Posted on 12/12/2008 7:04:08 AM PST by meandog
Bush changes mind, may save auto giants
Facing the potential bankruptcy of iconic American firms, President Bush on Friday abandoned his longstanding objection to using using the Wall Street bailout fund to help save G.M., Ford and Chrysler.
A frustrated Republican congressional official said: "If only they had said this last week, we could have saved ourselves a full week."
Ten hours after the Senate rejected a separate lifeline for the automakers, White House Press Secretary Dana Perino said in a statement it would be "irresponsible" to let the companies crash. So she said Bush will "consider other options," including the $700 billion Troubled Assets Relief Program that Congress created for the Treasury Department in October.
"Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms," Perino said in a statement. "However, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program — to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time."
(Excerpt) Read more at politico.com ...
If you check out my words, you will find that the 73.00 figure includes legacy costs which is added to the wages of current UAW employees in order to come up with this figure. The figures I have quoted are accurate. The 73.00 average is the lie-more lies from the enemies of manufacturing and in my opinion enemies of this country. As for being on this forum, My wife (nyconse) and I have been here longer than you...we are conservatives, but do not like the trade or economic policies of current Republicans. I have great hope that his might be corrected if we had some new blood. Judging from the severity of the economic meltdown, we are correct in our assessment.
There is but one benefit. America keeps a manufacturing base. We need to rebuild manufacturing in this country not destroy the last vestige of it. If you think the transplants will remain after a big three melt down, you are wrong. One has only to look at the electronics industry to see this. America will become dependent on foreign manufacturers for all our products including military products (assuming you consider transplants American, I do not-nor do I believe they would build military equipment in a crisis). This is a terrible idea and will destroy this country. If for no other reasons than national security...we need to save the Auto industry.
My house cost me thousands in repairs...As for affordability, I hear that argument all the time, but maybe having a thriving American construction industry is more important then saving money by building crap houses. My house in the Mid West I just sold (transferred to Ohio) was built three years ago by American workers. It was cheaper than the house in Georgia so I don’t think this cost thing is necessarily true. I think the building companies don’t pass any savings to the consumers but pocket the profit. What they do is illegal and in my opinion these people are criminals.
Your attitude will lead to a truly in your words ‘sucky’ America. As for buying American...I leave you with these words. Buy American or bye bye America. An old saying but completely true. A country that manufactures nothing will not remain a great powerhouse. If you and other completely clueless Americans succeed in destroying an American industry...how is this some sort of accomplishment?
But you see, we are talking about the ‘folding’ of an entire industry-Millions of jobs will be lost-many are not union jobs. Now, if you think the President loves the auto industry or the unions, you are delusional. He is a globalist. President Bush refused to meet with any Auto CEO’s since becoming president and has never met with any union representatives either. The only reason Pres. Bush would give the Auto companies this loan is because he knows the devastating affect this will have on our economy. He loves this country more than he hates the big three or unions-unlike many of you. Good for you Pres. Bush...some issues are to important to leave to the politics as usual crowd.
BOYCOTT DETROIT. Let the blue states buy their cr4p. What’s a good Japanese replacement for my F350? Baseball, hotdogs, apple pie and Toyota!
I’ll regret voting for Bush in 2004 if he does this. Let them file Chapter 11 and restructure. If they don’t come through that, then so be it. This invasion of the federal government into the free market is ridiculous.
If the fact that the banks, Wall Street firms, and now the Big 3 automakers sauntered up to the Congressional handout window begging wasn’t bad enough…now we find out what they were doing BEFORE they ventured to D.C.?
Key industry actors in the current financial crisis gave $14 million to conventions, CFI reports. The following are some of its findings:
Freddie Mac gave $500,000, half to each committee.
Ford Motor Company donated $200,000 for the conventions, half to each host committee (Also, Kirk Kerkorian, Ford’s largest shareholder with ties to GM and Chrysler, gave $3.5 million).
General Motors provided 735 new cars to the Democratic and Republican Party convention committees for elected officials’ use.
American International Group, or AIG, gave $1.5 million split evenly between the two committees
Hedge funds and their managers gave $3.9 million – $2.7 million to Republicans and $1.2 million to Democrats.
Investment companies including Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, UBS and Lehman Brothers, gave $1.5 million.
Other financial institutions that have received or are eligible for bailouts, such as Citigroup, U.S. Bancorps, Wells Fargo and Bank of America, donated $2.9 million – much of it was given to the Republican committee.
Yet each and every one of these firms have either requested or have received some of OUR (meaning yours and mine) hard-earned money in the form of bailouts. As we all know, if you or I were to make that sort of transaction and then come begging for money four months later — we’d be told “so sorry, but you f—ed up and now you have to suffer the consequences”.
