Big 3 Auto Bailout?

Should taxpayers bail out the big 3 automakers as they asked for in DC this week?

  • Yes

    Votes: 44 26.2%

  • No

    Votes: 124 73.8%
  • Total voters
    168
I have thought for years that GM, Ford and Chrysler need to whittle down there product lines and be competetive to Nissan, Honda and Toyota.

What the big Asian 3 have done is smart. The each only have 2 brands, a Luxury and the Standard.
You all know this already but:
Honda has Acura as their luxury Brand
Toyota has Lexus as their luxury Brand
Nissan has Infiniti as their luxury Brand

GM, Ford and Chrysler has spread the Dealers out by essentially offering the same product simply reebadged. When all of their brands were homoginized in the 70's and 80's it was the perfect storm for the more Simpler Asian Automakers to take hold at better price point and fuel economy.

GM has held on to Chevrolet, Cadillac, Buick, GMC, Saturn, Hummer, Saab, Pontiac. I believe 2003 was the last year of the Oldsmobille but they should have kept going slashinig models. In my opinion, they'd be a lot healtier with Only Cadillac as their high end and Chevrolet as their standard. Streamline their production lines and make the dealers follow suit.

Ford, do the same; Make it Lincoln and Ford.
Chrysler could be Dodge cars and trucks as their base and Chrysler as their higher end models. With Jeep, Dodge and Chrysler, redundency is huge.

If they were to have this as part of their plan in asking Congress for assistance I'd be more for it, but I fear they're just trying to keep the last Dinosaur alive.
 
A Modern Parable.

A Japanese company (Toyota ) and an American company (Ford Motors) decided
to have a canoe race on theMissouri River . Both teams practiced long and
hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile. The Americans, very discouraged
and depressed, decided to investigate the reason for the crushing defeat. A
management team made up of senior management was formed to investigate and
recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering,
while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order, American management hired a consulting
company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while
not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another
loss to the Japanese, the rowing team's management structure was totally
reorganized to 4 steering supervisors, 2 area steering superintendents and 1
assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people
rowing the boat greater incentive to work harder. It wa called the 'Rowing
Team Quality First Program,' with meetings, dinners and free pens for the
rowers. There was discussion of getting new paddles, canoes and other
equipment, extra vacation days for practices and bonuses. The pension
program was trimmed to 'equal the competition' and some of the resultant
savings were channeled into morale-boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid off one rower, halted development
of a new canoe, sold all the paddles, and canceled all capital investments
for new equipment. The money saved was distributed to the Senior Executives
as bonuses.

The next year, try as he might, the lone designated rower was unable to
even finish the race (having no paddles,) so he was laid off for
unacceptable performance, all canoe equipment was sold and the next year's
racing team was out-sourced to India.

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years
moving all its factories out of the US , claiming they can't make money
paying American wages.

TOYOTAhas spent the last thirty years building more than a dozen plants
inside the US . The last quarter's results:

TOYOTAmakes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and
collecting bonuses...
 
Total burden cost (salary and benefits) for the union employees of the domestic companies is about double that of the transplants. ($85/hr vs. $45.) Stories are nice, but facts are better.
 
The good news is that with the government bailout, congress will now be naming the car models...

Chrysler's electric/gas model is coming out as the "CrossDresser" in 2010...
 
Toyota and Chevy are going to merge and come out with the Toyolette then we'll be ok.

I vote NO

Witchhouse
 
bailoutyk2.jpg
 
Blueone said:
A Modern Parable.

A Japanese company (Toyota ) and an American company (Ford Motors) decided
to have a canoe race on theMissouri River . Both teams practiced long and
hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile. The Americans, very discouraged
and depressed, decided to investigate the reason for the crushing defeat. A
management team made up of senior management was formed to investigate and
recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering,
while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order, American management hired a consulting
company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while
not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another
loss to the Japanese, the rowing team's management structure was totally
reorganized to 4 steering supervisors, 2 area steering superintendents and 1
assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people
rowing the boat greater incentive to work harder. It wa called the 'Rowing
Team Quality First Program,' with meetings, dinners and free pens for the
rowers. There was discussion of getting new paddles, canoes and other
equipment, extra vacation days for practices and bonuses. The pension
program was trimmed to 'equal the competition' and some of the resultant
savings were channeled into morale-boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid off one rower, halted development
of a new canoe, sold all the paddles, and canceled all capital investments
for new equipment. The money saved was distributed to the Senior Executives
as bonuses.

