Big 3 Automaker Bailout

[JohnHenry]

Execs from the Big 3 have reaffirmed my long standing opinion of them... arrogant jerks who are out of touch with their customers (who also happen to be taxpayers.)

I would have to produce a business plan if I wanted a loan for a lawnmower and a trailer to start a grass cutting business. How dare they show up for a congressional hearing, begging for billions of dollars, without having given any thought to how they intend to constructively spend the money?

If I were not so concerned for their hard working employees, I'd say screw 'em.

 

[blk45]

One of the largest problems GM is faced with is that 55% of their payroll expensess funds retiree benefits -- (in 2003, this amounted to aprox $2500/vehicle built) filing bancruptcy will help eliminating this debt (sorry harry444 ). Also, and some will take offense, but as mentioned -- drop UAW.

I know there is a lot more to it than these simple suggestions, but one of the things that I think has to be done (if they are going to get financial aid), is drastically reduce the money that the CEOs and other high payed Execs get. I have the utmost sympathy for the employees and don't want to see the companies fail because of the impact it would have on all of those people and their families. I'm going from conversation, so if this isn't completely factual, I apologize. Back in the day, Lee Iacocca asked for a "bailout" and agreed to make $1 per year until the money was payed back. If these Execs truly want to save the companies, and not just their extremely inflated paychecks, that should be one of the terms. They all receive very minimal salaries until the companies get back on their feet. I also think it is absurd that they all spent about $20k each to fly there in their private jets. I know 20k is a spec compared to the amounts they are dealing with, but it is principle. They aren't even trying to help themselves. Every thing was hunky dory when they were making money hand over fist. I don't recall them trying to help us consumers, they just kept jacking prices up even though the value of the cars was not going higher, in most cases, it was getting worse.

Also, as mentioned, they need to trim the fat. I don't want to offend anyone, because I'm sure that the employees have worked hard for what they feel they have coming to them, but I think they need to make some drastic cuts in that area as well. As dr detail mentioned, it is absurd the amount of each car that goes to cover that. I look at it this way, I think the employees would rather receive some of what they feel they are "owed", versus nothing at all-losing their job.

This whole bailout thing cracks me up. I'm sure there are certain situations where it makes great since to help companies out, but for the most part it is ridiculous. I was raised to take care of myself and be accountable for my own actions. If I got myself into financial trouble, I had to get myself out. It is amazing to me how many people in today's society think that it is other people's job to take care of them and help them out when they get into a pinch. Let some of these Execs face responsibility and repercussions for their actions. There are a lot of people that need a serious reality check.

That's like one of the companies that already got bailed out. Right after they got their check, some of the Execs took a weeks vacation that cost the company $450k!!! Pathetic!

Climbing off my soapbox.....

 

[dave40co]

I know there is a lot more to it than these simple suggestions, but one of the things that I think has to be done (if they are going to get financial aid), is drastically reduce the money that the CEOs and other high payed Execs get. I have the utmost sympathy for the employees and don't want to see the companies fail because of the impact it would have on all of those people and their families. I'm going from conversation, so if this isn't completely factual, I apologize. Back in the day, Lee Iacocca asked for a "bailout" and agreed to make $1 per year until the money was payed back. If these Execs truly want to save the companies, and not just their extremely inflated paychecks, that should be one of the terms. They all receive very minimal salaries until the companies get back on their feet. I also think it is absurd that they all spent about $20k each to fly there in their private jets. I know 20k is a spec compared to the amounts they are dealing with, but it is principle. They aren't even trying to help themselves. Every thing was hunky dory when they were making money hand over fist. I don't recall them trying to help us consumers, they just kept jacking prices up even though the value of the cars was not going higher, in most cases, it was getting worse.

