Big Three Bailout? Not So Fast

Big Three Bailout? Not So Fast

www.cbsnews.com

One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work.

A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.

To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader's Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time.

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Say what? And we wonder why the American car manufacturing quality has dropped like a rock. This is a pathetic abuse of cash and now that the chickens have come home to roost they are going to destroy thousands of lives with layoffs. This is one of the big problems with big corporations. When times are good and they are making too much money, well, they waste. They waste in a BAD way. Then when times get tight, instead of using reserves that could have been built up by NOT WASTING they simply destroy lives.

This is part of the problem. We see AIG taking vacations for their CEOs and upper management on OUR DOLLAR. Then we hear them say that it is common practice for insurance companies to do this. The same goes for all of the other large corporations.

And now they want OUR money to bail them out? This is unbelievable. And if Pelosi gets her way it will happen.

What a joke.

www.cbsnews.com
(visit the link for the full news article)

No need to worry, Hank says no TARP for the Big 3

AFP

US Treasury Secretary Henry Paulson on Wednesday ruled out the possibility of using part of the 700-billion-dollar rescue plan to help the struggling auto industry.

Paulson said the Troubled Asset Relief Program was targeted to the financial sector and thus could not be used to bail out carmakers unless Congress amends the plan.

"We care about our auto industry in the US. They are a key part of our manufacturing industry," he said, but added that "the intent of the TARP was to deal with the financial industry."

Not like the man ever tells the truth, but there ya have it.

As far as the big 3 goes (lowercase 'big' intentional ); this is what happens when the older generation of 'thinkers/leaders are allowed to linger beyond their usefulness like some illness. They appoint fellows and comrades to boards and executive administration according to a social structure strongly linked to class standing. They 'inheritors' are like-minded opportunists and 'political animals (or sycophants with no talent at all).

These are the culprits behind all the fat cat mentalities. They are simply ready to stretch out their hand and say, "Oy, help me, I want to prop up my idea of the industrial paradigm, we're buds!" Just like the airlines did. And now we see just how 'effective' executive decisions left to these people can be.

We are about to 'buy' into this big time. Over 2 trillion dollars down, we are now allowing these 'old generation' leaders try to use money to stop time. Pathetic, just doesn't seem to embrace the totality of our surrender to the bankers. We are becoming serfs to their whim. And we can't win either way, poor workers, caught in this quagmire of b/s profiteering, sustain it and survive, or let it die and starve. That's no way to live people. Just doesn't seem like 'the American dream.'

I would love nothing more than to see this country be the premier auto maker of the world again....but to be honest after years of selling us autos designed not to last with inferior parts I have no compassion for them.They did this to themselves if you ask me. I see no reason they deserve a bail out other than for saving the jobs of good hard working Americans that work for them.

No need to worry, Hank says no TARP for the Big 3

reply to post by anachryon


Not yet, anyway. Wait till January 20.

I guess that depends on whether you call giving low interest loans to the automakers so they can retool a bailout or not.

If they have to pay it back, I dunno.

The North American automakers are so riddled with inefficiencies, no amount of bailing out is going to keep them alive.

For one, their unions are at a point of power where they milk the company dry of what would have been profits.

On top of that, the vehicles they are making aren't on par with the Asian vehicles in terms of fuel efficiency... something most consumers are demanding now.


I'm sorry to say it, but the big three have no-where to go but bankruptcy. Bailing them out now just delays the inevitable, and tacks on a bill the taxpayers have to cover.

Companies fail, they get replaced by companies that can do it better... it's a basic form of natural selection, and it must be allowed to run it's course.

You can't hold onto the past forever.

Let them fail, just like any other business that isn't profitable..

I had been saying for years how there were very very few decent American cars.. and they were not built in America.. imagine that..

Look if they go under some one for sure will want there name and distribution etc.. "chevy, Ford, and Dodge" the Asians will fight for ownership of these markets.. these brand will still be here.. they will just end up getting better after there bought out by a profitable car company.

As for vehicles i own a 2005 Chevy pickup.. its manufactured in Canada.. My daily driver is a 1984 Honda, my wife drives a 94 Jeep grand Cherokee with 225,000 miles, the new 2005 Chevy Colorado pickup has 23,000 and doesn't get driven, as it gets the same MPG as the v8/auto full time 4wd Jeep, and only is a 4 cylinder 2 wheel drive standard cab mid size truck with a 5 speed.

My 1984 Honda CRX gets 50+ mpg if i drive it nice.. and its carburated.. no fuel injection.. 1n 1984 Honda beat today Hybrids for MPG..

Today it seems cars (especially American SUV's) have everything except the kitchen sink in them, sure air bags are good to have but we don't living rooms on wheels, with TV's and refrigerated glove boxes etc.. However there are still cars today that are basic safe transportation, but there all imports.. even the American ones are.. like the little Chevy Aveo for instance..

