Auto bailout makes no sense

[rooskers]

Autos and financials getting a bailout leads me to believe that the goal of every company in the United States should be get big enough and then who cares what your business plan is because you will always be bailed out.

If I was a Walmart executive I would be demanding 100 billion dollar bonuses, islands, forget one private jet how about whole airports with my own personal jet company. In fact I would just demand every cent Walmart makes because if we have a bad year I will just remind the government how many people we employ and how since we are so big we can't be allowed to fail and then take the governments money.

[snafu]

The BIG three auto executives didn't wake up one morning in Oct. 08 to realize their company was in trouble! What did they do to earn their giant salaries, bonus and perks? If line workers get $28. per hr., then management should be reduced to a multiple of that amount.

Did anyone see evidence of reduction of high level executives? If you have a problem where is the plan to fix it? They get this taxpayer money and were told to come in with a plan by March 09? What! Can you imagine any small business going to the bank and asking for a huge sum of money without a business plan? What is GW thinking! oh I forgot it's GW

[Joan.of.the.Arch]

Rooskers, I have been thinking along similar lines. "Too big to fail" was the line we were hearing in regard to the banks and AIG in the autumn. As angry and disgusted as that made me, I believed it. Yeah, too big to fail or the whole damn world goes down with 'em.

We are have no choice but to cut off our own hands to save our lives, it would seem. I thoroughly accept that the big 3 automakers failing would be very, very bad. I do not want them to go under, though I would like to see them remake themselves, perhaps work on some different products (they could even be transportation related), and be broken up. Should one segment of the economy have the power, through their failure, to determine the future of the country? What can we do? Could it be that small really was beautiful?

[cptacek]

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.

Didn't we just have a thread talking about people who were "laid off" and still getting paid? Has anyone figured up how much THAT would save?

[maat55]

No matter what anyone gets paid, the company's survival is the most important element. A dead chicken lays no eggs. The wolves are eating the chicken instead of sharing the eggs.

IMO, ch. 11 BK will chain the wolves and allow the chicken to heal. My guess is that you could find this is "Business for Dummies"

[GrimJack]

Chp 11 would run directly to Chapter 7. Currently, banks with their 300+Billion dollar infusion, still won't lend money. With no loan, most USians can't get a car. No one would be dumb enough to buy a car from a company that was in any kind of bankruptcy - why would you buy a car from a company in bankruptcy and may not be around to support warranties?

While everyone whines about all the money that union workers do not deserve to earn, one failed executive that fails so badly that the BoD is willing to pay them $100,000,000 to get rid of them would support 2000 union workers earning $50,000 a year.

I want to repeat that:
One Golden Parachute of $100million for a loser to walk out the door would support 2,000 union workers at $50k for 1 year.

If you want to rage about unfairness, please look for a real target.

[maat55]

Chp 11 would run directly to Chapter 7. Currently, banks with their 300+Billion dollar infusion, still won't lend money. With no loan, most USians can't get a car. No one would be dumb enough to buy a car from a company that was in any kind of bankruptcy - why would you buy a car from a company in bankruptcy and may not be around to support warranties?

Hogwash, the airline industry survived it just fine. If you think the auto industry will just blow away in ch 11, your sadly mistaken. I say if the banks are not putting the money to work, the gov. should demand it back.

While everyone whines about all the money that union workers do not deserve to earn, one failed executive that fails so badly that the BoD is willing to pay them $100,000,000 to get rid of them would support 2000 union workers earning $50,000 a year.

Are you advocating that two wrongs make a right?

I want to repeat that:
One Golden Parachute of $100million for a loser to walk out the door would support 2,000 union workers at $50k for 1 year.

If you want to rage about unfairness, please look for a real target.

You are right that management needs to change, but to think that they only are the target is extremely short sided.

[GrimJack]

Grim:

Chp 11 would run directly to Chapter 7. Currently, banks with their 300+Billion dollar infusion, still won't lend money. With no loan, most USians can't get a car. No one would be dumb enough to buy a car from a company that was in any kind of bankruptcy - why would you buy a car from a company in bankruptcy and may not be around to support warranties?

Maat:

Hogwash, the airline industry survived it just fine. If you think the auto industry will just blow away in ch 11, your sadly mistaken. I say if the banks are not putting the money to work, the gov. should demand it back.

Note the line in bold - how can you compare buying an airline ticket with buying a car? It does not matter what you say - the administration that gave the banks the money changed the rules so that there is no oversight and no take backs.

Grim:

While everyone whines about all the money that union workers do not deserve to earn, one failed executive that fails so badly that the BoD is willing to pay them $100,000,000 to get rid of them would support 2000 union workers earning $50,000 a year.

Maat:

Are you advocating that two wrongs make a right?

No. I do not see anything wrong with anyone making $50,000 per year. Why do you think it is wrong for someone to make $50,000 per year?

You are right that management needs to change, but to think that they only are the target is extremely short sided.

Hunh?

[maat55]

[QUOTE]

Grim:
Maat:Note the line in bold - how can you compare buying an airline ticket with buying a car? It does not matter what you say - the administration that gave the banks the money changed the rules so that there is no oversight and no take backs.

I personally would buy a Ford or Chevy with no worries and IMO, they will be around longer than me.

Grim:
Maat:No. I do not see anything wrong with anyone making $50,000 per year. Why do you think it is wrong for someone to make $50,000 per year?

Neither do I. Based on the numbers presented, lets say 68.00 per hour:

68.00x40=2720.00x52=141,440.00 With all compensations considered, this is the number I go by.

[cptacek]

Didn't we just have a thread talking about people who were "laid off" and still getting paid? Has anyone figured up how much THAT would save?

GrimJack, I would like to hear justification for job banks and getting paid during the "lay off".

[Inkstain82]

It's wrong for someone to make $50k/year for a job that others would be willing to do for much less.

[MoneyTrev]

It's wrong for someone to make $50k/year for a job that others would be willing to do for much less.

Obviously. Fire the union workers!

[kenny911]

It's wrong for someone to make $50k/year for a job that others would be willing to do for much less.

With that thinking, none of us will have a job.

[GrimJack]

It's wrong for someone to make $50k/year for a job that others would be willing to do for much less.

Yeah! Let's bring back slavery! That is what is wrong with the race to the bottom, the bottom is slavery - I am sure that there are people in the world who would do the job for room and board.

Inkstain82 - I do not say this often but your statement is so stupid that I can only hope you are a troll.

[GrimJack]

GrimJack, I would like to hear justification for job banks and getting paid during the "lay off".

The jobs bank was established during 1984 labor contract talks between the UAW and the Big Three. The union, still reeling from the loss of 500,000 jobs during the recession of the late 1970s and early 1980s, was determined to protect those who were left. Detroit automakers were eager to win union support to boost productivity through increased automation and more production flexibility.

The result was a plan to guarantee pay and benefits for union members whose jobs fell victim to technological progress or plant restructurings. In most cases, workers end up in the jobs bank only after they have exhausted their government unemployment benefits, which are also supplemented by the companies through a related program. In some cases, workers go directly into the program and the benefits can last until they are eligible to retire or return to the factory floor.

By making it so expensive to keep paying idled workers, the UAW thought Detroit automakers would avoid layoffs. By discouraging layoffs, the union thought it could prevent outsourcing.