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RE: Obama asks Bush to provide help for automakers - International Herald Tribune

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RE: Obama asks Bush to provide help for automakers - International Herald Tribune
by flynn23 at 7:14 pm EST, Nov 21, 2008

Mike the Usurper wrote:

janelane wrote:

SAY NO! to a bailout of the automakers.

Here, here! Online petitions are getting a slow start, so email your reps directly.

Senator Chambliss contact form
Senator Isakson contact form
District 6 Representative Tom Price contact form

Granted, these guys are all Republicans from GA, so accordingly they only sponsor bullshit legislation, but its worth emailing them anyway. My email text is below.

Dear So-and-so,

Please vote against the bailout of the US automakers. They have been operating inefficiently for 30 years and are finally being brought to bear. They need to file for bankruptcy, purge their management pool, eradicate the bloated unions, and streamline their operations, all of which they can do probably quite successfully without my tax money. They need bankruptcy to encourage them to finally innovate and quit lobbying against every major safety and fuel efficiency advance in this country. They’re already making efficient cars, they’re just not selling them here!

This is capitalism, and this is what companies do in this country, they don't fly to DC and beg for alms. It’s a waste of money in an already wasteful government and will only prolong the inevitable since the companies will have absolutely no impetus to avoid future bailouts. Also, I reject the notion that Detroit workers are worth more than other workers at other companies. This will only snowball into a feeding frenzy among failing companies. In this economy, we need to encourage strong, viable companies, not propped up puppet-companies.

Regards, your-name-here.

-janelane

Update: Chambliss speaks!

Dear Mrs. Hoffman :

Thank you for contacting me regarding a financial rescue of the automakers. It is good to hear from you.

The automobile industry has deep seated problems that cannot only be solved by more money. Instead, a restructuring of the industry is needed. I am not in favor of using taxpayer funds to bailout the industry.

Okay, while I am not in favor of this especially, these specific sets of bastards are pulling something truly despicable. Chambliss, and if you really want a name, Dick Shelby of Alabama, are pulling this crap for two reasons. One it helps the Honda, Toyota, Daimler and Nissan plants in their home states. Two, it does everything it can to burn and bury the UAW. They could care less about GM, Ford and Chrysler (way to support national security and domestic companies guys).

To throw a little history into the mix, when Chrysler was in serious trouble in the early 80's, people stopped buying them. Completely. This isn't like an airline going belly up and people just get their ticket on some other airline, people have cars for years, and if the manufacturer croaks, so do minor other things like I don't know, spare parts dealers and manufacturers. Great, you have a nice new Chevy, getting parts for it just turned into an exercise in futility, like trying to find parts for a Packard, Hudson or Studebaker.

Talk about chopping off your nose to spite your face. While I fully agree that there are a TON of stupid things being done in Detroit, the second GM files for Chapter 11, Chapter 7 will be hit within six months, and between 2.5 and 3 MILLION people will be looking for new jobs, from line workers to mechanics. That's a big enough number that we'll be on our way to a full blown rerun of the 30's. That's no way to run a country. Put the screws to these idiots (yes, they need to be able to show a plan for what they're planning to do before we hand over the money) but watching them go belly up will throw the already bad economy into a place it has not been in our lifetimes.

I want to echo this. And I'll disclose my bias as well. I'm the first male in my family to not work for a Big 3. My father has 35 years in at GM and, while eligible to retire 5 years ago, can't because his pension and 401k are underfunded. And that was before he saw it melt over the last 100 days. To add to it, most of my family is employed either directly or indirectly by the domestic automotive supply chain. If you want to see the smoking crater that leads to a massive nuclear winter, this is it. You cannot just let these guys go belly up. It would be catastrophic, very much like the aftershock from a nuclear bomb is what does most of the structural damage after the first blast.

Granted, the Big 3 have big problems in the way they handle their business, but you have to look at this in context. This is not 1979. All 3 have made impressive strides in terms of quality, marketing, product development, and supply chain. Toyota got to where it's at by chasing GM et all, not by doing things all that differently. That's not to say there can't be more improvement, but a lot of that was unable to be executed on because of the root problem, which is health care costs for retirees and the last vestiges of a unionized culture that is all but gone from the ranks.

Today's auto worker is not the same as my Dad's generation. And the UAW is not the same as it was in 1981.

The best proposal I've seen is to use the government bailout money to fund the retirees health care plan, which is being spun out under a separate trust for the UAW. Essentially merge this with Medicare into its own trust. This will unburden the companies and get that albatross off their balance sheets. They'll still have financial problems, but hole in their head which makes any kind of surgery moot will have been removed. You would then be able to allow the execs at these companies to tackle their liquidity and capital problems with a much smaller number, execute on bringing products to market, and keep the engine humming. It will be a lot smaller number (for direct capital infusion, not total price tag) and if they can't execute, then yes, they should go BK.

If you did this, worst case scenario is the BK's, but those factories will go right back into production with a lot let detritus to worry about. GM still sells more products than any other automaker. Period. BUT you won't have the cataclysmic effect of destroying 500K retiree's lives, and rendering ALL 3M of the industry's dependents into unemployment. Yes, salaries will go down, and not all 3M will return to work, but the industry will emerge MUCH much stronger and more profitable. Once and for a long time.

Bailing out the industry as a whole without this approach, just keeps the patient dead on the table longer while you delude yourself into "saving" them.

RE: Obama asks Bush to provide help for automakers - International Herald Tribune


 
 
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