Automobile bailout collapses

[Elfdart]

This is a good this, isn't it? I thought the best plan was to let the carmakers go through Chapter 11 bankruptcy, and then they have a fighting chance on the other side.

Who in their right mind is going to buy a car from a company that went bankrupt and tore up all its contracts? It's not just the union contracts. Those service agreements and warranties? Suddenly they wouldn't be worth the paper they're written on.

[TC Pilot]

There comes a point when you just have to go tell the UAW to go fuck themselves, or rather the money-grubbing, corrupt leeches at the top. The whole industry would be better off without them wasting resources, manpower, and capital.

Sure, it might suck that useful industries like automobile manufacturing is getting shafted while those worthless parasites in banking get billions for their gross negligence and incompetence, but that doesn't change the fact that the whole concept is terrible when they don't even have a plan to pull themselves out of the red.

[SirNitram]

Blaming the UAW sounds downright perverse here. Beyond the contract that goes into effect next year(Which reduced pay, pension, and health insurance), they offered up further cuts onto the slab, they're cutting programs that drew criticism, and already accepted their pay being pegged to non-union workers pay.

If the UAW was responsible, I would expect some blaming of them from the Big 3. I'm not hearing it. What you instead get is some Senators who have an idealogical hate of unions, subsidized foreign automaker plants in their states and don't have a stake in a Big 3 collapse, complaining, whining, and filibustering. The UAW is Designated Whipping Boy, like all unions, when it comes to conservatives.

For those talking Chapter 11: The general view I've seen from people knowledge in the process is that if they go into Chapter 11 normally, it's over. The dealerships and suppliers, already not being paid on time, likely do similar. The Big 3 rapidly sink to the point of Chapter 7 Liquidation, repeat, rinse.. And then you've got a few million new unemployed. So if you like seeing the new unemployed numbers leaping by 500k a go, that might be good.

An arrangement where they go into Chapter 11 with a promise of federal funds and a plan, that would work. But that option was thrown out the instant the GOP decided to filibuster instead of offer an alternative.

[Admiral Valdemar]

Prop up, for all intents and purposes, a corpse, or behead it and get the mop out. Not exactly stellar choices, to be honest. the "auto industry reigning supreme in the US" days are over, but if anything can be salvaged to at least give the people reliant on the industry a few more months, shouldn't it be taken?

[aerius]

There's enough blame to go around for everyone. The company management gets blame for managing the company into the ground with stupid-ass beancounter decisions (let's cut $100 off the engineering & build cost, then hand out $3000 rebates!) and lack of planning in betting all in on trucks & SUVs and losing. The UAW & management share blame for decades worth of unrealistic contracts, wages, and so forth which strangled the automakers. Lack of vision, lack of planning, mediocre execution, nasty endless conflicts between management & union, and high costs, that's a recipe for bankruptcy if there ever was one. Stupid stupid stupid all around. It's sad because they're actually seeing the light these days and if it weren't for the current economic disaster they could turn things around with some restructuring and co-operation from the UAW.

[LMSx]

SirNitram's got a good point here: If it was the UAW's fault things were held up, wouldn't the automakers be really pissed off? Looking at this NYTimes article, I don't see anything from the automakers. Instead it's just back and forth between the Senate Republicans and the UAW. Given that it looks like a deal everyone liked was in place before the Senate Repubs reared their head, I think it's safe to blame the Republicans for being unreasonable.

Anyway, I have no idea why on earth Harry Reid won't force the Republicans to filibuster, instead of letting them stamp their feet and shut things down. 2 years of this, what an awful majority leader.

[SirNitram]

Prop up, for all intents and purposes, a corpse, or behead it and get the mop out. Not exactly stellar choices, to be honest. the "auto industry reigning supreme in the US" days are over, but if anything can be salvaged to at least give the people reliant on the industry a few more months, shouldn't it be taken?

Pretty much. The simple nature is no one's going to be able to restructure shit when Chrystler and GM are already so in the hole they can't pay their suppliers, and there's no reason to think it's changing. The US Auto industry based out of Detroit may never dominate again, but that's quite different from being stable enough to continue, especially if they can retool.

But there will be no retooling as it stands now. None. Best case is that two million people are unemployed and the suppliers go heavy red trying to retool to existing manufacturers. Worst case involves towns where the local wage-producer is a supplier or auto plant simply die on the vine.

But remember, unions. Unions bad.

