The bailout bill’s demise in the Senate is inspiring all kinds of unhinged commentary this morning. Even by the recently declining standards of discourse, some of the comments we’re seeing around the autoblogosphere are sublimely ridiculous. By the tone many commentators are taking you’d think the US has never overcome adversity before, and lacks the entrepreneurial vigor to survive a highly necessary reorganization and rebirth of our domestic automakers. Rather than calling on Detroit to slow down its little red love machine and find a business plan that’s gonna last, we’re hearing some of the most prominent names in the business calling for a new lender of last resort. Namely that lamest of lame ducks, President George W Bush.
Having opened the opportunity for an epic flip-flop on the use of TARP funds, W has brought Automotive News [sub] publisher and editor-in-chief Keith Crain to the mountain top, with co-author Peter Brown in tow. In a piece that puts the “bs” in subtle, Crain offers W an opportunity to rescue his DOA “L” word (legacy, you perv) by showing “leadership and statesmanship.” By reassuring Americans that we have survived worse than this and reaffirming our national commitment to the principles which made our economy great?
Of course not. Crain blames a “Senate minority” for the bill’s failure, and then admits that Corker’s plan “could be a basis for a viable industry,” but only if W makes with TARP funds first. But his argument is predicated on the assumption that, like ethanol, a Detroit bailout might be reborn in Obama.
And indeed, Obama is continuing to make noises about finding “a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required.” Based on his “disappointment” at the failure of the bailout plan, it sounds as if he would support a Bush TARP raid for the industry. But he’s also not leading any charges on the issue, thanks to his own ambitious spending plans.
Between massive infrastructure investments, health care reform, and a homeowners assistance plan, Obama has plenty of plans for your tax dollars. Plans that he knows carry little of the baggage that an auto bailout drags around. Now wonder the Wall Street Journal reports that cooperation between Bush and Obama over TARP policy is breaking down. Furthermore, SecTreas Paulson has “indicated he wants to consult with the Obama team on any big moves, especially a draw down of the next $350 billion. Mr. Paulson doesn’t want to commit funds to a program if the new administration might later undo the effort.”
If Bush and Paulson get a go-ahead from Obama to spend TARP funds on a bailout, it would be a return to the unpopular position of giving money without real conditions.
Specifically, the blocking Senators blame the UAW for not making immediate sacrifices. The UAW is holding to its position that wages should come to parity with transplants, but not until 2011 when its current contract ends. As with two-tier wages in the 2007 contract, this gives the UAW the luxury of appearing to make concessions while protecting its longtime members and their considerable perks. It also allows the UAW to call the negotiation breakdown “a blatant attempt to make workers shoulder the lion’s share of the costs of any restructuring plan” in a prepared statement.
The fact that UAW President Ron Gettelfinger refused to even meet with Corker and the Senate Republicans severely limits any mileage the union might get out of its populist rhetoric. And proves how hard the reforms Obama calls “necessary” will be to realize.
Ultimately, this decision will come down to George W Bush– making it nearly impossible to predict an outcome. Bush had previously opposed a bailout, then opposed use of TARP funds, and is now departing from both of these positions. As a lame duck he could either stand firm on principle, or he could cave in to rescue a severely tarnished reputation.
Needless to say, I advocate that he take a moment to think about throwing away market principles in the face of a wave of self-interested doomsaying. Look at the auto industry employment numbers, and then gauge the mileage in subscribing to the “coastal conspiracy” and “civil war redux” theories. And for goodness sake, think twice about the real impact of a D3 bankruptcy on the jobs situation.
If all the necessary concessions from labor, bondholders, management and dealers were readily available, a compromise could well have been reached over the last few weeks. The desperation of the situation has been clear for all to see. Dumping money on the problem certainly won’t increase any of the stakeholders’ incentive to make painful reforms.
Meanwhile, $14b could do plenty of good mitigating the pain of a weak economy for all Americans, rather than for only the most shrill. If Detroit goes down, we can survive.
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I don’t think there is anything that The President could do now to improve his legacy unless he ordered Air Force one to ram an incoming ICBM aimed at New York with him still in it. Doing nothing for Detroit won’t significantly make it any worse. He could leave the whole mess for Obama Inc. to sort out. By then we could be looking at the big Detroit 1 (as in FoMoCo). OTOH he could just throw all kinds of dough in Detroit’s direction and make an even bigger mess for Obama Inc. Interesting times.
