Posted on 01/26/2006 12:17:48 AM PST by Aussie Dasher
US President George W Bush thinks hard pressed American auto giants, General Motors Corp and Ford Motor Co, should develop better cars instead of looking to Washington for help.
In an interview with the Wall Street Journal, Mr Bush said he had not talked to the struggling companies about their finances.
But he hinted that he would take a dim view of a government bailout of the top two US carmakers, the newspaper reported.
"I have been very reluctant – I'm mindful of the past where at one point in time, a predecessor of mine was faced with that same dilemma," Mr Bush was quoted as saying. "I would hope I wouldn't be asked to make that decision."
Asked if he had spoken to GM chief executive Rick Wagoner or Ford chief executive Bill Ford jnr, Mr Bush told the newspaper, "Not about their balance sheets".
"And I haven't been asked by any automobile manufacturer about a bailout," he said.
Asked if the Government should take any pre-emptive action, Mr Bush was quoted as saying, "I think it's very important for the market to function".
Mr Bush suggested he felt optimistic about the companies' prospects, according to the newspaper.
Ford and GM have said they would close plants and cut tens of thousands of jobs.
Competition, particularly from companies based in Asia, soaring health care and pension expenses and production costs have increased financial pressures on the unionised companies.
The newspaper said while neither GM nor Ford had sought a bailout, they havhade dropped hints they would welcome government help in areas such as coping with rising health care and pension burdens for their workers as well as the high costs of developing fuel-efficient vehicles.
Mr Bush suggested that one way automakers could make more appealing products was to promote cars using alternative fuels, a topic he plans to mention in his state of the union address next week.
He said in the interview that US automakers could find new market share in the competition to sell vehicles that run on alternative fuels.
"As these automobile manufacturers compete for market share and use technology to try to get consumers to buy their product, they also will be helping America become less dependent on foreign sources of oil," Mr Bush told the newspaper.
Unfortunately, we have Ms. Granholm in charge of MI, and her state of the State address last night left little to the imagination. Seemed like every other sentence was either placing blame on "unfair federal trade agreements" or to suggest "better solutions to the healthcare problem" were needed at the national level. Hopefully we'll see her blatant collectivism rejected at the state level in Novemeber, as well consistency on the issue in the current Administration.
Then there's the "jobs bank," under which laid-off workers still receive 95 percent of their wages, a benefit that seems sure to be on the chopping block when Ford and the United Auto Workers enter bargaining on a new contract next year.
I'm not sure about recent activities, but I do remember in the 70s and 80s how hard the unions fought against automation, which would have lowered prices and standardized quality and quality control. The days of unions being a benefit are over, as far as I'm concerned. I've seen little evidence (in my limited exposure to them) that they do anything to instill a sense of pride in workmanship or in the trade they claim to serve. Instead, all of the pride is focused on the union and its struggle against the company that pays its membership so they can pay their dues to the union, so the union can continue the struggle.
American citizens don't seem to be the rising up kind.
Back in the days of yore, UAW and others associated with the industry pressured the companies into some rather unsustainable contracts.
At the time, the companies were extremely profitable and saw no dark days ahead, plus they were afraid of the political pressure the unions could put on them, not to mention the potential losses in strike situations, so they caved. It's worth noting that there were and are still places in MI where one cannot park a foreign car, and where one does not dare to hire non-union labor, for fear of violence (assault, vandalism, theft, etc.).
As time has gone on, the contractual pay increases, pensions, and health care cost increases, coupled with increasingly soft demand for US autos at the prices they are offered, has put a heavy strain on the ability of these companies to compete in the global market (though some are doing far better overseas than domestically, again due to labor costs).
It's also worth knowing that the vast majority of the blue-collar (waged) employees and some subset of the white-collar (salaried) employees that were part of these contracts and currently being laid off (under union contract, they CANNOT be fired) will continue to receive full health benefits and 90% of their pay for 18 months after receiving their notices. After that, they still qualify for unemployment benefits from the state. So Ford is looking at it's balance sheet and laying these people off now, knowing it will have to pay nearly all of them most of their wage (the average line worker makes over $65,000 a year) for this period of time for no labor whatsoever. Things have gotten that bad.