Now, wait a minute. You keep mentioning the electronics industry, which I am in. The mass market CONSUMER electronics industry has indeed pretty well gone overseas: Bad for me - I am in one of the last vestiges & presently (still) job hunting! But, there is all kinds of high tech electronics industry still here - a good part of which is supplying modern weapons and components for such to the U.S. military.
At least in the consumer electronics areas I work(ed) in, there never was particularly significant Japanese production in the U.S. The U.S. companies simply shifted production to overseas plants or vendors, or were displaced by vendors who were foreign all the way. Well, maybe not always 100% “all the way”. Last time I checked, Pioneer Electronics, for example, was still doing some of their product development, engineering, and testing in the U.S., but not the production, of course. In fact, I was just over at their website and they are hiring engineers for locations in CA and OH - unfortunately not in my specialty. :-(
Whether or not the “transplant” auto companies stay here is not dependent on whether the “big three” declare bankruptcy. It is dependent on whether or not it is cost effective for the transplants, or anybody else, for that matter, to manufacture here. The auto market may decline, but it is not going to disappear.
Why is it assumed most of the suppliers can’t adjust? Any company over 100 employees that can’t shrink by 20%, or even 50%, and survive / adjust, probably does not deserve to survive.
I’d also challenge something from another post: I’ll bet Toyota would LOVE to build or buy a plant to manufacture military vehicles for the U.S., in the U.S. True, there might be some “technology transfer” issues (in both directions), but such could be handled. And, true, we theoretically could get in a confrontation with Japan, again, someday, but THEN you nationalize ‘em (Toyota’s U.S. operations.) Not NOW (GM, Ford, etc.)
That said, I am not TOTALLY opposed to loans to the big 3, IF those loans are made under similar conditions to those which a conservative / cautious bank would require. At the very least, the execs and the union heads need to convincingly show how they will get to the point of competitive costs. Of course, then gov’t financing might not be needed: Maybe Warren Buffet would “do the patriotic thing” (at the urging of Joe Biden?)
Of course, I want manufacturing to stay in the U.S. That’s what I was doing (until recently!!!) But, having the gov’t run / control it even more than it does now will make the situation worse, not better.
As an aside, I recently saw that Circuit City declared bankruptcy, and is closing 120 stores, but, the company is not going to disappear, nor will most of their suppliers. In fact, they are still running ads nationally, though locally, they are advertising the store here closing.
Yo, Bushie. How's that whole "No Child Left Behind" thing going?
The Other American Auto Industry
I'd also point out that Nissan doesn't just "send profits home to Japans." Nissan is a publicly-traded company right here in the U.S. (ticker symbol NSANY), and their profits go to wherever their shareholders happen to live.
How odd is it that a UAW employee working for a Big Three company is better off with Toyota or Honda stock in his pension fund than the stock of the Big Three company he works for?
Doesn't that say something?
The Nissan Titan and Toyota Tundra may be good alternatives to the F-150, but I don’t think any of those foreign companies produces anything that compares to the Super Duty trucks.
We have discussed this before...I know this but it in no way equals an American auto maker earnings for this country. Also, we need an industrial base in order to be a prosperous nation. These transplants received millions and millions of dollars to locate here-taxpayer money. This a bailout for sure. Also, these companies have no loyalty to this country and will soon be gone if they and their bought and paid for Senators succeed in killing the big three. Not surprising to me that all Republicans and a few Democrats who come from these states all voted no to the idea of a bridge loan for the big three. In my opinion these senators are traitors and should be investigated by justice. Those who defend them are misguided to say the least.
You are out of work? I would say the industry is not going that well. What plant did you work for? If you think it is ok to outsource our military equipment production to the Japanese...there is nothing left to say. I can only say you are dead wrong especially about national security. I checked out tv’s before buying mine. The closest I could come was Vizeo which manufactures in Asia but is an American owned company. What tv is built in this country. What computers? I keep hearing about how America is really still manufacturing, but I see something completely different.
Bush gave the liberal/progressives Medicare Part D, the biggest expansion of the Welfare state since FDR....and they hate him.
In fairness, BJ Clinton gave us balanced budgets and NAFTA...and conservatives hate him.
Go figure.
Yeah but that was written by the hated Peggy Noonan. But then again, maybe she was right?