Unhinged commentary? No way…
From The Hill:
Michigan Gov. Jennifer Granholm (D) said it was “un-American” for senators to have voted against approving a bailout of troubled automakers last night, saying their vote may cause a recession to become a depression.
“It is unacceptable for this un-American, frankly, behavior of these U.S. senators to cause this country to go from a recession into a depression,” Granholm said during a radio interview Friday morning.
I totally agree with you Edward (excellent editorial by the way).
This isn’t the end of the world; bankruptcy exists as a way out of the hole the domestics have dug themselves into. And even if they go under, we’ve survived the loss of big corporations before — New York Central and Pennsylvania railroads, Eastern and Pan Am airlines for example.
The thing that galls me is that they’ve had 35 YEARS notice to fix their myriad problems, ever since the Arab oil embargo. Now Keith Crain of all people is serving as Bush’s chief advisor on how to clean up this mess?
From Reuters:
“Of the $350 billion portion of the TARP that the U.S. Treasury is authorized to tap, only $15 billion remains uncommitted.”
Coincidence? Probably.
the Small 2.801 are bankrupt and have been for a long time…There are 7 retirees to every 1 active UAW…The retiree benefits can *NEVER* be met even if active UAW works for free.
Read their SEC filings! They will need at least a $120B handout in order to survive.
Throwing other people’s money stolen at gun-point (taxpayer’s) at them will not keep them solvent…Ever.
Step 1. Revoke CAFE and replace with gas tax – better for the environment and just about everyone else.
Step 2. Eliminate Union Shop laws.
Step 3. Sit back and watch America take over the world car market.
Or…
Do what Congress is likely to do and remain mediocre for another three or four decades, while we keep trying to “fix” the game for the domestics.
The world is getting to a point where mediocre will eventually lead to failure. It’s not good enough just to be good anymore. So, it may not last that long.
The internal contradiction of the Democrats’ identity politics regarding the car biz is interesting as a study of compartmentalization.
You’ve got the made-in-Japan Prius set demanding union jobs be saved, by saving a company they hate and don’t ever plan on actually purchasing a product from.
Its strange, on the coasts where most the blue states are, you find the smallest percentage of domestic iron represented in the daily traffic jam. That is also where you find the strongest support for bail-outs on the account of “preserving jobs.” You’d think they were dancing in the streets. The foolishness of the SUV crowd and their Detroit enablers has been exposed with recent economic developments, what the greenies supposedly hated has been destroyed and with it the dinosaur companies who couldn’t “get it” in their opinion.
Ironically, the cars they’re driving if they were made in the USA at all, were probably made in a red state in a trans-plant. They hate those evil red state senators for short-selling the union blue-collar “working families” that make the stuff they refuse to buy. To engage in that political activism while refusing to spend your own money on one of those union-shop cars and not note the contradiction of your actions vs. your words boggles my mind. Anyone who advocates a bail-out for Detroit from the confines of their foreign car automatically has no credibility in my opinion.
What a joke.
http://emptywheel.firedoglake.com/2008/12/12/shutdown/
Note the amount of southern states that have factories in the shutdown. Survival, like payback, can be a bitch sometimes…
The sky is falling!
Clown Porn!
Rampaging Sploshers downtown!
French People; -fighting wars instead of surrendering, and, and; -attempting to play Rock Music!
Plushies NSFW-ing on the mildly-upscale shopping mall’s marble tilework!
Housepets driving Lamborghinis!
Turks going without deodorant!
Improv Everywhere standing still in Train Stations!
Members of the Clergy NSFW-ing … –things they’re not supposed to NSFW!
A Democrat. …
… -AS PRESIDENT!!!!!!!!!
Dogs and Cats living together! –Mass Hysteria!
If we could just round up Bill Murray, Bruce Willis and Will Smith, I know they could sort this thing out.