Also, as mentioned, they need to trim the fat. I don't want to offend anyone, because I'm sure that the employees have worked hard for what they feel they have coming to them, but I think they need to make some drastic cuts in that area as well. As dr detail mentioned, it is absurd the amount of each car that goes to cover that. I look at it this way, I think the employees would rather receive some of what they feel they are "owed", versus nothing at all-losing their job.

This whole bailout thing cracks me up. I'm sure there are certain situations where it makes great since to help companies out, but for the most part it is ridiculous. I was raised to take care of myself and be accountable for my own actions. If I got myself into financial trouble, I had to get myself out. It is amazing to me how many people in today's society think that it is other people's job to take care of them and help them out when they get into a pinch. Let some of these Execs face responsibility and repercussions for their actions. There are a lot of people that need a serious reality check.

That's like one of the companies that already got bailed out. Right after they got their check, some of the Execs took a weeks vacation that cost the company $450k!!! Pathetic!

Climbing off my soapbox.....

Amen!

 

[Bellydawg]

My question is, when will the unions step up and say "We want to help"? NEVER.

Besides being ineffecient in their processes and quality is still behind what it should be, there is definitely room for downsizing. The big 3 have been playing catch up to the foreign manufacturers for a long time.

Here's a novel thought. People have shown they are willing to pay for quality even after the big 3 convinced Congress to pass protectionist laws to raise the prices. Plus pass laws that show were a vehicle and it's parts are from, i.e. American content. There has been a long list of legislation handed down to give them better footing on the slope to betterment yet between management and the unions they have greased their path all along the way.

I surely believe in buying American, but don't tell me to spend my hard eaned money on an inferior product and make it sound patriotic.

I'm through.

 

[Len_nA]

My question is, when will the unions step up and say "We want to help"? NEVER.

Besides being ineffecient in their processes and quality is still behind what it should be, there is definitely room for downsizing. The big 3 have been playing catch up to the foreign manufacturers for a long time.

Here's a novel thought. People have shown they are willing to pay for quality even after the big 3 convinced Congress to pass protectionist laws to raise the prices. Plus pass laws that show were a vehicle and it's parts are from, i.e. American content. There has been a long list of legislation handed down to give them better footing on the slope to betterment yet between management and the unions they have greased their path all along the way.

I surely believe in buying American, but don't tell me to spend my hard eaned money on an inferior product and make it sound patriotic.

I'm through.

Damn, how uninformed are you people? "inefficient in their processes and quality is still behind" From the 2008 Harbour Report:

Chrysler has upped its game so much that it has tied Toyota for bragging rights as the best in North America, so say the surprising results of the 2008 Harbour Report—the authority on automotive productivity—released June 5.

Link here

Ford tops Toyota in Quality - Link Here

Toyota workers in Kentucky plant made more than UAW members last year - Link Here

 

[Bellydawg]

Damn, how uninformed are you people? "inefficient in their processes and quality is still behind" From the 2008 Harbour Report:
Link here

Ford tops Toyota in Quality - Link Here

Toyota workers in Kentucky plant made more than UAW members last year - Link Here

All I can say is, thank you for providing all of the information on these FIRST time events.

 

[groebuck]

apples - oranges

not really money spent to maintain stability - either in a country that does not want us there or our own people. Choice is easy to me. The problem is perception. People seem to think it's crappy american cars and short sighted development that caused this. Not really. Take a look at sales figures - it's not just gm ford and chrysler, Nissan down 42%, Toyota down 34% and Honda down 32%. The other sticking point for Republicans in congress is the UAW. That $73 an hour figure is inflated becuase they are including the cost of benefits to retirees. The actual gap between union workers and nonunion is 10 bucks and hour $55 - $45. That $10 an hour is the higher cost of benefits due to the Big three having an older workforce. Labor costs are about 10% of the cost of a new car and in a lot of cases american cars are less expensive than japanese cars. So the idea that they are unable to compete is suspect. It's the quality or perception of quality that affect competition. Look at it this way. The effect of the big three going under would create about 3 million fewer jobs (including everyone who counts on the auto industry). That's about 240 billion in unemployment. One way or another we are spending a crap load of cash. Why not use it to save jobs, and american lives - take care of our own now rather than let them fall and take care of them later at 10 times the cost?

