Tuesday, November 18, 2008
Posted by: Michele Bachmann at 1:31 PM
Fresh off the $700 billion-plus financial service sector bailouts, including the most recent dole to AIG that upped their bailout total from $85 billion to $150 billion, the Democrat-controlled Congress is trying to rationalize a new $25 billion bailout for the auto industry.

For years, the American auto industry has struggled to keep up with foreign manufacturers like Toyota, Honda, and Nissan. CEOs at Ford, GM and Chrysler  have operated using outdated business models, failed to invest wisely in new products and technology, and were not prepared for the massive rise in gas prices that scaled back their truck and SUV sales dramatically. 

But besides the Big Three’s lack of innovation and mismanagement problems, the Big Three have labor costs that are far higher than their global competitors.  Their CEOs failed to take on union bosses – and as a result millions of jobs could be in jeopardy.  Ironic, isn’t it?

The Big Three pay out an average of $30/hour more than their competitors, including pension and health care costs for hundreds of thousands of retirees.

Take GM for instance, as Michael Levine from NYU School of Law wrote in the Wall Street Journal yesterday:  “GM is contractually required to support thousands of workers in the UAW’s ‘Jobs Bank’ program, which guarantees nearly full wages and benefits for workers who lose their jobs due to automation or plant closure.  It supports more retirees than current workers.”

Taxpayers are once again being asked to throw their hard-earned money behind a short-term, unproductive investment which will only prolong the companies’ failures at a cost that could be even greater later on down the road.  Throwing taxpayer money at Detroit’s spiraling problems will not fix their long-term management and productivity problems. Any urgency that would force the Big Three to make tough restructuring choices would be lessened if federal money is available. Like AIG, they will be back at the taxpayer’s trough in no time.  Let’s not forget that Congress already approved $25 billion in auto industry loans only a couple of months ago.

There are alternatives.  For instance, if the Big Three were able to restructure and reorganize under the protection of the bankruptcy courts, they could be saved without a taxpayer bailout and could fix many of their long-term management and labor problems.  Filing for Chapter 11 bankruptcy does not mean a company has gone belly up, that it will be broken up and that all jobs and productivity are lost – it means a company actually has the ability to make structural changes to keep it afloat without the threat of outside lawsuits and through a comprehensive payment plan.

Once you cross this line and bail out the auto industry, where does it end? Are the airlines next?  We have already spent more than a trillion dollars in bailouts this year.  We must take a hard look at why the auto industry is in this position in the first place. Only then will our economy regain the stability it desperately needs.


Cross-posted at the Hill's Congress Blog



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Willie writes: Tuesday, November, 18, 2008 1:57 PM
Auto Makers Bailout Communist Agenda
I oppose the $25 billion in emergency loans to the auto industry because ours is not a socialist nation. The government does not need to own industry. Look at the garbage cars the USSR and China make. No one buys them. Also these auto makers are the same ones that kept out good innovations like DeLorean, and Tucker and that killed the Electric Car. We need to
put this kind of money into car companies like Zap and Tesla. We need to end our dependence on foreign oil. In 1984 Honda's CRX got 60 miles per gallon. Our auto makers should have followed that lead, but they got in bed with oil makers and produce a product no one wants. Good riddance to the auto makers and the union that drove them into the ground. They can do Chapter 11 and restructure into something better. We (USA) are not communists. Any congressman that votes on this bailout IS a communist. The 50% of Americans who didn't vote for Obama are ready for change. We want a change to smaller, constitutional government and our patience is running thin.
Daniel writes: Tuesday, November, 18, 2008 1:57 PM
Interesting.
This is certainly interesting.
Michael writes: Tuesday, November, 18, 2008 2:39 PM
National Defense
Before throwing the auto industry under the bus those in Congress best look at the products that they manufacture for our military.

These are jobs that we need to keep at home.
Michael writes: Tuesday, November, 18, 2008 2:51 PM
Republicans; the party of big government
Our government grew more since Bush was president than under Clinton; in fact it isn't even close.

Willie - the vote was

Obama 53%
McCain 46%

Obama by 8 and half million votes


Royinoslo writes: Tuesday, November, 18, 2008 2:59 PM
Times are a changin'
In the 1950s and 60s Republicans who went on witchhunts and found commies lurking under every tree or traitorous motives among mainstream politicians and patriotic organizations were relegated to the wingnut groups like the John Birch Society. Today they are given national forums on Townhall.com
max writes: Tuesday, November, 18, 2008 2:59 PM
Michelle Bachman?!
Ahahahahahaha!
vonryansexpress writes: Tuesday, November, 18, 2008 3:02 PM
Reorganization
The cry for reorganization.
A Court monitored re-write of contracts and the preemption of the state laws that enforce the dealership franchise agreements is required for GM and possibly the other two as well.

