What to do about Detroit

[AmpedNow]

http://sethgodin.typepad.com/seths_blog ... -abou.html

I was in Detroit last week... I have family there. I also drive a car. And I would rather that the world doesn't melt and the economy thrive. So I'm uniquely qualified to weigh in on the automobile industry.

Not only should Congress encourage/facilitate the organized bankruptcy of the Big Three, but it should also make it easy for them to be replaced by 500 new car companies.

Or perhaps a thousand.

That's how many car companies there were 90 years ago.

Interesting read.

[Big Media]

Not only should Congress encourage/facilitate the organized bankruptcy of the Big Three, but it should also make it easy for them to be replaced by 500 new car companies.

Or perhaps a thousand.

That's how many car companies there were 90 years ago.

Interesting read.

How many banks were there 90 years ago?

How many independent retail stores were their 40 years ago?

Pattern?

[Hoosier Daddy]

Another man's thoughts ...

Why The Double Standard On Detroit?
by Bill Press
11/21/2008


No wonder people don't trust politicians. Americans just voted overwhelmingly to steer this country in a new direction, yet Congress has ignored the pleas of Barack Obama and voted instead to continue the disastrous economic policies of George W. Bush by letting the American auto industry collapse.

In the acrimonious debate over an emergency loan to Detroit, we saw some of the worst examples of political preening, pretending and pontificating ever. And not just by Republicans.

Suddenly, before approving any financial help to automakers, members of Congress demanded answers from them that they never demanded from Wall Street. Everything they wanted to know was reasonable: What kind of changes are they going to make in their day-to-day operations? What structural changes have they agreed to? What limits are they going to put on executive salaries? What guarantees exist that we'll get our money back?

Again, those are all good questions, and questions Congress should ask. But Congress members were hypocrites in demanding answers to those questions from Detroit automakers when they had so recently approved a $700 billion bailout of Wall Street banks and financial institutions with nary a peep: no oversight, no accountability, no conditions, no restrictions.

Have Ford, Chrysler and General Motors made mistakes? Absolutely. For years, they stubbornly ignored all the signs and all the warnings that their business plan was headed for disaster. They fought congressional pressure to raise make more fuel-efficient cars. They dragged their feet on research into alternative fuels or electric cars. Instead, they kept turning out bigger and bigger gas guzzlers. Now the turkeys have come home to roost. Detroit automakers are stuck with outmoded plants and a huge inventory of cars nobody wants to buy. And they're still years from producing anything close to Toyota's hugely popular Prius.

Should Ford, Chrysler and General Motors be forced to change their ways? Absolutely. Indeed, this is the chance for Congress to force automakers to make the structural changes they have so long resisted: retooling plants to produce smaller, greener cars; dumping SUVs and Hummers; speeding up production of electric, photovoltaic or hydrogen non-fossil-fuel vehicles; and placing limits on executive compensation. Those are fair demands to make of Detroit in exchange for a federal bailout.

There's nothing wrong with putting strings on federal dollars. But here's my question: Why the huge double standard? Wall Street firms, remember, also screwed up. Indeed, they're the ones that drove us into the ditch in the first place. So why should they get all the dollars they want with no questions asked and no strings attached, yet Detroit be forced to jump through so many congressional hoops? Or why, as decided by George Bush and Hank Paulson -- and endorsed by Congress -- should banks and financial institutions get the entire $700 billion, while automakers most likely get not a penny of federal assistance?

For Republicans, we know the answer: because Wall Street is non-union, and Detroit is all-union. Because Wall Street is white-collar and Detroit is blue-collar. Because Wall Street is upper-class and Detroit is middle-class. It's a chance to make some political hay and drive a stake through the heart of America's labor movement. And Republicans would rather swallow broken glass than help a middle-class, blue-collar union member.

But what's wrong with Democrats, who got re-elected with the help of labor unions and are now gleefully stabbing them in the back? Do they really want to make their first post-Obama-election move the death of the American auto industry? Apparently so. Massachusetts Democrat Michael Capuano set the tone by telling leaders of the Big Three: "Damn it, I don't want to give you this money and have it stuffed back in my face."