[TC Pilot]

If the UAW was responsible, I would expect some blaming of them from the Big 3. I'm not hearing it. What you instead get is some Senators who have an idealogical hate of unions, subsidized foreign automaker plants in their states and don't have a stake in a Big 3 collapse, complaining, whining, and filibustering. The UAW is Designated Whipping Boy, like all unions, when it comes to conservatives.

Oh, I'm not saying GM, Ford, and Chrysler are completely blameless. They've driven their companies into the ground for decades producing crap cars against vastly superior competition.

I'm just responding to the whole "Oh woe, Republicans are trying to hurt unions!" (which is entirely characteristic for them, of course) quote Elfdart posted above when the UAW's part of what's been driving them into the ground. The truck manufacturer my father's been with for 20 years (when he joined, the company was on the verge of bankruptcy thanks to amount and size of pensions it had to pay), for instance, has two plants in different states making the same engine. One is AUW, the other is non-union; the UAW plant requires double the non-union plant in terms of manpower. Unions causing horrendous inefficiency? Whodathunkit?

[Bilbo]

Is it perhaps a bit too ungenerous to think that this was intentional sabatoge on the part of the Republicans?

They filibustered the bill. Refused to let a normal vote go on it. What would you say?

The UAW refused to budge one single inch on anything. As far as they were concerned their contracts last until 2011 and they wont talk until then.

Yet, thats the UAW, ready to let the company sink and lose all their jobs. But dont worry the union bosses will still get their salaries till the last day.

[LMSx]

Is it perhaps a bit too ungenerous to think that this was intentional sabatoge on the part of the Republicans?

They filibustered the bill. Refused to let a normal vote go on it. What would you say?

The UAW refused to budge one single inch on anything. As far as they were concerned their contracts last until 2011 and they wont talk until then.

Yet, thats the UAW, ready to let the company sink and lose all their jobs. But dont worry the union bosses will still get their salaries till the last day.

Unless you were at the bargaining table, I'm calling bullshit:
Link

Mr. Gettelfinger said Wednesday that the union would suspend the much-criticized “jobs bank” program, which allows laid-off workers to continue drawing nearly full wages.

He also said the union would agree to delay the multibillion-dollar payments to a new retiree health care fund that the automakers were scheduled to start making next year.

Beyond those two concessions, Mr. Gettelfinger said the U.A.W. would be open to modifying other terms of its contracts. Changes could include reductions in wages, health care or other benefits, and would require approval from union members.

By all reports, the White House, automakers, the UAW and Congressional Democrats managed to hammer out a deal, but the sticking point was when the Senate Repubs jumped in and demanded wages be cut immediately by 2009, not by 2011.

[SirNitram]

Is it perhaps a bit too ungenerous to think that this was intentional sabatoge on the part of the Republicans?

They filibustered the bill. Refused to let a normal vote go on it. What would you say?

The UAW refused to budge one single inch on anything. As far as they were concerned their contracts last until 2011 and they wont talk until then.

Yet, thats the UAW, ready to let the company sink and lose all their jobs. But dont worry the union bosses will still get their salaries till the last day.

So those were not UAW representatives in front of the Congress on my TeeVee, offering plans on C-Span? Or is this simply a talking point?

[SirNitram]

If the UAW was responsible, I would expect some blaming of them from the Big 3. I'm not hearing it. What you instead get is some Senators who have an idealogical hate of unions, subsidized foreign automaker plants in their states and don't have a stake in a Big 3 collapse, complaining, whining, and filibustering. The UAW is Designated Whipping Boy, like all unions, when it comes to conservatives.

Oh, I'm not saying GM, Ford, and Chrysler are completely blameless. They've driven their companies into the ground for decades producing crap cars against vastly superior competition.

Oh, Ford's still above water. But if you're silly enough to think two-thirds of the industry imploding will not destroy them simply from the effects of the corporations flailing down the drain..

We can play stupid games about 'Everyone is blameless', if you want. Of course, the fact the actions of the GOP, motivated entirely by an idealogical position, will do serious economic damage(As it did throughout the financial sector) can be acknowledged.

I'm just responding to the whole "Oh woe, Republicans are trying to hurt unions!" (which is entirely characteristic for them, of course) quote Elfdart posted above when the UAW's part of what's been driving them into the ground. The truck manufacturer my father's been with for 20 years (when he joined, the company was on the verge of bankruptcy thanks to amount and size of pensions it had to pay), for instance, has two plants in different states making the same engine. One is AUW, the other is non-union; the UAW plant requires double the non-union plant in terms of manpower. Unions causing horrendous inefficiency? Whodathunkit?