“he could cave in to rescue a severely tarnished reputation”
Bush’s reputation is hopelessly lost with the left. For the right, wouldn’t caving in tarnish his reputation even further? (Or does he think his reputation is improved by
taking taxpayer fundsincreasing taxpayer debt further by giving even more money to big business.)Who exactly is going to fund a bankruptcy for either Chrysler or GM or both with the credit market like it is? No one is going to give out that much money to keep the doors open at any of the big three right now, leading straight to liquidation. And if the government does it then its just the same as the bill that DIDN’T pass. The union has already made enough sacrifices on pay, its the pensions that are the issue and who has the money to take those over? It is very un-American of the GOP to have voted against the bill. We are the only government in the world that has cheap gas as an energy policy, unfair trade policies which aid foreign companies coming into the countries but not the companies already here and trying to compete both here and globally, and we are the only country that does not support out own industry. Japan has never allowed our automotive corporations into their country with any significant numbers in volume and their government has supported their automotive companies for years, along with currency manipulation. I don’t understand where giving money, what were to be LOANS, to our own corporations to keep them open and employing Americans and keeping OUR money here in OUR country became so wrong.
Everyone is cutting back this year:
http://omg.yahoo.com/news/miley-cyrus-gets-moms-old-porsche-for-16th-birthday/16475?nc
Mediocre is a perfect word. A bailout won’t change the fact that a majority of the vehilces the Big 3 make are considered mediocre. The pickups are okay, the cars make okay rental cars, the interiors are okay, etc etc etc. I can only imagine how many people will buy their mediocre vehicles if a bailout ensues…30% less than even currently? Like I said before, there are other car companies that have risen to challenges: Hyundai has completely changed in the last 10 years and Nissan has done the same over the last 4-5 years. The Big 3 simply cannot turn it around. The Japanese manufacturers came to our ‘house’ and made their manufacturing successful within our borders, with US supply base and workforce, while the storied Big 3 continue to pull themselves and everyone else into mediocrity every chance they get. Even today they are pointing fingers at Toyota and the other manufacturers located here….point the finger at yourself guys.
For the right, wouldn’t caving in tarnish his reputation even further?
Bush needs a reputation amongst people who have money (eg, not libertarians or greens). He’s got no chance at a speaking career–that much is obvious–the the only chance is directorship at some company that benefitted heavily from one or more of his policy decisions.
willman – thanks for the laugh
I think Bush will give them the money out of the TARP fund. I believe it will be just enough to get them to the end of January when Obama takes office.
I also think that the White House and the Republican Senators had a plan to try to force their version of the bill through. White House gave them the green light to swing for the fences. If it failed, which it did, then Bush would use the TARP funds. This way the Republican Senators can say they stood on their principals of fiscal conservatism.
With Bush leaving office he is the one who gave Detroit the money not the Republicans in congress. This way the Republicans in Congress had nothing to lose. They either came out with a bill they liked and knew if they did not get it that the White House was standing by to use the TARP. Either way Detroit was getting the bailout. That much was decided a few days ago.
I take no pleasure in the failure of all the people involved in the domestic-based auto industry. But there is nothing sacred about UAW contract terms. If the companies are failing and need new contract terms – why wait until the “end of the contract” (2011)? This is like the bailout containing “pork” – if it is truly an emergency then no “pork” should be necessary.
The broad spectrum of perspectives, many so ideologically twisted and ironic ones, over the imploding U.S. carmakers, is a delight to my intellect.
Chrysler and GM deserve to die. Neither have made a product I have desired for at least 25 years. They could not get my money the entrepreneurial way, so now they do it the socialist way, picking my pockets in the form of more government instituted debt/taxes.
What are the likelyhoods that they will make anyt desireable products in the future? Yup, sure, the whole of GM will be saved by one car model, the Volt! What future product will save Chrysler?
And it is so much fun to see Senators from transplant car maker states in the south, bashing unions while ignoring (”obscenely rich” was the term I heard often in the 60’s) ridiculously high pay for CEO”s.
You couldn’t make this stuff up, truth is stranger than fiction.
This is insane. GM and Ford need to file Chapter 11 and whittle down to do what they do best.
They do a few things very well. Full size pickup trucks, SUV’s, Corvette. We (the US), and the world, still needs those products where they make sense. Take what is left of your resources and go kick ass around the planet taking back the world ute market from Toyota.
I don’t think truck buyers will have any problem buying a top quality truck from a mean and lean auto maker who got rid of all their other distractions.
If all the necessary concessions from labor, bondholders, management and dealers were readily available, a compromise could well have been reached over the last few weeks.
With all due respect, I think that this misses the point. Particularly when we have the saga of the TARP vote as a good example of how politics work.
Corker stated that something about being “three words away from a deal” and “being close.” Clearly, he wants a deal. But he needs to put on a good show for his side and score points for his party.
