Would you bail out the auto industry?

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Would you bail out the auto industry?

yes
18
19%
no
75
81%
 
Total votes : 93

Postby Miriam C. » Tue Nov 18, 2008 5:49 pm

When a CEO makes 27 MILLION in "salary" in a failing company why isn't he fired. Hell Bill Clinton will gladly work for half that. :lol: Why just look at how little Obamma is gonna make. :thinking: I say hire Nancy to run it.Image

Better yet I'll do it! That's right for a mere Million $ I will show them how to save 26 million dollars the first day. :R :thumbsup:

Come on guys---sign up here for executive jobs. I will pay $1/4 million for underlings to say yes to the Union every time they make a demand. :twisted:
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Postby stbuch » Tue Nov 18, 2008 6:03 pm

It is so much money compared to what I make that it doesn't even seem real! They should try living on my salary!

I may still be teaching when I'm 70...good thing I love my job!

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Postby caseydog » Tue Nov 18, 2008 6:55 pm

Steve_Cox wrote:This crisis ISN'T the auto industry's fault -- it's the massive credit crisis that's keeping people from making large, financed purchases (like cars) and prevents the auto makers from borrowing any money to get past the slow economic times.

Detroit's had a rough 8 years -- but, the product line has evolved. The American consumer, for over a decade, demanded SUVs over all else. The D3 all produced record profits.

But almost instantaneously, consumer demand for large SUVs fell off, and American car manufacturers (by their own miscalculation) had terrible mid and small car lineups. They were punished. GM, Chrsyler and Ford have all laid off significant numbers of workers.

But they've completely redesigned their product lines and improved quality.


Since I work for car magazines, I drive a lot of new cars -- I'm driving a new Jaguar XF right now. I had a Dodge Journey last week. Detroit has a few outstanding new products, and a lot of mediocre ones, IMO.

I agree that GM was "giving people what they wanted," to some extent. But, cheap gas was destined to come to an end at some point. They knew it, but why innovate now when you can rake in billions now. They got caught with their pants down.



Oh, one other thing -- on the benefits to current and retired employees. Japan, most of Europe and Korea have national health care systems. We spend more than any of these countries on health care, and still have millions uncovered. Toyota, Nissan, Honda and even BMW don't have to worry about soaring benefit costs. Something to think about.
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Postby caseydog » Tue Nov 18, 2008 7:01 pm

Arne wrote:The workers in the auto industry made huge gains in pay and benefits that priced them out of the market, and then all of a sudden, they had competition.



Of course, there is no way that ANYONE living in the US could live on what a South Korean autoworker makes. But then again, autoworkers in Germany have sweet pay and vacation packages, and the German auto companies are doing okay.

There has got to be more to this picture than unions and $78 an hour. German CEOs make a LOT less than American CEOs, BTW.

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Postby MidTNJasonF » Tue Nov 18, 2008 9:49 pm

caseydog wrote:
Of course, there is no way that ANYONE living in the US could live on what a South Korean autoworker makes. But then again, autoworkers in Germany have sweet pay and vacation packages, and the German auto companies are doing okay.

There has got to be more to this picture than unions and $78 an hour. German CEOs make a LOT less than American CEOs, BTW.

CD


Actually that is not entirely the case. Not all German auto companies are doing okay. The Germans are actually trying to figure out how to bail out Opel (yes a GM concern) right now.

There is more to the story though and it is not CEO salaries either. Sure upper management can and should take a cut but their salaries are only one small part of the overall budgets of companies of these sizes. Their inability to manage is really the problem. Decades of their spineless inability to stand up to the unions is one part of it. Another part is poor high level financial planning, GMAC was deeply involved in the Credit Default Swap business that is major chunk of our current financial mess.

I see these main issues:
-Unions have driven up the loaded cost of a car through benefit and salary negotiations.
-Upper management makes poor planning decisions in long term model line development.
-Upper management makes poor decisions in compensating for the rising worker costs loaded into the cars by cutting corners, using lower quality components, and over all driving down quality.
-Unions create an adversarial system and work environment. Pride in their work and company is shifted to pride in their union affiliation.
-Union workers focus shifts to forcing job security, pay, and benefits through strong arm negotiation at the cost of focus on quality and the overall good of the company.
-Upper management makes absolutely horrible decisions on long term company financial plans taking focus away from making great cars and shifting it to getting involved in risky financial market for wishful profits.


S. Heisley wrote:I believe bailing out companies is bordering on socialism.

Our country was originally based on capitalism; but, I believe capitalism has gone awry because of corporate upper management greed and insensitivity to the market and the people. Anyone in upper management should earn his/her rewards. A law needs to be passed so that management can be allowed a modest salary plus a small percentage (or segment of a percent, depending on responsibility level) of any profits they are responsible for helping to create; but, not a carte blanche paycheck. However, if there are no profits, management should get only their modest salary.


