14
   

Bridge Loan Denied: WTF is wrong with these guys?

 
 
Reply Fri 12 Dec, 2008 07:44 am
IMO, a good (though short) article.

Quote:
"This isn't just about three large Michigan-based companies and the 240,000 people who work for them," said Ron Gettelfinger, president of the United Auto Workers, in The Washington Post. Detroit also provides jobs for millions of workers who work for car dealerships and thousands of other small- and medium-size businesses in towns across America. The domestic auto industry can't survive in today's unstable economy without government help, and "the costs of failure are unacceptable."


______________________________
And an even better article:

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article5329036.ece

This is not just a Michigan thing or even just a US thing; it is global.

Why can't anyone see that?
On top of that.....
I am all for making the autos prove they deserve to continue but for chrissake, if they fail the money and the sales go to FOREIGN auto makers. Why are these Repubs in favor of supporting foreign automakers? Oh yeah, because they have plants in their states. Greedy sons of bitches, if you ask me.

Do things need to change in the auto industry? Abso-*******-lutely. But don't things need to change in nearly every major corporation in America? (read, Citi who took the bailout money and still hasn't used it for it's intended purpose)

The republican party has failed us again. Our government has failed us (big suprise). Prepare for the worse folks.
 
Woiyo9
 
  1  
Reply Fri 12 Dec, 2008 08:01 am
@Bella Dea,
How the heck do you blame the Republicans for this? Forget the fact that the Senate has a Dem majority. You have 3 auto companies who do not know how to run a business and a Union who refuses to accept the reality that they are part of the problem.

Millions of workers today will get little to no raise nor any bonus. Yet, you want these taxpayers to give money to these losers?

Many Toyotas are built in the USA and employ American workers. Toyota gets it. Detroit does not and apparently, neither do you!

Bi-Polar Bear
 
  2  
Reply Fri 12 Dec, 2008 08:01 am
Don't worry....the times they are a changin'.....

http://img.photobucket.com/albums/v288/stevetheq/bailoutyk2qb3.jpg
0 Replies
 
Intrepid
 
  2  
Reply Fri 12 Dec, 2008 08:10 am
http://i3.photobucket.com/albums/y75/Intrepid2/USAutomakers.jpg
0 Replies
 
BumbleBeeBoogie
 
  1  
Reply Fri 12 Dec, 2008 09:00 am
World markets drop on rejection of US auto bailout
Fri Dec 12, 2008

World stock markets plunged Friday after a proposed U.S. government rescue of Detroit's ailing automakers collapsed in the Senate, intensifying fears about a protracted global slump.

European markets followed Asia lower, and U.S. stock index futures pointed to a sell-off Friday on Wall Street. The dollar sank to a 13-year low against the yen, dropping as low as 88.16 yen, and oil fell below $46 a barrel.

Investors were rattled after a $14 billion bailout for Detroit's struggling Big Three automakers failed to get approval in the U.S. Senate. The collapse came after bipartisan talks on the auto rescue broke down over Republican demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with U.S. plants of Japanese carmakers.

The bankruptcy of any of the big American automakers would deal another blow to the world's largest economy, already in recession, and ripple through export-dependent Asia, as well as global financial markets.

"The automobile sector is a fundamental industry for both the U.S. and Japan, and a failure would be a major blow to Japan as well," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Tokyo. "The bailout failure is just the beginning."

Japan's Nikkei 225 stock average tumbled 484.68 points, or 5.6 percent, to 8,235.87, and Hong Kong's Hang Seng index slid 5.5 percent to 14,758.39.

In Europe, Britain's FTSE 100 was down 2.7 percent at 4,271.85, Germany's DAX was down 3.6 percent and France's CAC 40 slid 4 percent.

Wall Street was poised to fall as well, with Dow Jones industrial index futures down 224 points, or 2.6 percent, at 8,373 and S&P 500 futures down 31.30 points, or 3.6 percent, to 843.20.

Hopes for the U.S. auto industry now appear to rest with President George W. Bush agreeing to tap a $700 billion Wall Street bailout fund to aid the carmakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

"If a company such as General Motors filed for Chapter 11 bankruptcy protection it could strike the Dow below 8,000 again," said Jackson Wong, investment manager at Tanrich Securities in Hong Kong.

