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TD
I would agree. And I would also add, That they get rid of there corporate jets, and corporate vacation condos and homes, Year end bonuses, Limos, helicopters, sports sponsorships, just in NASCAR they spend 100s of millions, drag racing is the same, etc. Then we will talk loan and Chapter 11. |
Four Big Lies about the Big Three Automakers
Monday, December 8, 2008 3:58 PM By: Dan Weil Article Font Size With congressional Democrats and the Bush administration agreeing in principle during the weekend to drop a few billion on General Motors and Chrysler, all signs point to a government-backed auto industry bailout. But could the crisis in Detroit be the product of myth, spin and outright lies? As the nation inches closer to an unprecedented investment in private industry, Newsmax has examined the falsehoods being spread to promote the deal. Indeed, the exact amount of money to be doled out isn’t clear yet. GM and Chrysler executives testified before Congress last week that they need $14 billion to survive until March 31. Whatever the total, a number of financial experts say it would be money better left unspent until the Big Three and their supporters agree to level with the American taxpayers. Until the car makers can offer convincing proof that they will be able to produce cars at a reasonable price that customers will want to buy, here are four of the biggest whoppers they are relying on to get a massive infusion of American tax dollars: 1. Detroit’s wages really aren’t out of sync with those of auto workers in other countries. It has been well established that total compensation for U.S. auto workers, including pensions and benefits, comes in around $70 per hour. That compares to $45 per hour for Japanese workers. But some auto industry supporters have distorted the argument. They use the American workers’ hourly wage without benefits – about $30 an hour – and compare that number to the $45 hourly total compensation for Japanese workers. Then they claim that U.S. auto makers are actually more labor efficient than their Japanese counterparts. Obviously that’s not comparing apples to apples. If you are looking at apples versus apples, a new auto plant in India offers hourly pay of only $19. And it’s not just line workers who are overpaid. Ford’s chief executive Alan Mulally earned $22 million in total compensation last year – a year that helped push the company toward oblivion. Asked last month if he thought he deserved a pay cut, Mulally said, “I think I’m all right where I am.” Top executives at Bear Stearns, AIG, Lehman Brothers, and Merrill Lynch probably felt the same way right before their companies went under. 2. The auto industry is unique and therefore must be bailed out. It’s true that auto companies, including suppliers, etc., account for about 3 percent of economic output and employ at least 1 million people. But those numbers aren’t dependent on the financial status of the Big Three. If the companies go into bankruptcy and come out stronger, the industry will employ about the same amount of people. If not, foreign auto makers will produce more cars in the U.S. and pick up many of these workers. Plenty other uniquely American industries are taking it on the chin, and no one is calling for a bailout of those sectors. Take newspapers for example. One could argue they are far more important for the functioning of our democracy than the Big Three auto companies. Newspapers are firing workers right and left and shifting more of their operations to the Internet. And they will have to continue doing so until they can put out a news product cheaply enough and well enough so that readers will pay to read it, and advertisers will pay to appear in it. That’s called adjusting to a changed market place, something the Big Three have largely failed to do since first facing foreign competition in the 1970s. 3. Bankruptcy for the Big Three will mean the end of the U.S. auto industry. That is simply poppycock. A prepackaged bankruptcy actually could leave the major automakers in better shape than they were prior to the financial crisis. Since the mid-1990s, the Big Three made most of their money on gas guzzling SUVs and trucks. That simply won’t cut it anymore. Bankruptcy will force the auto makers to quicken their shift to smaller cars. Plenty of companies have emerged stronger from bankruptcy. Nearly all the major airlines have gone through that process and came out stronger than when they entered. Some industry apologists have argued that American consumers won’t buy any cars from the Big Three if they are in bankruptcy because of concern that warranties won’t be honored. But as long as the companies offer quality autos at reasonable prices and make it clear that warranties will remain in place no matter what happens to the companies themselves, American drivers will want the cars. Meanwhile, bankruptcy would give the Big Three an opportunity to rework their labor contracts, cutting compensation, and to jettison incompetent executives. 4. A limited aid package now will ensure the industry’s long-term future. The amount of money being bandied about, $15 billion to $25 billion, is chump change. GM and Chrysler are bleeding $2 billion in cash a month. So the high end of the bailout range keeps them in business for about a year. Then what? Without major changes in their business model, they’ll simply be coming back to Washington with their hands out again. The Big Three have had so many opportunities to change their practices since the first oil crisis of the early 1970s, yet they have been reluctant to budge. GM still has eight brands of cars, even though critics have pointed out for years that’s probably about seven too many. As recently as last month, GM CEO Rick Wagoner had the gall to tell Congress: “What exposes us to failure now is not our product lineup, or our business plan, or our long-term strategy.” Until Wagoner and others at the Big Three come to realize those are exactly the factors that have put the industry on the brink of failure, there is no hope for improvement. And it’s not a bailout that’s going to make auto companies implement the adjustments they need to survive. And remember, this current "bailout" bears no resemblance to the rescue of Chrysler in 1980. In 1980, Congress passed, and President Carter signed, a law giving a U.S. government guarantee of a private $1.5 billion loan to Chrysler. Not one dollar of taxpayer funds was ever used in the deal. It's also important to remember that import tariffs sheltered Chrysler and the Big Three from Japanese competition in the 1980s. And unlike today, Chrysler also had a clear plan to make a comeback and the loan was relatively small. All of the automakers should follow Chrysler's 1980s success story: create a viable business plan for the future and get private sources to fund it. © 2008 Newsmax. All rights reserve |
