http://www.foxnews.com/story/0,2933,449115,00.html

I knew something like this shit would happen. The Big 3 auto companies have been running on 50 year old business practices and well quite frankly have run their companies into the ground. Top that off with organized labor forcing higher than hell wages for productionline work and we all knew this shit was going to blow.

For example, GM/Ford/yadda/yadda build 30k red trucks with varying kits and set them out in the warehouse and wait for folks to purchase them. They only sell 15k this year due to gas prices/recession/etc....they have to eat the 15k in trucks...

Toyota however runs a new business model ( one that was pushed in the 70's by an American but he was run out of town straight to Japan) that calls for the company to build what's ordered. Now before you say, errr that's impossible it's not. Once you set up your supply chains and delivery methods you can build one model after another of varying builds /makes off the same line . They due this in the NUMMI plant in San Jose, went there to train folks on this method in the 90's.

Now a recession hits, you don't have to eat 15 k trucks that weren't ordered.....you're basically flat and ready to change to a product that is selling.

Sorry, I'm a GM kid ( Dad just retired there after 40 plus years) but I knew this shit wasn't going to fly forever. I spent some time working for Toyota and learning the TPS (Toyota Production System). The Big 3 were approached in the 90's and it was suggested to them to adopt the system before it was too late. Of course the hog was fat at that time so they didn't feel the need to change. They ignored a basic precept....Change from a position of strength ,not when you're choking on stupidity...

Now our Govt being what they are, tax and spend , are going to cut them a check to keep on keeping on. It won't solve a damn thing...

Sorry, just heard about Pelosi's and Reid's bailout extension to the Auto 3 and I'm not at all happy.

Nanny state, we'll take care of you....jesus that won't fix a damn thing......

How dare you criticize the great Pelosi! The answer is free money for all who need it! From each according to his own to each according to his needs!

http://www.foxnews.com/story/0,2933,449115,00.html

I knew something like this shit would happen. The Big 3 auto companies have been running on 50 year old business practices and well quite frankly have run their companies into the ground. Top that off with organized labor forcing higher than hell wages for productionline work and we all knew this shit was going to blow.

For example, GM/Ford/yadda/yadda build 30k red trucks with varying kits and set them out in the warehouse and wait for folks to purchase them. They only sell 15k this year due to gas prices/recession/etc....they have to eat the 15k in trucks...

Toyota however runs a new business model ( one that was pushed in the 70's by an American but he was run out of town straight to Japan) that calls for the company to build what's ordered. Now before you say, errr that's impossible it's not. Once you set up your supply chains and delivery methods you can build one model after another of varying builds /makes off the same line . They due this in the NUMMI plant in San Jose, went there to train folks on this method in the 90's.

Now a recession hits, you don't have to eat 15 k trucks that weren't ordered.....you're basically flat and ready to change to a product that is selling.

Sorry, I'm a GM kid ( Dad just retired there after 40 plus years) but I knew this shit wasn't going to fly forever. I spent some time working for Toyota and learning the TPS (Toyota Production System). The Big 3 were approached in the 90's and it was suggested to them to adopt the system before it was too late. Of course the hog was fat at that time so they didn't feel the need to change. They ignored a basic precept....Change from a position of strength ,not when you're choking on stupidity...

Now our Govt being what they are, tax and spend , are going to cut them a check to keep on keeping on. It won't solve a damn thing...

Sorry, just heard about Pelosi's and Reid's bailout extension to the Auto 3 and I'm not at all happy.

Nanny state, we'll take care of you....jesus that won't fix a damn thing......


Actually, Bush just recently wrote a 25 billion check to GM or did you miss that back in October?

You people really need to stop looking at the party name and pay attention to what's really going on. There is no functional difference in most of the economics policies of the think-tanks behind the parties.

The right thing to do in terms of business is to let them go under, reorganize and then emerge as leaner, meaner operations. Or let Toyota buy them all out in a gesture of charity.

That won't happen though, because it will mean putting literally millions out of work, cutting off literally millions more from the retirements and the government can't sit idle while that happens. So the end result is what is the lesser fo the two evils? Teach the Big Three a lesson and screw over millions of tax payers (who will no longer be even paying taxes because of no income) or keep the ship of fools aloat.

This is what you get when you have unionized labor demanding so much, old business models and a Global Economy. People seem to think just because you encourage global trade that everyone is going to play fair and endorse labor practices that mirror the US. Heck No! The majority of the world removed from the West works much longer hours for a pitance. And people think I am crazy for saying wages need to be slashed, unions need to go etc etc. Its reduced pay or no pay at all when the company tanks. The US is going to join the rest of the world, be it by being dragged kicking and screaming, into a more humbler existance. Its that or collapse into a 3rd world nation.

Fuck it, if the government is going to bailout the auto industry with taxpayer money, I want a goddamn new car delivered to my doorstep. Even if it is a piece of shit American car.

Except for the impact on workers, who are really at the bottom of the food chain here, I would have to agree with the notion to let them go under.

It's not like the business model of only manufacturing what is ordered is new or novel - many businesses already follow something similar. With something as expensive as a car, that would only seem to make sense. If we could get away with letting the businesses sink, it would force them to follow actual business plans that work.

I don't care which party it is it's a fucking mistake to give them money to keep operating a bad business model.

Oh wait quick go and point at the republicans and say but but but...

That'll fix it...blah

http://www.twincities.com/ci_10937314?IADID

I have little sympathy for these companies but the number of people that would be adversely affected is simply too great to casually turn our back on the auto companies.

http://www.twincities.com/ci_10937314?IADID

I have little sympathy for these companies but the number of people that would be adversely affected is simply too great to casually turn our back on the auto companies.

To ignore them would bring catastrophic consequenses beyond the capacity of myopic thinking of Rush Limbaughisms and the faux free market that is spewed.

However just to throw money at it won't make that go away Byl. You think that free cash will trickle down to that gent putting in ashtrays for 25 bucks a hour? Nope , they'll lay his ass off still ( as they did my Sister) and keep those golden parachutes packed nice and tight.

