DC to Detroit: Drop Dead!!!
Or better, "You're morons, we ain't".
In what seems like an amazing amount of chutzpah, a man who's never worked an industrial job or in an industrial field, whose executive experience is say 2 months worth, and who so far has looked pretty dismal in reining in those financial corporations aside from showering them with trillions - well, he just bought himself some auto companies. Up and fired the head of GM, how's dem apples? Renegotiating (i.e. demanding huge cuts for) employee benefits and a range of other issues.
I bet a few people around Detroit are wishing they held a presidential primary last year.
But looks like besides owning banks and mortgage companies, we just got ourselves in the auto business. If we want to nationalize a few oil companies while we're at it, I know some guys who can help.
Funny, it almost feels like Donald Trump became President. "You're fired. Giddoutahere." Guess it's all in the attitude.
In what seems like an amazing amount of chutzpah, a man who's never worked an industrial job or in an industrial field, whose executive experience is say 2 months worth, and who so far has looked pretty dismal in reining in those financial corporations aside from showering them with trillions - well, he just bought himself some auto companies. Up and fired the head of GM, how's dem apples? Renegotiating (i.e. demanding huge cuts for) employee benefits and a range of other issues.
I bet a few people around Detroit are wishing they held a presidential primary last year.
But looks like besides owning banks and mortgage companies, we just got ourselves in the auto business. If we want to nationalize a few oil companies while we're at it, I know some guys who can help.
Funny, it almost feels like Donald Trump became President. "You're fired. Giddoutahere." Guess it's all in the attitude.
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I wonder if AIG's right wing defenders will now stand up for the autoworkers. They have a sacred contract, the terms of which can never be changed ever for any reason. I'm sure AIG's financial products employees will all go to Detroit and hold rallies in solidarity with GM's workers.
March 30, 2009 11:01 AM | Reply | Permalink
Creative indignation, Desi, for lack of a better word.
If the Government said to autoworkers today:"Forget anything you had previously negotiated with GM before, you just gonna get a big fat ZERO for work already done" - then yes, it would be the same as what happened to AIG.
The Government could have easily re-negotiated AIG compensation, using exact same words Obama used today for GM. They didn't.
One doesn't need to be a right-winger to see the difference. But one might need to be a wild-eyed leftist not to.
March 30, 2009 2:58 PM | Reply | Permalink
If they reduce pension benefits, then they are cutting payment for work already done.
March 31, 2009 7:52 AM | Reply | Permalink
The slashing of benefits sucks, but shareholders should've dumped Wagoner long ago.
GM should just be nationalized and repurposed for building light rail and conducting EV R&D.
March 30, 2009 11:26 AM | Reply | Permalink
That's an interesting idea.
Rec'd, desidero.
March 30, 2009 8:09 PM | Reply | Permalink
General Bullmoose:
(Speaking
What's good for General Bullmoose is what's good for the U.S.A.
And by Dow Jones and all their little averages,
Don't you forget it! Right, boys?
Men:
(Singing)
Right!
Three rousing rahs and a few hussahs
And a hip-hip-hip hooray
What's good for General Bullmoose
Is good for the U.S.A.
Part 2:
General Bullmoose:
(Speaking)
We'll show these hillbillies what's what!
Right, boys?
All but General:
(Singing)
Right!
He makes the rules
And he intends to keep it thataway
What's good for General Bullmoose
Is good for the U.S.A.
C
March 31, 2009 10:17 AM | Reply | Permalink
One related thing I am confused by: is Obama for maintaining employer-provided health insurance or isn't he?
At his internet town hall meeting March 25, he says it's not wise to get rid of it at this time.
But it is suggested in today's news (at least from what was available before Obama's announcement) that the government as a lender of to Chrsyler and G.M. is doing to be demanding the same things that shareholders have been demanding for years: cut the worker health isnurance deals in order to survive:
We don't know the details yet, but the hints I saw surfing around don't look promising as to avoiding contradictions on this front. Doesn't it sound like the same old same old "give up benefits in order to keep your job" routine? New boss (the U.S. taxpayer) same as old boss (shareholders/bondholders)?
To be clear where I am coming from: I am someone who would love to eventually see single payer health insurance in this country, so please, don't bother arguing with me about that, I have been sold long ago, read all the arguments ad nauseum...find it tiresome to even get into that whole thing.
What I am trying to do is figure out what Obama's game on health insurance reform is. Is anyone really thimking that out? Could it be that they actually want autoworkers screaming about their health insurance?
March 30, 2009 11:31 AM | Reply | Permalink
I've been wondering if something along these lines isn't true lately. Wondering if it's not a political shepherding of voters akin to FDRs' statement, "I agree with you, I want to do it, now make me do it."
