Auto bailout dilemma

No Bailout for the auto makers-
They aren't competitive with the foreign n automakers-
Proof -Why do their sale keep dropping--

Either way, ax the people managing on top. Our ONLY way to get out of this mess is to hold those that made the decisions accountable for the mess that they made.

I'm not torn at all. No bailout without drastic government intervention--dump the heads of the Big Three, insist on re-tooling for smaller, fuel efficient cars (something that should already be market-driven) and for parts to make high speed rail possible in this country

There will still be an 8 million annual market for new cars regardless of what happens to GM, Chrysler and Ford. Those companies' suppliers can simply shift their manufacturing to Honda, Toyota and Hyundai which know how to run efficient U.S. factories, pay competitive wages, keep overhead low, and produce cars that people actually want. Bankruptcy and shedding of old ideas and destructive union work rules and pensions could clear the way for a much needed rebuilding of the U.S.-owned auto industry.

If we require the same concessions we did of Chrysler then I have no problem. The Chrysler deal required the company to secure their loan with stock, required a complete restructuring of their management, required a business plan approved by Congress, as well as required Chrysler to gain concessions from their partners, suppliers, services, and... the UAW. If Ford and GM can do all that then loan them the money. If not, let em tank now instead of becoming an even bigger burden on the economy later.

It's a shame that things have gotten this bad, but the automakers are their own worst enemies. I fail to see how they refused to acknowledge the future while building bigger and bigger vehicles while oil prices kept going up.

Start requiring Corporations to re-invest in their companies. Allow management a pay difference of 10%-15%, from the work force of the Corporation and that includes all executive Corporate officers. Also, make them pay their share of taxes and not weasel out of their fair share !! Then, Corporate America will be in line with the goals and ideals of America and not think they are above the rest of the country !! Union-busting will not solve America's problems. It is an idea that will never go away, I don't care how concerted an effort is engaged in, by the Corporations, or Republicans !! File bankruptcy and see if you can make the unions go away. They will come back, even stronger. The difference is, with the Corporations, it's greed !! With workers, it's improving their and their family's living conditions and future. If America doesn't know that, by now, the she will never know !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

Honda and Toyota are building vehicles inside the United States are they are not looking for a handout.

Ford, GM and Chrysler have a failed business plan that was dictated to them by the UAW.

Ford, GM and Chrysler should enter into a pre-planned bankruptcy, which would allow them to continue to operate. They then could shed the union dictated labor contracts that are dragging them down.

Sign the Petition and tell Congress not to bail out the auto industry:

http://www.rallycongress.com/no-bailout-for-the-auto-industry/1409/

GM, Ford and Chrysler got a bailout from President Reagan in the 1980s when he imposed quotas on the umber of cars Japan could export to the USA. So what did the leaders of Detroit do? They raised their prices, gave themselves big salaries and bonuses, and used the cash to buy other businesses instead of retooling to better compete against Toyota and Honda.

I say let them go Chapter 11.

Say Hey! If the taxpayers can infuse hundreds of billions of dollars to bail out these corrupt financial companies on wall street, they can sure as hell give a few billion to the industry that puts 3 or 4 million or more citizen's to work. And don't blame it on the union's, that have earned a decent wage, decent working conditions, and hiring standards. LET THIS FINANCIAL MESS BE A LESSON!! GREED HAS TO BE REGULATED NO MATTER WHAT REAGAN SAID. REAGAN ALSO SAID THIS NATION DIDN'T NEED AN ENERGY PLAN. whiteagle38

Where were you, with your silly petitions, when the Bankers/Crooks were getting their bailout ? Anybody that thinks it's the worker's fault that the Auto Corps are in trouble, is whistling Dixie, as in, union free states !! Take away the unions and you have slave-wages nation !! You get that, and you have a very unhappy nation !! God Bless the Oligarchy and all of it's bootlicks !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

Where were you, with your silly petitions, when the Bankers/Crooks were getting their bailout ? Anybody that thinks it's the worker's fault that the Auto Corps are in trouble, is whistling Dixie, as in, union free states !! Take away the unions and you have slave-wages nation !! You get that, and you have a very unhappy nation !! God Bless the Oligarchy and all of it's bootlicks !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

