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Today's Nuze

DEMOCRATS STILL WANT AN AUTO BAILOUT ...

By
Neal Boortz
@ November 17, 2008 8:14 AM
Permalink | Comments (39) | TrackBacks (1)

... and 70% of the American people do not.

Democrats are insisting on bringing an auto bailout to the table, even though the Bush administration says that the $700 billion bailout was not intended for this purpose ... and even though it is going to be a very tough fight for Harry Reid in the Senate. But fight they will and this week on Capitol Hill we will hear from auto executives and the United Auto Workers.

Nancy Pelosi came up with a plan that she believes will be enticing enough to get enough Republican support. This plan includes adding certain strings to the auto bailout: new fuel-efficiency standards, development of new technology "to compete in the domestic and global market" and restructuring company finances. The Democrats also want to include limiting executive pay. In other words ... the Democrats feel that they, rather than the consumers, are the ones who know just what kind of cars the manufacturers build. All this is going to do is force the automakers to build cars that the American people have already shown that they just do not want to buy.

The Democrats also want to limit executive pay ... but what about the over-inflated pay of the workers at these auto companies, thanks to union contracts. I've told you this statistic before, but $1,600 of every GM car you buy goes toward the healthcare costs of union workers. For companies like Toyota that aren't unionized - that cost is only $200 per car. GM also spends another $1,000 per vehicle on holiday pay, work rules, plant-shutdown-pay and line-relief to UAW workers. Those are costs that auto makers such as Toyota don't have to worry about. The average Ford, GM or Chrysler union worker makes about $71.00 or more per hour. For Toyota, Nissan and the rest ... about $48.00 per year. Do you detect a small problem here?

If the Democrats are truly concerned about "restructuring company finances" they should start with union contracts. What is clear from this situation is that these companies can no longer handle the burden of unionization ... so why should the Democrats allow this practice to continue if they succeed with their bailout? It will be the taxpayers funding the system that broke these auto companies to begin with.

Of course, this is not how United Auto Workers President Ron Gettelfinger see things. He said over the weekend that union contracts are not the problem. He says the problem is out of his control because these auto makers are suffering from the housing slump, credit crisis, etc. He says, "The focus has to be on the economy as a whole as opposed to a UAW contract ... We're here not because of what the auto industry has done ... We're here because of what has happened to the economy."

Nonsense. The bailout would only delay the inevitable.. and unless something is done right now about the union stranglehold on the auto industry the inevitable is bankruptcy. Let them go bankrupt. That doesn't mean they go out of business ... it means that union contracts can be voided unilaterally by the auto manufacturers and they can then get about restructuring their businesses based on consumer wants rather than political mandates.

By the way ... have you heard of the auto worker's "Job Banks Program?" Well, click here, read this, and then tell me how much you support a bailout.



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» A matter of perspective from JABbering Stooge

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What others are saying

  • Auto Bailout
    Once again, in the face of truth, the democrats and the media defend policies that not healthy for anyone.
    Chapter 11 would be a 'bailout' for the auto industry. The 25 Billion is a payoff to the Unions and would have no lasting effects.
  • Was just wondering...
    Does the manufacturing process at GM have robots that lay carpet over outside door handles that are in the floorboard, or is it manual union labor that allows this? That was 20 years ago, I wonder if they ever got that fixed. I haven't given them any business since.
  • UAW
    The more I read about the Big 3 and the UAW the more I do not want to ever buy another NEW car or truck from them. I can think of 10 or 11 NEW cars and trucks that I have bought in the last 15 years and I am pretty sure I paid way too much because of the UAW for these cars. As much as I like GM cars and trucks I think my next new purchase will be Toyota or some other non-union car manufacturer. I paid over-inflated union prices for all these cars and trucks and now these same morons want MY TAX dollars to bail them out? I hope they all go out of business.
  • Look for the Union Label
    Dems support this for one reason only: If GM goes to bankruptcy court, then the existing UAW contract is trashed, and GM will never go for some of those gold plated (no, solid gold) benefits packages. UAW workers wiil have to "suffer" like the rest of us by having to pay SOME of their medical benefits.
  • Bad Deal
    No bailout for the auto industry. I do not like liars. they say they are struggling because of the economy. But the big three were struggling years ago during the SUV boom that they dominated. Why arent foriegn automakers suffering as much? The government needs to stop using astronomical numbers that daze us and put these figures in terms of what it costs taxpayers. Tell us all that the automakers want 150 dollars or so of our money. Tell us that this bailout of irresponsible people is going to cost us, the taxpayers, over 5000 dollars each, in addition to the taxes we already pay that dont cover what the government spends. Sad, we had better wake up people, or our grandkids wont have a country to run.
  • I just wrote my Rep and Senators
    A simple note, to sum up my feelings:

    Senator XXXX,
    Please take a principled stand and oppose any taxpayer-funded bailout of Detroit automakers. A bailout will allow the Big Three to continue the failed policies of the past, and would consititute throwing good money after bad. If you (Congress) want to help, let the Big Three seek bankruptcy protection like the airline industries did, and restructure themselves BEFORE putting my tax dollars on the line. I am already upset that my tax dolalrs are going to bail out my neighbors who lacked the good sense to not buy more house than they could afford. I paid off my personal bills, and bought a smaller house than I wanted -- because I knew a bigger house was too much of a financial risk. Now, I'm going to end up paying for those big houses, anyway, but without getting the benefit of living in them. Please don't let this happen to me again with the auto industry. Thank you, and I'll remember your support as a small-government Republican at the polls in XXXX.

    Very Respectfully,
    Ian XXXXX
    PS. I think Governor Palin was a good addition to the McCain-Palin ticket because she is a SMALL GOVERNMENT Republican. That *used* to be a redundant statement, but nowadays, the Libertarian party is starting to look like the only party to espouse the small-government, Reagan-esque worldview that defined the Republican platform.
  • Auto Bail Out
    While I don't agree with the government bailing out the auto industry or any other for that matter, I do wonder what will happen to the workers if the plants close. Maybe the government should provide some incentive with stipulations on executive pay and bonuses and renegotiation of union contracts or no unions at all. The automotive company executives and union leaders are responsible for this mess and they need to pay a BIG piece of the price if these companies go under. I only care because its my tax dollars that will bail them out for their poor decisions and greed. I drive a Toyota and won't own a GM, Ford or Chrysler if they gave it to me.
  • $700 billion
    I had a picture of what that number meant when they sold it to us during the campaign.
    I naively thought $700 billion would be used to buy bad loans from banks. That would help the banks. Then, we-the-people would charge the homeowners the interest they thought they were going to pay before the Fed jacked interest rates. Then, after those loans were paid by the people who live in the homes, we would see a slight loss between the interest we borrowed the money at and the interest the homeowners were able to pay.
    Since the day the $700 billion package was passed, I see none of that. NOW THIS.
    Bait and switch. We live in a kleptocracy. Neither party has a Reagan or Truman in it. I can lead a shop crew, but I don't have the tools to lead the nation. I'm looking for a new national leadership who don't steal.
  • NO BAIL OUT
    There is no leadership in these companies. I have yet heard anyone say “because I believe in this company, I will not take a dime n either salary or stock options”. If the leadership has little faith in their companies, why should the consumer.

    They will not fail, they seem to have assets. The rumor going around here in Detroit is the purchase of more market share by GM for the Chinese market at the same time they are telling us they will run out of money.

    They build products no one wants, this is a clear fact. If there was a want for their products, then back in 2003 and 2004, they would have gained market share. It does not matter how great they perform, how long they last, if people don’t want to buy them, they have to come up with something that they do want.

    The UAW is part of the problem, not “the” problem. The UAW leadership has been fighting flexible manufacturing, streamlining and other things that these companies need while they sit on the board of directors.