Reprieve for Tax Shelter Is in Proposed Bailout for Detroit
<NYT_BYLINE version="1.0" type=" ">By LYNNLEY BROWNING </NYT_BYLINE>Published: December 10, 2008 <NYT_TEXT> A little-noticed provision in the proposed bailout plan for Detroit’s automakers blesses an aggressive tax shelter sold by large banks and insurers to municipal transit agencies across the country. The provision asks the government to help the agencies by guaranteeing the economics of the complex shelter, despite years of efforts by the Treasury Department and the Internal Revenue Service to shut it down and collect billions of dollars of unpaid taxes, interest and penalties owed by the banks and insurers. The shelter, known as Silo, for sale-in, lease-out, was one of the costliest corporate tax dodges in recent years and allowed participants, including the American International Group, to avoid paying tens of billions of dollars in taxes by buying and then leasing back depreciation rights and assets at the agencies. Many of the deals are faltering because of the credit crisis and have put the agencies at risk of having to make large payments to banks and insurers. Last month, the agencies asked the government to back their role in the deals. The I.R.S., which banned the shelter in 2004, offered a so-called amnesty in August to more than 45 corporations that engaged in more than 1,000 Silo deals involving municipal property. Senator Charles E. Grassley, Republican of Iowa and the ranking member of the Senate Finance Committee, said on Wednesday that the provision was “a dark-of-night move that unravels an important tax reform and benefits tax shelter participants, including transit agencies, corporations and foreign banks, on the U.S. taxpayers’ dime.” http://www.nytimes.com/2008/12/11/bu...2&ref=business |
I don't know why my post got deleted, But here it is again.
The money is good for the big three, BUUUUUUUT it just postpones the bankruptcy for GM and Chrysler. Ford will take the money and the restructuring of the UAW but those are not necessary for Ford. . The money and restructuring of UAW contracts will not help GM from it's inevitable union with Chapter 11. I just would hope and pray that it would be Chapter 7. But alas, there are far to many Chevy people out there to let that happen. No accounting for taste. And then it wouldn’t let me post a picture of a kid peeing on the Chevy Bowtie. But, I have learned over the years, To copy and save my post. So here it is again. Ron |
3 Attachment(s)
I guess I will try them one at a time..
Ron |
22 Pounds of Fat: UAW's Work Rules Weighing Down Industry
Will they give up their precious work rules? Ever wondered what a UAW contract looks like? Here is all 22 pounds of it (in this case, Ford’s 2,215 page 2007 master contract...Picture at the site. Most of these rules are deliberately anti-efficiency. You can't move a guy off the (say) window-installation line, where he's not working because frames aren't being put out quickly enough, to the frame-welding line. Because it's the rule. So everything slows down for no good reason. These rules are mostly put in as coercive tools against management. Want to speed up that frame-welding line by diverting some window-installation workers to lend a hand? Well, maybe: But it will cost you. How much is it worth to you? This sort of nonsense is killing American industry. http://ace.mu.nu/archives/279636.php |
DJ
although I will not read 2200 pages of anything , Well, Maybe , Playboy., the site must have been a giant union piece of cake. The Chapter 11 is necessary to get rid of this 2200 pages of BS for the US auto companies. You can not just decide to disregard a union contract with any company, However, In a Chapter 11 bankruptcy you can get ride of all, or at you discretion, or most, of union demands. Unions don't like Chapter 11, but they brought it on themselves. Here is an example. Job pool. that doesn't sound to bad. But what it does is, If Ford or whoever, gets rid of a job, Lets say you were installing whatsits into the wigget, and along come a better way for Ford, The whatsit is already in the Wiggit, and therefore the position, or job, is no longer needed. Now the UAW with it's job pool program say that an employee has to be paid his/her salary, even if the job no longer exist, for 5 years. W O W. UAW is just a bad thing/ Ron |
I did a Tech Rep call in Birmingham, UK, auto assembly plant. I was scheduled in at low usage hours so I could do an up-grade on a PAP compressor, PAP = Plant Air Package, usually 10kHP or bigger turbine driven multistage centrifugal compressor used for pneumatic tool air supply. Big surprise, all the lines were shut down and the workers were asleep or playing cards or visiting. What gives? ‘Quota’ was the answer. Meaning what I ask? Union rules, only so many parts or units per day. Then just go home, why hang out here. Contract is for 8 hours is the response. So for the next five hours they just do nothing? Correct, was the answer. Needless to say that plant and the Brit auto industry is history. At the time that plant had been nationalized and the work product became so defect rich and pricy that not even the Brits would buy one.
