How bad is the economy?

[coog]

With the economy being the way that it is, what does everyone think about Congress bailing out the auto industry? Aint trying to start a political thread here, just curious what everyone thinks.
Me?In a real mix up on this one.Bail em out, maybe save a whole industry and a whole lot of jobs along with it.Dont bail em out, teach big corporation something about responsilblity.
Dunno myself. glad I dont have to make that decision.

Easy.No amount of your money will be able to bail them out.CAFE standards, over-generous pensions, sky-rocketing medical costs have doomed the Big Three.That $25 billion would disappear in no time flat, without tangible results.They need to go through bankruptcy to shed some of these obligations and then congress needs to let them build the cars that people want, not that the Greenies want them to build.Foreign car companies building their cars here are doing it profitably, so at least there is a model for the Three to follow.

 

[Poley4]

When does no money keep you from buying a new saw?

Well, some of are married and have a family. As much as I like saws, there are more important things.







Just don't ask me to name any!

 

[Kennygee]

Cad

I think I have full blown CAD now Just got THE CALL I will be getting up at 5:00 am to drive 100mi one way to buy a $40.00 saw. Got to hope it is the right one , got to make up some of that 1 billon

 

[Woodie]

They need to go through bankruptcy to shed some of these obligations

No such thing as a bankrupt automaker. Can't be done. Why wouldn't GM have already done it otherwise? Or Chrysler?

Who here on this board would spend $30,000 (or more) on a piece of very complex machinery, one with thousands of moving parts, kept in motion by millions of lines of computer code, from a company that is bankrupt, and may not be around to support the vehicle in six months time? Now let's add to that scenario...this machine in question is vital to your day-to-day life, and if inoperable for even a short period of time, throws your lifestyle into turmoil?

The anwer is...no one. Any Chapter 11 would immediately be converted to a Chapter 7 liquidation. No revenues---no chance of recovering.

So you folks that own Chevy pickups (lock-washers or not, Ultra...), think real hard about how you feel about the situation. If you don't want to be parting out your vehicle on eBay, that is.

And owners of Ford and Dogde pickups...think real hard too, because a GM bankruptcy will destroy the supply base, almost all of which are shared by other OEMs. Chrysler would fold within weeks, Ford might take several months longer. Those in the market for a new vehicle...Toyota and Honda will be pleased to supply you with one. Ooops...Toyota and Nissan only make half-tons, so that's out. Don't need a truck? They'll be pleased to supply you with a sedan. Of course, we just took out 50% of the supply base, so the laws of supply and demand being what they are...let's just say you'll drive off that dealer's lot feeling like you just got :censored:ed by a train.

Now we've just added another 3 million people to the unemployment and welfare lines. So those folks are going to be buying :censored:all from the companies the rest of you work for...and so on...and so on....and so on...

Don't get me wrong...I don't think these loans are a great idea myself. But I also know they're the only idea we've got.

Note: For those who don't already know--I'm a Ford salaried worker.



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[Metals406]

No such thing as a bankrupt automaker. Can't be done. Why wouldn't GM have already done it otherwise? Or Chrysler?

Who here on this board would spend $30,000 (or more) on a piece of very complex machinery, one with thousands of moving parts, kept in motion by millions of lines of computer code, from a company that is bankrupt, and may not be around to support the vehicle in six months time? Now let's add to that scenario...this machine in question is vital to your day-to-day life, and if inoperable for even a short period of time, throws your lifestyle into turmoil?

The anwer is...no one. Any Chapter 11 would immediately be converted to a Chapter 7 liquidation. No revenues---no chance of recovering.

So you folks that own Chevy pickups (lock-washers or not, Ultra...), think real hard about how you feel about the situation. If you don't want to be parting out your vehicle on eBay, that is.

And owners of Ford and Dogde pickups...think real hard too, because a GM bankruptcy will destroy the supply base, almost all of which are shared by other OEMs. Chrysler would fold within weeks, Ford might take several months longer. Those in the market for a new vehicle...Toyota and Honda will be pleased to supply you with one. Ooops...Toyota and Nissan only make half-tons, so that's out. Don't need a truck? They'll be pleased to supply you with a sedan. Of course, we just took out 50% of the supply base, so the laws of supply and demand being what they are...let's just say you'll drive off that dealer's lot feeling like you just got :censored:ed by a train.