So does Gettelfinger. If he is going to bring a haircut to his membership so soon after getting them to accept the last compromise contract that is supposed to be in effect until 2011, then he needs to fight a bit, lest he lose credibility with them. He has to consider the timing and manner of delivery of a deal to his constituents, too.
The Dems also have to walk a line. While they want a deal, they can’t be perceived as being too hostile to the union demands. They’ll have to gently nudge them.
All sides want a deal. But deals often take several rounds of haggling and push-pull before they come to fruition.
The deadlock was not shocking, given the circumstance. It was easy for them to do it, because they knew that Treasury and Bush could cool the jets of the markets with promises of TARP funds. (The GAO has already blessed the concept, which effectively paves the way to it.)
The mechanics may vary, but there will be a deal. The GOP leadership wants it, even if they don’t want the public taint of it on their hands. These guys on both sides of the aisle are masters at playing the voters, and they’ve played this one quite cleverly. Don’t fall for it for a second.
Since we have no voice anymore in this Country the only thing left is not buy from these Company’s,this will speed up what will happen anyway and maybe save the tax payer money in the end.Get the KY out this is going to hurt!
well said ed. i tend to agree with a few of the other posters — i believe detroit will get enough cash to stay in business (whatever that means to these floundering companies) one way or another.
but in terms of opinion, even with all their present employees; in what way is an industry constantly laying off high numbers of workers and getting spanked by the competition one that deserves to continue operating at subsistence level on our dime? i’m not a free market believer, or conservative, but i have heard enough of their crap in my life to at least ask that question (of course, it pales next to the banking fiasco…)
as Tony Soprano said to Paulie, “if it don’t work as a business, get rid of it.”
and to carnot, i don’t think that standing with organized labor on principle trumps purchasing quality goods for any consumer. if one chooses to buy a foreign car for reasons of efficiency, durability, etc. that is just a wise spending decision.
i wouldn’t know from shopping experience – i’ve only ever driven well-used cars and i don’t own one now – but i do know that few people have the financial luxury to always make purchases that reflect their beliefs about worker’s rights. if our lives are to be defined by our political stance on labor, then WHERE are we to buy ANYTHING manufactured under fair conditions in this import-only fucking feudal debtor state?
I’ve got the answer.
Fact: The US taxpayer should not be used to help GM, Ford and Chrysler. I don’t care that the banks got bailed out – two wrongs don’t make a right. Besides, it’s not looking as if the bank bailouts are working so well anyway.
Taxpayers earning $14.00 with modest benefits shouldn’t subsidize auto workers earning whatever it is that they make, including very, very nice benefits.
This seems to leave the Detroit three in the position of bankruptcy. Almost everybody loses big-time in bankruptcy. Especially the workers.
All nastiness and rudeness aside, I feel that GM, Ford and even Chrysler have some good product offerings. Under better circumstances I’d bet that GM and Ford could prosper.
They are paying too much for labor. This would include salary, benefits, jobs banks and work rules. They are saddled with too many dealers. They are saddled with too many brands. The problem is, that the US and state laws are such that it’s way too expensive for GM and Ford to rid themselves of the above problems. Yes, I understand that management got themselves into these obligations, but since they’re about to go kaput, blaming management presently, doesn’t seem to make much sense. It is, what it is. Deal with it.
Facing reality, wouldn’t it make more sense for Washington to quickly enact some special laws that allow GM, Ford and Chrysler to pare their dealer networks to a realistic number? Perhaps GM and Ford should be allowed to drop some brands without getting sued for billions? Perhaps they should be allowed to force changes onto their workers? I’m thinking of some compromise agreed upon by management, Washington and the UAW. I’m thinking of wages, benefits and work rules that are similar to the ones of Americans working for Nissan or Honda. Perhaps substantial changes have to be made re the heavy burden of the retirees. I think that as painful as this might be, the workers would still get a better deal than many, many fellow American workers presently enjoy. Besides, at the end of the day, all of the above will be much better for the workers than bankruptcy. Bankruptcy would make my scenario look like a walk in the park.
If GM could pare down to Chevrolet and Cadillac, and if they could work with a realistic amount of dealers, and if they could get their overall labor costs more in line with the transplants, GM should be able to prosper even if their market share falls to 15%. Ford without Mercury, could prosper with 10 or 12% market share. Heck, even Chrysler could prosper with a 7% market share. Honda and Nissan do rather well in America with modest market shares.
