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chaloobi
SFN Regular
1620 Posts |
 Posted - 11/19/2008 : 11:46:02
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Here in Michigan the economy's more like in depression than in recession. The auto industry's been in decline for some time and the state government's been unable to diversify the employment base much, despite (apparently) valiant efforts. Now it's clear that the double-whammy of the sudden dramatic spike in gas and then the credit crisis/huge recession has all but killed GM and Chrysler and Ford's not much better off. So what is it with Republicans and the auto-industry - why do they so stubbornly refuse to help?
I have a theory. From a political stand point - and politics trumps everything in the Bush Administration - the auto-industry and Michigan are the enemy. Michigan didn't go Republican in either election and the UAW is always pro-Democrat, though much of their membership (incomprehensibly to me) feels otherwise. I believe the Bush administration took a reap-what-you-sew attitude and basically told Michigan and the Big 2.25 to fuck off, offering absolutely no help and no consideration at all when forumlating policy. And they still feel that way now and probably hope they can force GM into bankruptcy in order to both hurt Michigan and skewer the UAW, which will find it's contract more or less voided.
There is a lot wrong with management at the Big 2.25. There is a lot wrong with the UAW. There is a lot wrong with their unholy, dysfunctional marriage. But these companies arn't near death due to those problems, but because of the horror's of sudden $4.25 gasoline and the crashing economy. No management could have prepared their company for this kind of thing and it's absurd to say the company's deserve bankruptcy because of bad planning.
If these companies go down hard, it will hardly be just Michigan and the UAW that get run through a meat grinder. There's a LOT of people all around the country - the world - who depend on the US auto-industry for their daily bread. I'm realing with the willingness of so many people to let so much harm come to pass based on callous ideology, spite and/or vengeance.
Here's a link to an arcticle addressing some of the common misconceptions about the domestic auto-makers. I hear many of these complaints in interviews with people who don't support loaning the companies money and there's plainly a lot of ignorance out there.
http://www.courier-journal.com/article/20081117/BUSINESS/81117032/-1/rss
Any thoughts on this issue? I put it in politics because I believe political ideology/policy is behind the willingness, the desire even, to see the Big 2.25 go down hard. But I don't believe Republicans have the best interstes of the American people on their mind. And I don't believe it's in our national interests to let this thing play out that way.
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-Chaloobi
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H. Humbert
SFN Die Hard
USA
4574 Posts |
Posted - 11/19/2008 : 12:12:09 [Permalink]
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Originally posted by chaloobi
There is a lot wrong with management at the Big 2.25. There is a lot wrong with the UAW. There is a lot wrong with their unholy, dysfunctional marriage. But these companies arn't near death due to those problems, but because of the horror's of sudden $4.25 gasoline and the crashing economy. No management could have prepared their company for this kind of thing and it's absurd to say the company's deserve bankruptcy because of bad planning. |
This is where I think most people would disagree. Forecasters had been warning for decades that the auto manufacturers needed to start building more fuel-efficient vehicles to cope with the impending approach of peak oil. The auto companies were the ones who instead fought every minimum mpg standard the federal government tried to enact and flooded the market with gas guzzling SUVs. The auto makers are near bankrupt now because they put all of their resources into that losing formula. The recession caught them with their pants down, no doubt, but to say they couldn't have planned better for this inevitable downturn is absurd. Notice it's just the American car companies that are at risk of complete bankruptcy. Foreign companies planned better and invested in more forward-looking vehicles.
That said, I think the federal government will eventually give in and help out the auto companies. The feds just want them to sweat it a bit. After all, it is bullshit that these automakers need to be bailed out again. The government should not be in the business of corporate charity. I think many lawmakers legitimately see the American auto industry as a relic of a past age and a lost cause. They see propping up it up as merely postponing the inevitable. But there are a lot of jobs on the line, and I think for that reason the government will eventually (but reluctantly) step in and pump in enough cash to keep them afloat.
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"A man is his own easiest dupe, for what he wishes to be true he generally believes to be true." --Demosthenes
"The first principle is that you must not fool yourself - and you are the easiest person to fool." --Richard P. Feynman
"Face facts with dignity." --found inside a fortune cookie |
| Edited by - H. Humbert on 11/19/2008 12:13:33 |
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Paulos23
Skeptic Friend
USA
446 Posts |
Posted - 11/19/2008 : 12:19:55 [Permalink]
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The UAW is part of the problem as well. Including huge pensions to pay off for workers, high salaries, and high benefits. If the unions where not so strong and pig headed all of these would have been reduced long ago.
Currently, it costs the American companies about $75/hour per worker (and that factors in the cost of pensions and benefits), where as the foreign automakers in the states pay about $43/hour. That is a big difference, and it is hurting the American companies.
