Gm And Ford Bailout

DeepGreen · November 13, 2008

Sent to me by a good friend. What are your thoughts?

THE MOST LUCRATIVE HEALTH CARE BENEFITS IN THE U.S. PLUS A $25+ BILLION BAILOUT

CNBC reported yesterday that Rep. Barney Frank (Democrat-MA) & Chairman of the House Financial Services Committee will be holding hearings for a $25+ billion bailout of General Motors and Ford.

Currently, union represented employees (and retirees) at GM & Ford receive some of the most lucrative health care benefits in the U.S. The average total compensation and benefits costs for a GM worker is $78/hour compared to its U.S. counterpart at Toyota of $48/hour. (Wall Street Journal 11/13/08) "The cost of providing health care adds from $1100 to $1500 to the cost of each vehicle" GM's sells. (USA TODAY, 6/24/06) GM/Ford/Chrysler "spend more per car on health care than on steel". (Lee Iacocca) GM & Ford reported recently that they burned $14.6 billion in the 3rd quarter of 2008.

If the American taxpayer is expected to sacrifice to bailout GM & Ford, it is only reasonable & equitable that the employees at these companies (including management) also be expected share in that sacrifice. If not, American taxpayer will simply be subsidizing the continued production of costly, uncompetitive vehicles that cannot compete in the global marketplace.

It will be very interesting to see if, in exchange for billions of taxpayer dollars, GM & Ford are required to make the systemic changes needed for their return to market competitiveness. Or whether the bailout is simply the re-payment of political debts for the union's support in the most recent election.

meangreendork · November 13, 2008

Those two companies desperately need the help, but I agree, they have to put their part in as well. That means improving their vehicles so they can be competitive again and also not letting it all be paid off by taxpayers.

November 13, 2008

Toyota is still a young company in America. They will see their time..

"But age is creeping up on them. All three Japanese companies are anticipating that the ranks of retirees will swell over the next several years. Toyota's American arm, for example, has just 258 retired production workers (G.M., by contrast, has more than 400,000 retirees)."

The health insurance for retired workers is what really adds to the $1500 to each car.

"Toyota expected to pay out about $700 million in pension benefits in fiscal year 2006, which ended in March. That's less than a tenth of what G.M. expects to pay on its pensions this year."

Green Mean · November 13, 2008

In general American automakers have dropped the ball for over two decades now and they are in a deep hole. It is just sad that the stupid business decisions these companies have made is hurting the workers for these companies as they are the ones getting shafted. Whatever losses they get they certainly deserve it because they have done very little in advancement of vehicles compared to the foreign automakers when it comes to gas efficiency and catering to the changing tastes and culture of peoples wants in cars. Dont get me wrong, I still love Ford and GM as I have them both in the house but they need to get their act together quickly otherwise they will see even a bigger hole in their sales in the U.S.

Edited November 13, 2008 by Green Mean

bigrobdsp · November 13, 2008

I refuse to bail out anyone. I dont understand why we dont just let companies go broke. Its not going to help our situation to keep these dying companies afloat. It will hurt a little in the short term, but over time we will all be much more stable. I have been writing my congressman (Ralph Hall) letters of support for continually voting against the Bailouts. I hope others do as well.

UNTflyer · November 13, 2008

The bailout is completely out of control!

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

http://www.washingtonpost.com/wp-dyn/conte...1202846_pf.html

NT03 · November 13, 2008

How much of the so called bailout money do you really think will be used to actuall "bailout". These people will just use our money to buy luxury cars , take expensive vacations among other things. I've always been against the bailout and now i hear CEOs among others are going to get bonuses as part of this F'n bailout , good GOD!!

Green92 · November 13, 2008

I refuse to bail out anyone. I dont understand why we dont just let companies go broke. Its not going to help our situation to keep these dying companies afloat. It will hurt a little in the short term, but over time we will all be much more stable. I have been writing my congressman (Ralph Hall) letters of support for continually voting against the Bailouts. I hope others do as well.

Certain companies you can't let go broke because they would collapse the entire economy (financial sector). However, companies like Ford and GM need to be allowed to fail and go into bankruptcy. See Japan for what happens to your economy when the government props up companies that should have been allowed to fail for years and years.

It's terrible for the employees but we are trying to save a country and not a company.