I repeat: As unfair and lousy as my scenario may be, it’s tremendously better than most any realistic alternative out there. I assume that very few people actually believe that 15 billion dollars is going to make any long term difference for the Detroit companies. Nobody believes that the UAW is going to arbitrarily to agree to work rule changes that are going to help productivity. The Detroit business model is broken. Washington loans with silly attachments aren’t going to change or fix the broken business model. Does anybody really believe that a Washington appointed auto czar is the answer? Bankruptcy might allow the needed changes to fix the broken business model, but that’s a pretty brutal way off fixing the problem.
Yep, my way’s the best way.
Pardon my poor grammar and punctuation. I barely scraped by grade twelve. Thank God for Spell Check.
Let the flaming begin.
Marry Christmas,
Shabster.
the only thing left is not buy from these Company’s
Haven’t we been doing that for the past 30+ years.
ferrarimanf355, production cuts at the relatively small number of GM factories in the South can be explained by product demand independent of any political consideration.
Totally wild speculation, but the Spring Hill, TN plant has value. It fits the pattern of locating an auto manufacturing plant in a rural area of a right-to-work state South of I-64 and East of the Mississippi. Easy to see Nissan being interested at the right price.
Excellent editorial.
As a lawyer with some bankruptcy experience in Silicon Valley, I am surprised by the idea people in Detroit and Washington DC have that bankruptcy is some kind of death blow. It’s not. The government has set up chapter 11 bankruptcy for exactly the type of situation the carmakers find themselves in. The process has been refined over the years, and it works fairly well.
The idea that Congress should set up what amounts to a special bankruptcy procedure for the carmakers makes no sense. Mixing politics and industrial policy is a recipe for disaster. If the carmakers can be saved, following the bankruptcy recipe is the only real choice we have.
Payback is a bitch. The Republicans are pissed the autoworkers didn’t vote for them so they are going to take their bailout and go home like the spoiled brats they are. Lets not lose sight of the fact that foreign automakers are in the Republican states so Detroit failure works in favor of these States. The people who voted against the bailout are the same people who supported $millions in incentives for off-shores to locate in their states, seems like a double standard to me. We shouldn’t be surprised though because Congress is the best government (lobby)money can buy. If the hourly wages are only 10% of the cost where is the other 90%. C11 will not be an orderly affair. There will be a major disruption of the markets and massive unemployment that will effect most of North America. Those people who think a failure of the Detroit 3 does not effect them will be in for a rude awakening. Something that hasn’t been discussed enough is what impact the loss of 40%+ of auto production will have on the cost of vehicles from the suppliers that remain.
losthope and pch101 may well be right. I don’t know why Bush would make a public statement unless he were really considering it. Wouldn’t be the first time the man confused me though.
As for the union-senate class war kabuki, clearly either side could have made a deal happen. And the UAW is the side asking for the money, leading me to believe that they have more at stake than the Senators. And Gettelfinger’s claim of unfair treatment strikes me as a red herring. Bondholders aren’t going to have a date positive for taking that haircut? Dealers will get to choose when they are starved of product or otherwise killed off? Management will get a czarist disfunctionectomy but not until 2011? The Union versus Senator imagery does play well for his base though. Shrinking as it is.
Back in the real world, making the two-tier concession in ‘07 was an admission that survival meant changing. Well, there they are again, staring at the precipice. In the scenarios they are peddling, everyone gets fired if one OEM goes down. So man up and enter the 21st century, by helping your employer do the same. Check out what they pay unionized caregivers, and countless other valuable, demanding jobs across America. Check out what they pay at transplants. In fact, just look at job markets across America. Now ask yourself how badly you want to see your employers become viable again. And how awesome is it that you even have an opportunity to revive said undeserving employers courtesy of the American taxpayer?
Pretty awesome. I’d take the deal.
And the UAW is the side asking for the money, leading me to believe that they have more at stake than the Senators. And Gettelfinger’s claim of unfair treatment strikes me as a red herring.
Gettelfinger has to save face. He has to do combat before his troops will award him the medal. If he just caved immediately, they would tell him to take a hike.
The union membership has to feel that their backs are truly up against the wall. That process takes time.
I would also not be confident that the bondholders would go away for 30 cents. This whole process gives them an incredible amount of leverage; after all, it has become a matter of public record that much of the future rests on them.