Our auto industry turns out bad product. The SUV and truck development since the mid-1980's has marketed high clearance vehicles that obstruct the roads and have too much fuel capacity.

GM needs to close down more than just Oldsmobile. The Pontiac Aztec is a recent example of concepts that should never have gone beyond the clay. Buick and Pontiac and perhaps the Chevy truck line should be shut down. Re-tool Chevrolet, Cadillac, GMC trucks. Sell off all the boutique lines and get cars into the flow that define the market not ones that are tardy on the trend line and not competitive with the Asian success stories such as Accord and Toyota.

Ford's product is meaner and more dynamic but they could stand to stand down the Mercury line and rely on fantastic product such as the Edge and retro pony to continue the brand along with the tighter Lincoln.

Chrysler’s boxy lines that evolved from the cab forward design need to go the way of the Zil. Too much torque and too little taste. Truck line needs to get away from the RAM CAM mentality and Peterbilt weight and lighten the load.

These heavy cars and trucks are absurd. Either fast and furious or lean, lithe and lethal but slim the stuff down and cut the fuel consumption.

Then, have the courts figure how to scale back UAW hallucinogenic blue collar assembly salaries in order to protect existing pensions and health care, (within normal parameters) and stop the endless ladder climb between Executive compensation and UAW demands for more perks and higher wages. No one is without sin in the American Auto business.

Sell off subsidiaries; cap the Asbestos lawsuits.

No bailout beyond the capital needed during reorganization.

tom writes: Tuesday, November, 18, 2008 3:26 PM
chapter 7 bail out after they go down?
I support the $25 billion short-term loans to the auto industry with conditions.

Federal Contractor Misconduct Database (FCMD)
94. General Motors Corp. $ 513.1m 12 Instances of Misconduct(Since 1995) $ 313.7m Misconduct $(Since 1995)

http://contractormisconduct.org/

Vote no unless we get offshore drilling and a card check ban
Wow should we bail out the car companies or not?
seems there are 2 answers to that question? YES and NO
lets look at so far what we did?

bear sterns -bailed out?
FM/FM - Bailed out?
lehmans - NO Bail-out?
Aig - 2 bail-outs?


Some of our complaints?
union costs?
ceo pay?

GM bail out?
some want ceo's removed?
there are no Lee Iacoca's left?

Wonder if we would have had this whole bail out problem if we had 100 Lee
Iacoca's in the senate? or is it time for new blood ,new ideas ,new people
in the senate?

bear sterns -no one at fault?
FM/FM - no one at fault? YET?
lehmans - no one at fault?
Aig - no one at fault?

Seems we all want to lower everyones pay ,but how about congress pay?
I wish I had a job that paid me more than most while I was on vacation?

$50,000 from every member of congress would come to $26,000,000
or over $100,000,000 in 4 short years? Also what would that save in
pensions? Even if we help GM and others out what good
is it if we still send money OFF SHORE for OFF SHORE OIL!!!!!!

I THINK IF WE TAKE OUR FREIGHT OFF THE ROADS AND ON TO RAIL THE AUTO
COMPANIES COULD MAKE HIGHER MPG'S IN CARS BUT HOW CAN WE BUILD LIGHTER
CARS THAT WILL COMPETE WITH 40 ROLLING TONS ON THE SAME ROADS?

IS THAT LIKE HAVING AN AA MEETING AT THE LOCAL BAR?
COMMON SENSE WOULD BE
TO LOWER CONGRESS PAY,JUST LIKE CEO PAY,
COMMON SENSE WOULD BE
TO USE AMERICAN OIL FOR AMERICAN AUTOS WE BAIL OUT,

VOTE YES FOR DRILLING ,
VOTE YES FOR CARD CHECK BAN
VOTE YES FOR LESS TAXPAYER MONEY FOR HIGH PAY IN ALL AREAS OF GOVERNMENT

