Auto rescue bill in peril, opposed by GOP senators

[SpareRib]

http://news.yahoo.com/s/ap/20081210/ap_on_go_co/congress_autos

Here are some excerpts - (My comments in bold)

Was there any doubt?

"People realize that this bill is an incredibly weak bill, (and) is the product of an administration that wants to kick the can down the road and let somebody else deal with it," said Sen. Bob Corker, R-Tenn.


I have been saying this until I'm blue in the face.

Rep. John A. Boehner, R-Ohio, the minority leader, said the legislation "asks taxpayers to further subsidize a business model that is failing to meet the needs of American workers and consumers."


And while we're at it...let's save everything on wheels -

Democratic Sen. Max Baucus of Montana announced he was against the measure because of a provision to bail out transit agencies. The bus and rail systems could be on the hook for billions of dollars in payments because exotic deals they entered into with investors — which have since been declared unlawful tax shelters — have gone sour.


The final straw - This stuff has got to stop yesterday!

Also included in the bill is an unrelated pay raise for federal judges.

These are the boneheads that want to save us from calamity by telling Detroit how to do it's job.  Your tax dollars at work.  When is enough enough??

(Edit for clarification - I agree with Corker, Boehner, and Baucus.  They obviously didn't write this thing.)

[Masshog]

Chrysler won't even release their financials....  and Cerberus won't put up any more cash.... Frankem. 

[SpareRib]

Chrysler won't even release their financials....  and Cerberus won't put up any more cash.... Frankem. 

I wasn't aware that their financials are still under wraps.  That's the silliest thing I ever heard of - standing before congress with their hands out for help with no disclosure.

If I tried that with my local bank, I'd get laughed out of the neighborhood.

[Masshog]

Go figure?  At least thats my understanding. 

[Masshog]

Might as well just write the checks to Cerberus....  save the step of pretending to give it to Chrysler first.

[SpareRib]

Mass, I know that Cerebus is the private equity firm that acquired Chrysler, but who the heck are these guys?

[john c]

Chrysler won't even release their financials....  and Cerberus won't put up any more cash.... Frankem. 

Then, if they get a dime, each partner, shareholder, officer and their wives should sign a personal guaranty.

[Masshog]

Just another hedge/private equity fund. 

[BlackKnightHogFan]

Just another hedge/private equity fund. 

That is highly leveraged and has a ton of debt.  In fact, they used mostly debt to acquire CHY and that is one of the reason they a sucking wind so bad and won't release their financials. 

Spare you mentioned if you tried that with your local bank they would laugh you out of their offices.  If you had financials like CHY and you showed them to your local bank, they would be shocked and scared.  If CHY released their financials even Congress would likely not give them any money.

I don't know why all the negativity toward the bailout, y'all must not have heard, if we don't bail them out the world as we know it will end.  It must be true, Barney Frank told me so. 

[SpareRib]

That is highly leveraged and has a ton of debt.  In fact, they used mostly debt to acquire CHY and that is one of the reason they a sucking wind so bad and won't release their financials. 

Spare you mentioned if you tried that with your local bank they would laugh you out of their offices.  If you had financials like CHY and you showed them to your local bank, they would be shocked and scared.  If CHY released their financials even Congress would likely not give them any money.

I don't know why all the negativity toward the bailout, y'all must not have heard, if we don't bail them out the world as we know it will end.  It must be true, Barney Frank told me so. 

BK - Thanks - That's interesting info.

Here's the latest I have -

http://apnews.myway.com/article/20081211/D950L7T00.html

But McConnell said the measure "isn't nearly tough enough." The Kentucky Republican also called for a different bill - one that would force U.S. automakers to slash wages and benefits to bring them in line with Japanese carmakers Nissan, Toyota and Honda - in return for any federal aid.