Instead, Capuano and fellow self-righteous Democrats decided they'd rather help George W. Bush kill 3 to 5 million more jobs, cause 775,000 retirees to lose their pensions, and force 2 million workers to lose their health benefits. You think the economy's bad now? Imagine how much worse it will be when U.S. automakers go belly up, wiping out 20 percent of all retail sales in America, eliminating one out of 10 American jobs and destroying what little is left of America's manufacturing sector.

This is the time to change Detroit, not to kill it. If Congress can suddenly find $700 billion to bail out the banks, certainly it can find $25 billion as an emergency loan -- not bailout, but loan -- to help the auto industry retool and regroup. Letting Detroit go bankrupt is a risk we simply can't afford.

Source: Ironton Tribune

[Jet Black]

No offense, but what a load of crap.

They fought congressional pressure to raise make more fuel-efficient cars. They dragged their feet on research into alternative fuels or electric cars. Instead, they kept turning out bigger and bigger gas guzzlers. Now the turkeys have come home to roost. Detroit automakers are stuck with outmoded plants and a huge inventory of cars nobody wants to buy. And they're still years from producing anything close to Toyota's hugely popular Prius.

There's the crux of it, right there, a total misunderstanding of scientific and technological realities, what Americans really want, and what role government should play in manufactuing decisions.

Absolutely. Indeed, this is the chance for Congress to force automakers to make the structural changes they have so long resisted: retooling plants to produce smaller, greener cars; dumping SUVs and Hummers; speeding up production of electric, photovoltaic or hydrogen non-fossil-fuel vehicles; and placing limits on executive compensation. Those are fair demands to make of Detroit in exchange for a federal bailout.

And there's the Democratic playbook. Make them this, make them that. I tell you the truth, I wouldn't trade a pint of piss for a Prius, nor would anyone I know. They are cars that fold into coffins on impact. What right does the government have to say what kind of car I must buy or what fuel mileage it must have? Don't give me that "greater welfare" crapola, this is America and I'm an American, and I demand to drive whatever I want as long as it's safe to have on the road. I hate high fuel costs, but I'll pay 'em to have a big, full-frame, V8 car or truck. That's why there are so many trucks and SUVs on the roads, because government killed the big American car but failed to kill the big truck/wagon. Now leftists want trucks and SUVs dead. Well, it's none of your business. You want to drive a Prius, go ahead; leave my car or truck alone. Not going to bail out GM unless they pray to the Green Gods of sunbeam cars and $50k hybrid 4-cylinders? Good. The last thing we need in this country is a Chevrolet pickup as mandated by people who think socialism and greenism are good and neccessary.

[David Paleg]

Dont you feel sorry for the state of Michigan?

Auto industry economy problems and Rich Rodriguez... both in the same year.

[Hoosier Daddy]

Jet,

Would you agree with this?

Why The Double Standard On Detroit? -- REDUX
edited by Hoosier Daddy
11/26/2008

In the acrimonious debate over an emergency loan to Detroit, we saw some of the worst examples of political preening, pretending and pontificating ever. Suddenly, before approving any financial help to automakers, members of Congress demanded answers from them that they never demanded from Wall Street. Everything they wanted to know was reasonable: What kind of changes are they going to make in their day-to-day operations? What structural changes have they agreed to? What limits are they going to put on executive salaries? What guarantees exist that we'll get our money back?

Again, those are all good questions, and questions Congress should ask. But Congress members were hypocrites in demanding answers to those questions from Detroit automakers when they had so recently approved a $700 billion bailout of Wall Street banks and financial institutions with nary a peep: no oversight, no accountability, no conditions, no restrictions.

Have Ford, Chrysler and General Motors made mistakes? Absolutely. For years, they stubbornly ignored all the signs and all the warnings that their business plan was headed for disaster. They fought congressional pressure to raise make more fuel-efficient cars. They dragged their feet on research into alternative fuels or electric cars. Instead, they kept turning out bigger and bigger gas guzzlers. Now the turkeys have come home to roost. Detroit automakers are stuck with outmoded plants and a huge inventory of cars nobody wants to buy. And they're still years from producing anything close to Toyota's hugely popular Prius.

