# bailout



## gilbequick (Oct 6, 2007)

Have they done anything to indicate that they're trying to bust them up?


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## brian john (Mar 11, 2007)

Paul there are either concessions or no US carmakes, then the Germans and Japanese can have the complete market with a better car built open shop. Is that you goal?


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## BryanMD (Dec 31, 2007)

In that the major stumbling block is the retiree obligations and not the current workers... I'm surprised we don't see chatter about beefing up the PBGC* so it can take over that responsibility from the car makers (with a promise to replace those funds at "some point in the future").

At least then the money we (everyone but UAW and the makers) pays is going somewhere and is held *relatively* secure rather than being spent.


* (in case you don't know the acronym):
Pension Benefit Guaranty Corporation - Wikipedia, the free encyclopedia


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## All_amped_up (Nov 12, 2007)

paul d. said:


> i'm thinking that the goal of the "Big Three" auto makers is to bust the UAW. looking like they're going to suceed. i know some IBEW guys that USED to work at GM in atlanta. times is changing.


Only problem is, the plant is shutting down. It's amazing how the Gov. will toss $$ to the banks and whatnot without blinking an eye, yet for the Union they are looking at EVERY detail, they dogged on the CEO's for taking a private jet to the hearing at 1st, yet haven't said or done squat about the big wigs having HUGE corporate VIP party's and outings after their bailout.

On that note, since the Gov. are using OUR tax money to loan out with a 4% {I think} interest rate, shouldn't it be fair that WE the tax payers charge the IRS a interest rate on our return? Or the rate and profit they make from our taxes being loaned out be returned to US?


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## paul d. (Jul 13, 2008)

brian john said:


> Paul there are either concessions or no US carmakes, then the Germans and Japanese can have the complete market with a better car built open shop. Is that you goal?


yeah brian, UAW says ,asof this a.m. no wage concessions til 2011. what now??? will a gm/chrysler bankruptcy void all union contracts?? what a mess.


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## threewire (Jan 28, 2008)

All_amped_up said:


> shouldn't it be fair that WE the tax payers charge the IRS a interest rate on our return? Or the rate and profit they make from our taxes being loaned out be returned to US?



:laughing:


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## worn kleins (Dec 13, 2007)

*get the gov out*

The gov has no right using our tax money to bailout any of these bastards. The a-holes in congress don't have a clue about what to do. The last thing I want to see is the car designed by Ried/Pelosi/Obama, nor would I probably want to buy it. The car companies would still be doing fine if the gov hadn't started to interfere with how they build cars. Gas going to $5 a gallon didn't help. If you want to see where things are going when the gov gets involved just look to Russia where the state tells you what to drive, do you really want one of those pieces of sh*t? I think if the big 3 wanted to break the union they could simply file chapter 11 bankruptcy. All sides are going to have to give something, just the way it goes. With GM 62 billion in debt and a market cap value of 2 billion, that's a hole you just can't dig your way out of. They either file bankruptcy or they will need us the taxpayers to give them the 60 billion as a gift to get them on their feet. Getting rid of the UAW doesn't solve the problem. One way or another the big 3 have to be able to build a car with the same cost as Toyota. Which business is next with their hand out for our tax money? My sales are off right now, does anyone know where to send the application for some bailout money:thumbup:??


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## BryanMD (Dec 31, 2007)

worn kleins said:


> The gov has no right using our tax money to bailout any of these bastards...


You know the expression "it's all pocket games"? Cause that is what it comes down to.

There are 3,500,000 UAW members working for the Big3 and their supplier companies. If a "reorganization" occurred and they "streamlined" operations and just 20% of the workforce were laid off that would still be 700,000 people showing up for unemployment -at once-. Most chatter about this scenario has a lot more than 20% getting fired outright.

Then there is the real issue of the pensions for the retirees and the guys with time in. SSA can't handle it and neither can the PBGC. (see my post above) So... whats going to happen? 

We have a choice to allow them to do an orderly salvage and pay out of our left pocket or we can force them into insolvency and then pay (A WHOLE LOT MORE btw) out of our right pocket.

That is the plain and simple choice. There really isn't another.


