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Stocks fall as fate of automakers hangs in balance

Discussion in 'The OT' started by curt8403, Nov 19, 2008.

  1. curt8403

    curt8403 Hall Of Fame

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    Wall Street turned sharply lower Wednesday, as a bailout of Detroit's Big Three automakers appeared stalled on Capitol Hill, and another round of downbeat economic news further disheartened investors.

    http://www.ksl.com/index.php?nid=152&sid=3872612


    the thing that makes me so mad is that the greedy gonifs rode their private jets at a cost of $200,000 round trip on their way to Washington to stick their hands out and beg for baksheesh
     
  2. Sirshagg

    Sirshagg Hall Of Fame

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    It's so IRRITATING!!!

    Business plan:
    Give self enormous salary and bonus
    Run company into the ground
    ask government for bailout
     
  3. curt8403

    curt8403 Hall Of Fame

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    Dec 27, 2007
    yes, hence the terms Gonif and baksheesh
     
  4. ccr1958

    ccr1958 Hall Of Fame

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    and the talking head financial gurus on all the news/financial networks
    saying they need chapter 11 to renegotiate union contracts....
    what about not filing chapter 11 & renegotiating the contracts of the
    executives....can't they live without VP of the Sr. VP of the regional Sr. VP etc..
    until they get their acts together...it is just like all giant corps.....take out
    the small guys jobs & keep all the levels of crap on the top....
     
  5. Ira Lacher

    Ira Lacher Icon

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    Folks, this is not about punishing a business for being greedy stupid. Lord knows the Big Three have made mistake after mistake. But so have politicians, and we keep re-electing them.

    The real reason there's such a backlash against the Big Three is that if they file for Chapter 11, a bankruptcy judge could invalidate their contracts with the United Auto Workers, effectively destroying the union. And if the UAW goes, the rest of the American union movement is toast.

    That's what this is all about -- to destroy the unions.
     
  6. Stuart Sweet

    Stuart Sweet The Shadow Knows!

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    You may be right, Mr. Lacher, you may be right.
     
  7. curt8403

    curt8403 Hall Of Fame

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    Dec 27, 2007

    we should all remember what Mitt Romney's father did to save AMC years and years ago.
     
  8. Nick

    Nick Retired, part-time PITA DBSTalk Club

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    The...
    The unions, particularly the UAW, and their greedy members are a BIG part of the
    problem. $150 an hour, including the cost of bennies is outrageous for a guy that
    bolts on the same part time after time, a job that the average 10th grader could do.

    IMO, it's disgusting what greed has done to this country! :barf:
     
  9. ccr1958

    ccr1958 Hall Of Fame

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    Wagoner(GM CEO) previously won an agreement from the UAW to close 12 North American facilities by next year, persuaded 34,400 union workers to accept early retirement or buyouts and for the first time required union retirees to pay health-care premiums. Those changes cut $9 billion a year from GM's costs.

    The Detroit-based automaker's current assembly workers get $31.75 an hour in pay, including overtime and bonuses, and $19.25 in benefits, according to an analysis by Laurie Harbour-Felax, president of Chicago-based Stout Risius Ross Inc. Adding pensions and other retiree costs raises the total to about $73.

    Toyota's U.S. workers cost about $47.25 an hour, including $31.50 in pay and $15.75 in benefits, the study found. Toyota doesn't have additional expenses for retirees because so few of its U.S. factory employees have reached retirement.
    -------
    i don't agree with everything worker unions stand for....but if not for the
    uaw american autos would be built by computer controlled "robots"
    how many people would be out of work??....the uaw will make concessions
    to keep their members working....but not until the auto companies make
    some too....including putting the pay rates back when the company gets on
    its feet....
     
  10. curt8403

    curt8403 Hall Of Fame

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    I agree, but I always want to give the little guy the benefit of the doubt. I think that the unions would rather take a pay cut than lose their jobs, and see the american auto industry go down the drain.
     
  11. Ira Lacher

    Ira Lacher Icon

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    Toyota also has plants in the South, where the cost of living is far lower. The South has long been a dumping ground for manufacturers who pay wages below the national average for comparable work.

    The givebacks will be permanent. You can bank on that.
     
