The auto bailout failed.

[PrincessFiona]

Wow. Personally, I wasn't a fan of the bailout, but I did think it was going to pass. I wonder what will happen to the dow in the morning!

Kris

[SuzySunshine]

Re: The auto bailout failed.

It sounds like the reason it failed was because the UAW wouldn't take the wage cuts. I'm sorry, if they'd rather have no jobs then lower paying jobs then that is their problem. I still think the unions are a very large part of the problem for those 3.

Re: The auto bailout failed.

I'm not bummed that it failed. From what I've heard (and my VERY limited understanding), bankruptcy might be the best solution.

[Sheherezade]

Re: The auto bailout failed.

I agree about the bankruptcy option - although I worry about that many workers landed on unemployment and in the government's pension fund. (It ran out of money when it had to pick up all the pensions from the S&L debacle in the 80s --I'd imagine this will be more people with no pensions.) I do agree with the criticisms that we didn't ask for a 50% paycut from AIG or any of the banks we've bailed out. We didn't have them crawl up to Congress and beg and apologize for their stupidity. We didn't ask them to cut healthcare for their employees - and we gave them oodles more money. Of course, I think they should have done all those things in a perfect world. If they had, I suppose the exposed mess might have caused bank runs and more distress. So, no perfect world. Bastardos.

[HouseofWool]

Re: The auto bailout failed.

My biggest concern is that DH's grandfathers both worked for GM and I wonder what will happen to their pensions. The one who was an engineering exec, I am confident will figure out how to manage, but the other who hauled new vehicles, I just don't know...

[migirl]

Re: The auto bailout failed.

When we saw the headlines in today's paper this morning, DH said, "We'd better get ready for our parents to move in with us."

I know a lot of you don't support it, but hard times in the auto industry means lots of pain and fear and uncertainty here so maybe you could temper your glee just a bit...

[DCJenn]

Re: The auto bailout failed.

Conceptually, I think the plan was flawed.

In reality, having grownup in the rust belt, this is going to have a long and painful reach.

What lots of you probably don't realize is that lots of parts companies hire developmentally disabled adults to do things like stuff the widgets into the packaging. So...it's going to have lots of unintended consequences across social programs as well.

Scary times.

Jenn

[Sheherezade]

Re: The auto bailout failed.

I agree, Jane. When I read the dissenting senator's remarks against the bailout, I felt it was heartless. It was something to the extent that this is a failed business model -but the U.S. taxpayer didn't have anything to do with it, so why should they suffer? My thoughts were that most of the *current* workers in the system didn't have anything to do with high legacy costs, decisions to pursue the SUV platform over fuel efficiency, contracts with dealers, etc. They just go to work each day and do their job -- and now that will be gone. They didn't have a lot to do with the failed business model either, but they will suffer. I don't doubt that the CEOs will soon find some way to pay their mortgages. It seems that the people in the fault for much of this financial crisis will remain comfortable but the innocent bystander is getting smacked.

I was in a clothing store the other day Christmas shopping and the manager said that no one had received their paychecks at the store for a week -- and they couldn't get any answers as to why from the corporate heads. Merry Christmas, huh? This economy is contracting fast....hard landing dead ahead. Hopefully, all the spotlight on Michigan will bring it some new industry via government meddling. The state deserves a little extra stimulus. Aren't you already at 10% unemployment?

Cross post with Jenn: Another unintended consequence - they are linking some of the media bankruptcies (Tribune, etc) to fall off in ad revenues from the Big Three. (Probably would have happened anyway....but interesting to see how the fingers of one industry end up all over the place.)

Re: The auto bailout failed.

Hopefully I'll get a chance to listen to more about this on the radio this morning. I think it is too bad that the UAW wouldn't take more salary concessions. If the car makers go bankrupt, do you think the business is going to go away? I think they will continue to operate, though likely with some ugly layoffs, and that some divisions (Volvo, Cadillac) could be sold or spun off or something. I don't see this as something where the car industry disappears from America.

The banking industry has screwed up TONS in all this stuff but I'm hearing they are going to have some major layoffs coming up. It would be great if no one had to be laid off but how can the carmakers get around that?

Just an aside, a friend was telling me that there have been laws about excessive corporate compensation -- I think a higher tax rate on bonuses over a certain amount (like millions). He says that has been completely worked around by employment contracts that gross up the bonuses to cover taxes. So the WaMu guy who was CEO for like 3 weeks and could walk about with, what, 20 million? He will get something along the lines of $26 million or whatever extra is needed to gross up for additional taxes.

[SuzySunshine]

Re: The auto bailout failed.

I definitely think the industry needs help, I definitely don't want all of these people to end up in the unemployment and for all of the retirees to be left out in the cold. I don't know how to stop either of those from happening but I do think that ALL parties have to be willing to compromise and it doesn't look like some (i.e. the UAW) are willing to. This goes back to my post in the unions thread a few weeks ago, there are union members out there that feel entitled just because they're a member, not because they do good work and until that mentality changes I'm not sure these three can be saved.

[Meenah]

Re: The auto bailout failed.

This just made me ill, the wrong people will suffer.

[Momo]

Re: The auto bailout failed.

Here's a thought...I think this a chance for Bush to try and "Salvage" some of his legacy...not much but albeit some. Think about it, historically the auto industry has been the back bone of American ingenuity and pride. At least 1 if not all 3 are teetering on the brink of collapse...if Bush pulls off something that prevents it, and allows for them to have a chance at turning their doomed corporate ships around, then his executive decision could very well been seen as saving one of our "national" industries. :huh: :02:

[Meenah]

Re: The auto bailout failed.

Oh Suz, you are giving him credit for some brains, which I am convinced he does not have!!!!!!!!!

[Momo]

Re: The auto bailout failed.

Oh Suz, you are giving him credit for some brains, which I am convinced he does not have!!!!!!!!!

I just think he's desperate to have some sort of "positive" attached to his legacy...if what he does allows for the big 3 to turn things around, then he would historically be seen as the presdient that did this.

[HouseofWool]

Re: The auto bailout failed.

My fear with bailing them out is that they will return to the status quo all to quickly. Poor choices in the types of vehicles produced and unions have done them in. While they can make changes to the product line, albeit slowly, unless the unions make some pretty hefty concessions, the outlook seems grim to me. I understand that they made a comitment to retirees, etc. but without huge wage and benefit cuts to current machinists, I don't understand how the bailout will help.