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View Poll Results: Bail em out or let em sink?
Bail em out - They're vital to our economy 3 15.00%
You made your bed, now sleep in it. 17 85.00%
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Old 11-19-2008, 01:14 PM   #1
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GM, Ford and Chrysler Bailout

Bail em out or let em sink?

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Old 11-19-2008, 01:17 PM   #2
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Old 11-19-2008, 01:23 PM   #3
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I've heard it said that the government takeover of the existing pensions would be more expensive than the bailout. It is honestly so FUBAR I have no real opinion. It is like jumping off a building and trying to decide which floor you like the best on the way down.

Listening to the pundits say "Oh no, there would be strings attached" and seeing that they have zero idea about what strings and how to enforce…

I know Ford has some small cars in Europe that are competitive. Maybe relaxing the safety regulations and lowering the speed limit? I'm voting present.
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Old 11-19-2008, 01:25 PM   #4
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Old 11-19-2008, 01:28 PM   #5
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let em sink!
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Old 11-19-2008, 01:33 PM   #6
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Quote:
Originally Posted by RatherBNmexico View Post
let em sink!
I totally agree that the bad business practices and failure to prepare and recognize the emerging credit problems should not be rewarded. It is, as so many say, socialism.

What if the cost of taking over the pensions was substantially more money than any proposed bailout? How much more in taxes would you pay before you decided to go red?
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Old 11-19-2008, 01:49 PM   #7
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We own a honda and a toyota so we should be good to go.. the jeep I can find parts for in junkyards... let them sink, rebuild and go on.
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Old 11-19-2008, 02:06 PM   #8
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let them sink? are you serious?

my town has about 50k people in it.. we have 4 chrysler plants, 2 gm plants, and was getting the new getrag tranny plant until it shut down when we were 95% done building it.

now i gotta say.. who the F@CK wants 3 of the biggest corporations in america to die?

F@CKN idiots.. imo.. dont take the business practice of the top .5% of the workers for a corporation to be a guide on weather the business should shut down or not..

the management is what was wrong.. the board sold out chyrsler to mercedes in a transaction that actually lost more money for chyrlser than what chrysler recieved for themselves..

mercedes bought em out for like 2.6 billion and TOOK over 6 billion out of chyrslers future expansion fund.. then the new company who bought them even did more shit to F@CK em over..

thats just my opinion tho.. MY family grew up a factory family.. both grandpas, 2 uncles, an aunt, and my dad all have worked for chrysler and my grandma worked for gm.. plus not to mention my gf, whos both parents, her 2 real gpas and her step grandpa all worked/work at chrysler..

id say 75% of the people i know will be directly affected by chyrlser alone going under.. not including my WHOLE town which will die if the automakers are not bailed out..

the only other factories here where i live are haynes international which is a steel factory.. which im sure will be hurting when the auto places close

and if you think that the U.S. losing these 3 companies wont affect ANY of u.. keep dreaming.. good luck trying to find a job when that happens.. and if you have a job.. goodluck keeping it..
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Old 11-19-2008, 02:08 PM   #9
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Quote:
Originally Posted by jupiterboy View Post
I totally agree that the bad business practices and failure to prepare and recognize the emerging credit problems should not be rewarded. It is, as so many say, socialism.

What if the cost of taking over the pensions was substantially more money than any proposed bailout? How much more in taxes would you pay before you decided to go red?
Why should the taxpayers be required to take over the pensions?
Let em file bankruptcy and reorganize just like any other business.
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Old 11-19-2008, 02:09 PM   #10
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That's right. File Chapter 11.
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Old 11-19-2008, 02:14 PM   #11
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Quote:
Originally Posted by MoA View Post
let them sink? are you serious?

my town has about 50k people in it.. we have 4 chrysler plants, 2 gm plants, and was getting the new getrag tranny plant until it shut down when we were 95% done building it.

now i gotta say.. who the F@CK wants 3 of the biggest corporations in america to die?

