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Auto Industry being treated fairly? - 4/1/2009 8:10:17 PM

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I'm sure most have heard about the 30 and 60 day notices given to Chrysler and GM. GM's CEO was forced to walk the plank.

Is this what the auto companies deserve? Or is it harsh compared to the treatment of the financial institutions that are in trouble?

I think it's a bit of both. Most banks seem to be in trouble because of risks they took that didn't pay. The auto companies seemed to stick to old practices and systems when taking a risk (more hybrids, green technology) could have paid off. Companies that don't keep up with the times don't deserve to be propped up - no one bailed out typewriter manufacturers who didn't switch to making computers - but it seems that the industry suffering because of the safe bet of what people were buying at the time is getting it much harder than the industry that took the high risk bet of what would work in the future.

RE: Auto Industry being treated fairly? - 4/1/2009 8:43:11 PM

ThatDamnedPanda

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quote:

Is this what the auto companies deserve? Or is it harsh compared to the treatment of the financial institutions that are in trouble?

I think it's a bit of both.

I agree with you (as usual.)

But I think the reasoning is pretty simple. The banks are savable, even if only because the government will ultimately do whatever they have to do to ensure that the banking system survives. On the other hand, the auto industry, as it is presently structured, can not possibly survive without major changes in the way they do business. I think the Administration's goal is twofold - first, they want to bully the industry into making changes that may allow it to survive in some viable form; and second, as long as they're doing that anyway, use the opportunity to make an example of them. Obama's sending a message, and at the same time offering up a couple of auto execs as sacrificial lambs to a nation thirsty for the blood of CEOs. Bold move on his part; i admire the audacity, but not quite sure yet whether I admire the concept and the execution.

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RE: Auto Industry being treated fairly? - 4/1/2009 8:47:08 PM

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I heard that the Union members in Detroit are absolutely livid about this. They thought they had a friend in high places, and now they're feeling just absolutely double crossed.

And this is a big deal in Michigan, you had better believe it. This won't be soon forgotten. A lot of pensions are riding on this, and millions of some of the last good paying jobs in the United States are dependent on this, and it looks to some as though all they are getting is a sneer and a middle finger, while trillions and trillions are being absolutely wasted in Washington these days.

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RE: Auto Industry being treated fairly? - 4/1/2009 9:48:22 PM

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quote:

ORIGINAL: 4u2spoil

The auto companies seemed to stick to old practices and systems when taking a risk (more hybrids, green technology) could have paid off.

I'm not siding with the auto companies... my opinion is that the government shouldn't bail out anyone. However, the statement you made above is highly debatable. I suspect that the auto-makers have sunk a pretty penny into research and development of new technology. I also doubt that the sale and promotion of hybrids or any other green technology would have been sufficient to sustain them. People want what they want, and only when a company has a relative monopoly (such as Microsoft) can people be forced to accept something else.

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RE: Auto Industry being treated fairly? - 4/1/2009 9:51:45 PM

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quote:

ORIGINAL: Sanity

I heard that the Union members in Detroit are absolutely livid about this. They thought they had a friend in high places, and now they're feeling just absolutely double crossed.

And this is a big deal in Michigan, you had better believe it. This won't be soon forgotten. A lot of pensions are riding on this, and millions of some of the last good paying jobs in the United States are dependent on this, and it looks to some as though all they are getting is a sneer and a middle finger, while trillions and trillions are being absolutely wasted in Washington these days.

From what you've heard, what do you think their reaction will be if GM is able to avoid bankruptcy and save the pensions?

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RE: Auto Industry being treated fairly? - 4/1/2009 10:43:24 PM

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I'm furious at the hypocrites in Washington, forcing the auto industry to bankrupcy, simply because those people don't make the millions to be inside the policy making in washington D.C. Why we'd be forcing more people onto unemployment and welfare at this point, with the only manufacturing industry left in the US is something I don't understand.
Other countries subsidize their automakers, while we give ours the finger. And the black hole that is the banking industry, cannot be allowed to fail because I imagine pounds of flesh would be demanded of the administrators who let it happen. It's enough to make a person cynical. M

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RE: Auto Industry being treated fairly? - 4/1/2009 11:03:39 PM

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quote:

ORIGINAL: 4u2spoil

but it seems that the industry suffering because of the safe bet of what people were buying at the time is getting it much harder than the industry that took the high risk bet of what would work in the future.