March 30, 2009 2:36 PM | Reply | Permalink
Funny, how short memories are...
When all this sh&t started everyone was screaming let the auto companies go bankrupt, fire all the CEO's, let 'em go to hell in a handbasket. Funny, they were all screaming that the unions were the problem, the workers were overpaid, they needed to cut back.
Funny, what I heard the President say this morning is that GM can survive and the government is going to help PROVIDED GM managment makes some pretty severe and specific changes. Likewise he said, Chrysler can survive IF they secure a deal with FIAT which the government has been trying to broker.
And he said he's sending a "recovery czar" to Michigan to help communities rebound.
I don't hear that as saying "drop dead." But then, I don't speak your language and am afflicted with "longer-term memory."
March 30, 2009 11:31 AM | Reply | Permalink
I remember that, Jade. Thanks for reminding everyone.
March 30, 2009 7:02 PM | Reply | Permalink
Actually, Desidero, you might rethink your title, as the righties on CNBC right now are arguing quite passionately that the administration is doing the opposite of "drop dead," by interfering with the natural order of things with their "socialist" meddling, that the natural state of things is bankruptcy when it's required, the courts and not executive branch the recourse. They'd like to see the administration saying "drop dead," but that's not what they are seeing.
March 30, 2009 11:56 AM | Reply | Permalink
Wall Street has all the money, Des.
March 30, 2009 11:58 AM | Reply | Permalink
Sorry, I don't quite get it. Does "make a deal with Fiat or else" amount to the same as "live long and prosper"?
Is "Chrysler, you make shitty cars that no one wants to buy, piss off" a positive sign?
He did what, gave GM 60 days worth of money to strike a deal with Fiat, and Chrysler 30 days to vacate the premises? This is good news for Detroit?
March 30, 2009 12:03 PM | Reply | Permalink
Chrysler did make shitty cars nobody wanted to buy. So did GM. They're getting a second chance and gov't aid to avoid total collapse -- the second chance and aid they've asked for.
The only problem I have with this is he should've been as tough dealing with bankers.
March 30, 2009 12:17 PM | Reply | Permalink
Totally agree, Desidero. The absolutely fucking stupendous executive prowess Detroit has shown thus far can only be ignored by sekrit commenists.
March 30, 2009 12:06 PM | Reply | Permalink
There's a lot of room between your interpretation and reality, Des. There almost always is.
March 30, 2009 12:12 PM | Reply | Permalink
Make the deal with Fiat or else? Of the not so big three, Chrysler is by far is the weakest. I think the administration call for Chrysler to accept Fiat's offer or risk going under makes great sense. This puts some real new thinking in at Chrysler. Personally I think if this deal goes through Chrysler will have a better chance of surviving over the long run than GM.
Fiat used to be the Chrysler of Italy, made crappy car after crappy car. Now there are a model for turning a car company around.
Read more here:
http://www.businessweek.com/globalbiz/content/nov2006/gb20061110_334864.htm?chan=search
And here:
http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/14/100008964/index.htm
March 30, 2009 12:30 PM | Reply | Permalink
Well obviously the AIG and Wall Street folks are due their bonuses and we can't change a contract that gives people million dollar bonuses. Our hands are tied, even though the company would have gone into bankruptcy without government assistance. But when it comes to the auto industry, it's time to void contracts and get tough demanding even more concessions from workers on health care and pensions - and that's just for those lucky enough to keep their jobs.
What happened to those new strict exec compensation limits on Wall Street? For sure those will be recommendations or "standards", not forced down the throats of Wall Street as the only option if they want federal help to avoid bankruptcy. Have they asked those business leaders to renegotiate contracts with their workers and to revise their compensation structures as conditions for a bailout, or are we continuing to feed the beast?
Oh, but today the Obama administration wants to get tough! Good, but perhaps they picked the wrong industry to get tough on with one of 10 Michigan workers already unemployed and asking for more concessions there, while continuing to allow the excesses of Wall Street.
March 30, 2009 12:38 PM | Reply | Permalink
Two wrongs don't make a right.
The handling of Wall Street - definitely wrong.
But the way the auto industry operates is unsustainable. Yes, absolutely, they need to get tough on the industry. I don't yet know what will happen with all of the workers who may be affected down the line, but without intervention now they'd be in even worse shape 1, 5, 10 years from now.
By all means, be upset at the double standards with Wall Street vs. Detroit, but the wrong response is to think "Welp, that industry got a shitty free ride, so why not this one too?"
March 30, 2009 12:50 PM | Reply | Permalink
Agreed but we still need to fight the double standard here. Right now we're being told that a million dollar bonus is a sacrosanct right while $30 an hour is somehow an unreasonable wage. Working people get the cram down and rich people get more money? That ain't right.
