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.

We don't need to bail them out, they need to attempt to reorganize thru the bankruptcy court, that's what it's there for, top managenment and the UAW need to go, they got them to this this point..they need a new team, not the same old people with a big deposit in their bank account....duh

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.

Perhaps you would share with us, Kahuna, how your son feels about very possibily working for mediocre to low wages, poor benefits and very limited retirement benefits. Will he be job hunting, moving to a smaller home and changing his lifestyle if the auto companies are trimmed to their quicks? It would be nice to have the perspective of someone in the industry who would be effected by returning autoworkers to the level of marginal wages and benefits.

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.

It is going to be very interesting to see how the President elect handles this situation. He professed a strong union tie and they really gave the money and the votes during the election.

Originally Posted by golfnut

We don't need to bail them out, they need to attempt to reorganize thru the bankruptcy court, that's what it's there for, top managenment and the UAW need to go, they got them to this this point..they need a new team, not the same old people with a big deposit in their bank account....duh

That's for sure GF. It really rattles my cage when the blue collar suffers the slings and arrows of the corporate scavengers. Everyone knows about corporate greed, yet nothing is ever done about it. Get rid of all the big guns is the best solution and keep those employees that are the producers and foundation of the corporations. Has anyone given any thought to the money that could be saved if corporate executives were all terminated and middle management carried the ball to a very lucrative resolve?

Bailout? NEVER Why lay this burden on the tax payers to pay for the bailout because of executive greed??? ....b

Originally Posted by barb1191

That's for sure GF. It really rattles my cage when the blue collar suffers the slings and arrows of the corporate scavengers. Everyone knows about corporate greed, yet nothing is ever done about it. Get rid of all the big guns is the best solution and keep those employees that are the producers and foundation of the corporations. Has anyone given any thought to the money that could be saved if corporate executives were all terminated and middle management carried the ball to a very lucrative resolve?

Bailout? NEVER Why lay this burden on the tax payers to pay for the bailout because of executive greed??? ....b

Do you mean like the fat-bottomed banking industry, Barb? http://www.msnbc.msn.com/id/28337800?GT1=43001

The bottom line is that no amount of bailout changes the basic fact - the cars aren't selling.

What good is there to keep building a product nobody's buying? At this rate of build-to-inventory we'll need the entire State of New York or Arizona (random choices!) as the Great American Junk Yard.

There is only one fix for the auto industry - some plan to make the cars more attractive financially (since they aren't making it on looks, quality, performance or resale value) to the customer base, coupled with a federal block-purchase of 33% of the existing inventory for whatever purpose these cars can be used. The first moves inventory over a multi-month time frame, and the second infuses capital into the companies now. To sweeten the pot, all future labor (executive, management & floor) pay increases become tied to the company profits, with a quarter going to raises and the remainder to dividends to the stockholders.

When either executive/management or labor gets greedy, it's like a snake eating itself from the tail end - eventually the snake dies from self-consumption.

Originally Posted by Peachie

Do you mean like the fat-bottomed banking industry, Barb? http://www.msnbc.msn.com/id/28337800?GT1=43001

Our congress, in their infinite wisdom, decided not to be so strict with the money they threw at them and thus the restrictions were not put in to stop this kind of thing.

Originally Posted by Bucco

Our congress, in their infinite wisdom, decided not to be so strict with the money they threw at them and thus the restrictions were not put in to stop this kind of thing.

This is a lame-duck congress with no conscience and those returning (over 90% of them) for the next session are banking on the precept that Americans have lousy memories. They believe that what they do now will be forgotten in 2010 out of our collective dumbness fed by a locally distributed diet of "pork."

Will we remember in 2010 or will Congressional "pork" continue to be that tasty?

The department my son runs for Ford did the analysis that concluded that if either GM or Chrysler went under, the suppliers that they'd suck down with them would cause Ford to shut down as well. Ford has husbanded it's money pretty wisely and could survive market conditions as now exist for another year or so without any government help. They have a lineup of attractive, fuel efficient and hybrid vehicles ready to hit the market in late 2009 and 2010, a better lineup of product than any of their competitors they believe.

But are my wife and I worried about our son and grandsons? Certainly. If any of the auto companies fail our son would certainly be out of work. Could he get another job? With his experience, performance and advanced degrees, almost certainly. Would it take awhile? Probably. Would he have to move from suburban Detroit? Almost certainly. Would the experience have an effect on our very smart grandsons, all of whom are attending private schools? Certainly. Can my wife and I help? No. Would it be a very tough couple of years for a young family. Absolutely.