I think various govt officials paved the way for people like us to get the shaft....
Gov't officials, maybe. The US taxpayer, no. If you asked the taxpayers how they felt about covering thousands of pensions that disolved, they would let you know in a hurry how they feel about it. We are paying enough in Social Security taxes. Most of us have to supplement that on our own. What's good for the Goose ........
I'll put the '67 up against it any day. Looks, class, and speed. Th C6 can't touch it and would eat dust.
Okay, it is a mess. My perception (from 1000 miles away) of the US automotive industry 'situation'.
The Corporate wazoos: pampered, elitist corrupt business weenies, who will screw over their own company (workers and shareholders and customers alike) with the goal of jumping ship with some form of golden parachute when their bad behavior gets things going downhill, or a better offer comes along. They are immoral crooked scum. Greed wins.
The workers: generally overpaid, underworked union types. They have bought in too deeply to the thought that 'the man' (front office) is trying to screw them over at every turn or contract, thanks to power-hungry unions. They cannot think far enough to realize that their skill level is no more than a Nebraskan Farmhand with 5 years experience, yet their pay is 3 times as high. Sure, 'the man' is making millions, but you 'deserve' more. Even if the company goes in the toilet. Envy fueled by corruption wins.
The shareholders: primarily a bunch of yuppies looking for a 50% profit in three days, damn the ethics or business practices. If the next 'the man' is offered automatic bonuses of 5 mil a year no matter how crappy a job they do, that's okay. If the union says the employees need an extra 15 minute break every 43 minutes, so be it, just tell me the stock went up 14% yesterday. Greed wins.
The customers: we want to buy American, to help America. Do we look at how the company is run to see if we like it? Heck no for the most part. Do we realize that even most of the crappy stuff being made here is 'backed' by corporate execs described above who hide behind hideously intricate legal protections ? Heck no! When do we do anything about crappy products? Usually after its too late and it doesn't affect the criminals that 'were' running the company. Apathy fed by a great feeling of powerlessness wins.
The government:
Repubs = big business, except Pres Bush is doing it right, telling the big boys to get their crap straight without a handout (we hope).
Democrats = protect that little guy. Okay which little guy? Well of course whichever one I'm standing in front of when I'm making a re-election/fundraising speech.
It is a mess.
What happened to your husband is going to happen to many folks in the years to come - in one form or another.
For several generations, we as a society have allowed ourselves and our leaders, both political and business, to create a culture of debt. We have sacrificed ethics for a few pieces of silver, and we are quickly finding that we no longer have either.
We as a society have sown to the wind. And now we will reap the whirlwind. It is just that simple.
I'll add to "Miller Creek's" explanation:
The unions asked for & received more than that...they got permanent protection for dead-beat workers. A person can come in drunk, high on whatever, have a fight with the boss, sabotage the parts on the line which effects the production of a whole plant and NOT get written up, let alone fired. Also, some are on a permanent dose of medical leave: They go on leave, come back just enough to renew benefits, and go back on leave. THAT, too, is the union's doing.
It's the dead-beats. There are many who work their tails off & have pride in what they do, but it's almost futile to do a good job.
Possibly, however, I have modded mine just a wee bit. :-)
600Hp close to 500ft/lbs of torque, .28 drag coefficient, re-calibrated computers. Would be an interesting race.
I do like the looks of the C6 over all of the previous ones. The exposed Xenon HIDs rock IMHO. Also mine is a limited edition Lemans Blue. :-)
Of course Ford and GM aren't looking for bailouts.
Their pending North American bankruptcies are just a scam to get out from under their pension obligations.
They have nothing to fear from "Chinese" competition...
They ARE the "Chinese" competition.
Ford Unveils Joint Venture in China To Build Compact Passenger Cars
Ford Announces China Expansion Plan
Ford Plans $1 Bln China Plant in Nanjing
General Motors Sees New China Family Car Eclipsing Sedan Sales
General Motors Plans Expansion to Launch Cadillacs in China
General Motors Plans $3 Billion Expansion in China
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