F@CKN idiots.. imo.. dont take the business practice of the top .5% of the workers for a corporation to be a guide on weather the business should shut down or not..

the management is what was wrong.. the board sold out chyrsler to mercedes in a transaction that actually lost more money for chyrlser than what chrysler recieved for themselves..

mercedes bought em out for like 2.6 billion and TOOK over 6 billion out of chyrslers future expansion fund.. then the new company who bought them even did more shit to F@CK em over..

thats just my opinion tho.. MY family grew up a factory family.. both grandpas, 2 uncles, an aunt, and my dad all have worked for chrysler and my grandma worked for gm.. plus not to mention my gf, whos both parents, her 2 real gpas and her step grandpa all worked/work at chrysler..

id say 75% of the people i know will be directly affected by chyrlser alone going under.. not including my WHOLE town which will die if the automakers are not bailed out..

the only other factories here where i live are haynes international which is a steel factory.. which im sure will be hurting when the auto places close

and if you think that the U.S. losing these 3 companies wont affect ANY of u.. keep dreaming.. good luck trying to find a job when that happens.. and if you have a job.. goodluck keeping it..
Thy won't just disappear, even if they were to cease to exist as a corporation then their assets will be sold off and other manufacturers can move into the hole they leave behind.
Most likely they would just reorganize like the airlines.
No business deserves an automatic bailout from the tax payers and the workers are as much at fault for the mess as the management. Unions drove up labor costs to ridiculous levels.
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Old 11-19-2008, 02:20 PM   #12
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Did everyone forget Ford made some of the first Jeeps for WWII? They did one hell of a job manufacturing military equipment (a non-government owned company) that basically let us win the war. Without their help, the outcome may have been very different. Now they need our help.

Do we turn our backs on the company that helped us and put tens of thousands of people out of work? Last time I checked, it's a loan and they will have to pay it back. Sure, they will get a good rate but why shoudn't they? They will be borrowing large sums of money so they should get some discount. Banks borrow all the time on a discount.
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Old 11-19-2008, 02:23 PM   #13
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No business deserves an automatic bailout from the tax payers and the workers are as much at fault for the mess as the management. Unions drove up labor costs to ridiculous levels.
Spot On.....In the 80's when the union guys at the local GM plant were driving Toyota's but still collecting their large checks and pension funds while blaming poor quality on everyone else. Things haven't changed except their wages and pensions got fatter.

I alaways advocated that the engineers and managers of this wacky world should have unionized many years ago. I could be sitting in my barkalounger watching tv and bitching about the unfairness of it all while collecting a fat pension check every month.

Instead, I GET to work another 20 years and pray that some of my 401k comes back to life.

The unions have long outlived their usefulness. Starting to wish I had gone into the trades or stayed with the PD instead of going to school.
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Old 11-19-2008, 02:26 PM   #14
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Thy won't just disappear, even if they were to cease to exist as a corporation then their assets will be sold off and other manufacturers can move into the hole they leave behind.
Most likely they would just reorganize like the airlines.
No business deserves an automatic bailout from the tax payers and the workers are as much at fault for the mess as the management. Unions drove up labor costs to ridiculous levels.
if the management of the corporations would take a pay cut than they wouldnt be in this situation..

heck when cerburas or w/e bought chrysler.. the plant manager here in kokomo got a 2 million dollar signing bonus.. not including the fact that he makes WAY more than that throughout the year..

i remember reading that gm gave like 125 million in bonuses to their top 10 management positions.. i dunno if the # of $ is right but still.. that is just BONUSES and not their actual salary..

now dont tell me that an electrician working in the furnaces 12-16 hours a day, 6-7 days a week, and making $100,000 a year has ANYTHING to do with the corporation not having money..

i think the government should set salary caps on the management if they were to bail out the companies..

