auto bailout

[Full Quiver]

I keep hearing a few Congresspeople saying we have to bail out the Big 3, maybe they aren't so big. They keep saying that China and Germany are bailing out their automakers.

Has it or when will it dawn on them that China and Germany as well as most others are socialist and even Communist in the case of China and therefore it's not so surprising that those governments would bail out such corporations. Odds are those govt.s own a large portion of those businesses.

Ford and GM are very successful worldwide especially in Europe. I bet they don't have to deal with the UAW over there.

Here is an email my Senator sent me when I told him what I thought about bailing out the Big 3.

Dear Mr. Page,



Thank you for taking the time to contact my office with your opposition to plans for a bail out of the major American automakers. Your input is important to me, and I appreciate the time you took to share your thoughts.



I fully understand and appreciate the contributions to the American economy that have been made by General Motors, Ford Motor Company, and Chrysler. As I am sure you are aware, these companies employ many Tennesseans and make up a sizeable and valuable portion of our state's manufacturing and retail sectors. From the plant in Spring Hill to suppliers and automotive dealerships across the state, the impact of a major corporate failure for these companies would be felt at multiple levels throughout Tennessee.



But I have been troubled by a number of issues surrounding the so called Big Three's proposal. Their contracts with the UAW and many other long-term obligations for which they have been unwilling to take tougher positions, along with changes in the automobile market and restrictive state laws that limit their ability to rapidly adjust to major changes cast great uncertainty on their future economic viability. If we in Congress were to give $25 billion to these companies now, without them making needed changes, I do believe they would be back again in a few months asking for more public support.



On November 18, 2008, I attended a hearing of the Senate Banking, Housing, and Urban Affairs Committee and heard testimony from the CEOs of the Big Three Auto Manufacturers and the President of the United Auto Workers Union. I was given the opportunity to discuss with them the specifics of their loan request and how that money would be used. Precise details, much to my dismay, were not forthcoming, and I was disturbed by the lack of planning that became apparent during their testimony. Between this hearing and personal discussions with industry insiders, I came to the conclusion that this package would not be an appropriate response to the current problem. Many of my colleagues agreed with this assessment, so much so that the bailout bill did not even come before the full Senate for a vote.



This week, the Big Three are scheduled to submit a report to Congress detailing how the funds they may yet receive would be used. Following this report, we are scheduled to have more hearings in the Banking Committee on the topic, with a likely vote to follow the week of December 8. Once I have received this report, heard new testimony, and have had a further chance to evaluate the viability of these corporations, I will make a final decision on this issue based on the new information. But unless there are significant changes, I am highly skeptical of making any loan to these troubled corporations.



Moving forward, we in the Senate will continue to monitor our country's economic situation. I assure you, the difficulties being faced by Tennesseans during these times of economic uncertainty and hardship are of the utmost concern to me, and I and my staff will be using all the resources and options at our disposal to help in the months ahead.



Thank you again for your letter. I hope you will continue to share your thoughts with me as I serve you in the United States Senate.



Sincerely,

Bob Corker
United States Senator

[MacUser]

Chapter 11.

Restructure and Keep Going.

[Full Quiver]

I agree Mac

[DaJudge]

The unions are killing the American automakers. The union contracts are making it impossible for them to compete with the Asian car makers. Bankruptcy will allow them to renegotiate the contracts and come back stronger. Forget the bailout.

[jinjer]

Bob Corker did an excellent job with his line of questioning. One particular question or comment was about Chrysler's current 80% shareholder having plenty of cash but being unwilling to make further investment in this company.

Jinjer

[Tim Elston]

Bush, Pelosi, and Obama are all on board for a bailout. This is so doggone depressing. It makes me angry.

[TW]

The failure and possible bail-out of the auto makers is far more complicated than what is being represented here. The automotive industry is, in a sense, representative of America Industry in general. Government policy, bad management, and union greed all play a factor. The government has failed to provide a level playing field for American Industry with it's refusal to levy tariffs. A quick look at the Harmonized Tariff Schedule of the United States (2008) (Revision 1) Chapter 87 reveals that the U.S. does not levy tariffs on almost any motor vehicle imported into the country. Also laws that have been enacted to protect the environment generally are not helpful to industry, as they are restrictive in what and how products can be produced. Management must also be held accountable for their part in this. It is rare that a manager in this age spends his entire working life in one company, with a vested interest in the long term success of that company. They have become Cooperate Mercenaries, moving from company to company every few years, climbing the career ladder. They have little interest in the long term viability of a company, only short term profits. While the American worker is the most productive in the world and deserves a premium wage http://www.jamaica-gleaner.com/gleaner/ ... ness4.html the labor unions have pushed this to unrealistic levels. However, labor still remains the smallest cost in manufacturing.

There are four major sectors in the American economy, Automotive (Industrial), Housing (the Building Trades), High Tech and Service (Hospitality). With the problems faced by the Housing industry, we as a nation, cannot afford to allow a total failure in any of the other sectors. To stabilize our economy it will take a change in the mindset of all involved, Government, Management, and Labor.


TW

[Tim Elston]

The government has failed to provide a level playing field for American Industry with it's refusal to levy tariffs. A quick look at the Harmonized Tariff Schedule of the United States (2008) (Revision 1) Chapter 87 reveals that the U.S. does not levy tariffs on almost any motor vehicle imported into the country.

TW, I agree with everything in your post except the part about tariffs. Tariffs effectively impose a tax on domestic and foreign consumers to the enrichment of those employeed in the domestic industry that is in competition with imports. It is, in fact, a level playing field not to impose tariffs. To impose tariffs disadvantages foreign competition, and when competition is not on a level playing field, the consumer is the one who suffers.

If US automakers are forced to compete with foreign producers without an arbitrarily contrived advantage at consumers' expense, then they will be forced to fix the other problems you mention. What the automakers are essentially doing is, rather than produce at their competitors' level of efficiency and quality, steal an advantage from the taxpayer through a bailout, which they were not allowed to steal from the consumer through tariffs.

The American economy is better served, in the long run, by a more efficient international market than by an inefficient domestic market propped up by the taxpayer.

[Full Quiver]

Today I heard that GM's debt was $62 million.

If you owe more than you make and you try to by a new car GM would say your debt to income ratio is out of whack and therefore we won't loan you money.

Why is it that they want us to loan them money then?

[Tim Elston]

Today I heard that GM's debt was $62 million.

If you owe more than you make and you try to by a new car GM would say your debt to income ratio is out of whack and therefore we won't loan you money.

Why is it that they want us to loan them money then?

Good question. I like what Michael Moore said: "If they are too big to fail, then they are too big to exist." Let them fail. America can survive without them. Someone will get it done better and without the double standard. Good for the Senate Republicans for putting a stop to doling out the billions like it is cheap candy.

[one love]

until Bush takes the funds from the bank bailout money and directs it to the auto makers. Which would make the politicians happy so it does not stain their record. I assure you they are talking about this.

[Full Quiver]

Kevin, that just proves what I said about Bush before the 2000 election. He is not a conservative!