Auto bailout makes no sense

[MoneyTrev]

It doesn't make sense.

I wonder why they don't release what is happening behind the scenes. There leaves much to be desired.

[maat55]

maat, you take a greater-than-15% pay cut and we'll see how productive you are. These guys are unquestionably overpaid, but you have to be reasonable. The cut in labor's pay and benefits is just one piece of what should be an overall reduction in costs by the automakers.

Why do I have to be reasonable? We either live in a free market or not. Just because they may loose more than 15% to make the company viable is not my problem. Why on earth should I subsidize them?

They make twice the money I make, but its my obligation to make sure they do not suffer, Give me a break. If the companies are not viable due to other costs thats one thing, but no one has mentioned other costs as an issue.

I live in the real world, I run a business in the real world, what the heck is the real world anymore?

[GREENBACK]

I live in the real world, I run a business in the real world, what the heck is the real world anymore?

I know exactly what you're saying. The whole idea that they have earned that kind of money for the work being performed has made me scratch my head for many years.

The idea that people would finance vehicles for thousands of times there worth is another head scratcher when you consider that the high price was mostly to keep paying big salaries and benefits for jobs that didn't merit it.

I hope the real world returns for the auto industry. We'll all benefit.

[Bimmer]

maat, you take a greater-than-15% pay cut and we'll see how productive you are.

Um, I think most would (or should) be overjoyed to still have a job. The thought of losing pay leads to thinking losing job might be next. I would be highly motivated to be productive and worth keeping at the job.

[sweeps]

Um, I think most would (or should) be overjoyed to still have a job. The thought of losing pay leads to thinking losing job might be next. I would be highly motivated to be productive and worth keeping at the job.

B.S..

[sweeps]

Why do I have to be reasonable? We either live in a free market or not. Just because they may loose more than 15% to make the company viable is not my problem. Why on earth should I subsidize them?

They make twice the money I make, but its my obligation to make sure they do not suffer, Give me a break. If the companies are not viable due to other costs thats one thing, but no one has mentioned other costs as an issue.

I live in the real world, I run a business in the real world, what the heck is the real world anymore?

maat, if cutting pay by 15% or more is no big deal, then why don't you cut your employees' pay and let's see what happens.

I couldn't care less about a bailout. F' em all as far as I'm concerned. But we're talking Management 101 here. You start messing with people's compensations you get unexpected and often very undesirable results.

[disneysteve]

maat, if cutting pay by 15% or more is no big deal, then why don't you cut your employees' pay and let's see what happens.

I couldn't care less about a bailout. F' em all as far as I'm concerned. But we're talking Management 101 here. You start messing with people's compensations you get unexpected and often very undesirable results.

If maat's business is successful, there would be no justification for cutting pay. In the case of the car companies, surely every worker is well aware of the deep trouble they are in and probably fears for his/her job. While they may not be pleased with a pay cut, I'm sure they'd agree that it beats having no job at all.

[sweeps]

Under that theory, do a 50% cut.

[maat55]

maat, if cutting pay by 15% or more is no big deal, then why don't you cut your employees' pay and let's see what happens.

I couldn't care less about a bailout. F' em all as far as I'm concerned. But we're talking Management 101 here. You start messing with people's compensations you get unexpected and often very undesirable results.

I've never had to cut my employees pay, but I have cut their hours on many occations when necessary. At the same time, my business is viable at all times. My business is feast or famine and my employees are fully aware of this.

In my company, if you don't pull your weight or do your job properly, your let go. The unions make this impossible for the auto makers. No one forces any worker to go to a job, if you don't give them a reason to work for you, they will work somewhere else, but the company should be able to let go non productive workers and layoff when necessary, not to mention pay fair wages.

[sweeps]

Well, believe it or not, I'm about as anti-union as someone could be. But I come from a very blue-collar family and a very blue-collar town. I know what it's like to have your whole livelihood dependent on one employer. And without the union sticking up for you some schmuck in a suit from 1,000 or 5,000 or 10,000 miles away determines the fate of your family by just shooting off an email while he rakes in millions in salary, bonuses and other perks.

I don't care about the bailout, let the companies go bankrupt, whatever. But have a little bit of respect for these people who bust their ass to work a crappy job with few alternatives so they can survive and feed a family.

[maat55]

Well, believe it or not, I'm about as anti-union as someone could be. But I come from a very blue-collar family and a very blue-collar town. I know what it's like to have your whole livelihood dependent on one employer. And without the union sticking up for you some schmuck in a suit from 1,000 or 5,000 or 10,000 miles away determines the fate of your family by just shooting off an email while he rakes in millions in salary, bonuses and other perks.

I don't care about the bailout, let the companies go bankrupt, whatever. But have a little bit of respect for these people who bust their ass to work a crappy job with few alternatives so they can survive and feed a family.

I hear what you are saying and I believe that blue collar workers are the salt of the earth. But the unions have crossed the line between fair representation and destructiveness to a company.

My guess is that the workers see a bunch of idiots in suits living like kings and counter by wanting more compensation, both are driving the company into the ground.

I believe it is up to them(management and the workers) alone to hash it out without government involvement.

I mean no disrespect to any worker.

[simpletron]

Not that I'm surprised, considering the source, but the terms of the bailout as I understand them make no sense.

The government is going to lend money to the automakers. They will then have until March to provide evidence that they have a viable business plan. If the government determines that the plan is not viable, the loans will have to be repaid at that point.

Sounds great, but if the automakers can't turn around their situation between now and March, where exactly are they going to get the money to repay the loans? They are running out of money now. They will burn through whatever the government lends them over the next 3 months most likely, leaving them in the same situation they are in right now.

The government may be calling this a loan, but I suspect it won't ever be repaid.

it gives the auto companies time. basically it guarantees thier survival until the end of march. which gives the obama administration, the big 3 and UAW, 3 months to figure out a long-term solution.

the amount they got was the remaining amount of the first 350 billion of the TARP (the second half won't be released by congress until obama takes office), which is the best the bush administration can do in the short time. if you take that amount they were given and divide by how much cash they are burning though it would take 3-4 months to run out, thus the deadline of 3 months. the remain requirements are there to act as a guiding light because if they did those thing, then they'll be closer to financially viable.

[GREENBACK]

As I understand things the union does not want to commit to any major concessions til 2011. I don't see any possible way for these companies to survive that long unless they can keep getting big loans from the gov't(us).

[Goldy1]

dh just got laid off from an engineering job at an auto supplier. He woul dhave taken a pay cut in lieu of losing his job. The skilled and engineering staff at his work made about $20 to $22 an hour and had no raises for 8 years tho. The union at uaw gets raises and extra amounts her hour for inflation called "cost of living" At my dh's job, only a few remain until business picks up and they had a 10% pay cut. The sentiment is "at least I have a job"
Over the years my dh was somewhat a tad less motivated due to no raises but he still did his job well and he was still paid well in our eyes. non union=can't strike. WE understood company wasn't making as much=we make less and appreciate they are not bankrupt.
I just don't agree with a comany not being able to run themeselves the way they want to.

[Broken Arrow]

Er, hmm, it's gotten rather heated in here....

Well, on the political end anyway, it doesn't make sense to me either. I think the Obama camp did say (when found out that Bush approved it) that this is a bridge loan, and it's going to be a "bridge to viability" or a "bridge to bankruptcy".

I guess we'll find out what happens in March....