Ah and thought I'd clarify for your Rover. The 25 Billion signed by Bush was specifically for converting to more energy efficient vehicles. I'm not sure this bailout being discussed now is anything more than free cash ( tho they are saying they will be low interest loans).

I'm curious, with gas down how badly do you think those companies that rushed to put out any type of flex fuel/electric or such type cars will eat it now that John Q Public will think twice about giving up his truck.

Hell I know I'm going to hold onto my Avalanche till it's paid off now instead of rush to sell it.

Ah and thought I'd clarify for your Rover. The 25 Billion signed by Bush was specifically for converting to more energy efficient vehicles. I'm not sure this bailout being discussed now is anything more than free cash ( tho they are saying they will be low interest loans).



Right, and I was and am somewhat pissed that this had to be done in the first place, being the companies had created the problem for themselves. Now, setting aside that money as a separate issue, the companies are saying that their losses are so great that without the cash infusion they are requesting they will go under; the number of layoffs will not be as great if they get the money, than the wholesale loss of jobs that will occur if they don't. Either way, they are saying people are going to be getting screwed.

My only position here is that the impact needs to me minimized as best as possible. If we allow the companies to go under, the jobs impacted will extend beyond the companies to the local dealers, contracted parts suppliers and manufacturers, etc. How many will this add to the unemployment rolls and that cost, to the local welfare and food stamp rolls and that cost, to the uninsured rolls and the related medical costs that get passed along to everyone else, etc.

It is much more than tossing money at some inefficient or incompetent CEO's and their cohorts. Hopefully, if a bailout is forthcoming there are some serious strings attached. But something needs to be done.

Just was surfing the news, and caught a blurb on the bailout, with the figure given of approx. 2 1/2 million jobs lost in the event of the automakers going under. That makes it even more vital that something effective be done, and hopefully with some oversight.

Talking about this over coffee this morning, one of the folks asked rhetorically how many others are dependent on each of those laid off workers salaries; from the children for meals and clothing and shelter to the neighborhood grocer and hardware (and yes, even Walmart) to the schools funding if the laid off are forced to relocate. The picture is much larger than just an over-paid assembly-line worker, or incompetent management.

Look at the impact the closing of the DHL plant is going to have in that town in Ohio; approx population of 12k, and 7k are going to be out of work. What business will be able to survive?

Oh I'm aware Byl, I'm from the area of Anderson Indiana ( yes the one featured on the new HBO special, Sat races were great grwoing up!!).

My Father retired from a GM owned company , Guide Lamp, after 44 years in the nick of time. I have a brother , lil sister and other family members out of work or on the verge of being so.

Giving them money, the Big 3, won't fix the problem. It'll return in a few months ...

Unless they change how they do business nothing will fix it..;(

Oh I'm aware Byl, I'm from the area of Anderson Indiana ( yes the one featured on the new HBO special, Sat races were great grwoing up!!).

My Father retired from a GM owned company , Guide Lamp, after 44 years in the nick of time. I have a brother , lil sister and other family members out of work or on the verge of being so.

Giving them money, the Big 3, won't fix the problem. It'll return in a few months ...

Unless they change how they do business nothing will fix it..;(

Hence the call for oversight.

GM announced yesterday that Residential Capital, which is the mortgage-based unit of it's financial arm, may not survive; and, Delphi Corp. which is a spin-off parts operation is not likely going to be able to emerge from Chapter 11 bankruptcy protection.

They need to use the monies for the stated purpose of refitting their operation to make a new breed of auto, and get out of all the extraneous BS by selling off, or simply dropping. There will still be hardships facing many, but not nearly as significant a number than if they are left hanging.

First and foremost.

You DO NOT sacrifice "The Arsenal of Democracy" on the altar of ideological free market purity.

Where would we have been in 1940 without the Big Three?

Partial, temporary government investment is not a bad idea. Our industrial base is a matter of national security. The Big Three need to be put back on the right track. They have made short sighted, stock market decisions for the last few decades. The intervention of the government will remove the short term profitability impulse and will force the automakers to start producing automobiles that are more inline with what our needs are as a nation.
To help make us less dependent on oil
To force them to build with the highest quality of standards
To enable them to innovate and advance with new technologies.

So for the short term, it is not a bad idea to form a partnership between the Big Three and the American people.

To force them to build with the highest quality of standards
To enable them to innovate and advance with new technologies.

Dude you do remember this is a government operation. We're likely to end up with cars that break down 90% of the time and cost 10 times what they should to make them.

Dude you do remember this is a government operation. We're likely to end up with cars that break down 90% of the time and cost 10 times what they should to make them.


You mean that things would just end up being the same as they are now?

"Dude you do remember this is a government operation. We're likely to end up with cars that break down 90% of the time and cost 10 times what they should to make them."

This is a tired argument.

The thing that pisses me off to no end, the Bush admin and the lame duck congress is willing to write a blank check to wall street (Republican) for up to 700 billion dollars. When a unionized (Democratic) company who employs 1000's more people than the financial industry comes to ask for a 50 billion dollar loan, we get all this feedback about shitty cars, poor management, salaries, you name it.

Do you have any idea how bad it will get when 1 million+ angry, unemployed, blue collar, union workers descend on import car dealers and factories? I may be right there with them. This is class warfare at its finest.

I dont suppose any of you noticed the fires in California are in burning uncontrollably in super affluent areas did you?

Phel, I don't think anyone was willing to look the other way when the "blank check" suggestion was on the table. Thousands upon thousands of people wrote their leaders telling them they'd be kicking them out of office if they signed the bill, and it failed the first time for that very reason. I personally was against that bail out as I am against this one, three mismanaged companies ... and as one fails, the other two grow stronger as they suddenly have a larger market share.

These bailouts were a horrible slippery slope. Buying up Fannie Mae / Freddie Mac and then NOT saying "well we own the means to make mortgages, so now our government is going to issue 5% (see: lower than national average but higher than the fed rate) interest mortgages to anyone who qualifies to refinance you all out of your balloon mortgages" and you know, make a huge fucking profit on our tax dollars while helping everyone out of losing their home was the first of many stupid decisions our leaders have made when it came of this mess. Getting a bill to bail out wall street, then doing a half ass job of it and calling an audible over to bailing out the credit market was strike two. Then the auto industry is another big mistake as its not going to change anything.

