If we bail them out what should the terms be?

[Beavah]

Yah, OK, so what happens if we continue with this socializing risk experiment Bush started and the Democrats now have bought into? If we were to bail out the auto industry in some form against all rational sense, what should we at least be demanding as terms?

 

B

[gwd-scouter]

Hmmm...could start with renegotiating the auto worker's contracts and set their pay and benefits more in line with others in the manufacturing industries, sell the corporate jets and make the execs fly commercial, seriously question the worth of men making millions a year in salary who let their companies lose billions, force them to raise gas efficiency standards, remove the light truck status of SUVs so that they fall under the same rules of gas efficiency as passenger cars. Most people I know that drive SUVs are parents driving their kids to school and running errands - a passenger vehicle. In full disclosure, I have a 1996 Explorer bought because of its utility on scout outings, but I also drive it to take my son to school and myself to work. It's old, it's paid for, and it's gone when scouting for me is over.

 

I don't know the auto makers' corporate structure, but I'm sure the big three each have twice as many VPs as necessary so time to trim the fat. I watched a bit of the congressional hearings of the big three and the CEOs were silent when asked if they'd be willing to sell the corporate jets.

 

Oh well. Really audacious to come to DC begging for money after stepping out of a multi-million dollar aircraft.

 

Lastly, I would expect the taxpayer-supplied loan to be paid back in full before any bonuses and other perks are dolled out.

[evmori]

Terms? How about they use the bailout money to upgrade & revamp! Nothing to the employees! No bonus to the big shots!

[scoutldr]

I'm all for wealth redistribution and bailouts...as long as it's voluntary for those who have to pay for it. Had a brilliant idea on the way to work this morning. How about we put a check-off box on this year's 1040 form. Those who are in favor of a bailout can check the box and send in an additional amount of money to give to the Big 3. So, folks, let's put OUR money where our mouth is. Who will be the first to stroke an additional check using REAL money and not add to the deficit that our grandkids will have to pay for?

 

Let's do the same for universal health care and welfare! Those whose hearts are charitble, stroke a check. Those who are not, keep your money. It's between you and your God...NOT the government.

[OldGreyEagle]

To bail them out with conditions means setting up an organization fuled by government workers to oversee the "rules". Now, what government "run" industry can you name that is any good? Amtrak? Is that still around? The Postal Service? If it was any good Fed Ex, DHL and UPS wouldnt be around. Is the Veterans Administration a picture of client service?

 

No bail out, no to helping out louts and thugs who gorged at the trough of mediocrity and want the government to help them out

[scoutingagain]

As noted I'm not in favor of forking over government $$ as is that's for sure.

 

But, I think it's a matter of overall long term economic health for the US and national defense that we retain a heavy manufacturing capability in this country. And I believe there is room for a going concern or two manufacturing cars in this country. Just not the way the big 3 and UAW do it.

 

I'd be willing to discuss short term loans, to be paid back before any dividends are paid or stockholder equity created. But I'd do so only with those that file Chapter 11 and are truely willing to reorganize under a new cost model. As far a customers not buying cars from Chapter 11 firms, this is already happening. The big three have consumers so scared now, who's going to buy a vehicle from a company when the CEO says they may go out of business in a couple of months. In addition to loans there may be some considertion of guaranteeing warrantees for a period to provide buyers some sense of stability.

 

A couple of thoughts.

 

SA

 

 

[Narraticong]

So, I live a couple block away from the huge, multi-billion dollar General Motors Technical Center. It's a cool place where all the design work takes place. While I don't work in the auto industry, most of my friends and fellow Scout Leaders do. Some of them are already out of work.

 

I am not generally in favor of government interference in any private industry. But several things need to be considered. We allow foreign automakers to flood our market with underpriced vehicles with no tariffs attached. At the same time, those countries place severe restrictions on vehicles being imported into their countries. Compare environmental, health and safety requirements in America versus Japan or China. We do not have a level playing field.

 

We might consider trade restrictions on foreign autos and parts made anywhere but the USA. And that would include Big Three parts made in Mexico and Canada. Increased costs for US manufactirers might be offset by increased market share.

 

Another thing to consider. Think about the incredible damage done to the US Budget by our Congressman and Senators. How huge is our deficit? Why on earth are those people allowed to sit in judgement of how the auto industry should do business? Talk about the blind leading the blind!

 

No, this is a huge mess and I just don't have faith that anyone currently "in charge" really has the knowledge to fix it! But I'm confident that when the Obama Administration comes to town, all will be better.

[scoutldr]

Yah, narraticong, keep dreaming. Don't you mean the "Clinton Administration, v2.0"?

[Lisabob]

I find it kind of surprising that people take cheap shots at teh USPS. These are the same folks who, for less than 50 cents, will deliver a letter in a couple of days to practically anywhere in the country. The USPS is also one of the very few self-funding government corporations in existence - in other words it is not a perennial money suck on the budget like Amtrak. Sure DHL and UPS and FedEx exist to provide faster (and higher priced) services. But that doesn't mean the USPS is a lousy organization. Rather, it means some enterprising folks figured out that there was an under-served niche out there and decided to fill it. I believe we call that "the market" and most folks figure that's a good thing. Now you're griping about that too?