Should Ford, Chrysler and General Motors be forced to change their ways? Absolutely. There's nothing wrong with putting strings on federal dollars. (H/D Note: If you don't want the "strings" then you don't take the Federal money and you fix the problem yourself -- on your own or through private investment. That's always been an option here. There are no guns aimed at anyone's head ...) But here's my question: Why the huge double standard? Wall Street firms, remember, also screwed up. Indeed, they're the ones that drove us into the ditch in the first place. So why should they get all the dollars they want with no questions asked and no strings attached, yet Detroit be forced to jump through so many congressional hoops? Why should banks and financial institutions get the entire $700 billion, while automakers most likely get not a penny of federal assistance?

Can we afford to kill 3 to 5 million more jobs, cause 775,000 retirees to lose their pensions, and force 2 million workers to lose their health benefits. You think the economy's bad now? Imagine how much worse it will be when U.S. automakers go belly up, wiping out 20 percent of all retail sales in America, eliminating one out of 10 American jobs and destroying what little is left of America's manufacturing sector.

This is the time to change Detroit, not to kill it. If Congress can suddenly find $700 billion to bail out the banks, certainly it can find $25 billion as an emergency loan -- not bailout, but loan -- to help the auto industry retool and regroup. Letting Detroit go bankrupt is a risk we simply can't afford.

I'm not picking a fight. I'm just asking where the line should be on Federal bailouts.

[Lester]

Labor cost per hour, wages and benefits for hourly auto workers, 2006.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

So union peeps are making about x1.5 what a non-union autoworker makes... and that's still an assload more than I make.

I think I'm starting to see the problem. Let them fail, let the unions fold, then lets get back to business.

[Hoosier Daddy]

Let them fail, let the unions fold, then lets get back to business.

That seems to have been the plan all along.
Make the workers suffer.
Not just hurt, but Suffer. Screaming at the top of your lungs, cut-and-bleed-to-death suffering.
Punish the entire generation, and make them an example to all the young people now entering the workforce.
Break them financially, emotionally, and physically.
Make those people scared to death to utter the word "union" ever again.
Leave a lasting impression on friends, family, and any casual bystander who sees what happened.
Nothing like watching an elderly retiree lose his home and life savings after working 30+ years for one company.
Stupid bastard. He should have known.
Let the company get out of all their signed promises and financial commitments.
Come back at 40 cents on the dollar in wages.
Bare minimum or non-existant health care.
Outsource everything possible.
Have frequent layoffs.
Destroy the Middle Class through a multi decade, bare-knuckled, management-directed campaign.
Leave CEO salaries and benefit packages untouched.
After all, they've earned it and who are you to say they shouldn't have it.
At $21.7 million a year, Ford Motor Company CEO Alan Mulally is OK right where he is.

Sounds like a great plan for the American economy.

[Lester]

HAHAHAHAHA!!!!! That's right!

Suffer!

High school graduates making $70+ dollars AN HOUR!!!!

Yeah, boy... that's suffering alright... at least it will be... when the gravy train runs out.

[Hoosier Daddy]

Nice exaggeration. Auto workers don't make $70 an hour. The suffering I mentioned is working full-time for 30 years under a signed agreement, then having that agreement jerked out from under your feet at a time in your life when you can't realistically re-enter the workforce and get back anything you just lost. Your life has been destroyed.

By the way, at $21.7 million, the CEO of Ford makes $10432.70 an hour, based on a 40 hour workweek. Of course, that doesn't include the private jet, the clothing allowances, the executive home, and the golden parachute. Adjust that figure downward and then we'll talk about what a retired auto worker should expect to receive.

[Jet Black]

No, I don't agree. Ideally, I want government regulation knuckled back to bare minimum, mainly on safety and reasonable pollution considerations; and no bailouts. Mark my words, because I've marked the words of smarter people than me who've said mainly the same: Bailout now, plus leftist govenment gets their hooks into the auto business, there will be no auto business here in a few years. I don't want that - I want a strong auto business. I don't want people to loose pensions either, although in my mind all these golden union parachutes are no better to me the consumer than all the excutive ones. I don't get any of that stuff, I work strictly a day's work for a day's pay, and nothing more, but now I should pay as a taxpayer for union crazy benfits what I couldn't afford as a consumer?

