Showing posts with label Big 3. Show all posts
Showing posts with label Big 3. Show all posts

The UAW Has Blood On Their Hands While We, The US Taxpayers Have Dirt In Our Faces. [Bailout]

12/19/2008 02:49:00 PM

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JCPenny catalog2Your own little Detroit, just in time for Christmas!   And again I state, if the UAW is so good, then why is Detroit in trouble?  Why don’t the import auto makers have problems?  Why aren’t they screaming for a bailout?  The difference between the two?  The UAW.

This morning President Bush announced that his Administration, acting unilaterally after Congress declined to intervene, due to the UAW refusing to make concessions, will bail out the auto industry to the tune of $13.4 billon now, and possibly another $4 billion in February.  “The time to make hard decisions to become viable is now, or the only option will be bankruptcy,” Bush said.  “The automakers and unions must understand what is at stake and make hard decisions necessary to reform.”

The White House admits that it consulted with Obama on the loan package.  They briefed the Obama transition team over the last several days and options under consideration, according to a transition aide not authorized to speak publicly.  White House spokesman Joel Kaplan confirmed that there had been “consultations ongoing” between the two sides but he declined to go into specifics.  The financing will be drawn from the $700 billion TARP, the fund set aside in October to bailout Wall Street firms and banks.

Obama issued a statement on the bailout loan to Detroit:

Today’s actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers.  With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together – including labor, dealers, creditors and suppliers – to make the hard choices necessary to achieve long-term viability.  The auto companies must not squander this chance to reform bad management practices and begin the long-term restricting that is absolutely required to save this critical industry and the millions of American jobs that depend on it.

DETAILS ON THE “LOAN”

Here’s a sneak peek of the plan, as released by the White House:

  • Amount:  Auto manufacturers will be provided with $13.4 billion in a short-term financing from the TARP, with an additional $4 billion available in February, contingent upon drawing down the second batch of TARP funds.
  • Viability Requirement:  The firms must use these funds to become financially viable.  Taxpayers will not be asked to provide financing for firms that do not become viable.  If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.
  • Definition of Viability:  A firm will only be deeded viable if it has a positive net present value, taking into account all current and future costs, and can fully repay the government loan.
  • Binding Terms and Conditions:  The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
    • Firms must provide warrants for non-voting stock.
    • Firms must accept limits on executive compensation and eliminate perks such as corporate jets. [The companies must show the White House they are “taking all reasonable steps” to sell aircraft or interest in aircraft.  And they must provide plans to control their expenses that would include details about spending on holiday parties, travel and new real estate.]
    • Debt owed to the government would be senior to other debts, to the extent permitted by law.
    • Firms must allow the government to examine their books and records.
    • Firms must report and the government has the power to block any large transactions (> $100 million).
    • Firms must comply with applicable Federal fuel efficiency and emissions requirements.
    • Firms must not issue new dividends while they owe government debt.
  • Targets:  The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
    • Reduce debts by 2/3 via a debt for equity exchange. [The companies would need to provide the government with restructuring plans by Feb 17.  Those plans would need to show the companies and their subsidiaries have used their best efforts to reduce outstanding unsecured public debt, with the exception of pension and employment benefits obligations, by two-thirds.]
    • Make one-half of VEBA payments in the form of stock.  [The White House has called for the automakers to make 1/2 of the approximate $21 billion owned to UAW retiree health-care trust in stock instead of cash.]
    • Eliminate the jobs bank. [The bank provides nearly full pay to union workers on long-term layoff.  The workers receive normal unemployment benefits however, the jobs bank provides compensation that would make the workers benefits, while on layoff, equal to about 95% of their weekly income.]
    • Work rules that are competitive with transplant auto manufactures by 12/31/09. [Meaning equal to that of Nissan, Toyota or Honda however, the U.S. Treasury has changed its stance, saying it had identified an error it wanted to correct to make terms of the package consistent with its intent.]
    • Wages that are competitive with those of transplant auto manufacturers by 12/31/09.
    In addition, the firm will be required to conclude new agreements with its other major stake holders, including dealers and suppliers, by March 31, 2009.


    These terms and conditions would be non-binding in the sense that negotiations can deviate from the quantitative targets above, providing that the firm reports the reasons for these deviations and make the business case to achieve long-term viability in spite of the deviations.

    Interest on the loans is currently set at 5% for three years.  In the event of a default, interest rates could rise to 800 basis points above either Libor or 2%, whichever is greater and is payable immediately.

    The companies would need to provide the government with weekly status reports, beginning this week.  The reports would need to detail companies’ 13—week rolling cash forecasts.  The companies also are required to provide biweekly liquidity status reports after loan disbursements and monthly certifications of expense policy and compensation compliance.

    WHO GETS WHAT, MAYBE

    GM     - $17.4 billion.  GM is set to draw $4 billion on Dec. 29, followed by another $5.4 billion on Jan. 16.  Should Congress release a second set of TARP funding, GM would get an additional $4 billion on Feb. 17.

    Chrysler - $4 billion on Dec. 29.

    Ford – Ford is not seeking any assistance.  “As we told Congress, Ford is in a different position.  We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government,” Ford President and CEO Alan Mulally said.  “But all of us at Ford appreciate the prudent step the administration has taken to address the near-term liquidity issues of GM and Chrysler.”

    MEANWHILE THE UAW IS NOT HAPPY ABOUT PAY AND BENEFIT CONCESSION

    If you remember, because the UAW would not make concession, that was the reason that the Republicans said no to the Detroit bailout.  Well, Bush added in that concession, and the UAW is not a happy camper.

    House Financial Services Committee Chairman Barney Frank (D) is calling the wage stipulation “an unfair assault on working men and women” that could force them to accept “a disproportionately large reduction in what is currently legally owed to them.”  The provision, Frank said, “could give foreign auto companies in effect the ability to dictate wages for all American auto workers,” and “it’s outrageous to be giving foreign companies the right to set wages for American workers.”  He is already pushing for Obama to change that portion of the emergency loan package, something the U.S. Treasury said the incoming Administration will have the power to do. 

