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BREAKING: Bipartisan Auto Aid Deal Reached
Details are unavailable but there is word from Democratic Senator Levin’s office that a bipartisan deal has been reached to fund an automaker bailout. It appears the compromise will involve providing funds from the energy department that were earmarked for retooling.
It is also unclear if there would be enough support to get it passed.
Senators will be speaking to reporters at 2:30 PM EST.
Volt is go?
Source (Marketwatch)
Posted by: Lyle
74 Responses to “BREAKING: Bipartisan Auto Aid Deal Reached”
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November 20th, 2008 at 1:13 pm
cant wait
first
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November 20th, 2008 at 1:13 pm
thank god for bush
second
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November 20th, 2008 at 1:16 pm
Go Volt and the electrification of the automobile!
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November 20th, 2008 at 1:20 pm
I knew Republicans weren’t going to go on record as the party that insisted on destroying the American auto industry…
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November 20th, 2008 at 1:21 pm
You knew they weren’t going to let them fail. Not with the state of the economy.
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November 20th, 2008 at 1:22 pm
Let’s hope there are restrictions on how it can be used.
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November 20th, 2008 at 1:22 pm
/owned
(My first solely internet d00d speak post…only question left is if they have time to jam it thru this week, or if they have to come back in December to get it done)
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November 20th, 2008 at 1:23 pm
Like Manna from heaven, what glorious news. When the government is here to help, problems are solved. UAW workers will forever keep their job bank, and Wagoner can fly his family everywhere on their jet for evermore. No need to reorganize.
Absolutely nothing is going to go wrong now, everything’s going to be just fine, just like it was in the 1930s. Oh, and the Volt’s going to be under $35K too.
(sad thing is, many otherwise intelligent adults on here don’t realize how preposterous those notions are)
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November 20th, 2008 at 1:24 pm
How about the government do this:
Purchase 20,000 Volts at $25,000 down on each and they must be delivered by 12/31/2009 when they will collect another $25,000 each. Every day it is delayed they will lose some money. This will give the government some plug in cars (which is in Obama’s plan) and jumpstart the manufacturing of them. This will also help with testing them. GM will get $50,000 for each one and some much needed cash now.
Some kind of plan like that would be nice.
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November 20th, 2008 at 1:31 pm
giving them money is not saving them, letting them go into chapter 11 and restructuring would be saving them, nothing will change the unions and ceo’s will stay the same, cost of products will go up.
It probably didn’t mater anyway when the messiah got into office, he said he was going to do anything it took to save the auto industry, (unions) I get so frustrated with all of this it really makes me worry what our country is coming to
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November 20th, 2008 at 1:33 pm
I don’t like the wording of the announcement…
“…divert to troubled automakers money from a program that currently finances the development of fuel-efficient vehicles… to cover their immediate expenses.”
____________________
Every action concerning the big 3 seems to be dependent on their partially selling their soul. Will bailing the big three out ,IN FULL, mean that a city in China becomes the new “Motor City”?
And this does nothing to spark the E-REV program.
I smell fish.
____________________
hi statik,
Good call on the GM pop to a ceiling of $4, I thought it would be $4.93 for sure. Notice how the rest of the market followed it up…then back down like a baited jig line? What’s that smell?
=D~
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November 20th, 2008 at 1:35 pm
Casey – keep waving that bloody shirt.
Money/CNN report: “What’s really killing Detroit: Union Workers”:
“Fact: Pay isn’t the problem.
GM, Ford and Chrysler all hire union workers to work in their U.S. factories. But their Asian competitors have based most of their U.S. factories in Southern “right-to-work” states where companies don’t have to hire union staff …
But even the Detroit automakers themselves don’t claim to pay more than Asian automakers working in the U.S. GM estimates its hourly pay for an assembly line worker is about the same as that of someone working for an Asian manufacturer here.
The differences come from retirement and health-care. Detroit automakers pay a lot more per worker-hour because they have more retirees to whom they extend full health-care benefits.
The UAW recently made significant concessions that should save GM, Ford and Chrysler a lot of money in the long run.
The union allowed Detroit automakers to pay newly hired workers less per hour than previously hired employees. It also agreed to take over the cost of retiree health care provided the automakers paid lump sums into an investment fund to cover the costs.”
[But fine, you wanna toss the retired and workers' families to the curb, you keep saying that. By the way, how are YOUR employer benefits?]
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November 20th, 2008 at 1:36 pm
“2Snowboard Says:
November 20th, 2008 at 1:23 pm
Like Manna from heaven, what glorious news. When the government is here to help, problems are solved. UAW workers will forever keep their job bank, and Wagoner can fly his family everywhere on their jet for evermore. No need to reorganize.
Absolutely nothing is going to go wrong now, everything’s going to be just fine, just like it was in the 1930s. Oh, and the Volt’s going to be under $35K too.