March 30, 2009 1:14 PM | Reply | Permalink
This is always the way, Destor. Always. The system only works for the highest bidder. In my opinion the fear isn't to what extent the government owns businesses, the fear should be the extent to which businesses own the government and we will never hear protests about that.
March 30, 2009 1:27 PM | Reply | Permalink
Perfect summation, Bev.
March 30, 2009 2:47 PM | Reply | Permalink
Yes, perfect!
March 30, 2009 9:22 PM | Reply | Permalink
in my opinion, the administration is trying to take a rational, not philosophical, approach to this. it's not about fairness here, it's about sustainability. and labor costs are not the structural ailment that has been a leading cause of financial firms' failure. therefore, rationally, it's not the first thing that should be addressed.
on the other hand, this is a root cause of the U.S. auto industry's failure, and is a central element to reforming these companies. it MUST be addressed.
March 30, 2009 2:31 PM | Reply | Permalink
But are labor costs the problem here? Or is it legacy costs that the Big Three have to deal with? Absent the retiree costs, workers at a Big 3 automaker bring home about what American workers at Toyota make. So it's not current labor costs that are the problem.
March 30, 2009 3:01 PM | Reply | Permalink
Destor, the mistake you're making is thinking that making real things has value. What has value is inflating balance sheets and making big bubbles. People who labor in manufacturing and make real products are so 1952. It's amazing we even allow them to walk freely on the streets. They're so embarrassing. Thank god for gated communities. I think what you need to do is stop whining about AIG and go get yourself some leverage so you can prop up your assets and pretend to be richer than god. That's what makes America great, man. Who cares about the little people? What we need are more vastly inflated Hindenburgs out there to fly ever so high . . .
. . . and explode spectacularly upon impact.
March 31, 2009 8:05 AM | Reply | Permalink
Demo, the auto industry is in trouble and needs to make changes - universal healthcare would go a long way towards making these companies viable in the future. Wall Street needs to make serious changes to their compensation structure too - but we are not using the power of the US government to make that happen. It's easier to accept forced sacrifice from the UAW, middle class workers and the auto industry when others are being asked to sacrifice as well.
March 30, 2009 1:15 PM | Reply | Permalink
They can't see that. What would it do for morale and work product if everyone in the company was to take a hit until better times?
March 30, 2009 2:03 PM | Reply | Permalink
Unsustainable? What? The middleclass?
March 30, 2009 6:15 PM | Reply | Permalink
Total non sequitur response.
But no, by all means, the auto industry should keep plugging along, pumping out SUVs whenever gas prices nosedive, crushing programs like the EV1, resisting efficiency standards, over-producing, building for obsolescence, etc. etc. etc. Obviously I was referring to the middle class!
March 30, 2009 6:44 PM | Reply | Permalink
But none of those issues are what has brought the auto industry to its knees. Sure, a major depression is going to expose all kinds of structural weaknesses in the economy but the auto industry did not cause the financial collapse. It's like my governor trying to furlough state workers for a month. As if that clerk at the DMV caused this mess! The only lifestyles we seem to be trying to sustain are those of the wealthiest and the most at fault for the whole mess.
March 30, 2009 7:02 PM | Reply | Permalink
March 30, 2009 8:28 PM | Reply | Permalink
To be a socialist or not to be a socialist. Is that the question?
March 30, 2009 12:59 PM | Reply | Permalink
Socialism doesn't work all that well, either. Socialists handle this in the same way we do - lay people off. This is the way companies have historically solved the problem of bad management - stick it to the workers.
What would happen if everyone in the company took a percentage cut in pay. what would happen if workers cut back hours to 32 but were able to keep benefits, what would happen if multi-million dollar payouts to retiring execs were postponed or stopped, if corporate jets were sold, New York apts sold, money was used to retool instead of paid out in stock dividends. It's amazing to me that these execs cannot think of any way to reform the business other than to cut off the head of labour.
March 30, 2009 1:48 PM | Reply | Permalink
So are you moving more left to the dreaded C....... word?
March 30, 2009 2:13 PM | Reply | Permalink
No, I'm moving more to Robespierreism. (Just kidding...kind of.) If we don't reform this system the oligarchy will soon dismantle every safety net, every program and every kind of labour advancement we have implemented in the last 100 years.
The corruption is systemic - we need campaign reform, we need term limits, we need to end lobbying, we need to rein in campaign financing and expenditures, we need to regulate greed by reenacting Glass Steagal, anti trust laws, banking regulations and labour laws, transparency in business, government financing and the media - the system we have is broken and we are in serious, serious trouble.
People don't understand that all the guns in the world aren't going to help defend them from government enslavement and excess - the way to enslave any people is to get them in debt.