By talking about paying them 30 cents, we are setting ourselves up for paying a lot more. Since they can probably kill a Chapter 11 filing and turn it into 7 if they fail to support the reorganization, they have more leverage than anyone, including the government.
It sounds like wonderful theory, but in practice, this empowerment of the secured lenders was a very bad idea. The price of this deal just went up, thanks to the Republicans insisting on it. Bad tactics, but hey, it’s not their money.
Edward Niedermeyer you say check out the pay for caregivers well check out how much work they do in an hour. Anyone out there worked in a car plant in the last 5 years. Hourly assy line workers in GM have to work for an average of 55 minutes in each hour. They don’t have the luxury of taking a break when they want because the jobs keep coming down the assy line one after the other. Can any of us honestly say we work for 55 minutes out of every hour while we are at work?
America’s working poor has suffered economically from the HUGE number of illegal entrants these past twenty years.
I felt the agony as wages stagnated, declined in some areas, and rents rose as the demand for affordable housing by MILLIONS of illegals drove me and others out our apartments… reduced to living out of a car even though working full-time.
Existing laws held the answer to our problem but the feds 9and other levels of government)chose to not enforce those laws and allowed the “undesirables” within the working-poor socio-economic group of citizens to suffer.
Of course the working-poor can not afford lobbyists, campaign contributions or offer wondrous jobs to politicians departing office or to their families.
Do not expect much, if any, compassion to the auto makers or the unions from my class of Americans.
From one who has performed the jobs that Americans supposedly will not do; from getting the food from the fields to your tables, building the nation’s infrastructure, transporting the goods from warehose to store, etc. at wages that never allowed the amassing of capital, never paid enough to even consider purchasing the most menial shanty and with nary a benefit such as heath insurance or pension AND, when performing agricultural work not even receiving over-time pay until more than 60 hours of work was performed per week…
part of me hopes the recession continues so that millions of Americans enter the ranks of the working-poor and experience what a large silent seldom-heard minority have experienced for far too long.
From my viewpoint ALL bailouts are merely hand-outs by an elite class to assist their fellow elites.
There are Americans living closer to a 2nd-world lifestyle than what the non-working-poor can imagine.
If our ranks grow large enough perhaps we can garner enough power to right some of the wrongs that research into economic history of the past 40 years reveals.
Just read the Financial Times commentary “Chapter 11 is the right road for US carmakers” by Nobel Prize-winning economist Joseph Stiglitz. Sounds a lot like what TTAC has been saying.
The following is part of an email originating from Detroit Regional Chamber, asking everyone to contact Bush, Paulson, and Bernanke to urge them to “act”:
Imagine a category five natural disaster hits your home state and the government tells FEMA not to come. That is the equivalent of what happened to Michigan last night,” said one chamber member this morning. We couldn’t have said it better ourselves, except it’s not just about Michigan. It’s about the whole country.
That did it for me. Imagine: FEMA in charge of the Big 3 recovery. Based on their stellar record in Mississippi and Louisiana, I am now fully confident that our domestic auto industry will be in good hands under public oversight. A 180-degree change in opinion for me!!!!
Ron G. needs a pink slip as much as Rick W. I would hold any funds hostage to their immediate resignation. If not, then ok the $14b as a tourniquet to stop the bleeding and hand it off to Obama, who has a better chance w/labor than Bush
Sen. Shelby is a hypocrite.
@unseensightz
I believe it’s correct to say both sides of the aisles have said they realize they would be the provider of the Debtor In Possession loan for Ch11, or at least guarantee it via one of the larger banks. I believe the comment from Chris Dodd was “we really don’t have the necessary experience to run a loan of that size, and it might be worth having a professional company run it for us.” (Or words to that effect).
So while the credit market might be closed for GM directly for a Ch11 DIP request, the government has said they’d ensure that it was available.
@tesla deathwatcher: +1
People should view real-life bankruptcy as less like its counterpart in “Monopoly” version and more like its counterpart in “Wheel of Fortune.” (In the former it’s game over; in the latter, you have a chance to get back in it and solve the puzzle.)
Hello?
Hello Ron, this is Rick Wagoner. I want to talk to you about your contract.
You mean you want to reopen it?
Yes.
No.
That’s it?
That’s it.
But Ron. We, uh, well, the truth is we can’t afford to pay you guys anymore.
We’re not making any more concessions.
No. You don’t understand Ron. We can’t afford to pay you anything.
Sure you can.
No we can’t.
