Toyota joins Detroit Three misery

First-year operating losses hardly compare to the state of the US automakers, but I don't see anything in your article about the Japanese government bailing out Toyota.

Now, let's hear the ridiculous Republicans blame the UAW for Toyota's financial problems !! or maybe, Govenor Blagojevich ! I am expecting their nonsense any minute, now. Just because, their Party is bankrupt of ideas and ideals, they want to make America, into their image. No, thank you !! 8 years has been enough, of the misinformation, distortions and incompetence of the Republican Party !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

Don,

Rush got a new contract at $400,000,000 (I'm just one of you, folks) to spew that garbage for the next several years.

The UAW has been given the opportunity of a generation to explain to the American people the real problem with compensation in our society today: the immoral differential between the exorbitant average pay of a CEO of an S&P 500 company, and the pay of an average worker.
The modern Republican party has kowtowed to the rich and powerful at the expense of the average blue collar working American all along the way.

In 1950, the average pay of an S&P 500 CEO was less than 30 times that of an average U.S. worker; by 1980, prior to the "Reagan Revolution, the average pay of the S&P 500 CEO was approximately 50 times higher than that of an average U.S worker. But by 2007, the average pay of an S&P 500 CEO had soared to more than 350 times as much as that of an average U.S. worker.

This is both immoral and unsustainable in a democracy. By way of comparison, in Europe, an average CEO only makes 22 times as much as an average worker, and in Japan, only 17 times as much.

If America wants to be competitive again, we need to reduce CEO pay to a level comparable to CEO pay in Europe and Japan. I know exactly how to accomplish this feat. The UAW should agree to immediately lower U.S. union worker pay to a level equal to the level paid by their non-union, non-American competitors. In return, auto CEO’s must agree to permanently lower their compensation to only 20 times that of an average union worker.

Once this has been accomplished, Congress must move to apply the same pay standards to AIG and all of the financial institutions that took one penny of taxpayer money from the TARP fund.

These points are just as easy to digest as the bs GOP talking point about tying UAW wages to Japanese/European companies is. And the basic argument is so conveniently portable for other companies being bailed out.

Ivan Drasko,

Ditto. Instead of throwing taxpayer money at them, let them go through an orderly reorganization under Chapter 11.

Ditto. Instead of throwing taxpayer money at them, let them go through an orderly reorganization under Chapter 11.

Posted by: Don't Bailout the Big 3 | December 22, 2008 2:46 PM

You missed my point entirely.
Are you in favor of AIG etc filing for Chapter 11 bankruptcy?...I didn't think so...and nor do I think the auto industry should file just because the Republican party want's to score a few political points.

Ivan Drasko
Why is it acceptable for a CEO to make 50 times the average worker, but immoral if its 350x? Yes obviously if its taxpayer money, we have the right to set the rules. But to be honest, since taxpayer money is on the line I would rather these companies have the best management team they can so we have a chance to recoup our investment. Might be a bad time to implement a 50x wage rule. As for publicly traded companies not receiving federal money, its up to shareholders and the board to decide appropriate CEO pay.

Posted by: cogmeyer | December 22, 2008 3:14 PM

Teresa,
If we're bailing out the Wall Street criminals (with my taxpayer money) then I want those CEO's to suck it up and take massive cuts too.
Blaming blue collar workers while throwing tons of money at the Wall Street criminals, who are running their business's like a casino, is exactly why we are in this mess in the first place.

Cogmeyer, don't you think that GM needs the best line workers too? The workers pay is on the line, why not the big guys in the big offices? Why not the middle managers? Are they special? Are they too precious to share the pain of the rest of the workers?

Liz

Sure any business that hopes to be competitive needs to compensate all employees fairly and competitively. And actually I don't have a problem with the call for reduced CEO pay, except for the fact that its mostly symbolism. You cut executive pay at GM and you might several hundred million. You cut UAW pay / benefits by $10 and you save billiions. You close a factory that is only open because of a UAW contract clause, and you save billions. Eliminating or selling car lines saves billions. So sure, in principle, it would feel great to see bosses take big pay cuts, sell their vacation homes and some Campbells soup for a change But for these companies to make it, they need much more drastic changes, and the focus on the symbolism of CEO is really just a distraction for the masses.

I love it when banks take our money, then tell us to get lost.
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"After receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending it. Some won't even talk about it.

"We're choosing not to disclose that," said Kevin Heine, spokesman for Bank of New York Mellon (BK), which received about $3 billion."