Personally, I think they should let one of them fail and sell the departments and factories to smaller car companies trying to start up in the US. |
You can go wrong by being too skeptical as readily as by being too trusting. -- Robert A. Heinlein
Facts do not cease to exist because they are ignored. -- Aldous Huxley |
| Edited by - Paulos23 on 11/19/2008 12:37:03 |
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Gorgo
SFN Die Hard
USA
5310 Posts |
Posted - 11/19/2008 : 12:48:49 [Permalink]
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Seems like that if the government were going to spend large amounts of money because they're worried about the workers, it would spend a lot of money on things like education, housing, health care, food, retraining, and public transportation, to name a few. That's the kind of thing laid off workers need. Corrupt car company CEO's are the one's that need the big car companies bailed out.
If the car companies are such a huge national interest that we need to bail them out, and we can't nationalize them, then we need to have the taxpayer's get a share of the companies, make sure the right people get fired, and have some control over how things are repaired, and make sure the taxpayers get their money back first.
I'm not sure that we need to talk about how one union is too strong, I wonder rather if we need to talk about how the rest of them aren't strong enough. |
I know the rent is in arrears
The dog has not been fed in years
It's even worse than it appears
But it's alright-
Jerry Garcia
Robert Hunter
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chaloobi
SFN Regular
1620 Posts |
Posted - 11/19/2008 : 13:08:28 [Permalink]
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Originally posted by H. Humbert
This is where I think most people would disagree. Forecasters had been warning for decades that the auto manufacturers needed to start building more fuel-efficient vehicles to cope with the impending approach of peak oil. |
But while gas was cheap, few people were interested in small cars or the added expense of fuel efficient technology. Does it make sense to stop building the profitable vehicles that the market really wants and instead invest in developing a host of products nobody wants to buy with technology nobody wants to pay for? Also, nobody anticipated the sudden enormous increase in gas prices. I don't know what they were thinking but I have to assume they expected that if gas prices went up they would have time to develop fuel efficient product.... But the price of gas isn't what ultimately killed these companies anyway - they're dying because the market dropped by 40% in 2008 in a year they were already in the red over the rise in gas. | The auto companies were the ones who instead fought every minimum mpg standard the federal government tried to enact and flooded the market with gas guzzling SUVs. The auto makers are near bankrupt now because they put all of their resources into that losing formula. The recession caught them with their pants down, no doubt, but to say they couldn't have planned better for this inevitable downturn is absurd. |
You make it sound like this is just a run of the mill down turn, but it's not. Nobody credible ever would have predicted the price of gas would go crazy the way it did and nobody would have predicted the financial system would seize up sending the economy into a tail-spin unprecedented since the great depression. This is not something a company can reasonbaly plan for. A few other notes - the auto companies didn't put all their resources into that formula (see the link in the OP), and that formula was a winning formula up until a year ago - it's only losing in hindsight, and note that all vehicle sales are down across the board, not just SUVs so even if they had more small cars they could easily still be in the trouble they are now. | Notice it's just the American car companies that are at risk of complete bankruptcy. Foreign companies planned better and invested in more forward-looking vehicles. |
They also don't have to provide health care for their employees, don't have the huge numbers of retiree's to support, don't have the very poorly negotiated labor contracts, and have protections for their domestic markets. There's a lot of reasons why the foreign car companies are doing better, and not all of them can you blame on Big 2.25 management.
I don't believe for a second these companies have not been mismanaged over the years. But again, that's not the biggest reason they are in such trouble right now. Nor is it a good reason to let them die and cause the loss of so many jobs.
| That said, I think the federal government will eventually give in and help out the auto companies. The feds just want them to sweat it a bit. After all, it is bullshit that these automakers need to be bailed out again. |
The only one that was bailed out before was Chrysler, with government loans, and they paid back all their loans with interest. Why is that bullshit and why should Ford and GM be punished for it if it was??? | The government should not be in the business of corporate charity. |
No, but the government should be caretaker of the economy and have the best interests of it's citizens underlying all it's policy. I don't see how letting these companies die a sudden ugly death, with the economy the way it is right now, can be in any way described as being a responsible caretaker for the economy. | I think many lawmakers legitimately see the American auto industry as a relic of a past age and a lost cause. They see propping up it up as merely postponing the inevitable. But there are a lot of jobs on the line, and I think for that reason the government will eventually (but reluctantly) step in and pump in enough cash to keep them afloat. |
Many no doubt think this way but I question the legitimacy of it. |
-Chaloobi
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chaloobi
SFN Regular
1620 Posts |
Posted - 11/19/2008 : 13:15:09 [Permalink]
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Originally posted by Paulos23
The UAW is part of the problem as well. Including huge pensions to pay off for workers, high salaries, and high benefits. If the unions where not so strong and pig headed all of these would have been reduced long ago.
