70° SUNNY, Automaker Bailout
Last Modified: Friday, November 21, 2008 at 2:01 a.m.
Tired of the mismanagement of the last eight years, I voted for Sen. Obama, hoping that a change in fiscal and social outlooks would help our troubled nation. Now, I am not so sure my vote was the right one. I say this primarily because of the controversy over the bailout of the auto industry. Some are saying giving $25 billion or more to the three major automakers stands as a payoff to union members who in the vast majority voted for the Democratic candidate. Others say one in five workers are closely tied to the industry and if the auto industry tanked, so would our interdependent economy.
But I join a growing majority - at least in viewing media comments - that favor letting the time-honored risk/reward tenets of our capitalistic system operate. I remember Chrysler's government bailout - which only prolonged the agony. I remember ITT, TWA, Montgomery Ward, Pan Am, all once-robust companies that did not survive market realities.
Let the automakers file for Chapter 11. Let's use the $25 billion or more to help extend workers' compensation and, hopefully in a new administration, fund a universal health-care system that is not a major deterrent to corporate competition in our global society. Let a new industry appear dedicated to energy efficient vehicles and market strategies attuned to an increasingly green-oriented world. I sincerely hope the new administration will not follow an all-too-familiar Democratic welfare-state mantra. Change was their battle cry. It's needed now more than ever to right our fiscal ship.
WHIT WEIHE
Lakeland
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November 21, 2008 6:01:06 am
RE: Link
Whit the letter writer is somewhat doubtful of his vote for change. Kind of early there dude!
The new POTUS doesn't get to come on board till 20 Jan. 09!
The conservative mind set is to let the big three and all the massive suppliers to close their doors. The still employed workers of all these thousands of shops become suddenly unemployed and go from paying over a hundred billion in payroll and property taxes to the IRS suddenly become unemployment liabilities and their homes or rent becomes delinquent! Ask any real smart economist how fast the whole economy will truely tank and how fast it would take to restructure and start up again?
The rescue loan is a major first step and the auto makers need to come to the table with real efforts to become lean and mean!
Who will replace all the wealth and revenues lost if the overall car industry crashes on top of an all ready failed economic system?
Maybe the OPEC nations of Dubai, the massive Singapore markets or the lucrative banks holding trillions of American dollars in the Cayman Islands could step up and float a loan to the American auto makers? Not!
There are many people worldwide who could care less if America goes bankrupt! Some may even be betting we will with their CDS's!
All Americans need to stand up and make sure this disaster does not happen!
Russia in the 90's tanked and they are already ahead on their recovery! America can prevent a total collapes and we can't afford to take ten years to recover because our national security is more in jeparedy than it every was because of importing crude oil!
The new president can't take control yet and the more powerful aligned congress has not been seated yet! The Bush-whacker gang will leave office pardoning their corrupt deeds that made a complete mockery of regulations and congressional checks and balances!
America needs infusion now and greedy CEO's need to step up and lead or get out of the way! America is not going to fail like Soviet Russia because too much is at stake!
Americans need to prepare to tighten the saddle and and get ready for a rough ride! To fail is not an option!
Federalizing these auto plants like FDR did to support the war effort in WWII is a last resort and will be slow in getting started!
Rescue is
November 21, 2008 6:15:18 am
BS Scout, I enjoy reading your posts. You always make good points. As well you have a heart for the veterans and workers who have sacrificed much of their lives for their country, played by the rules and yet find themselves on the short end of the stick thanks to greed and corruption.
Good work!
November 21, 2008 6:29:52 am
Thanks the Sisters!:< I just posted to your wonderful post on the Coup issue!
I believe the Ledger wanted these forums to allow their readers to discuss and offer constructive critiques of the wide and varied issues.
Stuff and Step lead the stiring crowd that offer no positive solutions just thnic epethets
that indirectly reviels their contempt for civil discourse!
Keep the posts coming!
Cheers:<
November 21, 2008 8:00:23 am
BS, without quoting and responding, I will try to remember as much as I can of what your original post said. I do, for the most part, agree with what you have said and am sort of at a disagreement with myself on certain aspects of what I think should happen. I think in bailing out the big three we are just creating more space for them to keep doing what they have always done. Which is, for the most part, put out crap that they expect us to buy because we are Americans and there are still plenty of us who buy American cars for that reason. If the big three are forced into bankruptcy it will be a huge and devastating effect on our general economy but it would also bring in a huge correction in cost of goods, cost of housing, cost of labor, cost of pretty much everything in the northwest. Do we really need to be paying someone $20.00 an hour to put lugnuts on a car? Does that person, who probably does not have higher than a high school education really need to have no other choice than to buy a $300,000 house because that is what a small 3 bed 2 bath cost in the greater Detroit area and does that person really need to pay $3.00 for the cheesburger at McD's that we pay a buck for? If one of the big three files chapter 11, it has been said by some experts that the other two will have no choice as the costs will come down so rapidly that they will once again be able to sell new cars at reasonable prices because the unions will no longer control the auto industry and instead, the auto industry will control itself. Several years ago, Ford wanted to copy Mercedes Benz's Alabama plant idea and give all workers on the line from the lugnut guy to the engine guy the ability and right to STOP the assembly line if they saw a quality issue. The unions raised a stink about it for this reason and that so it never happened. So Ford keeps putting out cars that have to be fixed at the dealer instead of fixing them before they leave the assembly line. What a concept, a car that actually is right when you get it. The unions had their time, they may still for safety reasons and supervisor disagreements but the control they have over the big three is one of the big things that is killing the big three. The upper management is also so far removed from reality they have no idea what is going on. For the bailout to take place it needs to start at the top with CEO's pay
November 21, 2008 8:09:24 am
Mr. Weihe...that's what you call "buyer's remorse". Bailing out the auto industry is nothing less than rewarding bad behivior. Poor management from the top and ridiculously lopsided contracts with UAW are just two of the reasons they are in their situation. I listened to a report this morning where union line workers were making $75/hr which is $150K/annually. Not too shabby for putting doors on vehicles.