(sad thing is, many otherwise intelligent adults on here don’t realize how preposterous those notions are)”
Yup. Now we can look forward to the sequel to this story in about 3-4 months.
Merry (early) Christmas guys !
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November 20th, 2008 at 1:36 pm
I hope that GM management will wake up after seeing their stock drop to $1.70 today. It’s critical that they get their ship in order and steer toward green waters. VOLT cash is waiting in our FDIC insured bank accounts safe and secure until the day we can make our deposits and take delivery.
GO TEAM VOLT! Don’t lose a single day of progress getting the VOLT to the show room floor and into full production.
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November 20th, 2008 at 1:39 pm
I have to do it, my post from Monday:
===================================
#108 Statik said,
Monday, November 17th, 2008 at 9:32 pm
http://gm-volt.com/2008/11/16/gm-ceo-calls-chapter-11-bankruptcy-filing-a-fantasy/#comments
I was waiting for another ‘finance thread’ to post this but I a very well-connected source (and I hate it when someone says something like that and then doesn’t give his name…but I have to do it in this instance), from my finance site has said that the Dems and Republicans have already agreed on a modified redirection of the 25 billion dollar ‘fuel efficiency plan’ …and that once it is tabled it will get rubber stamped.
This alteration supposedely has very little strings, and is very simplistic in nature…with no oversight attached…just some token ‘executive compensation’ restrictions, which came at the behest of the Dems…it is strictly money to bridge to Jan 20th.
Apparently, Reid stills want to attempt to push through a big fancy 25 billion dollar auto aid package (in addition to the other 25B) inside the extension of jobless aid bill, but Pelosi has altered course somewhat and really just wants to get it done and get what the Republicans are offering, and immediately start working on greasing the wheels to get the money out ASAP (Long story short about the extra 25 billion, they are working the phones right now trying to get to 60 on the extra 25, but it is not going well).
‘He’ says look for the original 25 billion restructure to come out thursday, but friday at the latest.
…long story short, it looks like GM will survive through Jan 20th. Who knows what will happen then, a lot of people in both camps are getting weary of giving out money and are thinking about trimming down handouts big time. It is not 50-75 billion or nearly enough, but it solves some short term issues (if your pro-non bankruptcy)
/but hey, looks like a early Christmas present for those employess still at GM…a few more guaranteed paychecks
==============================
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November 20th, 2008 at 1:39 pm
I hope it works out. Seems as though the $25 Billion (split amongst the automakers) is only a get through till the next administration stop-gap measure.
We’ll see this all played out again this winter – as GM isn’t going to be in any better shape come February.
Course maybe the execs will learn a little PR and fly first class or (god forbid) coach to Washington when they come calling again.
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November 20th, 2008 at 1:43 pm
#15 Statik
“‘He’ says look for the original 25 billion restructure to come out thursday, but friday at the latest.”
You Da Man Statik! (cheers)
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November 20th, 2008 at 1:43 pm
Oh heck, might as well do the other one too:
=======================================
http://gm-volt.com/2008/11/18/auto-company-ceos-testify-before-the-senate/#comments
#44 Statik said,
JonP, I don’t know if I would want to keep playing the GM stock game, but theoretically Wednesday/Thursday would be the low before the pop on rumoUr that the 25 billion is going through (I don’t know why everyone has not already put together the fact the first 25 billion is all but guaranteed).
I think you would be better off just holding the line right now, trying to get out at $4.00 and just take your losses on the other $1 and be happy. If you have to play something, buy some puts on Caterpillar or somthing.
I like this if you want to do a little market gambling and want to get right in there today and try and chase down that 20 points today, lol:
CATNI.X–Feb 09 puts ($45) @ 11.85
(Caterpillar closed at about 36 bucks yesturday)
(Standard disclaimer: As always, invest at your own risk and do your homework, and don’t make me feel bad if you lose money, hehe)
======================================
Today, on those CAT puts and GM:
======================================
#55 Statik said,
November 20th, 2008 at 10:31 am
http://gm-volt.com/2008/11/20/its-down-to-the-wire-for-gm/#comment-81782
I don’t know if your out there lurking JonP, or you took me up on this. But the Feb 09 puts ($45) are now trading at $14.25 now, up from $11.85…just about exactly up 20%…in one day.
Sell ‘em now, take the money.
/pats self on back
———
Today on GM:
#82 Statik, November 20th, 2008 at 12:30 pm
BOOM! Crisis over. Bipartism agreement. GM up.…see you in January
—-
#84 Statik, November 20th, 2008 at 12:39 pm
JonP, there is the second half of my answer to you about GM and what you should do with your shares from yesturday: It ain’t at $4.00, but $3.30 is better than the $2.50 yesturday (or the lows of $1.72 earlier today).