William writes: Tuesday, November, 18, 2008 3:27 PM
Subsidizing Malinvestment
Free market economists (of the Austrian School, in particular) would note that the Big Three US automakers made malinvestments during the boom part of the cycle and are now paying for it during the bust. In a free-market economy, entrepreneurs, such as start-up car makers in the Silicon Valley, are ready to step and fill the vacuum. Why should we bail out malinvestment. Let the market clear itself.
Michael writes: Tuesday, November, 18, 2008 4:21 PM
Tom - A Little Reality
The average salary for Government jobs is $56,000

Card check for workers forming unions is currently legal; you can't believe everything you see on TV

We are in this mess because of the borrow and spend mentality over the last eight years

The last time the US government had a surplus was when Clinton was prez

The policy used back then was paygo; either cut spending or raise taxes to fund the programs in any bill passed
Screwtape writes: Tuesday, November, 18, 2008 4:54 PM
Michael
Card checks by themselves cannot vote in a union. They can merely force a secret ballot (vote that is) for representation. The new law would take away the secret ballot in some cases, a move which big labor wants badly.
foxmustang writes: Tuesday, November, 18, 2008 8:46 PM
I agree...
that the UAW has to be willing to give big concessions or go the way of the dinosaur......
However, Paulson and his cohorts that are overseeing the bailout, absolutely refuse to give the auto industry 25 billion but has no problem giving his buddies in the financial market 700+ billion to divide up almost without restrictions........
Denise writes: Tuesday, November, 18, 2008 9:52 PM
Buy Foreign
Nothing will ever change in this country until we quit awarding failure. The "dumbing down of America" has resulted in bigger benefits for those, who fail in life or just choose not to be responsible, and penalities for everyone that does the right thing and is responsible for their own lives.

We never should have bailed out anyone. We should not bail out failed Big 3 management and corrupt, inept unions. AIG excecutives should be investigated until every corporate rock is overturned and what is under is exposed for the public to see...with all governmental money put off limits from legal fees for their defense.

I have a car that was specifically created for me in Britain. I have never had as much as a flat tire. I never will change my custom made Jag for a failed product created by failed management and built by inept unions.

I will never buy another union made product, if I have a choice, should we save any union from their own folly.

My reply to Detroit is screw you. Charity begins at home and, in my home, charity goes to my family FIRST. Buy foreign (better value and better product) and put the bastards out of business.
B2slim writes: Tuesday, November, 18, 2008 10:42 PM
EVIL gas guzzling makers "BAIL OUT" ?

Isn't that special

Obama is not even swron in yet and on day 2 of his PRESIDENT ELECT status: he had dispached Pelosi to negotiate the PAY BACK TO UNIONS for ELECTING OBAMA:

NOW those big evil corporate greedy gas guzzling auto makers, who earn 85 bucks an hour plus benefits, want US TO SUPPORT THEM TOO:

WHAT ABOUT GLOBAL WARMING ???
What about 40 miles to the gallon

WE HAVE BEEN SO "HAD", why the voters never saw it before they crowned KING LIAR to become POTUS:
tx honey bee writes: Tuesday, November, 18, 2008 10:44 PM
Hate to see them go..

I hope the US Big Three will find a way to take cuts, restructure, etc and somehow save themselves.. even if they have to become the Big Two, if that is feasible.
With so many other Entities also trying to get their hands on our Bail Out funds, I am waiting for the Hacks of Big Media to make their big grab.. Afterall, their journalistic credibility is nearly shot, and ironically, many of their biased alphabet media outlets are in financial nosedives.. I bet they are counting on it considering what they did for the Dem-BO-Libs who are now "prepared to really take power".
B2slim writes: Tuesday, November, 18, 2008 10:44 PM
BIG "UNION" pay-off !

SO we are not even into day ONE of the FIRST 100 days of King Obama's rule

and on day 2 of his victory, he dispached Pelosi to negotiate the pay off to UNIONS for electing him:

WHAT EVER HAPPENED TO BIG EVIL GAS GUZZLING MAKERS ??

HMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMmm
B2slim writes: Tuesday, November, 18, 2008 10:47 PM
PSSSSST MICHAEL

what about the 45% who stayed home and didn't vote ???

giggle
B2slim writes: Tuesday, November, 18, 2008 11:02 PM
KaBillions here, there, everywhere !

OH DEAR: the mad man has his hands on
the checkbook already and isn't even Sworn in!

He has to pay for the votes he got!