Well, that would be a good first step toward a new, ground up business model.  Kudos to Mitch McConnell. ( Run what Barney tells you through a filter  )

[ConwayHog]

That is highly leveraged and has a ton of debt.  In fact, they used mostly debt to acquire CHY and that is one of the reason they a sucking wind so bad and won't release their financials. 

Spare you mentioned if you tried that with your local bank they would laugh you out of their offices.  If you had financials like CHY and you showed them to your local bank, they would be shocked and scared.  If CHY released their financials even Congress would likely not give them any money.

I don't know why all the negativity toward the bailout, y'all must not have heard, if we don't bail them out the world as we know it will end.  It must be true, Barney Frank told me so. 

Barney Frank?  What a deal.  He's the posterboy for what is wrong with Congress.  I don't know if he's had some medical issues or just can't speak but would you ever believe someone who speaks in a manner such as him?  Pretty hard to take him seriously (policy decisions aside). 

[HognotinMemphis]

Good. I am glad it is in peril and I hope it doesn't pass the Senate. I hope GM and Chrysler file reorg bankruptcy, fire all the current senior managemen, and hope the unions lose their pensions and health care benefits and hope automakers become non-unionized.

[Fletch]

I may be the only one, but I am not so sure that letting them fail is the correct thing to do from an economic standpoint. We can all talk tough and be cynical about there not being a large economic impact if this were to happen, but the truth is nobody knows and it could be much more damaging than many people think.

[SpareRib]

I may be the only one, but I am not so sure that letting them fail is the correct thing to do from an economic standpoint. We can all talk tough and be cynical about there not being a large economic impact if this were to happen, but the truth is nobody knows and it could be much more damaging than many people think.

Fletch, this is just my opinion, but I believe that if these guys don't radically revamp their business model, we will just prolong the inevitable.  Re-org may be the only way to gain the concessions from the union necessary to bring their wage and benefit package in line with their competition.  The "job bank" and benefits package need overhauling that neither the UAW nor their benefactors in the Democratic party have so far been willing to undertake.  It also may be necessary to force the internal changes that will produce an effective product offering.  The Japanese produce an effective product line domestically that is eating Detroit up, and they are far more nimble in manufacturing changes than the big three.  Detroit must learn these things if it wants to be viable.

[Verge]

Thank god for the GOP..


I know how i will be voting in 2010.

[The Marmot]

Thank god for the GOP..


I know how i will be voting in 2010.

Libertarian?

[HotlantaHog]

Barney Frank?  What a deal.  He's the posterboy for what is wrong with Congress.  I don't know if he's had some medical issues or just can't speak but would you ever believe someone who speaks in a manner such as him?  Pretty hard to take him seriously (policy decisions aside). 

There is plenty to disagree with about Barney's policies, but he is smarter than the average member of the House. He understands financial services regulatory issues better than most.

[ConwayHog]

There is plenty to disagree with about Barney's policies, but he is smarter than the average member of the House. He understands financial services regulatory issues better than most.

That was a mouthful.  We're in trouble if that's the case.

[Masshog]

There is plenty to disagree with about Barney's policies, but he is smarter than the average member of the House. He understands financial services regulatory issues better than most.

He certainly knows how to use them to get what he wants.  Just another criminal in a suit.  Did I mention that hes my representative criminal? 

[Fletch]

Fletch, this is just my opinion, but I believe that if these guys don't radically revamp their business model, we will just prolong the inevitable.  Re-org may be the only way to gain the concessions from the union necessary to bring their wage and benefit package in line with their competition.  The "job bank" and benefits package need overhauling that neither the UAW nor their benefactors in the Democratic party have so far been willing to undertake.  It also may be necessary to force the internal changes that will produce an effective product offering.  The Japanese produce an effective product line domestically that is eating Detroit up, and they are far more nimble in manufacturing changes than the big three.  Detroit must learn these things if it wants to be viable.