 

And no, I don't work for the postal service either.

[scoutldr]

FWIW, DHL has announced it is shutting down all US operations. I think that the USPS is the best bang for the buck going. I would love to be able to take AMTRAK. I once looked into going from Va to Florida. It would have taken me two full days (by way of DC) and cost more than plane fare (for a 2 hr flight).

[OldGreyEagle]

Perhaps I was too hyperbolic in my style, once more into the brach my friends...

 

What in the past experience of the US goverment gives us any indication that it can run the Auto Industry?

[scoutingagain]

I don't think anyone is talking about a state run industry. However there are strategic national interests to provide some type of support to a new fledgling auto industry. Be it tax breaks, loans, whatever. This is not unusual, epsecially at the state and local level.

 

A couple of new auto companies emerging from Chapter 11, free from current labor and pension obligations could be competitive. But it would be a much smaller industry, employing far fewer employees at lower wages.

 

The airlines went through this a few years ago. And while some are still flying, (United, Continental) they shed their union contracts, laid off thousands, reduced routes and became more competitive. Others were lost. Eastern, TWA, Pan Am. It can be done and it's painful. Ask those who worked for TWA. And as noted, don't the rest of us won't feel some.

 

 

SA

[packsaddle]

No 'loan' should be made that can't be recovered through sale of the assets. At the time of the loan, stock options, priced on that same day, equivalent to the amount of the loan should become the property of the federal government and held until the 'loans' are repaid. Then the stocks may be sold over some period of time at whatever profit the government chooses to collect.

Management levels below VP should not be paid a greater salary than the Senior Executive Service. If they don't like that, put the SES in charge, they can't do worse.

How many vice-presidents are seated at each car company?

How many vice-presidents does the USA have?

What is wrong with this picture?

Each president or CEO should not be paid more than the President of the USA. Same rule for the remaining VP. If after a year, the 'big three' have not learned a better business model from the Chinese, Koreans, or Japanesse, sell the stocks and liquidate the assets to recover the 'loans'.

I've had my complaints with the USPS but then I've had them with UPS and FedEx for that matter. I agree with Lisa, considering what they do, they do a pretty good job. For that matter, back when I worked for the Feds, I was constantly pleased with the efficiency and careful jobs done by the people I worked with. They really cared. I know for a fact (because I was the contract monitor) that some of the work I saw by contractors could have been done better and cheaper by federal employees, had they been allowed to do it. The contractors met the minimum requirements and then cut and ran. No further responsibility nor oversight. I tried to get the contracts people to tighten the terms and they argued that their hands were tied. Then the public saw poor quality and blamed the feds rather than the people who actually did it.

I worked for the Army so this might be different for other agencies but I enjoyed the work and I had utmost respect for the people with whom I worked.

On the other hand, I have been watching state governments squander funding as if they intended to. It seems that the more government servicesare influenced by politics rather than the interests of the people, the more wasteful and damaging are the actions.

[kraut-60]

If...we? Well, seeing how this is a "we" deal...I'll put my 2 cents worth in. First, I'm a gear-head from back in the late 60's-early 70's and I grew up driving Detroit iron and most of it was muscle-car.

 

That being said, I can offer no business solutions as I am not a business man and did not sleep last night or anytime recently in a Holiday Inn Express (I do however drive past one several times a week).

 

If the big 3 (BTW, what makes them big? Is it the huge amount of money siphoned off by the biggest parasitic labor organization...the UAW?)...any way, the B3 need to pare down the models built by each that ultimately cater to nothing more than vanity...examples; Fords Ranger and Chevrolets Colorado truck models...Dodge Caravan and GM's Chevy/Buick/Pontiac mini-van lines (mini-vans should go away as a US made product).

 

If I was the guy calling the shots, I'd have the restructured B3 make only the following models;

Ford gets to continue building Crown Victoria 4dr sedans for fleet use (taxis and police cars)

Chrysler-Jeep develops and builds one all-purpose 4x4 that can be modified to fit the needs of the consumer (think the Hummer truck with drop-in bodies built to suit the application).

GM,Ford and Chrysler develop and build ONE truck line to include a light truck (Ranger/Colorado/Dakota sized)...Standard pick-up (F-150/C-1500/Ram 1500)...Heavy-duty pick-up/cab-chassis F-250/350, C2500/3500, Ram 2500/3500).

Ford retains the right to build and market the Mustang...the most popular American built car and the best looking...and before any chev-heads suffer an MI, get real,...the proposed Camaro will be DOA with the bail-out...and it looked weird...not like a Camaro should (1969).

All three develop and build a single line of GREEN 4dr sedans that are 5 star safe and get 40mpg plus...a station wagon with seating for 6 will be acceptable as an optional model...all wheel drive with traction control will be mandatory.

 

I am firmly in the dont bail 'em out side...once the smoke clears the phoenix of a restructed and resurgent US auto industry will emerge...AND they will have to learn to play nice together and build what America needs...not what they think we need.