"Thomas Kelly, a spokesman for JPMorgan Chase (JPM), which received $25 billion in emergency bailout money, said that while some of the money was lent, some was not, and the bank has not given any accounting of exactly how the money is being used."

"We have not disclosed that to the public. We're declining to," Kelly said."

"The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?"

"None of the banks provided specific answers."
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http://www.usatoday.com/money/industries/banking/2008-12-22-bailout-money-where_N.htm?csm=34
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It's so bad, the banks don't even care or feel the need to explain why they're being so secretive.

Ivan Drasko,

Yes, Ivan, I was not in favor of bailing out AIG. The only reason any auto companies should file is because they are bankrupt. Executive compensation is certainly within the realm of matters a bankrupcty judge may influence in approving a reorganization plan.

So sure, in principle, it would feel great to see bosses take big pay cuts, sell their vacation homes and some Campbells soup for a change But for these companies to make it, they need much more drastic changes, and the focus on the symbolism of CEO is really just a distraction for the masses.

Posted by: cogmeyer | December 22, 2008 4:26 PM

Cut CEO pay and management bonuses and you save billions too.

http://www.google.com/hostednews/ap/article/ALeqM5j4du5x_AukGeVZ5Rli1iFTG1jEWgD957QS000

Never undersetimate the greed and waste that occurs at the highest level of our corporations. Don't get distracted by management pointing at the worker and calling them greedy and unreasonable. Don't get fooled by the propaganda that says the workers are the problem and management is the innocent, helpless victim (Your "plant kept open because of union contract" nonsense. It takes two side to make a contract.) The "masses" that you have such contempt for are not the whole problem, or even the major problem. Look to those who called the shots. Look to those who designed the products. Look to those that financed the deals. Look to those who bled the companies dry for their incredibly large salaries even as the company failed.

You cut UAW pay / benefits by $10 and you save billiions. You close a factory that is only open because of a UAW contract clause, and you save billions
Posted by: cogmeyer | December 22, 2008 4:26 PM

Teresa,
If we cut the blue collar auto workers healthcare and retirement benefits it will save us more than having massive pay cuts for all of the way over paid CEO's, upper and middle management of white collar wall street?

This is exactly why Republicans don't win elections anymore....

(By the way, you're also over inflating auto workers hourly pay rate....again)

and the focus on the symbolism of CEO is really just a distraction for the masses.

Posted by: cogmeyer | December 22, 2008 4:26 PM

Teresa/ Don't Bailout the Big 3,
And the focus on the symbolism of American blue collar auto workers is really just a distraction for the masses. You're funny, I can always pick out your posts because they always make absolutley no sense whatsoever unless you happen to be a partisan Repub.

I need an explaination. Why should some person who worked for 30 years and earned their retirement have it cut so some guy who took the reigns of the company a year ago and did nothing to stop the bleeding can fly around in a private jet and get his millions of dollars in bonuses at the end of the year?

lochnessmonster,

That is why we should not bail these companies out. They need to go through the normal bankruptcy process so the claims of all stakeholders can be fairly considered by the bankruptcy judge rather than have taxpayers pay the companies debts and end up a claimant in the inevitable bankruptcy proceeding that will follow.

Corporate welfare is now good since it is going to companies with union employees???

For you folks that can't undertsand why the banks were bailed out quickly, while the auto makers had to jump thru hoops - ask yourself this:
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Can this country survive without its credit markets?
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Can this country survive without the car makers?
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The TARP bill was written badly since there was no accountability attached to the $700 billion.

My problem with the bailout is that it doesn't appear to be a means to an end. I haven't seen anything to convince me these companies are going to return to profitability. My problem with Chapter 11 is they will dump their pensions and health care obligations on the taxpayers. From the frustrated taxpayer perspective - heads you win, tails I lose.

* * * * *
Posted by: Herbie H. | December 24, 2008 3:26 PM
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You are right, Herbie. This seems to be the wave of things to come. Out of the apparent chaos in recent events, the clear trend has been to shift the risk of loss from businesses (and others) to the government and taxpayers to an unprecedented degree. That set a dangerous precedent. If the government is to be the ultimate risk taker for all human endeavors, then it will arrogate to itself the right and power to set the conditions upon which it accepts those risks. Once the latter has been established, you can kiss goodbye anything that resembles a free market or human freedom. In my humble opinion it would be much better if we altogether avoided going down that sad road. It is only because of our general nearsightedness as a people, and our appetite for plunder, that we have taken this wrongheaded path.