Giving them taxpayer money to continue their as is business model nothing short of rewarding a student for bad grades or giving an employee a raise for poor performance. Any businessperson in their right mind would not do it and neither should Congress. Will there be fallout? Absolutely. Will restaurants or shops near manufacturings plants or dealerships loose business? Absolutely. That's a risk you take in business, and I'm sure the successful shops will relocate; others will pursue other businesses.
That's what you call capitalism.
November 21, 2008 8:26:42 am
The only serious problem that I see here is the commented on domino effect on the economy, that will affect many jobs as a result of the failure of the car industry. The problem is not the industry itself, but the mismanagement, as evidenced by the hearings with the CEO's in Washington. There has to be a infrastructure of commodities in place, a reworking of said business management, as well as a compensation in the structure of our nation. We are now consumer driven, and the companies that service our expenditures on goods, cannot be just coldly kick out of the picture completely without a tremendeous loss of jobs and capital that sustain the economy. Ergo, no industry, no jobs, no money flow back into the system. IMO, clean out the mismanagement, the corrupt greed at the top and do so with stricter rules attached to the monies given, such as a realistic payback period, and guidelines/accountability of where the monies are spent and how. It is now a prudent thing for the future of the energy sources that the companies begin to modify their goals, structures, and products, gearing them for a multi-purpose of supplying products of necessitiy and of importance down the road in other, cleaner avenues of energy consumption. There is the field of supply and demand that has to be a future oriented goal of cleaner energy, population and eco friendly figured in with and including profits. Just my thoughts in the matter!
November 21, 2008 9:55:56 am
From physics I remember that vaccums tend to get filled. Im sure Detroit isnt all that irreplacable. The bottom line is that while the UAW has forced the big 3 to compensate workers far more generously than what is sustainable for any of these companies, the big three have also been producing products that are less than marketable. Its a double whammy. They have been giving workers too much, giving customers too little. No business can sustain itself.Aside from SUV's and trucks, what has detroit given us lately? The family car is now the domain of the Japanese, the luxury car is now German territory.All the while, the starting UAW worker, many with only a high school education, gets 29.00 and hour, about 50% more than i started out at as an attorney with 7 years of college/lawschool. Not to be a snob about it, but come on. I'd take almost 60 grand to work an assembly line.Yeah, it would be rough if the big 3 fell. Its going to be rough anyway. But the vaccum will fill. Maybe Tata from India will come in, maybe other manufacturers will get a chance. But upholding a supplier when there are very little "demanders" seems foolish.I make the same argument with regard to the banks. By loaning them money, we are effectively feeding the foreclosure crisis. If the banks have liquid funds from the government,they have no reason to get liquid funds from other sources, ie there borrowers.If we forced banks to find their own liquidity, you can bet they would start working with borrowers, at least to SOME degree, to get those borrowers making payments again and getting liquid funds back into the banks.The old addage is as true as ever, the best way to learn to swim is to jump in the water.I went door to door campaigning for Obama. But the whole time I felt that no real change was coming. Sadly, that feeling is proving well placed. Democrats have beholden themselves to Wall Street and the UAW/AFL to the point that getting elected may very well mean bankrupting the nation of its future, if not its present economic viablity. On the other hand, republicans, well, those maniacs spoke for themselves by electing Bush and supporting Palin.I probably should have voted for Alan Keyes.There is a new book by a guy named Peter Heather on the decline of Rome. Good reading. Very relevant.
November 21, 2008 11:50:15 am
I think there's a bit of misunderstanding of my first post. And those people that think the auto industry has no impact outside Detroit are seriously uneducated about a national product that has dealerships in every county in America.
I believe the recue package needs to be offered with clear expectations of saving the industry that settled the vastness of this nation beyond passenger rail service.
I am sure the rescue will be forthcoming and any other rescue efforts this nation may have to do to prevent the total collapse that Russia experienced over a decade ago and has rebounded to a point that it could overtake America as the leading super power!
It ain't going to be allowed to fail and free enterprise don't have time to restructure from a complete collapse!
Those plants will produce something! It may be electric hybrid cars and mas transit railcars and buses. I am not a firm believer in goverment running businesses but we the people need to take charge and stop slidding into the abyis of an absolute bottom.
You think we have crime problems now, wait till money can't buy you food or shelter there will be hoards storming food storage and warehouses.
Yes it can get worse!
November 21, 2008 12:19:25 pm
Just curious as I am a lil behind on the news, have they implemented a plan (the automakers) to submit to congress showing what changes will be made to these companies so they can move forward with a plan??I personally think that unless they nip the problem at the source (CEO's), things won't change. Cars are overpriced, heck, just about everything is overpriced now. A lot of people can't afford to buy these cars that have already been produced because they are just too much money, and without wages adjusting to the cost of living increases lately, you just can't afford that shiny new car.
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