Executive Compensation needs to be brought in line with something… Something other than “Late ’90’s Big 3 – Masters of the Universe”.

And the other white-collars should be ready to swallow a 20% salary reduction and start contributing for half of their health-care coverage.

Let’s see what that does to new vehicle sales in SE Michigan? 12 million vehicles becomes 9 million vehicles, or less…

I’m not trying to defend the GOP, but Shelby/Corker’s actions are not inconsistent with what they said in hearings the week previous.

Corker singled out Cerberus for (probably) looking to get Chrysler a hand-out long enough to offload that pig.

He singled out the UAW to understand that if your member’s employer fails, you got nothin’. He wanted the UAW to understand that bringing forward the 2011 concessions was probably essential.

Without agreement ahead of bailout, he understood balances of negotiating leverage would change and there was potential for things to fail.

The Democrats appear to have chosen to ignore those concerns in the presentation of their bill.

The right lean amongst most of the auto enthusiast crowd will no doubt blame those damned unions, but The Truth About the Bailout Failure is this: The outgoing Republican majority decided to ’show its ass’ one more time with it latest oppositon to working families, even defying the immediate ideals of the outgoing adminstration it once supported. And when GM and Chrysler do fail, making our recession even more disasterous– that’ll be all the more blame to lay at the feet of President Obama in 2012.

Republicans are right to lay the failure of the Senate vote at the boots of the UAW. The UAW talked of “consessions” that were no such thing – suspending the JOBS bank in favor of some other worker support program, delaying payment into the VEBA which can’t ever be afforded and for which they have to keep paying gold plated heath care, requiring buyouts for existing workers that must be shed in order to right size the company (closing unneeded plants, eliminating models, brands) when non-union businesses simply fire excess labor and touting the 2007 wage agreements as a concession when they only apply to new hires – new hires that aren’t brought in until the existing workers leave via attrition or buyouts yet again.

The UAW needs to get realistic and make real consessions, like those asked of of shareholders, white collar workers and bondholders if GM is to survive.

My only hope is that the Bush Administration implements the Corker plan using TARP money .

No, not enough said as your statement didn’t begin to tell the whole story. Toyota routinely has had their hands out to state and local government when building and expanding a facility. I doubt that either of us, I know I don’t, have any idea of subsidies available to Toyota on their imports to the US. Japan does have a national health care system, and does play games with their currency, and both those factors contribute to their sales and profits here. I haven’t spent hours on the numbers, and might not have access to the data if I wanted to, but it’s my understanding that an enormous hunk of GM’s legacy costs are health care related. GM, and other employers that provide health care for their current and former employees also pay the way for those people who stiff the providers since the uncollected fees are spread among those who do pay. Where would GM be if we had a national health care system here? I don’t know, but the situation would be different.

It looks like GM, Ford and Chrysler will shrink at best and possibly vanish. If this happens, and Honda stays to their game of avoiding large vehicles, Toyota will inherit that realm. What will their profit/loss numbers look like down the road when we hit another dry spell?

It seems the transplants are trying hard to lower the wages of their workers, and if the UAW goes, this push will become more intense. Look at the working and pay conditions in the mines and factories when unions came into being. Does anyone think that corporations are more generous or ‘enlightened’ now? We soon forget why certain structures and regulations arose, and dismantle them at our peril. The current liquidity mess is an example. The push to deregulate was one pillar of the ‘conservative’ agenda, and we now see where that led. The ‘unions are bad’ idea was another and we’ll eventually learn that this tale is another dead end.

Here’s an interesting link:

http://www.politico.com/news/stories/1208/16545.html

and

http://www.theautochannel.com/news/2008/12/12/297885.html

Firstly, stay safe.

Secondly, the idea that any bits of the supply chain or complete manufacture that contribute to the military would be allowed to vanish, I think, is just nonsense. Sure they’ll be smaller, but someone will recognize the necessary bits of that industry and secure them away.

Lobbyists put out the “but the Bigish3 are vital to our national security” lie and the MSM ran with it.

Then we saw all sorts of ugly calls to action on faulty retelling of WW2 history. It’s another variant of Just do it BECAUSE they are the Bigish3. We owe them..

such as giving wealthy people trillions of dollars in public money with few strings and no surety of payback. if i remember correctly, poor people were contacting their congresscritters in droves begging for the bailout.

need another $100 bill to light that cigar, Mrs. CEO?

I however am very concerned about GM’s future as a HUMMER driver…Not an H2 or H3, but an 1151 uparmored version with a .50 cal on top and powerered by a big GM diesel. I am going to be walking enough in Afghanistan without added mileage due to parts unavailibity not to mention the fun involved in finding IEDs without the benefits of having a vehicle around you.

To me this is the elephant in the room. The big 3 build a lot of the machines that are powering the war or at least the powerplants for them. Is someone going to build a retrofit kit to slap a VTEC Honda motor in my buffalo if Detroit fails?

If we want to promote upward mobility, we would get our public education system fixed. That would mean a funding source other than local property taxes. Class warfare can exist without being explicit.

http://www.youtube.com/watch?v=_vZF5ZTu2Go&feature=related

I was thinking about the same thing yesterday. When Detroit pays people for not working, the UAW gets slammed for its “job banks”. When Toyota and Honda use down time so workers can be “trained” or “educated” it’s seen as evidence of their business smarts.

Well, the interests of the lower economic classes who don’t want to be lower class forever certainly align with the wealthy.

Better to have a system that encourages the creation of wealth for all rather than a system that encourages class warfare.