The next year, try as he might, the lone designated rower was unable to
even finish the race (having no paddles,) so he was laid off for
unacceptable performance, all canoe equipment was sold and the next year's
racing team was out-sourced to India.

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years
moving all its factories out of the US , claiming they can't make money
paying American wages.

TOYOTAhas spent the last thirty years building more than a dozen plants
inside the US . The last quarter's results:

TOYOTAmakes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and
collecting bonuses...
Click to expand...


I agree with fc3's comments. The story above is great, but what it doesn't tell you is that the Toyota rowing team did not have a union filling their canoe with water and drilling holes in the bottom at the same time during the race
 
http://www.msnbc.msn.com/id/28108346

Democrats, White House seal auto bailout deal
Republicans express caution, calling plan an ‘ass-backwards’ approach


WASHINGTON - Majority Democrats and the Bush White House have finalized a deal to spend $14 billion on emergency loans for struggling U.S. automakers, congressional officials said Wednesday. Strong opposition lingered among some Republicans.

The White House did not go as far as to say the deal was final, although it did report “very good progress.” The measure could see a House vote later Wednesday and be enacted by week’s end.

It would create a government “car czar” to dole out the loans, with the power to force the carmakers into bankruptcy next spring if they didn’t cut quick deals with labor unions, creditors and others to restructure their businesses and become viable.


Congressional Republicans, left out of negotiations on the package, are expressing grave reservations and may seek to block it.

Sen. David Vitter, R-La., promised to filibuster the measure, which could delay a final vote for days.

He said the package has an “ass-backwards” approach to curing what ails the U.S. auto industry— giving carmakers money immediately, and only later demanding that they restructure.

Nevertheless, Democratic leaders were confident enough that a bill could advance that they set a procedural vote for the House floor later Wednesday. Even still, Sen. Mitch McConnell, the GOP leader, said in late morning that his side hadn’t seen the measure yet and wouldn’t agree to votes on the measure Wednesday.



“Republicans will not allow taxpayers to subsidize failure,” McConnell said, although he added that the auto situation would be addressed by the end of the week.

The congressional officials revealed agreement on a bill only on grounds of anonymity because the deal has not been formally announced.

At the White House, Deputy Chief of Staff Joel Kaplan said the administration and Congress have made “very good progress on a conceptual agreement.”

“We’ll be talking retail to individual senators to win their support,” said Kaplan, who said he expected President George W. Bush to lobby Republicans to vote for the package.

Kaplan said it was critical that the legislation have a clear definition of what is long-term viability for the companies.


A breakthrough came when Democrats agreed to scrap language — which the White House had called a poison pill — that would have forced the carmakers to drop lawsuits challenging tough emissions limits in California and other states, said congressional aides.

Environmentalists already were livid that the measure draws the emergency loans from an existing loan program to help carmakers retool their factories to make greener cars.

Kaplan also said the president was dispatching Chief of Staff Josh Bolten to Capitol Hill to make the case for the legislation with skeptical Republicans.

Kaplan said the Bush administration would work with President-elect Barack Obama’s team on choosing the so-called “car czar,” acknowledging that Bush’s tenure ends in 41 days and the automakers’ woes will continue well into 2009.

“We expect to work closely with the president-elect’s team on what is the most effective means of implementing this legislation,” Kaplan said.

Asked about the role of the “car czar,” Kaplan said: “This is not somebody who’s going to run the companies. This is someone who is going to bring them around the table, knock heads.”


“This is a bridge to either fundamental restructuring or bankruptcy,” he added. “They either have a long-term plan that’s viable or we get our money back. And if we call our money back, which is required under this bill, then those firms are not going to be able to survive.”

Getting 60 votes for an agreement, with many senators expected to be absent for the emergency, postelection debate, could be tricky.

Sen. Carl Levin, D-Mich., an ally of the auto industry, said, “This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate.”

He called for Bush and President-elect Barack Obama to lobby personally for the auto bailout.

Obama defended the auto bailout as necessary given the threat a potential Big Three collapse could pose to an already battered economy.

“As messy as it may be, I think there’s a sense of, ’Let’s stabilize the patient,’ “ he said in an interview published in Wednesday’s editions of the Chicago Tribune and Los Angeles Times.

He called the auto industry’s plight — lackluster sales, choked credit and widespread economic turmoil — “the perfect storm.”

A key compromise on the measure came when negotiators reached a compromise to require the czar to revoke the loans and deny any further federal aid to automakers that don’t strike restructuring deals by next spring. Democrats had proposed giving the overseer that option but not requiring it.



