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Do you think American automakers deserve to be bailed out? (Merged with GM email)

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Do you think American automakers deserve to be bailed out? (Merged with GM email)

Old 11-17-08, 06:55 PM
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Do you think American automakers deserve to be bailed out? (Merged with GM email)

Do you think after all the warnings American automakers had about smaller more fuel efficient cars, problems with American cars vs. Japanese ones and America automakers inability to adapt to consumer needs that they deserve a bailout?
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Old 11-17-08, 07:07 PM
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I don't know about what they "deserve," but I do know it would be extremely bad for the economy if GM and/or Chrysler were to go belly up.
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Old 11-17-08, 07:13 PM
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yes.....by the oil industry.
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Old 11-17-08, 07:14 PM
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I think Obama should offer them the 25 billion if they make all their cars hybrids by 2012. See that ripple effect on the oil indusrty.
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Old 11-17-08, 07:39 PM
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Obama said on 60 minutes that he wouldn't give them a blank check and that they didn't deserve a bailout, under normal circumstances, but echoed what JasonF just said.

The domestic automakers need to go under, completely restructure, and come out of it. But their problems are are deep, from the lack of innovation overall, to the asinine amount they are paying per hour total to make cars compared to their counterparts.

Read an article the other day that put GM's true cost at $70 an hour to build cars when you included all the other things they are paying through their union contracts. We can argue about the union all we want to, and the fact that GM signed those contracts, but this has been a long time coming. They can't compete doing that and a bailout of any kind just pushes their collapse back temporarily.

The auto industry needs a serious restructuring from the ground up. Bailouts keep that from happening.
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Old 11-17-08, 07:39 PM
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No one deserves a bail out. As for whether they should get it, I say no.

Just wondering, if there was a bailout, are the CEOs and the rest of the higher corporate divisions of these automakers still going to be making 6-digit salaries?

Maybe the problem could be diffused a bit if the higher execs would agree to a major paycut. Even if they decreased their salary to less than $100k, they would still be better off then a majority of Americans.
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Old 11-17-08, 07:41 PM
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Originally Posted by Fooman View Post
Maybe the problem could be diffused a bit if the higher execs would agree to a major paycut. Even if they decreased their salary to less than $100k, they would still be better off then a majority of Americans.
Or if they didn't have to pay employees that they didn't need to be productive. They pay a lot of people who don't work. And if you decreased their salary to less than $100k you wouldn't find anyone to put up with the job for that amount. Just like when Ben & Jerry tried to do the same.
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Old 11-17-08, 07:52 PM
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One of many examples of highly paid US CEO/Executive 'vision' and leadership.

A fella making a mere 100,000 a year couldn't take the largest automobile company in the world and run it into the ground.

Takes a fella making millions a month for that kind of expert leadership.
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Old 11-17-08, 07:52 PM
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What's the point in just giving them another $25B to mismanage? I would only consider it if they made radical changes to their corporate governance and culture. In other words - when hell froze over.
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Old 11-17-08, 07:53 PM
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Not familiar with what Ben and Jerry did, but yeah, I agree that the execs wouldn't want a pay cut. Which is why I'm adamantly opposed to the bail out.

The money would only delay the inevitable and that the company would still fold in the end and the winners would be the execs, all at the expense of the taxpayers.
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Old 11-17-08, 07:55 PM
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Any bailout should come on the condition that upper management is fired and investigated for running their business into the ground because of risky or questionable practices. Same should apply to banks/mortgage companies/insurance companies, etc.
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Old 11-17-08, 07:58 PM
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Originally Posted by Ephemeral_Life View Post
Any bailout should come on the condition that upper management is fired and investigated for running their business into the ground because of risky or questionable practices. Same should apply to banks/mortgage companies/insurance companies, etc.
I would go with that provided the UAW contract is voided and they start from scratch as well.
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Old 11-17-08, 08:26 PM
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Well, I'd have to say...in this era of Free Market work...I'm sure we'd find some people who'd gladly accept $80K instead of $200K for a lot of exec positions. We just haven't looked hard enough. I am very confident we have some pretty smart guys and gals who make $20K a year, who could rise to the occasion. We just have to put the effort into finding them.

Place an ad online for God sakes. Make the requirement of getting the executive position...of never before being an executive and currently making less than $35K a year.

Hell, call it http://www.chryslerchange.com and put the word out. You'd find thousands candidates who could work more and harder than these executives who are currently just riding the wave of their wealth and seniority.