  12. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    One of these two is incorrect:

    As ccr1958 explains Detroit auto-makers pay assembly workers $51/hr versus $47.25 for Toyota's U.S. workers. I'm pretty sure UAW workers would take a $3.75/hr cut to avoid layoffs. The problem is the other average $22/hr per current employees working paid into the retirement fund for retirees which, though it's the American way, is a stupid way of accounting for obligations to retirees.

    And what, exactly, does anyone plan to do with the retirees? They've already taken on the burden of their Medicare Supplement health insurance which was a promised benefit. I know. The federal government is going to start paying for the Medicare Supplement so that the pensions can be cut more.

    According to their own web site, Toyota Motor Manufacturing has locations in Alabama, Indiana, Kentucky, Mississippi, Texas, and West Virginia. They employ 2,996 people in North America including Canada and Mexico.

    In Michigan only, excluding dealers and independent parts folks, GM typically employs about 54,460 people as follows:

    [​IMG]

    In Nick's Georgia GM employs almost 2,000 people in Doraville. In neighboring Tennessee they employ about almost 4,000 people. In Ohio they employ about 11,700 folks. Here in California they employ less than 200 so the impact is small, but in Indiana we're talking about almost 8,000 jobs.

    Alot of this is concentrated in a few towns. They have about 2,100 employess in a Wentzville, Missouri, GM Truck assembly plant, which represents about 10% of the city's population. If we think in terms of even only 3 additional fewer service and sales jobs (bank clerks, Dish and DirecTV installers, etc.) in Wentzville for each assembly job lost and they only cut 20% from GM Truck assembly operation, were talking about instantly increasing unemployment in the community by 4% of the population (and a much greater percentage of the local workforce).

    I don't understand the bailout of the investment houses. But I do understand the need to provide bridge loans to the auto makers. The former produce nothing tangible, the latter produce alot of the remaining goods American's produce.
     
  13. BattleZone

    BattleZone Hall Of Fame

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    That's the whole problem with unions; it kills efficiency. If those jobs could be done by robots for less money, they should be. If the companies can make the same number of cars with half the labor, they should do that too. It would help make them competitive, and ensure the future of the remaining jobs. You don't have to pay benefits to robots, and you won't be paying retirement for those robots for 30 years after they've left the company. That's a big chunk of what is killing the US auto makers. Most of the rest is gross mis-management.
     
  14. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Michiana
    Care to illuminate us?

    The son commented on MSNBC this morning - video caption:
    Nov. 19: Fmr. Mass. Gov. Mitt Romney discusses why he believes the best option to ensure future success within the U.S. auto industry is to let the current "Big Three" fall into bankruptcy.​
    http://www.msnbc.msn.com/id/3036789/
     
  15. curt8403

    curt8403 Hall Of Fame

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    Mitt Romney's father chopped all the executive perks at AMC to the bone, and used the money saved to bolster the company at the production and worker level. It saved AMC at the time
     
  16. hdtvfan0001

    hdtvfan0001 Well-Known Member

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    A friend of mine close to the industry (which I am NOT)....told me that we're at the point where we can pay for fixing the industry or pay for the funeral....either way, we'll pay.

    He says the funeral will cost alot more, and I'm inclined to believe that.
     
  17. russdog

    russdog Godfather

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    The main problem is not the union and it's not the current management. GM had crappy management for decades, from Roger Smith to the Toothpaste People, but that's not the current guys. The biggest problem is history: workers in many industries used to get defined retirement packages, not 401K's. GM is on the hook for paying pensions to large numbers of retired workers who earned those pensions fair-and-square. The foreign car companies with US plants don't have that legacy overhead. So, do you want to screw the retired folks for something that's not their fault?

    GM is also on the hook for mega-healthcare-costs. If we had universal healthcare like every other industrialized nation, it would lift $1,600-per-car off of GM's back. But we don't, so the car industry takes a beating so the insurance companies can make a profit while contributing zilch to the quality of healthcare.

    As for robots, it doesn't work. Toyota and Honda know how to build cars, and they don't do it by using robots for everything. Rather, they use robots for some tasks and people for others... just like GM does. Back when Roger Smith was running GM into the ground, he wasted $billions-with-a-b on building a robot Buick plant to get rid of workers, and it never worked. Anybody with a clue could have told him that, but the robot-sellers wanted the money. For the money he wasted on the failed Buick robot plant, GM could have bought 100% of Toyota at the time. (Really. Honest.)