On the money....

I think its fair to say there's nothing on this planet as parasitical as Wall Street/The Banking/Insurance Industry.

If this debacle has not made folks understand/realize who's *really* behind the curtain -- I don't know what will....

- R

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RE: Auto Industry being treated fairly? - 4/1/2009 11:54:59 PM

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quote:

ORIGINAL: ThatDamnedPanda

quote:

ORIGINAL: Sanity

I heard that the Union members in Detroit are absolutely livid about this. They thought they had a friend in high places, and now they're feeling just absolutely double crossed.

And this is a big deal in Michigan, you had better believe it. This won't be soon forgotten. A lot of pensions are riding on this, and millions of some of the last good paying jobs in the United States are dependent on this, and it looks to some as though all they are getting is a sneer and a middle finger, while trillions and trillions are being absolutely wasted in Washington these days.

From what you've heard, what do you think their reaction will be if GM is able to avoid bankruptcy and save the pensions?

It's a sad state of affairs but GM's pension cannot be saved. GM has systematically paid into the fund too little for too long. GM's execs aren't stupid and knew this day would come but they remain hateful of their blue collar employees and simply chose to screw them over.

The execs who made those decisions should go to jail for fraud against hundreds of thousands of people.

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RE: Auto Industry being treated fairly? - 4/2/2009 12:26:15 AM

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quote:

ORIGINAL: TheUtopian

If this debacle has not made folks understand/realize who's *really* behind the curtain -- I don't know what will....

It's beginning to look increasingly probable that nothing will.

If the perceived cause of the problem doesn't somehow fit into the left vs right paradigm, it seems that very few are interested.

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RE: Auto Industry being treated fairly? - 4/2/2009 5:35:14 AM

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You can't compare automobiles to the banking system. But what's happening to the auto industry is what happens when companies go bankrupt. Massive layoffs, selling off of assets, standard sop for a bankruptcy. Hopefully at the end comes a restructuring which saves the companies and allows them to slowly hire back workers once the company is on its feet again.

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RE: Auto Industry being treated fairly? - 4/2/2009 6:59:40 AM

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I am concerned that tool and die -machinists are being --thrown out.

That batch of workers is necessary to an economy. It is easy to hate GM, Ford, for their arrogance.

In a way- it might be cheaper for the govt to just pay the payroll of very specialized workers- reassign them but keep them working- so their skills are not lost.

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RE: Auto Industry being treated fairly? - 4/2/2009 7:30:33 AM

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As sad as the whole thing is, comparing the two is like comparing apples and oranges. You just can't.

The auto industry in this country has turned into a bloated, outdated, corpse. They didn't spend money where they needed to, they gave shareholders and employees too much, and didn't look toward the future. Now they are paying the price.

If the union employees want to point fingers, they need to first do so while looking in a nice clear mirror. They are as much to blame as anyone else.

If I head out to the farrowing house to stand next to the body of a dead sow, no matter how much grain I try and poor in that sow's mouth, she is not going to miraculously jump up, full of health, and start having more healthy baby pigs for me. She will continue to lay there, rotting. Better to toss the corpse into the rendering truck and feed my healthy young sows.

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RE: Auto Industry being treated fairly? - 4/2/2009 9:07:46 AM

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quote:

ORIGINAL: TreasureKY

I suspect that the auto-makers have sunk a pretty penny into research and development of new technology. I also doubt that the sale and promotion of hybrids or any other green technology would have been sufficient to sustain them.