heck my dad is taking the chyrsler retirement buyout.. he gets a $70,000 check and 1/3rd of his retirement.. this comes out to about 30-35k cash plus like $1000 a month.. thats assuming the pensions are still there in the next year.. seeing as all the buyout money comes from the combined retirement pension of all the companies workers.. (my dad has 25 years at chrysler not including his 6.5 years off for sick leave where he almost died, and 4 years of layoffs)
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Old 11-19-2008, 02:30 PM   #15
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The unions have long outlived their usefulness. Starting to wish I had gone into the trades or stayed with the PD instead of going to school.

heh.. im in an apprenticeship through the IBEW.. just because getrag tried to get a free transmission plant out of chrysler.. our local has about 30 apprentices laid off.. apprentices get the work before the journeymen too..

im in year one of the program and they said it may be over a year before i even get put back into work..
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Old 11-19-2008, 02:32 PM   #16
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Thy won't just disappear, even if they were to cease to exist as a corporation then their assets will be sold off and other manufacturers can move into the hole they leave behind.
Most likely they would just reorganize like the airlines.
No business deserves an automatic bailout from the tax payers and the workers are as much at fault for the mess as the management. Unions drove up labor costs to ridiculous levels.
Exactly. I touched on this point in another thread. The unions have continued to bite the hand that feeds them, and now the workers may just have to reap the consequences (as well as the rest of us). Unions make such outlandish demands and have such ridiculous requirements for these companies that they cannot afford to stay competitive. The retirement benefits, and plant regulations (companies must run plants at 80% even if demand is significantly less) among other crazy union demands have driven the big three to the brink of collapse.
Mitt Romney had a great op-ed in todays New York Times about the bail out, and it has been found that the unions cost the big three around $2,000 per car over their foriegn competition, this cost is passed on to us, and then we wonder why we pay more for American cars that are inferior to their foriegn counterparts...The real question is, how many senators does it take to figure this out.
Of course we shouldn't expect Chris Dodd to act with any prudence, hes sitting pretty after his sweetheart Country Wide deal (sorry, couldn't resist that shot.)
o.k, rant over. and I got my fire suit on, so go ahead.
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Old 11-19-2008, 03:20 PM   #17
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Why should the taxpayers be required to take over the pensions?
Let em file bankruptcy and reorganize just like any other business.
Well that is a great question. PLEASE do not attempt to frame me up for saying the pensions should be bailed out. I am assuming that the Pension Benefit Guaranty Corporation.

Have a short read. I'm no expert on the PBGC, but every reasonable discussion I've heard so far is based on the idea that the load would fall to PBGC, which is in very poor shape, largely because they have been undercharging business forever.

Underfunding may trigger pension bailout | USA Today (Society for the Advancement of Education) | Find Articles at BNET

Pension Benefit Guaranty Corporation (PBGC)

So clearly it is a sort of catch 22. If I understand the structure of GM, it is basically a bank. Loans make up the bulk of the profit center, pensions make up the liability. The cars are a bit of a sideshow.

Speculative scenarios:

A.) We bail them out so we continue to get parts and have jobs and people are not dumped into the streets and start becoming a drag on the taxpayer via healthcare, BUT the debt contributes the rapid drop in the value of the dollar. Foreign cars and parts become unaffordable to the average person, as does food and other basics. Union people get payed in dollars, which don't buy much of anything on the world market. Global depression. Financial collapse.

B.) We don't bail them out. Relatively large dislocation and unemployment ensue. Major cities decline. Junk yards are quickly rid of parts. Crime goes nuts. Prison systems expand even more. GDP drops. Foreign players (China) withdraw from dollar support. Global depression. Financial collapse.

BTW, I don't believe Obama CAN kill the coal industry. It is going to be one of our best exports. I suspect we would all be crying for unions if we were working in coal mines.

Alright. Shoot me down.