    House speaker Nancy Pelosi (D) said the White House package “unfortunately singles out workers and clearly put them at a disadvantage before negotiations have even begun.”

    “All stakeholders – management, directors, bondholders, suppliers, dealers, workers – will have to participate in shared sacrifices to help the industry move forward,” UAW President Ron Gettelfinger said, noting that the UAW members have already made more substantial sacrifices to help make the domestic auto companies more competitive.  [Those concessions were over a year ago, in an totally different economy.]

    ”We are disappointed that,” President Bush, “has added unfair conditions signaling out workers,” Gettlefinger said.  “We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed, as we join in the coming months with all stakeholders to create a viable future for the U.S. auto industry.”

    “Because these provisions are unnecessary to achieve our goal and because they were unilaterally inserted by the President into what was otherwise a negotiated agreement, I believe that the incoming administration and the Congress should take whatever step are necessary to remove them,” he said. 

    The UAW has criticized the idea of cutting employment compensation.  “While we appreciate that President Bush has taken the emergency action needed to help America’s auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers,” UAW President Ron Gellelfinger said in a statement.

    What the UAW needs to remember, is that this money is a loan to GM and Chrysler, a bailout for the auto makers, the company itself, NOT to the workers.  Because if the company doesn’t exist, then the workers don’t have a job.  If the UAW needs money to continue giving their members the same lifestyle they are use to in pay and benefits, then they should solicit Congress for money and take a loan out themselves.

    TARP

    Then there is the entire issue of the second part of the TARP funds.  Currently of the first $350 billion allocated to the Treasury, the department has committed:

        ■  $315 billion to inject capital into banks and AIG
        ■  $20 billion to unfreeze consumer credit markets
        ■  $13.4 billion for GM and Chrysler

    This leaves the Treasury will less than $2 billion at its disposal.  Treasury Secretary Paulson said that Congress must release the second half of the $700 billion TARP, stating he would meet with lawmakers and Obama’s transition team to discuss when to ask for the rest of the rescue money. 

    But some administration officials suggested that the final decision to request the funds might not come until after Obama takes office.  Treasury officials have grown increasing concerned in recent weeks that they could be left without enough cash to stem another financial crisis, such as the collapse of a bank or other major institution.  But on the other side of the coin, many in Congress have been critical of how the US Treasury has handled the first part of the $350 billion in funding.

    In order for the Treasury to access the second half of TARP, the White House must send Congress a plan detailing how the money would be spent.  Congressional Democrats say they don’t expect a request to come before Jan. 4, when the new Congress is scheduled to convene.

    Once that submission is made to Congress, they have a 15 day window on voting to pass a measure to block release of the money.  If Congress passes a bill to not release the money, then the White House could veto and overrule the congressional vote, but then Congress could also overturn that veto.

    The reason Paulson is talking to the OBama team, is that the timeline for all of this, puts the passage into the first days of Obama’s presidency.  It is unlikely, and I would be very surprised, if Bush petitions Congress to release the money.

    Congressional Democrats say they don’t expect a request to come before Jan. 6, when the new Congress is scheduled to convene.  Once a request is made from the White House, Congress has 15 days to pass a measure that would block release of the money.  Six plus fifteen equals 21, meaning Obama is in office.  Or if Congress passed immediately, Bush could veto the funds which would mean that Obama would have to make the request to Congress, thus adding additional responsibility on Obama’s Administration. 

    OBAMA

    ”Today’s actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers,” Obama said.  “With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together including labor, dealers, creditors and suppliers to make the hard choices necessary to achieve long-term viability.”

    Obama has also said that “the American people’s patience is running out.”  He says the automakers should “seize the opportunity” to come up with a plan to make their companies sustainable.

    Obama also said a final restructuring package shouldn’t just include concessions from the workers.  He said they shouldn’t be the ones “taking all the hits”.  Obama says everyone involved with the auto industry has to be “part of the process.” 

    Obama wouldn’t say if he had any specific changes to the plan laid out by Bush this morning because he had yet not examined the exact details.

    Bush however, has handed off to Obama his probable first and major difficult decision when he becomes President regarding our economy.  Then his administration must politically and economically judge whether GM and Chrysler have become financially viable at the end of March.  If his new team concludes that the automakers have not become financially viable, it means bankruptcy for GM and Chrysler and widespread layoffs far beyond the automakers.  Meanwhile, Bush has insured that the automakers do not fall on his presidential watch, while it will be up to Obama and his administration to determine if GM and Chrysler are viable, and possibly fall.

    CERBERUS

    Cerberus owns 80 percent in Chrysler.  The White House package strips away the requirement that Cerebrus be held liable for any losses experienced by the taxpayers.  Lawmakers, both Democrat and Republican, have expressed outrage that Cerebrus, which is profitable, had refused to put up any more cash aid to Chrysler. 

    In an emailed statement, Cerberus said that it will hand over equity in the company’s automotive operations to labor and creditors as part of the loan agreement.  “Concessions by all relevant constituencies” are needed to restructure Chrysler.  The fund agreed today to put up another $2 billion into Chrysler.  Administration officials said the investment effectively put Cerberus on the hook for far more than just the government loan, and that taxpayers were being protected through tough restrictions imposed in the loan agreements – including provisions that would give the government an equity stake in GM and Chrysler.

    RANT ON

    First of all, this is a bailout plan, plain and simple.  Sure, the White House will point to a long list of requirement in the deal’s terms as proof that this isn’t just another bailout.  But that’s bogus:  this is a politically-driven plan and none of the important concessions listed by the White House are binding or likely to happen.  That’s because, unlike in bankruptcy court, this bailout offers no accountability.  There is a zero chance that the government will require GM or Chrysler to pay back these loans if they are unable to right themselves by March. 

    Second, the “deal” is non-binding.  Detroit could come back and simply say they haven’t obtained “viability” because no one is buying cars.  That’s their ticket out.

    Third, it’s an end-run around our representative democracy.  Congress spent over one month debating whether and how to support the automakers and, in the end, decided to put no taxpayer money on the line.  The White House’s action today nullifies that congressional decision, violating the constitutional command that the legislative branch makes law and the executive branch enforces it.

