I am sick of bailouts, let it all burn

[miir]

I dunno, you implied that american car manufacturers are having problems selling cars... well this year all car manufacturers seem to be having problems selling cars. That doesn't change the fact that GM is still selling the most cars.

GM has more hybrid models than any other manufacturer.
GM will be introducing the first mass produced electric with the Volt.

GM has actually taken some pretty big steps in adapting to the current market. Unlike Chrysler who seems to think that marketing more hosepower, more cubic inches and a HEMI makes sense, or Ford who just seem lost.

[pyrella]

Actually, I was trying to point out, that they aren't able to be self sufficient, thus remaining in business. If you're selling the most of a product, but your costs exceed your profits due to poor business practice (Union fuckery, etc), you deserve to go out of business. Also, just because one company is selling more cars than any other, doesn't mean they are selling the most amount of cars, they just have a higher percentage of the total market in comparison to competitors. However, again, if you're not remaining profitable....


I'm not exactly sure how to put this any more clearly.

Business does bad, business goes out of business.

Not..

Business that people have a sentimental attachment to does bad, use other peoples money to save them.

Hell these are publicly traded companies - the public (who chose to via investing) is already footing the bill by investing in a company that's doing poorly. Now all the other people who *aren't* invested in this company, have to turn around and throw their good money after bad, in the hopes that those who *are* invested in it, won't lose all their money. instead of just most of it.

[Forthe]

That is a pure ideological argument pyrella.

You need to look at the pro\con of such a decision (numbers). If you let the big three go down what is the cost (lost corp and income tax revenue, unemployment benefits, etc etc)? Once you have derived that number you can consider the costs and benefits of offering assistance.

If you can help restructure the industry (while pushing your energy policy) for near the same price as letting it fail I think the decision is a no brainer.

[Avestan]

What I think many of you are ignoring is the cost of saving these guys. Forget the bailout money, the cost of saving bad companies is that you create incentives for companies to be bad.

Ford, GM, and the rest, will all be better companies in the long run if we let them burn now. They will not go out of business (they may be purchased), but they need to get competitive by getting rid of ridiculous pension plans, over-the-top benefits, and non-performing and overpaid workers. All of that is easier in bankruptcy.

[Forthe]

What I think many of you are ignoring is the cost of saving these guys. Forget the bailout money, the cost of saving bad companies is that you create incentives for companies to be bad.

Ford, GM, and the rest, will all be better companies in the long run if we let them burn now. They will not go out of business (they may be purchased), but they need to get competitive by getting rid of ridiculous pension plans, over-the-top benefits, and non-performing and overpaid workers. All of that is easier in bankruptcy.

You are assuming they will file for Chapter 11, which GM has publicly stated isn't a viable option, rather than Chapter 7. Chapter 11 may work for the airlines but you only need short term confidence in a purchased ticket but would you buy or lease a car from a company in Chapter 11. How much faith will you have in that warranty?

You also assume that if they do liquidate then someone will buy the plants and take over the business. This is far from guaranteed. It is just as likely the assets would be bought and scrapped\moved to eliminate competition.

There is no reason union concessions shouldn't be part of any bailout package but "getting rid of ridiculous pension plans" for existing retirees is straight up theft.

Either option is a gamble. You could spend money and they could still fail. You can let them fail and pay a heavy cost regardless. The risks should be measured and acted on accordingly, not because your ideology says this is how it should be regardless of the outcome.

[Sirton]

Im mixed on these issues.

My main thought is:
fk them were is my bailout.

Then I think auto industry=WWII=vital industry ect. like aviation or ship building or banking, space.


real debate, both have good reasons

[pyrella]

[Truant]

lmfao. That's good shit.

[Sabek]

And the automakers are saying even if they get the $15 Billion dollars that it is only a "bridge loan" and that they will very likely be looking for more money next year.

http://www.cnn.com/2008/US/12/09/gm.aut ... newssearch

[Soreali]

guess we'll have to see next year.. since they got the 15B...still think they should have burned..

[Boogahz]

http://www.statesman.com/news/content/n ... kelso.html

Fat man in red hat says toys won't show up unless S. Claus Inc. gets bailout
By John Kelso
AMERICAN-STATESMAN STAFF


Friday, December 19, 2008

Senate Republicans yesterday turned down S. Claus Inc.'s request for a bridge loan to keep the North Pole business from having to file for Chapter 11 bankruptcy protection.