News about the rejected auto bailout sent the dollar as low as 88.16 yen " its lowest level since Aug. 2, 1995 " before it recovered to above 90 yen. That heaps more bad news on major exporters like Toyota and Sony " already reeling from waning global consumer demand " whose overseas income is eroded by an appreciating yen.

Toyota Motor Co. dived 10.1 percent, Nissan Motor Co. lost 11.5 percent and Sony Corp. fell 6 percent. South Korea's Hyundai Motor Co. shed 9.3 percent and Kia Motors Corp. was off 9.1 percent.

Mainland China's stock market fell as investors were discouraged by the lack of any major new initiatives to spur the economy following a top-level economic conference earlier in the week. The benchmark Shanghai Composite Index dropped 3.8 percent to 1,954.21.

"It's hard to truly convince investors that the government can move effectively to steer the economy from here. That's the source of the pessimism," said Cheng Weiqing, an analyst at Citic Securities in Beijing.

Figures this week show that China's economy is feeling the pinch of the global slowdown. For the first time in seven years, exports fell in November.

Investors also grappled with grim U.S. economic and corporate news. New unemployment benefit applications in the week ending Dec. 6 rose to a seasonally adjusted 573,000 from an upwardly revised figure of 515,000 in the previous week. And Bank of America Corp. announced it expects to cut 30,000 to 35,000 jobs over the next three years.

The past week of gains in world markets was "more predicated on hope than reality," said Arjuna Mahendran, head of Asian investment strategy at HSBC Private Bank in Singapore.

Investors were now facing a reality check after earlier this week shrugging off dire economic data from the U.S. and China including the loss of more than half a million American jobs in November, he said.

Markets had rallied after President-elect Barack Obama last weekend flagged a massive stimulus package for the U.S. economy once he takes office in late January, pledging the largest public works program since the creation of the U.S. interstate highway network a half-century ago.

"This has been a typical bear market rally. It's been based on very high expectations of Obama's fiscal stimulus plan," Mahendran said. "It's been based on expectations and nothing else."
--------------------------------------------

AP business writer Kelly Olsen in Seoul, South Korea, and AP writers Eileen Eng in Kuala Lumpur, Malaysia and Mari Yamaguchi in Tokyo contributed to this story.
BumbleBeeBoogie
 
  1  
Reply Fri 12 Dec, 2008 09:14 am
@BumbleBeeBoogie,
Auto Bailout: White House Considers Using Wall Street Bailout Funds
by KEN THOMAS and JULIE HIRSCHFELD DAVIS - AP
December 12, 2008

WASHINGTON " Running out of time and options, the White House said Friday it would consider using money in the Wall Street bailout fund to prevent the U.S. auto industry from collapsing after the Senate refused to pass a rescue bill endorsed by President George W. Bush and congressional Democrats.

"The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry," White House press secretary Dana Perino said.

The Wall Street bailout fund is one of the few remaining options for General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks. Bush had originally refused to use the bailout fund to help the automakers, insisting that help come from Congress. But the White House said it must reconsider after the Senate failed to agree on a $14 billion rescue plan.

"Congress spoke last night. They don't have the votes to do anything," Perino told reporters on Air Force One as Bush traveled to a commencement speech in Texas. "They didn't get it over goal line and so we have to consider what other options we would take." She declined to say when a decision would be made.

About $15 billion from the first half of the $700 billion financial bailout remains uncommitted. Treasury in the past two months has pumped out about $335 billion to banks and insurance companies. To begin tapping the second half of the bailout, the administration would first have to notify Congress, which could block it or put new conditions on how the money is used.

The Senate's rejection of the $14 billion rescue plan and further evidence of a deepening global recession made world stock markets plunge. U.S. stock index futures pointed to a big sell-off later on Wall Street. The Dow Jones industrial average was projected to drop 278 points, or 3.2 percent, to 8,292, while the broader Standard & Poor's 500 index was forecast to fall 33.80 points, or 3.9 percent, to 840.70.

In Detroit, United Auto Workers President Ron Gettelfinger said he was confident that a solution to the auto industry's financial crisis will emerge in Washington despite the Senate's defeat of a bailout bill.

Gettelfinger blamed the defeat of the auto industry bailout bill on southern Senators who he said are anti-union and anti-Detroit.

Story continues below

The Senate rejected the bailout 52-35 on a procedural vote Thursday night _ well short of the 60 required _ after the talks fell apart.