To an extent this is the basis of my opinion that they're being treated harshly. I don't think anyone doubts that they might be in a slightly better position if it weren't for economic conditions as a whole. In China for example, GM is seeing growth, and consumers think of Buick as a reliable luxury brand where sales are strong. Even Honda and Toyota, which are known for reliability, safety and green/gas saving options are suffering. So surely the current problems aren't 100% due to GM and Chrysler's failings

At the same time, failing to look at trends can keep things stagnant, but is not a way to grow and often becomes unsustainable. 10 years ago, it was a safe bet to make CD players because that's what people were buying at the time. There were MP3 players before the iPod, but Apple saw that people were moving towards downloads and digital formats and found a way to lead that trend until it overtook what was happening at the time.

Market considerations should certainly be factored in, but Chrysler and GM need their own iPod. Even if people are buying one thing now, they have to take a trend and lead it. Otherwise they're destined to go the way of the walkman, the typewriter, the film camera (there are still enthusiasts, but digital is becoming the standard), and other products where the demand changed.

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RE: Auto Industry being treated fairly? - 4/2/2009 9:16:28 AM

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quote:

ORIGINAL: 4u2spoil

I'm sure most have heard about the 30 and 60 day notices given to Chrysler and GM. GM's CEO was forced to walk the plank.

Is this what the auto companies deserve? Or is it harsh compared to the treatment of the financial institutions that are in trouble?

I think it's a bit of both. Most banks seem to be in trouble because of risks they took that didn't pay. The auto companies seemed to stick to old practices and systems when taking a risk (more hybrids, green technology) could have paid off. Companies that don't keep up with the times don't deserve to be propped up - no one bailed out typewriter manufacturers who didn't switch to making computers - but it seems that the industry suffering because of the safe bet of what people were buying at the time is getting it much harder than the industry that took the high risk bet of what would work in the future.

There a couple of other problems that the auto makers face that banks dont. Unfair international trade practices, CAFE standards and the power of the UAW.

Government officials who dont know the auto business telling lifelong auto execs how to run their business, but letting their banking cronies get away with their incompetence is unconscionable.

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RE: Auto Industry being treated fairly? - 4/2/2009 9:24:54 AM

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quote:

ORIGINAL: ThatDamnedPanda

quote:

Is this what the auto companies deserve? Or is it harsh compared to the treatment of the financial institutions that are in trouble?

I think it's a bit of both.

I agree with you (as usual.)

But I think the reasoning is pretty simple. The banks are savable, even if only because the government will ultimately do whatever they have to do to ensure that the banking system survives. On the other hand, the auto industry, as it is presently structured, can not possibly survive without major changes in the way they do business. I think the Administration's goal is twofold - first, they want to bully the industry into making changes that may allow it to survive in some viable form; and second, as long as they're doing that anyway, use the opportunity to make an example of them. Obama's sending a message, and at the same time offering up a couple of auto execs as sacrificial lambs to a nation thirsty for the blood of CEOs. Bold move on his part; i admire the audacity, but not quite sure yet whether I admire the concept and the execution.

The banks would otherwise be dead. They are 'savable' as you suggest ONLY because WE saved them.

Get a more advised grip people, we tinker around the edges with businesses ALL the time then throw some tough-love at the auto makers while making the bed and laying out a nice soft pillow for wall street.

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RE: Auto Industry being treated fairly? - 4/2/2009 9:28:40 AM

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quote:

ORIGINAL: CruelNUnsual

quote:

ORIGINAL: 4u2spoil

I'm sure most have heard about the 30 and 60 day notices given to Chrysler and GM. GM's CEO was forced to walk the plank.

Is this what the auto companies deserve? Or is it harsh compared to the treatment of the financial institutions that are in trouble?

I think it's a bit of both. Most banks seem to be in trouble because of risks they took that didn't pay. The auto companies seemed to stick to old practices and systems when taking a risk (more hybrids, green technology) could have paid off. Companies that don't keep up with the times don't deserve to be propped up - no one bailed out typewriter manufacturers who didn't switch to making computers - but it seems that the industry suffering because of the safe bet of what people were buying at the time is getting it much harder than the industry that took the high risk bet of what would work in the future.