March 30, 2009 3:08 PM | Reply | Permalink
So the trick for an old fellow will be to die before the debt comes due. East enough.
March 30, 2009 3:25 PM | Reply | Permalink
This country could about about 20 years to the left before it even gets to the "c" word spelling conservative.
March 30, 2009 6:17 PM | Reply | Permalink
Wouldn't that turn be to the right?
March 30, 2009 6:47 PM | Reply | Permalink
We're so far to the right that turns to the left are still deep in right territory. The pendulum might flip over the top, and that would be kinda ugly.
March 30, 2009 10:13 PM | Reply | Permalink
Actually, so far as I can tell, the Socialist (pick a subparty) view on restructuring is:
1. Toss out current management
2. Put workers' committees in charge of production
3. Mandate a moratorium on layoffs, enforce industry-standard wages, fully fund VEBA and pensions
4. Proceed with bailout to cover above with caveat that gov't investment be used to build mass transit and energy-efficient vehicles
5. Institute health care reform
An idealistic agenda, but layoffs are not a part of it.
March 30, 2009 2:16 PM | Reply | Permalink
"Pick a sub-party" is quite the task, comrade, as you point out. Just picking a website takes you down some really old memory lanes.
March 30, 2009 3:29 PM | Reply | Permalink
GM will have to go through bankruptcy in order to cut brands and dealerships, about half of which have to close for GM to be viable.
Cutting brands and dealerships without bankruptcy is not possible due to state franchise laws.
March 30, 2009 1:12 PM | Reply | Permalink
Let's see...
References to Obama's lack of executive experience. A call for Michigan to have a presidential primary.
I guess it's still all about Hillary!
March 30, 2009 1:29 PM | Reply | Permalink
Oh thats goooood....
March 30, 2009 2:58 PM | Reply | Permalink
I have a hard time reconciling the idea of the US government demanding that a US automaker merge with a foreign one (that has come- back after getting generous support from their government). Does this mean that Italy is, in part, bailing out American corporations (or just another inside-out sourcing)? I do realize that American is nearly a wholly-owned subsidiary of China, but let’s not say it aloud.
I understand the original idea behind the deal: FIAT (Fixing It All the Time) makes small fuel –efficient cars that Chrysler can adapt. I think the deal mostly means we’ll be selling Fiats in Chrysler showrooms here, while they sell Fiats in Chrysler showrooms there (the cars would be renamed though- Fiat’s Grande Punto would be a Chrysler Big Deal, I guess). But is it really impossible (like in our DNA) for American automakers to build decent small cars for small amounts of $lira?
As to the labor concessions, unions are being politely asked to “renegotiate” for the benefit of all, and look; Wagoner is being booted out with a measly $20 million to get him by (and a Dunce cap to keep warm). The labor renegotiations (gun to head or not) have absolutely no relation to the brazen illegal and immoral theft of well-deserved earned executive bonuses attempted by congress.
March 30, 2009 2:25 PM | Reply | Permalink
Yeah, it is, in part a bailout of a US company by an Italian company backed by Italy's government. But the AIG bailout is also a bailout of foreign banks (Societe Generale and Deutsche Bank to name 2) using American taxpayer money and an American company as a conduit. So... fair's fair?
March 30, 2009 3:03 PM | Reply | Permalink
I believe FIAT is officially "Fix It Again, Tony".
March 30, 2009 4:16 PM | Reply | Permalink
Yes, that is the correct usage. That's coming from a former owner of two Fiat X-19's, the first one brand new and used for 13 years and 175,000 miles, the replacement was a $700 used one that was only a year younger, that was finally deemed not worth replacing after 4 years of use when it needed new transmission linkage, because of rust.
I often took a lot of "fix it again Tony" verbal abuse, to which I would respond that "but my mechanic's name is Louie, not Tony." In my opinion, there was no finer two-seater sportster to make it through snowstorms, as the engine was over the rear wheels, it could go through banks of snow that were far above it's front bumper.
I drove it about 10 times from New York to Milwaukee and back, two of those times with someone else in the other seat, and once from Milwaukee to Cape Cod for a two week visit with a friend. The convertible design was that ingenuous eye-talian design, as you could fit the removable top over a very large suitcase and quite a few other things in the front trunk, and you still had a little back trunk behind the engine for necessities.
It got excellent gas mileage and was a simple car without all those fancy schmancy parts that cost money to replace. (You could even roll your own windows up and down, you didn't need a motor to do it for you!) It was also great for city parking spaces.
I owned a used MGB before I bought the first Tony. Now that was quite bit more than a "fix it again" experience. After a few months of many problems, the infamous English electrical system exploded in flames on a quiet suburban street, leaving me running around screaming and pounding on doors for someone to call the fire department.
