Big 3 Auto Bailout

[Crowsnest]

Agree with most of what Adams writes, and isn't it interesting how the successful car companies like Honda/Toyota and others are in the southern U.S states that have a (NON-UNION) work force.

 

Should be as plain as the nose on their faces.

 

 

[reevesr1]

Let me preface this by saying I don't know what all the issues are in the Big Three. But, I can state with some confidence that neither do many on this board.

 

While labor costs are certainly a significant, if not the biggest cost factor in the making of a car, the difference between union and non-union wages are not the only issue here. Just becasue Honda/Toyota/Nissan are successful and not using union workers does not mean they are successful BECAUSE they are not using union workers. These are not necessarily causal (though they may be, I don't know).

 

And the thought that all management is stupid is utterly absurd. There are tons of really smart people in the auto industry. I know, I've worked with lots of them. Whatever the issues are, I'm sure they are complex, or they wouldn't be in this mess right now.

 

Just becasue it seems all so simple from the outside don't make it so.

 

 

 

 

[Rainbow]

also a company like GM does not cease to exist it if goes into bankruptcy. Court ordered bankruptcy protection just gives a company time to reorganize. Hard to believe? Air Canada, American, United, and Northwest Airlines have all been bankrupt @ one time or another and there's still 10s of thousands of people earnin' good wages in those companies.

 

Let the f***ers fold

 

 

What about the thousands of big and small companies they owe for design work or parts ect.

[Taco]

What about the thousands of big and small companies they owe for design work or parts ect.

 

any bailout will make very little difference to those companies. No matter what happens it ain't gonna be pretty. The *hit is well distributed in the fan blades by now, all that remains to be seen is how far away will the splatter land.

 

 

[Castuserraticus]

From the analysis I've read, the maximum level of auto job cuts through bankruptcy and downsizing would be 30%.

I think United Airlines has been bankrupt at least twice.

 

Rickr has the correct, balanced view. Humans have the well documented habit of extrapolating the past trend infinitely into the future. The car companies projected infinite growth.

 

The north American manufacturers have greatly closed the gap with the Asians according to repair incident statistics. The differences now are minor statistically and, in some cases, have reversed. The low quality label is largely outdated. They were making lots of trucks and larger cars because that's what the market wanted.

 

I think they spend too much on rebranding and advertising. Toyota and Honda rarely change the model names. They just continually retooled and improved the existing names. The original Civics and Corollas were crap but few remember that in light of the recent models.

 

 

The auto problems were visible years ago. It has been a long time since Ford, GM, and Chrysler made money selling cars. Their profits have been entirely from financing activities for many years.

 

Unions took too big a chunk without regard for the effect on the feeding hand. The successful unions of the future will need to get rid of the confrontational attitude and learn to work with their corporate employers. The basic premise that all people are equal is fatally flawed. Some people excel and should be rewarded and others are weak and should be fired. The biggest complaint of unions I've heard over the years is that non-performers are protected.

 

Managements' nose was too deep in the trough. There's too much disparity between management and factory floor wages.

[jones]

weedy1 that was a funny story. the letter below is circulating the internet. this is a letter from a businessman to the head of GM. the bad formatting is the way it came so no apologies. looked up this knox company and it is a legitimate company so maybe this is a real letter and maybe not. it has some good points especially about lazy and spoiled labor and crappy management.

 

> From Gregory Knox,

 

 

> In response to your request to call legislators and ask for a bailout for

 

> the United States automakers please consider the following, and please also

 

> pass this onto Troy Clark, the president of General Motors North America for

 

> me.

 

> You are both infected with the same entitlement mentality that has bred

 

> like cancerous germs in UAW halls for the last countless decades, and whose

 

> plague is now sweeping the nation, awaiting our new "messiah" to wave his

 

> magical wand and make all our problems go away, while at the same time

 

> allowing our once great nation to keep "living the dream"…

 

> The dream is over!

 

> The dream that we can ignore the consumer for years while management

 

> myopically focuses on its personal rewards packages at the same time that

 

> our factories have been filled with the worlds most overpaid, arrogant,

 

> ignorant and laziest entitlement minded "laborers" without paying the price

 

> for these atrocities…and that still the masses will line up to buy our

 

> products

 

> Don't tell me I'm wrong. Don't accuse me of not knowing of what I speak. I

 

> have called on Ford,GM ,Chrysler,TRW,Delphi,Kelsey Hayes, American Axle and

 

> countless other automotive OEM's and Tier ones for 3 decades now throughout

 

> the Midwest and what I've seen over the years in these union shops can only

 

> be described as disgusting.

