Originally Posted by Villages Kahuna

Now that President Bush has agreed to give two of the U.S. auto companies about $17 billion, accompanied by some tough conditions, we've begun to understand the implications of the Bush conditions.

The shareholders of the two companies will have their investments essentially eliminated. That's fair--equity should bear the highest risk.

The debt holders of the two companies are going to have to take a huge writeoff of the monies owed them--maybe 50% or more.

Some of the suppliers to the two companies will also have to write off some of their receivables. Some may not make it and will have to be liquidated.

A large number of the dealers of the two companies will have to be closed. They're simply not needed. Many are threatening to sue.

Now the UAW has also spoken. Its president says he's going to ask the new Obama administration to change the requirements that Bush placed on the union. Bush prescribed that their wages and benefits be competitive with the foreign "transplant" auto makers by the end of 2009. The UAW says they've already given enough, that they're being singled out to solve the problem. This when they still have total hourly compensation and benefits that are 30-40% higher than the transplant workers; they get paid 95% of their pay if they're laid off; their health insurance costs them virtually nothing; and they have generous pension plans that don't require contributions from them.

It's pretty obvious that the UAW is willing to drive the U.S. indiustry over a cliff before they give up anything. My reaction is...so be it. Don't take any of our money. Solve the problem yourselves in a bankruptcy court. if you can't or won't, then find another job with another employer. These people--the UAW leadership and members--simply don't get it.They don't realize how little most Americans care about them and their plight. This is the same story as happened with Leyland Motors in the U.K. After $18 billion from the British government, the union workers still wanted raises and favorable work rules. Leyland finally went out of business and was liquidated.

The cost to all of us of the UAW's stupidity and avarice will be great. Some more than others. One of my sons works for Ford and they will almost certainly be sucked into the vortex caused by UAW greed. I wish the end result could be avoided. But it's pretty clear that the UAW is not going to let it happen.