Its like the oil thing. As long as we can affordably continue to use oil, we'll do it. Only when it starts to become a financial issue are we smart enough to wake up and start looking at alternatives. If the (enter any industry name here at this point) industry are going to get their mistakes financed by the taxpayers (see: private profits and socialized losses) they can afford to make those very same mistakes.

The reality is that people are losing their jobs right now, and will be for some time. Is it worse because its a job lost from an auto manufacturing plant instead of a job lost at Circuit City or Linens and Things or Best Buy or Wal Mart? Buying off the debt of bad business practices isn't going to make those jobs any more secure 1, 2, 5 years from now. Some of those newly unemployeed are going to struggle for a bit, but others will find their ways into businesses with better business practices, and some will find their way into small companies with big ideas ... and those are the only way we will pull ourselves out of this financial mess we've set ourselves (and the world) up for over the past few decades.

Phel, I don't think anyone was willing to look the other way when the "blank check" suggestion was on the table. Thousands upon thousands of people wrote their leaders telling them they'd be kicking them out of office if they signed the bill, and it failed the first time for that very reason. I personally was against that bail out as I am against this one, three mismanaged companies ... and as one fails, the other two grow stronger as they suddenly have a larger market share.

These bailouts were a horrible slippery slope. Buying up Fannie Mae / Freddie Mac and then NOT saying "well we own the means to make mortgages, so now our government is going to issue 5% (see: lower than national average but higher than the fed rate) interest mortgages to anyone who qualifies to refinance you all out of your balloon mortgages" and you know, make a huge fucking profit on our tax dollars while helping everyone out of losing their home was the first of many stupid decisions our leaders have made when it came of this mess. Getting a bill to bail out wall street, then doing a half ass job of it and calling an audible over to bailing out the credit market was strike two. Then the auto industry is another big mistake as its not going to change anything.

Its like the oil thing. As long as we can affordably continue to use oil, we'll do it. Only when it starts to become a financial issue are we smart enough to wake up and start looking at alternatives. If the (enter any industry name here at this point) industry are going to get their mistakes financed by the taxpayers (see: private profits and socialized losses) they can afford to make those very same mistakes.

The reality is that people are losing their jobs right now, and will be for some time. Is it worse because its a job lost from an auto manufacturing plant instead of a job lost at Circuit City or Linens and Things or Best Buy or Wal Mart? Buying off the debt of bad business practices isn't going to make those jobs any more secure 1, 2, 5 years from now. Some of those newly unemployeed are going to struggle for a bit, but others will find their ways into businesses with better business practices, and some will find their way into small companies with big ideas ... and those are the only way we will pull ourselves out of this financial mess we've set ourselves (and the world) up for over the past few decades.

Good post

Looking from the outside in, if Wall Street can get bailed out, and the American Automakers can get bailed out, then damn it, the average American citizen should be bailed out of the mortgage. I mean, if they're gonna throw money around, make sure it gets all around the table right?

Looking from the outside in, if Wall Street can get bailed out, and the American Automakers can get bailed out, then damn it, the average American citizen should be bailed out of the mortgage. I mean, if they're gonna throw money around, make sure it gets all around the table right?

That is the thing I don't understand. If they went and refinanced the entire country at 5%, EVERYONE would win. I would win (its 1% less than the current 6% now), the banks would all get their money straight from the government, all the people about to lose their houses would get a normal sized mortgage payment, and even Sanchek and his inflation fears would win because the government would make every single penny back PLUS 5%. And every one of us would be saving a few $$ a month we could put towards some Best Buy, Linens and Things, and General Motors shit. I'd love a new car, but I can't afford one this year - if I was dropping a few hundred less a month, maybe I could.

That is the thing I don't understand. If they went and refinanced the entire country at 5%, EVERYONE would win. I would win (its 1% less than the current 6% now), the banks would all get their money straight from the government, all the people about to lose their houses would get a normal sized mortgage payment, and even Sanchek and his inflation fears would win because the government would make every single penny back PLUS 5%. And every one of us would be saving a few $$ a month we could put towards some Best Buy, Linens and Things, and General Motors shit. I'd love a new car, but I can't afford one this year - if I was dropping a few hundred less a month, maybe I could.


It's absolutely correct, create cash flow. But you also have to realize that the wall streeters really have no clue about how to create cash flow unless its into their own pockets. They think in terms of stock prices not in real terms.

the banks would all get their money straight from the government, all the people about to lose their houses would get a normal sized mortgage payment, and even Sanchek and his inflation fears would win because the government would make every single penny back PLUS 5%.

You want the government to immediately pay trillions of dollars to banks, but don't think that would cause inflation?

Where would that money come from? Something like that would cause more inflation than the FED dropping the overnight rate to 0%.

Everyone keeps coming up with these plans that are rooted in the same paradigm that got us here. We can't fix this problem by spending money we don't have (and likely can't borrow for much longer).

I'm not sure if this is viable but something like this has to happen.

The Big 3 have to immediately cut out the models that no longer sell. They then need to bring in specialists to help them remake how they do business. Toyota has folks that do this for all their suppliers, even going so far as to extend loans to their suppliers to help them remake how they produce.

A serious downsizing, yes this is the ugly part but unless the unions step in and play ball on the wage structure it's neccessary.

Maybe real mergers, not stock market versions , but plants that build all models ...and yes this is also viable see NUMMI in San Jose for a working model.

I think the govt could step in and help by helping countries that build automobiles sold here ( Japan, Korea, etc) that we'll no longer allow the one sided free trade deal we have now.

Some of those countries have already decided to play ball and started building their cars here in the U.S. in states that don't have to play by Union rules.

Perhaps this is a step the govt could help with. Help relocate newly tooled production lines to states like Utah that don't have to play by Union rules.

In truth the best route might be to let them fail outright. Then give tax options for the new upstart companies to rebuild elsewhere in the U.S.