SilverEagle · November 14, 2008

The bailout is completely out of control!
In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.
Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.
Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.
http://www.washingtonpost.com/wp-dyn/conte...1202846_pf.html

And who's responsibility is it to fill the independent monitoring posts? If it was left to the Bush administration, then I'm not surprised that no monitors have been appointed. Actually I wouldn't be surprised in either situation.

Wouldn't the first order of business in this bailout be to appoint the independent monitors?

LongJim · November 14, 2008

It's a joke. And until the public CARES ENOUGH to vote the criminals out of office completely, this will continue. If this was the 1770's there would be politicians hanging by their necks for treason.

SilverEagle · November 17, 2008

And here is another view of this whole financial situation. Read it to the end, because there is a very interesting comment there.

http://www.star-telegram.com/ed_wallace/story/1040507.html

woody82986 · November 17, 2008

I'd rather personally see them dig themselves out of their own mess, but I think a bailout is going to be necessary to stave off the collapse of a huge sector of our economy. It's not like bankruptcy is gonig to be the end for these companies. They will come out of the other side and be able to produce again. Althought consumer confidence in a company coming through and out of bankruptcy is extremely low. All this being said... I hope they figure it out soon. I want my Ford stock to go back up! haha

Green Mean · November 17, 2008

Ford and GM has to consolidate. They need to get rid of some of their brands and just focus on a few. Then they need to advance their products like the Japanese companies.

Coffee and TV · November 17, 2008

It's a joke. And until the public CARES ENOUGH to vote the criminals out of office completely, this will continue. If this was the 1770's there would be politicians hanging by their necks for treason.

If it were the 1770's people would be hanging anyone who invented an automatic carriage machine.

eulesseagle · November 17, 2008

Since my wallet is a government ATM machine for all these bailouts I need some of BHO's distribution of wealth to trickle down my.

LongJim · November 18, 2008

If it were the 1770's people would be hanging anyone who invented an automatic carriage machine.

GOOD!

FirefightnRick · November 19, 2008

Corey the Driller from east Texas.

I heard this guy interviewed today and although his personal letter written to BHO back in October gained him a bit of notoriety, today's interview hit on a bit with the bailouts. There's lots of blame to go around with this slippery slope we are going down with the bailouts, and George Bush and his administration does share just as much responsibility as it was under his watch that the stimulus checks were given out and Mr. Miller stated as such. But I wanted to post his letter below to give an understanding of exactly what it must be like to struggle and succeed through values our parents, teachers and coaches tried to instill in all of us. It's a great story, all of it true, about a man's sacrifices to build something with his own hands, from the ground up. I know it's a response to Obama's tax plan and that will be and still is up in the air for now. But the overall general view of what this man went through to get his company up off the ground is inspiring(just as our very own Frenchy's or "Little Guy's Movers" or "Drago Supply" etc... and you can't help but wonder, should he fall on hard times, where will his bailout be?

Again, for those who are infatuated with Obama, try and overlook the criticisms in this letter about the tax and liberal ideology issues, and look more at what the man say's he went through to build his company.