The sticking point was the refusal of S. Claus Inc.'s toy-plant-workin' elves to agree to pay and benefit concessions.

As part of the Troubled Workin' Elves Recovery Program, or TWERP, Republican senators had asked the elves to accept a contract that would keep them working if they'd agree to lowering their salaries by 5 to 7 percent across the board. But when leaders of the AF of Elf CIO balked on the deal, the agreement with the elves came up short.

"It's lookin' like a ho-less Christmas," said Claus Inc. CEO S. "Santa" Claus, adding that the impasse could jeopardize the delivery of millions of dollars worth of presents to children around the U.S.

"If we don't get some help from the government, this operation could fold up like Lehman Brothers, leaving Christmas trees around the country with nothing much under them on Christmas morning, " Claus told representatives during a hearing, with hat in hand.

Make that with red hat in hand.

Claus asked the government to extend $15 billion from the $700 billion bailout package to his toy delivery conglomerate. Claus pointed out that without federal help, his rooftop-to-chimney sleigh company could run out of cash within days, canceling Christmas altogether.

Economists worry that the loss of Claus Inc. could cost the country millions of jobs by putting Spencer's Gifts, Bed Bath & Bambi and other stocking-stuffer-related operations out of business. Also affected would be mistletoe farmers and Lord knows how many mall Santas and photographers who make a living taking pictures of youngsters screaming in terror while seated on Santa's lap in front of Gadzooks.

There had been some criticism of Claus from House members when it was learned that Claus and a team of his executive elves had traveled to the hearing in Washington from the North Pole on a private jet. But on his return trip, Claus emphasized that he and his management team had reindeer-pooled in a hybrid sleigh, and had spent the evening on the way in at Super 8.

Claus Inc. had even agreed to the creation of a "fruitcake and eggnog czar," who would oversee how the $15 billion is spent.

Meanwhile, the White House was weighing its options.

"Administration officials are continuing to gather information from the toy-makers," said White House spokesman Tony Fratto . "We'll be focused on trying to get the best policy, because, frankly, the president doesn't want some disgruntled kid kicking him in the knee."

[Sylvus]

I still don't get you guys. No one is even mentioning the $700 Billion gift to the financial industry, but you're all up in arms over a $17 Billion loan to the auto industry. Not even the Japanese car manufacturers want to see the Big 3 burn.

While Japanese automakers are in a far better financial state than their American counterparts, they are all getting battered in the shrinking U.S. vehicle market.

In November, when American auto sales plunged 37% to their worst level in more than 26 years, Toyota's sales sank 34%, Nissan's were down 42% and Honda's fell 32%.

Vehicle sales in Japan and Europe are also waning, and even demand in developing economies in China, India and Latin America is weakening.

"This is a global crisis affecting the entire auto industry: No one is immune," said Nissan's Sproule. "And it is in everyone's interest to see a healthy auto industry that is able to manage through this crisis."

Toyota, Japan's top automaker that makes the Camry sedan and Prius hybrid, has already slashed its profit forecast for the fiscal year through March to $5.9 billion, or about a third of its previous year's earnings. Expectations are rife that another downward revision is coming.

For now, there are even alarming signs that the Japanese may be falling in the footsteps of the U.S. automakers, said Endo.

GM, which has already idled five factories this year, announced Friday that it is temporarily closing 21 factories across North America.

Toyota has also suspended production at several North American plants in recent months.

The region is critical for Japan's automakers -- both Toyota and Honda sell more vehicles in North America than they do in Japan.

"There is absolutely no way in my view that the Big Three's woes can work as a plus for the Japanese automakers," said Tsuyoshi Mochimaru, analyst for Barclays Capital in Tokyo.

2.5 Million jobs in the US are tied to the auto industry. The American companies fail, and I think you'll find it's going to be pretty painful for you even if you don't live in Michigan and don't have a job that seems at all related to the auto industry.

[Fairweather Pure]

I still don't get you guys. No one is even mentioning the $700 Billion gift to the financial industry, but you're all up in arms over a $17 Billion loan to the auto industry.

We shouldn't have bailed them out either. The past month has proven that, and then some. In a sense, America as a whole needs to hit rock bottom for a nice reality check. I believe we're only delaying the inevitable with throwing money at the problems.

[Fairweather Pure]

Also, Ford turned down the money. Go Ford.