Sanchek you're sounding like a broken record, we all get the point - but since there's NO WAY to fix that overnight, move the fuck on. Its getting pretty old and boring and getting to the point where I don't even bother to read what you wrote anymore since I already read it 100 times. If its possible for a for-profit bank to make a 6.0% interest mortgage, and the government can afford to pay $700 billion dollars to buy the for-profit mortgages, then the government could do a 5.0% mortgage.

If you suggest a plan which is fundamentally flawed, don't be surprised when someone points it out. Your plan would leave us in worse shape than Iceland, within a year.

that we'll no longer allow the one sided free trade deal we have now.


Bingo!

There has to be some serious people understanding that serious concessions are needed.

The Unions, the Management, the suppliers, the parts people, the dealers, ect...

Everyone has to get into the same room with Government sitting there with a check and say "Work this shit out, or you are all fucked and get nothing."

Next the money has to be paid with the caveat that the auto industry will have 2 fundamental mandates.

1. They will be become a cornerstone of the new national energy policy. More hybrids, more fuel efficiency. More money into research and development. Detroit needs to become the mecca of new technology.

2. They need to look toward going on the offensive in the emerging markets. Make cars that can be sold in India and China and Russia. Playing a defensive, America only plan is fucking idiotic. Make a better car, sell a better car to as many people as possible.

that we'll no longer allow the one sided free trade deal we have now.

That's kind of funny, most people don't even know what "free trade" really means, but free is good right? Free is better than not free! That's why they don't call it neoliberalism. That sounds vaguely Marxist or something.

I'm aware that we don't have anything close to freetrade. We give and get taken in nearly every exchange.

That's why I laugh when folks on here say something like "free trade failed blah blah blah".

Dumbass, we don't have Freetrade and never have. Even our closest allies place tarriffs on our goods and expect us to allow their goods free entry.

China, not an ally by any means, is a great example of us bending over and taking it in the keister for no good economic reason and instead for some psuedopolitical reason that usually ends up in some backroom deal to get a damn bill passed.

Mitt Romney's take on it:
http://www.nytimes.com/2008/11/19/opinion/19romney.html?hp

I would've voted for Romney if it were him vs. Obama. This reminds me why.

Romney would have won against Obama, he didn't represent Bush and the fear of continuing Bush's policies.

I still don't understand how anyone wanted McCain in the primaries over Romney or Paul. Well the Republican machine blocked out Ron Paul more effectively than any NBA power forward could ever manage to do.

The Republican machine will never allow a Mitt Romney or Ron Paul to be the nominee; the Christian Right won't hold with a Mormon being in charge, and too many people would find their out-stretched hands empty with Ron Paul.

That was a really interesting column by Romney. Thanks for sharing.

and too many people would find their out-stretched hands empty with Ron Paul.


Some of us actually think that might be a good thing.....

But you need at least 50%(or close) of the country to feel the same way for him to win.

Tell that to Al Gore.

I guess I'm judging the outcome in retrospect Tale. Looking back I wonder how many more folks wish they hadn't backed a McCain who made so many blunders down the road. Instead they would have gladly backed a Romney who actually does a better job of representing real moderates as opposed to McCain's "maverick" style.

I was talking specifically in regards to Sixee's comments on 'some of us think that would be a good thing.'


and sanchek, yeah I know. You also know what my point was. I don't think Paul would be close to winning in this day and age with the gimme gimme culture.

Yeah Romney has some good ideas in that op-ed.

And now this about the CEOs: http://abcnews.go.com/Blotter/WallStreet/story?id=6285739

No doubt about it, there's some serious problems with the astronomical compensation corporate CEOs and bigwigs get. On top of that, we're seeing that they don't really take much of a fall when they run these companies into the ground? Even celebrities and sports stars aren't bulletproof like these guys.

Romney's article skims over many of the important details in the situation, however. As we've discussed here before, this is no different than the Wal-Mart debate. American's want everything cheap, everyone paid well, and we don't want to have to work at the same time. If you want something cheap, you can't pay union wages. But at the same time, we don't want American's working for slave wages. The two don't go together. Parts are manufactured overseas, and we'd just as soon not know the details behind how those are manufactured. That's the real catch to the system, and why domestic vehicles often out price foreign models - for cars, or just about anything else. Without overhauling our entire system, there isn't an easy out, and just expecting the Big 3 to fall and be forced to restructure doesn't address the real problems - especially as we go further into a global recession.

The best part is, even the slave wage countries are beginning to outsource our outsourcing, especially as they develop industrially. The real fun is that this is what we supposedly wanted - helping bring civilization to the natives and teach them how to build their own factories.

No doubt about it, there's some serious problems with the astronomical compensation corporate CEOs and bigwigs get. On top of that, we're seeing that they don't really take much of a fall when they run these companies into the ground? Even celebrities and sports stars aren't bulletproof like these guys.

The corporate executives, particularly the older money ones, live in a completely unintersecting country to the rest of us, made possible primarily because when the boards that are put together to represent the shareholders are selected, they pick from the same group of people. The results about as shocking as a Hollywood trollop on a crack binge.

Here's a thought:

Spend the bail out money on the displaced workers and those drawing a pension from the Big Three and their suppliers.

Then step back and let them fold. Also allow the autoworkers union fold, as with no auto industry, why have a union?

The government then steps in to aid whom ever picks up the pieces. The companies thus can re-organize under a leaner business model. Perhaps one with no union (wait, no perhaps. Just plain and simple NO UNION), build to order at just a few state of the plants and executive compensation with a cap and no compensation at all unless the company is healthy. The unions and the executives have both bleed those companies dry. Both need to go. They BOTH need to be thoroughly punished. The executives for being greedy and incompetent and the union for not having the vision to understand that the industry can no longer afford unionized labor AND the automakers out dated business models. Neither group had any idea that they were killing the goose that was laying those nice chrome plated candy apple red eggs. They sat back and let this come about all the while Toyota treated their people well enough to the point they did not NEED a union, built vehicles only if there was a demand and kept things lean and mean. As for the US of A and unions, I think its time to go back to:

"I have a job for you. Its non-union. Take it or starve. I still pay more than our asian sweatshop competition"

But it's not nearly as fun to watch them get out of their cars at the night club :(

I never realized that being paid $45/hr as opposed to $95/hr equated to "slave wages". Since I don't even make half of $45/hr, am I less than a slave?