    The workers worked hard to get Obama in office by taking part in the class warfare but the consumer is not falling for ‘we need help’ when the average auto worker makes 5 times as much as the people buying the product. It all comes back to bit the union worker on the butt because the age of labor is long gone and the consumer does not buy any product with their conscience but their pocket book.

    As for quality, my caravan has had 5 a/c condensers, two sets of rear heater pipes and a number of other things that were not covered under warrantee. I stopped buying ‘American Made’ products because I can’t find any I like. My caravan is Canadian, which is a foreign country. My dodge truck is made in Mexico – so don’t tell me to buy American until the Union workers all buy the products they build (not lease them either).

    Just to add this, if you all want to see what the country will be like in 2 or 3 years, come here to Michigan. We have been in some sort of recession under Granholm, we attract no business and top the country in a number of failures. We seem to live in a vacuum, reelecting the same people who have been damaging us; some will end up running things for Obama. We will get what we deserve.
  • Auto Bailout
    Let them go under. We already gave the $25B to make their cars more fuel efficient. Why can't one of the BIG 3 take the hydrogen generators people are installing in their gas cars and trucks and make it part of the factory vehicle? I have a friend that get 50% better mileage running on water/gas! The technology has been around for a long time and several patents are out there waiting to be purchased or improved.
  • Buy Volkswagon
    Volkswagen is building a new plant in Chattanooga. Tennessee is an open shop state, so the UAW won't be able to get a stranglehold on it. Buy Volkswagons and help us poor Southerners put wood over our dirt floors.
  • AWU
    The Union got them into this mess, let the union bail them out.
  • Auto Industry Bailout
    Since I actually WORK in the universe of the Detroit 3, I feel qualified to add my nickel's worth.
    #1 - Detroit now builds cars and trucks equal to anything on the planet. I know, becuase I've had no small hand in improving powertrain quality. They've already invested BILLIONS in high tech improvements so they can make better engines and transmissions. It's working. 300,000 miles from a Ford Triton V-8 is just average nowadays.
    #2 - If I had a dime for every time I've had to curse the UAW for obstructionism, I'd be rich. "United Against Work" is the wry epithet applied by many of my D3 management and engineering friends.
    #3 - A bankruptcy filing would have far-reaching effects through the supply chain - GM owes legit businesses BILLIONS in unpaid bills. Their policy of avoiding payment of past due invoices is legendary, or should be. So there would be a mountain of "collateral damage" among companies that would not deserve it. Yes, I work for one, so I'm biased. Sue me.
    #4 - They have not ENTIRELY done this to themselves. Government policies have repeatedly forced the D3 to invest billions, plus the efforts of many very smart engineers, to build vehicles that don't sell, or if they do sell, don't make a profit.
    The sorry fact is that the new DemocRat power machine will bail oout the UAW, thereby bailing out GM/Ford/Chrysler. Letting the D3's engineers continue to design and build good cars is a good thing, but keeping the AUW in place means that the cancer will only be in remission. It will come back.
  • Auto bailout.
    Ain't the auto industry "big business"? Isn't the demonizing of "big business" one of the Washington democrat's goals? Well, heres their chance to bankrupt one just like BO said he's gonna do to the coal industry.
  • 70% Of Americans Do Not Support
    First, let me say I do not support bailing out the auto industry. I just don't like the use of the above statistic to support the argument. It assumes that everyone is fully informed and understands the consequences of the choice. Since the majority of these people are "government educated", I would estimate that the previous statement is not true. That is why we do not live in a democracy. Sometimes the majority of the people do not know what is the best choice.
  • bail out NO
    just like the housing market, the auto industry has done this themselves. It isn't as if they didn't know they were headed to trouble years ago. It doesn't take a rocket scientist to see that prices have increased over the years, and yes, gasoline and diesel would too. Because the auto industry is more interested in their perks and bonuses for the big guys, they subverted laws, regulations and morality to get what they wanted. Yes we need vehicles, but to tell you the truth, because we still, at least until 21 January live in a capitalist country, I can pick and choose what I wish to buy. I pick the vehicle that gives me the biggest bang for my buck in aesthetics, maintenance and overall mileage. IF the auto industry hasn't picked up on that, it is not my fault.