Oh, and the big problem is that no bank is willing to lend money for them to reorg. If there was a willing bank, none of this would be on the table.
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Old 11-19-2008, 04:51 PM   #18
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i saw on the news today that the ceo of gm flew his private jet to beg for a bail out. that trip cost $20,000 to make in his private jet. they also showed round trip tickets in coach for $288. a reporter said it best "its a slap in the face to the tax payers"

i would love to say you made your bed, but theirs so many more effected. they just said many parts suppliers for gm would instantly go bankrupt also, gm owes them 28 billion right now.

gm will likely file bankruptcy, similar to what united air lines did, and screw everyone but the top 1% in that company. anyone notice that united air lines changed their letters on the stock market and their stock opened back up at $30 a while ago.
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Old 11-19-2008, 05:00 PM   #19
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That's the game. I worked in corpomerika for many years. The projects I worked on did very well and brought millions in additional revenue into the company, which went to some corporate raider asshat that fired all the talent out of the company and ran it on fumes and pipeline product until it was sold. All my work went directly into the pocket of a jackass I completely despised.

Clearly pay caps would have to be part of any bailout, but they couldn't set them low enough to please me. But I guess if you set exec. pay low enough the execs would walk. It is really difficult to be pragmatic with issues like this. Gordian knot, is that the term.
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Old 11-19-2008, 05:17 PM   #20
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i saw on the news today that the ceo of gm flew his private jet to beg for a bail out. that trip cost $20,000 to make in his private jet. they also showed round trip tickets in coach for $288. a reporter said it best "its a slap in the face to the tax payers"

i would love to say you made your bed, but theirs so many more effected. they just said many parts suppliers for gm would instantly go bankrupt also, gm owes them 28 billion right now.

gm will likely file bankruptcy, similar to what united air lines did, and screw everyone but the top 1% in that company. anyone notice that united air lines changed their letters on the stock market and their stock opened back up at $30 a while ago.
Agreed executive spending and compensation can be out of control. However I think without favorable executive compensation these companies will fail anyway. I know alot of the time (myself included) we think of these execs as rich asses that just fall backward into money, but we must remember that there is a reason they are CEOs, they know what they are doing.
Taxpayer money should not be used to provide golden lifestyles for these people, lets keep it in perspective though, a private jet flight for a major company CEO is really no big deal when you consider corporate executive culture. (besides, if we want to tlk about outrageous spending, lets look at some of our law makers, and what they do on our dime).
I'm certainly not jumping up to defend these CEOs, but I think we must keep it in perspective, and yes this is where it gets tricky a private company taking government money, what standards do we hold them to?
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Old 11-19-2008, 05:30 PM   #21
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if a big corp is making tons of money, and doing great, and hiring is going up, i'm all for them spending money, and doing whatever they want for their ceo's. but when you are on the verge of failing, screw the ceo lifestyle. my problem is the ceo's never feel the pain of their mistakes.

not that i can do their job, BUT, when you're the largest vehicle manufacturer in the world for so long, and you're broke, someone isn't doing their job right.

ceo's should not get bonuses when companies are failing, and it happens every day. ceo's shouldn't be on the job for a few weeks, then the company fails, and they get millions. there in lies my problem with this.

and $20,000 in the scheme of gm's problems is nothing, but it sure is a sign of whats going on. if that ceo would've gotten on a commercial plane, first class even ($880) that would've showed tremendously their effort, and dedication to this problem.

aig went bankrupt, and is still flying their people around in private jets
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Old 11-19-2008, 05:34 PM   #22
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And slightly below the radar, in the murky world of M&A, CEOs are payed to destroy companies for quick profit, at the expense of our economy, competition, diversity etc. They are also fully aware of what they are doing. This crew has been crafting the laws, and guess who the bagholder is? What's funny is that the honest, hard-working people that are getting screwed largely do not understand the game or even know who to direct their outrage at. What a perfect scam.
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Old 11-19-2008, 07:43 PM   #23
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Old 11-19-2008, 08:41 PM   #24
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why should be bail them out too? the banks were bad enough. if we bail them out what is to stop walmart or home depot from wanting the same thing? where's it going to end? i have a small business, if i get into financial problems i am S.O.L. why should it be any different for big business. I have jeep payments every month and parts to pay for, should i apply for a financial bailout? this is rediculous.
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Old 11-19-2008, 08:54 PM   #25
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Remember the total of credit derivatives is around 62 trillion dollars. That is so much more money than the real economy of the planet it is inconceivable. Not so long ago our national debt was around 3.2 trillion, which was totally out of control.