I am sorry but you contradict yourself. You believe that our country is getting away from its Capitalist roots and turning Socialist yet you advocate governmental laws restricting the salary that an employee of a privately owned or publically traded (shareholder owned) company can make. You advocate the creation of laws to suppress the compensation of a private citizen for the overall good of the people or the workers is one of the very core ideals of Socialism.
I do not disagree that ridiculous salaries, fat bonus plans, and golden parachutes are a big problem but I do not believe in creating bigger government and more laws to control it. If you truly believe in Capitalism than you would think the free market should correct those problems by forcing those CEO’s to adapt or forcing them out of business.
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Postby BillyLandry » Tue Nov 18, 2008 9:54 pm

That is a tough question. I always did say that because the car companys
keep going up on the cost of the vehicles and the people having to get longer and longer term loans that it would catch up with the car companies. I also think about how they have their own financing they have to be making tons of money not only from the profits of each car but from the interest that they collect. Are they really in trouble or they just trying to get on the bandwagon. I have to wonder also about all the cars that they are selling in China and India That they were talking about
on a TV show that I watched. Does that money come back to the US or is this what they want some of that money for like over seas expansion. I
think this is a complicated situation. The govt should look thorougly into
there books before passing out money.
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Postby starleen2 » Tue Nov 18, 2008 10:00 pm

Instead of taking their profits and reinvesting it in the company to make product that are what people can afford or want, they gave it to the shareholders instead – that is why they are failing – or part of the reason. Ever since the American economy changed to an investment economy – this time had to happen. When share prices dictate the viability of a company – then they (the company) begin to inflate their worth beyond what is sustainable to attract more shareholders and inflating the share price – And when you hit a correction in the market – then this is what you have. Remember when companies used to invest in themselves to gain a profit that was shared among the workers, not the investors! When GM goes under is my Jeep now Free? (there now I feel better) ;)
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Postby satch » Tue Nov 18, 2008 10:24 pm

I own one of each of the"big 3", I,m screwed! :lol:
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Postby Elumia » Tue Nov 18, 2008 10:25 pm

If we don't bail them out, the government will be obligated to pay into the pension fund that is unfunded - it's a lose lose proposition for the taxpayer. Does it matter which way? Which one costs less? Why not give every American family 10K cash to go buy an American car? It will also stimulate the economy for used cars. The EU and Japan will cry foul so it will never happen.

US businesses have been too busy shipping jobs to lower wage areas to boost stock prices (hmm, bonuses are paid in stock option!). The long term consequences of this short term outlook is that the consumer's in this country have less to spend because their wages have stagnated.

I've only driven one "American" nameplate as my primary car since I started to drive way back in 1977. Part of the problem is that I am 6'5 and German cars just seem to "fit" better, so I've been driving VW's. We have owned American Brands, My wife drives a Jeep and it is a fine car.

I am somewhat intrigued by the Ford Flex, but it still seems big and gets a whopping 24MPG Hwg. I need to replace my car and I would like to buy a small sport wagon. Detroit doesn't even have an offering in this segment. (think Passat, Jetta, A4 wagon). Jetta Sportwagon has a diesel coming that gets 40MPG. I work in sales - I buy the gas... American's have had some successful products, think about the minivan. Now it just executed better by the Japanese.

When you think about it, SUV's are the replacement for the old station wagon your mom drove. We regulated the fuel economy of "cars" so Detroit outwitted the feds by giving us SUV's and told us they were safer than a wagon even though they drove like a truck (and were taxed and regulated as a truck). If you equate the CAFE reg's with the subprime crisis, you see that the regulations failed to bring the intended result and have us in the mess we are in now as they encouraged the Big 3's business model. Once the road was full of SUV's, those in cars couldn't see around them so they bought one too. Japan, Germany and Korea had to make cars for markets with considerably higher fuel costs, the US market products were adaptations of those products.

The other thing I heard is that GM and Chrysler may be bought out by Chinese Auto makers. Why not, we have given all our money to China, why not let them spend it here?