 

[groebuck]

Finally the voice of logic !!!!

Thank you !

wrong though.

 

[Poorboy]

That $73 an hour figure is inflated because they are including the cost of benefits to retirees. The actual gap between union workers and nonunion is 10 bucks and hour $55 - $45.

Glen these would be my sticking points ... the benefits to retirees is far and beyond almost any other company in the world, given some civil service retirees including Senators, Judges, Congressmen (people who usually have more than their share of the wealth) have even a better plan.
and not everyone on an assembly line or working in a plant is equal ... should someone putting on lug nuts really be making $45-$55 per hour?

on another note...anyone want to buy my Town & Country minivan :lol2:

 

[Bunky]

In most cases, people are comparing budgetary costs per hour not the gross pay. A worker making $25/hr may have a burdened cost of $35/hr since the company has to the gross salary, plus social security/unemployment, all benefits (health care/401k), etc.

This is why I think it is funny where conservative congressman say health care benefits are not a right and yet enjoy them themselves. If Congress did not have health care, we may get better reform. It is not the access that is the issue, it is the affordability (and it is not just greedy lawyers).

But, in the union system, in a mfg environment, senority is more important than performance. The unions developed under a cruel mfg system and morphed into a problem unto itself.

 

[Poorboy]

In most cases, people are comparing budgetary costs per hour not the gross pay. A worker making $25/hr may have a burdened cost of $35/hr since the company has to the gross salary, plus social security/unemployment, all benefits (health care/401k), etc.

This is why I think it is funny where conservative congressman say health care benefits are not a right and yet enjoy them themselves. If Congress did not have health care, we may get better reform. It is not the access that is the issue, it is the affordability (and it is not just greedy lawyers).

But, in the union system, in a mfg environment, senority is more important than performance. The unions developed under a cruel mfg system and morphed into a problem into itself.

absolutely :rockon

 

[Mr. Clean]

In most cases, people are comparing budgetary costs per hour not the gross pay. A worker making $25/hr may have a burdened cost of $35/hr since the company has to the gross salary, plus social security/unemployment, all benefits (health care/401k), etc.
....

If I understand your point, I disagree. The real employee cost to an employer is comprised of all of those items. They are not merely budgetary costs.

 

[groebuck]

PB they don't - that is an average of all workers from assembly to skilled trades and above. Believe me it is not a golden parachute. My dad is a GM retiree, they have cut his health coverage three times since he has retired and he and his wife live in a modest house probably not worth more than 160K. He has enough to live on but he's not juggling gold nuggets. That is the olderwork force. US based japanese automakers are still relativly young. The Big three built up a pool of reitirees long before honda and toyota had plants in the US. It's not how generous they are in 15$ an hour added but how many retirees there are.

Look at it this way - if they used bail out money to offset the cost of paying for retiree benefits and the UAW workers agreed to 45 an hour basically even footting wtih the non UAW japanese plants - that labor cost reduction would reduce the cost of car by 800 bucks. Cars that typcially sell for 2500 less than the japanese equivilent already.

 

[Poorboy]

PB they don't - that is an average of all workers from assembly to skilled trades and above. Believe me it is not a golden parachute. My dad is a GM retiree, they have cut his health coverage three times since he has retired and he and his wife live in a modest house probably not worth more than 160K. He has enough to live on but he's not juggling gold nuggets. That is the olderwork force.

ok ..that's just the way it read ... I do know some local highway workers(civil service), some that only stand there and wave a flag or hold a slow/stop sign and make $35 per hour plus benefits just because they have a strong union and connections ..that's just not right ... I think Bunky was meaning that salary should be based on production not seniority ...

