CP Future Plans dependent on Auto Industry Bail Out?

^ Including the CEO's.

Ensign Smith is on the right track. Yes the UAW workers make a very good living at the pay rate they are at no matter how much it is. The way I see it you hear nothing about the corporate honchos at the big 3 taking any kind of pay reduction to help out. If they expect the blue collar guys busting there butts everyday in the plant to work for less then the guys sitting behind the desks in the corporate office better be willing to do the same. I recall them mentioning early on in the hearings that if they bailed out the auto industry that none of the money could go for bonuses of the executive staff. No if I am not mistaken bonuses are for when a company is turning a profit and on a sound financial base. If these people are taking bonuses at this time they need to be taken out behind the barn and shot for being idiots. The American public is just as much to blame for these economic problems as the government. The big 3 make cars that are just as good as the rest so it is time to support American companies that employ American workers. I know Honda and the rest have plants in the US but the profits go overseas. We have supported the rest of the world long enough, now it is time to take care of ourselves and band together or we may all end up speaking Chinese as our national language.

(stepping of soapbox now)

Nailing the execs to the cross for their pay and bonuses is not going to help the situation either.

The real problem with the auto industry is that, much like the majority of other American companies, too often it has been overly focused on short-term profitability at the expense of long-term viability. While the Big Three were content to rake in huge profits present-tense with their SUVs and pickups, the Japanese automakers were looking ahead, anticipating higher energy costs and rising environmental concerns and planning accordingly.

If GM had had the mindset of Toyota, instead of shelving the Impact, they would have used it as a foundation for long term growth and technological innovation.

Unfortunately, this short-sightedness isn't limited to the U.S. auto industry, but is endemic to many American sectors. Which is a big reason why there aren't any U.S. television manufacturers to speak of any more, for example. American industries tend to dominate early on, hold their own in the middle ground, then slip into obsolence in the long term. We need to change our corporate culture and begin to think like the Japanese and Koreans.

In the mean time we need to help our domestic auto industry dig itself out of the hole it's dug, so that it will have a chance to change its ways for the long term.

While I'm no big fan of the big 3, I think its pretty obvious that there are some in congress who are dead set on busting the union. I highly question the accuracy of that $73. Many third party observers have stated it's just not a fair number. Why is 15 billion making such waves when 750 billion was given or set a side without question? Sounds like Wallstreet was getting a payoff rather than a bailout. Something tells me Wallstreet has given way more to many of these politicians than the big 3 have. Its very corrupt and I truly feel we are not getting the truth in any of this.

It would be a disaster if our auto industry fails. So many secondary businesses would go under, millions would be out of work, lost taxes not being collected, more people on government assistance. How is this going to be good for our country?

The sad part of this is even the tool Bush see's you can't let them go under. Yet some of his fellow republicans, who are from the south that have foreign car plants in their states, are the biggest oppoents to this small bridge loan. It's these same people who helped come up with that 70 something an hour number.

Does anyone on here have AIG car insurance? If you do, not only you paid your premium monthly, your tax money was used to keep them afloat while they went to day spas which was also on your tax dime. So before you say "let the big 3 fail", practice what you preach and cancel your policy.

It was criminal the handouts given to AIG, Fannie Mae, Freddie Mac, and the others. The government shouldn't have given out money to anyone.

But at least the economy was saved!

More like the economy isn't nose diving, just scraping the tops of the trees at this point since there still isn't enough gas to get it to the runway, it's still going to crash.

It's a tough call on the auto bailout because of the consequences of bankrupcy, but I'm still against bailing out (or loaning to) any company that isn't a viable business model anymore. I don't get where this is an incident of capitalism failing. I think it's working out perfectly. Some businesses are very successful because they are providing a product or sevice that people want to buy, affordable, and making the business a profit. If you don't have those building blocks, then your company fails, even for those who scam the system.

What sucks is that the ones who get screwed the most are the workers.

~Rob Willi

Loopy said:
So our governmental process didn't see the necessity to loan money on the current terms to the auto industry but good ole George I do whatever i want Bush is going to take some of the bail out money from the financial industry and slide it on over to the auto industry.

Dare I say I totally agree with you? :)

Perhaps, it is time that we take a look at the bigger picture. As we continue to hand out money to corporations who are financially irresponsible, stimulus checks, welfare, etc, the value of the U.S. Dollar continues to diminish. Eventually the loans to the U.S. will no longer be available. What happens when we can no longer give money away to solve everyone's problems?

I hate to say it, but the system is broken. Perhaps, in the long run, it would be most beneficial for us to bottom out, fix the problems and start from scratch. It will be difficult for all of us. However, maybe, just maybe it will bring a little humility and bring this country closer together as a whole.

RollercoasterpsychoOhio said:
Ensign Smith is on the right track. Yes the UAW workers make a very good living at the pay rate they are at no matter how much it is. The way I see it you hear nothing about the corporate honchos at the big 3 taking any kind of pay reduction to help out. If they expect the blue collar guys busting there butts everyday in the plant to work for less then the guys sitting behind the desks in the corporate office better be willing to do the same. I recall them mentioning early on in the hearings that if they bailed out the auto industry that none of the money could go for bonuses of the executive staff. No if I am not mistaken bonuses are for when a company is turning a profit and on a sound financial base. If these people are taking bonuses at this time they need to be taken out behind the barn and shot for being idiots. The American public is just as much to blame for these economic problems as the government. The big 3 make cars that are just as good as the rest so it is time to support American companies that employ American workers. I know Honda and the rest have plants in the US but the profits go overseas. We have supported the rest of the world long enough, now it is time to take care of ourselves and band together or we may all end up speaking Chinese as our national language.