Sure you can.
No we can’t.
Was there anything else?
Listen Ron, I’m serious. We’re out of money.
You’ve been out of money for years.
That’s true. But this time I mean it. We’re broke.
Borrow some money.
We’d love to Ron. Really we would. But no one’s lending money right now.
And this is my problem because…?
Because we don’t have any money.
Sure you do.
No we don’t.
Sure you do.
Ron. We’ve asked the federal government for money.
See? I knew you could do it.
They turned us down.
Bastards.
They turned us down because you wouldn’t make any concessions.
I already told you. We’re out of the concession business.
And we’re out of business Ron. No joke. You’ve got to share the pain here. You’ve got to work for less money.
But I thought you didn’t have any money.
We don’t. But we will if you work for less money.
So the less money we make the more money you get?
I wouldn’t put it that way.
How would you put it?
I’d say working together we can both get someone else to pay the bills.
How much?
How much what?
How much money can you get us?
I can get enough to pay your contract.
And?
And what?
Exactly.
Are you asking for more money?
Yes.
I don’t think that’s going to fly. I really don’t.
Did you ask?
Are you asking if I asked the federal government to increase your wages and benefits?
Yes.
No.
Then we have nothing to talk about.
That’s absurd.
Rick. Listen to me. You don’t know anything about negotiating.
I don’t?
No. Trust me. You don’t. You don’t start by asking for less money. You ask for more, THEN you ask for less.
Oh.
When you came back to Congress and raised your bailout request from 25 to 34 bil, that was a mistake.
You know about that?
Everybody knows about that. You looked like a jerk. You got it backwards.
I did?
Yes. Now I want you to go tell the President you want more money.
How much?
Doesn’t matter. Pick a number. Just make sure the feds can’t pay it. Then tell George you’ll settle for less. Just make sure less is more than you actually need.
L-E-S-S. Got it. How much do I need Ron?
Jesus. If you don’t know… Lots. I dunno. 60 bil.
That ought to do it until we finish the turnaround.
Turnaround. Riiiiiight. Anyway, sort that out. Then give me a call.
Ron?
Yes Rick?
What if it doesn’t work?
Threaten him.
You mean his family?
No. Sort of. Listen, I’ll shoot you a quick email.
Thanks.
Don’t blow this, Rick. My guys are counting on you.
They are.
Of course they are. You’re the man.
That’s right. I’m the man.
Say it like you mean it.
I’M THE MAN.
That’s right. You’re the man.
I’M THE MAN.
Putz.
What’s that?
Lutz. Make sure you put a muzzle on Lutz.
K. Goodnight Ron.
‘Night Rick.
Just a couple of thoughts. . .
There don’t need to be any “special” laws for the big3, they need to play by the same rules as everyone else who files CH11.
To enact special laws would just increase legal fees, resulting lawsuits and delay any real change while the legalities are worked out in court.
CH11 is designed for this type of case and the rules are well known by all sides especially the financial obligations and rights associated.
The “payday loan” bill didn’t pass because everyone knows it’s just a waste of money. It will NOT save the industry, it just puts a 60 day band-aid on the problem and adds this stupid idea of a Car Czar to the mix.
@RF
Crikey! Are you moonlighting for SNL? You should be!
I think I need a moment.
“Sen. Shelby is a hypocrite.”
Maybe we can get Senator Dodd to change his name to Senator Trabant….How fitting.
The UAW should consider playing a card the NASCAR set can understand.
A football game for the bailout bucks. Yeah, how about the University of Michigan vs. University of Georgia, …..
… oh, wait ……..
@1996MEdition: Sure! -Cheers.
It’s Official!
The GOP-Senate opposition to the Detroit bailout is about union-busting.
“This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.”
From:
http://thenewshole.msnbc.msn.com/archive/2008/12/12/1713569.aspx
Anyone who advocates a bail-out for Detroit from the confines of their foreign car automatically has no credibility in my opinion.
On this, we agree. That’s why there are two D3 US-built products in my garage, in coastal California. A bailout works if Americans put their purchasing dollars in the game.
Meanwhile, $14b could do plenty of good mitigating the pain of a weak economy for all Americans, rather than for only the most shrill. If Detroit goes down, we can survive.