There a couple of other problems that the auto makers face that banks dont. Unfair international trade practices, CAFE standards and the power of the UAW.

Government officials who dont know the auto business telling lifelong auto execs how to run their business, but letting their banking cronies get away with their incompetence is unconscionable.

Wasn't it those same "lifelong auto execs" that supervised the long uninterrupted slide of the US Auto Industry..that led inexoribly to them asking for public monies in the first place.Or if you prefer we can just blame Pres.Obama and his administration for this one too.....

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RE: Auto Industry being treated fairly? - 4/2/2009 9:30:28 AM

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quote:

ORIGINAL: pahunkboy

I am concerned that tool and die -machinists are being --thrown out.

That batch of workers is necessary to an economy. It is easy to hate GM, Ford, for their arrogance.

In a way- it might be cheaper for the govt to just pay the payroll of very specialized workers- reassign them but keep them working- so their skills are not lost.

I know this is what I see as most challenging. I think part of the restructuring has to involve training current workers on new technologies so that sector isn't completely lost. Most people don't encourage their kids to grow up and become industrial workers, but it's really a very important part of an economy. The US used to produce more than they consumed, and if there's going to be any balance in being more than a purely consumer driven society availability of industrial jobs can't be taken for granted.

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RE: Auto Industry being treated fairly? - 4/2/2009 11:32:40 AM

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quote:

ORIGINAL: 4u2spoil

quote:

ORIGINAL: pahunkboy

I am concerned that tool and die -machinists are being --thrown out.

That batch of workers is necessary to an economy. It is easy to hate GM, Ford, for their arrogance.

In a way- it might be cheaper for the govt to just pay the payroll of very specialized workers- reassign them but keep them working- so their skills are not lost.

I know this is what I see as most challenging. I think part of the restructuring has to involve training current workers on new technologies so that sector isn't completely lost. Most people don't encourage their kids to grow up and become industrial workers, but it's really a very important part of an economy. The US used to produce more than they consumed, and if there's going to be any balance in being more than a purely consumer driven society availability of industrial jobs can't be taken for granted.

These workers- the tool and die machinists are needed. Bankers are not.

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RE: Auto Industry being treated fairly? - 4/2/2009 11:54:03 AM

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quote:

ORIGINAL: pahunkboy

These workers- the tool and die machinists are needed. Bankers are not.

But where else will overconfident cokeheads and alcoholics be able to find work that pays them well enough to support their habit? And who do you expect to support the coke dealers?

Kidding (mostly). That might have just been the one I went out with.

Joking aside, I'm sure there are some financial sector workers who are good at what they do, and if they're good at keeping large amounts of money safe and adding value to it, they deserve to be compensated accordingly. I don't believe those people exist in the numbers that banks are reporting. In fairness, the same is likely true of the auto industry. Unfortunately they're going to have to do something about the people who aren't adding value a lot quicker than the banks. Hopefully they make the right cuts.

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RE: Auto Industry being treated fairly? - 4/2/2009 1:49:27 PM

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quote:

ORIGINAL: CruelNUnsual

Government officials who dont know the auto business telling lifelong auto execs how to run their business, but letting their banking cronies get away with their incompetence is unconscionable.

They are not getting away with anything.

Banks deemed too weak have been refused bailout money, federal regulators have shut down certain banks as well as forcing a number of takeovers/mergers.

Under both administrations.

And directly related to the GM situation, have imposed operating limitations on many institutions:

AmTrust Bank ordered to halt lending

Regulators have ordered AmTrust Bank, the 11th-biggest bank operating in Arizona, to stop making certain new loans tied to real estate until the company bolsters its reserves against losses.

The Office of Thrift Supervision accused the Cleveland-based institution of engaging in unsound banking practices related to delinquent loans and of having a low level of reserves.

............AmTrust was issued a cease-and-desist order last week barring it from making raw-land, development and speculative real-estate loans until it boosts capital.

Order To Cease And Desist, Amtrust Bank., Cleveland, Ohio, Order ...

< Message edited by rulemylife -- 4/2/2009 2:15:03 PM >

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