Now we've just added another 3 million people to the unemployment and welfare lines. So those folks are going to be buying :censored:all from the companies the rest of you work for...and so on...and so on....and so on...

Don't get me wrong...I don't think these loans are a great idea myself. But I also know they're the only idea we've got.

Note: For those who don't already know--I'm a Ford salaried worker.



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The Big three can save themselves... They just need to shed themselves of the fat, bloated Unions. Put a salary cap on every employee, at every level of the companies... Wanna have a job still? Then every employee makes $30,000 for the next two years, no benefits.

Lots of folks living in America on those wages. Why should the Government shell out more taxpayer money (that it doesn't have anyway) for companies that have bad business practices?

Cut the fat from inside... Then come beg for a handout.

There are a lot of construction companies going under nationwide... Thousands of people out of work... Where's their Bailout?

 

[Woodie]

They just need to shed themselves of the fat, bloated Unions.

You do realize, don't you, that that would be against the law, right?

Starting to see where this is going?




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[coog]

I understand this is personal for you, but surely you must see that a special case cannot be carved out for the auto industry alone.We already have every big spending city,county and state demanding relief, as well as the banking and insurance industries.The President and Congress have continued the foolish policy of choosing winners and losers, but it needs to stop.The market works only if we let it work, painful as it may be.I'm not sure I buy the argument that "people won't buy" from a company undergoing bankruptcy.I think they will, if it is the best product at the best price.Government intervention got the industry where it is today...why would you trust them to solve their problems?

 

[Woodie]

I understand this is personal for you, but surely you must see that a special case cannot be carved out for the auto industry alone.We already have every big spending city,county and state demanding relief, as well as the banking and insurance industries.The President and Congress have continued the foolish policy of choosing winners and losers, but it needs to stop.The market works only if we let it work, painful as it may be.I'm not sure I buy the argument that "people won't buy" from a company undergoing bankruptcy.I think they will, if it is the best product at the best price.Government intervention got the industry where it is today...why would you trust them to solve their problems?

Here's the thing...I certainly won't claim to be unbiased. But it's less personal than you think, because I'm about 90% sure I'm in the next round of 10% we've already announced are going to be cut by January 31. So I'm likely gone, loans or no loans.

And I agree with a great deal of your theory. In general, government needs to stay out of the markets. And under normal circumstances, I would be opppsed to these types of loans. So if one of the Big Three were teetering during an economy that was not in a deep recession, I would say yes, let it go. Take the excess capacity out of the system.

But right now, we're mired in a recession, and two of the three are headed over a cliff, which will pull the third one down with it. The failure of the Three would put this country into a depression we would not emerge from for years.

Principles are great, but the economic jolt caused by taking out 50% of the auto market would be catastrophic.


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[Taxmantoo]

I'm wondering if BK might be the best thing for the future of the automakers, if not for their employees, shareholders, and suppliers. All the legacy costs from the idiotic policy of paying today's expenses with tomorrow's profits would be gone, and they could compete on an even footing with the imports.

The good news for the retirees is that a GM bankruptcy won't affect their health benefits now that the UAW took that over. The PBGC would take over the cash pensions, but they don't cover health insurance.

 

[lab-rat]

Good stuff

I wish the best for all. With that said, what I am impressed with is everybody knowldge on the economy!!! This is good everyone should speak up -dave-

 

[coog]

I hope the best for you.My family pulled up stakes three years ago for a job opportunity 750 miles away and it turned out to be the best thing that could have happened for us.
As to the effectiveness of a bailout, look what $1 trillion has done for the banking industry.The sooner the American people see that we are responsible for our own lives and that the government efforts to turn us into needy infants can only lead to a bad outcome, and frankly, if we are headed to another Depression, it is too late to stop it.

 

[Metals406]

You do realize, don't you, that that would be against the law, right?

Starting to see where this is going?

I understand that there are bureaucracies, and powers that be, that would make cutting the Unions out of the picture an impossibility... And I was speaking from an idealist standpoint.

But lets get to the facts--Unions' have gone from groups of employees banding together, to make a safe work environment, and a fair days pay... To a bloated conglomeration, that takes advantage of it's position, to squeeze the employer into ridiculous wages, ridiculous retirement, ridiculous paid vacation, etcetera.