I can't believe the CEOs of the Big Three flew to DC on three separate luxury jets to ask for money.

What.

The.

Fuck.

I had the same reaction L2, exactly.

Isn't that like driving up to the soup line in a limo and then pouring half of it out as you climbed back in to go home?

Serious disconnect between reality and their upper echelon world ( Malse called them out on this on another thread I think it was.)

Are either of you honestly surprised, or just saying that for effect?

How long do you think it's been since someone like those guys flew coach? Hell, I don't even fly coach.

I'd have expected them to show a bit of humility instead of showing up the way they did.

Don't mind you riding First Class San, you didn't run a major company into the ground and then show up at my door asking for money. Then asking me to validate your parking on your limo parked out front ;P

Even if they did fly coach one time for appearances, how much happier would you be knowing that they were overtly manipulating your perception of them?

(Don't get me wrong. I'm not defending their living beyond the means of their companies. Fuck all three of them for all I care.)

Eh good point...

My point tho is , if you knew you were holding your hand out couldn't you show a bit of wisdom and arrive humble?

If nothing else it shows how totally tone deaf they are, how completely enmeshed in the auto corporate culture, and how unable to preside over any real change they actually are.

Wow.

We are just throwing our money away at these clowns.

Are either of you honestly surprised, or just saying that for effect?

How long do you think it's been since someone like those guys flew coach? Hell, I don't even fly coach.

I would have thought nothing about them flying there first class. The private jet thing though, wow...

They already own the jets. Flying them from Detroit to DC is a little more expensive than first class, but not an order of magnitude or anything.

edit: Actually, I just checked Delta's prices. If they were to buy first class tickets tonight, to fly from Detroit to DC tomorrow, an owned private jet would likely be cheaper.

Price of jet fuel on top of everything else negates that San.

Flying a solo private jet is very expensive.

They already own the jets. Flying them from Detroit to DC is a little more expensive than first class, but not an order of magnitude or anything.


There is no possible way they have the operating costs of a jet down below $10,000 for a flight, much less $1000.

Fuel, pilot, co-pilot, any crew, annual maintenance and licenses and hanger / number of trips, the list goes on. Maybe if they were flying a Cessna themselves.

They already own the jet and are already paying for the fixed overhead (crew, hanger, licenses, etc). The additional variable cost of a trip that short is not as much as you might think (I've seen as low as $1200/hour).

How much did their particular trips cost? Who knows. I'm sure we won't ever.

Not nearly as much more than first class as people seem to assume though.

Jog my memory - who was the guy back in the industrial revolution who supposedly saved money by minimizing the number of solder points needed on a job, reducing by one to save money?

When asking for a bailout, start cutting fat. Do they really need private jets, and the costs associated? Do they need to fly first class? This is what you cut out of your expense budget, along with other fat, before you start asking for handouts. When you've finished that process, and actually have streamlined your business, then we can talk funding.

I'm saying this from the position of someone who has never flown first class, and probably never will be able to afford it. This is bullshit, and we're back to the problem where the people running the country and making decisions don't actually live in the same country as the rest of us.

Sanchek I am sure you realize the point here. If they were willing to say they will make all executives take a pay cut to only ... 200 times what their lowest paid employee makes, and sell that jet to "make ends meet", then took the first class flight they may have stood a chance. They didn't. Their immediate way to cut spending is laying off people at the bottom before touching the salaries of the people at the top, and it sucks.

So airplanes and symbolism aside what really gets me is seeing a bunch of billionaires bitching about the need for them to be handed money because instead of being worth 10 billion they are only worth 6 billion.

Sure, I get the point. I just disagree that it's significant.

On the scale we're talking here, it is an absurd waste of time to care so much about a few thousand dollars. It would be like a loan officer harassing you over an extra 10 cent slice of bacon on the Egg MacMuffin you had this morning.

Kind of, but it's just the tip of the iceberg when it comes to everything else those executives are doing wrong.

The CEO culture is what got us into this mess. When boards and CEOs all win all the time, who cares about all the people who lose through pay cuts, outsourcing, job cuts, and the like. The mortgage issues were piss poor management worried about profit and nothing else. We need that culture to change or nothing will.

I was watching Peter Shiff? I think his name is on CNN tonight. He's the guy who pretty much called all of this right. I think there lies a danger in his remedy of this situation though, he has a pretty obvious agenda he wants filled. He feels the whole situation should be allowed to collapse and that it will eventually right itself. I don't think that this would be a good thing.

Oddly enough he said to just let the retirees use medicare in place of their current health benefits that will get canceled in the event of a bankruptcy or of a total crap out of the company.

The current management needs to go. Then bring in good solid forward and innovative managers, they are out there. Those new managers need to have a base salary with performance incentives based not on stock prices but on innovation and real profits.

To end up with 3 million or more on unemployment and most likely then on welfare is not and should not be an option. We might as well throw in the towel on the whole fucking mess.

It's lame that the n-million unemployed thing keeps being thrown around, when that assumes that not only will every single employee will be instantly unemployed but also that the Big 3's entire supply chain will instantly go bankrupt too and also lay off 100% of their employees.

I'm pretty sure that the actual number of American, blue-collar Big 3 employees is less than 150k.

About the Jet thing.


Nero wasnt a firefighter, so he couldnt have helped put out the fire that burnt down 60% of Rome. But he sure as hell shouldnt have been playing his harp and singing to it.

And it doesn't take being a firefighter to hand somebody a bucket of water....

These guys are just too far removed from reality to understand why everyone is making a big deal about this.

I also heard that a few of the CEOs made a gesture of forgoing thier salaries for the next year, only taking a dollar, instead....

Bill Ford had the right idea, saying he wouldn't get paid till Ford became profitable...

I wonder how much of a monkey wrench this throws into things?