—-
#88 Statik, November 20th, 2008 at 12:51 pm
Still going, 10 minutes later. Up to $3.80 now. Hope your out there and ready to sell Jon.
—-
#89 Statik, November 20th, 2008 at 12:52 pm
And there is $4.00 on GM. I have to know…did you put it the sell order @ $4.00 yesterday? There is going to be a whale of resistance I think at that number.
SELL SELL SELL
lol
—
#99 Statik, November 20th, 2008 at 1:21 pm
And now back to reality — $2.79. EVEN
/Jon, I hope you got out my friend
================================================
================================================
Ok I know I’m ’snapping’ my own arm off patting myself on the back right now and I’m being about as obnoxious as I could possibly be. I should probably be professional about it.
/but c’mon
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November 20th, 2008 at 1:43 pm
Im buying a Toyota.
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November 20th, 2008 at 1:45 pm
Good. Now we can start talking about the next bailout that will be required by April/May.
Barak, the albatross has been passed to you.
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November 20th, 2008 at 1:45 pm
http://www.portfolio.com/views/blogs/market-movers/2008/11/18/the-return-of-the-70-per-hour-meme
The Return of the $70 Per Hour Meme
“You might expect it from right-leaning commentators like Will Wilkinson. You wouldn’t expect it from someone like Mark Perry, who lives in Flint, Michigan. And you certainly wouldn’t expect to see it in the New York Times, from the likes of Andrew Ross Sorkin. But all of them are perpetuating the meme that the average GM worker costs more than $70 an hour, once you include health and pension costs.
It’s not true.
The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM’s total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.
Now that GM’s healthcare obligations are being moved to a UAW-run trust, even that fictitious number is going to fall sharply. But anybody who uses it as a rhetorical device suggesting that US car companies are run inefficiently is being disingenuous. As of 2007, the UAW represented 180,681 members at Chrysler, Ford and General Motors; it also represented 419,621 retired members and 120,723 surviving spouses. If you take the costs associated with 721,025 individuals and then divide those costs by the hours worked by 180,681 individuals, you’re going to end up with a very large hourly rate. But it won’t mean anything, unless you’re trying to be deceptive.”
The GOP never dreamed it would get to kill a massive part of organized labor and have an entire region of the country completely collapse on the Democratic parties watch to boot, but that is just the opportunity that has arisen for the Limbaugh/Coulter wing of the GOP ….
10 to 12 million jobs lost, boom!, 200 to 1 trillion dollars in emergency social spending to deal with the collapse’s impact on the region, the UAW dead and Wal-Mart the biggest employer in the region, Michigan in full economic collapse and millions of voters ripe for being in play in the next round of the Culture War.
The GOP, and the media pundits who are all clamoring for Obama and the Congress to let the auto industry die will be damning us and running against the Democratic Party as the party that ‘Let Michigan Die’ or ‘Let Detroit Die’ for a generation if the auto industry is allowed to die.
It’s the Shock Doctrine at work — again.
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November 20th, 2008 at 1:49 pm
Merry Christmas to the idiots that run those companies.
Where the hell is my check?
I want the Volt but these companies need to reorganize.
Put me in charge. They will change big time.
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November 20th, 2008 at 1:49 pm
“Excellent, Smithers. Now, lets get the Volt’s wheels on the road!!!”
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November 20th, 2008 at 1:52 pm
I saw a bit that indicated GM was going to announce who got the Volt battery contract officially at the LA Show, but now the announcement is delays. Is this a nail in the Volt coffin?
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November 20th, 2008 at 1:52 pm
#21, Lurtz, Thanks. I suspected this all along. However, where can I go to check your figures?
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November 20th, 2008 at 1:52 pm
How about this for an analogy……
When your ICE car is burning oil, you have a few choices.
1) Buy quart after quart and watch your money go up in smoke.
2) Scrap it and try to manage without.
3) Or overhaul the engine and keep it for the long run.
This $25 billion US auto industry bailout amounts to another quart of oil….
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November 20th, 2008 at 1:55 pm
After yesterday’s charade, I am more convinced than ever that giving these guys $25 billion without a MASSIVE restructuring plan in place is no different than throwing it in the fireplace.
The present business model is just unsustainable. Furthermore I have real difficulty in seeing how such a massive restructuring is going to be possible, considering all of the “stake holders” involved.
I voted for bailout with conditions in the recent poll. With every passing day, it gets harder for me to see how such a thing can be possible.
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November 20th, 2008 at 1:58 pm
Bipartisan group strikes deal in uphill push to revive government auto industry aid
http://finance.yahoo.com/news/Bipartisan-group-works-to-apf-13633769.html
WASHINGTON (AP) — A bipartisan group of auto-state senators reached a last-ditch compromise Thursday to throw Detroit’s Big Three a government lifeline worth billions, but the plan faces an uphill battle in a reluctant Senate.
