The Carmagedonn Thread: FCA and "Consolidation"

[Grand Prix]

An example of how it might actually be a good thing to let things go is the British car industry. It went to absolute hell in the 70's and 80's, and while the companies pretty much all evacuated, Britain is far from being left in financial ruin right now.

Although many seem to bitch about how most British car companies are now in the hands of foreign companies. Would be funny to see the same thing happen to the American car industry, but also sad. If only GM and the other two actually studied the fall of British Leyland, they wouldn't be in this situation. Sure, there were a lot of causes for the death of British Leyland: unions, platform sharing, lack of platform sharing, internal competition, and unchanging designs. However, I think all of these things happened because they became such a huge empire.

"Those who fail to learn from history are doomed to repeat it."

 

[YSSMAN]

I say let them go Chapter 11 and FIGURE IT OUT FOR THEMSELVES.

You're missing the point as well. They (in particular GM) may not be able to go into Chapter 11 and would be forced directly into Chapter 7 (ie, liquidation). That is the last thing that we want. But even going into Chapter 11, we have some problems. First and foremost, who do you know thats going to buy a car from a "bankrupt" company? Secondly, who is going to pay for their warranty costs? Certainly not GM, Ford or Chrysler...

The entire thing today has been an absolute circus compared to the Senate hearing yesterday. I'm absolutely furious with those members of the House who get up there and grandstand about the situation seeming to think that they and their constituents would be unaffected by a collapse.

...Although having Barney Frank there makes me smile, but thats for another day...

Nevertheless, what we've seen so far for the past two days:

- The heads of GM, Ford and Chrysler are willing to do what Iacocca did nearly 30 years ago... Cut their pay to $1, no more bonuses across the board (already in effect at GM and Ford), all in the name of cutting costs

- They traveled to Washington by private jet, each of them. Whoopdy doo I say, but some of the House folks are making a big deal of it. Travel costs have already been slashed, it was publicized a week or so ago that GM was delaying new product debuts to Detroit and Chicago (instead of LA) because of the cost associated with getting the vehicles out there.

- Truth be told, we're on a "wait and see" pattern to know exactly how much cash each of the companies would like. GM is calling for $10-12 BN, Ford as I recall wants $8 BN, and Chrysler with $7 BN.

- Congress is hinting at having strings attached with the extra money, higher CAFE standards have been suggested, the aforementioned bonus cuts, etc. The big question would be as to if they can get some kind of assurance that the cash would stay in the US and make certain that American workers keep their jobs.

- Confusion seems to be whats going on with whats to blame for the situation. GM, Ford and Chrysler are pointing figures at financial institutions that have tightened regulations on loans... While also suggesting that there isn't any confidence in order to buy-in. Something that Toyota, BMW, Honda, Nissan-Renault, DaimlerBenz, Volkswagen AG, etc can all confirm as well...

====

I'm getting very angry while watching whats going on with the testimony yesterday and today, so I've only been able to watch it in chunks. Some members of the House and Senate "get it," and simply put, others do not. The Senate could vote by the end of the week according to Senator Dodd, a situation where he thinks he has enough votes to squeak something through. I'm uncertain which bill that is, although I know President Bush threw his voice behind what I believe to be the House bill this afternoon... Extending benefits (or expediting them?) from the "secret" bill from the early fall. There are some people on the Hill suggesting taking the money out of the TARP program (that'd be the $700 BN that hasn't done jack squat), but Paulson is saying no.

Its all very frustrating. It seems logical that the Democratic Senate and House, along with Obama in the White House wouldn't have a problem passing an aid package. Problem is, based on some figures, there may not be enough time for the companies to last until February or March of 2009.

 

[Philly]

- Congress is hinting at having strings attached with the extra money, higher CAFE standards have been suggested, the aforementioned bonus cuts, etc. The big question would be as to if they can get some kind of assurance that the cash would stay in the US and make certain that American workers keep their jobs.

This is the thing that frustrates me about this. You have these government people who know little more about cars other than they get you from point A to point B, using up gas and emitting CO2 along the way. And yet they seem to think they know what is best for the automotive industry. Higher CAFE standards? I think most companies are already putting a lot into reaching what has already been set. Setting a 50 MPG standard will force the big three to have to put so much money into development we'll have to have this whole fiasco again in ten years or sooner because they can't afford to turn completely around, start selling cars people want to buy and then immediately start performing miracles with fuel mileage.