During the same era, did a power plant turnaround at a place called ‘Fiddlers Ferry”. Big, big twin line coal burner. Fifty two separate Unions on site and not a single day without some Union ‘working the rule’ or in grievance about some damn thing or another. No small wonder the CEGB gave up and sold off all the power plants to private enterprise. At the time, CEGB = Central Electrical Generating Board owened all the power plants and it had to cost mega-mega over projected cost to do so much as empty the dust bin. I had no particular issues with the Brit Unions cuz they knew I just did what I came to do, so no point filing tons of grievances about trivia. Like I can wrench as good as the next guy so had a tendency to not wait for some Brit Union wrench to eventually show up, maybe. Did the paperwork, but no Brit wrench at the appointed time, and I just got after it myself. ;) Scamp |
Ron, You hit the burning red hot coal of reality. Product and process development are very punishing as anyone of the big three tries to do anything modern or technologically up to date. Every move has to be subjected to scrutiny by the UAW and it always comes to pay-up or else. Things like eliminating fasteners or switching from die cast aluminum or die stamped metal to injection molded high strength glass fiber plastic can get so horribly expensive in terms of what is owed the UAW that it stifles progress. We can legitimately say Detroit is not up to date in process technology or product technology or line process quality technology. We can also say that there is no lack of talent or ability to get up to date and jump on the market and make it stick.
Then, we can also state that virtually everything is hamstrung and crippled and the question becomes who is dog and who is tail in Detroit. A 22 lb tome of enforced inefficiency makes a strong case about who is calling the shots and who is going with the flow. Customer attrition and customer alienation has intervened now, seriously so, and the battle ground is now sustaining the status quo of old dogs wagging old tails. Or they simply take pot luck that customer attrition and alienation brings. Remember Westinghouse? Same deal, but they are now owned by Siemens and make spare parts for existing Westinghouse product still in service. Made a call at Westinghouse, Lester, PA, once. Grief what a safety wired in the pissed-off, self-destructive mode that place was in. No win came down there, same as currrent day Detroit. The Old Baldwin Locomotive works is there in Lester, so got to see some old time stuff from the age of steam piston locomotive era, so that was edcational. Scamp |
ABC/WaPo poll: Majority of Americans oppose Big 3 bailout
If you look closely at the Washington Post, waaaaaaay back in Section D, page 10, you’ll find out that a majority of American adults oppose efforts by the Democrats and the White House to subsidize the Big Three automakers. For some reason — call it an editorial glitch — the poll finds itself in the back of the newspaper, along with personal ads and the obituaries. Will our elected officials on Capitol Hill uncover this data? Most Americans continue to oppose a government-backed rescue plan for Detroit’s Big Three automakers as majorities blame the industry for its own problems and are unconvinced failure would hurt the economy, according to a new Washington Post-ABC News poll. Wow, who knew that 55% of Americans hate auto workers? That was the excuse offered by pro-bailout advocates, who accused Senate Republicans of union-busting and of acting unpatriotically — as if our American citizenship depended on the Escalade. In fact, not only do most Americans oppose shoveling billions of dollars into unprofitable companies, the level of opposition has remained unchanged for a month, according to the internals of the polls. If those who oppose the bailout hate unions and workers, that’s news to … union workers. According to the poll, 53% of union workers oppose the bailout. Fifty-six percent of non-union workers oppose the bailout, too. Democrats, which spent the end of last week screeching about how Republicans hate the nation and the economy, only support this by a bare majority within their party (52%). Only 41% of independents support the bailout, about the same level as the general population. I guess all non-Democrats hate their country, and almost half of Democrats too, for that matter. Maybe the East and Midwest really hate America, too. Oddly, in those regions most affected by the collapse of the car companies, only half of respondents support the bailout, with opposition equal. It’s less popular in the South and West, where 59% of Americans oppose the bailout. I guess everyone everywhere hates America. Who knew that the only people with a patriotic bone in their body were those who spend money we don’t have by giving it to companies with a long track record of losing it just to retain the favor of labor management that don’t listen to their own rank-and-file? Now, that’s news. Too bad the Washington Post chose to bury it in the coupon section. Update: Hey, Gallup finds half of Americans are unpatriotic, too! According to the same survey, Americans are about evenly divided over the merits of the failed bailout package: 47% say they would rather have seen the legislation pass, while 46% preferred that it fail. The biggest culprit in the Gallup poll for the demise of the bill wasn’t Republicans, but auto executives, followed closely by the unions. (via Political Machine) http://hotair.com/archives/2008/12/16/abcwapo-poll-majority-of-americans-oppose-big-3-bailout/ |
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