Quote:
Originally Posted by Villages Kahuna
I'll confine my response to the auto industry debate. If all that's being considered is giving the auto companies the "bridge loan" that they're requesting, that would be like peeing down the rat hole. Back when I was a commercial banker we would occasionally see requests like this. We were never so blunt with the customer, but when we discussed the request we'd almost always conclude that the loan would be a "bridge to eventual insolvency". That's all lending money with no strings to the auto companies would be. Look at what's happening to the banks to whom we've given tens of billions of dollars. They're still not making loans. That's because the Treasury Department attached no particular requirements to their "investments".
In the case of the auto companies, I'd give them money. But only if some combination of--or all of the following conditions were attached. Some of these might be things that the managements and the UAW would have to agree to jointly, if they really wanted and needed the money. They'd have to decide which was worse, the following conditions or the result if they received no money...
• A dramatic cut in employee and retiree pension and healthcare benefits.
• A substantial cut in hourly wages.
• A substantial cut in management salaries--at least as much in percentage terms as the union workers.
• A prohibition in any management incentive compensation until certain conditions were met. Like a couple of years of profitabliity; higher fleet CAFE averages; progress towards more non-gas cars, etc.
• Agreement that any future union contracts obtain not only management and union approval, but also the approval of the government.
• A requirement that the management be required to make quarterly reports to the government and that the government would have final approval of capital spending plans, future product planning, and overall expense budgets.
If they want the money, then everyone involved should be required to pay a hefty price--just like the price the taxpayers would pay in order to make the loans.
Like I said, a bridge loan without conditions would be like peeing down a rat hole.
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Kahuna, I have to disagree with your proposal to fix the automotive industry. Lets see... give me a mediocre wage that will barely or won't make ends meet so my children won't see college, etc., give me a miserly pension and make me figure out how to get decent healthcare in this woefully lacking affordable healthcare country. Sign me up, I need a job like that!
I have a different proposal, let the worker's buy the stock and own GM, Chrysler and Ford companies. Therefore, profits earned would be distributed to those who earned it, not the white collar workers living off the labor and sweat of the blue collars because they feel "they are more important and deserve more of the financial pie". Automotive workers would reap their wages and benefits and the remaining funds would be applied to the health of their respective companies. There is a whole different earnings/profit mentality within a company with workers whom own the business.
I am beginning to believe many of the problems of this country are all the "public companies" where profit for the owner and workers is not sufficient, there must now be enough money to feed all the people owning stock and feeding at the trough. (This has a huge implication in medical costs that no one will mention, the providers of service and supplies are reimbursed as they should be. But any medical service or treatment one seeks, handsomely rewards the massive number of stockholders standing around the edges.) Am I the only one with this perception?