I think that they can probably pull off something more like keeping jobs in the US though. At least, if they tried. I have no doubt that Congress has the ability to come up with requirements that would end up costing GM more than the loan amounts, putting us back at square one, but I think that if they are smart, GM and Congress can work something out that'll keep jobs here and not cost too much.

Its all very frustrating. It seems logical that the Democratic Senate and House, along with Obama in the White House wouldn't have a problem passing an aid package. Problem is, based on some figures, there may not be enough time for the companies to last until February or March of 2009.

I'm not sure how much of what I've heard is political BS, but I liked Obama's reaction to the situation. Unlike most people who seem to be either on the "Screw 'em. The state is frozen solid 9 months of the year, and you can't get through road construction the other three" side or the "ZOMG SOLAR CARS!!!!" side, he seems to think that the best solution will be discussing it with the automakers and finding out what kinds of requirements won't break the companies, but will also help out with whatever everybody wants.

 

[YSSMAN]

Its getting silly. Seriously.

Mitt Romney says some things that make sense, and some thing that do not in his NYT Op-Ed from today...

Just for S&G's:

The Import Cars Aren't Selling Either...

 

[///M-Spec]

You're missing the point as well. They (in particular GM) may not be able to go into Chapter 11 and would be forced directly into Chapter 7 (ie, liquidation). That is the last thing that we want*.

*emphasis mine.

Okay, I'll bite:

Why?

P.S. I thought Romney's piece was pretty good.


M

 

[V1P3R]

The Import Cars Aren't Selling Either...

Soo... looking at that graph there is a lot of pricks out there?

 

[YSSMAN]

Why?

Chapter 7 would be a total liquidation of any of the three, which would otherwise be a disaster. Splitting up brands, technology, tradition, I don't think thats what anyone would want. We've seen it happen with BLMC, AMC, etc... And it never works out that well.

I would suppose that coming from a GM family, I may be a bit biased, but I only see Chapter 7 as no-win situation.

 

[///M-Spec]

Chapter 7 would be a total liquidation of any of the three, which would otherwise be a disaster. Splitting up brands, technology, tradition, I don't think thats what anyone would want. We've seen it happen with BLMC, AMC, etc... And it never works out that well.

I would suppose that coming from a GM family, I may be a bit biased, but I only see Chapter 7 as no-win situation.

I'm familiar with what Chapter 7 is. Are you familiar with the term "Begging the Question"? Because what you're stating is a perfect example of one.

"No one wants the Big Three to fail, therefore we should bail them out"

You state your premise that "no one wants the Big Three to fail" as a given when it is not. Thus your conclusion, as well as the original premise, is questionable.

I think that if we turn this into a public poll, you would be surprised at just how untrue your premise is.

The full question is: "why would I NOT want market forces to kill off a company that has no reason to survive?"


M

 

[Danoff]

I'm with Mike. These guys have known for a long time that they needed to pick it up and get with the program. I haven't considered buying American for quite some time, and don't see that changing in the near future (unless GM goes under, in which case I may have to buy a 'vette).

We've already given them $25 Billion for new vehicle research. If that's not enough to keep them afloat, I say let them go.

 

[Joey D]

What I don't understand is why are we bailing out other companies but not the Big Three? The entire state of Michigan will collapse if the Big Three go under. Apparently according to news reports on the radio, 1 out of every 10 people in Michigan are employed by the auto industry. That's a lot of people who would no longer have a job.

I can understand if the Big Three were the only ones with their hands out, but just about every company is wanting a slice of the government's pie. Hell AIG made a slight waver and the government threw money at them. I don't get how they can pick and choose who they help out.

Brad and I might have a different outlook on all of this since we will be directly affected if something happens. I for one don't want to ever think about what the state of Michigan would look like with out any one of the Big Three, let alone all of them. I'm not going to speak for Brad though.

