GM Leaders flew in their private jets to meet Congress and tell them our country is headed for “catastrophic collapse” if the government doesn´t give them a $25B bailout. GM said it will run out of cash as early as January if it does not get help from the government. Analysts said GM will be liquidated if they are forced into bankruptcy. Republicans are against a GM Bailout although they advocated the $700B Bailout for their crony banks on Wall St., yet the Bush Administration opposes the package saying Congress should instead adapt an existing 25-billion-dollar loan program aimed at helping the auto industry develop more fuel efficient vehicles. Meanwhile, Obama and Congress are studying the entire situation.On the blogosphere, many bloggers are saying “No” to GM. They want them to go into bankruptcy. Some blame it on the union and union benefits and pensions. Others blame it on CEOs, their private jets, and their inability to manage their own business without outsourcing overseas and taking huge salaries. I heard Michael Moore saying “No” as well. He said GM is building a new plant in Russia and any bailout will allow GM to plant plenty of dollars overseas with no assurity of increasing domestic jobs.
I grew up in Michigan. My father worked in an auto factory in his quest for the American Dream. My father was a proud union supporter. The union viewed ALL workers as equals. They were the first advocates of one person, one vote, regardless of race-ethnicity.
I struggle when I consider the GM Bailout. Why? Because I don´t know what it is. Is it a union bailout? Worker Bailout? Executive-private jet bailout? Offshore bailout? I don´t know!! I support the workers, the union, USA Bailout! Americans need jobs! Those jobs should be bailed out. But is that what GM is promising? Or are they promising to complete their new GM plant in Russia? I don´t know.
I feel the same way about the $700B bailout. No one seems to know where the money is going or what the plan is to solve the problem. No one seems to know who is providing oversight. How is that possible?
My only hope is the new Obama administration, first to provided needed oversight, then to ensure the bailout creates jobs in America and Hope for all of our futures. Most Americans I know DO NOT want a handout. They just want an opportunity to WORK and Support their families!
What are your thoughts?
References:
US economy faces 'catastrophic collapse' without auto bailout: GM
References:
US economy faces 'catastrophic collapse' without auto bailout: GM
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10 comments:
I'm against the bailout. I was against the financial bailouts as well. It's not right that a few companies can make money not by competing in an open market, but by getting lovey dovey with our legislators and administration.
It doesn't really matter which side is at fault, unions or management, but I believe both sides had a finger in it. These companies are not going to get better just by doing what they're doing now.
Toyota runs a good company for automobiles with plants in the USA. We're not going to be car less or jobless if GM goes bankrupt.
Nelson,
I am torn on this issue.
I do not want GM to go bankrupt. That would be devastating for their 3000+ American workers, particularly in Michigan.
I think they need to get rid of the executives. I think they dont need to build factories in Russia or in other countries.
I dont think we should allow the auto companies to go out of business.
They should be building fuel efficient cars here in the US.
This is where I am torn. Who makes these decisions? Does the govt make the loan and provide oversight?
GM needs to file Chapter 11 bankruptcy. If Americans are forced to bail them out this time via our tax dollars, how many more times in the future will be have to do it?
Bankruptcy will force the auto makers and their unions to become competitive in salaries and benefits and to build fuel efficient cars. Everyone needs to realize that the cars auto companies produce are a function of the publics demand. The auto industry may have had some roll in promoting high profit gas guzzlers but it was primarily in response to the demand, based perhaps on safety considerations and related auto company propaganda.
The bottom line result has to be a lean and mean company that can compete with Toyota, Honda and VW on an even playing field. That may require the government to pick at least part of the tab for retirees. This is an expense that is killing the big three
I think what is being left out are the vehicles that the big 3 create in other countries. Look at the GM brand in Europe, Opel, high fuel efficient vehicles, good market share, yet they are no longer allowed to be brought or imported into the USA. Why??
Why is it everyone assumes that bankruptcy means the end of jobs and the companies that provide them. This is not the purpose of chapter 11. Under chapter 11 bankruptcy, the company can reorganize, abrogate the union contract, and take whatever other steps are necessary to get their house in order. Many companies have come out of chapter 11 as better companies. While in chapter 11, the auto companies are protected from creditors. This might be the downside for suppliers who have to meet their payrolls too or layoff workers. Thus, the gov't's role may be to make sure that ripple effect doesn't happen. It would be better if the companies could lay out a plan detailing the compensation reductions that are needed and the other proposals going forward to make them competitive. If their business plans have the agreement of the unions internally and at their suppliers, I would favor bridge loans to keep them in business. If the unions won't cooperate in this endeavor, bankruptcy will be the only alternative. This is not likely to happen in a Democrat controlled Congress that is beholden to the unions for their $80 miilion contribution to their political campaigns.
I do not want GM to go bankrupt. That would be devastating for their 3000+ American workers, particularly in Michigan.
Perhaps some of our attitudes depend on where we came from. I'm originally from Texas and I live in Arizona. I don't want my tax dollars heading to 3 *companies* in Michigan. I'm against corporate welfare (thought you were too?) and besides, it's not the only place that can make cars.
Nelson,
Part of the reason I am torn is because I grew up in Michigan and I know how vital the auto industry is to that state´s economy.
I´m not for corporate welfare, nor am I for government oversight. nor am I for lost jobs, lost economy in the US.
I think the corporate leaders have done a poor job at leading their busiensses and have been far too greedy as exemplified in flying to Washington DC in their private jets to ask for a handout.
Also Toyota does manage their business differently. I know in San Antonio their workers work rotating shifts, rotating days off, long days, lower wages, limited benefits. I am not sure this atmosphere would be welcomed by many, but I suppose if you had nothing else, you do what you have to do to support your family.
Also Toyota does manage their business differently.
The Toyota plant in San Antonio was shut down for 3 months. There were no layoffs. During those 3 months the employees were paid to do process improvements. Not bad for managing their business differently.
Here's the link to the newspaper article: http://www.chron.com/disp/story.mpl/business/6105787.html
General Motors' Destruction of California Transit Systems
The destruction of transit in the East Bay and across the Bay Bridge was, unfortunately, typical for California's other large metropolitan areas. The only large city in California where GM did not destroy the transit system was San Francisco. This was because it was not able to do a takeover: San Francisco's transit system was owned by the City. Of course, GM was savvy enough to not directly buy these transit systems. They used "front" companies, funneling the money through them, and when they achieved control, it was the end for the transit system. All without the public's knowledge. I believe that everyone should know the truth about GM. It's a shame that the public is always kept in the dark.
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