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Postby Juneaudave » Tue Nov 18, 2008 10:27 pm

We have some left over federal bridge money in Alaska, will that help?
:cry: :cry: :cry:
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Postby satch » Tue Nov 18, 2008 10:36 pm

Juneaudave wrote:We have some left over federal bridge money in Alaska, will that help?
:cry: :cry: :cry:


:lol: :lol:
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Postby halfdome, Danny » Tue Nov 18, 2008 10:58 pm

I've been watching this thread from the beginning but didn't vote as I had no sure answer. I don't like putting people out of jobs but... I finally voted NO and found 79% voted the same. I've been buying Chevy's since 1975 and I sure don't want them to go away but General Motors best learn how to swim, dog paddle or something to keep from drowning in their debt. In this bad economy my small business is struggling too, but it's all up to me to make it work, not the government. Let them go bankrupt if they must and reorganize and they will be a stronger company, if they survive. If you go back to the roots of the auto industry there were so many brand names that are all but a notation in history. Lets hope the "Big 3" arn't another failure in history. :D Danny
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Postby ARKPAT » Wed Nov 19, 2008 3:11 am

Now where is my BIG Beany Baby investment at. Which closet was it in. :thinking: :lol:


Sorry people I know this is a serious problem; I have no answers. :oops:


Keep looking up and help each other as we can. :worship:

:thumbsup:

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Postby Arne » Wed Nov 19, 2008 8:18 am

http://www.highbeam.com/doc/1G1-141780318.html

check above link to get total numbers in Delphi job bank.... the woman below makes $64k/year for doing nothing. She has done it for 6 years. That is $384k for doing nothing. She is one of about 500 people doing the same thing. The company is in bankruptcy. They can not be fired or laid off.

I think I have it right, if I multiply 64k x 500 it comes out to $32,000,000.00.

It also means their job skills are now 6 years old. In this new economy, they are probably unemployable. Certainly will not get 32 bucks an hour. Plus benes.

---------------

FLINT, Mich. -- All day, Judy Rowe sits in a room at a large, old Delphi Corp. auto parts plant here, reading, sewing or staring into space.

For this she earns $31.80 an hour.

There are 70 people in this room, all employed by Michigan-based Delphi and protected by the United Auto Workers union. They clock in at 6 a.m. and clock out at 2:30 p.m.

But there is nothing for them to do.

"I think I'm slipping into a depression," said Rowe, who has been languishing for six years in this strange and very unique form of unionized employment limbo known as the jobs bank.

If there was work to do, they would be on the manufacturing lines. But there isn't. And they can't be laid off because their union contracts include this unique provision.

The jobs bank is a bullpen of sorts for surplus workers. It was designed two decades ago as a temporary haven that has become a permanent and expensive catch basin for declining auto industry companies.

There are 4,000 workers in the jobs bank at Delphi, which has filed for bankruptcy, and an additional 6,300 in the jobs banks at struggling Ford Motor Co. and General Motors Corp. There are 2,500 more at Chrysler.

At the Delphi East plant in Flint, they get their full salaries for sitting in a large room.
www.freewebs.com/aero-1
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Postby S. Heisley » Wed Nov 19, 2008 11:21 am

MidTNJasonF wrote:
S. Heisley wrote:
I believe bailing out companies is bordering on socialism.

Our country was originally based on capitalism; but, I believe capitalism has gone awry because of corporate upper management greed and insensitivity to the market and the people. Anyone in upper management should earn his/her rewards. A law needs to be passed so that management can be allowed a modest salary plus a small percentage (or segment of a percent, depending on responsibility level) of any profits they are responsible for helping to create; but, not a carte blanche paycheck. However, if there are no profits, management should get only their modest salary.


I am sorry but you contradict yourself. You believe that our country is getting away from its Capitalist roots and turning Socialist yet you advocate governmental laws restricting the salary that an employee of a privately owned or publically traded (shareholder owned) company can make. You advocate the creation of laws to suppress the compensation of a private citizen for the overall good of the people or the workers is one of the very core ideals of Socialism.


Yes, Jason, I thought about how I wrote that after it was published and agree that it could sound like socialism. But, I didn't say how much the salary should be; simply that it should be modest. The salary would need to be in line with the position and that would be dependent upon the company offer, not the government. Further, please note that I said that management should also get a percentage of the profits. This would make their efforts to manage (or mismanage) based considerably on that reward, not unlike a commission. Please feel free to correct me if I'm wrong; but don't believe Socialism allows for profit rewards in this manner. Recognize that no society is perfect, whether socialistic or capitalistic, and that the line between the two becomes thinner and thinner with each law. My above suggestion is indeed imperfect and would need considerable work to put into effect. Closing all the ways that people can conspire to greed and inappropriate behavior is impossible. But, I believe that whether a society is based on capitalism or socialism, both need some border rules/laws to keep people from finding at least some of the loopholes to squeeze through to lawlessness and evil conniving. Laws are another form of a lock; and, as we all know, locks simply keep honest people honest and only discourage some of those who are evil-bent. Unfortunately, ignorance, whether chosen or unchosen, and outright greed and evil will always exist anywhere we are in the world. We can only try to eliminate some of its effects. I hope this clears up any misunderstanding.
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