Again, there is much more to the electronics industry than mass market consumer electronics, though of course that WAS a very big part, and, obviously, the visible part to you. High end electronics are alive and reasonably well, considering the economy, whether for military or even for home stereo. In terms of the latter, I give you, as an example, Martin-Logan, whom any real audiophile knows of as a successful and respected company. As for the former I give you Texas Instruments - sure, if you buy a $20 TI calculator, it’s probably made in Malaysia or someplace like that. But, in terms of National Security, TI’s consumer products are minimally relevant: The concern is whether or not TI can reliably supply those neat circuits that allow our missiles to, for example, recognize an enemy ship as an exact type and adjust it (the missile’s) attack for optimum (”incoming!”) direction, angle, and velocity.
Indeed, that part of the electronics industry I was in has basically “had it”. So has that part which made manual telephone switchboards. Should the gov’t have bailed out the latter? Or should it have provided fertile ground for the companies making the replacements to make them here?
(I must decline to say exactly where I worked however - they are still in business, if only minimally, and spreading around the bad news about their situation only increases the odds against their being able to transform into something new that can succeed.)
I guess we’ll just have to disagree on military production equipment. The “big 3” going into bankruptcy is not going to effect significantly items like guns, missiles, planes, ships, etc. I don’t even think it would affect military vehicles much, but, if it does, I am not saying outsource ‘em - let Toyota (for example) build the basic vehicle (for example) HERE, and some other U.S. company can follow up and do the “aftermarket” work, if really high tech is involved. (When it comes to basic vehicle technology itself, Toyota, Honda, etc., are probably at least equal to Detroit.) But, more likely, some remnant of “Detroit”, if it even comes to that*, could surely carry on with what I am sure is a lucrative business.
I just don’t think it will come to that. Bankruptcy is NOT going to vaporize, say, GM. Damage, perhaps, esp. short term. Change and reorganization, certainly. (or certainly I’d hope so.)
“Also, these companies have no loyalty to this country and will soon be gone if they and their bought and paid for Senators succeed in killing the big three.”
Loyalty has nothing to do with it. The transplants aren’t going anywhere. If the big three are killed (which bankruptcy won’t do, if handled anywhere near correctly), then who is going to make cars for the U.S.? Correct me if I am wrong - there are still import limits, and, besides, it is currently cheaper for Toyota, Honda, etc., to make cars for the U.S. market, here. The incentives were due to the individual states and localities fighting over getting the plants in THEIR backyards — the factories were coming to somewhere in the U.S., regardless.
In 1973 the US textile and apparel industry employed 2.4 million workers, in 2005 it employed 650,000. Most of these jobs were nonunion and located in the rural South. Today this nation no longer has the manufacturing capability to clothe itself.
Food, clothing, and shelter are considered the basic needs to sustain life. If the textile industry wasn’t important enough to save, why should autos be any different?
We need to wake up and realize globalization has been bad for America. In 30 years we’ve gone from being the greatest close to self sufficient economy the world has ever seen to a bankrupt debtor nation that cannot clothe itself and is on the road to not being able to feed itself.
The once great industrial infrastructure of the United States was created during a hundred year period after the Civil War. Investment during the 100 year period in which our manufacturing economy was created meant investment in tangible productive assets. Since the 1970’s Wall Street has shifted from making investment in hard assets having a productive life of decades to financial manipulation of paper assets. Paper instruments rise and fall based on quarterly paper profits instead of the long term productivity of hard assets. Rebuilding America’s manufacturing economy requires Wall Street to shift its investment horizon from minute by minute to decades if companies are to raise the capital to build the factories. Government policy will also have to favor US investment and provide a hospitable long term and predictable tax, trade policy, and regulatory environment if investors are to accept the risk of deploying capital for decades.
Unfortunately, there is no indication Wall Street or the government has any inclination to create the conditions necessary for a renaissance of US manufacturing. In fact, if Obama’s union checkoff plan passes, expect to see the remaining US factories organized within 5 years and nationalized within 10.
I agree with you completely. When I lived in Georgia I was shocked to see the shuttered factories. I am ashamed that I did not stand up for textiles, steel, electronics. I bought the trade bs-most did back then. Now I see that industry is essential to the country and want to save the autos and then start rebuilding this country so we have a decent future. It may be too late for me;I’m 47, but let’s do it for our children. The Wall street bankers are not qualified to run our economy this has been clearly demonstrated in the last three months. Our country is bankrupt...we must rebuild our industry and become self sufficient once more in all areas. I don’t want to become a nation of consumers begging for crumbs from Europe or China. I want this country to become an economic giant once more. The financial weenies are already talking about how our best days are behind us...we will not lead in a meaningful way. I say nonsense. We can become the shining city on the hill. Our best days lie ahead if only we take the appropriate actions today.
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