 

[Div is back]

What I don't understand is why are we bailing out other companies but not the Big Three? The entire state of Michigan will collapse if the Big Three go under. Apparently according to news reports on the radio, 1 out of every 10 people in Michigan are employed by the auto industry. That's a lot of people who would no longer have a job.

I can understand if the Big Three were the only ones with their hands out, but just about every company is wanting a slice of the government's pie. Hell AIG made a slight waver and the government threw money at them. I don't get how they can pick and choose who they help out.

Brad and I might have a different outlook on all of this since we will be directly affected if something happens. I for one don't want to ever think about what the state of Michigan would look like with out any one of the Big Three, let alone all of them. I'm not going to speak for Brad though.

Your misunderstanding of the whole financial system of the world is striking.
The banks were bailed out because they are the true backbone of the world's economy.

If the banks had not been bailed out, every single corporation in America would be knocking at Washington DC's door for a bailout.

No bank bailout = no credit = no business can survive.

The automotive industry is simply one of thousands of industry that needs help. The banks were too big to fail, the beg three? Yea right!

 

[Philly]

So it's right to spend $700 Billion to bail out an industry that would cause the economy to collapse if it went under, yet we can't spend a (comparatively) measly $25 Billion to bail out an industry that, while not as crucial, will still severely cripple the economy if it went under? Or is the banking industry really more than 28 times more important than the auto industry?

We've already given them $25 Billion for new vehicle research. If that's not enough to keep them afloat, I say let them go.

All the money in the world being directed at the Big Three for vehicle research wouldn't help them at all (unless they could somehow get excellent cars on the lots in two days) if there will be no company to build and sell said cars. That $25 billion will help them significantly farther down the road. Putting more money in the industry now is what will allow them to get there in the first place.

 

[Keef]

The banks aren't too big to fail. Nothing is too big to fail. The world's governments thought the banks were too important to fail.

I personally think the best option--if it is an option--would be allowing the companies a chance at a chapter 11 reorganization. There would be problems with that. It works for airlines because the company only has to stay in business long enough to finish your 4 hour flight. There's no prolonged agreement, unlike when you buy a car. When I buy a car I trust that the company will be there for the years I'll be paying on it and for the whole life of the car, because it will need future maintenance and parts. But under chapter 11 there would be no guarantee of that and people would realize that. Car sales would go through the floor. But those people who did trust the companies would still buy their cars. Everyone knows why chapter 11 could be good because it's been talked about time and time again.

But if that's not an option, then oh well. Terrible times are going to come either way. The reason those fires over in California keep blazing hotter and hotter every year is because we put them out. If we let them burn all their fuel as they would naturally then they would not be nearly the problem they are now. GM and Ford and Chrysler are problems and if we keep spitting on the flame they're just going to come back bigger and bigger, over and over again. I say let them burn. New companies waiting for an opportunity will grow up out of the rubble and enjoy their time in the sun.

One thing I think people forget is that those new companies will burn down one day, also. It's a cycle that happens naturally and our governments have screwed with it. Now nobody is actually sure what's going to happen.

 

[Joey D]

Once again, you fail to realise what's going to happen to the state of Michigan. Our entire economy relies on the working of the auto industry. I think it's unrealistic to think that you can just let this go and everything will be rosy. Seriously, the more I hear people talk about this the more I dislike this ideological mind set.

Look at Chrysler back in the day, the government loaned them money and they paid it back with interest. Who's to say the same thing wouldn't happen now? GM and Ford are both on the verge of getting vehicles out that are good and that people will want to buy. Looking towards the future I can see good things coming down the line and a vehicle I might actually want to own.

 

[Philly]

But if that's not an option, then oh well. Terrible times are going to come either way. The reason those fires over in California keep blazing hotter and hotter every year is because we put them out. If we let them burn all their fuel as they would naturally then they would not be nearly the problem they are now. GM and Ford and Chrysler are problems and if we keep spitting on the flame they're just going to come back bigger and bigger, over and over again. I say let them burn. New companies waiting for an opportunity will grow up out of the rubble and enjoy their time in the sun.

Thus is the nature of a capitalist boom-bust economy. If we're going to work by this logic, surely we should have let the banks die and the economy crash because they will only come back and cause bigger problems the next time the economy takes a dive?