 

>

 

> Mr Clark, the president of General Motors, states:

 

> There is widespread sentiment in this country, our government and

 

> especially in the media that the current crisis is completely the result of

 

> bad management. It is not…

 

> You're right – it's not JUST management…how about the electricians who walk

 

> around the plants like lords in feudal times, making people wait on them for

 

> countless hours while they drag ass…so they can come in on the weekend and

 

> make double and triple time…for a job they easily could have done within

 

> their normal 40 hour week

 

> How about the line workers who threaten newbies with all kinds of scare

 

> tactics…for putting out too many parts on a shift…and for being too

 

> productive (mustn't expose the lazy bums who have been getting overpaid for

 

> decades for their horrific underproduction, must we?!?) Do you really not

 

> know about this stuff?!?

 

> How about this great sentiment abridged from Mr. Clarke's sad plea:

 

> over the last few years …we have closed the quality and efficiency gaps

 

> with our competitors.

 

> What the hell has Detroit been doing for the last 40 years?!?

 

> Did we really JUST wake up to the gaps in quality and efficiency between us

 

> and them?

 

> The K car vs. the Accord?

 

> The Pinto vs. the Civic?!?

 

> Do I need to go on?

 

> We are living through the inevitable outcome of the actions of the United

 

> States auto industry for decades.

 

> Time to pay for your sins, Detroit.

 

> I attended an economic summit last week where a brilliant economist, Alan

 

> Beaulieu surprised the crowd when he said he would not have given the banks

 

> a penny of "bailout money". Yes, he said, this would cause short term

 

> problems, but despite what people like George Bush and Troy Clark would have

 

> us believe, the sun would in fact rise the next day… and something else

 

> would happen…where there had been greedy and sloppy banks new efficient ones

 

> would pop up… that is how a free market system works…it does work…if we

 

> would let it work…

 

>

 

> But for some reason we are now deciding that the rest of the world is right

 

> and that capitalism doesn't work – that we need the government to step in

 

> and "save us"…save us, hell – we're nationalizing…and unfortunately too many

 

> of this once fine nations citizens don't even have a clue that this is

 

> what's really happening…but they sure can tell you the stats on their

 

> favorite sports teams…yeah – THAT'S < /SPAN>important…

 

> Does it occur to ANYONE that the "competition" has been producing vehicles,

 

> EXTREMELY PROFITABLY, for decades now in this country?...

 

> How can that be???

 

> Let's see…

 

> Fuel efficient…

 

> Listening to customers…

 

> Investing in the proper tooling and automation for the long haul…

 

> Not being too complacent or arrogant to listen to Dr W Edwards Deming 4

 

> decades ago

 

> Ever increased productivity through quality, lean and six sigma plans…

 

> Treating vendors like strategic partners, rather than like "the enemy"…

 

> Efficient front and back offices…

 

> Non union environment…

 

> Again, I could go on and on, but I really wouldn't be telling anyone

 

> anything they really don't already know in their hearts

 

> I have six children, so I am not unfamiliar with the concept of wanting

 

> someone to bail you out of a mess that you have gotten yourself into – my

 

> children do this on a weekly, if not daily basis, as I did at their age. I

 

> do for them what my parents did for me (one of their greatest gifts, by the

 

> way) – I make them stand on their own two feet and accept the consequences

 

> of their actions and work them through.

 

> Radical concept, huh…

 

> Am I there for them in the wings? Of course – but only until such time as

 

> they need to be fully on their own as adults

 

> I don't want to oversimplify a complex situation, but there certainly are

 

> unmistakable parallels here between the proper role of parenting and

 

> government.

 

> Detroit and the United States need to pay for their sins.

 

> Bad news people – it's coming whether we like it or not

 

> The newly elected Messiah really doesn't have a magic wand big enough to

 

> "make it all go away" I laughed as I heard Obama "reeling it back in"

 

> almost immediately after the vote count was tallied…"we might not do it in a

 

> year…or in four…" where was that kind of talk when he was RUNNING for the

 

> office

 

> Stop trying to put off the inevitable …

 

> That house in Florida really isn't worth $750,000…

 

> People who jump across a border really don't deserve free health care

 

> benefits…

 

> That job driving that forklift for the big 3 really isn't worth $85,000 a

 

> year…

 

> We really shouldn't allow Wal-Mart to stock their shelves with products

 

> acquired from a country that unfairly manipulates their currency and has the

 

> most atrocious human rights infractions on the face of the globe…

 

> That couple whose combined income is less than $50,000 really shouldn't be

 

> living in that $485,000 home…

 

> Let the market correct itself people – it will. Yes it will be painful, but

 

> it's gonna be painful either way, and the bright side of my proposal is that

 

> on the other side of it is a nation that appreciates what is has…and doesn't

 

> live beyond its means…and gets back to basics…and redevelops the work ethic

 

> that made it the greatest nation in the history of the world…and probably

 

> turns back to God.

