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  • Morning Bell: No 'Change' Coming to Corporate Bailout Parade

    According to reports, ailing U.S. automakers are already lobbying the Obama transition camp for a taxpayer-financed bailout, and they’ve turned up the dial on doom and gloom in recent weeks to make government action appeal all the more pressing. General Motors, for one, says it will run out of cash around the end of the year unless something big happens — like an immediate economic rebound that boosts sales of its autos (unlikely) or a major infusion of government money.

    These efforts are showing signs of success. In a letter to Treasury Secretary Hank Paulson over the weekend, House Speaker Nancy Pelosi (D-CA) urged government intervention, professing herself “convinced that our nation’s automobile industry — the heart of our manufacturing sector — and the jobs of tens of thousands of Americans are at risk.” On Sunday, incoming White House Chief of Staff Rahm Emanuel called the auto industry “an essential part of our economy and an essential part of our industrial base” and said the Obama administration would explore “different options” to save it.

    An administration truly committed to “change” ought to consider this option: bankruptcy. It’s not the end of the industry, but a new beginning. Here’s why:

    • First, it’s really not so radical, in terms of magnitude. Yes, shareholders would stand to lose out, but with GM’s current market capitalization of just $2.5 billion, they wouldn’t lose much. Apple, by comparison, is worth $87 billion.
    • Second, reorganization would put the automakers on a sustainable course. Key are labor costs: Gold-plated salaries and benefits packages for union workers mean the automakers lose a bundle on most cars sold. There’s no incentive to renegotiate when government dollars to pay those contracts are a real possibility. With a bankruptcy judge’s approval, collective bargaining agreements can be reformed to fit economic realities.
    • Third, bankruptcy is the only way to restore innovation to the U.S. auto industry. In the end, the automakers make money by producing vehicles that consumers want. But any government money is sure to come with strings attached. Pelosi, for example, said the government would exact a “recoupment” for any investment of taxpayer funds — specifically, a say in what kinds of cars it produces. That’s a recipe for certain failure and future bailouts. Bankruptcy, in contrast, strips a company down to its valuable assets and then sets to putting those assets to work in the marketplace. Whether it works or not, it’s the best chance for success.

    The incoming administration can deliver this dollop of change today: Take the bailout option off the table once and for all and let Detroit get itself working again.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    50 Responses to Morning Bell: No 'Change' Coming to Corporate Bailout Parade

    1. Jeff Bennett, Casper says:

      It would be interesting to know how many people are employed by the oil and gas businesses in this country, vs. the automobile manufacturers in Detroit. I dare say the number should make our industry an "essential industry". I can't remember ANY oil and gas company asking for government bailouts during the last bust (1982-1988). I think we laid off about a million workers during that time.

    2. William Lulias, St. says:

      I agree totally with the bankruptcy option. What we are seeing develop before our eyes, and children's eyes, is the elimination of creative thinking and problem solving which is the mother of invention. The "Greatest Generation", that of my father and mother, exceeded by hard work and solving problems with the little they had. Great ideas were hatched and great solutions were formulated by them. Look how they fought and won WWII and how they worked tirelessly after the war to great prosperity. There were no handouts. Today, however, we sadly throw money at everything as a band aid fix to stop the bleeding. This money approach, or bailout, makes everyone feel good until we bleed to death. Then what? The days of handshakes, honor and a moral compass have left us. No wonder people "cling to their guns and religion".

    3. Gaile, Cartersville, says:

      Just how many companies are the taxpayers of America going to bailout> When will it end. Will the rest of them be like AIG and use the money to go on lavious retreats. Aren't there any stipulations that these company have to follow as to the use of this money?

      We taxpayers need answers now before any more money is released. Apparently, Congress doesn't care how much in debt they put the taxpayers or how AIG spends the money nor how the banks are using the money. Throwing good money after bad just doesn't make sense. Let these companies file bankruptcy and restructure, just like others have done in the past.

    4. Joe Moon says:

      This bail out is just the results of big brother government. Every generation until now was free to succeed, or fail. In order to gain power over the people our Congress every since the great depression, has increasingly increased taxes, made government more powerful, and weakened the citizenry to the point that we are one great welfare state.

      Because of this innovation, creativity, imagination, and love of freedom has been eliminated.