 

[Keef]

Once again, you fail to realise what's going to happen to the state of Michigan. Our entire economy relies on the working of the auto industry. I think it's unrealistic to think that you can just let this go and everything will be rosy. Seriously, the more I hear people talk about this the more I dislike this ideological mind set.

Look at Chrysler back in the day, the government loaned them money and they paid it back with interest. Who's to say the same thing wouldn't happen now? GM and Ford are both on the verge of getting vehicles out that are good and that people will want to buy. Looking towards the future I can see good things coming down the line and a vehicle I might actually want to own.

But instead you own a car that gets it. One from a well-managed company that's profitable (even though they only make ludicrously expensive oxymoron luxury-performance cars!), and that makes cars that appeal and apply. The Cooper is the kind of car people not only want, but need, and you have one. GM has no competitor and failed to not only see, but "risk" the future on development that didn't actually apply to the world's circumstance while it would have been in development. By that I mean designing fuel and space efficient cars while gas is 95 cents a gallon.

The entire country will go into a depression, not just Michigan. People around here would lose jobs left and right, and I'd be one of them. My dad's job is fairly secure as machinists go, because he'd be one of two they'd keep out of the whole 12 of them. I would most certainly lose my job. You might lose your job. Lots of people will. Hey, maybe it'll be the event that kick starts me to get back into college.

EDIT: Philly, don't say "we". Say "the government". I didn't vote for it. Nobody voted for it. They made their own decision. The government must guard us from our own financial decisions, you know that.

The fires always come back. They always go out. Over and over and over. But apparently when you don't let them go out because it would be better for everyone, they come back sooner and bigger. Before you know it you're fighting fires all day every day and not making a lick of progress. If you wouldn't have screwed with it in the first place you would never have that problem, but of course that was a problem we didn't foresee. Now the only way to get back to the natural cycle is to let it all burn down in one raging conflagration from hell. It'll grow back slowly, and it'll be nice. Until it burns down.

 

[Div is back]

I love how this conversation is lead by Michigan people. Really objective!

The fact is that your industry is fundamentally flawed and it is not the backbone of the US economy, it might be in your state, but it doesn't account for the whole country.

• GM has the biggest lineup of fuel efficient cars (30 mpg+)
• GM has some of the best quality rating in the industry
• GM has some of the best pricing in the industry
• GM has sold the most cars worldwide in 07 and 08 up to date

...yet they're bankrupt.

FACTS:

• The average GM employee makes 72$/hour, a comparable job in the south is rated at 48$/hour
• UAW has stated they will NOT make any concessions on their benefits and pay grades.
• The big three blames their current situation on the economy. Have you seen Toyota, Nissan, or any European manufacturers ask for money because the economy was poor?
• The beg three can't put a number to the amount they need. The 25 billion asked is based on a projection of a recovery by March '09, wishful thinking.

What's so great about capitalism is the weak die and the strong survive and flourish. I'll restate it again, the factories, the workers, the knowledge, the technology will STILL be there under a chapter 11 bankruptcy. These will be picked up by other companies, the good will be kept and the bad will be trashed.

 

[Keef]

I love how this conversation is lead by Michigan people. Really objective!

The fact is that your industry is fundamentally flawed and it is not the backbone of the US economy, it might be in your state, but it doesn't account for the whole country.

• GM has the biggest lineup of fuel efficient cars (30 mpg+)
• GM has some of the best quality rating in the industry
• GM has some of the best pricing in the industry
• GM has sold the most cars worldwide in 07 and 08 up to date

...yet they're bankrupt.

FACTS:

• The average GM employee makes 72$/hour, a comparable job in the south is rated at 48$/hour
• UAW has stated they will NOT make any concessions on their benefits and pay grades.
• The big three blames their current situation on the economy. Have you seen Toyota, Nissan, or any European manufacturers ask for money because the economy was poor?
• The beg three can't put a number to the amount they need. The 25 billion asked is based on a projection of a recovery by March '09, wishful thinking.

What's so great about capitalism is the weak die and the strong survive and flourish. I'll restate it again, the factories, the workers, the knowledge, the technology will STILL be there under a chapter 11 bankruptcy. These will be picked up by other companies, the good will be kept and the bad will be trashed.