Mr. Obama,
Given the uproar about the simple question asked you by Joe the plumber, and the persecution that has been heaped on him because he dared to question you, I find myself motivated to say a few things to you myself. While Joe aspires to start a business someday, I already have started not one, but 4 businesses. But first, let me introduce myself. You can call me 'Cory the well driller'. I am a 54 year old high school graduate. I didn't go to college like you, I was too ready to go 'conquer the world' when I finished high school. 25 years ago at age 29, I started my own water well drilling business at a time when the economy here in East Texas was in a tailspin from the crash of the early 80's oil boom. I didn't get any help from the government, nor did I look for any. I borrowed what I could from my sister, my uncle, and even the pawn shop and managed to scrape together a homemade drill rig and a few tools to do my first job. My businesses did not start not a result of privilege. It is the result of my personal drive, personal ambition, self discipline, self reliance, and a determination to treat my customers fairly. From the very start my business provided one other (than myself) East Texan a full time job. I couldn't afford a backhoe the first few years (something every well drilling business had), so I and my helper had to dig the mud pits that are necessary for each and every job with hand shovels. I had to use my 10 year old, 1/2 ton pickup truck for my water tank truck (normally a job for at least a 2 ton truck).
A year and a half after I started the business, I scraped together a 20% down payment to get a modest bank loan and bought a (28 year) old, worn out, slightly bigger drilling rig to allow me to drill the deeper water wells in my area. I spent the next few years drilling wells with the rig while simultaneously rebuilding it between jobs. Through these years I never knew from one month to the next if I would have any work or be able to pay the bills. I got behind on my income taxes one year, and spent the next two years paying that back (with penalty and interest) while keeping up with ongoing taxes. I got behind on my water well supply bill 2 different years (way behind the second time... $80,000.00), and spent over a year paying it back (each time) while continuing to pay for ongoing supplies C.O.D.. Of course, the personal stress endured through these experiences and years is hard to measure. I do have a stent in my heart now to memorialize it all.
I spent the next 10 years developing the reputation for being the most competent and most honest water well driller in East Texas. 2 years along the way, I hired another full time employee for the drilling business so that we could provide full time water well pump service as well as the well drilling. Also, 3 years along the path, I bought a water well screen service machine from a friend, starting business # 2. 5 years later I made a business loan for $100,000.00 to build a new, higher production, computer controlled screen service machine. I had designed the machine myself, and it didn't work out for 3 years so I had to make the loan payments without the benefit of any added income from the new machine. No government program was there to help me with the payments, or to help me sleep at night as I lay awake wondering how I would solve my machine problems or pay my bills. Finally, after 3 years, I got the screen machine working properly, and that provided another full time job for an East Texan in the screen service business.
2 years after that, I made another business loan, this time for $250,000.00, to buy another used drilling rig and all the support equipment needed to run another, larger, drill rig. This provided another 2 full time jobs for East Texans. Again, I spent a couple of years not knowing if I had made a smart move, or a move that would bankrupt me. For the third time in 13 years, I had placed everything I owned on the line, risking everything, in order to build a business.
A couple of years into this, I came up with a bright idea for a new kind of mud pump, a fundamentally necessary pump used on water well drill rigs. I spent my entire life savings to date (just $30,000.00), building a prototype of the pump and took it to the national water well convention to show it off. Customers immediately started coming out of the woodworks to buy the pumps, but there was a problem. I had depleted my assets making the prototype, and nobody would make me a business loan to start production of the new pumps. With several deposits for pump orders in hand, and nowhere to go, I finally started applying for as many credit card as I could find and took cash withdrawals on these cards to the tune of over $150,000.00 (including modest loans from my dear sister and brother), to get this 3rd business going.
Yes, once again, I had everything hanging over the line in an effort to start another business. I had never manufactured anything, and I had to design and bring into production a complex hydraulic machine from an untested prototype to a reliable production model (in six months). How many nights I lay awake wondering if I had just made the paramount mistake of my life I cannot tell you, but there were plenty. I managed to get the pumps into production, which immediately created another 2 full time jobs in East Texas. Some of the models in the first year suffered from quality issues due to the poor workmanship of one of my key suppliers, so I and an employee (another East Texan employed) had to drive across the country to repair customers' pumps, practically from coast to coast. I stood behind the product, and made payments to all the credit cards that had financed me (and my brother and sister). I spent the next 5 years improving and refining the product, building a reputation for the pump and the company, working to get the pump into drill rig manufacturers' product lines, and paying back credit cards. During all this time I continued to manage a growing water well business that was now operating 3 drill rig crews, and 2 well service crews. Also, the screen service business continued to grow. No government programs were there to help me, Mr. Obama, but that's ok, I didn't expect any, nor did I want any. I was too busy fighting to make success happen to sit around waiting for the government to help me.