    I am sick of these big companies whining and asking for help (eg., BOA) when it is their fault and they have been sticking it to the people who will be feeding them out all these years. As a side bar – BOA? Lend them the money at the highest interest rate they give to customers and if they miss a payment by a day, charge them a penalty fee. They might pay over the internet, so do it like they do. An instant transfer to BOA for payment takes 4 to 5 days to process (same as Chase finance) Why do they do this? They make more money off late fees than they could have ever imagined.
    Off the tangent, who is going to pay for all of this? Money isn’t printed in a back room. Taxes have to rise and frankly I am already up to my eye balls in taxes and don’t make 6 figures. Wake up people. Our country is slowly going down the road to socialism and the walk back won’t be in our life time if we allow it to happen. (e.g., Cuba 1959)
    Bail them out. a resounding NO!
  • The Pattern? Mislabeled Rhetoric
    To the earlier poster:

    Fascism includes, as a necessary component, an authoritarian government and the guiding principle that the state is more important than the individual, to the point of eliminating individualism altogether.

    You, like most people carelessly throwing around inflammatory rhetoric these days, are confusing Fascism with Socialism. Socialism involves the same government control of production as Fascism, without the authoritarian government.
  • car company bailout
    I keep hearing all the conservative talk-show guys blaming the union contracts for the cost problem in US cars vs foreign cars. Doesn't it take 2 to agree to a contract? If you want to blame the contract, how about blaming the executives who signed off on them? You know, the guys in the corner offices making millions a year because they're so smart.
    Yes, pensions and retiree heath care benefits are expensive, but the guys making millions agreed to them! These provisions in the contracts are in effect deferred compensation. Instead of more pay at the time the work was done, the auto companies PROMISED to give that pay at a later date in the form of a pension or health insurance. If you want to break that promise now, you should give the workers all the value of these items in cash now. You could take the money out of the multi-million dollar pensions the executives pay themselves.
    If the idea is to make cars as cheaply as possible, just do away with all government regulations. Let the auto companies out from under workman's comp laws, OSHA, racial quotas, everything. And let's also void all car warranties, those cost money too.
    If the US car companies get their way and break their contracts, and stop paying pensions and health-care costs of their retirees, most of them will be forced onto Medicare or Medicaid, because the pension is their main source of income. I personally get a pension from a tire company, and when obamma puts through his plan to nationalize my pension, I'll go down to the unemployment office and sign up for lifetime unemployment, because the government will have fired me from my pension. I'll also have to switch from the Republican party to the donkeys so I can get my handouts. I worked my whole life to be able to retire with my pension, but if it's taken away, I'll just pull a chair up to the handout trough top get my share. I'm too old to start over again.
  • Management is to blame!
    They always gave the union what they wanted in order to keep the plant running. I think what is best for GM to enter Chap. 11 and than the union contract are null and void.

