Big Three Bailout (merged)

[TA in KC]

How do you feel about the idea of a bailout for the big three?

[eatingupblacktop]

From what I've read, the sad thing is they've lost just about all of their highly skilled and innovative engineers and designers. Meaning they aren't planning any great numbers of new product or radical designs to come out for the next model cycle or two.

This at a time when the competition is fierce, the market low, and consumers are demanding better quality, latest technology, better reliability, better fuel economy, and all at a lower price each year.

Tough situation they're in. Bailout no. Helping hand yes - but with terms and conditions! Like oversight for technological strategies from industry sources other that just the board room - like suppliers, engineers, assembly line workers, consumers. Marketing strategies emphasizing what buyers want rather than the ad agencies' glorified Hot burnouts and drifting tv ads that some art director fresh out of art college wants to see on the screen for his own self fulfillment. Just like the speeded up rambling non stop voiceovers describing the "terms and conditions" legal qualifier at the end of radio ads. Same as the microprint T&C at the bottom of the latest teaser lease rates in newspaper/magazine ads. That crap has to go!

NA auto makers need to wake up to the present and realize if you're only standing still, then you're actually moving backwards. The NA consumer has become educated by the Japanese and no longer believes the Big 3's hype, even recognizing the hype for what it is. All flash and no substance. The unions have to play a part here as well and any handout should bind them to the terms and conditions. Execs should be under contract with a limited pay structure and no bonuses for the duration of any financial package the gov't offers until the loan, and I stress LOAN, is paid back. Hopefully once the industry is back on their feet, the lessons wil have been learned and there will not be a propensity to revert to self destructve policies of the past.

I think if all of this falls into place, the Big3 would be a match for any international competition. They better do it quickly however, China is knocking at the door!

[TA in KC]

Interesting points blacktop.

[jcrome04]

What I've never understood about American car companies...

The European cars from the same brand are BEAUTIFUL!

Like the euro Focus looks MUCH nicer than the NA Focus. And The Ford Falcon that isn't even in the American lineup is an AMAZINGLY beautiful car!

.....I think anyways! B)

[Captain Meeks]

Well my opinion is just my opinion,but, as far as the big three bailout...no... I have to agree with blacktop on some of the issues...to hand the same managers and CEO's money with no real plan for restruture or change is like loaning money to someone to pay a power bill that is three months old,knowing they have no ability to pay the past bills and no further income to pay the future bills. Now on top of that, they have another payment to you...in which you expect to get paid. There is no way this will work. With the taxpayers left holding the bill and some CEO with another golden parachute. If they need alil help maybe they need to hire Warren Buffet to help with a restructure....the idea behind giving all these companies billions of dollars so they can go on buisness as usual. It is very deheartening for these companies to ask for all this money and still offer nothing in return other than debt. The taxpayers already own the largest mobile home lot in the world,now we are ask to help in the purchase of the largest used car lot..... :(

[jcrome04]

Maybe they should just go belly up, cause they blew it.

Give a different American brand that knows whats up take hold.

[eatingupblacktop]

[SW03ES]

Maybe they should just go belly up, cause they blew it.

Give a different American brand that knows whats up take hold.

You want to see many parts of this country go into a depression?

I'm not for a "bailout" but I do think the government needs to take part in some sort of restructuring that can work for them.

[smooth1]

I am completely against this. I know it's going to hurt alot. I know I will be effected, but Ford, GM and Chrysler have been in this boat for years! They have been doing the exact same thing for 25 years! This is only a "take advantage of the moment" ploy by them. GM has lost over 18 billion dollars just this year alone! How is 25 billion going to help even 1, let alone all three? 6 months from now, we'll be 25 billion dollars lighter and right back where we are right now. Cerberus bought Chrysler just last year! They were worht 24 billion in holdings at the time, Chrysler alone is about to drag them under! The labor unions have a huge hold on the auto makers in Detriot and refuse to let go. They have outdated designs, and it would take model years to get back on track. Both Ford and GM made alot of very bad desicions. This isn't the worlds fault or the economy.

[lenore]

Maybe they should just go belly up, cause they blew it.

Give a different American brand that knows whats up take hold.

You want to see many parts of this country go into a depression?

I'm not for a "bailout" but I do think the government needs to take part in some sort of restructuring that can work for them.