Currently, it costs the American companies about $75/hour per worker (and that factors in the cost of pensions and benefits), where as the foreign automakers in the states pay about $43/hour. That is a big difference, and it is hurting the American companies.
Personally, I think they should let one of them fail and sell the departments and factories to smaller car companies trying to start up in the US.
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The union contract would never have gotten so bad - and it is bad in many ways - without management's concurrance. The contract is negotiated afterall.... When things were going great, past management let all kinds of crazy things into the contract and now that things are going bad they are locked into it. This is where you can blame the UAW for not giving some back , but keep in mind UAW officials are elected and who's going to vote for the guy that let the company cut your pay and benefits in half? It isn't a simple thing.
Note that some of the costs the companies pay for US workers is because the US doesn't have a sensible health care or pension system. But the foreign competitors don't have those costs to deal with, since their governments are 'socialist.'
I think letting them fail at this time would be a horrible mistake. |
-Chaloobi
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chaloobi
SFN Regular
1620 Posts |
Posted - 11/19/2008 : 13:16:56 [Permalink]
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Originally posted by Gorgo
Seems like that if the government were going to spend large amounts of money because they're worried about the workers, it would spend a lot of money on things like education, housing, health care, food, retraining, and public transportation, to name a few. That's the kind of thing laid off workers need. |
No, the kind of thing laid of workers need is a job. The rest of that comes with having a good job. |
-Chaloobi
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Gorgo
SFN Die Hard
USA
5310 Posts |
Posted - 11/19/2008 : 13:45:23 [Permalink]
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The rest of that comes with having a good job.
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Sure, but they seem to be about bailing out the wealthy while the good jobs go elsewhere, and union is somehow a bad word. The unions didn't send good auto company jobs to Mexico, that was Clinton. |
I know the rent is in arrears
The dog has not been fed in years
It's even worse than it appears
But it's alright-
Jerry Garcia
Robert Hunter
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chaloobi
SFN Regular
1620 Posts |
Posted - 11/19/2008 : 14:14:38 [Permalink]
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Originally posted by Gorgo
The rest of that comes with having a good job.
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Sure, but they seem to be about bailing out the wealthy while the good jobs go elsewhere, and union is somehow a bad word. The unions didn't send good auto company jobs to Mexico, that was Clinton.
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#1. If they give loans to the auto companies to get them past this downturn, it won't be bailing out rich people. It will be keeping literally hundreds of thousands of people working, and not just UAW guys either. There are more people working for suppliers than working for the Big 2.25. Then there are the dealers to consider, and the trucking companies that move parts between suppliers and the company plants on a daily basis, and all the restaurants, stores, service providers, ad nauseum that stay in business based on what all these people buy...
#2. Union is not a bad word. The truth is that unionization took auto-workers out of terrible working conditions for crappy pay and won them fair wages & benefits, reasonable working hours, and safe factories. And even today in the transplant factories, those guys have better wages and benefits because of the fear they might organize under the UAW. But the UAW went too far and management went along. Believe me, I have seen things that would make the most staunch socialist shake his head in disgust. But that doesn't mean you throw the union baby out with the bathwater. There IS a happy medium out there.
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-Chaloobi
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| Edited by - chaloobi on 11/19/2008 14:15:14 |
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Dave W.
Info Junkie
USA
26022 Posts |
Posted - 11/19/2008 : 14:14:44 [Permalink]
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I think the American auto companies are doomed. They won't consider bankruptcy because Chapter 11 can easily turn into Chapter 7, and people want six-year and extended warranties on their cars, but if the company might not exist after one year, what good is it?
Eventually, people are going to realize the same thing about the bailout. They're looking at $25 billion right now, and if they meet a whole bunch of conditions, they'll get more money next spring. Even slightly cynical car buyers are going to look at those conditions and say, "yeah, right."
My Saturn is getting close to dying. When it does die, I'm buying a Toyota Yaris. Primarily because of the gas mileage, secondarily because of its cheapness, but tertiarily because I've got a good feeling that Toyota will be in existence throughout the life of the warranty, without many billions in US taxpayer aid. |
- Dave W. (Private Msg, EMail)
Evidently, I rock!
Why not question something for a change?
Visit Dave's Psoriasis Info, too. |
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Paulos23
Skeptic Friend
USA
446 Posts |
Posted - 11/19/2008 : 14:23:55 [Permalink]
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Originally posted by chaloobi
The union contract would never have gotten so bad - and it is bad in many ways - without management's concurrance. The contract is negotiated afterall.... When things were going great, past management let all kinds of crazy things into the contract and now that things are going bad they are locked into it. This is where you can blame the UAW for not giving some back , but keep in mind UAW officials are elected and who's going to vote for the guy that let the company cut your pay and benefits in half? It isn't a simple thing. |
Agreed, but UAW should have given some back. I agree workers don't want to vote in someone that would lower their benefits or pay. But I have known unions that have done that and have thrived for it. It is all in how long term the union leadership is willing to look.