If the big three reorganize in less than a panic, everybody from creditors, stockholders, executives, to union wage-earners and pensioners will loose something, but not everything. If GM goes chapter 11 and they split up the pieces, everybody looses everything - stock=$0, pensions=$0. But the US pumping another $26b into the big three just so they can pay off the union for another 6 months, while pretending like they can retool to make 50 mpg cars that Hummer owners can use, is just pissing in the wind. Time to swallow the pill, waiting will not improve anything.

PS - Everything in this world is not about overcompensation of executives. Yes, it's bullshit IHMO, but that's the way of the world. Mr. Whoever's 21 million for failure is bullshit, but it's only 0.084% of the bailout money they want, so it's not my main concern. My main concern is, what's the best for the country? I think a strong GM is important, but I think a free market is more important, and I think print & pay bailouts are going to hurt me the taxpayer much worse than GM going Chapter 7.

[Hoosier Daddy]

Everything in this world is not about overcompensation of executives. Yes, it's bullshit IHMO, but that's the way of the world.

Why is it "the way of the world"? Does that make it right?

Why is overcompensation of executives OK, but (alleged) overcompensation of people just like you such a horrific, 'gotta-be-changed-immediately-in-any-way-possible' problem? The pay differential between corporate executives and employees has increased exponentially in the last two decades. No one should deny the top brass a realistic wage for the decisions they have to make and their job responsibilities, but the people who actually make the product and tend the shop ought to get a cut of the profits, too. Why do you resent that so much?

This is one issue I'll never ever understand: Together, my wife and I will never make $21.7 million dollars in our lifetimes, never mind me making that obscene amount in one year. You are probably in the same boat. Who brainwashed you? Why do good ordinary American citizens of above average intelligence and good work ethic TRASH and ATTEMPT TO THWART and DERAIL the goals and progress made by middle class workers? And then you turn around and go to the mat for Upper Upper Class CEOs and managers who live a lifestyle and live in a world none of us will ever see or be a part of? I just don't get it.

I don't get any of that stuff, I work strictly a day's work for a day's pay, and nothing more.

Envy or jealousy toward union workers who make more than you do?

[Force Commander]

A Detroit News video article about how Ford operates in Brazil. Either way you feel about the issue, it is interesting viewing.

http://info.detnews.com/video/index.cfm?id=1189

[Jet Black]

Yeah, I'm jealous, same as you. I have to work hard for what I have. But then reason sets in, and I remember that the fact that I have to work hard plus the fact that there are a lot of things I want that I can't afford, does not equal that I should have a say in what other people have or make.

Yes, those guys making big money just for (as I see it from my lowly perspective) doing little more than starting at the bottom of the country club set and rising to the top, are certainly overcompensated, obscenely so. That doesn't mean the government should take any of that away from them (bailout deals excepted) or that I deserve anything more than I already have. I get irritated that every time we talk about fixing some problem in the economy, Nancy starts talking about compensation packages. The two have nothing to do with each other. Finanacial bailouts are not predicated upon the high compensation packages of execs, but on the much larger failings of the financial system, which stem from overly-greedly people playing the system, too much government intervention, dirty back-room dealings, or a mix of all three. I don't understand why we have to drag in the union organizer's dream of redistributing the wealth of the board to the workers, every time we talk about fixing financial problems. It has nothing to do with it.

On a more personal note, Yes, nobody does $21M of work in a year, making phone calls and deals. But I have come to put in this perspective, which idea I got from reading Jesus's response to the question of paying taxes. Jesus asked the questioner, "Who's picture is on your money?" It was Caesar's picture. "If it's Caesar's money, give it to him," Jesus said [my paraphrase.] That's how I think of high finance and rich executives -that big money is in their world, for them to play with, not mine. Nor should it be in mine, because I don't understand how to get or handle that kind of money, nor how to use it to grease the wheels of industry in such a way as to keep millions of people working. In other words, it's not my $21 mil, it's not for me to worry about. I should be worring about the $XX,000 I made this year at a cush job while people are working their guts out at McDonald's for $16,000 a year, and I'm mean and pissed off when they don't fix my $1 value burger just like I like it. Nancy ain't gonna fix the world by tying our economic recovery hopes and real jobs to her dream of sticking it to da man.