Oh yea, let goverment take care of it like they did the Social Security System, the Health system, The border security, the welfare system (that has created 4 generations of handouts) Oh yea they are pro's at fixing things. Are you crazy. Let the darn companies file for bankruptcy and let some good come out of the restructuring. Giving these handouts is just bad money thrown in to a deep hole of no return. The Unions which are ran like a welfare system are what caused a great deal of the failure. Giving everybody fantastic wages, whether they work or not (Socialism) There is no incentive for these folks to perform or excell. As for restructuring, well that is what the courts are for.....let it happen. Throw the bums out....

[eatingupblacktop]

Maybe they should just go belly up, cause they blew it.

Give a different American brand that knows whats up take hold.

You want to see many parts of this country go into a depression?

I'm not for a "bailout" but I do think the government needs to take part in some sort of restructuring that can work for them.

Where does it end? Who's next? There are a lot of important industries that employ a lot of people and who are hurting just as badly. Why should they receive any less consideration from the government? The lineup to the trough gets longer every day.

One advantage to a bankrupcy is that contracts are voided and new ones can be drawn up. Of course this stiffs the suppliers but cancels the union contracts. Perhaps unencumbered of their current shackles and with a broadened perspective of the circumstances that brought them to this point, new owners/management/investors will have a cogent plan under which intelligent restructuring can take place. In this scenario, well placed financial aid from the government contingent upon efficient production of viable products, might make sense.

Here's an idea, howbout some capital investment from Big Oil. With the all time record profits in the history of the US they've been squeezing out of joe consumer, and their recent cutbacks to exploration projects, their coffers must be overflowing. It would mean giving back, the honourable way to show concern for a nation in economic distress. Of course this would presume that Big Oil has any Honour to begin with.

I say throwing good money after bad only serves to indicate that either panic has taken root at the highest level, or the payoffs continue, obfuscated by a well crafted cloud of fear and confusion. Where is all this money going exactly? If the recent AIG California resort junket is any indication, the wolf is guarding the chicken coop!

Also look for Chrysler, otherwise known as DEAD BRAND WALKING, to become a takeover target of the Chinese!

[lenore]

Maybe they should just go belly up, cause they blew it.

Give a different American brand that knows whats up take hold.

You want to see many parts of this country go into a depression?

I'm not for a "bailout" but I do think the government needs to take part in some sort of restructuring that can work for them.

Where does it end? Who's next? There are a lot of important industries that employ a lot of people and who are hurting just as badly. Why should they receive any less consideration from the government? The lineup to the trough gets longer every day.

One advantage to a bankrupcy is that contracts are voided and new ones can be drawn up. Of course this stiffs the suppliers but cancels the union contracts. Perhaps unencumbered of their current shackles and with a broadened perspective of the circumstances that brought them to this point, new owners/management/investors will have a cogent plan under which intelligent restructuring can take place. In this scenario, well placed financial aid from the government contingent upon efficient production of viable products, might make sense.

Here's an idea, howbout some capital investment from Big Oil. With the all time record profits in the history of the US they've been squeezing out of joe consumer, and their recent cutbacks to exploration projects, their coffers must be overflowing. It would mean giving back, the honourable way to show concern for a nation in economic distress. Of course this would presume that Big Oil has any Honour to begin with.

I say throwing good money after bad only serves to indicate that either panic has taken root at the highest level, or the payoffs continue, obfuscated by a well crafted cloud of fear and confusion. Where is all this money going exactly? If the recent AIG California resort junket is any indication, the wolf is guarding the chicken coop!

Also look for Chrysler, otherwise known as DEAD BRAND WALKING, to become a takeover target of the Chinese!

Ahmen......

[SOMEONE ELSE'S GOT MY NAME]

You know, it just keeps getting better & better:

http://www.cnn.com/2008/US/11/19/autos.ceo.jets/index.html

If you're going to hold out your tin cup ... begging for money ... best not to arrive via 1st class ... much less the way these inept clowns run their show. "It's not our fault ... it's those damn medical benefits, and retirement costs of the hourly line workers that caused our condition". Right.