Management has to go. No golden parachutes. Equity has to be wiped out. Bond holders take a haircut.

Plants have to be closed as the market dictates, and worker benefits should be the same as any other worker in the US gets. No more, no less.

I saw an interview with Wilbur Ross the night Corker was basking in the light. Ross is a VERY impressive guy IMO; no emotion, no bullshit, just cold facts and logic all the time. He said the Corker play was a stunt since there was no way in hell the financial parties involved were involved nor could they possibly agree to anything in the time frame in play.

Everybody with the possible exception of Wagoner, Lutz and some of the bystanders knows this thing is headed for the rocks bailout or not. The only variables are when and how. What a bailout will do is postpone it and provide some time that will hopefully be used to lessen the impact on the society as a whole. GM has been headed for the wall for years, and, like a weakened person who dies during a cold snap, this financial train wreck hastened their demise.

The republican hacks are taking advantage of the situation to sell their union busting idea. Sadly, much of the gullible public have been sold on the free market bullshit and are lapping it up. Ignorance plus jealousy make a powerful combo, and the ‘conservatives’ are making hay. As Obama said, Reagan was a transformational figure having sold the lower economic classes on the idea that their interests aligned with the wealthy.

Edit: A point about the jobs bank. It gets a lot of negative publicity, but look at what Toyota is doing in their truck plants. They’re paying the workers to ‘train’, do maintenance, etc. Sounds a lot better than paying them a percentage of normal pay to stay home, but it’s still a money loser, and we’ll see where this goes if sales stay way low for an extended period. The transplants have had it easy in this regard since they’ve been running flat out nearly all the time. But if they decide to lay people off, we’ll see what happens when they call them back. If sales are good, they might not have time to train rookies and get high production and high quality, so they’ll have to adjust in some way.

The only weak link in the validity of the article may be GM’s assets. This part “…puts up collateral equal or greater to the loan amount advanced..” it seems to me what we need is an article by some detail oriented commercial lending analyst to break down that very thing – GM’s balance sheet. Including assets already pledged as collateral and ball park estimates of asset values when possible. Isn’t this needed before we can say there’s any future for GM, or any bailout money possible with collateral worth that name ?

And Kurt, as a fellow Ontarian I agree with you however I think we are “locked in” by bad luck and circumstance. How do we escape this jail? Just bend over… What I mean – The size of our bailout funds will amount to more than double what the American taxpayers will pay, on a per capita basis. Then that will quickly become triple and quadruple as the shift of remaining jobs oozes southward, just watch and weep. Fuzzy math indeed. Don’t count on even close to 10% of the billions paid out having any value to Canada after as little as one year.

I have read your many excellent comments on this site with interest and often with agreement with what you have to say but I think you are off base on this bailout boondoggle. As a resident of Durham (Newcastle) I often shudder to think of the affect of a GM collapse on the local economy. It is not a pleasant thought. That being said, any grant/loan/bailout that our Feds or provincial govs give to GM is a complete waste of money. GM is a seriously sick company. It is dysfunctional in almost every way imaginable. It will ineveitably collapse as we now know it. It is better it does so now rather than later. In fact it should have happened a long time ago. Now by collapse I actually mean a planned orderely and structured CH11 engineered to fix whats wrong and save as many jobs as possible so as you can continue in a good job working for a company that actually has a future. The fact that GM’s senior management team is still in place after the all the incompetent stupid decisions they have made is one of the great mysteries of our time. By the time GM make their second and third visit to the public purse, which will happen, the US taxpayers may well revolt (as well they should) because nothing is really going to change in the way GM does business unless they are forced to do so. If you handled your finances in the way GM does your creditors would quickly sort you out, why should GM or any company be any different. I have written to Bev Oda and John O’Toole to protest my taxes being spent on a sick and dying company like GM. If they must help the Automotive manufacturing sector they should spend it on Ford, Honda or Toyota, at least they seem to know how to run their businesses. Sorry Mikey I am not taking a shot at you, God knows I have many friends that work in GM Oshawa and I do not wish anyone there ill will. Enough is enough, GM must reap what it has sown.

Unrelated, in the second paragraph:
“…offered-up…”

those who know their economic history know that there are still arguments among economists about the causes of the great depression, which are thought to include reduction in purchasing, reduction in ability to pay taxes, debt, false prosperity, unemployment and banks being dumb with money.

so while it might be comparing apples and oranges it’s still comparing fruit which might go rotten on us.

Banks are effectively part of the Treasury. Indirectly, they effectively print money.

Recessions become depressions when banks collapse en masse. Those who know their economic history know this, which is why those such as Ben Bernanke are so eager to prop up the banking system.

During economic downturns, companies fail. The incompetent companies are sure to fail, because subpar performance doesn’t cut it when times are bad.

We can debate whether a bailout is necessary for practical reasons related to the stability of the economy. But I frankly find it offensive when the Detroit Defenders act as if the 2.8 deserve my money.

Detroit worked overtime toward failure for decades, screaming about patriotism while simultaneously screwing ordinary, hardworking Americans left and right. They deserve to fail.

Maybe we need to save them, or at least prop them up temporarily, for our own reasons. But they are not entitled to a penny.

The 2.8 have benefited from good timing. If we weren’t facing the largest economic downturn in seventy years, nobody with any common sense would even be thinking of saving them. Unfortunately, with the timing of the situation, this sort of blackmail can go unpunished and may even be rewarded.

I may end up writing the check, but don’t expect me to be grateful for having done it. And those who have jobs there should be on their knees thanking us for bailing them out, even though they will have never deserved a single nickel of it.