Obama vs. General Motors

[Eagledad]

>>I love my Suburban. It's great for scout outings and my business. But I'm not sure I'll ever buy another one, because I don't want to subsidize the UAW.

[GernBlansten]

You are aware that Japanese auto manufacturers get lots of support from their government don't you?

Talk about cutting off your nose to spite your face.

[SR540Beaver]

I agree with Ron Paul in principle, but I don't think he personally would have been effective.

 

Brent asks what the government does well. While I don't care for big government (see support for Ron Paul), there are a few things the government does indeed do well. I actually am old enough to remember back before my state had complete interstate highways from border to border and we had to go everywhere on those two lane blacktops. Stop and consider the amount of commerce and wealth that the interstate system has brought about since it's inception. Another thing they do well is military. Nuff said there. FDIC. I've been in bank data processing since 1981 and dealt with more bank and savings and loan failures and "take overs" by the FDIC then I'd like to admit to. Part of my job was to convert the data from failed banks to solvent banks who bought the proceeds and to prepare data from failed institutions to be handed over to solvent banks processed by competitor data processors. The FDIC came about to keep things like the old style run on banks from happening and to keep depositor confidence up and finance and commerce humming along. It is a system that works very well. What Obama and Geitner have proposed with investment firms and other financially based institutions is a similar process to provide best practices regulation and guard against people losing half their savings. It is NOT an evil plot of a socialist government taking over private industry like Hannity, Rush, Ingraham and others like to portray it. It is putting needed regulations in place to tame a wild beast based on proven existing programs that work.

 

That is at least three things the our government that we elect do well. There are others. Is goverment bloated? Heck yeah! Does it need trimming? Heck yeah!

 

I'm a conservative, but I'm an honest conservative. Obama is only following in the footsteps of what Bush got rolling before him. We are where we are today in large part due to what a conservative majority party gave us over the last 8 years. I hear talk radio pounding the theme of spending our children and grandchildrens money. They were strangly silent when people were raising the same concerns while congress was spending like drunken sailors eight years ago. Back then the conservative mantra was that deficeits didn't matter. Well yeah, they did. That is why they are now the opposition party and few people will give them the time of day.

[SR540Beaver]

Joe Bob,

 

Had GM filed chapter 11 and reorganized, they could have kissed the UAW contracts good bye and started anew. They chose to take tax dollars instead.

[Eagle1982]

There's already precedence. John Ricardo left the Chrysler Chairman spot and Lee Iacocca, then the president of Chrysler, assumed the CEO spot. The govt just did a quieter job of getting rid of Ricardo than they did Wagoner.

 

We need a U.S. automobile industry, for a few reasons.

(1) If you think in a downturn Japan will layoff Japanese workers to keep American workers employed, you are kidding yourself. (although, they did do some short term layoffs in Japan)

(2) From 2006 SAE data, for every domestic direct auto job, there were 10-12 jobs that were crested by it. For the Honda and Toyota transplants that number was 4-5.

(3) The U.S. needs the potential for mass manufacturing and assembly as a function of homeland security. Last thing we need is to be making everything in China, then enter a war with China.

 

However, why bail out a company that has been farming more and more stuff overseas? If GM was going to make a real commitment to more manufacturing in the U.S. I'd like it better, so I guess there would be strings attached.

[JoeBob]

GernBlansten: "Did the UAW ask for tax dollars?"

 

Yes!

Gettelfinger lobbied hard for the bailout to be passed. Who do you think GM is writing checks to with our tax dollars? UAW members. I contend that the main reason that UAW was so intractable about serious concessions (they did sacrifice lesser paid new hires), was that they knew that the Dems in congress would bail them out.

"We will work with the Obama administration and the new Congress," said Gettelfinger.

http://www.uaw.org/auto/12_19_08auto1.cfm

 

Although needed at one time, unions have devolved into legal gangs. Without legislation specifically covering their activities, the UAW would be in violation of RICO statutes.

 

Card Check anyone?

 

I fault the Big 3 CEOs for not standing firm against their labor unions during contract negotiations, but I'm not sure what recourse thay might have had.

 

I agree that part of that labor cost is legacied because of retirees pension and health care. But that cost is again the fault of the unions who extorted those extravagant benefits from the company.

 

Looks like I might be a Ford man in the future.

 

[Eagle1982]

So, if Obama is now in Europe at the G20 summit, who is running GM?