(stepping of soapbox now)

Um, no. The Big Three aren't American when they get all their supplies, parts, and other factories all out of this **** country, United States. I'd even consider Honda and Toyota more American than they are, at this point. Their profits not mind up in here in the states, but they still are getting taxed on. What's it matter anyway? The government blows it on dumb crap, anyways. AND, these companies actually give people jobs so that they can live their lives and make money, helping the economy.

Yeah.

bholcomb said:
A bunch of people lost their job when the .com bubble burst, and nobody was asking for bailouts then.

That's not even remotely a valid comparison. That was hundreds of small companies employing relatively small numbers of people. That was primarily a business recession, not a consumer recession as we're seeing now.

Ensign Smith said:
That $73 figure (sometimes cited as being $70, sometimes $77) includes the cost per worker hour to service retiree pension and health care obligations.

Which is the result of many, many years of the unions pushing against the auto companies. Heck, even at $55/hr. in total benefits and pay, isn't that ridiculously high for jobs that require so little training or expertise? People in my line of work make about that much and bust their asses to get degrees and years worth of training. Seems like a lack of parity there. Pay and benefits has to be proportional to the scarcity of qualified workers. That's why doctors get paid more, because there are fewer people qualified to do the work. If you can stand and have arms, you can be a line worker. When the proportion is artificially changed, you get the problems we're seeing now.

Joe Six Pack gets all pissed off about CEO salaries, and while I agree that they're insanely high, they're not even a drop in the bucket of these companies' expenses. It's largely symbolic and not a real fiscal problem.

I do agree with Mike that the biggest problems surround the lack of vision and understanding for what consumers want. I had one "American" car, my first one, and it was a piece of crap. It was also largely made in Mexico. The four Toyotas I've had since then, ironically enough, were built in the states (save for the motors, I believe), fed by manufacturers who were also domestic. The Japanese companies were first to really nail just-in-time manufacturing, empowered workers to give feedback about the assembly process, etc. And most importantly, they respond to the market.

And remember that these "bailouts" are loans, not free money. Yes, they seem to be high risk to me, but they're not free money. They're a credit resource in a time when lenders aren't that interested in lending.

^^^This is what my major problem is with the big 3. For a long time they just flat out refused to build what consumers wanted. About 1 1/2 years ago I tried finding a midsize 4dr sedan for purchase. I tried very hard to buy American. I found a foreign car nearly loaded, 27 mpg city, 50000 full warranty, 100000 powertrain, $16500 out the door. Not one American car came close to that with the options I feel should be standard. What also I didn't get was that always trying to "pull one over on me" I ALWAYS get at American dealers. Not once have I leased or bought a car and not found some tricky, shaddy tactic used by the dealer to try and squeez an extra 400-1000 out of me.

But any of this has little to do with the fact the playing field is not level in regards to cost to produce. Foregin companies get bigger tax breaks than domestic and many also get assistance from their respective governments to pay for health care for their employees.

As Jeff stated, this is not a bailout so to say. It is a high risk loan. But not higher risk than giving cash to Wallstreet which is similar to a slot machine. With credit markets frozen and no one buying cars, is it any wonder the car companies are being hit hard? People cry about the UAW but who's crying about all those bankers still having fun in the sun on our tax money? Would you rather have a banker from Wallstreet keep his job or a guy in a 3 bedroom ranch with 3 kids wondering if he will still have a job tomorrow? That Wallstreet banker isn't wondering if he will be poor by the end of the month.

One other thing is who will mass build military equipment in the event of a large scale war? Car plants can quickly become tank plants and military truck plants. If they go under, I don't think they are going to keep these lines and buildings ready to go and in good shape.

I guess I forgot the main question at hand. Not now but some where down the road if all big 3 failed I would say it would have an effect on CF plans.

If all of these foreign companies are building cars in the United States, then I guess we can just use their plants in case of a war can't we?

What the hell are you talking about? Are we going to commandeer GM plants so we can drive Chevy Malibus into battle against the Japanese? I want what you're drinking!

Hey, at least those Maibus would protect us from shoes being hurled at our heads. :)

Classic. The way he dodged that first shoe makes it look like he dodges shoes on a daily basis. Good reflexes.

Well, he's certainly no stranger to dodging.

Everyone posting has part of the problem, and all of these issues are to blaim. But look around and see what is going down the road. Mostly SUV's and gas hogs. Who forced the driver to buy that product? Look at what is passing you that wasn't made here. Yes, unions don't want any more concessions and the retiree's have it better than overseas workers. White collar is lazy and over paid. Our R&D results in Escalades and Pick-ups that are never used for hauling.

But is this any different than other manufacturing? And yes, we are loosing it elsewhere.

I can remember when TV's were made in the USA - until cheap labor and a trade deficit became the norm. The Alaska pipeline was justified to supply (just) us with oil, and we had only one telephone company. All this said, politicians also are to blaim.

The question is, not how we got here - how we take control back.

^You say you want a revolution? Well, you know, we all want to change the world.

Sorry for the double post. Here's another article backing up some of the points that have been made:

http://www.ohio.com/business/36215144.html

According to its sources, base pay for unionized domestic auto workers is virtually identical to that at foreign-owned plants in the U.S.