When I operated my welding shop, the shop charged $70.00 an hour for services rendered. I couldn't even keep up with overhead at that price!!

So you get these Unions demanding $75 dollars per man hour, for a 25 dollar an hour job... And you don't think the companies overhead, and what they are forced to charge for their product will be askew? Then you have the CEOs' making asinine amounts of money for a salary... And is it any wonder a new truck costs 50 thousand dollars?

My whole point is: You wanna keep working? You have to manufacture lean. You're in the industry, I know you've been reading as much as I have about lean manufacturing practices, in order to cut overhead. Another way to stay lean, is to take a paycut... I've done it.

1) Paycut--still have a job

2) No paycut--beg congress to appropriate money that doesn't belong to them, so you can keep the fat salary and benefits going, at who's expense?

Our mills are going to shut down here bro... Not just a couple jobs are gonna go by-by... It will effect an area locally the size of the State of Maine... Where's our bailout?

There's never an excuse to steal from people... No matter what guise the theft is wrapped in.

 

[ropensaddle]

I really don't know whether the bailout system is going to work.
I genuinely feel for people like woody and the many other at risk employees and their families. If the bailouts were to go toward them or ordinary Americans ,I would probably feel much better about them. The problem is imo, the upper management in our fine country is screwing the pooch. They make too much for ruining the profits of major corporations by their greedy self absorbed behaviors. I almost bet somewhere in the company there is an employee that has many years with the company that could manage it way better than any friggin CEO. C = criminal E= enterprise O = organizer that is my honest opinion of all today's economy problems.

 

[lab-rat]

This is what I'm getting at! Those on Capital Hill don't think we understand what's going on with the economy. We will survive and grow and will come out smarter and stronger KEEP ON SAWING -dave-

 

[Woodie]

My point about the loans (and keep in mind folks...the industry will pay interest on these, albeit at less-than-market rates) is that, without them, it's not just the auto industry that's going to be affected. The liquidation of the Big Three at substantially the same time will take a dump so large on the American economy that it will cripple everyone for years. So if you think unemployment is bad now, wait'll that turd splashes down...

Economic theory is one thing, and you're talking to someone who reads Adam Smith for fun! (Kill me now...) But sometimes principles have to yield to realities, and I believe this is one of those times.

Best bet...GM gets the cash it needs to get over this hump, and limps along, all the while paying it back...until the economy recovers. At that time, either GM can bounce back on its own, or an orderly sale to another company can take place.




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[lab-rat]

:agree2:

My point about the loans (and keep in mind folks...the industry will pay interest on these, albeit at less-than-market rates) is that, without them, it's not just the auto industry that's going to be affected. The liquidation of the Big Three at substantially the same time will take a dump so large on the American economy that it will cripple everyone for years. So if you think unemployment is bad now, wait'll that turd splashes down...

Economic theory is one thing, and you're talking to someone who reads Adam Smith for fun! (Kill me now...) But sometimes principles have to yield to realities, and I believe this is one of those times.

Best bet...GM gets the cash it needs to get over this hump, and limps along, all the while paying it back...until the economy recovers. At that time, either GM can bounce back on its own, or an orderly sale to another company can take place.




.

Good call

 

[Lakeside53]

Hmmm.... Just to stir things up... Private and public companies are dieing...

How about sheding 25% of federal employees... and a cut in their pension/benefits? I bet if the Post Office costs go up, we'll just see another increase. Why should Federal employees be exempt from pain?

 

[lab-rat]

Hmmm.... Just to stir things up... Private and public companies are dieing...

How about sheding 25% of federal employees... and a cut in their pension/benefits? I bet if the Post Office costs go up, we'll just see another increase. Why should Federal employees be exempt from pain?

I don't know that they should be, any cut or loss of jobs is not good !!!!opcorn:

 

[Lakeside53]

I don't know that they should be, any cut or loss of jobs is not good !!!!opcorn:

O.K. then then they should hire any unemployed (with full benefits) to sweep leaves and polish the sidewalksopcorn:

 

[lab-rat]

O.K. then then they should hire any unemployed (with full benefits) to sweep leaves and polish the sidewalksopcorn:

Good point unless you work for Govt. oops did I just say thatopcorn: -dave-