See, here is the problem. We have these executives floating from corp to corp, with little to offer the company. They have their little ideas, but they are certainly no Lee Iacocca. Maybe initially they had some talent, but over the years, they get stagnated. Old. Tired. Haggard. And they need to be thrown out. Once they have the taste of cash, they become bloated. Nobody asks questions about their ways of doing business because they have the position to prove they are untouchable. It is only until the business fails, that we once again see how executives are just fucking around living lavishly off of the hard work of those below them.

Which is why we need to recruit outside the typical corporate recruiting landscape. By paying less, we could actually get more.

Last edited by DVD Polizei; 11-17-08 at 08:35 PM.
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Old 11-17-08, 08:42 PM
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Originally Posted by kvrdave View Post
I would go with that provided the UAW contract is voided and they start from scratch as well.
I'm OK with that in terms of going forward. I have some problems with voiding the pensions of people who worked for GM for decades (and planned their retirements) in reliance on the belief that they were entitled to certain benefits upon retirement.
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Old 11-17-08, 08:51 PM
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Originally Posted by DVD Polizei View Post
Well, I'd have to say...in this era of Free Market work...I'm sure we'd find some people who'd gladly accept $80K instead of $200K for a lot of exec positions. We just haven't looked hard enough. I am very confident we have some pretty smart guys and gals who make $20K a year, who could rise to the occasion. We just have to put the effort into finding them.

Place an ad online for God sakes. Make the requirement of getting the executive position...of never before being an executive and currently making less than $35K a year.

Hell, call it http://www.chryslerchange.com and put the word out. You'd find thousands candidates who could work more and harder than these executives who are currently just riding the wave of their wealth and seniority.

See, here is the problem. We have these executives floating from corp to corp, with little to offer the company. They have their little ideas, but they are certainly no Lee Iacocca. Maybe initially they had some talent, but over the years, they get stagnated. Old. Tired. Haggard. And they need to be thrown out. Once they have the taste of cash, they become bloated. Nobody asks questions about their ways of doing business because they have the position to prove they are untouchable. It is only until the business fails, that we once again see how executives are just fucking around living lavishly off of the hard work of those below them.

Which is why we need to recruit outside the typical corporate recruiting landscape. By paying less, we could actually get more.
I completely agree with you. Automakers need to be looking for younger more innovative minds in order to survive. I knowhow things once were in the auto industry but regardless of what the top execs think their consumers want in the present they need to start looking more towards they future which besides concept cars really isn't something addressed.
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Old 11-17-08, 08:54 PM
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UAW is going to be taking up healthcare for their members in 2010 so tearing up the contracts is extreme. And although GM does pay more for workers in toto, foreign auto makers have the benefit of paying just for labor and relying on their governments for healthcare.

Give them the 25 billion on the condition that they refine the CAFE standards that were just passed, but at a faster pace than the 20 years provided. Have all of the Boards and Executives wipe-out as they are just now working on hybrids, claiming that Americans did not want hybrids even though Priuses are on months-long waiting lists. They are on the verge of introducing hybrids but Chrysler and Ford are a bit lacking as GM is in the forefront.

One thing that pisses me off to no end is the Michigan Delegation; The two senators love to respond to questions about GM's lack of foresight and need for removal with: "We all made mistakes but we changed!"
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Old 11-17-08, 08:58 PM
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They need to make affordable hybrids, and not squeeze supply so it drives up the price of the car. Like selling a Toyo Prius for $28K and higher and then purposely throttling supply. In any case, fuck that. I'll buy a used BMW or Lexus, thanks for the same price, and be safer. These small hybrids are a death wish. And don't get me started on the Volt. How much is the battery to replace on that sucker. One big volt to my wallet, I'd guess.
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Old 11-17-08, 09:19 PM
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Originally Posted by JasonF View Post
I don't know about what they "deserve," but I do know it would be extremely bad for the economy if GM and/or Chrysler were to go belly up.
Actually, you don't know that. (neither do I)

When an issue is hyped and puffed up to magnify the impact (such as 1 in 10 jobs are affected by the auto industry, millions of jobs will be lost, etc.) that is an indication that the issue isn't as dire as it sounds. Because if the reality was that bad, there would be no need to engage in hyperbole to make it sound worse.

Does anyone think that auto plants will close forever and not re-open under new ownership? Maybe Toyota and Honda will buy some of those plants and use them to produce vehicles. And if that should happen (jobs gone forever) why is that any worse than all of the other manufacturing jobs that were lost over the last 20 years?