March 30, 2009 5:50 PM | Reply | Permalink
You do realize that Chrysler and Fiat have been in discussions on this exact alliance -- openly -- since January 20? The only thing being forced on them is the timetable, which is fine since Chrysler seemed content to dawdle and see how much more government bailout they could suck up without changing a thing. It was a part of their proposed restructuring plan which was supposed to be completed this March. ... And guess what they never completed?
And Des, the acronyms are hilarious but no longer relevant.
With regards to the merger and union reactions, this is how sentiments were running in January:
“We're on board with this important strategic initiative as it will help preserve the long-term viability of our great company, its brands and of course UAW-Chrysler jobs,” said General Holiefield, Vice President, United Auto Workers (UAW).
It'll be interesting to see how things might have changed, but I think the workers realized they were on a sinking ship a long time ago.
March 30, 2009 4:50 PM | Reply | Permalink
Yes, I know they’ve been working on it since January and it’s part of the restructuring plans. US taxpayers are putting at least another $5 billion into it, whereas Fiat is putting $0 billion in. Fiat is giving Chrysler small engine design and engineering for a 35-55% stake (hence, my question about American inability to build efficient cars).
I’m not saying it is even the wrong thing to do, compared to other options (if there are any). The automakers have stalled on the restructuring and, as expected, come back for more and sooner. I simply see it as ironic that they’re turning to a bailed out Italian company to save Chrysler. GM was originally going to merge with Chrysler, and since Ford dropped out, why not restructure as one entity?
It doesn’t sound like they plan on doing that much in the way of cross-pollination, besides Fiats small engines, but Fiat has come back from the grave, so maybe there’s something there. I really don’t know how this is going to work out in the long run, but I see it helping Fiat as much as Chrysler. Chrysler may be doomed as it is, but if so, let's go from there.
Anyway, I think saving these skilled jobs (not by lowering their wages or bennies, again) is at least as important as “retaining” the execs at AIG or funneling cash to GS. Zipperupus' reply below says it all better than I could. (And I miss my little Spyder, even if it was in Tony’s shop more than I drove it).
March 30, 2009 6:08 PM | Reply | Permalink
The auto companies have come back sooner because in last Fall's campaign, the powers-that-be decided to run against Detroit and give the carmakers a package they knew wouldn't do it. (With the southern states that are hosting the Japanese hoping for full burial - who says people don't smile at funerals).
March 30, 2009 6:26 PM | Reply | Permalink
Good point, and there's something brutally cruel (or cruelly brutal) in the way they're kicking around the car cos. who manufacture a real product to the subservient waiting, hand and foot, on the financial "institutions."
March 31, 2009 12:15 AM | Reply | Permalink
I guess I don't have the same definition of "earned" and I sure the heck don't believe any of the people who are determining who "earned" the bonuses no matter what the definition.
March 30, 2009 6:21 PM | Reply | Permalink
Sorry, the last sentence was meant as snark. Guess I don't have the knack of creating the intended tone in online text yet (I really hate smiley faces and the like though necessary). I thought maybe the bold would give it away.
March 31, 2009 12:00 AM | Reply | Permalink
What we have is a vicious circle. The finance industry can hold a gun to the public's head in the form of threatened frozen credit lines. No matter how much cash we throw at them, they can turn the spigot off... but because the spigot can be turned off we have to throw more money at them. And there's no consequences because they can collect taxpayer bonuses or turn the spigot off.
The auto manufacturers can't threaten anything to the US economy that the financial industry couldn't do a thousandfold. Thus, they get the tough medicine while finance is allowed to collude further into a monopoly.
What should have been done was to restructure the banks and use taxpayer bailouts for smaller regional banks/lenders. Get out the anti-trust hammer and smash them to pieces. This was a golden opportunity, an we missed it. Instead, it looks like the Obama administration believes the hype that big banks have the heft to pull themselves out of the hole they dug for themselves.
The banks were weakest right at the start of the administration... and all that was done was to make them the world's largest recipient of welfare that can never turn off because without the welfare the economy will fall apart.
We are now one and all investors in portfolio that despises us. And we don't have the shareholder rights to vote out the management. Disgusting.
March 30, 2009 3:12 PM | Reply | Permalink
Good analysis. Oleeb's revolution is over before it began.
March 30, 2009 4:27 PM | Reply | Permalink
Refreshing to talk politics.
March 30, 2009 3:31 PM | Reply | Permalink
This seems to be symbolic in the sense that the executive is picking and choosing how it is going to exert new found power on the private sector.
This pres they fired gets a twenty mill severance package.
I am not so sure I know how this is going to play out.