Now, we have been manufacturing the mud pumps for 7 years, my combined businesses employ 32 full time employees, and distribute $5,000,000.00 annually through the local economy. Now, just 4 months ago I borrowed $1,254,000.00, purchasing computer controlled machining equipment to start my 4th business, a production machine shop. The machine shop will serve the mud pump company so that we can better manufacture our pumps that are being shipped worldwide. Of course, the machine shop will also do work for outside companies as well. This has already produced 2 more full time jobs, and 2 more should develop out of it in the next few months. This should work out, but if it doesn't it will be because you, and the other professional politicians like yourself, will have destroyed our countrys’ (and the world) economy with your meddling with mortgage loan programs through your liberal manipulation and intimidation of loaning institutions to make sure that unqualified borrowers could get mortgages. You see, at the very time when I couldn't get a business loan to get my mud pumps into production, you were working with Acorn and the Community Reinvestment Act programs to make sure that unqualified borrowers could buy homes with no down payment, and even no credit or worse yet, bad credit. Even the infamous, liberal, Ninja loans (No Income, No Job or Assets). While these unqualified borrowers were enjoying unrealistically low interest rates, I was paying 22% to 24% interest on the credit cards that I had used to provide me the funds for the mud pump business that has created jobs for more East Texans. It's funny, because after 25 years of turning almost every dime of extra money back into my businesses to grow them, it has been only in the last two years that I have finally made enough money to be able to put a little away for retirement, and now the value of that has dropped 40% because of the policies you and your ilk have perpetrated on our country.
You see, Mr. Obama, I'm the guy you intend to raise taxes on. I'm the guy who has spent 25 years toiling and sweating, fretting and fighting, stressing and risking, to build a business and get ahead. I'm the guy who has been on the very edge of bankruptcy more than a dozen times over the last 25 years, and all the while creating more and more jobs for East Texans who didn’t want to take a risk, and wouldn't demand from themselves what I have demanded from myself. I'm the guy you characterize as 'the Americans who can afford it the most' that you believe should be taxed more to provide income redistribution 'to spread the wealth' to those who have never toiled, sweated, fretted, fought, stressed, or risked anything. You want to characterize me as someone who has enjoyed a life of privilege and who needs to pay a higher percentage of my income than those who have bought into your entitlement culture. I resent you, Mr. Obama, as I resent all who want to use class warfare as a tool to advance their political career. What's worse, each year more Americans buy into your liberal entitlement culture, and turn to the government for their hope of a better life instead of themselves. Liberals are succeeding through more than 40 years of collaborative effort between the predominant liberal media, and liberal indoctrination programs in the public school systems across our land.
What is so terribly sad about this is this. America was made great by people who embraced the one-time American culture of self reliance, self motivation, self determination, self discipline, personal betterment, hard work, risk taking. A culture built around the concept that success was in reach on every able bodied American who would strive for it. Each year that less Americans embrace that culture, we all descend together. We descend down the socialist path that has brought country after country ultimately to bitter and unremarkable states. If you and your liberal comrades in the media and school systems would spend half as much effort cultivating a culture of can-do across America as you do cultivating your entitlement culture, we could see Americans at large embracing the conviction that they can elevate themselves through personal betterment, personal achievement, and self reliance. You see, when people embrace such ideals, they act on them. When people act on such ideals, they succeed. All of America could find herself elevating instead of deteriorating. But that would eliminate the need for liberal politicians, wouldn't it, Mr. Obama? The country would not need you if the country was convinced that problem solving was best left with individuals instead of the government. You and all your liberal comrades have got a vested interested in creating a dependent class in our country. It is the very business of liberals to create an ever expanding dependence on government. What's remarkable is that you, who have never produced a job in your life, are going to tax me to take more of my money and give it to people who wouldn't need my money if they would get off their entitlement mentality asses and apply themselves at work, demand more from themselves, and quit looking to liberal politicians to raise their station in life.
You see, I know because I've had them work for me before. Hundreds of them over these 25 years. People who simply will not show up to work on time. People who just will not work 5 days in a week, much less, 6 days. People always looking for a way to put less effort out. People who actually tell me that they would do more if I just would first pay them more. People who take off work to sit in government offices to apply to get free government handouts (gee, I wonder how things would have turned out for them if they had spent that time earning money and pleasing their employer?). You see, all of this comes from your entitlement mentality culture.
Oh, I know you will say I am uncompassionate. Sorry, Mr. Obama, wrong again. You see, I've seen what the average percentage of your income has been given to charities over the years of 2000 to 2004 (ignoring the years you started running for office - can you pronounce “politically motivated”), you averaged of less than 1% annually. And your running mate, Joe Biden, averaged less than ¼% of his annual income in charitable contributions over the last 10 years. Like so many liberals, the two of you want to give to the needy, just as long as it is someone else’s money you are giving to them. I won’t say what I have given to charities over the last 25 years, but the percentage is several times more than you or Joe Biden (don’t you just hate goggle?). Tell me again how you feel my pain.
In short, Mr. Obama, your political philosophies represent everything that is wrong with our country. You represent the culture of government dependence instead of self reliance; Entitlement mentality instead of personal achievement; Penalization of the successful to reward the unmotivated; Political correctness instead of open mindedness and open debate. If you are successful, you may preside over the final transformation of America from being the greatest and most self-reliant culture on earth, to just another country of whiners and wimps, who sit around looking to the government to solve their problems. Like all of western Europe. All countries on the decline. All countries that, because of liberal socialistic mentalities, have a little less to offer mankind every year.
God help us...
Cory Miller