      We as a people need to quit giving government money, and look to ourselves to solve our problems, not to big brother.

    5. Kim, Massachusetts says:

      The auto industry is a union industry. The Democrats depend on them. There's great incentive for our Democratic Congress and President-elect to do what they ask. How do we stop them?

    6. ME, Detroit MI says:

      I find it astounding how much vitriol exists in the US for the American Auto Industry. What got us here in the first place? Government already DOES dictate the vehicles which can be sold to the public, through physics-defying fuel economy mandates and other regulations dictating poor engineering solutions.

      The American Automobile Industry is directly responsible for nearly 3 million American jobs that would be lost in the first year. More jobs would be lost over time – a potential of 2.5 million more.

      Elimination of the industry will not only affect employees, but the governments' losses of tax revenue, paying out more unemployment benefits, and health care support. This could reach into the $150 billion range in three years. In addition, U.S. personal income would drop by $150 billion in the first year. Resulting in that many dollars being taken OUT of our economy.

      Bankruptcy is not a viable option for an auto company. Who would buy a car from a company which may not be here to service it in a year?

      Since the federal government has already approved these funds, whether we like it or not. Why not loan it to real workers building real products?

    7. Ken Jarvis - Las Veg says:

      The REAL "Gold-plated salaries and benefits packages"

      are NOT Union workers,

      BUT CORPORATE EXECUTIVES.

      Remember ALL Contracts are

      an agreement between Managment and Workers.

    8. Ken Jarvis - Las Veg says:

      Faulty Logic – HF Style

    9. Ken Jarvis - Las Veg says:

      WHY DOES HF INVITE COMMENTS WHEN THEY DON'T POST THEM?

    10. Gordon, Florida and says:

      Perhaps we have arrived at a point where we can't pay a union worker high wages to tighten a nut on a bolt. Unions artificially inflate low level (wage/job value)position and we have finally reached a point where the economy is correcting itself.

    11. Joe Grate - St.Louis says:

      I thought everybody was against this bailout in the first place. It sounds like all that Pelosi wants to to is get the Gov't to control corporate buisness.

      I agree and like the bankruptcy option. Im not saying bankruptcy is a fun party ride but its a way to learn from mistakes and start over again, and the auto-industries have made their own beds.

      I think what Jeff Bennett says is interesting, about the gas and oil company's situation compared to the auto industries today.

    12. Gordon, Florida and says:

      When you look at salary costs, there is no question that the union workers take a larger piece of the pie than the executives. We have reached a point where the economy cannot sustain the high wages that are payed to union workers for tightening bolts. It is about time that there is a reality check by the unions regarding (wages vs. job value). Perhaps the economy is doing that for us.

    13. MrDale - California says:

      All the baliouts in the world are not going to make people buy cars they can't afford or don't want. Let the marketplace work!

    14. Eileen says:

      Bailout, rescue plan whatever you want to call it. The reason for Pelosi’s urgency is to payback all those auto workers unions’ employees that supported the democratic agenda. They are always firmly in the back pocket of any democratic candidate, as are most unions, from the restaurant unions to SAG, to the national teachers unions, all firmly reside in the hip pocket of democratic and his Dockers.

      I always find it interesting when times are tough our government tells us to honker down and reduce our spending to make ends meet. Yet, they continue to use tax dollars and continue to spend with abandon themselves.

      Are they asking the auto workers to decrease their hourly rates until this economic crisis is over or telling the auto companies to reduce their cost, honker down and try to make ends meet?

      The fact of the matter is a few years ago some automakers created electric cars, Honda, Toyota and GM all made nice looking electric cars. The oil companies objected to this trend for obvious reasons and paid the auto makers to stop making them. So the companies recalled these electric cars and eventually destroyed them and put them though the shredder.

      I did not hear criticisms from the auto or oil companies or the outrage from our environmentalist for ditching this program nor could they provide a logical or honest reason for trashing this program to the American people. They claimed the reason was low sales, but all three manufacturers had a waiting list for those who wanted to purchase their electric cars. Another reason was the cars were too ugly. GM’s auto looked exactly like their Saturn line which makes that claim a mote point.

      It is little hard to take these reasons for bailing out those companies who made the choice of profit over environmental causes, when they were excepting funds from the oil companies, who would eventually see their profits drop. GM and the workers unions should ask for help from the high profits the oil companies made from the 2008 summer, and not from the American taxpayers. The fact that the automakers are now making hybrids so the oil companies can still record their record profits, explains the reasoning against the electric car.

