Tuesday, November 11, 2008

No More Bailouts . . .

Now, Obama Asks Bush to Back Rescue of Automakers.
" . . . congressional Democrats began drafting legislation to give the Detroit automakers quick access to $25 billion by adding them to the Treasury Department's $700 billion economic rescue program."
Of course, it is just the "Detroit" automakers who will benefit. You don't hear Toyota asking for a bailout . . . or Honda . . . or Nissan . . . all of whom make cars in America.

The "Detroit" automakers need the bailout, as opposed to their competitors, because their expensive United Auto Workers contracts have bled them dry. And which employee union was a big contributor to Democrat party coffers?

This proposal is taxpayer life-support for an unsustainable situation.

Let the bankruptcies occur so the old contracts can be shed . . . and let the companies be reborn.


Anonymous said...

That and the detroit automakers make cars that do NOT meet consumer demands.

clipper said...

Exactly Strike! The unions have made American carmakers unable to compete with the japanese, while the quality of their product has become uncompetitive also. The foreign car makers have improved to a point where a Honda is far superior to a Ford Product. GM is way overpriced for what you get. Chrysler has been bailed out before, and here we are a few years later, with THEIR hand back out for more.

Even with the outsourcing to Mexico, Canada and other countries that are providing engines, transmissions, body parts etc, the union is still holding the whole industry in a death grip.

WE are in deep doo doo. I heard on the radio yesterday that the AIG bailout is being increased. It was stated that AIG could not make it on the original loans, because the interest was too high. It was stated that they either were going to need MORE money, or they were going to DEFAULT!!

Is this where I want MY money going? Do we want to bail out a company that just received a huge package, and immediately wants more or they will DEFAULT AND STICK IT TO THE AMERICAN TAXPAYER??

I have to think that letting the American Car companies go bankrupt will be a good thing and as you say, they can reorganize and do away with the unsustainable union demands, and once again become competitive. You might even see some of the people that are paying dues to the bandits, decertify in the name of saving the industry.

They would not have to go out of business. They would simply reorganize under the supervision of the bankruptcy courts, and start over with a realistic business plan.

I CAN'T AFFORD A NEW CAR! Why do I want to bail out a company so they can give autoworkers a usurious salary to build cars, while they can buy a new car with an major employee discount, while I drive my 3 year old vehicle for another few years? Makes little sense to me.

We are in for a rough ride, and I don't think there is enough "change" going to come about in the near future to save us from a tough time in the short term.

It is time for some seriously careful attention to the problem, and I am not sure the Democrats are the one's to pull us through it. It was not simply Republican mistakes that got us here, and it is not going to be a partisan effort on the part of the Democrats that will be able to save us from destruction.

Greens and Beans said...

Strikeslip, this bailout stinks to high heaven. There is a great autoworker compensation disparity in terms of the wages and benefits between the typical domestic autoworker opposed to the foreign auto worker. Katie Merx of the Detroit Free Press writes that “GM reported an average cost of about $73 per hour for wages and benefits per worker” opposed to “the average hourly labor cost at about $47.50 per hour at Toyota Motor Corp.'s U.S. manufacturing operations.” (http://www.freep.com/apps/pbcs.dll/article?AID=/20071004/BUSINESS01/710040401/)

We could produce these autos here at the Griffiss International Cargo Hub at a considerable lesser cost per hour. We could do a better job of producing a quality product at a bargain basement cost to the auto manufacturers. And we could ship these units via road, rail or water directly from Central Oneida County. Albeit, we will need to work on reducing our utility costs and tolls before we could be serious with enticing some of these manufacturers. But first, this costly taxpayer bailout must not prevail. It will be interesting to see how our federal elected officials in both houses of Congress line-up on this taxpayer financed corporate welfare scam.

This is unquestionably pay-back time for Congress to cough-up funding for repayment of the recent Democratic victories. Not only are the domestic automakers pleading for this bailout, but the United Auto Workers (UAW) has also partnered with them in the fleecing of the Federal Government. Perhaps the $3 million worth of negative advertising, that UAW President Ron Gettelfinger authorized in October to criticize Republican presidential candidate John McCain, is a contributor to this repayment. (http://www.wtop.com/?nid=213&sid=1493045)

America simply cannot afford to be extorted by this partnership of employee organization and corporate extortion. Not intending to be redundant, but America desperately needs campaign finance reform.

Anonymous said...

The GM/Chrysler/Ford all are in the same boat. They make a product that the warranties just eat them alive. Billions of dollars in poor craftsmanship, claims, recalls plagued this industry. I have a 2008 vehicle that has gone through 3 cruise controls, directional assembly and seat upholstery that the fabric frayed so bad they replaced it. The testing and QC just plain sucks. I was involved in fleet purchases and out of the 30-40 vehicles we bought everyone had the fuel pumps replaced to the tune of almost $1000 each.They probably produced millions of these type vehicles. I had a Ford that all the ball joints went bad at once at 37,000 miles. I have not replaced that many ball joints in 45 years of driving. No one wants to know anything when these things happen.In order to get satisfaction you need to talk to a factory rep to make thing right. Makes you want to run right out and by some more.

clipper said...

Giving the subject more thought, I have to admit that the idea of the numbers of people that would be idled temporarily by a bankruptcy of the big three is a scary thing to imagine, but it may be necessary, or they may all be out of work PERMANENTLY, rather than just long enough to allow reorganization.

The sad thing is that many of these people are already feeling the pinch. My oldest son lost his job when it was eliminated in a downsizing effort. He was a plant superintendent for a company that makes seat rails for Honda cars. Even Honda is feeling a drop in sales, and they are presently ahead of the big three in sales and profits at present. Sales of new cars are off, period. The sooner we reach a "bottom" the sooner we can start the climb back to profitability and success.

I personally believe we are not going to turn the economy around with bailouts until it has hit it's bottom, and people finally realize that it HAS to change, and their lifestyles HAVE to change, along with their attitudes toward credit and spending.

clipper said...

Gee, today it looks like they may not GET their bailout. It seems that one of the committee members had the courge to tell one of the CEO's outright that the people of the country were peeved when they are looking for a bailout but came to Washington on private jets instead of flying commmercial. About $10,000 a flight average.

Let the automakers go broke in Detroit. Let them take some the empty textile and furniture plants in the Southeast and retool them to make and assemble cars. Bring those jobs here and they won't have to put up with unions or pay ridiculous pay.

Close the plant and I think it would make a union contract null and void. Open a new plant in the south, and I doubt very much that the autoworkers union would have much luck organizing down here. Pay for health insurance and a pension plan, along with a "living" wage, and they can produce cars in the south for about half what they pay those people in Detroit.