[nc211]

In terms of the union contracts and labor expenses associated with the trouble of these companies, I offer you the following example:

I am currently working on a hotel deal in Washington DC. There are 6 competitor hotels to the subject hotel. The subject hotel is a non-union facility. The competitors are union. The subject property looks better, performs better, and is in better shape to survive the coming bomb to that sector next year. I've seen the labor costs of all of these properties. The incomes of the staff don't vary that much from the union and non-union shops. However, management has more flexability to run their property more effeciently and effectively in the non-union property, which is why it makes a lot more money, can reinvest in upgrades to the property, and is the market leader of that area of DC by a longshot.

I was in NJ three weeks ago, pulled up to a gas station to refill the rental car, and was chewed on by a guy who came over as I was pumping my own gas, that I was taking his job away from him. He informed me, that in that area, nobody pumps their own gas, it's against union policy. That area of NJ is a dump, and I can see why.

[lenore]

In terms of the union contracts and labor expenses associated with the trouble of these companies, I offer you the following example:

I am currently working on a hotel deal in Washington DC. There are 6 competitor hotels to the subject hotel. The subject hotel is a non-union facility. The competitors are union. The subject property looks better, performs better, and is in better shape to survive the coming bomb to that sector next year. I've seen the labor costs of all of these properties. The incomes of the staff don't vary that much from the union and non-union shops. However, management has more flexability to run their property more effeciently and effectively in the non-union property, which is why it makes a lot more money, can reinvest in upgrades to the property, and is the market leader of that area of DC by a longshot.

I was in NJ three weeks ago, pulled up to a gas station to refill the rental car, and was chewed on by a guy who came over as I was pumping my own gas, that I was taking his job away from him. He informed me, that in that area, nobody pumps their own gas, it's against union policy. That area of NJ is a dump, and I can see why.

Yea, the guy who was supposed to clean the gutter was out, and the street cleaner was not allowed to touch the gutter (union rule) and the sidewalk guy cant touch the others jobs. and it goes on and on. When I was in the Navy I used to do everything, then I went on a ship and it is set up like a union, the same job that took me 30 minutes would literally take days, because I would have to go through all of the proper shops. Cant touch my tools, that is the rules. man they took all the fun out of being in the Navy, I remember when I could do a project from start to finish....Just a little example of what they did to our society.

[smooth1]

I think the labor unions served a purpose at one time, but today, they have outgrown thier place and have way overstepped that purpose. Florida is a right to work state, and somehow we seem to manage. I'm not blaming this on the labor unions alone, but I do think that GM, Ford, and Chrysler need to layoff employees from the top down, and not from the bottom up, which is what they will do anyway. Ford CEO made 11 million dollars in salary last year alone. I bet they can find a billion dollars by just trimming the executive staff back, and selling off some of the corperate jets, and misc. toys.

[eatingupblacktop]

Maybe they should just go belly up, cause they blew it.

Give a different American brand that knows whats up take hold.

You want to see many parts of this country go into a depression?

I'm not for a "bailout" but I do think the government needs to take part in some sort of restructuring that can work for them.

Where does it end? Who's next? There are a lot of important industries that employ a lot of people and who are hurting just as badly. Why should they receive any less consideration from the government? The lineup to the trough gets longer every day.

One advantage to a bankrupcy is that contracts are voided and new ones can be drawn up. Of course this stiffs the suppliers but cancels the union contracts. Perhaps unencumbered of their current shackles and with a broadened perspective of the circumstances that brought them to this point, new owners/management/investors will have a cogent plan under which intelligent restructuring can take place. In this scenario, well placed financial aid from the government contingent upon efficient production of viable products, might make sense.

Here's an idea, howbout some capital investment from Big Oil. With the all time record profits in the history of the US they've been squeezing out of joe consumer, and their recent cutbacks to exploration projects, their coffers must be overflowing. It would mean giving back, the honourable way to show concern for a nation in economic distress. Of course this would presume that Big Oil has any Honour to begin with.

I say throwing good money after bad only serves to indicate that either panic has taken root at the highest level, or the payoffs continue, obfuscated by a well crafted cloud of fear and confusion. Where is all this money going exactly? If the recent AIG California resort junket is any indication, the wolf is guarding the chicken coop!

Also look for Chrysler, otherwise known as DEAD BRAND WALKING, to become a takeover target of the Chinese!