"I dread looking at Wall Street," said Senate Majority Leader Harry Reid in anticipation of Friday's stock market reaction. "It's not going to be a pleasant sight."

The Bush administration has repeatedly said the Wall Street bailout fund should not be used for emergency aid to the automakers because it was designed to restore stability to the financial sector. But with the Senate's action, Detroit's supporters looked to the White House for help.

"Plan B is the president," said Sen. Carl Levin, D-Mich. House Speaker Nancy Pelosi said action by Bush was the "only viable option."

"For God sakes, I hope the president acts," exclaimed Mayor Virg Bernero of Lansing, Mich.

Detroit's carmakers employ nearly a quarter-million workers, and more than 730,000 others produce materials and parts for cars. If one of the automakers declared bankruptcy, some estimate as many as 3 million U.S. jobs could be lost next year.

Many congressional Republicans and some economists said the companies would be best to pursue a prearranged bankruptcy that would allow them to restructure quickly. But most Democrats and the carmakers rejected that, arguing it would quickly lead to liquidation because consumers would never buy cars from a bankrupt auto company.

Perino, speaking on Bush's plane, said that, "Under normal economic conditions we would prefer that markets determine the ultimate state of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary, including use of the TARP (bailout) program to prevent a collapse of troubled automakers."

"A precipitous collapse of this industry would have a severe impact on our economy and it would be irresponsible to further weaken and destabilize our economy at this time," she said. "While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable."

Bush, before departing the White House, consulted with chief of staff Joshua Bolten and senior counselor Ed Gillespie, among others.

"Obviously, we've talked about the urgency of the situation," Perino said.
--------------------------------------------

Associated Press Writer Darlene Superville contributed to this story.
maporsche
 
  1  
Reply Fri 12 Dec, 2008 09:15 am
Today is a GREAT day. Thank God Congress didn't approve this bailout.
JPB
 
  1  
Reply Fri 12 Dec, 2008 09:18 am
@BumbleBeeBoogie,
Quote:
In Detroit, United Auto Workers President Ron Gettelfinger said he was confident that a solution to the auto industry's financial crisis will emerge in Washington despite the Senate's defeat of a bailout bill.

Gettelfinger blamed the defeat of the auto industry bailout bill on southern Senators who he said are anti-union and anti-Detroit.


And they remain clueless!
Bella Dea
 
  1  
Reply Fri 12 Dec, 2008 09:20 am
@Woiyo9,
Uh, Toyota has even said that this needs to happen. Many of the suppliers they use will go out of business without the big three.

maporsche
 
  2  
Reply Fri 12 Dec, 2008 09:20 am
@JPB,
The blame falls on the Union this time...they refused to take a pay cut on CURRENT pay until 2011. These companies won't make it until 2011.

I wonder if you polled the auto-workers themselves and asked "Who would be willing to take a 15% pay cut effective immediately, but you'll still keep your job?" how many of them would have said "YES!".
JPB
 
  1  
Reply Fri 12 Dec, 2008 09:22 am
@maporsche,
Just to clarify my previous comment... the "they" I was referring to is the UAW.
maporsche
 
  1  
Reply Fri 12 Dec, 2008 09:23 am
@JPB,
Yep, I understood, and I agree wholeheartedly.
0 Replies
 
Bella Dea
 
  2  
Reply Fri 12 Dec, 2008 09:24 am
@maporsche,
Yeah it's a great day when world wide, markets are crashing.

It's a great day when our own freaking Senate chooses foreign business over American.

Yeah it's a great day. Rolling Eyes
BumbleBeeBoogie
 
  1  
Reply Fri 12 Dec, 2008 09:29 am
Auto bailout failure highlights a regional carmaking split
By Halimah Abdullah | McClatchy Newspapers
12/12/08

WASHINGTON " The Senate's rejection of a bailout for U.S. auto companies will heavily affect the South, which experienced an economic rebirth through a symbiotic relationship with foreign automakers and domestic auto suppliers.

It's that relationship that's prompted representatives from such companies as Toyota, which has an assembly plant in Senate Minority Leader Mitch McConnell's home state of Kentucky and planned facilities in Mississippi, to urge a bailout for their domestic competitors.

"I've talked to several Toyota executives and they are very concerned," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "The supply base is so tightly woven that you can't separate them at all. Failure would have a devastating impact on all regions but particularly the Midwest and South. Because of the tightly knit web of suppliers, a failure of a GM or Ford would take the supply base down for a considerable time and create an economic tsunami."