Remember the chart in this thread.

Fun with Charts

There is no metaphor to make this easier to comprehend. No one really understands what will happen if we are not able to bluff and bail our way out of this. What is very clear is that the fear of the result is enough to make both political parties totally cave.
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Old 11-19-2008, 08:57 PM   #26
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Thy won't just disappear, even if they were to cease to exist as a corporation then their assets will be sold off and other manufacturers can move into the hole they leave behind.
Most likely they would just reorganize like the airlines.
No business deserves an automatic bailout from the tax payers and the workers are as much at fault for the mess as the management. Unions drove up labor costs to ridiculous levels.
We are in total agreeance...for once
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Old 11-19-2008, 09:01 PM   #27
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why should be bail them out too? the banks were bad enough. if we bail them out what is to stop walmart or home depot from wanting the same thing? where's it going to end? i have a small business, if i get into financial problems i am S.O.L. why should it be any different for big business. I have jeep payments every month and parts to pay for, should i apply for a financial bailout? this is rediculous.
I agree that it seems like the gov't. is being asked to write never ending checks.
But the reason these industries (banking and auto) are in need of gov't assistance is because of gov't regulation. This is what happens when our wonderful all knowing gov't tries to become involved in private sector business, for the good of the people of course, well alot of good the gov't has done the people now, by driving these industries to the verge of collapse.
The reason you won't see wal-mart applying for a bail out is, so far atleast, the gov't doesn't have too much traction to allow themselves to interfere with walmart (other than outrageous corporate tax rates that forces companies to send business over seas, but thats a different story for a different thread).
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Old 11-19-2008, 09:12 PM   #28
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why doesn't the government take that $400 billion dollar bail out and disperse it to all of the citizens of this country? oh ya, we are f***ing paying for it. this makes me so angry. i'm sooooo glad that some one is spending my money for me!
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Old 11-19-2008, 09:34 PM   #29
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^^^ I couldn't agree more! It is our tax money in the first place, so thats what needs to be fixed... oh wait, they can't give us any of OUR money back because they have been spending money they don't have, why have they been doing that, becuase they are the U.S. gov't and can do whatever they want...
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Old 11-19-2008, 09:36 PM   #30
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Quote:
Originally Posted by 2much View Post
I agree that it seems like the gov't. is being asked to write never ending checks.
But the reason these industries (banking and auto) are in need of gov't assistance is because of gov't regulation. This is what happens when our wonderful all knowing gov't tries to become involved in private sector business, for the good of the people of course, well alot of good the gov't has done the people now, by driving these industries to the verge of collapse.
The reason you won't see wal-mart applying for a bail out is, so far atleast, the gov't doesn't have too much traction to allow themselves to interfere with walmart (other than outrageous corporate tax rates that forces companies to send business over seas, but thats a different story for a different thread).
Wait. I think you are missing the point. It is not about government regulation. It is about the government agreeing to NOT regulate the credit derivative market. Lack of regulation crashed the market in 1907 and laws were enacted to prevent the problem. Phil Gramm worked in congress to repeal these laws. This allowed AIG, GM and every other financial institution to take out insurance policies on investment risk. There were NO REGULATIONS regarding an insurer having money to back up the insurance policy. Sixty-two trillion dollars worth of these unbacked insurance policies have been sold, and now that a few have defaulted, layers upon layers are being called in. There is not enough money to make good on the promises. Had the government had regulations in place similar to what the insurance market does this would not be happening.

General Motors can't get a loan to restructure. That is the problem. They can't do what United did because the banks are holding onto every dime they can get because they have made enormous sums of money selling the credit derivatives and do not have the cash to back up if the debts are called in.

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