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## worn kleins (Dec 13, 2007)

There is another possibilty. Why assume that bankruptcy chap 11 would lead to insolvency? That has not been the case with other major corporations, ie the airlines and others. Also, there is and will be a demand for cars and trucks. Someone will fill the void left by any company. The industry should be able to assorb the employees from GM or whoever else goes out of business. The suppliers will also pick up the extra business from the companies still in business. There has to be an end somewhere to tax payer bailouts for these companies. The simple fact is that we are just seeing the begining of financial disasters. Unfunded and underfunded pensions and benefits are larger than the national debt and they include private corporations and public municipalities that will have no way to fund their future obligations to retirees. The day of the defined benefit is over. This is just the beginning.


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## BryanMD (Dec 31, 2007)

worn kleins said:


> There is another possibilty. Why assume that bankruptcy chap 11 would lead to insolvency? That has not been the case with other major corporations, ie the airlines and others. Also, there is and will be a demand for cars and trucks. Someone will fill the void left by any company. The industry should be able to assorb the employees from GM or whoever else goes out of business. The suppliers will also pick up the extra business from the companies still in business. There has to be an end somewhere to tax payer bailouts for these companies. The simple fact is that we are just seeing the begining of financial disasters.


I agree the companies could and would continue to operate. The issue is scale. Absent the credit issue (no/low car sales) the scale of the Big# isn't really a problem. They were selling plenty of units before and could again.

And I don't think anyone expects that there won't be more layoffs than those recently announced (250,000 this week)... the question (and why I broke up your quote this way) is about the distinction between continuing operations and the pension obligations.

Chapter 11 throws 1,500,000 dues paying UAW retirees and senior members to the curb and the rest of us are gonna have to pay for that if we can't make the car companies do it.

The sacrifices and cuts already absorbed are deep enough that the current workers are competitive with anyone. The build quality is fine. The changes that need to be made are not anything that can be done from the floor. Chapter 11 or bailout that doesn't change.




> Unfunded and underfunded pensions and benefits are larger than the national debt and they include private corporations and public municipalities that will have no way to fund their future obligations to retirees. The day of the defined benefit is over. This is just the beginning.


THIS is the real problem. And as you have alluded to it extends far beyond the automakers. 

What sort of precedent would it set for everyone else who thinks they have a pension? What sort of message would it send to the executive boards of the companies allegedly looking out for and oresently charged with that responsibility?

I pay my bills. I take care of mine. Why should they be left off the hook?


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## Frasbee (Apr 7, 2008)

I'm paying taxes to bail these guys out?

Doesn't that mean I'm obligated to get a free car?


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## brian john (Mar 11, 2007)

> There is another possibilty. Why assume that bankruptcy chap 11 would lead to insolvency?


That is one of the smartest statements so far, Obama might have a position for you.


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## BryanMD (Dec 31, 2007)

Frasbee said:


> I'm paying taxes to bail these guys out?
> 
> Doesn't that mean I'm obligated to get a free car?


How about buying a car instead? Or that new truck you want?
Here and in other places it has been suggested that if everyone (who could afford to) would go out and buy a car... a lot of the crisis would end.

It's also been suggested that the guvmint could do more by suspending excise taxes on those cars sold but thats really one of those unfunded mandates unless the feds give that money to the states.

I don't have any answers. Hell, it's hard enough to think the questions through. All I'm really sure of is that most of the people recommending the Chapter 11 route are folks I wouldn't and don't trust elsewise.


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## brian john (Mar 11, 2007)

Bryan:

Like every issue there are many contributing factors to this issue, unions, mismanagement at the big 3, changing times, perceptions regarding American cars from Americans, Congressional mandates, law suit, sucky economy.

And like always no one wants to step up to the plate and accept responsibility.


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## BryanMD (Dec 31, 2007)

brian john said:


> Bryan:
> 
> Like every issue there are many contributing factors to this issue, unions, mismanagement at the big 3, changing times, perceptions regarding American cars from Americans, Congressional mandates, law suit, sucky economy.
> 
> And like always no one wants to step up to the plate and accept responsibility.


Thanks for the outline 
I understand more than my self deprecating remark would imply.