      When the car manufacturers made record profits did they give Americans a break by reducing the purchase price? Of course not and here they are once again with their hands out asking, Please sir can I have some more?

    15. Tanda - Mpls, MN says:

      Let the market self correct. If it means bankruptcy, so be it! Stop the insane "government to the resucue" mentality.

    16. Pingback: Shopfloor » Blog Archive » Circling the Track over Automobile Industry Support

    17. Paul A. Schwab, Cent says:

      We should never have initiated the bail-out in the first place. Management, Unions and our Washington representatives, (current and former), have put us where we are today. Too many big bonuses for executives; too many regulations placed on business by our representatives in Washington; too much global warming hipe; too many Union bosses spending their winters in warm weather at the expense of the members; too much pressure put on Banks to lend to those who could not afford homes; too many liberal men and women in Washington with an "anything goes attitude". Are you reading this Chris Dodd, Barney Frank, Nancy Pelosi and Harry Reed etc…? Let the Companies fail if they cannot make ends meet. No one is bailing us out.

      We must do something to eliminate lifetime jobs for our Washington folks. We put term limits on Governors and the President. Why not put term limits on the Supreme Court Judges and our Senators and House Representativesas well? Put them all on the same health care system that we the people are on. Who are they with their part time jobs in Washington, then retire at our expense. When are the people going to wise up and start another TEA PARTY????

      We should all simply say ENOUGH IS ENOUGH. NO MORE TAXES, HOW THEN WILL THEY SURVIVE?

    18. Jim - Jacksonville, says:

      It just makes me nauseous to see automotive and bailout in the same sentence. What ever happened to "competition". Here the Big Three operate in one of the most unionized regions of the country and want taxpayers to pay people for not working. They could all take a lesson from the Japanese, Koreans and Germans who are locating plants in the Southeast and competing very well.

    19. Paul A. Schwab, Cent says:

      With all due respect, do you think my comments are too extreme? Thank you for a reply.

    20. ken largo fl says:

      the goverment created this problem they may as well fix it maybe next time they will use some common sense you dont give credit to people who cant afford it and you dont build cars for mexicans or south americans you build for the people in your own country first

    21. JRP, Los Angeles says:

      Part of the reason that the auto industry is struggling is BECAUSE of government intervention that already exists. Unrealistic performance demands for fuel efficiency, pollution and new technologies have hampered the ability of American car companies to compete in the world market. Bailout money would certainly come with heavy strings, if not chains attached that would completely shackle a salvageable industry. Have any of these bailouts shown even the slightest hint of their initial expectations? The initial 700 billion dollar bailout was apparently a low ball estimate for getting nothing done, AIG has run out of money TWICE more since their 85 billion dollar bailout and the market is still circling the drain. ENOUGH! How about starting with something simpler, more cost effective and revenue bolstering, like better trade agreements with our trade partners so we can level the playing field for America?

    22. Ken Forest, Va says:

      The auto industry has brought this on themselves like a lot of other industries and corporations in this country. I do not begrudge anyone a decent wage, but lots of these execs are paid enough to run a third world counrty for months or years. When someone peforming a $10 or $15 dollar per hour job is being paid $30 dollars how can the company get ahead. Then when people can't afford the product(cars) what happens to the company. Supply and demand. Bankruptcy may just be the answer. Then they can start all over again.

    23. Thomas Henman Jr. , says:

      Something overlooked when this option is mentioned is DIP (debtor in possession) . Where exactly do people think GM can get $30B or so in DIP? (DIP is in short supply from reports I've seen.)

      Assume they can't get that kind of money and you are not looking at re-organization but rather liquidation. Now add in the folks who would like GM's assets are cash poor and the value of those assets drops markedly.

      Now one also has to ask how many suppliers get taken under as well and does that push Ford and Chrysler past the tipping point.

      I personally thing the best option would be special legislation that would allow a re-organization outside the normal bankruptcy. Assuming the Democrat controlled congress will not do that then we are looking at major ripples throughout the county. Companies like steel, bearings, casters, parts suppliers, auto component suppliers, etc. are all looking at a good possibility of bankruptcy. Now that does not count all the dealerships, layoff at ad agencies, broadcasters, etc.