    Forth, it’s just a downpayment.  According to industry analysts and economists (e.g., Mark Zandi) future bailouts, or even bankruptcy, are inevitable.  How much will it cost?  Zandi says up to $150 billion.

    Fifth, according to the terms, if the auto makers have “not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.”  What if they auto makers haven’t attained viability, and they don’t have any money to pay it back immediately?

    Sixth, there nothing in the loan terms to keep Detroit from continuing layoffs and sending jobs to Mexico.

    Seventh, is another small problem:  this bailout is ILLEGAL.  The administration does not have the legal authority to use funds from the bank bailout in this way.  Congress earmarked that money for “financial institutions,” which the UAW automakers clearly are not.  The funds were to be used to restore liquidity and stability in the overall financial system, not to help nonfinancial corporate companies in distress because of  the UAW.

    And finally, the fact is that this bailout probably isn’t going to work.  Put simply, if the goal is turning the automakers around to achieve long-term profitability, this bailout is clearly inferior to a straightforward reorganization under Chapter 11 of the bankruptcy code, which so many large corporations have relied upon to escape dire financial straights and return to profitability.  A bailout actually makes achieving this goal less likely.

    And then there is the fact that auto sales have been SLASHED at record lows.  Detroit can continue to make cars however, who is going to be buying them? 

    And where is the “car czar” in all of this?  Oh yea, its the U.S. Treasury secretary, and we all know how good he’s been with that, right?

    SIDE RANT

    Why aren’t the same type of restrictions or concessions given to the “too big to fail” banks, who are still laying off workers, paying stockholders, paying bonuses, buying other banks, increasing interest rates on current balances on credit cards, and not making any credit available to consumers and businesses?

    And do I feel sorry for current employees and retirees who benefits may end up being cut 60% in the end?  Nope.  Why should they be any different from any other American who is suffering right now?  Join the recession with the rest of the country where you must choose between housing, food and health care.  And if you say the UAW has acquired rights to those items, then why doesn’t the rest of the country have the same?

    As for those who paid into the pension fund, and may not get those funds?  Well, what about all the millions of people who have paid into FICA, and come to find out, those funds are probably going to be gone and thus then what?   I paid in enough funds within a 10 year period to acquire enough points to be eligible to retire and eligible for disability.  Why do I have to wait at least 32 years AFTER that to be eligible for 70% of my retirement benefits, and wait a total of 37 years AFTER I’ve paid in enough to be eligible for 100% of my measly $1000 a month.  Can I have interest on all that money over the years?  Nope.

    There is the option of the 401(k) however, the Democrats in Congress want to seize those funds.

    And why do average US workers, making $10 to $15 a hour, if not less, have to pay taxes to support the UAW for workers who make two or three times those hourly wages, not including all their benefits?

    The UAW has blood on their hands while we, the US taxpayers have dirt in our faces.

    MEANWHILE

    A bailout for Wall Street was done in days in Congress.  A bailout for the auto makers was done in a few weeks.  Why is it taking MONTHS to do a bailout for US taxpayers?  In the meantime, the US taxpayer, who is suffering from record high foreclosures and unemployment get to move into their new digs while the UAW wants to make sure that their workers have everything they have had in the past.  A box under an interstate, or bridge. Are you going to choose a refrigerator box or build one from wooden skids?

    If Unions are so good for the economy, then why are automakers in trouble?  If the auto workers are so good, then why are the US made cars mostly sub-standard compared to foreign autos?  And if UAW made cars are so good, then why isn’t the import car industry in trouble?  Why aren’t the import companies screaming for bailouts?  Why is Detroit in so much trouble, but the import auto companies not?  What is their difference?  The UAW.

    Let the auto workers know what it’s like to have to sleep in one of their own cars in the middle of winter as a home or they can take pay cuts and come back to Earth with the rest of the United States and suffer along with everyone else.   Settle with something, and not nothing.  The UAW’s greed will be the downfall of at least GM.  Greed and Vanity are two of my favorite sins.

    FINAL NOTE

    I never thought I would say this, but Bush is a smart man.  If you don’t understand that statement on the “loans”, then you are obviously not getting the ‘whole picture” and /or are an Obama supporter.

    SOURCES:

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    Ford’s UAW Contract… The UAW Is Full Of WINERS.

    12/15/2008 08:57:00 PM

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    Senator Judd Gregg (R-NH) said in a statement explaining his “no” vote, “The UAW refused to make any real concessions and this lone obstacle brought the whole deal down and made it clear that we’d simply be throwing good money after bad.”

    The UAW points out that it has already made some concessions.  Last year, it renegotiated its contracts with the Big Three and agreed to cuts in wages and in pension and health-care benefits for new employees.  “Major concessions were made,” said Gary N. Chaison, a labor professor at Clark University in Worcester, Mass.  “And the frustrating thing for labor is that those concessions have been forgotten [in the bailout debate].”

    There’s only a few small problems with that.  First, this isn’t last year, this is this year.  And second, the concessions were for new employees, who don’t receive a whole lot of benefits compared to more senior employees, or retirees.  The UAW wants to continue on like nothing has happened.  This isn’t a bailout for the Big Three, it’s a bailout for the Unions.  The Unions are bleeding the Big Three dry right now, due to the Big Three not selling cars in the economic downturn and the UAW expects it to be business as usual. 

    If the any or all of the Big Three go down, it will not be because of them, it will be because of the demands of the Union to do business as usual without making any current concessions.  And because of this, the Unions won’t make concessions, then thus the Big Three don’t get their loan, because ultimately, the loan is for nothing more than paying health benefits for retirees!

    Surely in Ford’s UAW contract, as seen below, the UAW can make SOME CURRENT concessions so that the Big Three can survive instead of bleeding them dry.  Because if it weren’t for the UAW, then the Big Three probably wouldn’t need the loans.  But instead the UAW chooses to do “business as usual” and thus that will be their downfall and find themselves without jobs.  And what are they going to do?  Sue the automakers?  As if they have any money……..  If Unions are so good, then why is the auto industry, the industry with the largest Union workforce, in trouble?