Senate Majority Leader Harry Reid, D-Nev., canceled plans for a vote on a bill to carve $25 billion in new loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans oppose that plan
Even if agreement can be reached to consider their plan, Reid signaled earlier Thursday that the Senate was not likely do so until after Thanksgiving.
“We have some procedural roadblocks,” Reid said. (sour grape moment)
White House press secretary Dana Perino on Thursday blamed Reid for not allowing the Republicans’ separate auto-aid plan to come up for a vote.
“Unfortunately it looks like Sen. Reid just wants to pick up his ball and go home for the next two weeks — two months — for vacation,” she said.
Pressed on what the White House would do if Congress can’t agree on a plan to rescue the automakers this week, Perino said she thought lawmakers would return after the Thanksgiving holiday for an emergency legislative session if an auto company was in imminent danger of collapsing.
“I can’t imagine a scenario where they wouldn’t come back, unless the answer is that they just don’t care. And if that’s the case, then the American people ought to know that.”
=============================
So….look for ‘emergency legislative session’ just after Thanksgiving (lol), if Reid is going to be ‘difficult’ and they don’t get the vote out this week.
“Procedural roadblocks” indeed…that man might need another slap from Pelosi. They know it is going through, such a sourpuss. I doubt they really all want to drag themselves back in, and have to jump through this hoop agaain.
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November 20th, 2008 at 2:01 pm
BREAKING NEWS , BREAKING NEWS
The U.S. Senate approved the $ 25 bailout …….. 10 bucks for GM , 10 bucks for Ford and 5 bucks for Chrysler !!!
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November 20th, 2008 at 2:06 pm
#25 Charlie H
I was mostly quoting the original article, who in turn was referring to this:
http://www.uaw.org/barg/07fact/fact02.php
At the end was this interesting bit:
“How much are labor costs in relation to the total price of a new vehicle?
The total labor cost of a new vehicle produced in the United States is about $2,400 which includes direct, indirect and salaried labor for engines, stamping and assembly at the automakers’ plants.
This represents 8.4 percent of the typical $28,451 price of a new vehicle in 2006. The vast majority of the costs of producing a vehicle and transporting it to a dealership and preparing it for sale – including design, engineering, marketing, raw materials, executive compensation and other costs – are not related to direct or indirect manufacturing labor.”
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November 20th, 2008 at 2:15 pm
Lurtz “Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM’s total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.”
You wanna explain to me exactly why that is relevant? Most everyone knew that. I certainly knew that $70 an hour came from the massive rip off GM ponied up to regarding retired workers, not specifically relating to what they pay to the worker, but what they pay PER UAW contracts with their active worker. Sorry, that in no way makes that $70 an hour any less relevant or enlightening. It clearly demonstrates how the entire union arrangement with them is unsustainable, particularly when compared to the superiorly managed Japanese factories in the South east. Course I’m the one whistling Dixie if I think someone clearly reposting Democratic Talking Points is capable of handling cross examination.
So, to paraphrase… IT WAS TRUE.
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November 20th, 2008 at 2:24 pm
Statik#28 – Or now they say maybe they will come back in December. Yikes.
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November 20th, 2008 at 2:26 pm
#31 2Snowboard – Yeah! GM (and American society) promised the American worker that instead of European socialized healthcare and retirement, based on gummint taxes, that US industry would take care of its workers. No legions of unproductive workers collecting a gummint dole — as long as you had a job and worked hard, you wouldn’t be destitute in your old age.
Now that these workers kept up their end of the bargain and are in retirement, we should renege on the assurances made during their entire career and dump them on the curb. Suckers! What a ripoff!
As far as accounting for it per-hour of current employees, why not instead measure it in terms of the number of executive washrooms? Makes about as much sense.
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November 20th, 2008 at 2:26 pm
Toyota makes 4 large SUV models that get worse gas mileage than the American counterparts. Toyota is a total PR scam.
Also Toyota pays more money in donations to consumer magazines and lobbyists to brainwash consumers.
Trust me I have owned 3 Toyota cars they were all OK but not any better than the American cars I have owned. They were better than the European cars I have owned.
The USG is very stupid. Where is the brainpower of money?
Why give money to the banks and IRAQ? What do the banks do to make the USA money?
The Bush administration is so dumb. They have all been bough out by Toyota lobbyists who spend millions in Washington. For good reason Toyota invests in Washington to keep things on there side. They love American money!!
Who is the Greedy one not Detroit executives but Toyota sure is!
I hope Obama and change Washington and move the bush cronies out and move in some people with some American price and back our auto industry.
They can give loans out to whom. Housing buyers.
If we don’t have automobile manufacturing who can afford houses.
Chapter 11 is simply not acceptable
Read this about Toyota wanting to turn American into a nice sweat shop.
http://www.nlcnet.org/article.php?id=562
Stop reading Toyota PR and buying a Toyota Built in America.!!!