I have a buddy who owns his own lil Piper prop plane. On occassion he'll take 3 others and they'll make a round trip out to Wendover NV. It's aprox a 4ish hour drive round trip since you have to skirt the Great Salt Lake.

It's close to 2k for that that lil flight out to Wendover. He doesn't have to pay himself, or a flight crew and there are no drinks/foood served on the way out.

It's very safe to bet that flight cost closer to 20k than not for those big cats to fly to Washington. More than likely they lease the aircraft instead of actually own.

Price of round trip once crew was paid, gas paid for and all the added costs likely 50K now that I think of it. It's a pipe dream to try and draw it down to anything equal to first class.

It's lame that the n-million unemployed thing keeps being thrown around, when that assumes that not only will every single employee will be instantly unemployed but also that the Big 3's entire supply chain will instantly go bankrupt too and also lay off 100% of their employees.

I'm pretty sure that the actual number of American, blue-collar Big 3 employees is less than 150k.


It goes beyond the 150k in direct employment by the big 3, it goes to suppliers, restaurants, grocery stores, hospitals, other retail and wholesale businesses. It becomes a huge ballooning of unemployment which converts into government aid.

Bottom line is, I'll say it again, we pay either way. The question is which one brings the better chance of a positive return.

The CEO's, they just simply need to be replaced by innovative thinking and action oriented people. There has become a culture amongst those who go to Wharton, Harvard and Yale. No where else but in this "club" could you be the CEO of a company, completely fuck it up and walk away far more wealthy the day after you leave than the day before and then go get hired as the CEO of another company at twice the pay you were making when you were fucking up the other company.

Imagine being hired to build someone an online store but instead you deliver a flash animation of a boat and not only get a bonus for doing it but get recommended for another online store design by the guy who you delivered the flash animation to.

Each industry, Auto, Banking has it's own unique issue but they all have some very common issues that have caused this and the most prevalent issue is lack of regulatory oversight that allowed greed to be the driving force of business.

The area where government failed in these industries is not due to involvement on the regulation of those businesses but on the non-regulation, it might not make sense at first but think about it and it should.

Both of these industries have had the largest influence on our government with lobbying and with outright payoffs of elected and non-elected officials, so for these CEO's of both industries to blame it on government is simple scapegoating as they have all of the regulation they paid for.

There was info on the cost differential in the article.

Wagoner's private jet trip to Washington cost his ailing company an estimated $20,000 roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class.

There was info on the cost differential in the article.

I was on with my lowball 20k guess!!

They do tend to lease the private jets, or rent them. Not too many can outright afford a Gulfstream, and they won't sell a company or a person one, unless they can also afford the upkeep on them....

It goes beyond the 150k in direct employment by the big 3, it goes to suppliers, restaurants, grocery stores, hospitals, other retail and wholesale businesses. It becomes a huge ballooning of unemployment which converts into government aid.

I understand the number, but it's a worst-case scenario number to fear-monger people (and politicians) with. There's absolutely no reason to assume that all of those people will be unemployed and/or unable to find other work.

Where was this outpouring of sympathy for the companies who similarly depended on the financial industry?

I understand the number, but it's a worst-case scenario number to fear-monger people (and politicians) with. There's absolutely no reason to assume that all of those people will be unemployed and/or unable to find other work.

Where was this outpouring of sympathy for the companies who similarly depended on the financial industry?

You mean other than the 700+ billion in aid they are getting?

How does that help the companies who supplied products and/or services to Bear Sterns?

There was info on the cost differential in the article.

They probably looked hard for the cheapest possible airline price to exaggerate the contrast. The ones I saw on Delta when I looked were 2-3x more than that for first class.

That makes me highly suspicious of their numbers on the jet flight cost, since it differs so much from what I've seen.

I actually tried digging through Ford and GM's SEC filings for a little bit, but that's (unsurprisingly) not itemized at all.

They do tend to lease the private jets, or rent them. Not too many can outright afford a Gulfstream, and they won't sell a company or a person one, unless they can also afford the upkeep on them....

They definitely do own their jets.

They definitely do own their jets.


No, they do not.

Most don't due to maint costs.

http://www.reuters.com/article/topNews/idUSTRE4AK5EG20081121

In 99, GM and Chrysler started a charter service with 17 of the jets that they own. They certainly own the one Wagoner flew in on.

I'm pretty sure that's actually a requirement of his life insurance. It usually is on high end CEOs.

Citing a lease as evidence that they own none makes no sense. I lease a computer, but do own others. Etc.

You claimed they most certainly do own them.

I showed proof that they do not in fact own them all. In fact there's a leasing company up in Detroit that makes a living flying those guys around in their jets.

Chrysler isn't publicly owned and don't have to disclose their travel arrangements. However it still costs more than first class, tons more.

Look I'm a civil service govt employee (not a contractor) in the aerospace industry. Outside in the civilian world you make up to 1 1/2 more (and I'm not complaining about my pay) doing the same job working on aircraft. It's expensive maintaining aircraft period. It's expensive flying them not to mention the plush style in which they fly.

http://money.cnn.com/news/newsfeeds/articles/apwire/41d66b641682ae410835a463b8185505.htm

According to a regulatory filing, Ford Motor Co. CEO Alan Mulally's total compensation last year of $22.8 million included $752,203 for his personal use of the company's jet, as well as personal use of the jet by his wife, children and guests "to ease the burden of Mr. Mulally moving to Southeast Michigan and away from his family in Seattle."

It's long been accepted by the upper masses ( can we even call them a mass?) to travel accordingly. Kings of their domain after all. However perhaps that's part of what needs to change. Make them accountable and more closely watched.

I used to work for a company called Autoliv ASP. They brought in two hatchet men as CEO and his right hand man. They ran roughshod ( not rough shot yikes) over upper and midmanagement making cuts right and left. When the owners finally got tired of their antics ( Mussonni actually went on a verbal rampage at a board meeting) they fired him. He was quoted as saying who gives a damn, I have a 25 million dollar golden parachute...

Kings and Queens of their domain indeed...blah

You're right. I meant to say that they definitely owned his jet, but said they owned "their" jets at one point.