    Maybe it’s just time for the Unions to come back down to earth like the rest of the population of the United States, instead of demanding everything on a silver platter, while they make substandard vehicles.

    ford_uaw_contract

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    White House Bailing Out Big 3 Using TARP Is Illegal And Possibly Unconstitutional.

    12/12/2008 11:36:00 AM

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    the_week_9202_27If Unions are so good, then why doesn’t it reflect on the condition of our Economy?

    I’m doing part of my rant at the beginning…..  First Congress bailed out the banks against what the taxpayers of the United States wanted, in other words, they didn’t listen to their constituents.  A perfect example of taxation without representation.  We spoke, they didn’t represent what we the taxpayers wanted.  And that $700 billion bailout has been nothing but a comedy of errors since, considering that the bailout was suppose to only be for banks.  Since then insurance companies have had the money to buy out a bank and gain access to the funds, even a Dutch bank asked for TARP funds, among other “Stooge” moments.

    Now, most people don’t want the Big 3 bailed out, unless they are actually an employee of the Big 3, a retiree of the Big 3, or have a business that is directly influenced by the Big 3.  And the Democrats in the House didn’t listen and attempted to pass law.  The Senate, with their Republicans, said forget it.. ain’t gonna happen.  But obviously, there are those who again don’t seem to listen to what the taxpayers want.  Bush, going against his own party, says bail em out with his spokespeople saying because Congress  “failed”.

    And how is he planning on doing this?  By using the funds from the $700 billion previously mentioned.  There’s only one small problem… it’s illegal according to the wording in the bill.

    THE WHITE HOUSE AND THE UAW

    The Senate failed to pass the $14 billion bailout and the head of the UAW,  Ron Gettelfinger, blamed the Senate Republicans stating, “This was just simply subterfuge on the part of the minority in the Republican Party who wanted to tear down any agreement that we came up with, the auto industry around the world is in peril.”

    “The current weakened state of the economy is such that it could not withstand a body blow like a disorderly bankruptcy in the auto industry,” White House press secretary Dana Perino said today.

    Treasury spokeswoman Brookly McLaughlin said, “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.”

    Obama said he was disappointed that the Senate failed to act.  “My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term-restructuring that is absolutely required,” he said in a statement.  Yet on this Sunday’s past “Meet the Press” Obama stated, “We don’t want government to run companies.  Generally, government historically hasn’t done that very well.”  Is this “change” your mind, or another instance of “double speak”?

    According to Congress, the Emergency Economic Stabilization Act which created the $700 billion fund known as the Troubled Asset Relief Program, or TARP, could be used for the $14 billion bridge loan to the Big 3.

    In recent weeks however, Paulson has resisted the idea of using TARP funds for the Big 3 since it was created to provide liquidity to the financial sector, not the auto industry.

    Speaker Nancy Pelosi said she would never support an auto bailout that used money originally set aside to help the Big 3 develop fuel-efficient vehicles.  Then Pelosi “changed” her mind and clamed she wouldn’t support a bailout bill unless the Big 3 promised to drop their lawsuit against California’s emissions requirements.  Then Pelosi “changed” her mind again, this time saying she is willing to support the bailout without the Big 3 dropping the lawsuit, but only if Republican lawmakers support the bill. 

    SORRY, ITS ILLEGAL

    About $15 billion from the first half of the $700 billion remains uncommitted since about $335 billion has already been used for banks and insurance companies.  To begin tapping the second half of the bailout, the administration would first have to notify Congress, which could block it or put new conditions on how the money is used.

    The Treasury lacks the statutory authority to direct TARP dollars to the automakers.  While the statue, passed by Congress in October, grants the secretary extremely broad discretion to decide how to employ the funds, it clearly limits the recipients to “financial institutions.”  And the definition of that term is quite clear:

    FINANCIAL INSTITUTION – The term ‘financial institution’ means any institution, including, but not limited to, any bank, saving association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Island, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.

    Now one could say that GMAC qualifies under this, well it doesn’t.  GMAC is not a bank.  Providing customer financing is a function that many non-financial institutions, from department stores to bars, engage in regularly.  In other words, they self finance without being a bank.  If GMAC would offer loans to anyone for any purchase, then that would be a different matter.

    Even The Heritage Foundation says that bailing out the Big 3 is a bad idea and illegal:

    “Even if the Administration were inclined to do so, it simply lacks the power under the statute passed by Congress to tap TARP funds to prop up auto manufacturers.  This makes sense:  why else would have Congress spent the past month taking testimony from auto executives and then crafting politically contentious bailout legislation if the whole thing was unnecessary, because it had already passed the bailout back in October?

    The Administration must reject calls for it to trample the law, and accomplish an end-run around our represented democracy, by moving forward with a bailout.  Giving in would be both unprincipled and, ultimately, illegal.

    Worst of all, it would be counterproductive.  Reorganization in bankruptcy continues to represent the best chance for General Motors and Chrysler to survive and prosper.

    THE CONSTITUTION

    The Wall Street Journal reports that banks and bankruptcy experts were all in a huff over a line in the Monday draft of the bill providing that the government gets its money “senior and prior to all obligations, liabilities, and debts of any such holding company or company that controls a majority stake in the eligible automobile manufacturer.”

    This might be a violation of the Fifth Amendment, which guarantees just compensation for taking private property, bankruptcy and constitutional law experts told the Journal:

    “It really sounds like a clear violation of the taking cause in the Constitution, to put the government ahead of all the other lenders.  To go this route is a treacherous path riddled with all sorts of constitutional issues,” said Don Workman, head of the restructuring practice at the law firm of Baker Hostetler.

    On the other hand, Congress might argue that the bailout is actually keeping the car companies out of bankruptcy, and if the taxpayers are ponying up, then they should get some guarantees.

    OBAMA’S OPINION

    Obama has also said in the past that even if Congress does not bailout the Big 3, he will push for federal help once he is sworn in.

    RANT ON AGAIN

    Why do we even have Congress, a President and such if no one listens?  And ultimately, if what the highest in power wants, that person gets?  That is Democracy?