Just to clarify, that $72 per hour is the combination of pay and fringe benefits. I'm not sure what you mean by "south", but Toyota's guys make $45 in American factories. The main reason for that is the UAW and the "services" they do for the employees. Yes, bankrupting the company is a service. You may want to look at it in this way: each employee costs GM $72/hr, and Toyota's cost them only $45/hr.

Also, Div, don't forget that GM always has and still has some of the best engineers in the market. They can make mechanical wonders. Look at the ZR1. If GM wasn't in such dire straights they might be able to apply whiz engineering to all of the cars, instead of just the low-production flagship model. GM has great assets. But they're all hindered by piss poor management and bad contract agreements, especially with the UAW.

 

[Div is back]

Just to clarify, that $72 per hour is the combination of pay and fringe benefits. I'm not sure what you mean by "south", but Toyota's guys make $45 in American factories. The main reason for that is the UAW and the "services" they do for the employees. Yes, bankrupting the company is a service. You may want to look at it in this way: each employee costs GM $72/hr, and Toyota's cost them only $45/hr.

Also, Div, don't forget that GM always has and still has some of the best engineers in the market. They can make mechanical wonders. Look at the ZR1. If GM wasn't in such dire straights they might be able to apply whiz engineering to all of the cars, instead of just the low-production flagship model. GM has great assets. But they're all hindered by piss poor management and bad contract agreements, especially with the UAW.

Correct, and the only way for them to get out of these is through chapter 11 bankruptcy and then the government should provide funds to help them establish a new business model. They should provide the money, the question is when?

 

[Keef]

If chapter 11 is an option. I've heard that GM may or may not qualify for it. I don't know what the restrictions would be.

If the company could apply for it then a loan from the government may be required, and in turn would have to be paid back. I don't want the companies to go out of business, because most of the economists out there think chapter 11 would be a much better option.

 

[Philly]

Philly, don't say "we". Say "the government". I didn't vote for it. Nobody voted for it. They made their own decision. The government must guard us from our own financial decisions, you know that.

This is the government that you helped vote into office and represents you. But yes, it is them doing the deciding around here. And they did ask you for permission to be doing the deciding.

The fires always come back. They always go out. Over and over and over. But apparently when you don't let them go out because it would be better for everyone, they come back sooner and bigger. Before you know it you're fighting fires all day every day and not making a lick of progress. If you wouldn't have screwed with it in the first place you would never have that problem, but of course that was a problem we didn't foresee. Now the only way to get back to the natural cycle is to let it all burn down in one raging conflagration from hell. It'll grow back slowly, and it'll be nice. Until it burns down.

That doesn't explain shy the bank fire gets to be put out with far more cost to you and me, yet the auto industry one should be let to burn, even though it costs next to nothing compared to what us (taxpayers) are paying the banks.

I love how this conversation is lead by Michigan people. Really objective!

The Michiganders also tend to lead the whole "Auto News" section of the forums...

What's so great about capitalism is the weak die and the strong survive and flourish. I'll restate it again, the factories, the workers, the knowledge, the technology will STILL be there under a chapter 11 bankruptcy. These will be picked up by other companies, the good will be kept and the bad will be trashed.

The problem is that nobody will buy what's left of the Big Three. At least not until the economy turns around, a time when the Detroit Three would be doing fine anyway. Right now, nobody in the auto industry wants to buy more, except parking lots to store the stuff they built before they could react to slowing demand. I think everybody (except maybe VAG and Alfa) is keeping their cash to make it through the downturn.

 

[Keef]

This is the government that you helped vote into office and represents you. But yes, it is them doing the deciding around here. And they did ask you for permission to be doing the deciding.

"Don't blame me, I voted for Barr."

That doesn't explain shy the bank fire gets to be put out with far more cost to you and me, yet the auto industry one should be let to burn, even though it costs next to nothing compared to what us (taxpayers) are paying the banks.

Neither should have been bailed out in my opinion. I don't agree with any of it. I have no explanation for why one wins and one loses.