Note that some of the costs the companies pay for US workers is because the US doesn't have a sensible health care or pension system. But the foreign competitors don't have those costs to deal with, since their governments are 'socialist.' |
Maybe, but the cost I quoted was for workers of foreign companies work here in the states. These factories never unionized and they are still paid a fair wage and get some benefits (mostly because the companies know better then to abuse their workforce). There is no reason the UAW couldn't decrease their demands to something close to that.
I think letting them fail at this time would be a horrible mistake.
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Short term, I agree. But just bailing them out is not the answer either. These companies need to change, and just giving them a loan or a payout will just reward them for bad choices. We need to force them to change, or give them the chance to change and penalize them if they don't. These companies claim to be so far behind the curve, and yet there are companies that sell cheaper, work tighter, and just deliver a better product for cheaper. That became clear to me the last time I went car shopping. |
You can go wrong by being too skeptical as readily as by being too trusting. -- Robert A. Heinlein
Facts do not cease to exist because they are ignored. -- Aldous Huxley |
| Edited by - Paulos23 on 11/19/2008 14:25:02 |
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Kil
Evil Skeptic
USA
13477 Posts |
Posted - 11/19/2008 : 15:18:04 [Permalink]
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I would do the bail out, with strings attached, and keep my fingers crossed. There are just too many jobs at stake. And I would not hesitate to buy another Ford Ranger. My last two were great trucks, so I am happy that way, plus I would be putting my money where my mouth is, at least in part so they don't go under.
American cars aren't crap anymore. There were bad decisions about what cars to make but lets not forget that Japanese automakers are taking big hits too.
I would hate to see us lose our last big manufacturers. And I think that letting them go under would adversely effect an already bad economy. |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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Gorgo
SFN Die Hard
USA
5310 Posts |
Posted - 11/19/2008 : 16:16:51 [Permalink]
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You know and I don't, then. I had this discussion here with someone about a local GM plant where we heard all kinds of stories about people playing cards all day. My guess is that for every union person actually playing cards there were four management people on a distant golfing trip. But, I don't know that. |
I know the rent is in arrears
The dog has not been fed in years
It's even worse than it appears
But it's alright-
Jerry Garcia
Robert Hunter
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moakley
SFN Regular
USA
1888 Posts |
Posted - 11/19/2008 : 16:38:20 [Permalink]
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My father in law was floor management at a Corning Glass plant in Bluffton, In. Prior to the plant's closing nearly 25+ years ago they had a 20% absentee rate. Costs were just too high. They gave him the task of closing down operation and eventually keeping the building in shape for sale. So he still had 20 or so people working. One day he asked one fellow to help with the moving of some equipment. The guy refused claiming that he was an electrician. Since this guy was union it took a little work, but my father in law made it possible for this guy to have a lot more time on his hands to look for meaningful work as an electrician.
I guess you just don't know what you got 'til it's gone |
Life is good
Philosophy is questions that may never be answered. Religion is answers that may never be questioned. -Anonymous |
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filthy
SFN Die Hard
USA
14408 Posts |
Posted - 11/19/2008 : 17:48:01 [Permalink]
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Hmm. I'm in agreement with the loans with not just strings attached, but chains & manacles. Our current crop of upper management is not to be trusted -- witness the round of AIG (not to be confused with Ham's Hootenanny) partying with their cut of the bailout.
We will know that the economy is getting well when the mill-hands start driving new vehicles. We will know it has recovered when those vehicles are American built.
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"What luck for rulers that men do not think." -- Adolf Hitler (1889 - 1945)
"If only we could impeach on the basis of criminal stupidity, 90% of the Rethuglicans and half of the Democrats would be thrown out of office." ~~ P.Z. Myres
"The default position of human nature is to punch the other guy in the face and take his stuff." ~~ Dude
Brother Boot Knife of Warm Humanitarianism,
and Crypto-Communist! 
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Paulos23
Skeptic Friend
USA
446 Posts |
Posted - 11/19/2008 : 18:04:14 [Permalink]
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Originally posted by Gorgo
You know and I don't, then. I had this discussion here with someone about a local GM plant where we heard all kinds of stories about people playing cards all day. My guess is that for every union person actually playing cards there were four management people on a distant golfing trip. But, I don't know that.
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I have heard those stories as well, but for pipefiters. I think every union has stories like that against them. All I know is that with my Dad's union (Sheetmetal workers/tinsmiths) if you didn't show up, or goofed off, or showed up and there was no work you didn't get paid. But then that was the construction trade and they might be doing things different in the auto making business. |
You can go wrong by being too skeptical as readily as by being too trusting. -- Robert A. Heinlein
Facts do not cease to exist because they are ignored. -- Aldous Huxley |
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Killing the car companies