So as much as I hate to say it, the chances are that the UAW in particular will cause the U.S. auto companies to cease to exist. Will that event cost all of us a lot of money and prolong and deepen an already serious worldwide recession? I believe that it will. But as much as it will hurt me and my family, I still don't think it's the role of our government to continue to fund companies or an industry, however important it might be, if the stakeholders in the industry don't take the necessary steps to make themselves competitive--even at great personal sacrifice.

Originally Posted by SteveZ

This is a lame-duck congress with no conscience and those returning (over 90% of them) for the next session are banking on the precept that Americans have lousy memories. They believe that what they do now will be forgotten in 2010 out of our collective dumbness fed by a locally distributed diet of "pork."

Will we remember in 2010 or will Congressional "pork" continue to be that tasty?

I dont think it is nor will be the "pork" but simply voter apathy. We all get excited about this and get out and vote for a Presidential election or scream about our reps during a "situation" but when those elections come around the voter turnout will be light and those who vote will vote for the incumbents !

Originally Posted by Bucco

I dont think it is nor will be the "pork" but simply voter apathy. We all get excited about this and get out and vote for a Presidential election or scream about our reps during a "situation" but when those elections come around the voter turnout will be light and those who vote will vote for the incumbents !

If only you were wrong - but you are not...

At least let's see what we can do about it here next time.

why I don't know because they are in more than just the south and their suppliers are from all over the US and the planet.
I don't hear much from those who work in those plants about mediocre wages.
They all had it explained what kind of work environment they were going to get into...both the white and the blue collar. They bought into it!!! They make better cars for less with better quality because they are allowed to do more than the UAW allows it's workers to do at a significantly higher rate. The UAW will in fact let the company go down in flames before they concede. If the rank and file are stupid enough to allow it to happen, AGAIN, then so be it. Then they will have $0 per hour....good thinking. Why did I say again? In other threads related to the subject I pointed out my experience with GE Appliances in Louisville, KY. 1965 less than 10,000 employment....mid to late 70's more than 25,000 employment....late 80's and early 90's down to 15,000...2008/today less than 5,000.
The union absolutely held the line on wages and benefits in the face of higher than the competitions cost and man hours to build a unit.
We used to brag the appliance business was one of the few remaining products still manufactured in the USA....the union took the business to it's knees with the result being businesses were sold to foreign manufacturers...component manufacturing was all taken off shore to reduce costs.....
all of which is currently happening in the auto industry....you do know the made in America cars are less than 70% American components? They are on the slide going toward a locked door. The only remaining benefactors are the union officials. They still have their jobs and benefits.
My vote as expressed many times before...chapter 11....reorganize...throw out the management and the unions. Give the workers red, white and blue collars 1/2 the loaf they used to get....it feeds many more than no loaf at all!!!!

BTK

I'd much perfer to keep a 25 dollar an hour job then lose a 50 dollar an hour job.

I've been reading a little bit about the bailout in the online editions of the Detroit newspapers. I've read that the president of the UAW definitely wants the deadline for the union wages and benefits becoming "competitive with the foreign transplants" to be into 2010, rather than anytime in 2009. I don't quite understand the UAW organization, but the observation was made in one of the papers that if the deadline was in 2009, which is the current condition proposed by President Bush, the union president would have to take whatever structure is decided upon to the membership for a vote. If the changed conditions became effective in 2010, he apparently does not have to get membership ratification. (Don't ask me why, I don't quite understand the UAW's internal rules.)

The implication in one article I read was that the UAW president definitely does not want to permit the membership to become involved because he feels they will be more willing to "cave", accepting much deeper cuts in pay and benefits in order to keep their jobs than the president thinks is acceptable. The UAW leadership is apparently more willing to play chicken with the government, continuing to demand their higher pay and benefits at the expense of either other stakeholders in the companies or by getting additional funding from the Treasury Department. They apparently continue to feel that the massive campaign contributions made to the Democrats and the union help in winning Ohio and Michigan in the last election has created an IOU from the incoming Congress and administration.

At this point, whether or not to change the conditions attached to the bailout bridge loan is totally within the authority of President Obama. But several of the Democratic Congressional leaders--the lovable Congresspersons Pelosi and Frank and Senator Dodd, are already making noises that new legislation should be prepared for consideration by the new Congress that would provide for more money and a longer bailout period with less reliance on "giveups" by the UAW. They're quite certain they could get such legislation passed by the new Congress.

If there was ever a time that I actually wanted the GOP to filibuster legislation, it would be on this issue. But if the new legislation being talked about happens, I give up!