Now Chevy made a few good moves latly but to late, 1 they redesigned the drive train on the Cobalt and ekked 36mpg out of them.. but that was too late... then there is the volt.. still not out yet.. if they would have developed it one year or so earlier.. they could have saved there butt.

SO i say let them fail, and i would be out of the extended GM warranty on my pickup.. but i don't see any reason to keep around wothless business at tax payer expense... even short term tax payer expense (AKA Loans).

Obama will make sure the auto industry fails so he can push the energy bill where new companies will make more efficient vehicles. IMO. It will cost over 2 million jobs, but Obama knows what best for the American people.

Well, I would rather bail out the auto companies than the banks and investment firms which are nothing but crooks. At least the automakers employ blue collar workers, most of whom do in fact work. If we can give a couple of trillion to save the stock market, then we can give at least a 100B to the the auto companies.

Some guy making under six figures for doing nothing doesn't bother me nearly as much as some CEO banking crook making 50 Mill for robbing people of their 401k plans.

reply to post by Maxmars


Very true. It's a matter of back patting and givng your friends a nice little cushion. It's not about what's right which is very evident from the actions of the government and the fed.

I hate to say it because I live near Michigan and know of thousands of people that would be affected, but we need to let nature take its course. Toyota or someone else will come in and buy them up and turn their production around. However, giving them our money won't cut it. I also saw that congress is considering a 25B dollar bailout for these guys. At least that is what will be proposed and I believe that Paulson and Bush will kind of be forced to agree with it.

Originally posted by poet1b
Well, I would rather bail out the auto companies than the banks and investment firms which are nothing but crooks. At least the automakers employ blue collar workers, most of whom do in fact work. If we can give a couple of trillion to save the stock market, then we can give at least a 100B to the the auto companies.

Some guy making under six figures for doing nothing doesn't bother me nearly as much as some CEO banking crook making 50 Mill for robbing people of their 401k plans.

Very true. However, does it make it right? Where is this money truly coming from? Seriously. It's not really coming from us because the trillions didn't exist before this crap started. They are simply creating it out of thin air thus creating the potential for super inflation.

If we bail out a GM then what about the local grocery? What about the small businesses that are getting hit hard? The restraunts that are getting shut down because of the increase in food costs?

Where do we draw the line? Because those businesses employ a great deal more workers than the auto industry does.

I understand your reasoning. Unfortunately our esteemed leaders already made the choice for us to give the financial institutions this money. Where will it stop? Complete meltdown? Revolution? Or a depression so bad that the last big one will look like childs play?

I don't like to fear monger but this is where we are headed if they continue to try and pull this crap.

reply to post by johnsky



I couldn't have said it better myself. All very good points and ones that I agree with fully.

I think a bailout is fine for the auto industry, but the legislation needs to be well crafted to make sure that the money is used in a responsible manner and there is something built in to ensure that the money will eventually get paid back to the Government one way or another.

I also think that the Unions need to start realizing that some of their mandates are hurting the company. Of course great health insurance is a notable goal, but it's hardly worth it if the company goes out of business a few years later.

And the bailout may just work. While not a pristine model of a bailout, the Chrysler bailout back in the late 70’s turned out OK.

Are auto workers over paid or is it that others are underpaid? Back in the day Henry Ford paid his workers a unpresidented $5 aday. He figured if he payed his workers a living wage they would buy his cars.

Without the unions setting a standard for the rest of the work force you wouldn't have half the protective labor laws you do now. Back in the 1950's over half of this country was unionized now it's less then 7%. Maybe this has something to do with why our senior citizens have it better then our generation does.

The greedy corprite jerks in this counrty have done everthing they can to break the unions. Thier laughing all the way to the bank with obscene bonusus. Thier a the reason why so many people are underpayed and underappreciated.

Thats ok you keep buying your forign cars and keep hob knobbing your boss under his desk maybe if he likes you enough he wont fire you. As for me I've got a union to defend my rights.

[edit on 13-11-2008 by wantsome]

[edit on 13-11-2008 by wantsome]

[edit on 13-11-2008 by wantsome]

Actually, you kind of hit both sides of the coin at once with this statement. Yes, they were paid better than average but it was because of the unions that this was the case. This is why the 'corporation' is blaming the unions for destroying their business. They say they can't compete with Japan and such because they don't have unions and can pay what they feel is fair instead of what the union bosses feel is fair.

Actually, I agree that the unions need to be around but then there is a problem with the negotiation tactics they use. They also push for quite a few perks that are simply too expensive for employers to eat right now. Health insurance being the big one.

That leads us into yet another mess. It's all related. It's all part of the plan.