I think it's clear beyond clear though that they own the jet in question, that Wagoner used.

What I think is really cool is that we are facing a potential loss of millions of jobs and the posibility of tax payers handing over billions of dollars to companies whos management are neither good at managing nor good at innovation and they have, along with the elected representatives they paid to let them get this way and they have turned the whole thing into an argument over one flight on a private plane. Welcome to Britney Spears Journalism of the raping of American taxpayers.

Symptom of knowing that we're powerless to affect the outcome.

They'll run a nice dog and pony show, but the Big 3 represent many millions of dollars in campaign contributions and "perks" for our politicians. They'll happily spend our money or print some more to keep that gravy train running.

http://money.cnn.com/2008/12/02/news/companies/automakers_plans/index.htm

Mulally and Wagoner will be driving to Washington in hybrid vehicles made by their companies when they return to Capitol Hill later this week to make their case for loans. Nardelli is also not planning to fly to Washington but Chrysler has not disclosed any more specifics of his travel plans.

Well, I hope you're happy now.

I honestly pity the people who will now glean some sort of satisfaction out of this, as if the 10-20k is remotely significant or out of the norm for any C-level exec's travel budget.

I'd write more, but OMG American Idol Season 12 reruns are coming on!

Suprised you didn't jump up and down with sarcasm at the offer all 3 CEO's made of working this next year for a buck ;P

Cutting Wagoner's salary represents 8 one hundredths of one percent of GM's debt.

Maybe they should cut all the UAW employees' salary to $1 too, since they're just as much part of the problem in Detroit. That would help a lot more!

The UAW are at least, nominally, working; we have established Wagoner hasn't done anything productive as far as anyone can remember.

We'll see how well feigned humility sells.

I don't think they should cut either. It's just a similarly pointless, asinine idea.

Maybe it is time to take a more serious look at that vehicle designed by the teacher, Mr. Garrison, on South Park. :eek:


*Season 5: "The Entity" episode

I still don't understand how anyone wanted McCain in the primaries over Romney or Paul. Both Paul and Romney soundly defeated McCain in the caucuses here in CO. But since Romney edged out Paul, the state went to Romney.
That was a really interesting column by Romney. Thanks for sharing. I partially agree, however he's completely ignoring the new labor agreement that is scheduled to go into effect in 2010, which would reduce the healthcare and retirement burden from GM (the UAW would be taking them on), which would take about $6Billion per year off of GM's expense sheet. Further, there would be a 2 tier system where the current hourly workers would continue to get $28/hr, while the newer workers would be getting about $15/hr. Romney never asked that the financial companies make any changes, why did he demand that the automobile companies make changes all of a sudden?

GM froze their pension in 2006, so if you had X years of credit towards your pension at the end of 2006, you will never get X+1 years of credit.
I never realized that being paid $45/hr as opposed to $95/hr equated to "slave wages". No hourly person gets paid $45/hr on straight-time, nor the $70/hr that is being foisted around in the press. That number includes not only the wages and benefits for the worker, it includes the employee's "share" of the building, tooling, utilities as well as the employer's share of FICA and medicare taxes. At GM, the phrase used to describe that very inflated number is "fully burdened overhead." I'm pretty sure that the actual number of American, blue-collar Big 3 employees is less than 150k.
That's about right. However, it takes about 10 workers at the tier-1 suppliers to supply the parts to keep each person working at Ford or GM. Tier-1 means the suppliers who supply things directly to the car company, while tier-2 (and so on) means the companies that supply parts to the tier-1 suppliers. Chrysler outsourced far more of their supply chain, so it takes about 15 other workers to keep them going. For most of the tier-1 suppliers, they have no customers other than the big 3, as the Japanese transplants brought their own suppliers with them. There have been very few "wins" for American tier-1 suppliers to break into the market with the transplants.
You're right. I meant to say that they definitely owned his jet, but said they owned "their" jets at one point. When I worked for GM, they had a fleet of jets to carry parts to/from plants because in the case of an assembly plant being short of parts, that overnight was positively absolutely too late. I remember carrying parts to the Kokomo airport on more than one occasion to make sure it got on the plane.
They do tend to lease the private jets, or rent them. Not too many can outright afford a Gulfstream, and they won't sell a company or a person one, unless they can also afford the upkeep on them.... I worked at HP when fiorina replaced the existing company jets with brand-new $55,000,000 gulfstreams. They were laying off thousands of people, and had more than one department of lawyers who's job consisted of nothing more than evading WARN act notifications. One could tell that greater than average layoffs were going to happen that Friday because of the grea


Where was this outpouring of sympathy for the companies who similarly depended on the financial industry? They got $700Billion, and hardly any attention when they chose to turn around and hand $70Billion of that back as bonuses for their own staff. Only AIG got any negative press at all for their lavish parties in luxury resorts, and they got hardly any.

What irritates me is that the Big 3 are being demanded to make substantive changes that the financial industry never had to make. The financial industry were handed vast sums of money and the administration has chosen to refuse to make the public disclosures that were required in the 450 page bailout. I read the 3 page bailout bill, and the ~120 page bill, and was too disgusted by the nonsense going on to read the final ~450 page one that ended up getting passed.

http://i61.photobucket.com/albums/h69/kperras/thebig3.jpg

Good bye UAW. Can't say I'll miss you! Too bad the retard bush is going to attempt a bail out anyways.

What irritates me is that the Big 3 are being demanded to make substantive changes that the financial industry never had to make.

And they were behaving so responsibly!

http://news.bbc.co.uk/2/hi/business/7779442.stm

Sorry Big 3, we can't give you 14 bn even with large numbers of strings attached in order to save massive amounts of infrastructure and working and middle class jobs, because you might act irresponsibly with it, but ignore those sterling examples of fiscal integrity like that ONE GUY who made 50 bn go away all by himself, benefitting only himself and a handful of Palm Beach investors? Sure, no problem, we'll clean up that mess...

I have to think, as these cases continue to come to light, and the Senate continues with what has to be considered on a certain level, class warfare (because my god, we can't give anything to the unions, despite the fact that the vast majority of downstream employees whose jobs will be affected by plant closures don't happen to actually *be* union) as the economy continues to crumble, that we're going to be looking at some serious unrest and calls for that guillotine on the square.

