There are 100,000 employees in the US who build cars for Toyota, Nissan and Honda. Their total compensation ($44.20/hr) is $29/hr less than GM, Ford, and Chrysler ($73.21). The Big Three cannot compete.
If we give the Big Three $25 billion, in 4-6 months the money will be gone, the companies will still have bad business models and unable to compete with Toyota, Nissan, and Honda. The Big Three are burning a negative $6 billion a month. $25 billion won't last long.
On Saturday, the UAW indicated that there will be no more take backs in bargaining.
The only hope for the Big Three is to declare chapter 11, throw the union contracts away, and reorganize. The PBGC will take over the current pension program. What would emerge from the Big Three? Something leaner? Maybe Toyota, Nissan and Honda would expand and absorb many of those workers?
And it has nothing to do with Iraq. It's management failure at the Big Three. Horrible deals with the union that have run the US automakers out of business.
Posted by Joel at November 16, 2008 11:29 PMRubbish. What we need to do is give the industry to the workers -- it is their jobs which are on the line and they can hardly make more of a mess than the management has.
The only solution is to turn them into co-operatives. Then the people who are directly affected by the state of the industry will be making the decisions. Getting rid of stockholders will mean more ability to reduce the cost of cars, plus the natural efficiency gains associated with workers' control will help.
Why should economic liberty stop at the workplace door?
Posted by Anarcho at November 17, 2008 12:52 AM1. Take over the pension and health care for auto worker retirees. Level the playing field with the automakers that get help from their governments.
2. Bail out GM and Ford, who are huge multinationals with competitive world-wide product lines that can be brought to the US quickly if they remain in business. In return set realistic mileage goals for fleet average fuel economy.
3. Buy Chrysler from the venture-vultures at Cerberus at fire-sale market rates. Fire some management. Make the workers partners, and build new powerplants with a variety of fuel/hybrid options in existing car platforms. (Bonus: Dan Qualye loses money.)
Joel recites almost line-for-line the GOP talking points for the weekend talkshows. Monica Crowley said almost exactly the same sound byte in her leadoff on the McLaughlin Group this Sunday. And they both sound like the Disaster Capitalists that they are.
This is going to be the meme until the money is forked over - we need the money and please, please let us save ourselves from those awful horribile no-good unions whom literally storm the R&D facility every morning and wreck the place, keeping us from inventing the cars of tomorrow.
The Big 3 know this is their only opportunity with this trick and they've managed to get out ahead of labor demanding reforms & controls as part of any bailout. If the Federal government manages to attach hybrid or other alternative energy development to a bailout package, the automakers are guaranteed to demand union concessions in compromise. The meme is out there.
Posted by idiosynchronic at November 17, 2008 06:14 AMIt looks like the folks in DC are hell-bent to give the stimulus package another try seeing as the first one didn't have any real effect.
This time it's the car industry.
While the sanity of blowing cash around and running the national debt up even further is questionable; it seems inevitable - so this time let's target unemployment, create AMERICAN jobs and pump up the economy all at one time.
Consider the following:
Manufacturing costs of motor vehicles are 65% labor (i.e.: W-2 income), that's not all direct but due to suppliers. GM alone has over 1300 suppliers. (That's a lot of jobs!)
1 in 10 Americans makes all or part of their income due to the automobile industry.
Money turns over 5 times in a year.
Thus a vehicle with a manufacturing cost of 20K produces 13,500 in W-2 income which in turn becomes a total of 65K in 12 months due to the 5 turnovers.
(This isn't magic, it's simply how the economy works.)
Our domestic car makers are saddled with legacy costs, most of which will reduce dramatically in 2010 due to contract changes. They need to survive to get there.
Our own over-zealous government with a virtual alphabet soup of regulatory agencies has been no help either.
Foreign competitors have worked off-shore collectively to meet various US gov't. imposed emission and safety standards, thus dramatically reducing those R&D costs. American car companies are prohibited from that by our FTC.
Make no mistake; it’s no surprise that once again government has been a major part of the problem.
Here's the solution.