    Part One

    Maybe just maybe Mr. Gettelfinger the reason the GOP Senate said no was because they don’t want to pile debt on top of debt.  And maybe just maybe the reason they said no was because they don’t agree that a certain part of our population in the United States should get “special” treatment.  I am referring to not the pay the workers receive, but their benefits, which include health care for retirees.  Why should one industry be given special treatment when so many others have nothing right now, not even a job.  The UAW should be willing to make temporary sacrifices, such as cutting health care benefits to a minimum, in order for reduce costs until the Big 3 can get on their feet again.  But as usual, the UAW thinks they should have their cake and eat it too while the rest of the nation eats dirt.

    And where is all the money going to come from to buy these cars?  Currently all U.S. automakers are seeing the worst sales slump in 26 years.  GM today announced, after the fact of learning they weren’t going to get a bailout, that they were going to temporarily close 20 production plants.  But don’t worry, those who are laid off will get their unemployment benefits, and additional money from the Big 3 to compensate to make sure they get 95% of their weekly income.  Oh, and they still have insurance benefits this whole time.  So basically GM is saying okay, let unemployment support them, yes we still have to pay then according to our UAW contract to make sure they make 95% of their normal income, but hey, it’s less money for us to pay! So, that’s a nice Christmas present for all the UAW workers impacted by the temporary close…….  Did you get a paid month off of work for Christmas?

    No one has the money to make a new purchase of a new vehicle.  So millions of new cars are going to be sitting in lots doing nothing but gathering dust all because you think your workers deserve special treatment.  So tell me, where’s the profit in this bailout for me?  Remember, the new mentality is about “sharing the wealth”, so where’s my share in all of this?  Will I get a car at cost?  Will I get a full warranty on everything on that new car for the next 10 years?  Because I as a tax payer will be paying for YOUR bailout, especially if you can’t pay it back, for the next 20 years!  High risk with no high payback is bad business.  Isn’t that how Wall Street collapsed?  Isn’t that how the real estate industry collapsed?  By giving high risk loans to those who they knew couldn’t afford it.

    And since no one is buying new cars, where are the Big 3 going to get the funds to pay back this loan?  And what about them coming back asking for more money?  The Big 3 are going to end up being just like AIG, asking for more and more and more money, turning into a super black hole sucking the life out of our taxpayer funded accounts.

    And why are the big wigs being bailed out?  Banks, investment firms, insurance companies and now possibly the Big 3.  And I’m going to take a Socialist attitude here since that seems to be the “new way”.  When is it time to help those who pay for all this?  Where’s my bailout?  How about not having to pay federal taxes for an entire year?  If the government has all this money to spread around, then why can’t we get a break? 

    Why doesn’t the Big 3 have to go through what everyone else is?  Filing for bankruptcy reorganization and start over again.  In bankruptcy court, the process allows the auto industry to negotiate with creditors, stakeholders and unions.  The auto industry spent nearly $50 million lobbying Congress in the first nine months of this year while unions spent hundreds of millions to put Democrats in Washington.

    And maybe, if maybe twenty years ago, there had been a national healthcare system put in place, like every other major country of the world, then the UAW and the Big 3 wouldn’t have this contract for health care benefits.  This is the ONLY point so far that I agree with that Obama should do.

    Ultimately, the Big 3 bailout is nothing more than dividing the classes further and a continuation of destroying our economy. 

    Part Two

    So obviously another law is going to be broken on a bill that the taxpayers never wanted to pass.  But this seems to be the new rage among many these days.  Now you might think, well this is nothing new, all politicians are crooks.  Well, being a crook is one thing, breaking Federal law and ignoring the Constitution is another matter. 

     

    Oh, and one other small newline.  Obama is planning on raising taxes and sending the money to Kuwait.

    And I could always bring up the Obama birth certificate issue……..

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    Senate Does Not Pass Big 3 Bailout

    12/11/2008 10:16:00 PM

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    In case you have missed it.

    Via CNN

    And yes, I believe that the Big 3 should cut salaries, and cut hourly wages and benefits.  If that is what it takes to keep the Big 3 going, and to keep jobs, then so be it.  Which is better?  The Big 3 trying to do business as usual and going bankrupt, or cut expenses, bring the workers down to normal people level until the crisis is over, so they and other industries still have jobs.  What makes the Big 3 so special they shouldn’t have to suffer along with everyone else?

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    Exactly Who Is President And Whose Not Here? [Who Is In Charge?]

    11/21/2008 08:18:00 AM

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    94666-004-B6D627DFAccording to Bloomberg, Obama’s transition team is “exploring” a “swift”, prepackaged bankruptcy for the Big 3 as a possible solution to the industry’s financial crisis, including contacting at least one bankruptcy-law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack plan.

    When checking with the team’s press office, a Stephanie Cutter said, “We have not put out anything specific for the auto industry except that something needs to be done immediately.”

    Congress yesterday gave the Big 3 until Dec. 2 to show a plan of action showing that taxpayers and auto workers would be protected.

    So first why is Obama’s team working on something for now?  The man isn’t inaugurated as president until January 20th.  Obama isn’t even a senator anymore, as he resigned last weekend.  And he seems to think his team can come up with something that Congress hasn’t?  The arrogance of this man continues to completely shock and astound me.  I wouldn’t be surprised if Obama calls Bush and says “Hey buddy, ya know, it’s the end of your term.  Why don’t you go ahead and hand things over to me ahead of schedule.”  But then again, this is Obama’s “testing” time.  The actions and attitude that you see now are a pre-cursor to how he will be once in office, and that frightens me.  Between most of his transition team being nothing but his friends, who have absolutely no real world experience in Washington, and the fact that he’s basically making Clinton’s cabinet his own speaks louder than anything.

    Obama obviously doesn’t have a clue as to how the real business world works.  You don’t just hand the Big 3 their money, a blank check, you ask them for a plan of action.  It’s like anything else with business when it comes to asking for money for equipment or a project.  You don’t just submit a request for say, a million dollars in a company that makes 10 million a year profit.  You have to justify the need for the money, how you are going to spend it, what you are going to spend it on, why it is needed, and how it will be productive and profitable.  If you can’t do that, then 9 times out of 10, you are not going to get the money if you can’t justify the need, and your plan of using it.

