Why We Shouldn't Bail Out the Big 3 Auto-makers

The New York Post ^ | November 16, 2008 | Eric Torbenson

[St. Louis Conservative]

That beeping sound you hear this week is the semi-truck being backed up to the Federal Treasury in Washington. After being filled with taxpayer billions, it's on its way to Detroit.

A heaping bailout for the Big Three automakers - currently losing millions every day theyproduce cars no one wants to buy - feels like it's being gift-wrapped for the holidays.But the beeping sound you should be hearing is the heart monitor of the Big Three, slowing downto flatline. General Motors, Chrysler and Ford are such horrific financial wrecks that not even the Jaws of Life - and certainly not a taxpayer bailout - can save them.

MORE: The Future Of Cars

MORE: The Auto Industry: Boom To Bust

"We're funding a day care system for people with extinct skills," says Michael Covel, an entrepreneur, trader and author who is among many to back the simple argument: "let them die."

"We'll be a heck of a lot stronger in the long run if we just take the pain on this right now. They'll burn through it and be back for more. We're turning auto jobs into government-supported jobs and it's a shame." In just under two years, GM has lost $57 billion. The current quarter will provide more huge losses, and even in its regulatory documents the company admits that demand for its products isn't coming back soon. Translation: profits are as likely as trucks that run on rainbows.

[This_far]

You can take it up when you return.
I worked for GM for years, hourly to salary.

Bring it on. I was an avid critic of policy and made corporate changes the hard way, from within.

I should have just referred you to post #4 and moved on.

BTW, if you don’t want to be “nice”, perhaps you can pm me. Not sure what you intended to say about me that would get you banned.

Have a nice time and please, take a cab. There appears to be a slight occurrence of thread drift.

[fightinJAG]

Some very good info here as well:

An Auto Industry Bailout Will Fail.

[This_far]

Bet you voted too, didn’t you.

(I think I’m getting locked into an illogical logic loop)

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[fightinJAG]

And other companies will simply hire to pick up the slack.

It’s no use preserving “jobs” that are not producing anything people want to buy. In that case, you are simply handing out welfare checks and calling it a “job.”

Pelosi’s proposed $25B for the B3 automakers is slated to have $12B go to pay UAW union benefits to retirees. IOW, to people who already DO NOT HAVE AUTO JOBS.

[fightinJAG]

Excerpt (link below):

Should we really bailout Big Three automakers with $73.20 per hour labor compared to Toyota’s $48.00 per hour labor compared to $31.59 per hour for all other goods-producing labor in the U.S.?

[snip]

The chart above shows average hourly compensation for the Big Three ($73.20) and Toyota (TM) ($48.00), compared to average hourly compensation for Management and Professional Workers ($47.57), Manufacturing/Goods Producing ($31.59) and all workers ($28.48), data available here.

Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM (GM), Ford (F) and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?

Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda (HMC) and Volkswagen (VLKAY.PK) take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.

http://seekingalpha.com/article/105061-should-we-really-bail-out-the-big-three-automakers-with-73-20-per-hour-labor

[Spktyr]

GM, Ford, and Chrysler do not make any essential war material.

We’d get ships and tanks from Northrop Grumman, United Defense, Lockheed, General Dynamics, etc., etc.

[Spktyr]

Per a study posted here last week, ***68%*** of the UAW voted for the Obamination.

So, yeah, most of the rank and file really does believe what the UAW heads are saying.

[truthguy]

I vote for as dumb as a box of rocks. I agree totally with you.

Bronxboy, I've read your posts before and you seem to "get it". Some of the posters on this board just seem to be in this hatred of the Unions and the UAW that they have lost track of reality. They are blinded by their hatred and they would cut off there nose to spite their face. I'll bet most of these posters having worked in any type of a job that involves Manufacturing or Engineering or in any high tech environment. Some of them may have worked in Software or something of the like.

At any rate they simply don't know how hard it is to manufacture ANYTHING here in the US today. If they actually worked in the environment for some time then they might see what we are up against.

If you've read some of my posts then you undoubtedly know that I'm aware of how important it is to maintain our manufacturing base. We have lost so much already. I'm not against services. I had to go to the dentist last week and I'm glad I had this service available. But you know what? I noticed a lot of sophisticated equipment in his office that needs to be manufactured somewhere. Without this equipment he could not do his job very well.

So services and manufacturing go hand and hand. Kill one and the other will die in short order. Many if not most of the posters on this site cannot grasp this principle.

Now as far as the UAU goes, this is a tough problem. I dislike these fools as much as anyone on this site. They along with the Federal Government are responsible for the current situation. But for the time being we must deal with these folks and try to work something out.
Later-must go now.

[Spktyr]

I too wish to punish the people that donated FOUR HUNDRED MILLION DOLLARS to get Obama elected and that now turn around and whine about how they need a bailout and won’t make more concessions.

[BobS]

I want to see a public financial audit of the UAW. I want to see every single check they wrote.

[Spktyr]

Caterpillar broke the UAW and seems to be doing just fine now.

GM needs to declare bankruptcy and break the UAW as well. A lot of the regulations on manufacturing in this country is generated by people the unions put in office. *That* is the power that needs to be broken.

[truthguy]

Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda (HMC) and Volkswagen (VLKAY.PK) take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.

Your post had some good points but the above is simply breathtakingly stupid. It's surreal. Look I lack the time to respond but look at my posts to see how important it is to maintain our manufacturing technology. And by the way most JAG don't know jack about fighting. Maybe you are an exception. I don't know

[Petronski]

I think a better title/topic would be:

Why the Big Three Must Be Permitted to Fail

[TigersEye]

Just so I understand you - you want to financially punish people who have a different political philosophy than you?

When that political philosophy aims to undermine the foundations of the republic? Hell yes!

[Bombshell]

I agree completely!!!!!!!!!!!! Do NOT support unions if you can help it. They OWN Chairman Zero!!!!!!!!

[Jacquerie]

I would appreciate your opinion as to why Detroit, the once “Arsenal of Democracy” has been in a long term decline.

[red irish]

That is exactly what Ben Stine said and I agree. If the government gives them a loan with strings,ok. If they are going to tell them hey ok thanks see ya in six months then bankruptcy is the way for the automakers to go. I just hate seeing 3 million people lose their jobs. It’s time for the union people to wake up and change or go bankrupt. I want good American made cars. Not foreign companies. Don’t we have enough China crap. Where is the pride in American made products? Yea help them out but they must make changes,one being those at the top who are responsible.

[Spktyr]

The unions destroyed pride in USA-made goods. When the best made thing on a Moog suspension part is the UAW sticker (misspelt, of course) and even the Taiwanese counterpart looks better made, with the Japanese-made version looking like the rest of the car will fall apart before it does, that goes a LONG way towards destroying pride.

That said, I AM proud of what my countrymen here in the South make. Nissans, Toyotas, BMWs, Mercedes....

[This_far]

Not a bad idea.
They actual do, or used to, put out figures, but I never tried to figure them out.
Anecdotal, but consider the size of the UAW and then consider Al Sharptons financial situation with the IRS.
Who’s going to oversee it and how much will it cost.
Not saying either is proper, but in the real world...

Also, unless you (or I or anyone has a vested interest in the running of the union), I’m not sure we have bearing to ask for an accounting. Anymore than you or I would concerning any private business entity.

Should bail out money become involved, that is different.

[eyedigress]

On top of that the lay-offs would be comprised of the deadbeats who “can’t” be fired.