Hog wash. It destroys high tech design jobs, engineering, and suppliers. Sure the end assembly is done in the USA but that engine is not made or designed here.
We have a 600 B trade deficit between us and Japan now they are trying to destroy our auto market. Stop the Mess support American Industry !
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November 20th, 2008 at 2:28 pm
I’m not sure where Lyle got his breaking news… but no compromise has been reached, and the Senators (and house members) have been speaking since 2pm ET (if you tune in at 2:30pm you’ll catch the end of it)
What I’ve heard has been agreed to is they will come back Dec. 2nd to work on it some more.
the better news today for the future of BEV’s in general and the environment is that Waxman is making a bid to be chairman of the committee that Dingell has for years, and needless to say Dingell has pushed back on behalf of big auto against raising CAFE, etc
In any case, once again…
A British Lesson on Auto Bailouts
http://www.nytimes.com/2008/11/18/business/economy/18car.html?_r=1&th&emc=th
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November 20th, 2008 at 2:31 pm
I rebuilt aircraft for 12 years and resold them . The worst comment I got from them was when one called three months after buying one and said some plastic part had broken . I told him to bring the aircraft back and I would give Him his money back . He never called back , I wonder why ? The other call I remember was bout four months after the sale of one I put six months in repairing . He called to say I forgot to tell him something . I ask what . He said I forgot to tell him he had to wash off the bugs after he flew it .
God Bless
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November 20th, 2008 at 2:31 pm
A story just came up on the Yahoo site to the effect that Congress is going to require “business plans” from the automakers showing how the taxpayer money will result in “sustainable” businesses before any money is given out. That should be interesting!
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November 20th, 2008 at 2:31 pm
And the other good news is that unlike the other bailouts… congress has finally learned… before they hand any money they want to see something that looks like a business plan for how this money is going to be spent.
It’s too bad we can’t ask the government for a business plan before we hand over our tax money!
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November 20th, 2008 at 2:35 pm
The socialist Rebublicrats will put so much central planning requlation on this money that American Auto is DOOMED! Lawyers, lobbiests and overpaid union workers however will have a field day!
They’ll burn through this by February. I wonder how much comrade Obama will redistribute to them?
Anyone want to guess?
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November 20th, 2008 at 2:38 pm
Lurtz, I knew you couldn’t handle cross examination, but this response is just…. sad.
First, you dodged the question, why isn’t it relevant that the Union work counts against them over $70 per hour of “work” performed? Feel free to use your own propaganda numbers about what the Japanese pay.
Second, “America society promised the worker” what the hell does that mean? I never promised them anything, GM made an ignorant compromise with their unions, allowing for the biggest retirement handouts I have ever heard, like mini-golden parachutes for millions of previous workers.
Yes the executive perks should be included in evaluating their pay, who are completely overpaid also, (if not more so since some of them agreed to this albatross), or the current workers, or the retired ones, they are all overpaid. Get out of your myopic worker vs executive mindset, you still don’t grasp yet how all of this is unsustainable and its precisely the overstated propogandist cries about “destitute” that rationalized pushing for more and more luxurious retirement packages, and eventually will make that a reality by driving the company oversees or out of business. The Unions have done it before in the Rust Belt, they’re doing it again, and no government bailing out will ever stop that.
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November 20th, 2008 at 2:42 pm
From what I’m reading this Bi-Partisan agreement was a premature announcement by Sen Levin where he got a couple of folks to agree what the Bush Administration was pushing for in the first place….to use the already allocated 25B for immediate infusion instead of long term hybrid/plug in car development costs.
Sounds like it is nothing about nothing.
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November 20th, 2008 at 2:43 pm
Note: I previously mentioned Dec. 2nd… but that may actually be Dec. 8th, that they come back.
By the way, does anyone else think that Carl Levin (of Michigan) is looking more and more like Ben Franklin?
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November 20th, 2008 at 2:49 pm
Statik Statik Statik — As Jeff M says, your deal is apparently not a deal. The press conference has been cancelled. Back in December for another episode of “As the World Turns”. (But yeah highly likely something will come out of it).
Lurtz – Payment for retired workers should count in the labor costs. As I understand it these “legacy costs” are what is hampering the competitiveness of the Detroit auto makers.
My question is: what will it be in 2010 when the cost savings in the contract are fully implemented?
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November 20th, 2008 at 2:51 pm
“By the way, does anyone else think that Carl Levin (of Michigan) is looking more and more like Ben Franklin?”
Maybe he just wants to get a post over in France so he can get himself some ’strange’
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November 20th, 2008 at 3:03 pm
I wonder what the overall response will be when China comes in and offers to fund GM for 49% of the company.
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November 20th, 2008 at 3:04 pm
The problem with how this is developing is that it’s a political circus and not an economic issue. The auto makers are relying on the UAW and car dealers for the political support necessary to get the loans, yet these groups are in part the reason the auto makers need the loans in the first instance.