If GM is bailed out, given a loan, whatever from the government, then capitalism in this country has indeed died. (if there was anyone who doubted that it died with the bank bailouts.)

Because the problems that GM is experiencing are NOT the result of this latest financial crisis. It has been mismanaged for 20 years (at least). It has been strong-armed by the UAW. Both management and labor are equally responsible and they be held accountable.


Originally Posted by Ephemeral_Life View Post
Any bailout should come on the condition that upper management is fired and investigated for running their business into the ground because of risky or questionable practices. Same should apply to banks/mortgage companies/insurance companies, etc.
I disagree with any bailout. PERIOD. It is unrealistic to think that the responsible parties will be held accountable. "There's no time to be pointing fingers, we need to act and act now." I've heard that numerous times preceding each bailout. My take is, "if you have the time to write a check for $1 trillion, then you MAKE TIME to point fingers!"

If GM completely implodes. So be it. ANY bailout will not teach people the lessons that are necessary.

Last edited by sracer; 11-17-08 at 09:22 PM.
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Old 11-17-08, 09:19 PM
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I can't believe we even talk about "American" auto makers any more. What does that mean? Do these three ONLY make cars in America? What about my wife's 2006 Accord that was built in Ohio with 85% of it's parts coming form North America or Canada?

Making cars is a global business now and should be treated as such.

My answer is NO we should not bail out the auto industry. They were in serious trouble before. Do I believe they "mismanaged" themself? Sure, maybe. But it doesn't make a difference. Even if we judged them to have done everything perfect, they should not get bailed out.
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Old 11-17-08, 09:23 PM
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Originally Posted by Ronnie Dobbs View Post
Do you think after all the warnings American automakers had about smaller more fuel efficient cars, problems with American cars vs. Japanese ones and America automakers inability to adapt to consumer needs that they deserve a bailout?
First, I disagree with the premise of the post. Up until this year I believe, the Ford F-150 pickup was the best selling vehicle in America. I think the big 3 was making exactly what the consumer wanted. There were many other problems though like product lines that were too large and an image of low quality from 30 years ago that was never shaken.

I do not think they should be bailed out. I believe that stronger, more innovative companies will be born out of their demise.
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Old 11-17-08, 09:32 PM
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Originally Posted by CRM114 View Post
First, I disagree with the premise of the post. Up until this year I believe, the Ford F-150 pickup was the best selling vehicle in America. I think the big 3 was making exactly what the consumer wanted. There were many other problems though like product lines that were too large and an image of low quality from 30 years ago that was never shaken.

I do not think they should be bailed out. I believe that stronger, more innovative companies will be born out of their demise.
I was about to respond to disagree with your reply, but I did a little research first. You are right. GM still outsold Toyota in the US... even this year by nearly 100,000 vehicles. So it is not accurate to say that GM wasn't selling what people wanted (which is what I thought) but GM was simply and completely mismanaged. Even less reason to consider bailing them out.
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Old 11-17-08, 09:58 PM
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They gave up a market-share to the foreign automakers with fuel-efficient vehicles. Just because they closely outsold the competition doesn't mean the Big 3 produced a wide variety of vehicle models. And because of the large number of different models, you start to lose in production efficiency and quality begins to suffer, which is why the Ford Focus was a big seller until the fire-related danger of their engine compartments and other faulty issues became known.

Sure some plants would be re-opened by the foreign makers, but now you've now given up keeping profits in the US and would have to rely on a foreign company in a time of war for manufacturing. The decision to not bailout GM is not made in a vacuum; why would you choose to let as large of an industry fail amidst the worse crisis since the Great Depression?

Last edited by gmanca; 11-17-08 at 10:02 PM.
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Old 11-17-08, 10:13 PM
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nope, that's what Chapter 11 is for
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Old 11-17-08, 10:25 PM
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Who wants to buy a car that might not have a valid warranty or a dealership to have the car fixed? It's not like an airplane ticket for a bankrupted airline, using the service once without worry of future need.

The workers and the economy doesn't have to suffer for the mistakes of the incompetent executives; legacy cost issues and management are the issues with the companies.

Last edited by gmanca; 11-17-08 at 10:28 PM.
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Old 11-17-08, 10:32 PM
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The reason they want a bailout is so that they can keep operating and keep the profits.

If they file bankruptcy, they keep operating... but someone new is taking the profits.

This is a long time coming. I think we should use the following equation to evaluate whether or not they should get a bailout:

(number of people who will get fired who are dragging this company down) times (average severance package) = X.

If X is less than the cost of the bailout, then we shouldn't do one.
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