March 30, 2009 7:23 PM | Reply | Permalink
"I am not so sure I know how this is going to play out."
Pitchfork carrying people chasing politicians and bankers down the streets.
Just a guess?
March 30, 2009 8:07 PM | Reply | Permalink
I have a hunch that's not the package the UAW is going to get.
March 30, 2009 8:27 PM | Reply | Permalink
I was just watching the Governor of Michigan, I really really like her. Not just comparing her to Palin but comparing her to the Governor of Penn, whom I like and other good dems. She is smart.
And she is lobbying for this union. Like I said, we shall see.
But there are a lot of issues here. The old union members have sold out the newer ones. And when you take into consideration the health insurance issues for the present workers and the retired workers...
Well there are many, many issues here and there is no simple answer. I do not understand, however, why the Administration is sending out messages that the Union is not playing ball.
I do not have enough info.
March 30, 2009 8:38 PM | Reply | Permalink
The union contract may not be realistic given the current situation but I fail to see why the Wall Street bonus "contracts" were any more realistic. Time for some class warfare here. To me, the UAW is symbolic of what's become the decline of the American middle class. Sheesh, Obama couldn't even make good on repealing the tax cuts for the wealthy. We need a political party representing us, because the wealthy already have their own political party! We need some leverage. We need some people willing to bargain on our side for a change. How can we have leverage when the Democrats do the selling out of labor all by themselves!
I don't care what you call it - liberal, progressive, labor, left, green, blue or pink -- but the working middle class needs a political party that will relentlessly respresent the interests of American workers. We're just toast. We've got two parties representing global corporations and global stateless financial interests.
Don't come for the UAW until you've rounded up an equal number of the financial upper class responsible for getting us into this mess. I want to hear about their concessions. I want to hear about how they're going to go without healthcare. I want to hear about how you're going to gut their retirement security.
March 30, 2009 9:35 PM | Reply | Permalink
I am not for any bonus payments to anyone for any reason issued from any company that is receiving monies from the government. I really am not.
And I wish to see a democratic party once again that is relentless in its representation of the working man and woman in this country.
Oh, and I do not want to see anyone getting twenty million in severence and I do not wish to see management getting anything more than the guy or gal working on the line.
And I promise I am not going to gut anybody's pension. But what investments did the union make with those pension benefits. Was it all in the company.
As a matter of fact that brings up another issue.
I think the workers should have an immediate one half interest in the damn auto company.
Maybe that would be the best way to handle this.
Hell give them three quarters.
March 30, 2009 10:00 PM | Reply | Permalink
We need a political party representing us, because the wealthy already have their own political party!
No. They have two. ;)
March 30, 2009 11:59 PM | Reply | Permalink
Yep...and there is the problem for the rest of us in a nutshell.
March 31, 2009 12:11 AM | Reply | Permalink
"DC to Detroit" Was it really DC or is it Obama?
March 30, 2009 10:59 PM | Reply | Permalink
Ford, Toyota, Honda etc are not losing $15 billion a year, like GM. GM has never been run by an engineer, always lawyers and MBA's who get paid multiples of Japanese or European CEO's.
GM rejected new technology going back decades, fought against anything that would cost them a dime in profit, and made crappy automobiles for decades because of poor management and disrespect for their customers that failure was inevitable.
The country could not go on subsidizing GM any longer. The GM stakeholders thought they would be bailed out forever, now they will have to face up to decades of ducking the hard decisions.
The banks may also get their turn at insolvency in the not too distant future.
March 31, 2009 12:26 AM | Reply | Permalink
Maybe they will, and it is very possibly/probable that they will, or maybe they won't. All I am sure of right now is that the auto workers are taking it on the chin...no question about that, no 'ifs' involved in that equation.
March 31, 2009 12:33 AM | Reply | Permalink
I disagree. As of right this minute, it is not a done deal that these guys will go into bankruptcy. Highly possible but not yet a done deal.
Also, it's the bondholders that could blow this entire thing up in everyone's face. That's where the REAL focus should be. The Unions stance is they will not give concessions until the bondholders show good faith and do their share, actually more than their share but that's the crux of the matter so far.
People have every right to be angry but they should focus their anger in the right direction.
GM hasn't seen a profit since 2004. They were given bailout money a few months ago (under Bush) and the company has done worse not better. Who in their right mind would want to continue dumping billions in an entity that obliviously doesn't have it's act together as is?
This and the financial situation are two separate operations. (in terms of business operations, and P/L) Comparing apples and oranges at this point in the juncture seems a waste of time.
March 31, 2009 12:51 AM | Reply | Permalink
Fair enough...I can't argue that.