      Now all these folks who just lost their jobs are going to have a bunch more homes flooding the market. That's just going to push housing down even more.

    24. Deborah, HI says:

      I keep hearing that we, the taxpayers, need to tighten our belts. I have been eating beans and rice for a year and I never use my dryer.

      NO BAILOUT!

      Bankruptcy is not the end of the world. The automakers are going to have to redesign and retool anyway.

      Let them shut the doors for a while and figure out what they need to do.

      Remember Bush gave tax credits for SUVs. Even with the Chrysler bailout, 1/3 of their employees lost their jobs!

      We need to make sure the children have a warm bed and food in their bellies, not some millionaire at GM. Take my share of the bailout and help some young family stay in their home.

    25. George Maher, Florid says:

      Paul Schwab asks: are his opinions too extreme ?

      I think not since we the taxpayers are footing these foolish and wasteful expenditures.

      If businesses and industries cannot flourish, they should go bankrupt and reorganize themselves.

      Brings to-mind that old saying "if it moves, tax it,if it continues to move, regulate it, if it fails to move, subsidize it.

    26. Kirsten, Bozeman, Mo says:

      I'm pretty sure a newspaper with a right wing bias is needed. I'm all about fair and balanced but clearly the rest of the nation isn't. So if we are complaining about the left's bias, let's give THEM something to complain about. I'm pretty sure right wing columnists, journalists and freelancers will contribute.

    27. Marly Dao says:

      I am not going to sit by silently as Barack Obama, Nancy Pelosi

      and Harry Reid re-make our nation in their liberal image.

      That's why I just joined a grassroots conservative effort to

      RESIST Obama's liberal agenda. Please go here to join with me:

      http://www.grassfire.org/111/petition.asp?PID=187

      Thanks!

      Marly

    28. Paul A. Schwab, Cent says:

      In response to some of the liberal answers here, why not have some of the Union bosses and GM, Ford, Chrysler executives make loans, out of their fat savings, to the respective failing companies? Afterall, they were rewarded the big salaries and bonuses when business was booming. Maybe they can get more stock in failing companies to prove that those companies will succeed again.

      Best to break the unions; best to stop big fat bonuses in the future. Let's get real and go back to pay a person what he/she is worth. I worked for years on COMMISSION, no other way.

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    32. Den2006 says:

      It has to stop somewhere and bankruptcy would be the best thing for the big three. Throwing money at them now would be just a stopgap and recipe for more money later. Their not economically viable in the marketplace now with the Union Contracts and Government Regulations. This would be a true example of corprate welfare not what the democrats call tax credits for research and delevopment and investment. We can't afford this, we can't afford a lot of what's going on now and the sooner we realize that the better.

    33. Joe Karniewicz says:

      Our elected representatives need to be held responsible for giving in to the corporate lobbyists demands during the Bush administration, which created our current economic mess.

      Alan Greenspan, on July 16, 2002, at the Federal Reserve Board's semiannual monetary policy report to the Congress mentioned:

      "Serious governance and accounting issues have contributed not only to lower equity prices but also to a decline in the foreign exchange value of the dollar".

      "Business managers perversely created incentives to artificially inflate reported earnings in order to keep stock prices high and rising".

      "It is not that humans have become any more greedy than in generations past. It is that the avenues to express greed had grown so enormously".

      That was 2002, and what has happened since?

      Do Worldcom, Adelphia, Enron, Arthur Anderson, Freddie Mac, Fannie Mae, AIG, Lehman and Countrywide to name a few ring any bells?

      The current predicament that General Motors, Ford, Chrysler and even Toyota find themselves in has nothing to do with Unions. Most of the what many people are calling "high" wages are due to "Cost of Living" provisions in their contracts which were jointly agreed to a very long time ago.

      Does anyone knocking union wages have any clue or idea as to what the real minimum wage should or would be if the government had allowed that basic starting wage to keep up with inflation since it was first established?

      Why do "professional athletes" or any business executives deserve to be paid absolutely ridiculous sums of money and comps beyond any typical american workers dreams? Jerry Jones spent how much money putting together a "Super Bowl" team? How many millions of dollars were spent on executives driving a company to failure, and then receiving millions more because their contractual and legally binding non-union contract stated that they couldn't be fired?