    And with this bailout, there is no guarantee that it’s going to work.  The definition of insanity is doing the same thing over and over again expecting different results.  Why keep doing something that isn’t working?  And why bailout the Big 3, when no one has any money to purchase a new car, because there are over 10 million unemployed people in the United States?  And for those that do have the funds and/or credit to purchase a new car, they can’t get loans because the banks aren’t giving loans.  Bailing out the Big 3 isn’t going to work.  All it is going to do is make an ocean of cars in parking lots, ports and dealerships.

    The Big 3 need to fall to change the way they are doing things.  Their cars are substandard compared to the rest of the world and are overpriced compared to the rest of the world.  Thirty years ago was a different matter, today, I see more new cars broke down alongside the road than I do cars made thirty years ago.

    And what happened to Obama’s promise that we, the taxpayers, were the first in line for help when he got into office?  All I’m hearing about is the Big 3 and the environment for his first days in office.  Bailing out the Big 3 and making stricter legislation on the environment isn’t going to “stimulate” the economy, it isn’t going to give people jobs, it isn’t going to reduce unemployment, it isn’t going to help the stock market, it isn’t going to give people back their 401(k) that are basically becoming worthless, it isn’t going to do anything other than increase our tax liability in the long run.

    And what Obama needs to remember is that the Big 3 probably aren’t going to make it until January 20th, and he still needs to get his plan approved by Congress.  He isn’t a dictator.

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    GM, FORD Execs Say NO to $1 Salary In Exchange For Bailout. [GREED]

    11/20/2008 04:10:00 PM

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    auto_06 Back in 1979 Chrysler asked for government assistance.  The Chrysler Corp. Loan Guaranty Act required Chrysler’s creditors to accept 30 cents on the dollar paybacks and the U.S. government backed $1.2 billion in new Chrysler debt.  This allowed Chrysler to issue bonds at a 10% interest rate, rather than the 14% that Ford had to pay for its debt.  The bailout saved Chrysler. 

    As part of the deal, Lee Iacocca got his workers to take pay cuts and, for a year, he took a $1 salary and no bonus.  After Chrysler paid back its debts, Iacocca rewarded himself; Chrysler ended its Salary Reduction Program in 1981 and executive salaries were restored to their 1979 level.  Iacocca and his top executives also received retroactive payments in cash and stock to make up for the reduction in Chrysler’s stock price.  In 1981, Iacocca made $360,000 [$857,714.85 in 2008 USD].

    Yesterday, the CEO of GM and Ford indicated to  the House Financial Services Committee that they would not be interested in reducing their salaries, like Iacocca did, to $1 in exchange for a bailout. 

    “I’m willing to do what I’ve been doing,” Wagoner, CEO of GM said, saying he has already accepted a significant wage decrease and given up other forms of compensation.  He said he had previously cut his salary by 50 percent.  But he stopped short of saying he would accept a $1 salary.  His 2007 compensation was $15.7 million which includes the 50% cut.  GM went through $6.9 billion in the 2nd Q this year.

    Mulally, CEO of Ford said when asked if he would work for $1 a year, “I think I’m OK where I am.”  Mulally also said, “I absolutely respect the intent of your question as a symbolic gesture,” adding, “but it is a symbolic gesture.”  Last year Mullaly earned $21.7 million.  Ford went through $7.7 billion in the 2nd Q this year.

    As for Chrysler?  Robert Nardelli, had said on Tuesday he would be wiling to work under that salary as a condition for its $7 billion low interest loan under a federal bailout package. “I’d be willing to accept that,” Nardelli said.  As for his current salary?  Well, he isn’t required to disclose his salary at Chrysler, which is owned by the private equity firm Cerberus Capital Management.  Additionally, Chrysler went through only $3.3 billion in the 3rd Q this year.

    It is sad to say that the CEO’s of the Big 3, seem to think it’s business as usual and nothing has to change.  The only one who seems to be a bit humbled on the situation is Chrysler.  Give Chrysler their money in exchange for Nardelli getting a $1 salary.  Forget about GM and Ford, especially GM since they sent $1 million from a $25 million retooling plan from the US government, to their Brazil plant, which is independent of the US, and any vehicle that is produced there doesn’t come to the US.  And also with GM releasing what I personally call a propaganda threat video about what will happen if the auto industry is allowed to fall. 

    Obviously GM and Ford aren’t concerned about their workers as they claim they do, and are only thinking of their own selfish pockets.  Gluttony, Greed and Pride are three deadly sins that GM seems to be living to follow.  Only one more and they are over half way of all seven deadly sins.   At best, Chrysler have the money under the terms of the $1 salary, forget GM and Ford.  If the CEO’s aren’t willing to sacrifice to help save their companies, then they can go down with the ship and sell out to China.  And I absolutely despite Wagoner’s arrogance and greed.  Pride, Greed and Vanity are nearly halfway of the seven deadly sins.  Or they can oust Wagoner, since obviously he can’t handle his company, put a new CEO in his place, and then give them the money. 

    But in the end, mark my words, if the money is given to them, at least one of them will ask for more money, and will still end up in bankruptcy.  And additionally if the money is given, it’s the end of the free market.  If the bailout doesn’t work, and they all fail, or even one fails, the jobs are gone, everyone is effected, and we the taxpayers are stuck with the bill with nothing to show for it.  The bailout does not guarantee the success of the Big 3, and thus it does not guarantee that jobs are saved, and it also means that the bailout money is not paid back.

    Here’s a videos to take a gander at.  This is when U.S. Rep Jeb Hensarling (R-TX) questions all three CEOs about how can the Big 3 guarantee that they will not be back in a few months asking for more money, and why giving them money is going to work.  When questioning GM CEO Wagoner about actually seeing the plan, he replies that basically it’s up to the SEC to allow viewing that information.

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    GM Flies to Washington To Beg For Bailout, Meanwhile Gives $1 Billion to Brazil.