Instead of either shipping cases of cash off to car makers; or sending us all another check:
Send out a voucher for say $1,000 good on a motor vehicle for the percentage of the vehicle that's domestic. (Civic = 70% Ford Explorer=80%)
Let those not interested in a new car sell or give away their vouchers (Ebay would be loaded with them in no time flat) and those that are so inclined can use as many as they can get their hands on up to the full MSRP of the vehicle.
This would bail out the car industry without giving them a dime directly
Further it would reduce the overall age of the nation’s cars which would in turn;
increase overall fuel economy & decrease pollution.
Strengthen the dollar!
Since vehicles with a higher domestic content would be moving better this would reduce our imports, strengthening our dollar which would in turn further reduce what we pay for anything imported ...like gas!
Jobs
Instead of simply bailing out a few big companies, this would cause such a run that it would create employment throughout the industry affecting over 1300 suppliers and their workers.
That would give the economy good swift kick right where it needs one!
Pays for itself!
Since money turns over 5 times, and the vouchers are only good for the domestic content of the vehicle, every dime would be spent in the United States creating taxable income.
What is the income tax on 65,000 anyway?
(Remember? 20K manufacturing cost = $13,500 W-2 income x 5 = $65,000)
Another Stimulus Package?
I'm sure you'll agree that this makes more sense than simply sending out checks; many of which will be used to buy new flat screen TV's usually made in Malaysia or some such place.
Dammit, dammit, dammit, dammit.
There is enough BS piling up around this auto industry debate to fertilize all the fields in the US.
1. This is not the fault of the Unions.
2. This is not a problem of wages or of legacy costs.
3. This really is not even a battle between management and labor.
To throw all of those arguments into the mix just fogs up what the truth is.
1. It is a problem of United States government Right Wing policies and the extreme ideology of Market as King.
2. It is because our county, unlike every other civilized Nation in the fucking west, does not provide Universal Healthcare.
3. It is because our government did not have the political will to enact legislation that would mandate moves towards greener technology.
4. It is because the management of the auto companies married the management of the oil companies.
5. It is because the entire economy is fucked and people do not have the faith in the economy and will not risk buying a new car or they cannot get loans to buy new cars because the entire economy is in meltdown due to 1, 2, 3 and 4 above.
Get the myths out of the arguments before any kind of "solutions" can even come close to being hammered out.
First of all, I know that the GOP is trying to flex the very last of their quickly diminishing political muscle during this lame duck session but they do not have a leg to stand on. Fuck em.
They do not have the right - or I should say that the voters have told them that they do not any longer have any right to block any of the legislation that we want. The voters have made clear that the GOP obstructionism is OVER. We are done with their bullshit. They are done.
If they want to try to block legislation that the people very much want to happen right now then they deserve to not only lose their jobs but to go to jail. How come the GOP hate America so much?
The Democrats have to come in and clean up the disaster that the GOP has created once again.
We are facing an economy in tatters. We are facing unemployment at extreme numbers. We are facing a world in turmoil with war everywhere. We are facing a planet that is riddled with damage due to climate change because the fucking GOP has blocked every environmental action that we have attempted to take since Reagan took down the solar panels from the WH. I am really done with the Republicans. Done.
Get the BS out of the arguments so that real solutions can be implemented.
Get out of the way so that the Democrats can once again save the world from the disaster that the Right created.
Posted by Anjha at November 17, 2008 08:06 AMThe U.S. Government should be supporting the new "GREEN ECONOMY", companies like BG Automotive.
For USD $25 Billion, BG could put 1.5 million Electric Cars on the road while creating jobs, saving U.S. consumers USD $2.5 Billion/yr on gasoline, and also reducing CO2 emissions by 7.5 million net tons per year.
First legitimate electric car coming to the market.
Safe, reliable and affordable.
Check it out............
Article:
http://planetgreen.discovery.com/tech-transport/electric-c100-vehicle.html
Video-You Tube:
BeGreen Advocate
i am amazed that Shelby is thrown in this. If there was a man during the hearings for the 700Bn bailout to the thieves of Wallstreet, it was Shelby and I am a Democrat. I hate people that don't have intellectual integrity and lie just to score a political point. If there was anyone that was against the bailouts from the beginning it was Shelby and some other house congressmen. Don't lump Shelby.
Posted by dig at December 9, 2008 05:33 AM