I will wait until when/if GM goes into bankruptcy and/or Fiat buys Chrysler and turns it into a non-union auto maker before I comment anymore along those lines. I think it is a good bet it'll happen...but you're right, it hasn't yet.
And I see how the financial sector is being handled and how the auto makers are being handled as all part of the economic big picture. Sure the Big 3 had problems before this recession hit but it is this recession that has made them become not viable. So I don't see it as apples or oranges/waste of time...I think it is germane to the whole discussion of what is being done to help the economy start growing again.
March 31, 2009 1:16 AM | Reply | Permalink
Libertine what made them not viable was continuing to design gas guzzlers that piled up on the lots of dealerships. (while gas prices skyrocketed)
And they had a lot to say when it came time to regulate fuel emissions now didn't they?
As I said, GM hasn't seen a profit since 2004. What's that little diddy about doing the exact same thing expecting different results? Greed can corrupt no matter what business it is but stupidity is a sure fire way to fail.
March 31, 2009 1:23 AM | Reply | Permalink
I agree GM (Wagoner) did a lousy job of running that company and should have been out either way...he was not capable of enacting the changes needed. But I still feel in a semi-normal economy they would have been able to hang on, preferably under new management, until they were able to make the necessary changes in how they did business and therefore preserve many thousands of jobs and maybe creating more. But between now and when those changes come to fruition many auto workers are going to lose their jobs, possibly their houses and potentially face economic ruin. Economic downturn or not Obama was going green with our energy policy and Detroit was going to have no choice but to change. The economic downturn has not allowed them the chance to change along with our new energy priorities...
March 31, 2009 1:33 AM | Reply | Permalink
I don't see how unless the new management would have made drastic changes and the problem, there wasn't any new management. We have to deal in facts not theory.
We were not doing half as bad two years ago as we are now. If they had come anywhere close to seeing a profit back then I would possible buy into your argument but the fact is, they have been stubborn and bullheaded for years in terms of making smaller more gas efficient cars. They threw out a few bones hear and there but hell, have you seen the gas mileage on an Escalade Hybrid lately?
March 31, 2009 1:48 AM | Reply | Permalink
I hear you...their track record wasn't the most inspiring thing to behold. But in an age of a shrinking US manufacturing base, and the loss of the correspondingly smaller amount of good paying jobs that go along with what's left of that base, I think it would have been worth the effort to go the extra mile to keep them going.
It is all moot now...I am pretty sure they won't be able to hang on now that it appears the US government is bailing out on them.
March 31, 2009 2:00 AM | Reply | Permalink
Back in the 70's when we were all sitting in line on even and odd days was the time they should have gotten the wake up call but they didn't. I'm sorry but the auto industry doesn't have my sympathy, the workers do but not the giants.
I drive an American car at the moment but the truth is, the BEST car I ever had was a Toyota. Kept if for 12 years sold it for 1500 with 178k miles on it. Only major problem I had was replacing the struts. Heck it was a 6 cylnder and I drove on 4 from NC to Vegas and didn't even realize it until it cut off as soon as I came out of Hoover Damn. Now THAT'S what I call a dayum great car!!!! :)
From what I can tell the Prez wants to do everything humanly possible to help the workers out but let's face it, the giants have run the company into the ground (and have been doing it for years) I read, although I haven't fact checked, that Henderson was either in the process or had already purchased a plant in Brazil. Does that sound like a man who was thinking about American workers?
No one is going to walk away 100% with everything they want. The fact that employees have to possibly give up more than they have sucks but nothing from nothing leaves nothing if, everyone doesn't come to the table with concessions.
March 31, 2009 2:00 AM | Reply | Permalink
The Prez says he doesn't want to walk away, I believe him but if they don't come up with something (and in truth they have had years to figure it out) what's the choice? Dayumm if you do, dayum of you don't. Sound familar?
March 31, 2009 2:03 AM | Reply | Permalink
crap, familiar...sorry it's getting late. Nite :)
March 31, 2009 2:04 AM | Reply | Permalink
con't
In terms of severance pay. As far as I can tell that's not going to come out of taxpayers money. The government funds GM received was eaten up almost as soon as they received it. Although we probably paid for those first class jets Mr. Henderson so arrogantly tried to justify to Congress not to long ago. Looks to me shareholders will have to eat that 20 mill on the chin and if you're a shareholder, where the heck was your anger a year ago, two years ago?
Henderson has been doing basically the same thing year after year for the last 5 years with the exact same results. It was the shareholders that allowed him to stay. The Prez says, thanks but no thanks and everyone wants to get pissed with him? Give me a break!!!