The only good thing is that the $25B will not be enough and in the second go-round perhaps we’ll see the labor and dealer cuts needed to allow the domestic manufacturers to be truly competitive.
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November 20th, 2008 at 3:11 pm
#9 Brad
Awesome idea dude, I like that one. Gives them money up front, and a goal to work towards.
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November 20th, 2008 at 3:12 pm
#37 Noel – “A story just came up on the Yahoo site to the effect that Congress is going to require “business plans” from the automakers showing how the taxpayer money will result in “sustainable” businesses before any money is given out.”
As I alluded to above, this is virtually impossible. Any plan that actually resulted in a sustainable business model would require cuts in retiree benefits, cuts to some worker salaries, and cuts to the dealer network. Yet the UAW and the dealer network are a source of the political support needed for the bailout, so any realistic plan would alienate the very people the auto makers need for the bailout.
We’ll probably see some ginned up plan where the numbers add up but one in which the underlying assumptions are entirely unrealistic. Sort of like the health care plans ….
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November 20th, 2008 at 3:16 pm
Homework assignment for big 2.8 execs….
Harry Reid (senate majority leader) has given the motor execs some homework. Come up with a business plan! To be handed in no later than Dec. 2nd, and Congress will review and give a grade sometime after Dec 8th. The reward for a passing grade is $25B (better than a gold star), the penalty for a failing grade is bankruptcy (worse than detention).
Yesterday, some members of Congress gave some tips on the homework assignment. Sell those Jets! You might even try leading by example, and start working for $14/hr.
Now, guys, think back to your days at school or college…., if the teacher gave us a tip on what we needed to do for homework to get a passing grade were any of us dumb enough to ignore that advice?
If they ignore the not so subtle tips they were given, then they deserve to be fired. It is one thing to be put on the spot by a Congressional committee, it is quite another to ignore the advice with nearly 2 weeks to think about it.
It will be interesting to see the homework that they hand in.
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November 20th, 2008 at 3:18 pm
There is no deal.
It’s a shame we as individuals let our capitalism fail so much that we are now turning to socialist solutions.
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November 20th, 2008 at 3:20 pm
#7 etc statik’s predictions
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So far all unrolls just as you said it would.
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November 20th, 2008 at 3:23 pm
“The only good thing is that the $25B will not be enough and in the second go-round perhaps we’ll see the labor and dealer cuts needed to allow the domestic manufacturers to be truly competitive.”
Sadly, I don’t see this happening. It’s now or never as far as any real needed reform. Come January we’re into a long steady dose of more of the same.
We’ll end up subsidizing the big three until the foreign competition gets unionized and their costs rise to the same level.
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November 20th, 2008 at 3:23 pm
My BIGGEST gripe about the UAW is the job bank. Even my friends who are in the UAW and the JB think its ridiculous, but they are not going to turn away free money. The majority of the people that work the line in the plants work hard, but of course there are always worthless employees.
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November 20th, 2008 at 3:26 pm
On a somewhat unrelated note, Detriot News had this in a story today:
“Consumer Reports has concerns about letting domestic automakers fail,” the magazine’s publisher, Consumers Union, said in a written statement. “The loss of any major auto manufacturer would leave consumers with fewer choices and the industry with less competition and innovation, particularly at a transitional time when the industry is pursuing alternative energy technology. Moreover, the impact of losing a domestic automaker on the U.S. economy and jobs could be severe.”
It’s ironic how a publication that can arguably be blamed for the situation that the domestic auto industry is in, and now their inflence may have had a negative effect on the economy. Oops.
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November 20th, 2008 at 3:26 pm
Ughhhh, I’m confused! I just read on Forbes and Yahoo Finance that any bailout money will NOT be given until all 3 automakers produce a viable business plan as to what the gov’t money will be used for. The topic is shelfed until Dec. 2, in which point the Congress will re-convene to review the plans, and then go from there.
Who has the right information?
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November 20th, 2008 at 3:29 pm
53: kdawg
That’s just it. The assembly line jobs should pay a pretty good wage. Most of it is hard work. But when the bennies are taken to this ridiculous extreme, it not only hurts the company, but the workers who are actually on that line working right now. And the supplier who sends the parts in. And on down the line.
That’s my gripe about the UAW. Somewhere along the line they changed from a symbiotic relationship to a parasitic one.
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November 20th, 2008 at 3:34 pm
Here is what needs to happen:
LYLE NEEDS TO BE CEO of GM
Its a tough job but boy would he be able to make a difference and probably the Volt sooner.
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November 20th, 2008 at 3:36 pm
Mr Shelby of Alabama is adamant on letting the big 3 to go bankrupt. I believe he is playing favorites for his own state to benefit the foreign auto companies in his own State.