    Rick Wagoner should also be fired for the way her ran the company.
  • Big 3 bailout
    Once again Boortz has it wrong: "force the automakers to build cars Americans do not want." Americans do want those cars and they are being built by Toyota and other overseas competitors. Free market at its best!
  • Auto industry Bailout
    Just say NO! As pointed out in a WSJ article Saturday, Ford & GM have "invested/re-invested" $465 b - that's Billion with a "B" in their operations over the past 20 years - $365b of that in the last 10 years. What is there to show for it?? Nada. Zilch. Rien. With $465b, they could've bought Honda, Toyota, & Nissan. That $465b of capital has been simply wasted...destroyed. and now they want MORE - only taxpayer money this time. Wrong! The problem with the "Big 3" is that they are locked in to too many unprofitable contracts...not just labor/union contracts, but leases, pensions, local govt agreements etc. All those symbiotic, unprofitable, mis-managed contracts are legally enforceable. The only way to escape/void those contracts is through bankruptcy. A chapter 11 bankruptcy would allow renegotiation of all those contracts, freeing the "Big 3" to pursue profitable ventures. Additionally, let's not forget Washington's contribution through CAFE standards that are based only on US fleets rather than worldwide fleets. And finally, why, despite my eighty hour work weeks, when my family is struggling to make ends meet, pay for exhorbitantly priced health insurance ( in which all claims are denied), and pay continually rising Fed, State and local taxes, should I have to pay for those UAW workers who are earning far more, doing far less.
  • Dateline of linked article is from 2005
    Boortz,

    The dateline on this article is from 2005. Are you certain that the jobs bank was included in the current union contracts? I know there must be examples of union abuses in the current contracts, could you highlight some of those?

    In my opinion, management should take more blame for the downfall of these once great Companies. They entered into the contracts with the unions in the first place. They frittered away R&D costs to develop 3rd row seats that will automatically fold into the bed of an SUV. And GM's hail mary for the "green" future, the volt, is a car for which they have a negative profit margin.

    Let's not place the entire blame for the big 3's problems at the feet of the union. The union provided labor, while management provided the decisions that have driven these Companies into a brick wall.

    Z.
  • The big 3
    I have a Saturn (owned by GM) that is 10 years old and in great shape. It was made in the Springfield, TN plant (where workers were invested in the quality of the work and had the ability to shut down the line if they saw any problems) that GM closed down last year. Saturns that were not made in Springfield have 40% more problems.
    Anyway, when I decide to purchase a new car, which will probably be in the next year or so, I am choosing not to support the UAW or union workers with the money the government allows me to keep. I will be buying a Mazda or Toyota.
  • auto bailout
    does anyone remember what happened to the Mustang Ranch in NV?

    If the gov't can't make a profit by selling sex and booze, what makes you think they can effectively run ANY business?

    let the UAW fail, and get the hell out of the way of those who CAN make a profit
  • Root cause
    If anyone would truly scrutinize the books of GM and Ford, they would find their overseas operations are quite profitable. The difference? Unions and government regulations. What Washington could do to help financially heal these companies is to cut back on the regulations and allow GM and Ford to renegotiate union contracts to put sanity into what those folks get paid to build a car. Just some food for thought.....
  • Government
    If you think the problems we create are bad, wait until you see the solution. It's amazing but I'm not surprised to see that money be used for other purposes beside bailing out the banks.

    Besides, I'm positive that the banks were only going to use that money to by up smaller banks making them to big to go under.