I agree with everything you said. As a matter of fact I posted on another thread that a negotiated type of default may be necessary where bondholders get less than 100 cents on the dollar and massive restructuring must occur. I don't care at all for the bill in front of Congress either, but I think voting it down and just letting the Big 3 file for bankruptcy protection could potentially be a big mistake. I agree with all of your points on the concessions.

[SpareRib]

I agree with everything you said. As a matter of fact I posted on another thread that a negotiated type of default may be necessary where bondholders get less than 100 cents on the dollar and massive restructuring must occur. I don't care at all for the bill in front of Congress either, but I think voting it down and just letting the Big 3 file for bankruptcy protection could potentially be a big mistake. I agree with all of your points on the concessions.

Yup, fixing this malignancy is like cancer surgery.  If they don't get it all the first time, it's gonna keep coming back worse.  I know that a lot of people will be hurt economically by taking a chunk out of their benefits package and many may lose jobs.  But I also see the millions of folks hurt by the eventual cost of bailing these companies out.  Right now, it's you and me and our kids that are going to pay for this fiasco.  Actually, in any other industry, layoffs and wage reductions are a way of life.  People suffer, they adapt and they move on.  The only thing that makes this situation any different is the strong union involvement.  It shouldn't be allowed to be an issue.

[HognotinMemphis]

There is plenty to disagree with about Barney's policies, but he is smarter than the average member of the House. He understands financial services regulatory issues better than most.

What basis do you use to say he is smarter than the average member of the House? How does he understand financial services regulatory issues better than most?

What was his vocation prior to Congress?

[batesvillepharmer]

Supporting the aig,fannie,freddie or captial one bailouts not to mention the "tarp" give one little moral ground to stand on when opposing the auto bailouts, imho. It is time to either go all in with the government bail out or let it crash and burn and pick the pieces in 5-10 years. Either way, a lot of this country will be owned by China; they will either finance our bailouts and be our debtors or they will jump in and buy stuff on the cheap after the carnage.

[spit]

Supporting the aig,fannie,freddie or captial one bailouts not to mention the "tarp" give one little moral ground to stand on when opposing the auto bailouts, imho. It is time to either go all in with the government bail out or let it crash and burn and pick the pieces in 5-10 years. Either way, a lot of this country will be owned by China; they will either finance our bailouts and be our debtors or they will jump in and buy stuff on the cheap after the carnage.

as for auto industry i say crash and burn IF the mitherficking execs and union won't concede to make drastic changes, pay cuts, etc.  Its partially the UAW fault it failed tonight per what i'm reading.  Fick the ficking union dimbazz SOB's.  Will the UAW be b1tching when they are out of ficking work b/c the plant closed up? ficking idiots.

[Masshog]

I see that Deutsch Bank downgraded Ford to a sell this AM.... how franken brilliant is that?  For the most part, name the subject, and you will find that Wall Street research is almost useless.

[Steef]

Being reported this morning that the bill has failed in the Senate.

UAW refused to 'move' on wages. Republicans made the issue a dealbreaker. Dems are fingerpointing.

I don't know if this situation can be fixed, but I like the idea of fashioning legislation that intends to fix the problem instead of just throwing money at it.

FWIW, I thought Pelosi did some good things early on in the auto fiasco. And I've never had a kind word about her before.

[The Marmot]

Being reported this morning that the bill has failed in the Senate.

UAW refused to 'move' on wages. Republicans made the issue a dealbreaker. Dems are fingerpointing.

I don't know if this situation can be fixed, but I like the idea of fashioning legislation that intends to fix the problem instead of just throwing money at it.

FWIW, I thought Pelosi did some good things early on in the auto fiasco. And I've never had a kind word about her before.

http://news.yahoo.com/s/ap/20081212/ap_on_go_co/congress_autos

[BlackKnightHogFan]

Being reported this morning that the bill has failed in the Senate.

UAW refused to 'move' on wages. Republicans made the issue a dealbreaker. Dems are fingerpointing.

I don't know if this situation can be fixed, but I like the idea of fashioning legislation that intends to fix the problem instead of just throwing money at it.