Patrick writes: Wednesday, November, 19, 2008 1:36 AM
Auto Industry Bailout-American Tradition
Dear Congresswoman Bachmann

I watched you for the first time on Fox News and enjoyed your interview. As a proud American, a graduate of economics, a father of four and football coach for sixteen years - one thing I learned when I coached against an undisciplined opponent and witnessed that team fighting among themselves is that 90% of the time you had the advantage to win - As a Republican I am disappointed with our party and the lineup of whiners, if they were one of my players I would have conditioned them until they're legs gave out. To coin one my uncles phrases "What a group of bed wetters.'

The $700 billion dollar bailout is not the answer - Capitalism rewards those companies that use sound economic policies, institutes a comprehensive strategic plan, and raises the American spirit by keeping a competitive advantage. The auto industry has no one to blame but self serving union leaders, the incompetence of their ceo's, and millions allocated to ineffective marketing, engineering, and an outdated mission. They have taken for granted the support of the American people. With that said, the Big 3 need to thin the herd and return to tradition and manufacture all cars with the quality of Cadillac, Chevy and Ford. A bail out is necessary for such an icon of American industry, but strings must be attached. No waivering on setting retrictions to the bailout. We don't want the Big 3 to turn out like the addicted individual that always comes back saying they beat the addiction - loan me money to get back on my feet to then go out and use your generosity to feed the habit.

The UAW must be dealt with in a judicial manner, as does the NTA and the CTA, but it seems that not one politician has the perserverance or guts to do so.

RJBJr writes: Wednesday, November, 19, 2008 8:17 AM
A Silver Bullet
THERE IS A SILVER BULLET for the US auto industry! Haven't heard anyone yet, the execs, the Union, the Senators the TV gurus even getting close to finding it. Perhaps today in the House......?
Michael writes: Wednesday, November, 19, 2008 8:40 AM
Srewtape
Michael
Card checks by themselves cannot vote in a union. They can merely force a secret ballot (vote that is) for representation. The new law would take away the secret ballot in some cases, a move which big labor wants badly.

Check labor law and your facts; card check is used routinely in this country; most recently with AT&T
Michael writes: Wednesday, November, 19, 2008 8:41 AM
Hypocrite
Bachmann opposes bailouts but her family receives farm subsidizies
Michael writes: Wednesday, November, 19, 2008 8:46 AM
B2slim


Read what Willie said before you post; it wasn't about turnout

giggle
David writes: Wednesday, November, 19, 2008 10:40 AM
Union Thugs
Recommended reading for those who think continued shupport of the auto industry, filled with UAW thugs, should receive our hard-earned taxpayer dollars: read Linda Chavez's book Betrayal - How Union Bosses Shake Down Their Members and Corrupt American Politics.

Regardless of how important we may think the domestic auto industry to be, we need to let them stand on their own feet. Reorganize under the protection of bankruptcy - as did Delta, Continental, US Air - and come out stronger.

Just don't ask for my money so the thugs in the UAW can continue to be paid for nothing.
KYJurisDoctor writes: Wednesday, November, 19, 2008 11:11 AM
No bailout.
What the BIG Three automakers need is Chapter 11 bankruptcy! The SOONER the BETTER!! OsiSpeaks.com
A. writes: Wednesday, November, 19, 2008 11:35 AM
not a savior.
The liberal illuminati is all about saving people--I'm sure the airlines would be next in a long line of bailouts. We'll keep enabling unhealthy corporations in this country that eventually will drive themselves into the ground for a total loss. You might say that auto industry employees deserve better than to lose their jobs. I say taxpayers deserve better than to watch their money self-destruct.
El writes: Wednesday, November, 19, 2008 9:33 PM
Bachmann Denies Saying What She Said
What is up with Minnesota? We are proving to be as obtuse as Texans. Why do we feel the need to elect racist, anti-democracy, reactionary evangelicals? Go Michele Bachmann, just keep saying the tape of you accusing Obama of being anti-American is an urban legend. Palin - Bachmann in 2012.

See it at http://crooksandliars.com/node/24155
William writes: Thursday, November, 20, 2008 5:46 PM
Top Ten Based on Kelly Blue Book
In a CNNMoney.com article today (November 20), the top 10 resale value cars were listed based on Kelly Blue Book predictions. None of the Big 3 had a single car listed. In order, the cars were:

1) Honda Civic/Civic Hybrid
2) Honda Fit
3) Mini Cooper
4) Scion xB
5) Scion xD
6) Scion tC
7) Toyota Corolla
8) Toyota Prius
9) Toyota Yaris
10 Volkswagen Rabbit
William writes: Thursday, November, 20, 2008 5:49 PM
Top Ten Based on Kelly Blue Book
Note that the cars here are numbered in alphabetical order and not by resale value.
Rosemary writes: Thursday, November, 20, 2008 7:41 PM
Americans and their Congress
Just looking at listening to most members of Congress sends a chill up the spine.
Some are unqualified to say the least, some are disinterested or do not have the energy level required for the job. Most of them have set their financial house in order in one way or another and at this point do not have to worry about their income or the stock market or the cost of living. The Obamas or the Clintons, or the Bidens, or Pelosi or Reid or Frank or Dodd or Kerry or the Kennedys do not share any of the problems of middle class Americans.
Actually all members of Congress should drive American cars. Sure the American auto makers could have operated more efficiently - been more in tune to their customers' needs - but fact is -their business is our business.
Throughout our life time - my husband and I would never dream of buying a foreign car.
We have owned perhaps at least 75 American vehicles as part of our business fleet and for personal use and have had good luck with all of them. The Automobile industry is very important to the economy of this country. Perhaps the government could set up a board to oversee the re-organization of the big three - give them a shot in the arm and send them on their way. All those multi-millionaires in Congress should buy an American car - here and now.
rdk writes: Saturday, November, 22, 2008 3:01 PM
A consensus is building.
Most all folks in both political parties want the Big Three to reorganize consistent with some plan agreed to prior to loaning money or simply go the Bankruptcy Chapter 11 route. It would be cleaner if the Big Three, including the UAW, were to agree on some plan rather than allowing the courts to assist them. What is particularly clear is that no one wants the auto companies to continue under the status quo, with or without a loan. The arrogance of the companies and the UAW is even greater than their lack of common sense. Models for success exist; those models are provided by their competition.
Thomas writes: Saturday, November, 22, 2008 11:15 PM
UAW
Let the UAW bail them out or let them go belly-up. After all it is they that shoot themselves in in their feet with the biggest guns.
Paul writes: Monday, November, 24, 2008 6:31 AM
Screw the auto companies
Let 'em file chapter 11 and watch what happens. First the white collar workers get laid off and stop spending. Then the plants shut down for layoffs and the union people stop spending. Then the suppliers shut down because they won't get paid and they lay-off their white and blue-collar workers.

Then the suppliers to the suppliers shut down because they aren't getting paid and have nowhere to ship their product. The resturants and dry cleaners in those areas see a drop-off in business and start laying off people.

Pretty soon you've got Bush's recession turned into a full scale depression.

But then you purists of conservatism will be happy because your falied ecomonic policies have been proven correct and the United States and the world are in a full scale depression.

You people call yourselves Americans. You are a bunch of pouty-whiny pi55-ants living in a dream world of supposed conservatism. And you have the gall to call yourselves Americans.

You make me want to puke. Go Obama!!! You simpletons.
Thomas writes: Tuesday, December, 09, 2008 9:59 AM
Auto industry
Congress to appoint an auto czar to oversee the auto manufacturers? Hasn't this has been tried before? Look how well it worked for Russia and the former Yugosalvia. Do they now manufactures the most sought after vehicles in the world? Not even in the top 100!

Congress can't even manage themselves!
patricia writes: Wednesday, December, 10, 2008 9:42 AM
HERE is answer to our economy
I think if someone will retreive information on he number of the taxpayer returns for the past 2007 and times it by $50,000. you will see that there is less money than the trillions that is set for our future generation to pay off. Now I'm no CPA but I do have common sense. If we all were sent this amount of money,People would buy cars constuction would be up ,home mortagages paid stores will have a boost, medical will be afforded for the people as well as banks will have money in and through it small business will spring again ,we can afford to support them.And put a watch dog over the greedy,selfserving buzzards on wall st. and cap the ceo's that fill their pockets with out compassion. That will be the boost and return of the American peoples dollars into the rightful pockets.The state budgets also need a combing for the fleecing of moneys that should be going to infrastucture and is being wasted on Gala's.as well as favortism to individuals. WAKE UP AMERICA SMELL THE PUTRIED CORRUPTION OF THOSE WE HAVE ENPOWERED. I hope that Our incoming PRESIDENT WALKS TALL AND CARRIES A BIG STICK.I would like to see a deliverence of the American people from such a long road of heartache and downfalls at every corner. If each of us demand that our goverment take care Of its people,By its people and FOR ITS PEOPLE,I think we can feel we are what makes America the country it is. If we voted them in we should have the God given right to vote them out!
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