    11/19/2008 08:36:00 AM

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    gm1 I have come to the conclusion that GM is the auto version of AIG.  Now we have two sucking black holes.  Would you believe while GM is begging congress for billions of dollars, they sent US taxpayer money to Brazil?  And while US autoworkers are being laid off, in Brazil, GM employees, 7,000 of them, are on PAID HOLIDAY?

    Yesterday the CEO’s of the Big 3 flew to Washington, DC to beg, plead, rob, to tell Congress the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.  The CEOs told Congress that they will likely go out of business without a bailout. 

    Rick Wagoner of GM told members of Congress that the company is burning through ash, asking for $10-$12 billion for GM.  “We want to continue the vital role we’ve played for Americans for the past 100 years, but we can’t do it alone,” Wagoner told the Senate Banking Committee.  One person close to GM in Detroit said that the company needed around $11 billion within three months just to stay afloat.

    All three used private jets to make the trip, but lets focus on GM, shall we?  Wagoner used his G4 private jet, one of eight jets in the GM fleet that continues to ferry executives around the world.  Wagoner’s private jet trip to Washington cost his company an estimated $20,000 roundtrip.  After the hearing, Wagoner declined to answer questions about his travel.  GM (along with Ford) say that it is a corporate decision to have their CEOs fly on private jets and that is non-negotiable, even as the companies say they are running out of cash.

    But part of the money that GM wants is for health-care coverage by UAW retirees, especially for those who are too young for Medicare.  GM, along with Ford and Chrysler, want to make sure the retirees have the luxury of health insurance, and their pension, at the US taxpayers cost.  One GM retiree states that he receives $3,000 a month in pension and health-care insurance for life.  When he retired from GM, he was making $33 an hour as a welder/repairman and he received a pension and a $35,000 buyout after working for GM for 34 years.

    [I guess you an I are the ones who GM expects to pay the bill for their contract with the UAW, although you and I aren’t the ones who agreed to it.  We are not the ones who promised to pay wages to a “bank” or workers we no longer need.]

    Also, GM just opened a $300 million plant in Russia earlier this month and is expected to produce 70,000 cars annually.

    But meanwhile, GM is kissing some serious butt in Brazil.  It is being reported, as of today, that GM has decided to invest $1 billion (USD) to expand business in Brazil, the local media reported Tuesday.  The money is coming from the $25 billion US taxpayers to “complete the renovation of the line of products up to 2012” which is part of the retooling to bring vehicles up to meet the more stringent air quality standards and part of the CAFE (corporate average fuel economy” standards.

    But yet, GM”s chief executive in Brazil, Jaime Ardila has said that “We are not dependent on the U.S. in any way.”  And also according to Ardila, “It’s not part of corporate’s plans to file for bankruptcy, so we’re not going to speculate,” when asked if GM files for bankruptcy.  “GM [Brazil] is independent from an operational standpoint.  It develops its products locally, for a local market, and all of its suppliers are here.  Nothing is imported,” Andre Beer, former vice president of GM in Brazil, now a consultant in Sao Paulo, said.  GM Brasil is a separate legal entity from its parent in Detroit, they do not make anything for the United States market, yet they still received $1 billion in taxpayers money from GM US.

    And in Brazil, automakers AREN’T getting bailed out, or even asking for government aid.  But the Brazilian government did give them $8 billion Brazilian reals ($3.47 billion USD) into the auto loan market through government banks.

    Also at GM Brazil, 7,000 Brazilian workers are on mandatory paid leave.  “This probably won’t be the last paid leave announced by the company,” the director of Sao Jose do Campos’ metalworkers union, Vivaldo Moreira Araujo, said in a statement.  [So unlike here in the US the workers are not “laid off” but on PAID leave?  Am I missing something here?  Are you ready for the “twist”?]

    With the CAFE (corporate average fuel economy) standards imposed by Congress, vehicles that are fuel-efficient that are imported from their overseas factories count as fuel-efficient.  In other words, the CAFE states there must be a certain percentage of vehicles that meet CAFE standards produced.  

    To me, it sounds like GM is planning on using their Brazilian company to meet the CAFE standards for .  Yet in 2005 alone, American bought more cars than did China, India, Russia and Brazil, COMBINED.

    So, GM gets money from the US taxpayers, from a “handout” to retool vehicles to meet more stringent US air quality standards, sends part of that money to Brazil and uses part of that money to help retain jobs in Brazil, but begs Congress for money?  Have I missed anything?  So let me make sure I have this right.  GM uses US taxpayers money, free money, that is suppose to be used for retooling for US vehicles to meet the more stringent air quality controls that take effect in 2012, but sends part of that money to GM Brazil, a company that is independent from GM Detroit, for retooling on South American vehicles……….  And remember Nancy Pelosi wants a lame-duck session of Congress to give the Big 3 taxpayers money yet Treasury Secretary Paulson has said “NO” to using part of the $700 billion bailout for the Big 3.  The Big 3 has already gotten $25 billion for retooling and now wants another $25 billion for “daily operational costs” which include giving money to those who are retired, and obviously sending it overseas to other countries.

    GM needs to fall………… and learn to stand on their own two feet without help and learn to walk a new way instead of wanting something for nothing.

    GM Brazil

    Brazil is the largest GM subsidiary in South America and the third largest in the world according to their website.  In Sao Caetano do Sul, Brazil are the administration, technological center, engineering center and manufacturing facilities.  Vehicle assembly, plus engine and transmission manufacturing facilities are in Sao Jose dos Campos.  The Mogi das Cruzes Comples has manufacturing and parts distribution facilities.  In the state of Rio Grande do Sul, GM has a vehicle assembly facility in the city of Gravatai.  A parts distribution and warehouse are located in Sorocaba and a proving ground is in Indaiatuba, both in the state of Sao Paulo.  GMAC has headquarters in Sao Paulo and handles finance activities, including credit and leasing.

    The company’s Brazilian headquarters in Sao Caetano do Sul employs 11,333 engineers and administrative staff out of a national total of 23,874.

     

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    GM Sells Suzuki To Raise $230 Million

    11/18/2008 04:35:00 AM

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    gm_general_motors_logoLooks like GM has also wizened up.

