had a buddy the other day buy a pretty nice house without any down payment. I said dude, why in the fuck would you not make a downpayment? He said they told me i didnt have to! hurr! Yeah...good luck with building any equity there buddy

[araby]

Somehow watching a classic movie, like "It's a Wonderful Life" made me wonder how about how I should feel about car makers.

[Gypsiyee]

Speaking of stuff like that, on a side note, the banks around here are giving out shit left and right it seems like. I just had a buddy the other day buy a pretty nice house without any down payment. I said dude, why in the fuck would you not make a downpayment? He said they told me i didnt have to! hurr! Yeah...good luck with building any equity there buddy

jesus, seriously? I have a triple score of 788 last I checked and I can't even get a loan that easily.

maybe the banks there are living in a hole and haven't turned on the news to see that their bubble bursted...?!

[Gaazy]

Whoops been away again and didnt see your post.

Yeah, theres a bank here who gives them to damn near anyone from what I can tell. The head of the bank was even in my office the other day going over some big plans we are getting ready to put in place, and he was telling us about it. I dont know how the other banks around are doing it, but the Bank of Mount Hope sure is. With the housing situation the way it is here im going yo buy one in the next month or two most likely. Such a great time to buy here if you have the money.