Posted by: Don Fitzgerald, Chicago | November 13, 2008 11:34 PM

Don- less than 10% of the workforce is union represented in this country- where are the "slave wages" you are hyping-for most of the country who is not union represented? Non union auto workers in this country make the same wages as their union counterparts...
^^
I agree with you that its not the autoworkers fault- but the workers do need to look at who is representing them with a much more critical eye... simply put, -UAW negotiated wages, benefits and pensions are not competitive- which is a big contributor to the horrible economic performance of the big 3...
^^
A good example of this is when the UAW "allowed" automation and robotics into the big 3 manufacturing process- this should have had a significant positive impact on big three productivity and therefore increased ability to compete..BUT the UAW agreed to the new technology only if there would be no cut in the workforce because of the technology? So now, there are hundreds if not thousands of PAID UAW workers in "job banks" waiting in cafeterias, smoking lounges and likely union halls to be called to the line in the event they are needed..and as we know, there is nowhere near the demand for new cars... especially cars that are not competitively priced.
^^
The bailout is pure and simple a bad economic idea-( as were the financial bailouts) when you manage a company poorly, including negotiating horrible union contracts- you deserve to fail..

On a more pragmatic front- it is more likely that all 3 of the US manufacturers will not fail..in this scenario, the remaining two, or one would pick up a large portion of the workforce, sales, and profits of the failed company(s).

Failure creates innovation- and allows consumers to benefit from products created by companies that manage themselves well enough to compete for our money..

I agree with Stew's take of placing the onus of responsibility on the Auto-Makers themselves in the form of a loan, not a 'bailout'.

"If we require the same concessions we did of Chrysler then I have no problem. The Chrysler deal required the company to secure their loan with stock, required a complete restructuring of their management, required a business plan approved by Congress, as well as required Chrysler to gain concessions from their partners, suppliers, services, and... the UAW" - Stew

Everyone recognizes that there are multiple areas that are suffering and failing, but the repercussions of the Auto Industry failing would ripple through the suppliers as well. This would continue the current problem of mortgage foreclosures and credit defaults. Is propping this up going to stop this? Nobody can say, but is letting it fail and standing back watching going to push this recession into something worse? How would you reconcile 2.5 million unemployed people?

What would happen to not only those workers, but the municipalities that surround those factories - including the suppliers?

That is why this isn't limited to an Auto industry 'bailout' or 'rescue package'. Look at Flint, MI - you'd be seeing a number of towns go that way.

The denizens of the Swamp have so real good Business Plans here for the fallen Big 3.
If the Big 3 can just hold out, not lose too much more money, for about 70 more days, a new Lincolnesque-Kennedyesque-Jeffersonian president, President Barack Obama, a brilliant, dynamic, electrifying, transformative figure will solve this thing. Surely everyone recognizes that.

I hope that the people who will decide whether and how to help the domestic Big 3 have a better perspective on the auto industry than many of the posters here.

Build the cars that people want to buy? The Big 3 have been doing that. The trouble is that, until recently, we've wanted to buy big SUV's and pickups. Even the Japanese, who supposedly have their fingers on the pulse of America much better than the Big 3 do, recognize that. The Toyota Land Cruiser, for instance, started off as a small, tough, off-road vehicle with a four-cylinder engine. Today it's a V8-powered behemoth that very seldom is driven off-road - the Land Crusher. The Toyota Tacoma was introduced as a compact pickup; today it's nearly as big as the full-sized pickups of a few years ago. There's also the Nissan Titan, named for a large mythical creature, the Toyota Sequoia, named for a large tree, and the Nissan Armada, named for a large fleet. Even Honda makes a pickup, though it's smaller; Honda has never been a full-line car manufacturer.

The problem with the Big 3 has not been so much product per se, but cost structure. These companies have been in business for a long time. Through decades of providing those "good-paying jobs" that we all like, and buying labor peace through acceding to union demands, they have accumulated enormous legacy costs. The largest suppliers to the Big 3 are not steel companies or glass companies, but health insurance providers. The domestic transplants have younger workforces and don't have the legacy costs that the Big 3 do. The same goes double for cars built offshore in countries that have nationalized health care.

Given the differences in cost structure, all that a Toyota or a Nissan has to do is undercut the Big 3 in sales price by a small amount. In that way, the Big 3 supports the prices of its competitors, and a Toyota, with its lower cost structure, can be rolling in dough while a GM is sucking wind in the same market.

Finally, it comes back to product. A vehicle demands only so much price in its market niche. If the amount that a GM receives for a vehicle is primarily absorbed in legacy costs, there is little leftb over to develop new product. This lengthens product life cycles, so that a product after several years on the market becomes long in the tooth, and is overtaken by other competitors' products. A Toyota, by contrast, with lots of cash, can afford to freshen their products at short intervals, so that the cars in their showrooms are always up to date.