FWIW, I thought Pelosi did some good things early on in the auto fiasco. And I've never had a kind word about her before.

A subtle but important difference.  UAW did concede that they would "become competitive" with the transplant auto makers.  GOP wanted a definite date and the UAW wouldn't or couldn't give them one.  As an aside, the UAW President wasn't even involved directly in the negotiations.  That is he wasn't in the room, he had a cronie on the cell phone as a go between.  As in, "I don't know if I can get you that price, sir, let me check with my manager" just like buying a car. 

[The Marmot]

A subtle but important difference.  UAW did concede that they would "become competitive" with the transplant auto makers.  GOP wanted a definite date and the UAW wouldn't or couldn't give them one.  As an aside, the UAW President wasn't even involved directly in the negotiations.  That is he wasn't in the room, he had a cronie on the cell phone as a go between.  As in, "I don't know if I can get you that price, sir, let me check with my manager" just like buying a car. 

The UAW is setting their membership up for unemployment, just so they can try and point to the gov't and say "ITS YOUR FAULT, NOT OURS!!" If this doesnt expose the UAW for what they really are, nothing will.

If the US auto industry goes down, I guarantee Gettlefinger will get a fat check and a cushy job somewhere else within the corrupt labor union machine.

[john c]

The UAW is setting their membership up for unemployment, just so they can try and point to the gov't and say "ITS YOUR FAULT, NOT OURS!!" If this doesnt expose the UAW for what they really are, nothing will.

If the US auto industry goes down, I guarantee Gettlefinger will get a fat check and a cushy job somewhere else within the corrupt labor union machine.

Don't you think they are also up against the wall.  Do or die for the unions.  If they get negotiated down to competitive with non-union, what is their sales pitch.

[The Marmot]

Don't you think they are also up against the wall.  Do or die for the unions.  If they get negotiated down to competitive with non-union, what is their sales pitch.

I guess thats my point. Whats more important, the employment of the workers or the viability of their union right now? I guarantee if you asked the guy working the line in a GM plant to choose between his job or his union, he'd keep getting paid.

[RazrRila99]

I have a question -- isnt it the unions "responsibility" to watch out for the livelihood of its "members?"  Seems to me that it IS in the unions interest to keep their workers employed. 

How is the union "paid?"  I was under the impression that its a flat fee (i.e. $5 per head, dont know exact that is just a number) per employee and not a percentage of wage.  As long as the employee is getting paid by employer then the union gets their "fee", am I thinking correctly?

[HognotinMemphis]

Supporting the aig,fannie,freddie or captial one bailouts not to mention the "tarp" give one little moral ground to stand on when opposing the auto bailouts, imho. It is time to either go all in with the government bail out or let it crash and burn and pick the pieces in 5-10 years. Either way, a lot of this country will be owned by China; they will either finance our bailouts and be our debtors or they will jump in and buy stuff on the cheap after the carnage.

You've been watching too much Boston Legal. Choke down on that stuff.

[DeltaBoy]

I emailed my Senators and told them NO to the Bail out.

[SpareRib]

Here's the newest I have - Now Bush has changed his mind?

http://www.politico.com/news/stories/1208/16523.html

Man, I'm just dizzy.  The fact is that no one in a position of leadership is doing anything more than shooting from the hip.

I don't see any evidence of a long term plan for this country's future.  If we don't decide what we want to look like 10 - 20 years down the road and start making some hard decisions in the right now that get us there, we're in real trouble.  Right now our elected leadership is up to its fanny in alligators and neither they nor their advisors seem to be able to focus on draining the swamp.

So are we gonna be a manufacturing economy, a service economy, a financial bastion, a leader in high tech, a formidable military power ... what?  Is our goal truly to improve the quality of life and the safety of our citizens?  A lot of people are losing jobs, insurance, and their homes as the result of where we are.  It could well be that the right decisions made now may have very painful results in the short run for more folks.  I just hope that our leaders have the guts to make the right decisions now, however painful, to move us in the right direction for our future.