    It's going to be a hell of a ride these next 4/8 years.
  • Bailout
    Would you bail out a crappy restaurant chain that serves bad food ? Point is people do not want their product, and haven't for years, so no amount of bailout will help (except to get the dems more votes in 2010)
  • GM junk
    I bought a brand new 2005 Cadillac CTS. Cadillac is supposed to be the cream of the crop of the American automobile industry as far as quality control goes. While it's a very nice car to drive, it has cost me $5000 in non-routine repairs over its first 100,000 miles. Shabby union work, in other words.
  • The pattern? Fascism!
    What we are now seeing with the Pelosi-Reid Congress, Bush-Olson Treasury, a newly elected celebrity President who has been indoctrinated in Communism, is nothing less than Fascism BY DEFINITION! How else do you define government control of the means of production?
  • auto bailout and mis-management
    Mr. Boortz,
    I wish that people would use the right language on this issue. The industry is not asking for a bailout, they are asking for a loan guarantee. In layman's terms, this is really no different than asking for a co-signer. I am sure that many people have done this task to help their kids get their first car. As you recall, my employer Chrysler did this with Mr. Iacocca and we not only paid the money back with interest but did so early. I am also incensed at people saying that we are not building fuel efficent cars, etc. etc. We build what the public desires but we are not making cookies where all you have to do is change the recipe if markets change. We have to do massive re-tooling, meet government mandates, etc. and then the market may shift again. I think people need to look at what we have done. The new Dodge Ram 1500 pickup has an all new state of the art Hemi Engine that not only increases power but gets better gas mileage to boot. I am very proud of the products that I sell to my dealers and would stack them up against any competitor's foreign or domestic. I just wish people would realize that this industry is the core of our economy before they go shooting their ill informed mouths off. We will make it, we just need some a helping hand not a hand out.
  • Let 'em fail
    I bought my last car from the "big 3" in 1973 (a Chevy Vega - what a piece of junk - at 3 years the engine block split open, which happened to most of them). I swore not to buy another one so long as they were infected with unions and controlled by idiots who thought they were in the "fashion" business instead of the "engineering" or "transportation" business. They listened to two economists back in the 40's: John Maynard Keynes told them quality was irrelevant, and all they need do was lots of advertising with skimpily clad women. W. Edwards Demming told them quality was critical, and described quality circles, etc. They loved Keynes and laughed Demming out of town. Demming went to Japan, where they listened to him. Yet another success story for the left!!!!!! Let them fail - not just reorg - total collapse!!! NOW! They can be the fertilizer in which new, more innovative, more responsive companies can grow (hopefully without being infected by unions, but with Obama/Reid/Pelosi, that is probably not possible now).
  • See a pattern?
    The Government tinkers with banking, and then comes the bail out, then possible government take over.

    The Government tinkers with housing market, then comes the bail out, then possible government take over.

    The Government tinkers with Wall Street, then comes the bail out, then possible government take over (retirement plans)

    The Government tinkers with the auto industry (mandated regulations), then comes the bail out, then possible government take over?

    Anyone see a pattern here?
  • Those union wages include union dues.
    Those dues go overwhelmingly to the democrat party. Now the taxpayer can subsidize those union employees and democrat party campaign contributions.

    Who says the democrat party is no longer for public financing of campaigns?
  • Auto Bailout
    I did some rough math and found out that the $25B bailout would be approximately $25000 per person who voted in this past election.

    They could give me the $25K credit at my local Ford, GM, Chrysler dealer. That would get them going!
  • Bailout
    I might be in favor of loans if those loans went to retooling or steamlining the plants so that so many parts which are outsourced could be made in one location. I'm not in favor of propping up pension plans and healthcare that uniions strongarmed the management into. Look at how much more efficiently BMW,Toyota, Honda, Nissan and Benz run their plants right here. And they don't have unions breathing down their necks. As far as CEO compensation, instead of blaming the top level management, take it out on the repsective boards if you want to get upset. They decide who gets what at that level. This is what makes the Democrats being in control so disturbing. Facts and logic go out the window with these people. That's the way they live! Thanks America! Way to stick it to thoe rascally rich, conservatives. Yeah boy, we're gonna show them! Damn the economy, full speed ahead!
  • DEMOCRATS STILL WANT AN AUTO BAILOUT
    At this point I say let them do it......let the democrats spend 4 years spending and taxing to redistribute money.

    Then, if we as a nation survive, in 2012 we will see a rise of a new party, especially if republicans can't clean up their act.
  • Auto Unions
    Why is it we are not hearing about Saturn and BMW (I think they have a plant in South Carolina) running to the Governments begging for a hand out? Could it be because they do not have a union contract?
  • Auto ballout
    "The average Ford, GM or Chrysler union worker makes about $71.00 or more per hour. For Toyota, Nissan and the rest ... about $48.00 per year. Do you detect a small problem here?"

    With that difference in wages, I don't blame them for wanting to work for Ford, GM, etc.
  • The Bailout
    I hear the Q-Tip industry is really experiencing tough times. If they go out of business who will come to the rescue of personal hygeine? This travesty cannot stand!!
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