I vote for bailout with serious concessions and stipulations to have some "dream" they could pull out of their position. I believe Ford and GM need to be saved.  Not so positive on Chrysler.  That company has been bailed, sold, plundered of cash, sold to go private, rolled back out-its been an economic football endlessly exploited.  its capitalism gone stupid through endless exploitation.  Roll it into one or the other two cheaply I say! 

 

Other Changes include:

 

Some sensible (does not mean pay them $6.25 an hour) wage concessions from older workers, acceleration/resolution of legacy transfers already negotiated preserving as much as possible, severe downsizing of management and their pay and options including changing of some of the leaders here (Wagoner needs to be downsized), collateral provided to back up the loans (property/plants), written commitments to move these companies "more" green-they need to stop living in their total SUV and energy fairy tale (we need to get more out of each car-relates to energy consumption), reduced number of models on the assembly lines (bloated), and goodbye to dividends off these tickers until/if righted

 

As somebody who was born and lived in Michigan I believe I understand the awesome impact this would have in the Midwest if not saved.  The job losses would be catostrophic (millions heading to the unemployment office and straight to your pocket anyway) especially in this current serious economic crisis! The south or the west or the east will not be immune from this! 

 

This would also destroy any future serious manufacturing base we would have if (god forbid a time of real war were upon us and we needed it).  This would impact all car companies as well including many more states than Michigan. The parts supply chain is national and international.  Thats a side effect of globalization.  Toyota, Honda, and Nissan use the same parts supporting system-it would all fall into disarray.

 

I understand peoples reasons for saying just let this fail, but in the end it is bound to affect all including investors here and lets face it-we are far from a free market capitalist system currently.  You can kiss whats left of your market goodbeye for years, if you let them die!  Bankruptcy options will not resolve this problem.  You can clean out all the workers, stiff all vendors and suppliers and you will simply have the same net result.  Damage to our economy that we can not afford now!  Nobody will be able to buy cars in thius scenario-its too big!

 

Compared to what we have spent in Iraq, Katrina, financial company bailouts, SS and Medicare, this is really a drop in the bucket.  One can let ideology rule your thought processes here or you can practically understand that America can not take this hit at this time.  The middle class can not take this hit at this time.  We must be concerned about all our people!

 

In the end all would have to sacrifice and as long as their are endless corporate layoffs across the spectrum, its clear auto sales are not coming back soon (Toyota just cut back production).  Labor costs are just one factor in the auto industries plight.  Some have been management decisions, and some is out of their control.

 

This decision is REALLY about the middle class.  You keep beating them up in this manner you will have a fullblown depression on your hands.  Your market will be dead and so will be America!  Doesn't mean it will work-but I think we need to try!

 

In the end, the truth is, even with all US workers making minimum wage we still can't compete with Vietnam workers (they will do it for a bag of rice) and nobody would be able to buy anything. Keep it up and thats where we are headed.  If we save banks and let this die, then I will always love America, but I won't be very proud of her (greed run wild will have totally won over some essence of a common American goal), and I will surely watch over her slow and quickening demise!

 

Choose.  An America that has some common purpose or an America that says Darwin was an idiot while practicing economic Darwinism with no balance!

 

To me this vote is much more important than the elections just past!

 

JMO and the last I will say on this!  If I have not convinced you, then I hope you do not learn the reality the hard way.

 

Kutz 

Thank you for your replies Kutz, Macro and Trader.

 

Kutz, your post stopped me in my tracks and I have been thinking about your arguements, not done yet and imo so far, once down this slope, where does it end?

 

From what little I've read (and it's been Very little - work is crazy busy now) the leaders of each of these companies have been appealing to members of Congress for help. Have any of them come up with a cash flow plan, have any of them come up  with a comprehensive plan of action?

 

 

Cash flow is king in these situations, if there is no cash plan, or one that doesn't hold water, things would be even worse if the government bails them out.

 

Also, who's to say that another company won't step in and fill the gap left by the 'big' three......

 

Been:  Chapter 11 is about more than cutting workers and negotiating legacy payments, and downsizing wages.  Thats bad enough-there go the workers house, credit card payments, and car payments back into the a stressed system already reeling. 

 

Its about all the suppliers too. The same suppliers who do much of Honda and Toyota work too! they don't ship all their parts from japan to SC to assemble their cars.  Lots of parts come from here in the US!  Their terms will be re-negotiated (already pimped by a larger auto company on margins) and outstanding money owed to date paid at an un-godly low rate (a few percent) of what is owed and where 1-2% difference is the difference between a viable supplier and a dead supplier. 

 

Chapter 11 allows for this and you won't be able to stop that!  A judge will decide the rate!  These part suppliers will not survive that hit or any real hit and they employ more people than the already downsized  Big Three!  There are tens of thousands of these small and mid-sized companies in almost every state providing everything from headlights to car lighters, knobs, steering wheels, fabric, leather, handles-------its endless.