The last sentence completely misses the point, but then those who live by ideology alone usually do. Of course we’d survive a D2/D3 BK. The question is what condition is the patient — the United States — left in? $14B isn’t very much money in macro 2008 terms. It wouldn’t even pay for Boston’s Big Dig, for example. There are very few projects we could undertake for a mere $14B that can drive the economic leverage this bridge can, particularly if it accelerates the usual glacial pace of change in these huge companies, and leads to a sensible second dip that finances sustainability.
The Republicans who led opposition to this deal should be ashamed of themselves, for they could have used their influence to stem further erosion of confidence while driving for more accountability on the part of the recipients. They also could have policed the irrelevant and budget-bloating riders. The Democrats’ instincts to step in are correct for the situation at hand, but their impulse to stipulate products and meaningless business practices like not leasing corporate jets (of course these companies need corporate jets!) is not.
The Republican leadership had a chance to sit with Pelosi and say “we know we need a bill here, but we want a responsible one we can both take to the country as a show of unity to calm markets and demonstrate we’ll be working together next year.”
But no. They had to choose the divisive, obstructionist approach. Of course we’re also missing the pressure of a strong President with legislative chops. (Where’s Lyndon Johnson when we need him?) It would have been so much easier to back the UAW into a corner for 2009 pay cuts if Ron G. had understood that his Democrat friends were in agreement with the Republicans on the requirement. Now, surely Pelosi failed her own leadership test too, in ways that are less obvious or less transparently reported.
The $14B will flow, either from TARP or a revived effort in Congress. The market purists might grind their teeth, but I think the federal government now understands, on both sides of the aisle, that governmental liabilities will be larger (not to mention the social erosion) if the precipitous destruction of the D3, with their amplified effects in the economy, is allowed to proceed. More pragmatism, folks; less ideology.
Phil
@ Phil Ressler
It’s not just a matter of $14b today, but the commitments required to arrive March 31st “on budget”.
If I understand Corker correctly, he was direct in the hearing before the Committee, even before the “divisive, obstructionist approach” of the vote that night, that if the bailout process starts without the necessary commitments given (UAW, bondholders etc) there’s opportunity for obstruction all the way to March 31st.
This, I thought, was neatly summed up by Richard Tilton a few days ago in how a 100 day Pre-pack Ch11 might work on this site.
Where do you target your Macro effort for the best effect? Plenty have argued that sending it down the Detroit sink hole won’t be a valuable start. No-one is buying cars, especially theirs.
Without a auto industry can America even claim to be a superpower. Even the French have their own auto industry.
I’m politically right of center, think the “card check” legislation is inviting intimidation, but it would almost be worth it to see the look on all those Southern Republican faces as Toyota, Mercedes, Honda, Hyundai and VW facilities across the south turn into UAW shops.
Big Dick, Shelby should enjoy his victory while he can because come Jan. 21, 2009 “right to work” will be a memory in the South.
@ Ronnie
But wasn’t Mr Gettelfinger just explaining that the UAW are already at $28/hr where-as Toyota etc are at $30/hr? Why would you vote to be unionized? VW would be happy to move back to Mexico I guess, home of the Beetle!
@ PeteMoran:
The 100 day pre-pack C11 strikes me as a fantasy. A legal artifice that is easily outlined in the abstract but unobtainable in the daily realm. So I pay no attention to it. No doubt the $14B deal involves some slop through March 31st. No kidding. It’s an emergency measure needed primarily because the can has been kicked down the street by everyone involved for several years now.
Where do you target your Macro effort for the best effect? Plenty have argued that sending it down the Detroit sink hole won’t be a valuable start. No-one is buying cars, especially theirs.
Ten to twelve million people buying new cars this year is hardly “no one.” The sheer size of the D3’s fully-scoped, amplified presence in our economy makes any effort to fund their transition a macro effort. Plenty might have argued that the D3 are a sinkhole, but that doesn’t make them correct. I’m unmoved by the numbers of people piling on that argument. Even in a depressed vehicle buying year, the D3 will sell just under half the vehicles sold, and the Ford F150 will likely once again be the #1 seller. “No one is buying cars” is a market problem in part caused by banks choking off credit despite receipt of massive federal funds, and low consumer confidence in their own ability to pay going forward. There *will* be a rebound of demand. Two or three of the Detroit companies can find a road back, but they have to live through this meltdown of credit and demand to have a chance. The D3 aid package is the macro iniiative of our time, its value outleveraging the banks’ for much less money.
The American consumer has to at some point put their own money in the game to close the circle.
Phil