I'm willing to eat beets and cabbage soup if I could be truly convinced that what we are building is a better place for my grand daughters, and I have absolutely no concern for whether the UAW remains viable or my esteemed congressmen keep their jobs.

I can guarandamntee you that the Chinese know where they want to go in the next 20 years and their important tactical decisions are all made within the limits of this framework.

So my questions remain -

Where do we want to be in 20 years?
What are the decisions we must make today, however painful, to get there?
Who has the guts to implement them?

I'm looking for insight, integrity, and some plain old "grab the horse by the collar and drag him" leadership. 

[Singha Hog]

Thank god for the GOP..


I know how i will be voting in 2010.

Me too... the party that didn't have things so bad that everybody and their brother was begging for a bailout.

Seriously, where have you been for the last 8 years?

[Hawgnoxious]

Any company that wants to "borrow" money from the US government should be forced to close down their factories in Mexico, and move those jobs back to the United State IMMEDIATELY!!

[hog.goblin]

The GOP opposes bailouts for guys like this (the Dems should too):

http://www.youtube.com/watch?v=qDC0qcf0kzE

[SpareRib]

The GOP opposes bailouts for guys like this (the Dems should too):

http://www.youtube.com/watch?v=qDC0qcf0kzE

Regardless of where you stand on this issue, that's plain darn funny!
Here's a virtual +1.

[hawgbawb]

Thank god for the GOP..


I know how i will be voting in 2010.

I agree in principle with the GOP on this, but I worry about the domino-like economic consequences of letting Detroit fail. I would much rather spend a few billion USD on truly progressive, entreprenurial, technologically-superior car start-up companies or electric auto R&D.

My gut tells me that letting them fail will probably make this by far the worst recession since the Great Depression, but maybe that is the medicine we need.

[Verge]

I agree in principle with the GOP on this, but I worry about the domino-like economic consequences of letting Detroit fail. I would much rather spend a few billion USD on truly progressive, entreprenurial, technologically-superior car start-up companies or electric auto R&D.

My gut tells me that letting them fail will probably make this by far the worst recession since the Great Depression, but maybe that is the medicine we need.

There's a good chance, but it's just the principal of things. Unions are anti-free market, and their union salaries are anti-free market... thus, their company should fail.

[hawgbawb]

There's a good chance, but it's just the principal of things. Unions are anti-free market, and their union salaries are anti-free market... thus, their company should fail.

The union certainly gets a good share of the blame, but they are by no means the only culprits. Others include:
1. Poor, short-sighted management
2. Corrupt, coddling Congress
3. Poor governmental policy vis a vis energy
4. American consumers who have demanded gas guzzlers
5. Excessive health care costs 

[Masshog]

The union certainly gets a good share of the blame, but they are by no means the only culprits. Others include:
1. Poor, short-sighted management
2. Corrupt, coddling Congress
3. Poor governmental policy vis a vis energy
4. American consumers who have demanded gas guzzlers
5. Excessive health care costs 

Yep....

[ConwayHog]

4. American consumers who have demanded gas guzzlers

Then how come Toyota isn't out of business?  We have demanded gas guzzlers (trucks/SUVs), but we have also demanded cars and minivans (semi-gas friendly).  The market is complex and Chevrolet pitched their tent with the truck/SUV market.  Toyota, Honda, and Nissan all have viable backup alternatives and have recently began to get into the truck market (not the other way around).  I'm sorry but I don't feel the American consumer should take blame.  We all want a product.  It's up to them to determine whether they can operate a profitable business making that product. 

Here's why I don't feel sorry for these guys.  They have almost $200 billion a year in revenue and can't earn a dime.  That's a business model issue (labor costs, benefit costs, product costs/design, etc). 