 

[groebuck]

ok ..that's just the way it read ... I do know some local highway workers(civil service), some that only stand there and wave a flag or hold a slow/stop sign and make $35 per hour plus benefits just because they have a strong union and connections ..that's just not right ... I think Bunky was meaning that salary should be based on production not seniority ...

well that may be an extreme example but I think people forget unions protect everyone. That guy waving the flag may have it nice but that same contract is probably protecting the guy in the sewer drain who might die from a gas explosion. It can't be selective in coverage and protection.

When I was in college part of the uaw contract allowed me to work at the plant for the summer for 89 days. I worked second shift and did everything from clean up weird sludge to use a super sucker to clean aluminum chips from a vat that cooled and cleaned transmission cases. I had to wear a alarm system that if it went off I had 1 minute to get out of the vat or I would probably die from toxic gas. One week I had to vaccuum out these ovens that fired the cases. They got caked with this soot. In July in the plant it was about 110 degrees. I had to put on two sets of overalls, tape every opening left wtih duct tape, a hood and a mask then goggled...crawl inside and opening about 3 feet by 3 feet and vacuum out this soot.

trust me anyone who does that deserves 90 bucks an hour.

 

[Bellydawg]

In a free market system, a wage paid is what the market will bear. Now that wage may be based on experience and/or education, but should never be based on seniority.

Unions may have their place. I say may because I am not totally convinced. Unions were needed when the owners took advantage of the work force but are now a part of the problem.

One point that I don't recall being adressed is the UAW job bank. What a luxury to be able to come in to the union hall and collect a check for doing nothing (I know, the union is doing away with the program now).

Quality has also played a part. Is the quality better than in years past, possibly. Did I and others get burned by inferior products from the arrogant Big 3? You bet. They even tried with partnerships with Japanese manufacturers; i.e., Mercury / Nissan, Mazda, and brought those products down. And then when you have a warranty problem, they make it a burden to get it fixed. It is going to take more than a couple of sales and quality awards to get me back.

 

[groebuck]

I'm still puzzled on the whole quality issue - maybe 20 years ago but I have had owned three gm cars and one honda (acura). By far the most issue I had with quality was the Acura (and issue that lead me to detail city - the paint). Other than oil changes and brakes I have not had issues. Okay I blew up the motor on my sunbird but that was back before I knew you had to change the oil.

 

[Mr. Clean]

I agree the quality issue (or lack of) with the Big 3 might be a perception problem. Though I do still have my doubts about Chrysler products. But that problem was self inflicted. It will take some time to gain back the trust of the car buying public. They will have to produce top quality products which deliver more than the public wants (not expects as we know expectations are low). When problems arise, they must be dealt with swiftly and aggressively making the owner fully aware that their satisfaction is the company's utmost concern, not just an advertising slogan. Can it be done? Yes. The American workers can deliver.

 

[Bellydawg]

In my opinion then you have been lucky. Since 1974 I have had a Ford Pinto Wagon (enough said), Chevy fullsize pickup (leaking differential due to a bad casting amongst other things), Acura Integra (no problems), Mazda pickup (model before Ford got thier hooks in deep, minor issues), Mercury Villager (issues began shortly after buying, became a money pit), Chevy Suburban (nagging problems and fixing things that were not an issue on other vehicles), Mazda Protege5 (warranty issues were a pain to get fixed), Acura MDX (no problems).

When I bring in a part to be replaced at a dealership and they say, "Oh yes, that's a known problem with that model", I get ticked. Why aren't they fixed. Because the parts business is more lucrative than the sales business.

 

[Mr. Clean]

Funny, my Wife had a '74 Pinto (2-door hatchback) when I married her. She had purchased it used. Other than a paint issue on one small section of the hood (I believe it was a spot re-paint - that was generally well done), I don't recall any problems with that vehicle.

Edit to add: No doubt that service (maintenance and repair) after the sale provide a significant amount of income for a dealership.