    GM averaged to burn about $1.03 billion per month in the 2nd Q of this year and $2.3 billion per month in the 3rd Q of this year.  The GM-Suzuki partnership dates from 1981 but links loosened after GM sold a 17 percent stake in Suzuki in 2006, leaving it with three percent.

    GM has announced it will sell its entire 3.02% ($230 million) stake, about 16.4 million shares, back to Suzuki.  Suzuki will pay $14.04 a share, the same price its shares closed at on Monday in Tokyo.  With the buyback, Suzuki now owns about 20% of its own outstanding shares, Kyodo news agency reported.

    GM has also said that the $230 million is only three to seven days’ worth of cash, but by selling its stake in Suzuki, GM would save more money by delaying for two weeks incentive payments to its dealers.  Dealers were notified of the change in an email Monday.

    Suzuki will finance the acquisition from its cash reserves, the Nikkei newspaper reported today, citing a company statement.

    Suzuki Chairman Osamu Suzuki said in a statement Monday that the Japanese automaker and GM will continue to collaborate on projects currently underway.  “There will be no impact on Suzuki’s current business plan,” Suzuki, Chairman and CEO, Suzuki Motor Corp. said in a statement yesterday, indicating that they [GM and Suzuki] will cooperate to jointly develop environmentally friendly cars.

    “As GM taking this particular step to sell the shares it owns as a step toward strengthening its balance sheet is very understandable, we wanted to support GM’s decision,” Suzuki had said.

    With this stock sale, GM now owns no stake in any Japanese automaker as it already sold its entire stake in Isuzu Motors Ltd. and Fuji Heavy Industries Ltd. in recent years amid deteriorating earnings.

    In 1981, Suzuki and GM entered a capital tie-up when GM acquired a 5.3% stake in the Japanese car-maker.  The stake was bolstered to 20% in 2000 but in 2006, GM reduced its stake in Suzuki to 3% as part of its restructuring program.

    If you missed it, GM distributed a propaganda video on YouTube making the case that a $25-billion bailout now would be far less costly to the nation than allowing the industry to fail.

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    Ford Sells Mazda To Raise $540 Million

    11/18/2008 03:40:00 AM

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    fordlogo Looks like Ford has wizened up to what millions of Americans are doing now, selling their possessions off for money to just exist.  How interesting it is that when companies are desperate and beg for money, they still seem to find a way to get the money.

    Ford had burnt through $7.7 billion in the latest quarter.  It, along with GM and Chrysler, were lobbying Congress for aid.

    Ford Motor is selling 20 percent of its 33.4 percent stake in Mazda for Y52Billion but they will still remain the Japanese carmaker’s biggest shareholder however, its  reduced interest will give it less control over the company.  This means, many of whose current top executives on on loan from Ford.  Two of three board members from Ford are going to leave, Mazda said, and Takashi Yamanouchi, executive vice president, is going to become its new president and CEO.  Hisakazu Imaki, the current chief executive, will become chairman.

    ford   mazda

    Mazda is also buying shares, 6.87 percent in off-hours trading on Wednesday morning for Y17.9 billion or Y184 each, the closing price on Tuesday.  Mazda said the two companies will continue their relationship.

    The remaining stock will be probably picked up by a group of Japanese parts suppliers, trading companies and casualty insurers, who will divide Ford’s interest into segments of 1 or 2 percent each.

    Ford President and CEO Alan Mulally said “This agreement allows Ford to raise capital that will help fund out product-led transformation, and at the same time, allows Ford and Mazda to continue our successful strategic relationship in the best interest of both companies.”  Mulally added, “Ford will continue to focus on the Ford brand worldwide and deliver the products our customers really want and value.”

    Ford help invent Mazda in 1979 and had owned a steak in Japan’s fifth-largest automaker since then.  What is interesting to note is that Ford rescued Mazda from bankruptcy 12 years ago.

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    GM’s Propaganda “Threat” ‘If You Don’t Bail Us Out, This Is What Will Happen’ Video.

    11/17/2008 06:21:00 AM

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    The following propaganda video was made by GM “to explain some of the economic impacts in the country today.”

    So let me get this right.  Auto sales are down, no one is really buying new cars because they have no money, or can’t get a loan and thus the Big 3 are suffering.  So they are asking for a bailout, so they can pay Union worker to either stand around and get paid, or work and make fewer cars that no one is going to buy and sit on lots and pay off their pensions and healthcare benefits to those who have retired.

    And in the meantime, the Big 3’s demand for supplies lowers, thus the suppliers aren’t making as much money and lay off people or go out of business, just so the Union’s can stand around and half work still getting paid their same wage (which with all benefits has been determined to be around $70 an hour), and also so the Big 3 can pay their pension funds to those who no longer work for the Big 3?

    And in this video, GM says they are responsible for generating $693 billion in new vehicle sales.  Well, they aren’t this year, now are they or they wouldn’t be asking for welfare now would they?

    And all the Big 3 are good for is $60.1 billion in 2009?  $54.3 billion in 2010 and $42.0 billion in 2011?  That’s all the Big 3 are good for?  Pfftt…….

    Did I miss anything?

    Ya know.. welcome to the recession Big 3 and all your 239,000 employees, all your 775,000 retirees and family, and 2 million who use the Big 3 for healthcare.  Welcome to misery like the rest of the United States who have no jobs, and millions who don’t have healthcare benefits.  Because right now “I see no profit” in it for me, the average taxpayer and all I see is you getting bailed out by the Feds, while all your employees and retirees get things that the rest of the country is losing right now.  And ya know, 1.2 million people are unemployed right now, and you suddenly seem concerned about an additional 3 million (according to your skewed numbers).  Tell ya what, yes to your bailout however, EVERY taxpaying American in 2009 gets a 2010 vehicle for $500.00.  How’s that for a deal?

    BTW, the Senate plans to introduce legislation Monday attaching an auto bailout to a House-passed bill extending unemployment benefits.  A vote is expected as early as Wednesday.  Again, the House can’t do it’s job, and the Senate cleans up for the House.

    So why is it I ask, that a bank bailout was made in around three days from start to finish, and now its going to be the same for the Big 3, yet a stimulus package for taxpayers is taking MONTHS?

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