A few more thoughts on that last point I started: It seems odd to me that a large part of the $700B is going offshore (China) to pay off loans to foreign FI's, which in turn enables this offshore money to scoop up American companies at firesale prices? With foreign ownership what is the future of American jobs at those companies? Will the new owners take these newly aquired assets offshore along with the accompanying jobs and only return to retail their products, commodities, services (like tech support inquiries being handled mostly in India), credit services, etc., back to the American Consumer? To a large extent, this is already well under way. Look at the booming Chinese economic growth in the past few years. Walmart retails mostly Chinese made products. In Canada, most of the box stores sell only that.

I can't believe that the politicians who are constantly in contact with the captains of industry, are not aware of the developing scenario and repercussions. It will be interesting to watch how quickly Obama addresses these issues once in the White House. These are core issues for the American economy that require the country's top minds to draw the map showing the way to not a wild bouncing recovery, but a stable and sustainable new/evolving economic model for the future.

[SW03ES]

I agree 100% about the labor unions, its these deals they've swung with the automakers to keep UAW workers on the lines over the years that have done this, IN PART. The other part is that these automakers just haven't been building cars that Americans want to buy...for a long...long time. You can't expect a company to support people who worked for them for their entire lives...and their spouses lives...forever...and not expect that to be an issue at some point.

The unions have been paying a lot of the retirement benefits through this crisis themselves though.

HOWEVER, I don't know what an automobile industry-less America looks like, I really don't.

Thats why I would like to see these companies come out with a plan to show how they can streamline these businesses so that they can operate in this marketplace and in the future.

Issue is, if these companies are gone...they're gone forever...

I continue to be amazed by all these no win scenarios this situation is throwing up at us...

[nc211]

I continue to be amazed by all these no win scenarios this situation is throwing up at us...

I agree, and something just doesn't smell right to me about all of this. However, I do recall a few years ago that all the chatter was about how we weren't saving enough, using the credit cards too much, and leveraging everything to the hill. I think that has come full circle now.

I agree with SWO about the products these three offer to the market place. It's tough to support the "buy American" slogan these days, when Toyota, Honda, Subaru, etc all have plants here now too. At the end of the day, the simple fact is, the car consuming public simply want what the foriegn makers offer, over what the american makers do. I'd love a Tahoe, but would rather "like" a Toyota if it means I don't have to waste my time at the shop all the time chasing rattles, replacing parts, having water pour in through the door seals when it rains, catch fire in my garage, etc... In my opinion, GM, Ford and Chrystler have no one, no where, no how, to blame for the mess they're in, but them themselves. They've had decades to fix their problems, and haven't. They've had billions of revenues to spend in the research and development department, but produce the Cavalier.

[Marklouis]

Man, there are alot of good knowledgeable replies to this post, and i have to agree with the lot of ya. We cant trust just giving $25 billion to irresponsible companies. they had thier many chances in the 70's and 80's when the japanese and other foriegn imports started flooding into the states. they ignored the threat and competion completly - against cars that were built to last past the warranty without any major repairs. do you know why the "American" badged cars in europe land are built better and are more reliable? totally different infrastructure and thinking of the management over there - even though the higher quality parts they put in the vehices may be cheaper overseas, there isnt near the corruption in thier workforce as it is over here - greed contributes to most of that.

truth of the matter also, is the japanese are very disciplined and precise at what they build - and it shows it in the quality build of the cars. it doesnt matter if you buy a toyota or acura that was built on a monday in winter or a friday in the summertime, the quality will be the same. i was always taught to research where the car was built in america, what month, and what day it rolled of the line. no joke! my Dad the Ford freak at one time bought Crown Vics that way for years - now he drives a Toyota Camry.

The big three could have learned something long ago from the foriegn car makers - but what they created to be the "American way of building cars" always clouded judgement, and never changed in concept. it was all about number of sales and profit over quality and locktite warranties that are written to where the avereage joe needs a lawyer to interpret! like someone stated in a previous post - it has now come full circle.

I admit i like the new designs of the Malibu and Fusion, but now that I've purchased a 95....a friggin 95 13 year old LS400 and experienced 1st hand quality that was built to last to 300k and more, I'll probably never give the Big 3 another chance, and maybe niether will most of Americans.

you Lexus guys are awesome!

[RX in NC]

nc211,

True, but they also produced the Ram, the Silverado, and the F-150 - great products all....