      The autoworker in this country has been maligned and stereotyped to the point of ridiculous. The whole automotive industry has been in constant change over the past 20-years, and most of the negative comments towards those workers is completely unfounded. Arrange a tour and see for yourself instead of spreading absolute nonsense!

      We are all in big trouble now. This has progressed into a global situation in case you haven't noticed.

      No matter what you do for a living; do you honestly believe that you could survive a new "great depression" that's leaps and bounds beyond the previous one?

      I have never experienced a time when the Canadian dollar was worth $0.20 cents more than ours, and I guess the "Big Union Bosses" are responsible for that too?

    34. JM, Michigan says:

      Ordinarily I would be against government assistance and support letting the market work. However, the market has not been allowed to work for 30 years now. Three things have created a perfect storm that have put the auto companies in there current position. First, the US energy policy has created a warped market and dependence on foreign oil. We have not built a new refinery in 30 years because they pollute, we haven’t utilized nuclear energy because they too dangerous, no one wants windmills in there back yard or in their ocean view, hydro power disrupts the ecosystem. On and on it goes; there is always a liberal excuse to stop progress even though other countries seem to manage these issues quite well. Second, the current credit crisis is pummeling the automakers. Lending institutions are simply not providing loans for people to buy cars. Again pressure from liberals in congress has caused this through the lending practices pushed by Fannie May and Freddie Mac. Third, federal CAFE requirements have caused automakers to divert investment into area were the market would not otherwise be pushing it. This is not to say that the automakers are without culpability, but they would simply not need government assistance if free markets were allowed to work. That said, are we as conservatives satisfied to watch liberals kick industries over the cliff, then stand by and say tough luck? Did our founding fathers, which were often quite wealthy, look at the poor and abused populace and say they just didn’t compete well in the current market as dictated by Great Britain?

      I do agree however with the concern about the strings attached to government assistance. Conservatives must stand up and fight any strings attached. In no way should the government gain an ownership stake in the auto companies. This is nothing but a fast track recipe for government ownership of any industry they can gain access to by manipulating the market.

      Therefore, under the current circumstances, I support government assistance to the auto companies, but with no strings attached. But, are there other ideas that could help in a less intrusive way? I would like to offer the following for thought. First, federal and state tax cuts for auto purchases. Second, federal and state tax cuts on gasoline. Third, allow auto loan interest to be deducted on income tax. Forth, suspension on CAFE requirements, (let the auto companies figure out what the market really wants). I believe these ideas are consistent with letting people keep there own money and use it as they feel best, and at the same time reducing government intrusion into the market.

    35. Jim, Maryland says:

      Let the auto industry die. It will reform, much like the airline industry did, and it will have trimmed the fat and be better positioned to generate revenue.

    36. JM, Michigan says:

      A couple of addition points. If an auto manufacture goes into bankruptcy, no one will buy its cars. It’s not like a service industry or small part supplier. Cars are long term purchases, and risks are too high for individuals to shoulder. Bankruptcy would likely be the first step toward liquidation. Consider the economic impact the loss of the domestic auto industry would cause. I’ve heard estimates of 3 to 4 million jobs and that’s just the beginning. It would send our economy and GDP into incredible contraction. What do you think the government response to that would be? How many billions of dollars would need to be spent on a second "new deal"? If you want really big government, an economic disaster, like the result of the loss domestic auto industry would be just prescription to bring it about.

    37. Mark H, Springdale A says:

      The current financial crisis started many years prior to the Bush Administration. Our current situation is the culmination of many bad policies and decisions over the last 30 years by our elected leaders (that means us, by proxy), and leaders of large financial and industrial corporations. To blame the entire situation on President Bush simply shows a deep bias against the current administration. There's plenty of blame to go around.

      The auto industry is in dire straights partially due to the decline of our financial system, and partly due to union wage scales. As credit tightens, the ability of business and industry to cover short term liabilities is diminished. Short term liabilities include costs for material, supplies, and LABOR. The cost of materials and supplies is directly affected by the suppliers' LABOR expenses.

      Now, it should be obvious that LABOR directly affects the cost of goods and services. To say that the unions have "nothing" to do with the current situation the "Big Three" find themselves in today is simply wrong. Yes, the “Cost of Living” provisions in their contracts were agreed to long ago, but time does not negate their effect on product price. It's time for contract re-negotiation, or better yet, cancellation. Bankruptcy protection would go along way towards that end.