 

>

 

> Sorry – don't cut my head off, I'm just the messenger sharing with you the

 

> "bad news"

 

 

 

>

 

> Gregory J Knox

 

> President

 

Knox Machinery, Inc.

 

Franklin, Ohio 45005

 

 

 

 

[reevesr1]

The auto problems were visible years ago. It has been a long time since Ford, GM, and Chrysler made money selling cars. Their profits have been entirely from financing activities for many years.

 

I'm pretty sure GM was the first of the Big 3 to start financing their cars with the creation of GMAC. From what I remember from a story I read about it once, there was major resistance to the ridiculous idea of GM financing cars themselves. Once created, it did not take long before GMAC was the money maker within a pesky little car company.

 

GM has been divesting themselves of GMAC to finance their own reorganization for the past several years (I love wikipedia!), and may sell it's remaining share to allow it to buy Chrysler. Sounds to me like maybe GMAC should divest themselves of GM!

 

I wonder how much of the current mess may have been averted had the auto makers concentrated on making cars? Maybe none as I'm quite sure Toyota, Honda, etc. finance cars themselves as well and seem to be doing ok.

 

Oh, and Mr. Knox sounds like a disgruntled vendor to me! Just another guy smarter than everyone else who has all the freakin' answers. Answers which seem to confirm his own view of the world.

 

Wish I had all the answers. Or at least one.

 

 

 

 

 

[Taco]

Must you always be the voice of reason Rick? Sheesh! You take all the fun outta being an Internet troll. Grumble Grumble ;)

[reevesr1]

Sorry about that buddy. I'll try to be an ***hole more often.

[Ricinus]

I think after we crush the auto workers, we should go after the nurse's union. I mean what are they going to do, leave the province?

 

Oh... What.... Wait!!

[orvisonly]

Sorry about that buddy. I'll try to be an ***hole more often.

 

Don't be so hard on yourself. You're doing fine.

[duanec]

Not my doing.

 

 

that's rich! sums it up perfectly.

[birchy]

Don't be so hard on yourself. You're doing fine.

 

Pretty soon he'll be fishing one dry only...

[reevesr1]

Don't be so hard on yourself. You're doing fine.

 

Just watching and learning my friend.

[OneMoreLastCast]

First off, I want to say that my previous post was in response to statements made about "Unions" in a general sense, and I apologize Weedy for implying that you are ignorant because I know you are not.

 

You can't paint all Unions with the same brush, unless you want to call Teachers, Nurses, etc. lazy and put them into the same category as other Unions exposed in the past as being corrupt, Lazy, or worse. (ie- East Coast Teamsters back a few years, and possibly the Auto Workers in question at the moment).

 

The studies and investigations by unbiased people are finding that the problems the Automakers are facing are pretty much all Executive Based. Whether it be giving themselves Raises, BS Incentive Bonuses, or even giving into unreasonable Labor demands, it still points to the executives.

 

Terry's Original Post sums it up nicely and is perfect. Short, Sweet and to the point.

 

Most of the labor bashing comes from people that have no idea because they have never worked in a Union environment or Company owners that don't want Union Labor because it costs them more out of their pocket.

 

Do you think a Client looking to build a condo, Warehouse or something like an Oil Plant in Fort McMurray is going to pay more to have a Union Contractor do the job? They will take the Contractor that has the lowest price, can supply the manpower and has a great safety record. The extra cost for an employee's Benefits, Pension, etc. comes out of the Company's pocket.

A Union Electrician or Pipefitter in Alberta has a better chance to live on the same street as the Company owner, than their Non-union counterparts.

 

Just an example to show a different situation as far as Unions are concerned.

 

Don't get me wrong, I am one of those that don't know the labor situation concerning the Auto Industry Bail Out. I can only go on what I read just like everyone else here.

The only thing I suggest is that everyone take a look at the source. If an Executive states that it is a completely labor based problem that put them in their position or visa versa, I will look deeper for an unbiased report before blindly believing what I just read.

 

I'm sure if I wrote an article, put a bunch of bogus numbers and supposed facts that pointed to Rickr as the cause of the Auto Makers fall, and a large number of Sheep out there would believe it and pass it onto their co-workers the next day...

 

 

 

 

[Nick0Danger]

The bailout will pass, and it has to, it is one of the 2 biggest employers the US has, cant remeber but supplying the military is the other big on like building tanks and munitions and such. It would cost the US over a billion a year in social services (welfare) if 1 of the big 3 go under. start looking around and make sure you have all the facts. if one of them go under, we are all going to be in for some very hard times.

[TerryH]

..............if one of them go under, we are all going to be in for some very hard times.

Everything I've read on the topic recently suggests Chrysler is toast. In fact, an article in today's Financial Post suggests that even with a bailout package, GM and Ford will likely end up in bankruptcy proceedings. It's the only way to shed the union contracts and other problems. Terry