The problem is that nobody will buy what's left of the Big Three. At least not until the economy turns around, a time when the Detroit Three would be doing fine anyway. Right now, nobody in the auto industry wants to buy more, except parking lots to store the stuff they built before they could react to slowing demand. I think everybody (except maybe VAG and Alfa) is keeping their cash to make it through the downturn.

There's a lot of companies out there that are just waiting to snag some super-cheap liquidation-sale assets. Fisker. Tesla. Probably others we've never heard of. Probably some that are trying to start as we speak but can't afford the full-price buildings or supplies or people. The people and things of GM would be bought up in no time--because it's all great stuff. I already mentioned that GM has good assets--assets that people want. Buildings and infrastructure. Even the engineers, which are some of the best in the business. None of these good things can work to their full potential because of the bad management and agreements the company has made. I already mentioned that.

 

[YSSMAN]

Brad and I might have a different outlook on all of this since we will be directly affected if something happens. I for one don't want to ever think about what the state of Michigan would look like with out any one of the Big Three, let alone all of them. I'm not going to speak for Brad though.

I think you've got it summed up pretty easily there. There are people who care, but may be apathetic to the final result. There are people who don't care, under anything. And then there are those of us who are directly effected, immediately, and get little out of it no matter what happens. There are a lot of people up here who are so fundamentally opposed to the idea that it makes them sick to see that it very well could happen, but at the same time, they recognize how quick we'd be going in the crapper up here if anything happened too suddenly.

I'm still of the mindset that, give or take, a loss of GM or Ford would be far more dangerous than that of Chrysler. However, they made an interesting move on the Hill today...

The Congressional Democrats joined up to tell GM, Ford and Chrysler that they need to "have a plan" before they get any money. I think that is a reasonable request, and I'm thankful that they decided to do that ahead of time. The thing is, if they get the money, I want to make sure that they know what they're doing with it. If that comes with some strings attached, so be it. I've heard suggestions from everything including increased CAFE Standards to some kind of domestic labor requirement. God knows what would be in the final bill, if there is one, and what it would require of the companies in the end.

Conversely, I'm not completely opposed to Chapter 11 if the companies are afforded some assurances as to what can be accomplished... Particularly in regards to warranties and labor. I'd love to be able to see them buck off the UAW, but as we know, that will not be the be-all-end-all for making any of the companies profitable. Again, the question must be, how many people are going to buy a car from a bankrupt company? My theory is very few... I could be proven wrong.

===

I have heard suggestions that the Fed could use money from the TARP to cover a process at which GM, Ford and Chrysler sells all of their vehicles at half-price. It would move through inventory, and kick back cash at the companies to (in theory) line their pockets with some cash. I don't like the idea, but I'd love to hear what you guys think as well.

 

[Div is back]

The Michiganders also tend to lead the whole "Auto News" section of the forums...



The problem is that nobody will buy what's left of the Big Three. At least not until the economy turns around, a time when the Detroit Three would be doing fine anyway. Right now, nobody in the auto industry wants to buy more, except parking lots to store the stuff they built before they could react to slowing demand. I think everybody (except maybe VAG and Alfa) is keeping their cash to make it through the downturn.

Detroit was about to buy/sink itself out:
http://www.cbc.ca/money/story/2008/10/20/ap-gmchrysler.html

I can't believe that, with everything brought forward in regards to facts, you still think GM is a viable company, economic downturn or not.

The loss in North America is concerning to Jonathan Steinmetz, an analyst at Morgan Stanley in New York, who had expected G.M. to instead report a $122 million profit in the region. That shortfall could signify trouble later this year if demand for vehicles softens because of high gas prices and a stumbling housing market.

http://www.nytimes.com/2007/05/04/business/04auto-web.html

...that was in May 2007.

 

[YSSMAN]

I can't believe that, with everything brought forward in regards to facts, you still think GM is a viable company, economic downturn or not.

I don't think anyone is arguing the problems with poor management at GM, Ford and Chrysler. We've been bitching about it here for years. The issue at hand is that we've reached a "Perfect Storm" of sorts for the automotive industry. Not many people have the money, or the credit, to buy a car. If they do, chances are that they're not interested. High fuel prices, the housing problems, shrinking credit markets, instability in local/state/national economics have all come together at a point in which too many businesses are at a major risk.