      Unions no longer serve any purpose other than to guarantee job security and benefits, regardless of performance. With no performance incentive in the work force, and no threat of job loss for continued poor performance, output slows and quality suffers.

      Where the "minimum" wage should or would be is of no consequence. Minimum wage is simply a political tool, similar to the union labor contract, which guarantees a certain level of pay regardless of performance. These are basically bribes for your support of the political party or union. Base wages should be determined by the type of work performed and skill level required to perform the work; not through coercive negotiations, with unions threatening strikes if their demands are not met. Pay raises should be based on performance review, not contract clauses. If you don't like your current pay level, improve yourself and your performance.

      Bailout for the auto industry? I first thought is was a good idea, due to the far reaching effects on supporting industry, but I now believe bankruptcy would be better. It's not like flipping a light switch; one minute the auto companies are there, then they're gone. Look at Delta Airlines. They went through bankruptcy and now are adding more international flights. If, while under bankruptcy protection, the auto companies needed additional operating capital, maybe then we could talk about a federal loan. But if you want strings attached to limit CEO pay, then you must be willing to accept strings attached to limit union wages.

    38. JM, Michigan says:

      A lot of comparisons are being made to the airline industry. That is a completely fallacious argument. When someone buys a couple hundred dollar airline ticket, they use it and have then received the service purchased. There are no further obligations, therefore people are willing to buy tickets from airlines while in the company is reorganizing under bankruptcy law. Buying a $20,000+ vehicle is completely different. This is a long-term financial purchase. People want to know that the company is going to be there to stand behind there purchase and honor warranties. People will simply not buy cars from auto companies that are bankrupt.

      Regarding the unions, the current agreement recently reached with the UAW was a huge step in the right direction. But the current financial situation will not let the auto companies reap the benefit of the latest contract. Further progress is definitely desirable, but such improvements simply don't happen over night. Renegotiating a new contract under bankruptcy is a mute point because the auto companies need to sell cars to come out of bankruptcy to honor the contract.

      Taking a hard line approach may make one seem like a person of conviction, but the economic disaster of a failed (or more correctly, destroyed) auto industry will take the US in the wrong direction. Let's hear some solutions that correct the economic wrongs that have be wrought the auto companies and let market forces determine the outcomes and not the government.

    39. Alex, Coral Springs, says:

      I belonged to a union for 10 years( Tobacco & Confectioners) working in Keebler/Sunshine in Sayreville, NJ.. I saw people get away with a lot of bad things because of the union and a good part of why the plant shut down was because of the union.

      I say this.. Unions are more bad than good. One of the good things about unions is that they make sure everything is fair and management does not get away with injustices. But unions tend to become too big and that's when corruption comes into play.

      Unions don't take the company into consideration. They don't want to negotiate fairly and make the employee more responsible for their bad actions. I believe that the union had a vital role in the current situation Detriot finds themselves in. I say bail them out but as a loan and not a hand out. And i say to the union, it's time to put company first before union interest and make the employee more accountable for their bad actions and put a much higher standard on their work enthics..

      There needs to be MAJOR reform in that union. Or else, years from now, we'll be bailing them out again.

    40. Doug, Kansas says:

      The auto industry says they need the loan as a bridge to 2010 when the new labor agreement is effective. So if the Union really cares about preserving jobs, why would they not adopt the new wage concessions now? $50 Billion is like giving every working UAW member $200,000. Make it $10B bail out and give union members all $40k instead and liquidate the companies. After all, they are still sitting on some cash.

      Plus why pay $50B for something you could buy for about $7B (total estimated market cap of the Big 3)

    41. sichi,Tim says:

      Still?aoto industry is very important now. their voice should take into consideration

    42. Tim, Michigan says:

      I've worked in the auto industry for the last 20 years, and I think that the bankruptcy option may be the best if it frees them from the grasp of the unions. Too many times I've seen useless guys protected from being fired, while good men with real ability and drive are slowly ground down and gradually become tired and bitter. They know they will always be paid the same as the useless guy, no matter how hard they work. The unions had a place at one time in this industry, but now they are just sucking the life out of it.