My Ram will be 10 years old come February 15th. This week I finally had to replace a non-routine maintenance, non-warranty part on it, for the first time ever. My water pump had been clattering for 10 days or so and I knew it was nearing its end-of-life. It finally started leaking on Tuesday so I went to NAPA, picked up a new one for $62, and spent nearly three hours taking the original one off and installing the new one. By far the toughest job I've had to do on this truck - the radiator fan shroud had to come off, then the new serpentine belt that I had just put on back in August, then the radiator fan itself, and then a few other various and sundry parts had to be moved out of the way to get to the water pump. The hoses were in great shape so I didn't replace any after a thorough inspection. The radiator interior (as much as I could see of it) looked great as well. So now my Ram is purring like a kitten again with a new water pump and fresh coolant....

Again, that is the first non-routine maintenance, non-warranty repair to this vehicle since it hit the ground running on 2/15/99. Very, very few owners can say that about ANY vehicle they've had for as long as this one. My point is that yes, the Big Three have certainly built their share of turkeys. But they've also built some great ones as well, and this Ram has certainly fit into that category for as long as I've owned it....

Oh, and for the record, I'm also against any Big Three bailout unless they are forced to spend 100% of their R&D funding on hydrogen cell vehicles (which I believe is the only way that we're going to finally put an end to our addiction to oil)....

[cliffypitbull]

I am undecided about wether they should get any money or not. I think if American companies want to compete with the imports they need to make better vehicles. One example Chrysler vehicles during the most recent round of crash tests NOT one of their vehicles had a passing grade for crash test safety. That is really bad when all your new vehicles failed the crash tests and they wonder why they are on the verge of failing. Americans don't want to drive "unsafe" cars.

Another example my last vehicle a 2003 ZR2 Chevy Blazer developed a oil leak before it even hit 50K miles. Now I expect a chevy to leak oil with like 100K-150K miles LOL but not before it hits 50K miles. Then what really made me start looking at a import was when I took my Blazer into the dealer to get the leak fixed they couldn't find the "the problem" even after I told them where it was coming from. I think because they would have had to fix it for free because it was still under warranty. Also the sun roof leaked from the day I drove the Blazer off the showroom floor, brand new, every time it rained hard and once again they couldn't find the "problem". And again before I traded my Blazer in it developed a leak on the driver side window everytime it rained hard. Water was dripping right onto the window and door lock controls and it was only a matter of time before the controls started to short out or not work properly and once again they couldn't find "the problem".

I got SO SICK of hearing they "couldn't find the problem" and I bet they would have found the problems after the warranty ran out and then I would have had a huge bill to fix those problems. I had always been a "buy american" guy for the past 20 years but got disscusted with the american products they put out and that is why I just bought my first Lexus and traded in my Blazer.

Just my opinion, Cliff.

[MidNightGS430]

Well weve had the technology for years! And for years american automakers main focus has been on trucks and suv's!! They have barely released the hybrid line-up of tahoes and pick-ups etc. They've gotten better at the economical vehicles, But of course imports have always reigned supreme!

The main issue here is the economy and the impact this may have on it. Its a catch 22 because we cant risk losing more jobs!! We need to keep jobs and create jobs to stimulate the economy. But the average hard working individual will have to pay for the bailout through taxes!! So its give and take. I think we need to take the necessary steps to avoid our economy getting in worse shape than it already is. Trillions of dollars spent on the war thanks to G.W. hasnt helped in the least were in a complete mess thanks to this fool!! And there goes inflation, gas and grocery prices soar, And the worst unemployment rate since the 80's!!!!!

[TA in KC]

They have barely released the hybrid line-up of tahoes and pick-ups etc.

Most of GM's large "hybrids" are not really hybrid vehicles. They have an electric motor that powers accessories like the power steering pump, alternator, etc, but the electric motor does not power the car itself.

While they are capable of better fuel economy than the regular gasoline models, their fuel economy is nothing impressive when compared to true hybrid vehicles from Toyota, Honda or Ford.

I imagine the Tahoe and Escalade "hybrids" are/will be mainly owned by people who lead otherwise very high consumption lifestyles.

[RX in NC]

Keep in mind that hybrids are simply a stop-gap measure, not a permanent solution to our dependence on oil....