Its not just GM, Ford and Chrysler that are having problems. Toyota is facing a major slowdown with which they've had to cut things substantially, BMW and VW are in very tough positions right now... This isn't something limited only to the American market or American brands.

What we have to do is restore confidence in the market to make it so people want to buy cars again. Its well known that GM and Ford make plenty of cars that are not only competitive, but in many cases are better than the foreign competition... Sales of the Malibu demonstrated that easily not too long ago. The problem is, when you're on a stall... You're on a stall. Eventually, things will sort themselves out, but we're looking at years down the line. Losing GM, Ford or Chrysler only magnifies the pain economically, and more likely than not, makes recovery that much more difficult in the short-term.

 

[Tornado]

Apparently there is some disagreement over how viable bankruptcy is between Rick "Fire My Ass For Incompetence" Wagoner and the people that put him in charge:

Members of General Motors Corp.'s board of directors are willing to consider "all options" for the ailing auto maker, including an eventual filing for bankruptcy protection, a stance that puts them in rare disagreement with Chairman and Chief Executive Rick Wagoner, people familiar with the matter said. As part of his push to win a federal bailout for the company, Mr. Wagoner told Congress this week that GM management believes bankruptcy protection is not a viable option for the company. Instead, GM is focusing on persuading lawmakers to provide financial help, Mr. Wagoner said.

Linky.

 

[Omnis]

Mr. Wagoner can eat a fat one. Forget "winning" money, jerk. They should've spent their lobbying money on their interiors, and now they have to suffer because of it.

 

[YSSMAN]

Now thats interesting. I'm starting to come around to not liking Wagoner again, which is a surprise, because he had been on my good side for a while.

A question must be asked:

Where the hell is Lutz when we need him?

 

[Keef]

OMG

OMG.

OPINION: The real cost of unionized auto workers? $70/hour? Try $38!​

There are plenty of people in this country who would desperately love to see all unions go away. Over the course of the congressional hearings on an automaker bailout this week many of those people have continually brought up the un-cited "fact" that UAW workers get $70/hour in wages and benefits as opposed to about $40 or so for non-unionized workers at the foreign owned transplants. While the UAW and the Detroit automakers have made more than their share of mistakes and deserve a good chunk of the blame for what is happening, there is a major problem with this particular argument. IT'S NOT TRUE!

UAW members do not take home $70/hour. That is the automaker's cost per active employee. What's the difference? The latter figure is total spent by automakers on wages and benefits divided by the number of active employees. The cost of benefits includes the pensions and health care costs for the hundreds of thousands of living retirees in addition to active workers. Those punching the clock every day, don't get a dime of that. As of last year, UAW workers made an average of $28/hour in wages + $10/hour in benefits. The rest went to retirees, a cost that is borne by the automakers. The reality is that unionized and non-unionized autoworkers actually make very similar wages and benefits. Continue reading after the jump.

This guy is an idiot. I'm glad this is an "opinion". The guys already admitted our argument in this line:

UAW members do not take home $70/hour. That is the automaker's cost per active employee.

Yes, Mr. Writer. That is exactly our argument. And Toyota's cost per active employee is $45. He contradicts himself by saying that $70 covers active employees, but then he states that the health benefit portion of that covers active and retired. Which one is it, man?

Our argument doesn't care how much money the workers make. We care about how much money the company loses. It's the company that is going out of business, not the workers. And with costs like $72/hr per employee, yes, that's not at all competitive. It's excess, and it's one reason these companies are going down the tubes.

The rest of the article I didn't bother to read because the damage had already been done. I gathered that it was a bunch of personal experience, which doesn't hold up well in court.

 

[YSSMAN]

There has been a lot of study in all of it, I hardly find any of it conclusive at any point in time. If we want to speak in generalities, Toyota and Honda pay their employees better per hour, include more benefits, all without a union... Arguably to keep the union away.

But your final point is the key: Its not about how much they [the workers] make, its about what they're doing (should be building good cars and trucks) and what they're [GM, Ford and Chrysler] selling.

I think my major point of frustration, at least right now, is knowing that the really good products are still a year away. That there is something on the horizon that can turn things around, that we may not get to see. Especially that damn Fiesta.