If maximum efficiency is the desired quality, this is indeed bad. Of course, we could stop worshipping the holy grail of 'Maximize efficiency at all costs' and consider data for ten seconds.

Of course, it's worth remembering that none of this is happening in a vacuum. The foreign automakers took sizable hits in those markets that were trading the instant word got out this was not going through. Which means the actual damage done is happening already, and that's just from a setback.

To make myself perfectly clear if it's not already: I don't give a shit about what argument is put forth about the company's fortunes, ills, dumb moves, or long term likelihood of dominance. I'm more concerned with how much damage we will be looking like when the merry-go-round finally stops.

[TC Pilot]

Oh, Ford's still above water. But if you're silly enough to think two-thirds of the industry imploding will not destroy them simply from the effects of the corporations flailing down the drain..

We can play stupid games about 'Everyone is blameless', if you want.

Why would we do that?

Of course, the fact the actions of the GOP, motivated entirely by an idealogical position, will do serious economic damage(As it did throughout the financial sector) can be acknowledged.

Don't think that because I suggested the UAW go fuck itself that it's the only group, people, etc. that ought to be.

[SirNitram]

Oh, Ford's still above water. But if you're silly enough to think two-thirds of the industry imploding will not destroy them simply from the effects of the corporations flailing down the drain..

We can play stupid games about 'Everyone is blameless', if you want.

Why would we do that?

Of course, the fact the actions of the GOP, motivated entirely by an idealogical position, will do serious economic damage(As it did throughout the financial sector) can be acknowledged.

Don't think that because I suggested the UAW go fuck itself that it's the only group, people, etc. that ought to be.

The second and third replies really do make this a priceless post.

Would you care to respond to the points? Or perhaps clarify what some daft smiley offers in response?

[Patrick Degan]

Blame for the auto industry's woes can be fixed at a later date. Priority number one is damage control RIGHT FUCKING NOW and the GOP senators who threatened to filibuster simply did not give a rat's ass about that imperative.

The attitude of Corker and co. is akin to a cruise ship's officers arguing about whether or not to throw a life-preserver to a man who, perhaps drunk or just plain clumsy or just by pure accident, fell overboard; with those opposed and threatening to hinder operations if any move toward rescue is attempted all clucking about the man's irresponsibility for falling off the ship —which in the meantime is steaming onward while the man who desperately needs help is flailing about in the water and has sharks closing in on him.

[18-Till-I-Die]

Patrick and Nitram are dead on right.

This blame bullshit is silly, who fucking cares? Maybe it was the Unions, i really doubt it but lets just say it IS for the time being. Ok, fair enough. Why does this matter?

If the Big 3 go down it's not just going to cock that up, if they catch fire and explode we'll ALL be hit by the shrapnel. The autoworkers will be lose their jobs, then their homes, then anyone associated with it will be fucked over--dealers, suppliers, et al--and they'll end up losing everything or nearly everything. MILLIONS of people, not thousands or even tens of thousands but MILLIONS, will be left without work in one of the worst recessions in living memory, and at a time when we're coming off eight long years of what i can only describe as Hell on Earth for everyone other than Toby Keith. They'll lose their homes, they'll be forced to either find new work, in a time when unemployment is through the mesosphere, or starve basically. And that's the best case scenario in which the fall of the Big 3 doesn't cause a cascade of other failures that pulls the economy down with them like men being dragged under water by a sinking ship's whirlpool.

Damage control doesn't even begin to describe it. Using another sailing analogy: This is like people arguing over who drove our Good Ship Economy dead into the Cock Up Reefs, when the real problem is that the whole left side is sheared open and we're about to sink into waters infested with sharks who havn't had a meal in days.

[Chris OFarrell]

To paraphrase Obama, when the house is on fire, you call the fire brigade first, THEN the insurance company afterwords, not the other way around.

The Unions are being fucking crazy and they SHOULD have both sides of politics screaming on TV and denouncing them, pointing out that slightly less well paid jobs are a great deal better then NO jobs, but right now we don't have the luxury of time.

Though taking 15 billion out of the banks funds, well, the banks are busy pocketing everything they can get their hands on, so I doubt the car industry is going to do any worse with it.

[Surlethe]

So those were not UAW representatives in front of the Congress on my TeeVee, offering plans on C-Span? Or is this simply a talking point?

From the link I posted earlier -

Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with U.S. plants of Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.

That seems to contradict what you saw on C-SPAN, but I can't say for certain.

