Bailout Watch 250: Sound and Fury

bailout watch 250 sound and fury

This is the week that the CEOs of Chrysler, Ford and GM make their second attempt at securing enough bailout bucks to stave-off bankruptcy (Ford not-so-much, but since you’re offering…). As is the way of such things, the serious “negotiations” is already going down, as politicians and supplicants prepare to posture for public presentation. Automotive News [sub] reports that Republicans have decided to focus their hypocritical ire (imagine a politician chastising an automaker for not balancing their budget) on the United Auto Workers’ (UAW) Jobs Bank. “The Jobs Bank requires the Detroit 3 to pay nearly full wages to hourly workers who have been laid off. Although the number of workers in the Jobs Bank has dwindled, the concept has become a powerful symbol of auto industry excess. General Motors is likely to propose its elimination, says a source familiar with the company’s thinking. Last week Bond did not spell out precisely which concessions he expects from the UAW. But during the congressional debates, many GOP lawmakers singled out the Jobs Bank as a wasteful Detroit 3 practice.”

Don’t be fooled by the pro’s prose. Either GM’s already cut a deal with the UAW to kill the Job’s Bank, or it hasn’t. And if it has, you can bet the UAW didn’t ask for something in return– something which will NOT be the subject of public debate or disclosure (the joys of having a public turnaround plan and private for-pols-eyes only plan).

“The enormous costs in union-required benefits are unsustainable,” said Sen. Elizabeth Dole, R-N.C. “Renegotiating these contracts would be essential if there were to be hope of keeping these companies afloat.”

What’s the bet the automakers’ suits will throw the UAW’s recent “historic accord” (Daniel Howes) under the proverbial bus? And why not? As many TTAC commentators have pointed-out, the UAW’s compensation is hardly the central reason for The Big 2.8’s slide into bankruptcy. But it’s a lot better for the D2.8’s chiefs if Congress focuses on the union– rather than the CEO’s epic mismanagement on the branding, product development, manufacturing, planning and marketing fronts.

In fact, Jet-gate may set the template: a class war between the haves and the have-mores, with a sideshow of SUV bashing. Politics. You gotta love it.

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  • Dave M. I will say this generation styling has grown on me; previously I thought the Fiat version was far better looking. Miatas have always been pure joy to drive.
  • Kendahl A Tesla feature has been free, periodic, over-the-air, software updates that add new features or improve existing ones. Owners brag that their x-year-old car is better today, because of the updates, than it was brand new. Will Tesla start charging for these updates after a few years? Teslas hold their value very well. I suspect losing free updates will do serious damage to that.
  • BklynPete When I was a kid, the joke about Nissan choosing the name Datsun goes like this:Nissan execs were uncomfortable with the World War 2 connotations of their name in the North American market. Seeing how successful VW was over here, they went to VW's most-recent German ad agency. The Japanese told the Germans they needed a new name. The Germans agreed. They asked the Nissan execs when they wanted a review of potential names. The execs said two weeks. The German ad people said, "dat soon?"I will be crucified.
  • Kendahl Modern cars are better mechanically in every way compared to cars from the 1960s. But, and my age is probably showing here, the older ones are prettier.
  • Master Baiter I like the references to Red Barchetta. My fun car is a spiritual cousin to this Miata: 2001 BMW M Roadster--green with tan leather; five speed.