[Bubba Grizz]

My question is wtf are they doing with the profits? I may be wrong on this (and probably am) but aren't profits the money that is not being spent on salaries, materials, cost of running the business? That Japanese company is only getting 5.1 Billion this year? Shouldn't they be planning ahead and using that money towards making things better?

[Canelek]

No cost of living pay increase. No promotion. fucking pathetic "bonus".

Fuck Merrill Lynch

[Avestan]

I didn't support that bailout either. At least the financial bailout was supposed to go towards fixing a systemic fault in lending and credit supply (not that I think it actually did anything worthwhile). The auto-bailout is just lending money to bad companies.

I still don't get you guys. No one is even mentioning the $700 Billion gift to the financial industry, but you're all up in arms over a $17 Billion loan to the auto industry. Not even the Japanese car manufacturers want to see the Big 3 burn.

While Japanese automakers are in a far better financial state than their American counterparts, they are all getting battered in the shrinking U.S. vehicle market.

In November, when American auto sales plunged 37% to their worst level in more than 26 years, Toyota's sales sank 34%, Nissan's were down 42% and Honda's fell 32%.

Vehicle sales in Japan and Europe are also waning, and even demand in developing economies in China, India and Latin America is weakening.

"This is a global crisis affecting the entire auto industry: No one is immune," said Nissan's Sproule. "And it is in everyone's interest to see a healthy auto industry that is able to manage through this crisis."

Toyota, Japan's top automaker that makes the Camry sedan and Prius hybrid, has already slashed its profit forecast for the fiscal year through March to $5.9 billion, or about a third of its previous year's earnings. Expectations are rife that another downward revision is coming.

For now, there are even alarming signs that the Japanese may be falling in the footsteps of the U.S. automakers, said Endo.

GM, which has already idled five factories this year, announced Friday that it is temporarily closing 21 factories across North America.

Toyota has also suspended production at several North American plants in recent months.

The region is critical for Japan's automakers -- both Toyota and Honda sell more vehicles in North America than they do in Japan.

"There is absolutely no way in my view that the Big Three's woes can work as a plus for the Japanese automakers," said Tsuyoshi Mochimaru, analyst for Barclays Capital in Tokyo.

2.5 Million jobs in the US are tied to the auto industry. The American companies fail, and I think you'll find it's going to be pretty painful for you even if you don't live in Michigan and don't have a job that seems at all related to the auto industry.

[Fairweather Pure]

No cost of living pay increase. No promotion. fucking pathetic "bonus".

Fuck Merrill Lynch

My wife just got off the phone from an emergency meeting. Her company is cutting 900 jobs. She'll know if she's one of them in mid Jan. They've already cut bonuses for this year, where hers was going to be 40% of her base salary. Last year, the rep she replaced made 6 million in loans in Michigan. Her goal this year was 9 million. She broke 33 million last month. It doesn't mean a damn thing though.

It used to be that if you did your job well, the company did well, and you were appreciated and promoted through the ranks. Performance, seniority, and loyalty are all things of the past. In today's business, everyone is an expendable cog in the machine.

At the hospital where I work, we also get no cost of living increase this year, and they're aslo shaving back a % or 2 on retirement contributions. I may not even get my step bonus. Oh yeah, benefits are decreasing and costs are increasing.

It's rough times man!

However, as a family, we will adapt and survive. Everyone just has to rally around friends and family and weather the storm. Things will get better eventually.

[Aslanna]

No cost of living pay increase. No promotion. fucking pathetic "bonus".

Fuck Merrill Lynch

You still have a job don't you? Consider yourself lucky.

[Canelek]

If my boss told me some placting horseshit like that, I would have flipped out.

Yes, times are tough. Know what though? Considering myself 'lucky' is a bit premature when Bank of America, incompetant twats that they are, are going to axe 30-35 thousand people pretty soon.... I think I may be better off getting the resume polished up a bit. It may be my time to realize my dream of being a porn director.

[Winnow]

I think I may be better off getting the resume polished up a bit. It may be my time to realize my dream of being a porn director.

Hah! You're going to love Season Two of Californication!

[Aslanna]

If my boss told me some placting horseshit like that, I would have flipped out.

Luckily it's not his job to placate. Guess if you're not happy somewhere then it's time to move on! I doubt I'll see a raise this year.. And never had a bonus in this position so.. eh.. At least for the moment I'm not jobless so I'm not complaining about it.

[Boogahz]

I have never seen a "cost of living" pay increase at any job.

[Xyun]

It may be my time to realize my dream of being a porn director.