March 31, 2009 1:14 AM | Reply | Permalink
Des:
It is easy to see why Detroit would be handled differently than Wall Street. First you have to accept that Obama doesn't want to have to bailout ANY OF THEM. Once you accept this is likely the case, then the most rational and simple explanation is that the banks and AIG present a systemic risk to the entire economy, while Detroit presents only a sectoral risk. If the banks fail, the whole economy fails. If Detroit fails, while a huge blow to the manufacturing base of the country, it doesn't crash the entire U.S. economy. The fact that the president committed so much tax funds to help Detroit in the first place proves that he perceives their value to the country.
It's really become quite tiresome that you, Lalo and some other former (or, should I say, current) Hillary Clinton supporters are displaying as much anguish over the outcome of the election as are the REPUBLICANS! Just as with the GOP, it seems to me that your contempt for President Obama is overriding your higher mental processes. While we often disagree, I have always recognized that you, Lalo, and Billy G. (where ever he is now) are intelligent and skilled writers. I'm certain that you could have easily expressed your concerns about Obama's Detroit actions without the irrational venomous contempt you made sure was dripping from your post. That only detracts from any valid points you may actually be making.
March 31, 2009 11:01 AM | Reply | Permalink
Obama committed the tax funds to Detroit, or Congress/Bush did back in 2008? The auto makers asked for $34 billion in December. Instead they were given $13 billion with another $4 billion to come in February. So much for committing lots of money to Detroit. AIG got $85 billion, then up to $150 billion, and now up to $170 billion total. I'm happy Obama is the sole arbiter of which bailouts are systemic and which are sectorial risks, which indigent companies get to come back for more and which are stiffed, and now gets to be the decider on corporate management staffing. I'm sure he learned this teaching constitutional law.
I find it ironic that the folks in Michigan didn't get to vote in the Democratic primaries, something that quite a few are regretting today - no representation for the 8th most populous state, and it also means that Obama went into the presidency without having to make any appearance before or promises to that state. Since labor/UAW is taken as de facto Democratic bloc voters, all leverage was gone. Elections have consequences, and lack-of-elections have consequences too.
If you want to discuss systemic risks, discuss our over-reliance on oil, our inability to change CAFE standards, our continual lack of addressing the leftover burden of 1960s benefits in a 2008/2009 competitive field (i.e. all legacy companies are screwed), our inability to confront health care which unduly affects manpower-intensive industries, our subsidies/giveaways for defense, agriculture, oil, big pharma, finance & housing, but our insistence that Detroit has to play by market rules. (Laughably we do something similar with Amtrak, while subsidizing the competition - airports, highways, guaranteeing the low price of oil, etc.)
Venomous? No, I'm just being normally cuttingly ironic. The long knives are still sheathed. Writings on Bush & Cheney and cronies were 100x more pointed. But thanks for being sensitive - we need your type around.
March 31, 2009 11:34 AM | Reply | Permalink
From openleft.com -
"[White House officials] have more confidence in the leadership on the banking side - that there are people in place who understand what went wrong and the steps necessary to deal with this disaster."
....
Sirota and others point out that much of this is tied up in the personality of Steve Rattner, the hedge fund manager that is overseeing the auto company bailout/restructuring.
http://online.wsj.com/article/SB123845917380171771.html
Via OpenLeft: "DETROIT -- President Barack Obama's recovery plan for General Motors Corp. and Chrysler LLC appears to take aim at union retirees, a usually reliable Democratic constituency. After studying the plight of the companies, the president's auto task force concluded GM and Chrysler's survival is dependent on greater concessions from the United Auto Workers union."
Just to get us back in perspective, we're talking $8 trillion in bailout, but only $17.4 billion for Detroit (half of what they asked), which comes to about 0.22%. Yes, zero-point-two-two percent, 1/500th of our bailout. And I'm glad some hedge fund schmuck knows what Detroit needs to do - screw the retired line workers. Guess that's why he pulls down the big bucks.
http://www.politico.com/news/stories/1208/16620.html
And just remember, those left wing progressives complain too much.
March 31, 2009 11:52 AM | Reply | Permalink
Thanks, for the kind words, Des. I'm afraid I'm rapidly wearing out my welcome over at DailyKOS, though. They actually censored one of my comment threads today because, "while they didn't disagree with my point, they found it absolutely horrible". Wow, I didn't know I had it in me!
March 31, 2009 2:50 PM | Reply | Permalink
The Kos site has a low tolerance or understanding of "horrible". The responses to my postings at Kos & OpenLeft have been something short of hospitable, and Huffington Post managed to ban me and after numerous occasions of discussing with them could never get an inkling. I think it was noting that everyone kept beating up on Hillary because she supported Goldwater at what, 16 years old, while Arianna supported right-wingers well into the 90's. Mustn't point accusations at the Queen Bee.
March 31, 2009 4:04 PM | Reply | Permalink