Auto Bailout Bill Collapses in Senate Despite Intense Negotiations

[Revmitchell]

A deal on $14 billion in aid to Detroit's Big Three automakers fell apart Thursday night in the Senate despite intense negotiations on Capitol Hill between lawmakers, union officials and representatives from the three companies.

The bailout died after failing 52-35 on a Senate procedural vote.


More Here

 

[KenH]

Hopefully, President Bush will use some of the $700 Wall Street bailout funds to keep the automakers going until the new Congress is sworn in next month. If the automakers go under I see no way to avoid an economic depression in the United States.

 

[carpro]

Hopefully he won't.

But his liberal tendencies are too well documented to trust him on it.

 

[KenH]

Well, if it is liberal to work to save the U.S. economy from a depression, then count me in.

 

[carpro]

Well, if it is liberal to work to save the U.S. economy from a depression, then count me in.

Consider it done, depression or no.

 

[Martin]

A deal on $14 billion in aid to Detroit's Big Three automakers fell apart Thursday night in the Senate despite intense negotiations on Capitol Hill between lawmakers, union officials and representatives from the three companies.

The bailout died after failing 52-35 on a Senate procedural vote.


More Here

==While it does not surprise me I don't believe it is a good thing. Our country is faced with two terrible choices at this point in history. Neither choice is good and it appears that the Senate has made its choice between the two. It has made the choice to do nothing and risk the jobs of millions of Americans. This, I believe, is a mistake of historical proportions. I can only pray that I am wrong.

George Washington once said, "desperate diseases require desperate remedies". Unusual times call for unusual measures. Our country is at a place where it needs good, firm leadership like that of President Washington. For the most part we lack that today. It is a sad day for America when we find ourselves in that situation.

 

[Crabtownboy]

It seems to me the big question is whether a bailout would really help. In other words would it save the auto industry or would it simply delay its death? The three US automakers have been so blind the past 30 years to what was and is going on in the industry and the world, why would I trust them to do the right thing now? Would the big three waste the money and then come back with their hands out for billions more in six to nine months?

I really do not know what the best course of action would be.

Hope the Mod's do not mind the larger size font .. the small print on the cool screen bothers these old eyes sometimes.

 

[carpro]

It won't help without substantial cuts in plants and people.

The UAW is standing in the way and should be cut off at the knees.

Now they're looking for Bush to get them to the inauguaration and it looks like the spineless ninny might do it.

After Obama gets in, look for one auto bailout after another with a total cost to exceed $500 billion.

Democrats cannot let the Uaw disappear and take their hundreds of millions of political contributions with them.

 

[saturneptune]

Now they're looking for Bush to get them to the inauguaration and it looks like the spineless ninny might do it.

How many times during the election did you support and praise this guy? You just admitted he is a liberal. My premise is correct. You put the Republican party above conservative principle. Case closed.

 

[Crabtownboy]

How many times during the election did you support and praise this guy? You just admitted he is a liberal. My premise is correct. You put the Republican party above conservative principle. Case closed.

You are quite right. Remember when these same people believed that Bush could do no wrong?

 

[targus]

Remember when these same people believed that Bush could do no wrong?

Is this your opinion or can you provide proof of this?

I know of no one on this board (or anywhere else) that believes that anyone can do no wrong (other than our Lord).

And will you apologize when you can provide no proof?

 

[Pastor Larry]

The bill should have died, IMO. The UAW needs to make concessions to keep their jobs. Their wage package is about 40% more than the auto workers elsewhere in the US. Gettelfinger is again selling them down the river. One of the big problems of the auto industry is wages, and until that is settled, there will be problems.

Crabtown is probably right in his suggestion that this may simply delay the death. Poorly run companies dominated by poorly led unions deserve to die. Let them do it in peace.

The economy will survive, and the jobs will come back in a more profitable way. The reality is that the number of manufacturing jobs in the US is about what it was 50 years ago (http://blog.cleveland.com/letters/2008/01/us_manufacturing_jobs_havent_s.html).

 

[Martin]

It seems to me the big question is whether a bailout would really help. In other words would it save the auto industry or would it simply delay its death?

==Personally I think it would just delay the death. However considering the current situation I don't believe we can afford to let one or two of those companies to die now. When the economy is stronger then it would be bad but the ecnomy could handle it. Right now allowing one or two of those companies to go under could be an economic disaster of apocalyptic proportions. A small bailout would not be good but it would avoid the horrible results of one or two of them going under. After all the money for the auto bailout is already there, no new money would have to be paid out. Sadly I don't think many people in Washington, or in the general public, understand that.

The three US automakers have been so blind the past 30 years to what was and is going on in the industry and the world, why would I trust them to do the right thing now? Would the big three waste the money and then come back with their hands out for billions more in six to nine months?

==I agree, but if the economy is stronger in six/nine months then the government could be more aggressive and maybe even turn them down. Now is not the time to do that.

I think it is sad that those politicians in Washington, who are demanding accountability from automakers, waste millions of our dollars every year. Yet now they sit there shaming others for doing the same things they have done. I say shame on all of them!