What I keep coming back to is that absent the "credit crisis" cars would be selling an the "automaker crisis" would be less of an issue and therefore I am reluctant to say that the "baby with the bathwater" chapter 11 reorganization will resolve anything that matters or do it any better than an orderly reorganization would.

The structural business model issues that the Big 3 have are a whole other issue that I also believe would be managed better in that orderly reorganization a bailout (hopefully) would allow them to set up for successful continuing operations.

But like everything the devil is in the details... and we have damned few of them. Conjecture and supposition are not a good basis for rational decision making.


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## Frasbee (Apr 7, 2008)

BryanMD said:


> How about buying a car instead? Or that new truck you want?
> Here and in other places it has been suggested that if everyone (who could afford to) would go out and buy a car... a lot of the crisis would end.


I can do little more than repair my '87 Accord.

I hate debt, and even if I could manage to get a loan for a new car, I'm not sure I'd want one.

Here's to living within your means!


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## brian john (Mar 11, 2007)

Bryan:

The credit crisis appears to have been the the start of all this. Creative financing and debt by too many. Our government and the too many Americans fail to realize all these booms will end as will the recession. BUT IMO you have to be prepared during booms I do not incur unreasonable debt. I have raised my children ti understand this (I HOPE) ad constantly harp on excessive use of credit.

You cannot live on the money you may make tomorrow because sooner or later tomorrows cash will not be there. Compared to my contemporaries I have few toys. I drive a truck, my wife bought her first car in 10 years (old one died). ONe guy I know own an Escalade, Lexus, Harley chopper, 2 dirt bikes , a boat and 2 four wheelers (thats one just guy) he purchased everything on credit and now the creditors want them back as well as his house. But there are 100,000's of thousands of people in this fix. Then the local and state and federal governments tax and think those taxes will continue spending above what they tax, during the down times there are always less tax revenue and BAM the credit crunch snowballs.


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## BryanMD (Dec 31, 2007)

brian john said:


> Bryan:
> 
> The credit crisis appears to have been the the start of all this.
> You cannot live on the money you may make tomorrow.


Agree. No debt here either; plenty set aside too.

So, the Q becomes... what about everyone else?
Anything that would *really* change things would be pretty damned radical.

YouTube - The Beatles - Revolution 1


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## BryanMD (Dec 31, 2007)

What we are experiencing is the unintended consequences of the political philosophy of starve the beast which was inherited by examples of the Peter Principle in action.

It's past the time to get some grown ups who are still young enough to have to suffer the consequences of their choices in control.


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## Frasbee (Apr 7, 2008)

BryanMD said:


> What we are experiencing is the unintended consequences of the political philosophy of starve the beast which was inherited by examples of the Peter Principle in action.
> 
> It's past the time to get some grown ups who are still young enough to have to suffer the consequences of their choices in control.


Ironically, Bush's strategy of cutting taxes while somehow increasing government spending didn't work.

Cutting...taxes...yet...spending...more...

I guess someone didn't get the memo.


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## MechanicalDVR (Dec 29, 2007)

Frasbee said:


> Ironically, Bush's strategy of cutting taxes while somehow increasing government spending didn't work.
> 
> Cutting...taxes...yet...spending...more...
> 
> I guess someone didn't get the memo.


 

B jr. never had a clue and you want the guy to read a memo.


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## Control Freak (Mar 8, 2008)

just look at the way critics and corporations are blaming the UAW for skyrocketing prices. the cost of living gets higher and higher but thier wages can't? come on. to a non union worker who doesn't understand the UAW benefit package 70 dollars an hour sounds like alot but that is their total compensation per hour not their take home hourly rate.

do you guys really think the union is to blame. What about the republicans who voted against the bailout but at the same time give millions of taxpayers money to mercedes,toyota and hyundai (all foreign companies) for development and expansion? America has lost 40,000 manufacturing plants since 2001. come on. we need to stimulate OUR economy.

Blame the CEO's and replace them dont reward them for managing failures. I wish that companies would have an incentive to hire american workers and keep jobs here.


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## brian john (Mar 11, 2007)

CF read above CAREFULLY there are a variety of folks that can take the blame.

Union is part of the blame, not sure were they fall into the lineup but they are their.

I live in one of the more expensive areas of the USA and the loaded package for my union men is not 70.00 an hour.