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November 20th, 2008 at 3:36 pm
In 54 above, I meant to say: “It’s ironic how a publication that can arguably be blamed for the situation that the domestic auto industry is in, and now they are essentally saying that their inflence may have severaly negative effects on the economy.”
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November 20th, 2008 at 3:37 pm
Well, I do think they still have the possibility of getting money. I do think, though, it was a bad move to even have brought the jets. It really is not a big deal as far as money goes, but the impression it generated was terrible. I am strongly reminded of the guy about 15 years ago who was supposed to testify to congress about legalizing medical marijuana who was caught with weed at the security checkpoint. While it relates, it was a bad move. Let’s hope the big three do their homework and can come up with something useful, not just tossed together. They also need to offer a VERY good carrot.
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November 20th, 2008 at 3:41 pm
Statik@18 said in part:
…”Ok I know I’m ’snapping’ my own arm off patting myself on the back right now and I’m being about as obnoxious as I could possibly be. I should probably be professional about it.”
Come on, Dude. Don’t sell yourself so short! I’m almost certain that with just a little bit more effort, you could be even more obnoxious. (g)
Be well,
Tag
/papercut #746
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November 20th, 2008 at 3:44 pm
Here is a Wall Street Journal link of the NO Bailout situation I mentioned at post #55:
http://online.wsj.com/article/SB122720155194344635.html?mod=yahoo_hs&ru=yahoo
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November 20th, 2008 at 3:47 pm
Thank God those poor CEOs won’t lose their private corporate jets!
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November 20th, 2008 at 3:53 pm
If any of you were in the same financial status as the Big 3 CEO’s would you really give a s— if the companies went with Chapter 11 or Chapter 7?
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November 20th, 2008 at 3:53 pm
#61 Tagamet
Statik@18 said in part:
…”Ok I know I’m ’snapping’ my own arm off patting myself on the back right now and I’m being about as obnoxious as I could possibly be. I should probably be professional about it.”
Come on, Dude. Don’t sell yourself so short! I’m almost certain that with just a little bit more effort, you could be even more obnoxious. (g)
Be well,
Tag
/papercut #746
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Oh, I know I could be…for sure.
/stick around
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November 20th, 2008 at 3:55 pm
Thank you god!
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November 20th, 2008 at 4:06 pm
#37 noel park
A story just came up on the Yahoo site to the effect that Congress is going to require “business plans” from the automakers showing how the taxpayer money will result in “sustainable” businesses before any money is given out. That should be interesting!
#43 DonC
Statik Statik Statik — As Jeff M says, your deal is apparently not a deal. The press conference has been cancelled. Back in December for another episode of “As the World Turns”. (But yeah highly likely something will come out of it).
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I think it is a deal in any real sense. They figure they can’t push it out until they come back (especially with Reid busy eating humble pie and all), so why not ask for a plan in the meantime?
Can you just imagine Congress sitting down for a quickie vote in a couple weeks, then having GM, Ford and Chrysler each dump the ‘encyclopedia britannica’ of a turnaround plan on their desks to sift through? Anyway, who makes the decision on the merits of these plans, what happens if any of the 3 are not adequate? They are done? Or if one messes the plan up..do they all lose? I don’t buy it.
I have doubts that any of them could put together any coherent short term ‘turnaaround’ plan to make money and not be back begging for more in a few months (or could be reasonably expected to by anyone). Heck, I don’t think Toyota could present a plan to not lose money in 2009.
So what are they asking for…other than a pound of flesh? Probably something to throw back in the Big 2.8’s faces when Jan 20th rolls around and they all hobble back. I think you’ll find the Dems sing a different tune on the whole matter of ‘the importance of Detroit auto’ when it is their political necks they are risking.
Problem of course will all of this, is that GM will be hard pressed to make it until the vote goes through -AND- then waiting for the money to be dispersed. It is not impossible to foresee them crossing the bridge, but it will be a trip across. I’m sure we will have lots of panic reports from GM over the next few days, while Ford and Chrysler quietly draft their plans, letting GM bang their fists on the table and wave their arms in the air looking for the cash.
Good time to take a stab at amount they probably will request don’t you think? Not going to have much else to talk about from here on out for awhile. This is of course just a WAG with nothing to back it up…just spit-balling for laughs.
GM: 11-12 billion
Ford: 9-10 billion
Chrysler: 7 billion
(I’m sure the second it goes through, the Chrysler/GM merger is reborn…if not sooner).
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November 20th, 2008 at 4:10 pm
Mr Shelby of Alabama is adamant on letting the big 3 to go bankrupt. I believe he is playing favorites for his own state to benefit the foreign auto companies in his own State.
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Maybe – and that’s a good way to get re-elected. FTR, I am from Alabama, and against the bailout (and I voted for Obama and 7 other democrats earlier this year (and 1 Republican)). But I was against the bailout on Wall Street, too. I believe Shelby was as well.