The measure would attach an array of conditions to the bailout money, including some of the same restrictions imposed on banks as part of the $700 billion Wall Street rescue. Among them are limits on executive compensation, a prohibition on paying dividends and requirements that the government share in future profits and taxpayers be repaid before any other shareholders.

Also included in the plan is a requirement that the carmakers taking federal aid get rid of their corporate jets — which became a potent symbol when the Big Three CEOs used them for their initial trips to Washington to plead before Congress for government assistance.

The measure also includes a bail out of some of the nation’s largest transit systems. The bus and rail systems could be on the hook for billions of dollars in payments because exotic deals they entered into with investors — which have since been declared unlawful tax shelters — have gone sour with the collapse of American International Group Inc. and other financial institutions.
 
Well... looks like it's the "Big two" and not the "Big Three".

Ford said they don't need nor want the government's money this evening. How's that for an interesting twist? So we have one company owned by venture capital (Chrysler) and one a public company (GM) wanting taxpayer dollars...

Bzzzt. This thing ain't passing now.... and Ford will clean up... good move on their part.
 
Ford may be my next purchase. Only brand of American car I ever owned, and would like to support a company who takes this attitude and has had a clue to what was coming.

this could also be a slick PR deal to get people to buy Fords.

"Ford Motor Co.'s top executives say they hope to buff up the automaker's image"

It seems to be working on me already. Beter than our tax dollars being spewed out needlessly.

Go Ford!
 
Same here... I've been thinking about getting a new truck and Ford just went up a few notches....
 
Ford has been saying for at least the last week that they only wanted the promise of a line of credit, but they are not planning on using it unless the downturn lasts longer than the 12-18 months predicted.

Best regards,
Frank
 
I have a real beef with Chrysler getting ANY money... They are 80% owned by Cerberus which is a private equity/venture capital group that does over $100B a year... and THEY don't want to invest anymore in Chrysler... what the hell?! In the private equity world, that would invoke a serious "pay-to-play" provision and they would lose ALL of their equity by not investing alongside a new investor their pro-rata share (i.e. 80 percent)... but no... we'll let them keep their fricken' 80% ownership... I think it's a game of chicken. If they really want to write down their 80% ownership, let them do it. Go into Bankruptcy and the courts will wipe out their equity... as they should.
 
Four Suns said:
I have a real beef with Chrysler getting ANY money... They are 80% owned by Cerberus which is a private equity/venture capital group that does over $100B a year... and THEY don't want to invest anymore in Chrysler... what the hell?! In the private equity world, that would invoke a serious "pay-to-play" provision and they would lose ALL of their equity by not investing alongside a new investor their pro-rata share (i.e. 80 percent)... but no... we'll let them keep their fricken' 80% ownership... I think it's a game of chicken. If they really want to write down their 80% ownership, let them do it. Go into Bankruptcy and the courts will wipe out their equity... as they should.
Click to expand...

:smt013 wtf, is this right? The government doesnt look into this? How is it that you have this information and can make a rational assessment and yet our brilliant reps decide to spend OUR money this way?

THings like this piss me off, and I am forseeing a day when the majority of us are going to pool together, make a plan, have a revolution of sorts, and make a stand with our tax dollars as in not paying taxes one year.

Im am tired of watching my money go bye bye while being continually asked to give more and more.
 
http://online.wsj.com/article/SB122887590029593727.html?mod=googlenews_wsj

"The pressure from Washington lawmakers has put Cerberus in an uncomfortable spotlight. The New York firm, started in 1992, earned its stripes as a distressed-bond investor but expanded into a buyer of entire companies. Once it struck deals to buy GMAC in 2006 and Chrysler a year later, the firm has raised its public profile ever so slightly by hiring former Treasury Secretary John Snow and former Vice President Dan Quayle."

Think of it as bailing out Cerberus... and John Snow and Dan Quayle.


It's pretty common knowledge...

http://www.freep.com/article/20081206/BUSINESS01/812060363/1210/BUSINESS

Cerberus bought Chrysler from Daimler thinking they could flip it in a year or two and make some $$... Well... the bet didn't pay off and here we are as taxpayers bailing their "deal" out... It's BS...
 
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Yesterday I decided to conduct a very controlled and scientific study of exactly what percentage of the Big 3 cars and trucks, as compared to all foreign, are purchased by all of America.

The study consisted of me walking through a crowded parking lot and counting cars. By the time I reached my destination the results were just not looking too good for our big 3. The best they could manage was only 1 in ten vehicles or a 10% market share.

Perhaps when we do give the big 3 some money, the first caveat should be that they hire one of the main “suits” from Honda or Toyota to run their respective companies.
 
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