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## Control Freak (Mar 8, 2008)

i agree Brian. There are definitely some absurd policies like job banking to blame. I just cant get over the way that it seems that republicans are pro corporate and anti labor.


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## brian john (Mar 11, 2007)

Control Freak said:


> i agree Brian. There are definitely some absurd policies like job banking to blame. I just cant get over the way that it seems that republicans are pro corporate and anti labor.



Unfortunately they are that way to balance out the Dems. If both parties were not so tied to special interest and more open to ALL ideas we might make some head way.


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## worn kleins (Dec 13, 2007)

CF, some dems voted against the bailout also, and some didn't even bother to vote. Some repubs voted for it. It is not as simple as black/white.
Here is what I would like to see: The gov steps up and says we are going to drill here and now and keep gas AND diesel to below 2 bucks a gallon. I would have no problem continuing to buy trucks from detriot if I had that kind of guarantee. Between the credit crunch and 5 bucks a gallon, that is what killed the car sales.
The media has a big share of the blame here as well. You can't turn on the TV, the radio or open a paper without some stupid know-it-all reporter spouting off about how bad the economy is. This is nothing even close to the great depression, and it is not even that bad of a recession yet. No wonder everyone is holding onto cash. During the depression we had 25% unemployment, today about 7%. Over 90% of people with a mortgage are still making their payments on time. Most of the people who are in foreclosure had no business getting a mortgage they couldn't afford. The guy that bought my last house in 2005 financed 110% of the sales price with an ARM, now, if he goes into forclosure should we bail him out? No, but the media makes this guy out to be some poor guy that was taken advantage of and none of the mess is his fault. Bullcrap! By the time these bastard politicians get done, our great, great, great grandchildren will still be paying off the bill. The first 700 billion bailout will cost every family that files a tax return $5000.00 each, that is just for this first bailout. The car companies are projected to really need around 125 billion before it is all said and done. Add another 1 billion for the next stimulus package and so on and so on. Add to that the 200 billion that was given to Fannie Mae and Freddie Mac before the 700 billion and we still haven't added in the billions for AIG, Bear Stearns. Can anybody keep track of all this? Lets make that $10,000 for every family. I gotta stop now and get a really strong drink


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## Control Freak (Mar 8, 2008)

somebody in todays Dily News had a great idea. Let the banks that recieved the bail out money lend it to the automobile companies.

Bottom line is unless those banks make money there will be no construction. 

and about predatory lending.........Donald Trump is suing. according to him the 40 million dollars he has to pay for constrution costs and loan repayments for a project in Chicago should be renogiated because he was a victim of predatory lending.

another thing. I cant afford a house in NYC where i live and work but im starting to feel like a sucker for not buying one on credit anyway. I would get a bailout. I have friends who bought 400,000 dollar houses with no money down and also have nice cars who have no business doing so. makes me feel like an idiot for busting my ass and living within my means!!!


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## worn kleins (Dec 13, 2007)

CF, that's a good one about Trump, right on. Hey listen, I was thinking the same thing, why make my mortgage payment, I mean, why am I not jumping on the bailout gravy train? Then I realized that I have too much equity, I'm one of the schmucks that put 20% cash down when I bought, so stupid me, I can't claim to be taken advantage of. A friend of mine is in the same boat, he did the responsible thing with his mortgage. We both agreed, this sucks! No bailouts for us.
As to the banks lending money, forget about it. They got the cash stashed, riding on their balance sheets to bring their ratio's into normal. And here is the double edged sword; why would a bank make a big loan commitment now? Who is to say that many a business isn't looking to getting in on the bailout scam? They get the loan and then cry poor-mouth or that they were taken advantage of and now can't repay the loan, it means another "toxic asset on the balance sheet". GM is 62 billion in debt, would you loan them any money?


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## paul d. (Jul 13, 2008)

i read recently( dont remember where) that the largest single group of GM shareholders is UAW active and retired employees. a lot of retirees depend on the dividend to help out in retirement. as part of the bailout no more dividend to the RICH investors. this whole thing sucks. no winners.


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## paul d. (Jul 13, 2008)

current GM dividend; (yahoo finance) $1.00 (25.40%)


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