Let me know when you need a porn star for your production. Also, I'd like to look over the resumes of my costars as well.

[Fairweather Pure]

We had another "open forum" meeting with the CEO of our hospital today. He and all the other administrative staff are taking voluntary 10% pay cuts. He says there will not be a single layoff this year thanks to the fact that every department in the hospital cut 6% from thier budgets. The most intersting bit of news was that if the hospital hits our financial goals for 2009 all the way through to October, every employee will recieve a check for 2% of our pay, backdated to the first of the year. I don't think that will happen, but it shows that our administrative staff is looking for ways to try and reward the employees that are goving up things so everyone can keep thier jobs.

[miir]

I got my full bonus and a 3% increase.



The economy is fine.

[Kilmoll the Sexy]

It may be my time to realize my dream of being a porn director.

Let me know when you need a porn star for your production. Also, I'd like to look over the resumes of my costars as well.

Did he mention that he only directs gay porn? Pretty sure your co-star would be Sylvos.

[Canelek]

Just send in a 3 x 5 card with back hair glued to it, you dirty man you.

[Jarori Bloodletter]

F_ them and thier "all I need is x dollars".. IF we give them moneys only SOME will be used for the things that are needed..Most will be handed out for "PET" projects an such.

Dont get me started..

[Soreali]

I'm getting you started...

[Drolgin Steingrinder]

Instead of lending them money, why not a solution where the government buys into the companies? That way they'll have a shareholder's stake in putting things right, they'll have influence over how their - how your - money is spent and by adding a few provisos regarding buyback of the stock, the US might actually make money of off it.

Havent thought this through but it seems to make sense to me - although I realize that a lot of people will probably cry SOCIALIST and other oh-so-scary words.

[Siji]

The government has a stake in how the country does, and they're not doing such a bang up job with that. Don't see buying into companies being any more efficient.

[Avestan]

I am afraid of where this leads. I do not believe the government would do any ebtter than private investors in directing a company and would very likely do worse. I am also very afraid that this could lead to a ton of corruption and waste down the road as I do not think you could stop this kind of practice once started.

The companies just need to die or restructure on their own. There will always be a market for American car manufacturers that are run well. What we are doing now is pulling the bandaid off, verrrrry slowwwwly. It hurts more when you do it that way. Just get it over with.

Instead of lending them money, why not a solution where the government buys into the companies? That way they'll have a shareholder's stake in putting things right, they'll have influence over how their - how your - money is spent and by adding a few provisos regarding buyback of the stock, the US might actually make money of off it.

Havent thought this through but it seems to make sense to me - although I realize that a lot of people will probably cry SOCIALIST and other oh-so-scary words.

[Drolgin Steingrinder]

But a X billion dollar loan will do what, exactly? Extend them a vast line of credit for them to continue business as usual?

I just figure that

- By being shareholders, the people whose money is being spent - the american public - are represented and have an (indirect) say in how their "investment" is being handled. *
- By setting a timed buy back - say, 5% every year the first 6 years, then 10% the next 7, with appropriate clauses for earlier buybacks ** - the companies would be able to profit their way out of government control and the government would have an interested in the companies being as profitable as possible (providing the buy back price was set as a function of money lent and current stock value).

*)I know someone is going to come in here and talk about how governments are corrupt and notoriously bad businessmen, but guess what: Your businessmen are notoriously bad businessmen and every least bit as corrupt.
**) Yes, these are completely arbitrary numbers.

[Truant]

I agree Drol, but it wouldn't happen here for two reasons.

1. All the people that are/will scream SOCIALIST.
2. These companies hold more sway in our government than we do as the people. And just getting a loan and continuing status quo is the easiest way out. Not to mention more profitable in the short term...they're not worried about long term. They want to get their bonuses and hand the troubled company off to the next set of executives. That's the American Way(tm).

[Xyun]

Senator on a rampage!

Seriously, what justification is there for any exec in these companies (the ones that need taxpayers to bail them out) to make more than the president?

[Kilmoll the Sexy]

You know...I am all for a salary cap on any company that is publicly traded on any exchange. Ridiculous salaries and benefits are one huge reason we have such problems today. It is either that or hold those CEO's fiscally and legally responsible for losses in their companies.

[pyrella]

For publicly traded I don't think there should be a cap per se, however I do think the shareholders should have a say.

On the federally funded ones, what that lady put forth - you're capped while your federally funded, and when you're fully paid off, you go back to business as usual.