Frankly, I’m not certain the economic situation is as horrific as some have tried to make it sound – I’m not sure it’s not, either. But more analysis and less rushing in is something I was in favor of – and I was very ticked by what I perceived as scare tactics. I definitely thought there should have been more conditions on the 700B bailout and think that any organization or individual having no oversight is a very bad idea.
Likewise, I don’t think this bailout for the auto-industry is good. I don’t think it will achieve anything but delaying the inevitable. It’s not a long-term solution. It’s just a stop-gap measure from what I can tell. And that’s not going to cut it for me. If they come back with some very good business plans, then maybe I’ll change my tune.
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November 20th, 2008 at 4:35 pm
Lurtz pasted the following quote:
The Return of the $70 Per Hour Meme
“You might expect it from right-leaning commentators like Will Wilkinson. You wouldn’t expect it from someone like Mark Perry, who lives in Flint, Michigan. And you certainly wouldn’t expect to see it in the New York Times, from the likes of Andrew Ross Sorkin. But all of them are perpetuating the meme that the average GM worker costs more than $70 an hour, once you include health and pension costs….
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I read the entire quote, and I am more convinced than ever that the $72 figure is accurate, (not disputed above) and is also the relevant figure to use. The fact is, the Big 3 are totally uncompetitive with the US based Japanese auto makers, because of thier labor costs are 50% higher. Lurtz’s point that some of that money goes to retirees does not change the fact that the labor contracts have to be restructured if you want the big 3 to have a chance at competing.
That is why bankruptcy is the answer, is your goal is to get the Big 3 off of life support.
But if you would like to see a Big 3 with bloated labor costs, getting annual bailots to subsidize the bloat, then avoid bankruptcy. This alternative is great for union retirees, union bosses, and socialist politicians would would like nothing better than to see GM as a perpetual sick man, who can be nationalized.
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November 20th, 2008 at 4:45 pm
Working together can sometimes work. Sometimes we get more problems than the original problem would have caused. We will have to wait and see. None of this fixes the auto companies’ real problems. Just keeps them afloat for a few more months. For them to survive, they must have financing that would carry them through the next 3 years. Or should I say, access to loans, instead of financing. If they need a little more cash, it would be available, if they don’t need it, great.
The only real solution is either Chapter 11 or get them through next year so they can start receiving some benefits from reduced labor, pension and health care cost. During the same time they, especially GM, needs to re-work their dealer network after they start receiving reduced cost, as stated prior. But, they must survive through 2009 and well into 2010 to see any savings. The government loan (financing) would be available to help them re-work the dealer network, re-tool their factories, reduce the number of car lines and design and bring to production new more efficient vehicles, including the Volt.
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November 20th, 2008 at 8:33 pm
I thought I saw a VOLT in front of me on the highway but as I caught up to it I saw malibu on it. I’ll keep watching.
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November 20th, 2008 at 10:04 pm
Casey come on guy…..thank God for Bush. Thanking the one and only man who has single handedly caused this mess worldwide. I still feel that bankruptcy and reorganization would have made better sense. Now with more money being poured in Chrysler can just ignore the fact that they rushed the bonuses to their fat cat top people and still had guts to have their hand out infront of our legislative people. I work in a small rural hospital and nobody is bailing out the small guy in healthcare…..and I was just hoping for a huge bonus before we shut the door..
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November 20th, 2008 at 10:39 pm
25,000 Million …… that’s a lot of money to give someone when they can’t even show a “plan” to make money again. The hearings this week were an embarrassment and indication of the problem. These CEO’s fly in in there corporate jets, only one agreed to work for a $1.00 a year until things turn around and they sit there and stammer and stutter trying to answer questions. THEN they can’t even tell us what they need the money for or what the “plan” is to fix this!!! It’s outrageous. Thing is I really don’t have an issue with some of these guys making $2 million a year if they were getting companies like GM MAKING billions a year…instead GM has lost $20 Billion this year. It looks REAL bad when you are getting the pay and perks these guys get…..while they sit there and have their hands out looking for our taxpayer money to do God knows what with. Shame on ALL the senators who vote for this hand out without knowing where the money is going or how it will be paid back. Nobody wants these three companies to go under, we just want them to build quality, price competitive products that people want to buy. 30 years of NOT doing that has us where we are today.
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November 20th, 2008 at 10:53 pm
…in fact can someone tell me what management and the UAW are willing to give up to get these companies profitable again? Gettelman again just two days ago (while the hearings were going on!) said “no concessions or give backs” from the UAW. So I guess saving these three companies is all on the taxpayer….I guess when you contribute enough $$$$ to these elected officials in Washington you can get away with this. Wonder how much of the $25 BILLION will end up as political contributions back in the pockets of the senators who vote for this?
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