 

[Pastor Larry]

A small bailout would not be good but it would avoid the horrible results of one or two of them going under. After all the money for the auto bailout is already there, no new money would have to be paid out. Sadly I don't think many people in Washington, or in the general public, understand that.

I think it's all new money. In a country that's trillions in debt, there is no money there.

I think there is too much money tied up in automaking for it to die. It simply won't happen. If they don't get the money, they will do chapter 11, restructure, rework the union contracts (or void them and hire new workers), and resurface as better companies.

 

[Martin]

I think there is too much money tied up in automaking for it to die. It simply won't happen.

==A person can stand outside stare at the sun and say they can't see any light, but it changes nothing. GM is on the verge of falling off the side of the mountain. Just because you don't think it will happen does not change the fact that it is about to. I just heard this morning that banks are already starting to call in loans on GM car lots. We are on the verge of a disaster on levels we have not seen in this country. I know it is hard to believe. After all we have not seen this in our lifetimes and we always tend to think the "worst" will not happen. Well the worst is about to happen if something is not done. Having the government bailout private industry goes against every political principle I hold. However we are in a unique and very dangerous situation. George Washington once said, and I believe it applies here, "desperate diseases require desperate remedies". Sometimes we have to do what we don't want to do in order to avoid an even worse situation. I believe, we are there.

Having said all of that, I pray and hope that I am wrong and you are right. Sadly I fear I am not wrong.

If they don't get the money, they will do chapter 11, restructure, rework the union contracts (or void them and hire new workers), and resurface as better companies.

==Under normal situations I would say that would work and would be the way to go. However considering the current economic context I don't think that would work. People are not buying cars and they certainly are not going to buy cars from a bankrupt company. The result of doing nothing would be millions of jobs lost and an economic downfall of historical proportions.

 

[Revmitchell]

We can stand on a mountain top and scream the sky is falling. But that doesn't make it fact either.

 

[Pastor Larry]

Just because you don't think it will happen does not change the fact that it is about to.

Of course not, but I think you are missing my point.

I just heard this morning that banks are already starting to call in loans on GM car lots.

And then what? The dealers can't pay the loans, so they give up the cars, but the banks don't want the cars, and they won't have the money. So it is in the bank's best interest to restructure the loans.

This isn't like one person is defaulting on a house and the rest are good. The fact that there is so much money tied up in it, the banks/creditors can't simply walk away and forgive the debt. There is too much. They have to do something.

People are not buying cars and they certainly are not going to buy cars from a bankrupt company. The result of doing nothing would be millions of jobs lost and an economic downfall of historical proportions.

Not necessarily. People will buy cars from anyone for the right price. The problem is that the price isn't right to meet the market.

But a government bailout won't stop jobs from being lost. It will simply postpone it unless the restructuring takes place. And if the restructuring takes place, the bailout won't be needed.

 

[rbell]

Bailing out these guys is horribly shortsighted, IMO...because:

• There is a quartet of major issues that are not being addressed by the Big 3 (especially GM):
  • The hemmorhaging of money due to bloated union contracts and "legacy costs." Come on...we're paying some people not to work. $2,000 per car added due to these extra costs. They cannot ever be competitive with the unions doing their thing. The bailout delays the inevitable...and defeats the only route there is to fixing this (Chapter 11 reorganization).
  • Management that is, to put it bluntly, clueless. They waste money hand over fist, and though it doesn't add up to percentage-wise what is done in other areas, the effect on morale and the rank and file is incalculable. Once again, all 3 are bad, but GM is the worst.
  • An inflexible system of design and manufacturing. Honda can change a plant in a matter of days from one product's manufacture to another. GM takes months, or years, and the cost is in the tens of millions. They also have proven themselves to be horrible at adjusting to market forces. By the time they build a car to meet a market's need, it's obsolete--and the Toyotas and Hondas build a better one, anyway. The SUV and gas guzzler issue fits here.
  • They simply make inferior products. Which would you rather have: a Corolla, or a Cobalt? A Honda Odyssey, or a Chevy Venture?
• When you keep printing money to give away, you start the hyperinflation snowball rolling down the hill. Soon, we will not be able to stop it.
• You open Pandora's box. Now, everyone wants a bailout, and you've lost the high ground to say "no."

If this goes through, it's like a payday loan. It fixes today's mess...but it wrecks you down the road.

 

[rbell]

If you ignore all other auto bailout posts...please look at this data:

From Consumer Reports' 2009 buying guide: Car models 1998-2008:

The "Best of the Best" in autos--out of 64 models listed:

• 2 GM models listed.
• 2 Ford models listed.
• 0 Chrysler models listed.

The "Worst of the Worst" in autos--out of 35 models listed:

• 18 GM models listed.
• 1 Ford model listed.
• 2 Chrysler models listed.

Why, oh why should we bail out a company making such inferior products?

 

[tinytim]

Bush will use part of the $700 B to bail them out... http://news.yahoo.com/s/ap/20081212/ap_on_bi_ge/meltdown_autos_45

What a liberal!