Yet McConnell and members of Congress from Southern states that are home to foreign automakers emerged as some of the staunchest opponents of the Democratic- and White House-backed plan, which was approved Wednesday night by the House of Representatives on a vote of 237 to 170, but defeated in the Senate Thursday on a procedural vote, 52 to 35.

The South is home to a network of suppliers spread across such towns as Danville and Georgetown, Ky., and throughout Alabama, Mississippi, Tennessee and Georgia.

In central Kentucky alone there have been eight major layoffs at suppliers, at least one filed for bankruptcy, and groups that assist laid-off employees have helped nearly 550 workers. Kentucky has two Ford plants in Louisville, a Toyota factory in Georgetown and a GM plant in Bowling Green. The state trails only Michigan and Ohio in the number of autos produced.

Publicly, Toyota, Nissan, Honda and other overseas-based auto companies have tried to stay out of the current fray.

For years, Southern lawmakers offered lucrative tax subsidy packages to foreign automotive companies in return for building facilities in the region and hiring local workers. The South's lower wages and weaker support for unions were also a draw. Republican opposition to labor unions was at the crux of ongoing opposition to the bailout.

"They have such disdain for organized labor and that seems to be trumping everything," Cole said. "They're cutting off their nose to spite their face."

Sen. Richard Shelby of Alabama, the senior Republican on the Banking Committee and another vocal critic of the auto bailout, represents a state that offered choice tax subsidies to attract Honda, Hyundai and Mercedes-Benz. Sen. Lindsey Graham, R-S.C, whose state is home to a BMW plant, has said the Big Three will inevitably fail.

Like Alabama and Mississippi, Georgia also has benefited from hosting foreign automakers. The state is eagerly awaiting the arrival of a proposed $1.2 billion Kia manufacturing plant, which will be located north of Columbus near the Georgia-Alabama border.

In recent years, GM closed a factory near Atlanta.

Even as many Southern Republican lawmakers held firm, arguing that taxpayers shouldn't subsidize failure, experts said that if Chrysler, Ford and General Motors do fail, a number of auto suppliers and even several foreign auto companies will be pulled down by the undertow.

In the meantime, the infighting over the proposed bailout took on a decidedly regional tone, with lawmakers from the Midwest and Northeast expressing frustration with their Southern counterparts.

Others just want a resolution.

"We have to consider the diverse and complicated landscape of the auto industry," said Rep. David Dreier, R-Calif. "The question of what is an American car used to be a very simple one. That's no longer the case."

"Which is more American " the Ford built in Mexico or the BMW built in South Carolina?" Dreier asked. "What about the Chevy built with Japanese parts and assembled in Canada? How do we pick and choose winners in a diverse industry that involves foreign investment, American workers and a global supply chain? Is the Toyota plant worker in Kentucky less valuable to the U.S. economy than the Ford worker in Detroit?"

(David Lightman in Washington and Scott Sloan of the Lexington Herald-Leader contributed to this article.)
maporsche
 
  1  
Reply Fri 12 Dec, 2008 09:30 am
@Bella Dea,
Markets go up and down Bella...these bailouts will end our economy and competition in our country FOREVER.

You'd be willing to trade a short term (probably lasting less than 3 days) bump in the stock market for long term stability in our 'free' market system?
0 Replies
 
Bella Dea
 
  1  
Reply Fri 12 Dec, 2008 09:30 am
@Woiyo9,
Quote:
Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with U.S. plants of Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.


That's how I blame the republicans.


http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html

Quote:
To the Big Three’s defenders, meanwhile, the number has become proof positive that autoworkers are being unfairly blamed for Detroit’s decline. “We’ve heard this garbage about 73 bucks an hour,” Senator Bob Casey, a Pennsylvania Democrat, said last week. “It’s a total lie. I think some people have perpetrated that deliberately, in a calculated way, to mislead the American people about what we’re doing here.”

So what is the reality behind the number? Detroit’s defenders are right that the number is basically wrong. Big Three workers aren’t making anything close to $73 an hour (which would translate to about $150,000 a year).


Woiyo9
 
  2  
Reply Fri 12 Dec, 2008 09:30 am
@Bella Dea,
Stop the doom and gloom. If any of the "tiny 3" go out, someone will have to build 9M cars a year. Looks to me to be a windfall for Toyota of the "tiny 3" go out of business.