[Hoosier Daddy]

Yeah, I'm jealous, same as you. I have to work hard for what I have.

I'm not jealous. Not at all. I generally support those folks, as long as they're trying to be somewhat fair and rational. I belonged to three different unions during my working lifetime and was an elected officer in two of them. I've handled grievances, worked to secure labor contracts, and met with the "higher ups" in the national union heirarchy. It was a wonderful learning experience and I met and worked alongside some really talented people. At least in my experience, union leaders were not the big, bad, crooked Mafia types that Limbaugh and the conservative bloggers want you to believe they all are. Having made the upward transition to management, I still find my union experience and training helped me more than any college degree in dealing with workplace issues. I always try to be respectful to others even if there's a problem and I have to deal with it. I don't sit around dreaming how to screw people who are a few pay grades below me and I have zero respect for managers who do. And we have several of them.

The rest of your dissertation makes no sense, other than you don't like Nancy Pelosi, but neither do I. Pelosi, Harry Reid, and Joe Lieberman can take a long walk off a short pier right now and the country would be a much better place to live. You continue to give the top earners a free pass on everything while busting the chops of people who might be your next door neighbors. I still don't get it. Do you dream of being the CEO of General Motors and want to make sure that none of today's lavish perks are gone once you get the job?

By the way, who should replace Alan Colmes on FOX? I have suggested a big blue punching bag with a smiley face and "Thank you, Sir. May I have another?" painted on it. Viewers would never know the difference.

[CoolBreeze]

Screw Detroit. I lived there and most of my family worked for Ford.

But here's my bottom line:

Edsel
Corvair
Vega
Pinto
Chevette
Granada
Maverick
Citation
Gremlin
Pacer
Any mid Mustang
Cimarron

I could go on. When my Pinto burned up and the factory wouldn't do a thing about it (then, years later they found out that they didn't put proper oil ports in it) I had finally had it with American automobiles. I swore that day that I would never own another American car. Millions of others felt the same way. The Japanese showed us that a quality car COULD be made and we turned our backs on Detroit. The only reason they've been around this long is mostly due to old people and the NASCAR crowd. Well, the old people are dying off and Toyota is in NASCAR. I personally don't care where a car (or anything else) is made. I'm looking for quality. If we make it, I'll buy it. But I wont buy junk just because we make it.

[Jet Black]

Union officer? That explains a lot.

[Hoosier Daddy]

I've lived both sides of that debate. You just talk about it after watching FOX for a few days.

[Jet Black]

As you say.

[cgarison]

The part that I have seen that is totally ludicrous about all of this is that the law makers have no clue as to what makes a simple business tick in the modern age, much less an entity as large as an automaker. And then to hear the belly aching over private jets made my ass ache because it sounded as if congress is the most jealous, stupid bunch of hayseeds to hold power. These dimwits might know how to roll pork to their local constituents, but they have no clue the waste of time it would be for Rick Wagoner to sit at a commercial airport waiting for 2 hours to board a flight to DC. As a GM shareholder, I am appalled at the idea that the company I own must waste the time of their Chief Executive Officer to suit the needs of a bunch of brainless twits on capital hill.

Last week really pissed me off. It made me mad to out socialist elected officials get their nickers in a twist when talking to the leaders of the industrialized companies that make our nation possible. And why are the leaders of the big three in DC lobbying for money??? Because dipshit Barney Franks crashed the banking system which stopped all fleet sales of cars.

Great. The big three will fail because of the douchebaggery in DC. Go friggin' figure.

This is not a union issue. This is the TARP not doing its intended purpose and letting money flow. So this means that the world is potentially on the cusp of another depression if these jerks in DC don't get rid of the green eyed monsters that have them by the bollocks and start saving our nation and in this case, the world.