Regards,
Nydia

P.S. In a related note speaking of peasants with sticks, some shill for the National Board of Realtors wrote an article for the NYT this week on "Why now might be the right time to buy", and of the 127 comments that landed before they had to close them, all but a handful were scathing, asking him who was paying him, as his comments were so out of whack with reality in the major markets - I'll see if I can find and link it...

I think this might just be the catalyst that opens the eyes of the blue collar worker that all of the flag waving by the republicans was just a cover for the fucking they are giving the workers. I never understood why so many people laid down their guard and voted for a party whose main interest is to dismantle pretty much everything that America stood for and dismantle anything that favored the average person. Go figure.

Southern politicians are going to try to kill this bill at every turn.

Southern politicians are going to try to kill this bill at every turn.

Yep they are, wave that flag while you fight for foreign corporations.

I just bought an Expedition.... can we bail out Ford at least please :)

I just bought an Expedition.... can we bail out Ford at least please Ford floated their latest bond issue in the summer (or was it spring) before the credit market froze up, so they don't need to borrow money until 2010 at the earliest. GM and Chrysler didn't issue bonds in time, and no one is buying short term corporate bonds - everything is going into short term Treasuries. GM bonds are trading with yields in the 30-60% range (30% for bonds due in 2009/2010, and 60% for the long term bonds due out in 2025 and beyond).

Neither GM nor Chrysler has the money to do a chapter 11 bankruptcy. If they file bankruptcy, it is going to be chapter 7. The money they'd need for "debtor in possession" financing is about the same money they'd need to avoid bankruptcy completely. And Chrysler is owned by Cerberus, which is a very large investment firm, so they should be able to bail out Chrysler out of their own profits (and the only folks thinking that GM should buy Chrysler are Cerberus and their propaganda squad), but since Cerberus is intimately involved with both presidents bush, and with the administration of both, I predict they're getting bailed out to save pappy and the other cronies.

http://www.comcast.net/articles/finance/20081217/BUSINESS-US-CHRYSLER-SHUTDOWN/

There goes one... for a month.

http://www.comcast.net/articles/finance/20081217/BUSINESS-US-CHRYSLER-SHUTDOWN/

There goes one... for a month.

Politically this just blew quite a few republican careers as it now can be said that their refusal to fund this caused how many people? To be out of work during Christmas.

You can't really blame politics for a shutdown due to near flatline in sales. No amount of handouts make it smart for manufacturers to continue churning out cars that aren't selling.

Moreover, UAW workers will get nearly full pay and full benefits during the shutdown. These things have been happening for quite awhile now. I know a guy that worked at the GM plant here in Atlanta who was "laid off" for most of the past 5 years, without it ever impacting him financially.

You can't really blame politics for a shutdown due to near flatline in sales. No amount of handouts make it smart for manufacturers to continue churning out cars that aren't selling.

Moreover, UAW workers will get nearly full pay and full benefits during the shutdown. These things have been happening for quite awhile now. I know a guy that worked at the GM plant here in Atlanta who was "laid off" for most of the past 5 years, without it ever impacting him financially.

I should have been more clear and said "political perception".

No amount of money was going to avoid this.

Only those completely blind would pin this on one party or another.

No amount of money was going to avoid this.

Only those completely blind would pin this on one party or another.


Whether true or not it won't matter, what is the perception is what matters unfortunately. What people, or those attached to the US auto industry see is one party pushing for bailout to keep things going and one party against a bailout and now you see an automaker closing for 30 days. I would also bet that now you will see those in opposition do a flip and agree with a bailout.

No one working for the Big 3 is far enough removed from the situation to think that politicians are the problem.

Politically this just blew quite a few republican careers as it now can be said that their refusal to fund this caused how many people? To be out of work during Christmas.


I don't see it as a huge deal. Chrysler always stops production for 2 weeks around the holidays anyhow. This just doubles that. It's not actually a month of production holds in my eyes, it's 2 weeks. Two weeks more than they normally would have.

Honda outside Columbus (Marysville) has halted production for a bit too, and they weren't involved in any bailout begging.

All of the Big 3 historically halts 2 weeks in Dec and 2 weeks in July.

It's really not as big a deal as it's made out to be. Tho Rover's point of perception does bear weight, it only does so to those ignorant of the industry.

All of the Big 3 historically halts 2 weeks in Dec and 2 weeks in July.

It's really not as big a deal as it's made out to be. Tho Rover's point of perception does bear weight, it only does so to those ignorant of the industry.

Which I suspect is a great many people, including myself. The vast majority of the country is likely unaware of the information in this thread and will be until our beloved news media shares this with the rest of us. Which raises a good point. Will they?

Doubtful as the rule of thumb in the main stream is

"If it bleeds it leads"

Bad news sells, anything else is a byline.

Money given to big 3 today.. Good money going after bad. These companies are going to fail regardless.

Looks like the Toyota model is having a bit of an issue....

http://www.nytimes.com/2008/12/23/business/worldbusiness/23toyota.html?_r=1&hp

No not really, it's a direct reflection of the times. They'll take less of a hit and bounce back quicker.

hard to explain it to ya really, the discussion has been ongoing in several threads.

The foreign guys got hit differently than the domestics.

At the beginning of the year, the Big 3 already knew things were going down the tubes for them. They have been for years. However, the foreign manufacturers were trying to keep up with increasing demand due to the gas prices: http://www.iht.com/articles/2008/07/02/business/toyota.php

When September rolled around and things got really bad, the foreign mfgs got caught in the middle of ratcheting up production to meet that demand, while the domestics were already tapering off sharply.

It's hard to find numbers, but the last article I read said that Honda and Toyota both had something like 60 days inventory on the ground here. Still less than GM, but not by anywhere near the usual margin.

Their US sales are off by 30% or so and the Prius has been a consistent money loser for them. Reading the article it says they didn't count on a drop-off in the Asian markets and they apparently are not continuing some plants in the US.