Bailout idea

[Brickboy240]

I might not feel so bad about bailing out the Big 3, if they would be getting rid of the UAW at the same time, but since the DNC is beholden to the union, because of thier support and campaign money to Barack...forget it.

A bailout right now will only put off the inevitable...the demise of the Big 3 makers.

- brickboy240

[ForTehNguyen]

bailouts only buy time, not the solution to the original problem

[Ride the Lightning]

Originally Posted by ForTehNguyen

bailouts only buy time, not the solution to the original problem

That's right. At this point it doesn't matter what we do, the fecal matter has impacted the air oscillator and we are all along for the ride.

What happens if we do bail out the big 3 with the understanding that the UAW goes away? One of three things will happen:

1. Wages, bennies, etc. will all stay the same and the big 3 will still be in trouble.

2. Wages will stay the same, but they will all have massive layoffs, possibly half of their work force. That's roughly 250k people, half of UAW membership plus some management folks. Those 250k people will now have no way to pay for their homes, bills, cars, etc. and will default dragging us deeper into recession.

3. Wages will drop dramatically and the union members who have enjoyed an artificially high standard of living through the UAW will suddenly find themselves unable to pay for it. They will default and drag us deeper into recession.

As a result of any of the three, the home values in the affected areas will drop because the market is flooded and as we go deeper into recession there will be more and more people needing to sell a home that's value has dropped to way less than they owe on it. This is going to be a massive charlie foxtrot for several years. The only solution is to let the economy reset itself and we can be done with this. The more it is meddled with and manipulated the longer it will take for it to happen and the worse it will be when it does. I vote for screw'em all and let's get this over with.

[KEVWYO]

One thing that might be really helpful to everyone (UAW) included is knowing what the actual cost in material to make a car is and then the actual cost of a car after labor costs. If we all knew that I bet even the UAW people would be thinking to themselves ...."holy crap, we've been bankrupting ourselves all along."

[ForTehNguyen]

that wont change anything. All they had to look at for years is what honda/toyota pays their employees. Funny how the per hour costs of a honda/toyota worker when you count hourly wages and benefits, yet they still produce a far superior vehicle, their workers want to work there, and their suppliers want to supply for toyota/honda.

AP's Auto Bailout Coverage Nearly Ignores Excessive Labor Costs, Omits UAW's Concessions Refusal | NewsBusters.org

Total Compensation Per Hour, 2007-2008 (includes wages and all benefits):
Big Three automakers — $73.08
Toyota — $48.00
All workers — $28.48

Michelle Malkin E-mail from an auto industry worker

Dear Michelle,
Thank you for taking the time to read my comments. I worked in the Automotive Industry for most of my career as a supplier to GM, Ford, Chrysler, Honda of America, Toyota, Nissan, and BMW.

You were exactly right with your comments on Fox & Friends this morning. The UAW has handcuffed GM, Ford, and Chrysler with unreasonable and unrealistic burdens. Their balance sheets will never improve until they shed this weight.
There is another aspect affecting their business and is not being talked about in the media very much.

Having dealt directly with all current domestic automobile manufacturers, there is a distinct difference in how the Big 3 do business with their suppliers as compared to Honda, Toyota, and other foreign automotive assemblers. Toyota, Honda, and Nissan in particular want to make sure they are entering a partnership that insures financial success to all parties.

GM’s business practices generally lead to no profit, tremendous oversight by their internal supplier quality watchdogs, who demand unrealistic expectations, and extremely slow payment in the reimbursement of tooling costs to start new programs. It is not unusual to see reimbursement for tooling costs years after the program has started.

Their business practices are not a tax payer problem, but a terrible management problem. It was a noble idea for the Federal Government to lend them $25 billion to help. It is now known 4 X’s that amount will not cure the root cause of the problem., but only buy them 4 X’s the amount of time.

When a cancer is identified inside a person, it is immediately removed if possible. The Big 3 has a cancer that needs to be removed. It doesn’t take a rocket scientist to understand why they cannot compete profitability. They have parity on supply costs, materials, and energy with Honda and Toyota. So why can’t they compete? It is clearly the cost of labor.

A few years ago I was in Warren Assembly, in (Warren, County, (sic) [Macomb County,] Michigan. Two plants side by side make the Ford Focus and the Ford Expedition. As you drive from [Dearborn] to Warren County, every abandoned shopping center parking lot was full of vehicles. A friend of mine was then the HR Manager for Ford Truck and I asked him why they were still building.

His answer astounded me. UAW Labor is paid company wages whether they work or not. America has to wake up concerning this. Until we can get organizations like the UAW to understand the only missing ingredient to creating a level playing field is getting the cost of labor to a realistic level, domestic car makers will never be successful.

[AwPhuch]

Originally Posted by KEVWYO

One thing that might be really helpful to everyone (UAW) included is knowing what the actual cost in material to make a car is and then the actual cost of a car after labor costs. If we all knew that I bet even the UAW people would be thinking to themselves ...."holy crap, we've been bankrupting ourselves all along."

If they knew all the profits going out as "dividends" to the stock holders, and to the higher ups in the company...they would say "holy crap" these guys are robbing the company blind..getting rich off our work and paying us crap!

When SBC CEO left he took over 136MILLION in cash, and probably 2x that in stock options, and then gets 6 MILLION for the rest of his life as a "consulting" fee, along with many other HUGE benefits...we at the bottom who do all the work are fixing to loose our medical benefits and NOT get a raise to fill the gap when we have to buy our own insurance...all the while they laid off a few thousand workers here, a few thousand there, and bought a few other companies for BILLIONS of dollars. all the while telling the employees and the union they are too broke to give them a raise or even keep medical/dental benefits!

Without the union..the company would $h1t upon its employees and give them NOTHING...all the company cares about is protecting its stock price, protecting its dividends, and protecting the pockets of the stock holders, by laying off a few thousand they can keep the stock up 2/10ths of a point and give the multi millionaire stock holders a few extra $10K each quarter they get..yet those several thousand people who were laid off now my loose their houses or whatever...yah...companies will treat their employees fairly..MY BUTT!!!!

[ForTehNguyen]

there are plenty of companies without unions that treat their employees well.

[Ride the Lightning]

You don't even have to do that. All you have to do is look at how much they pay them to build the cars and compare that to what the people who buy the cars are making. As a general rule, the person who builds something should make less money than the average person who would buy it. Otherwise you aren't making any profit on the labor involved to build the car, you're just making a profit on the materials and that sucks.

[AwPhuch]

Originally Posted by ForTehNguyen

there are plenty of companies without unions that treat their employees well.

The ones that are listed on the stock market and are controlled by stock holders or smaller companies that have say maybe at the most a few thousand employees?

[ForTehNguyen]

google is the #1 company to work for, where is their union if it must be so nice to work there. Have some faith in businesses. Yes there are bad ones but there are good ones and these are the companies that will retain people. The smart companies know very well if their employees are treated well then their work, product, and services are a direct reflection of that.