[The Marmot]

Then how come Toyota isn't out of business?  We have demanded gas guzzlers (trucks/SUVs), but we have also demanded cars and minivans (semi-gas friendly).  The market is complex and Chevrolet pitched their tent with the truck/SUV market.  Toyota, Honda, and Nissan all have viable backup alternatives and have recently began to get into the truck market (not the other way around).  I'm sorry but I don't feel the American consumer should take blame.  We all want a product.  It's up to them to determine whether they can operate a profitable business making that product. 

Here's why I don't feel sorry for these guys.  They have almost $200 billion a year in revenue and can't earn a dime.  That's a business model issue (labor costs, benefit costs, product costs/design, etc). 

^^^^^ This.

The customer wants what they want. Its the crux of a market based economy. The companies, especially today, have to be flexible enough to meet the changing wants of the customers. Its just supply/demand.

Like Fresh said, Toyota and Nissan are building gas-guzzlers, yet they also build their core cars. Nobody has ever clamored to buy the fuel efficient cars put out by Detroit.

[john c]

^^^^^ This.

The customer wants what they want. Its the crux of a market based economy. The companies, especially today, have to be flexible enough to meet the changing wants of the customers. Its just supply/demand.

Like Fresh said, Toyota and Nissan are building gas-guzzlers, yet they also build their core cars. Nobody has ever clamored to buy the fuel efficient cars put out by Detroit.

I've said before that my son has a boutique used car business dealing in higher end cars.  He usually keeps me in Escalades but sold the one I was driving and I had to drive his Tundra for a while.  Drove it to central AR and back the other day.  I checked the mileage down and back as I always do in Escalades or X-5's.  I usually get very good mileage in whatever I drive.  What got the worst mileage?  Yep, the Tundra.

[john c]

http://news.yahoo.com/s/ap/20081210/ap_on_go_co/congress_autos

Here are some excerpts - (My comments in bold)

Was there any doubt?


"People realize that this bill is an incredibly weak bill, (and) is the product of an administration that wants to kick the can down the road and let somebody else deal with it," said Sen. Bob Corker, R-Tenn.


I have been saying this until I'm blue in the face.

Rep. John A. Boehner, R-Ohio, the minority leader, said the legislation "asks taxpayers to further subsidize a business model that is failing to meet the needs of American workers and consumers."


And while we're at it...let's save everything on wheels -

Democratic Sen. Max Baucus of Montana announced he was against the measure because of a provision to bail out transit agencies. The bus and rail systems could be on the hook for billions of dollars in payments because exotic deals they entered into with investors — which have since been declared unlawful tax shelters — have gone sour.


The final straw - This stuff has got to stop yesterday!

Also included in the bill is an unrelated pay raise for federal judges.

These are the boneheads that want to save us from calamity by telling Detroit how to do it's job.  Your tax dollars at work.  When is enough enough??

(Edit for clarification - I agree with Corker, Boehner, and Baucus.  They obviously didn't write this thing.)

Bush's speech would lead you to believe that the Corporate boards, their chosen managment and the unions were simply innocent victims of .... whatever.  The buck stops here?  How about the puck stops here.

[The Marmot]

The White House clears $17.4 billion for GM and Chrysler, with the same concessions from the failed bill attached.

http://news.yahoo.com/s/ap/20081219/ap_on_go_pr_wh/meltdown_autos

Well, at least they didn't just write 'em a check (for now).

We'll see how hard they push the UAW, like the Senate did.

[john c]

I'm curious what he meant - in detail - about what the suppliers were going to give.  Forgiving some of current accounts payable?  Forced reduction in pricing?  I guess there are some sad bankruptcy attorneys today but there may be a silver lining for them as suppliers go bankrupt.

[Steef]

If UAW doesn't blink, this is all a waste of time & dollars.

We'll be right back here in a couple/few months, doing the same dance.

I'm not thrilled with the idea of tax dollars underwriting overpaid workers.

'Course, same could be said about bank CEO's.