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    45. Bob, Stuttgart, Germ says:

      After much thought, and reading through many of the previous comments, I've finally formed an opinion on a possible auto industry bailout: No. No bailout. Why?

      In short, if U.S. car companies can't make cars people want to buy then they should go under.

      Now, if the U.S. car companies go under, won't there be a shortage of cars? I mean, folks will still want cars, won't they?

      And, if there's a shortage, won't supply and demand dictate that the more successful car companies will be there to make new cars for people?

      And, if these car companies make these new cars for people, won't this increased demand require new workers to make the cars?

      So, won't many of the U.S. autoworkers be hired to make these new cars?

      And, gee, don't most of our Japanese competitors hire non-union workers right here in America?

      So, it sounds to me like U.S. workers will end up doing just fine. And U.S. consumers will as well.

      The only loser here will be the unions and the Democrats.

      Gee…that doesn't sound too bad to me.

    46. Pingback: The Auto Bailout & The Bankruptcy Myth » The Foundry

    47. Joseph Karniewicz, A says:

      Just what have the Conservatives done to prove to the rest of America what really needs to be accomplished in these tough times? Where were your campaign contributions and advertising promoting the right candidate for the job?

      Big bad unions – sheeeesh – You people don't have a clue. Automotive wages and so called benefits have gone through the roof according to all the "experts", but the numbers of people working in that industry have also decreased dramatically. A typical GM assembly plant had almost 6,000 salary and hourly workers as late as 1996, then each new contract cut those numbers by approximately half. Robots made up most of the difference in manpower, and the outsourcing of seats, instrument panels, and other major sub assemblies to companies such as Lear resulted in those workers getting only a fraction of the pay and benefits the GM workers were getting.

      Have you ever heard of lean manufacturing? GM has gone so lean that they can't even provide all the vacation time off people want and are entitled to because that would make them too short handed to run production.

      The average assembly plant now has about 2,400 hourly and salary workers combined, producing even more vehicles per day than previously!

      On top of this, the quality has been vastly improved!

      The "jobs bank" was supposed to have been a temporary stop gap measure put in place to stem the loss of jobs by attrician, and this allowed GM to automate at a much quicker pace and mandate new work rules with the UAW blessing and cooperation. It was meant to be a win – win situation for both, and a necessity in order to survive.

      All "foreign" manufacturers are currently offering sales and zero % financing because their sales and profits have also been heading south. Do you blame the union for this too?

      Our government has already spent how much of the financial sector bailout funding, and what is there to show for it?

      The prime rate has been lowered to almost zero, and what has that accomplished?

      Savings account interest rates are a joke. The Canadian dollar is now worth 25% more than ours, and has been continually climbing since 2001.

      Japan admitted today that they are in a recession!

      Get your heads out of the sand and look around before making wild accusations and spreading outright lies!

    48. Joseph Karniewicz, A says:

      For: Bob, Stuttgart, Germany

      General Motors has many new advancements and vehicles coming in the near future, if they survive that is.

      They have taken many drastic measures to remain in business, and are still doing so.

      If GM goes under, my opinion is that Chrysler and Ford will soon follow. If this happens, the suppliers will lose a great deal of their business, and might not survive. That would have a big impact on every other manufacturer being supplied by the same suppliers.

      Will there be money available for possible new supplier companies to form? Will decreased volume mean higher prices for those parts?

      With decreased competition will the consumer pay more for whatever products are available?

      There is still a market for the dinosaur SUV's. Right now the majority of what we produce in Arlington, Texas is going overseas! Please take into consideration that the exports are even more expensive when duties are added, and yet enough people still want them, that's why our plant is now on overtime, even with other plants shutting down before Christmas.

    49. Joseph Karniewicz, A says:

      re: The Heritage Foundation

      This foundation is biased as are most extremists. Most major newspapers and television stations in the Dallas – Fort Worth metroplex, and Oklahoma for that matter, are biased Republican and anti-union.

      I much prefer the plain and simple truth based on actual facts, not fiction.

    50. Mark H, Springdale A says:

      RE: Joseph Karniewicz

      The facts are what they are. How we each interpret the facts is influenced by our past experiences, which causes the bias in our opinion. If there were no bias, there would be no difference of opinion.

      So Mr. Karniewicz is also biased. Would that make him an extremist, too?

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