 

Then it will ripple into the plastics industry.  Then it will ripple into the steel industry!  then the tire industry, the auto sales industry!  Endless jobs will be lost along the way.

 

Toyota and Honda and Volkswagon are not going to make up this difference. They are not crazy! There will be less choice.  Remaining companies will be even freeier to raise prices.  Again in many instances foreign companies use the same suppliers-they would have their own serious and debilitating production problems to contend with.

 

In college (summer job) I used to throw John Deere and Catapellar wheel housings off a GM foundry line.  These companies are all linked in ways you can not imagine!  What happens to GMAC loans in bankruptcy.  What about parts down the road for cars that need to be fixed?

 

I agree if they are saved we need more answers, more accountability, a profound change in how both management and unions work. beat them into it  In the end we may just be postponing the inevitable, but we don't want the brunt of this coming down now.  This economy is at the precipice!  We have already prostituted capitalism to get where we are.

 

I can't answer the "where does this end"?  It started with corporate nonsense that was allowed and ignored and its grown into a giant animal with unweilding unions to this day. 

 

Its newer on the financial side, but old stuff with say Chrysler.  Knowing what we know now, why was it ever allowed to be sold and financially plundered by the Germans. It wasn't that hard to figure out what would happen-then they dumped it off.  Now whats left is a beat up old football thrown around where everybody used it instead of grew it!  I think Chrysler needs to go (folded in) to save the other two-they had their chance!

 

We can give them the cash with serious strings OR we can capitalize our unemployment system and then ultimately Medicaid, because I fear thats where these worker who lose will go next!  They won't just disappear into the night!   Bet we will end up paying more that way-way more and faster than we think!

 

Wallstreet is less than immune to all this-nobody will escape this!  None of us!  Therefore I am not absessing about the meaning of capitalism.  Sombody smarter than I needs to start assessing the real calamity here.  I am only touching the surface!

 

JMO

 

Kutz 

 

My opinion on the auto makers is the same as my opinion on the Airlines, banks, and builders...

I don't believe public funds should be used to bail out these companies with failing business models, greedy management, and inflated compensation and retirement packages... When it comes to the collateral damage mentioned above, I'd rather let the chips fall where they may instead of rewarding these jokers and perpetuating these type of business practices...

When you find you are in a hole... quit digging...  

Too late-genie is out of the bottle and she has her whip in hand!  Financial companies think they need a trillion more!-You don't say-No problem!  You are now in the last throes of this election cycle bondage! 

 

I just love this sick market-for years when companies laid off workers their PPS often went up after doing so, BUT when the unemployment rate shoots up, Oh the sky is falling-sell sell!  Talk about oxymorons!  Duh! 

 

I may be a sick bastard, but this market is full of them and they have the economic brains of peas!!  They want to destroy their market once and for all-let em go for it! 10s of millions will stay out of this developing piss hole for years!

 

Lets add 500,000 workers to todays reporting of unemployment numbers, then what is the market going to do?

 

Just some rambling thoughts!  Can't have it both ways!  We have been trying to do just that for too long-its caught up to us!

 

Kutz 

Trader:  Lets hope you are not going back to work!  Good thing I got the damn tube turned off!  I think i am spending the afternoon planting bulbs!  Crisp late fall day!

 

Kutz 

 

http://www.cnbc.com/id/28111911 

On Sunday, the lead senator on the bailout legislation, Banking Committee Chairman Christopher Dodd, said it was time for GM Chief Executive Rick Wagoner to step down.

"I think it's clear GM is in the worst shape. Chrysler is, I think, basically gone," Dodd said on CBS's "Face the Nation." He said GM and Chrysler should probably merge.

 

True Kutz... the new Volt they have comming out costs 40 grand... these people have no clue

Armchair:  I am sure all the laid off auto workers will run out and scoop one up with their bar money!  See this stuff feeds on itself.  Are they even assembling it in America!  Can't sell it to broke people. 

 

Every person they lay off cuts their own throat even further!  Expand it to America as a whole.  A downward cycle-lay off 20% of your workforce downgrade your projections horde your cash.  When the PPS does not go up. -Wash and rinse again!  Until theres nothing left-that describes Chrysler! 

 

They don't even have a good battery system for this Volt yet.  I don't want an electrical car for another -510 years when Vandium batteries come out.  Don't want to be an auto guinea pig!

 

Does GM have a hybrid thats not a SUV-No-they can't help me.  Their done!  Thats the squirrels fault!  Nobody else!  Time for CEO forsight was 5 years ago.  Remove him and tell him his retirement benefits are a legacy drag on the company-take them away and give him a dunce cap in place of a watch!  better yet give him a new Volt!

 

Kutz