    Blaming the unions and blaming the current management is a perfect example of the kind of silly soundbite solutions that our current lame media give us. Anybody who thinks it's that simple doesn't know what they're talking about.

    Now, it's understandable why normal people don't know enough about the industry to say reasonable things. It's not understandable why the so-called journalists don't do their homework and synthesize the truth down to where normal folks can understand the essentials. Clowns like Thomas Friedman know just enough to be dangerous, then they go on TV and spout nonsense. The media today is being run like GM was run for most of the last 35 years: with incompetent leadership who have short-sighted quick-buck priorities. Simple soundbite answers to complex problems are almost always wrong, but stupid soundbite answers is the only thing the media lets us hear. It's a shame all the way around.

    In the meantime, people are looking for somebody to blame. A big part of the blame goes to our unofficial national policy of recent decades that encourages the destruction of the American industrial base. You can blame it on whoever you like, but it's not a simple issue. Blaming it on the workers and/or on the current management who has been doing a lot to turn it around in recent years is kinda silly.

    You can say that management should have moved faster, but it take 4 years from drawing-board to cars-in-the-showroom, and they do have things in that pipeline. (The fact that it takes 4 years is not foot-dragging, that's just how long it takes for everybody. Building new cars is complicated, it's nobody's fault, it's just how it is. It used to take 6 years, now they've got it down to 4. ) Had Detroit moved earlier on it, Wall St would have hammered them for not cashing in on SUV demand. Wall St only cares about next quarters' profits, they don't care one bit about the long-term health of anything. Nobody seems to mind until the crap hits the fan, then everybody instantly wants somebody to hang. I wonder how many of the idiot politicians who want to let GM go belly-up bought gas guzzling SUV's in the last couple years. I bet the correct answer is "a lot".
     
  18. paulman182

    paulman182 Hall Of Fame

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    The man has obviously been pondering this for a long time. Words of wisdom, IMHO.
     
  19. russdog

    russdog Godfather

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    Since I was 12, there's been only 3 things I have had a constant interest in: rock'n'roll, baseball, and cars. (That's too bad for me: first the Beatles broke up, then the Orioles started to suck, and now Detroit is going broke. When I was 12, maybe I should've gotten myself interested in something else ;-)

    I've followed the car industry closely, just because I like cars. The last time I bought a GM car was 28 years ago. Throughout, I have been a big critic of GM. I am not some GM-fanboy. However, the stupid things people say about the current mess are just wrong in their simple-mindedness.

    Again, I don't blame normal people for this. How is somebody supposed to know the truth? The dang media won't tell us anything that takes longer to say than 10 syllables. IMO, that's the main trouble with most of our national ills. It's not that the media is liberal or conservative, it's that they're lazy and irresponsible. We have 24-hour news, but we don't learn anything of value from them. However, they're happy to show us their latest whiz-bang video toys. All they do is play with techno-toys and soundbites. If you want a stupid cliche answer, just ask Tom Brokaw or some other talking head, because that's all you're gonna get from them. But if you want to actually know anything, you gotta spend countless hours doing your own homework. Sad but true.

    AFAIK, the reason we have "freedom of the press" in the Constitution is not because the Founders wanted to ensure that the TV people can make a big profit, it's because they wanted the public to have access to info about the issues of the day, so that the public could make informed decisions. Fat chance of that happening these days.
     
  20. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    The worst part of what's going on is that the dominant conversation created by certain politicians and most of the media is "anti-union versus anti-corporate" mixed with "anti-SUV versus anti-batteries" tinged with the "I-like-my-Chevy-truck" and "Everyone-should-drive-a-Prius" attitudes.

    As a nation we are so bogged down in this type of discussion that we seem unaware of the potential for finding ourselves with a "bread lines" situation. It is not logical to have prevented widespread bank closures only to allow GM and/or Ford to go into bankruptcy where the rules are not designed to deal with a problem of this magnitude.

    It's time to get creative. Perhaps the federal government could buy a half ownership interest in the Chevy Volt or something like that to infuse GM with enough cash to allow it to reorganize without bankruptcy.
     

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