[Eagledad]

>>You are aware that Japanese auto manufacturers get lots of support from their government don't you? Talk about cutting off your nose to spite your face

[Beavah]

Yah, Obama in this case is only stating the obvious. Chrysler is a dead man walking. No fool, not even the government, would rationally try to prop that company up. Either it gets bought out by Fiat or it's goin' Chapter 7.

 

GM really needs to be in Chapter 11, and the administration essentially said that. So the UAW and the bondholders get 60 days lookin' down the barrel of that gun, eh? I still don't think they'll get it together. I don't think the administration does either. So yah, that'll be Chapter 11, and probably the end of Gettlefinger.

 

Now, if only we could start takin' a hard line with the financial industry. AIG and Citi are both dead men walking. Too big to fail means "should be broken up."

 

Gas taxes, BTW, do not cause inflation. But if we ever get out of the recession, rampant inflation and $5/gallon gasoline is a given, eh? Prepare for it if you're smart! The Fed has been devaluing the dollar for 20 years, and in the last year has been almost literally dumpin' dollars from airplanes. That's a way out of our massive debt, eh? Inflate the dollar and essentially tax everyone's buying power to make up for the taxes we haven't been willing to pay to pay our own way.

 

None of that has a lick to do with Obama, it's all been brewin' for years. Poor guy is just left with the mess, and is tryin' to thread the needle between depression, inflation, national default, and the politics of pork and entitlement.

 

Beavah

 

[GernBlansten]

The UAW is just another supplier to GM et al. They supply labor. American Axle supplies axles. Delco supplies radios. None of the suppliers have asked for tax dollars directly, but they sure do support the big 3 bailouts. Its their lifeline.

[scoutingagain]

"I contend that the main reason that UAW was so intractable about serious concessions (they did sacrifice lesser paid new hires), was that they knew that the Dems in congress would bail them out. "

 

Well that might be true of members of congress, Dem and Republican who have significant populations dependant on the auto industry. But as Beavah noted, Obama seems to be the one politician with enough chutzpah to stand firm and either have them come up with a workable plan or force them into Chapt 11. that will void those union contracts, and put bond holders at risk. Chapt. 11 is where GM should have been back in Nov. had Bush not given away $12 Billion just to push the problem down the line to the next administration. Heck GM has a current market cap of less than $1.5 Billion, the US taxpayer owns them 5X. We will never see that $$ back.

 

And last I looked card check is going nowhere, in spite of the fear mongering of talk radio.

 

I agree with Beavah. Same should be done with AIG and the Banks that need to the $$. Govt. should back the FDIC so deposits are insured and lend $$ to a reorganized Bank or company to work itself out of Chapt. 11. AIG has a current market cap of less than $3 Billion. The US Taxpayer has given them approx. $188 Billion. More money we will never see again.

 

And don't talk about Obama and the Democrats. This was all done under the Bush Corporate Welfare Program. As Beavah noted. Obama's just stuck cleaning up the mess. I don't agree with every thing he's doing, but give him credit for trying to do something.

 

SA

 

 

 

[evmori]

Could be that maybe the big problem is the cost of labor i.e. salaries to auto workers????

[Eagledad]

>>And don't talk about Obama and the Democrats. This was all done under the Bush Corporate Welfare Program. As Beavah noted. Obama's just stuck cleaning up the mess.

[Beavah]

While its nice to dump this mess on the last president, the Democrates were running congress and were the gate keepers to making it happen.

 

??

 

Yah, hmmm.

 

Can't quite figure how yeh figure, Eagledad. Leastways if you're lookin' at it rationally and fairly.

 

The auto bailout money that Bush spent wasn't approved by Congress, eh? That was TARP money which the administration misappropriated to prop up GM and Chrysler without congressional approval. Congress was balkin' at the notion.

 

Now, it is true that since '94 the Republican Congress blocked any efforts to increase fuel economy standards, especially on the loophole "light trucks / SUV" category. Aided and abetted by the midwestern auto state Democrats. In 20-20 hindsight, uppin' those standards would have saved the domestic manufacturers from themselves (though to be honest, it's a pretty sad day when industry has to rely on our politicians to think for them).

 

B

 

[Lisabob]

OK I know that this is a tangent and a pet peeve to boot, but they are not DemocratEs. They are Democrats. No "E" in there.

 

As for suggesting that any president would WANT this sort of a situation? C'mon Barry, that is a low blow. I do not think any patriotic individual wishes massive economic dislocation, loss of manufacturing base, and political fall-out from the above, upon his or her own country. I don't think Bush wanted it. I don't think Obama wanted it. It is one thing to disagree (vehemently, even) with how the crisis is being handled. It is another to suggest Obama is somehow rubbing his hands in glee.