[aerius]

In an ideal world the government would take back every last dollar it's "loaned" to the financials and use it to keep the automakers and other manufacturers alive until the current crisis is over, at which point the companies are forced to reorganize and get profitable. But that's never going to happen so I might as well wish for unicorns.

[Broomstick]

Wa-Goner! Sorry, couldn't resist.

Earnestly though, a government takeover doesn't seem too bad for those companies. After all, their failure would be damaging while throwing cash at the greedy assholes owning them is just wrong.

Stas, in many ways what you write is absolutely correct, however, the antipathy towards government takeover/ownership of anything in the US runs so hot and deep that I'm not sure someone in Russia or other post-soviet nation can truly comprehend it on a gut level. There really are people here that would the US cease to exit in preference to sliding even slightly towards communism (which is how they would see it).

[La Maupin]

So those were not UAW representatives in front of the Congress on my TeeVee, offering plans on C-Span? Or is this simply a talking point?

From the link I posted earlier -

Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with U.S. plants of Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.

That seems to contradict what you saw on C-SPAN, but I can't say for certain.

Thing is? This seems to be negotiation in bad faith. We ended up with a plan that was approved by Democrats, by the President, by the automakers, by the union and by House Republicans, and the Senate Republicans decided to kick up a big horrific stink about it.

The Senate Republicans are demanding concessions that benefit neither the auto industry nor the workers - they simply ideologically benefit the far right by weakening labor.

By forcing the president to divert TARP funds to save the auto industry, the senate GOP actually weakens their own position, since they are going to be in a much smaller minority (either 58-42 or 59-41) next year, and they're undermining themselves by opening up ideological fissures in the right.

[TC Pilot]

Would you care to respond to the points?

I guess I wasn't being clear enough in expressing my confusion as to why you were directing any of that post in my direction, when it had absolutely nothing at all to do with what I was saying or meant to say.

Or perhaps clarify what some daft smiley offers in response?

Is more explanatory for you? I had no idea why the hell you were saying "Oh, Ford's still above water. But if you're silly enough to think two-thirds of the industry imploding will not destroy them simply from the effects of the corporations flailing down the drain.." in response to my "The Big 3 aren't blameless for driving their companies into the ground for decades."

[CJvR]

So the UAW have secured extra benefits for their members above and beyond what the average worker with a simillar job get? Now at the edge of the abyss when the companies no longer can afford that the senate and UAW are having a game of poker? Wonderful timing that!

Still sounds a bit like the drowning man is refusing to grab the nylon rope beeing thrown to him and perfer to wait for the silken one...
Perhaps the UAW should have said "Yes we will take as big a wage cut as the banking sector".

[Pablo Sanchez]

So the UAW have secured extra benefits for their members above and beyond what the average worker with a simillar job get?

You know, I'm getting pretty fucking sick of this meme. What do you think the fucking purpose of organized labor is? It is to bargain collectively so as to gain additional benefit. If the UAW agreed to bring their compensation directly in line with that enjoyed by non-union workers in the same field they would be completely abrogating their obligations to the rank-and-file and might as well disband. Which was almost certainly the point of the GOP demand for wage control; a completely unacceptable request which would allow them to roadblock while claiming it was the union's fault.

Not to mention the fact that compensation for UAW members is actually only incrementally higher than at the non-union, foreign-owned plants--about $55 an hour altogether, versus $45. The main difference is the huge obligation owed by the Big 3 on pensions for retirees, which the foreign automakers do not have because they've only been producing cars in America for a couple of decades. Not to mention the fact that union efforts tends to set standards industry-wide, thus incidentally improving conditions even in non-union shops, so really that $45/hour would be lower without the UAW.

[SirNitram]

Would you care to respond to the points?

I guess I wasn't being clear enough in expressing my confusion as to why you were directing any of that post in my direction, when it had absolutely nothing at all to do with what I was saying or meant to say.

Or perhaps clarify what some daft smiley offers in response?

Is more explanatory for you? I had no idea why the hell you were saying "Oh, Ford's still above water. But if you're silly enough to think two-thirds of the industry imploding will not destroy them simply from the effects of the corporations flailing down the drain.." in response to my "The Big 3 aren't blameless for driving their companies into the ground for decades."

I should point out I disable smilies in my posts. It eases up on the mindless idiot factor. The simple fact is the Big 3 weren't going into the ground for decades. Ford is still not in the ground, despite an enviroment where many companies can and will fail, mostly because of.. Lack of credit. You know, that thing that's impacting the markets?

Are you simply unable to grasp there might be more factors here than 'The Big 3 are dumb'?