Short term there will be problems but long term, the industry will be better off without the "tiny 3".
BumbleBeeBoogie
 
  1  
Reply Fri 12 Dec, 2008 09:31 am
@BumbleBeeBoogie,
Aid for carmakers dead over labor costs; next steps unclear
By David Lightman | McClatchy Newspapers
12/12/08

WASHINGTON " The U.S. Senate's effort to rush emergency aid to Detroit's ailing automakers collapsed Thursday night, as negotiators were unable to agree on how to curb labor costs.

"I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight," a clearly dejected Majority Leader Harry Reid, D-Nev., told the Senate after negotiators spent more than six hours in closed-door talks, trying to broker a deal.

"It is disheartening, to put it mildly, we were unable to come to an agreement," said Senate Banking Committee Chairman Christopher Dodd, D-Conn., who led the effort.

Foes were unapologetic. "Bailouts generally don't work and this is a huge bailout," said Sen. Richard Shelby, R-Ala., top committee Republican.

The House late Wednesday had passed a measure, crafted by Democratic congressional leaders and the White House, to provide $14 billion in emergency loans to the Big Three automakers. General Motors and Chrysler are said to be close to bankruptcy, while Ford, though in need of a line of government credit, doesn't need the money immediately.

Most Senate Republicans, led by Minority Leader Mitch McConnell of Kentucky, balked. They objected to government bailouts of specific industries, and some thought that bankruptcy would be a preferable option.

"None of us want to see them go down," McConnell said Thursday night, "but very few of us had anything to do with the dilemma they created for themselves."

Reid realized early Thursday that he couldn't win enough votes to stop procedural delays aimed at derailing the House bill, so Dodd had been talking behind closed doors with United Auto Workers union officials and Sen. Bob Corker, R-Tenn., about a compromise.

They were said to be close " Corker said the negotiators were two or three words away from a deal.

There was little disagreement on two of Corker's points: That companies would be forced to cut outstanding unsecured debt by at least two-thirds, and health and benefit plan funding would get half their scheduled payments in company stock.

However, the negotiators became stuck over labor issues. Corker wanted American auto company workers to earn the same as those who work for foreign-based manufacturers.

"There was no debate ... we ought to achieve parity on wages and benefits," Dodd said. "The issue was the timing of it."

Republicans wanted the change to take effect next year, but Sen. George Voinovich, R-Ohio, said the union was willing to make the change in 2011.

That clash "was the whole potato," said Sen. Pete Domenici, R-N.M.

All around Washington and the political world, supporters of the measure were worried about the consequences of the collapse.

"I'm afraid this country is going to be in deeper, deeper trouble," Dodd said.

"Shame on us if we cavalierly walk away and think we can do this another time. . . . This is about whether or not we're going to make a commitment to the middle class and a commitment to American manufacturing," added Sen. Debbie Stabenow, D-Mich.

Earlier in the day, White House spokeswoman Dana Perino warned that the economy "is in he economy is in such a weakened state right now that . . . another possible loss of 1 million jobs is just something our economy cannot sustain," she said.

In Chicago, President-elect Barack Obama joined the chorus, saying an industry collapse "would lead to a devastating ripple effect throughout our economy."

The White House and Democratic congressional leaders had spent days negotiating a rescue package that would create a "car czar" appointed by the president with authority over loans and company restructuring.

The plan won easy passage in the House, but in the Senate, where 60 votes are needed to cut off debate, many of the 49 Republicans were concerned that the loans would only prop up faltering companies, which would then seek more money next year when a friendlier, more Democratic Congress and Democratic president will be in office.

They also had strong philosophical objections. "There's a group of Republicans who don't care what anyone says; they're willing to let the companies go into bankruptcy," Voinovich said.
0 Replies
 
maporsche
 
  3  
Reply Fri 12 Dec, 2008 09:32 am
@Bella Dea,
Their hourly pay, their retirement benefits, and their other benefits combine to $73/hour.

THAT is how business measures compensation costs, they have to include everything that the employee receives.
Bella Dea
 
  0  
Reply Fri 12 Dec, 2008 09:33 am
@Woiyo9,
Again, if the big 3 go out, thousands of suppliers will go out of business. And those are the same suppliers Toyota uses. Guess Toyota will have to make their own ****.

Do you people not understand the way the auto industry works?

 

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