I tend to favor government help for the auto industry, but everybody is going to have to come to the table. Simply pouring money into the Big 3 without fundamental changes in the way that they do business will just postpone the inevitable. Legacy costs will have to be reduced; perhaps the virtually first-dollar health coverage enjoyed by UAW members will have to go away. How these hard decisions will be made in a Democratic administration I don't know; perhaps it will take a bankruptcy or two to get everybody's attention.

It's easy to blame tariffs, foreign competition, high labor costs, government etc. The bottom line always rests with management, period. Management screwed Detroit (and the country) over. They screwed the planet over with their heinous disdain for the environment, which means they could care less about your kids and mine. Throwing good money after bad never works. It's a failed model, because of failed management. Just because their quality has improved lately does not mean they should be bailed out. Plenty of companies out there that make great products don't always have good management or a good business model, and so they fail. That's capitalism. So just because their cars are better now is not a reason in and of itself to save a bad business model with bad management. I say no bailout for the Big 3, and no golden parachutes for the myopic heartless upper management. If anything, maybe help the employees financially to move on and retrain in a viable, sustainable industry.

For all that say buy American, I say to you "Make A Better Product and Make it in America". Most "American" cars are not made here, we support Mexico, Canada and who ever else will make them at a lower wage. Open new plants in America and implement them with new pay scales. We know labor is the most expensive part of auto industry. People will work for a reasonable and fair wage and benefits. If the UAW does not agree to the new terms, they are out of business as well. If things are done fairly, it should work. Foreign auto has proved that in America. Stimulate America.....
Those of us who do not buy American, we are not traitors or any of the other names that you like to call us. First of all , we probably have and would buy american autos, if we went by looks alone, but we don't. Our money is hard earned and we look for quality and longevity in a auto. American auto makers have depended on us to buy there product because they look good, not quality of the auto. They depended on us coming back for expensive repairs or trade- in a few years, because we are tired of spending money on repairs. They knew we had little choice on where to go. They were Three Big Shots who forgot about the little niche that foreign car companies held. They are not so big , now are they....
I was in the market for a new auto three months ago and ran into the same old things in "American" autos, as I did years ago. Little things to start out with matter. Open and close the doors they rattle and don't have that solid sound when you close them. Screws that are not all the way tighten or laying on the floor. Sloppy interior carpet, leather and dash finish. A solid and quite cabin feel when you are driving, not the engine noise that make you wonder if it running o.k. or the hard transmission shifts. Drive over a pothole and more rattling. We build some awesome engines, but we build some horrible ones also and continue to use them. Get rid of the old cheap to build engines. Surround the awesome ones with quality materials and craftmanship and "We Will Come". The auto industry has known this for years and done nothing about it. They though that Americans would always be like "Cattle Lead To Slaughter" . Now they are reaping the whirl wind and looking to "The Cattle" for help. I say help them now, if they address some of the problems that they know caused there failure. Instead of making quantities of autos with good Iooks . Make quality autos that look good. If this doesn't happen, we will be pouring money into the same bottomless pit.

"Americans" make some of the best looking auto on the road. Now we have to make some of the best built autos they can stay on the road.

I enjoyed the comments from the representative of South Carolina yesterday regarding the use of private jet service over commerical airlines of the reps from the big 3. The only corners that these "suits" are cutting are those of the blue collar active and retired employees. Why don't they ask the oil companies to bail them out? They over produced gas guzzling, giant eye sorers, because a few idiot American consumers will buy anything to keep up with the Jones. Just because something can be done does not mean that it SHOULD be. Top management of these organizations has been dated for decades and should be restructured from the top down. Get back to the "old school" values of good customer service, the customer is always right, lower pricing, longer contracts so your car note isn't as large as a house note. Let them fail and restructure, sell some of their private jets and other eminities to settle outstanding debt. Start all over as the good companies they used to be prior to the coporate greed!

Instead of the government giving a bailout to the INDUSTRY of which they can not manage now, give every consumer a $5000.00 rebate if they buy a car. It would help with keeping auto workers working and add to the economy and help the main stream. Let the people who made this mess be charged with fines to help get the auto industry working for the public and not a chosen few. NO MORE BAILOUTS to companies that have shown they can not manager the funds to begin with. Thank you for the opportunity to speak out