Rick

Edited November 19, 2008 by FirefightnRick

Green Guy Bass · November 19, 2008

^^^^^^^^^

Great story of personal success indeed. And I am glad to see that you are reading informed things to argue your point. I just wonder why people like him effectively killed off any threat of a mass production of electric cars in the late 90's and early 00's. If the Government, oil companies, auto companies, and lobbiest didn't ban together to continue the money grab - there might be a chance that 3 auto manufacturers would not be asking for a government hand out. GM produced electric cars that worked, were efficient, and people loved them who owned them. However, the powers that be got freaked out. Legally stole back their cars from the drivers. Then promptly destroyed them so we can continue craving oil. And let's be honest, the car companies would be a lot better off economically if hey had not done that.

Edited November 19, 2008 by Green Guy Bass

UNTflyer · November 19, 2008

There has never been a legitimate threat from the production of electric vehicles. Why? Because they suck ass.

Take the EV1 for example. The EV1 failed for several reasons - the batteries had to be replaced after 6-8 months. A full charge under normal driving conditions resulted in about 60 miles of travel. Recharge time on these things was 8 hours. Owners home electric bills were so high that it was cheaper to burn gasoline. In short, the cars sucked and nobody wanted them.

The fact is, auto makers would build gerbil-powered vehicles if there was enough demand.

Green Guy Bass · November 19, 2008

There has never been a legitimate threat from the production of electric vehicles. Why? Because they suck ass.
Take the EV1 for example. The EV1 failed for several reasons - the batteries had to be replaced after 6-8 months. A full charge under normal driving conditions resulted in about 60 miles of travel. Recharge time on these things was 8 hours. Owners home electric bills were so high that it was cheaper to burn gasoline. In short, the cars sucked and nobody wanted them.
The fact is, auto makers would build gerbil-powered vehicles if there was enough demand.

Do more research on this.

greenminer · November 19, 2008

Do more research on this.

Okay...maybe rat-powered.

Green Mean · November 19, 2008

There has never been a legitimate threat from the production of electric vehicles. Why? Because they suck ass.
Take the EV1 for example. The EV1 failed for several reasons - the batteries had to be replaced after 6-8 months. A full charge under normal driving conditions resulted in about 60 miles of travel. Recharge time on these things was 8 hours. Owners home electric bills were so high that it was cheaper to burn gasoline. In short, the cars sucked and nobody wanted them.
The fact is, auto makers would build gerbil-powered vehicles if there was enough demand.

If you think the technology isn't there to build better batteries that lasts longer for cars then you are completely wrong. If there won't be a full fledged commitment on this technology then you can never expect any sort of advancement from these American automakers. If not electric cars there are other ways to make things happen. They don't have to look too far...Toyota and Honda are perfect examples. And there can never be a demand if there is not a good amount of supply and other things like marketing, educating etc. All in all these American automakers deserve whatever they get because they have put themselves in this hole. Let them rot and figure their own way out. These corporations won't go anywhere...they will just have get smart and use their brains to figure out how to restructure their whole company and operations for the U.S. market.

meangreendork · November 19, 2008

There has never been a legitimate threat from the production of electric vehicles. Why? Because they suck ass.
Take the EV1 for example. The EV1 failed for several reasons - the batteries had to be replaced after 6-8 months. A full charge under normal driving conditions resulted in about 60 miles of travel. Recharge time on these things was 8 hours. Owners home electric bills were so high that it was cheaper to burn gasoline. In short, the cars sucked and nobody wanted them.
The fact is, auto makers would build gerbil-powered vehicles if there was enough demand.

Okay, okay, the EV1 came out in freaking 1999. And even then, it was a half-asked attempt at an electric vehicle. The tech is there, but the auto companies of the US need to commit to something new or they're going to be sucking the corporate welfare teat forever. Changes have to be made with the auto unions as well as in the research and production lines. Basically, they need to restructure. They can't keep doing business-as-usual.

Mean Green 93-98 · November 19, 2008

Mitt Romney: Let Detroit Go Bankrupt

November 19, 2008

Do more research on this.

There is a decent documentary on the EV1. It proposed that Detroit purposely killed the project from the beginning ... as a way to say, "hey, we tried!" Then people like UNTflyer will say the same thing.

I find it absurd that they didn't let people buy EV1s. They only let them lease them... and didn't let them renew the leases. So the company came and towed all the EV1s away and junk piled them. That is very crazy. How can you claim to have a product, but not really *sell* it?