The Big 3 - Bail out or Bust

[Christopher]

Sadly, I must say bust. Thanks for the posting, BN1 - what a read that was!

I bought my first car in '86 ('73 Plymouth Satellite) for $1,000 cash, from a private seller; coming from a "Chrysler" family, whose cars were the object of both rust and repair, I was too pragmatic to further the family trend of waste and ignorance, so I bought a 1984 Honda Accord hatchback for $2400 in '89. I drove it for a couple of years, put a ton of miles on it, and was rear ended in '89 by a Dodge 3/4 ton pickup which totaled it. State Farm handed me a check for $2350...I never looked at Detroit since.

Four ('85, '88, '89, and '98) Accords later, and now thanks to Congress' stimulus package and the sales tax rebate on new autos, combined with aggressive pricing and rebates, I'm being wooed to purchase two new autos to replace my '94 Toyota Pickup (total strangers typically walk up and ask me to sell it to them) and the wife's '98 Accord (selling it to our eldest at 1/2 of market value). Almost jumped on an '08 Tundra (5K rebate!), but $5+ gas will be here soon enough...decisions, decisions. Prius? Odyssey? Corolla? Higlander? Accord? Tacoma? I'm going to do my part to neutralize the efforts of the Detroit big three's finest whining welfare recipients. Their "pay me now AND pay me later" attitude is simply disgusting...

http://www.snopes.com/politics/soapbox/knox.asp
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Dear Employees and Suppliers,

Congress and the current Administration will soon determine whether to provide immediate support to the domestic auto industry to help it through one of the most difficult economic times in our nation's history. Your elected officials must hear from all of us now on why this support is critical to our continuing the progress we began prior to the global financial crisis.

We are living through the inevitable outcome of the actions of the United States auto industry for decades. It's time to pay for your sins, Detroit .

 

[budnipper1]

http://www.snopes.com/politics/soapbox/knox.asp
​

Dear Employees and Suppliers,


Congress and the current Administration will soon determine whether to provide immediate support to the domestic auto industry to help it through one of the most difficult economic times in our nation's history. Your elected officials must hear from all of us now on why this support is critical to our continuing the progress we began prior to the global financial crisis.


As an employee or supplier, you have a lot at stake and continue to be one of our most effective and passionate voices.. I know GM can count on you to have your voice heard. Thank you for your urgent action and ongoing support.


Troy Clarke - President General Motors North America
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Response from: Gregory Knox, Pres. Knox Machinery Company, Franklin , Ohio


Gentlemen: In response to your request to contact legislators and ask for a bailout for the Big Three automakers please consider the following, and please pass my thoughts on to Troy Clark, President of General Motors North America.

Politicians and Management of the Big 3 are both infected with the same entitlement mentality that has spread like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping this nation, awaiting our new "messiah", Pres-elect Obama, to wave his magic wand and make all our problems go away, while at the same time allowing our once great nation to keep "living the dream". Believe me folks, The dream is over!

This dream where we can ignore the consumer for years while management myopically focuses on its personal rewards packages at the same time that our factories have been filled with the worlds most overpaid, arrogant, ignorant and laziest entitlement minded "laborers" without paying the price for these atrocities. This dream where you still think the masses will line up to buy our products for ever and ever.

Don't even think about telling me I'm wrong. Don't accuse me of not knowing of what I speak. I have called on Ford, GM, Chrysler, TRW, Delphi, Kelsey Hayes, American Axle and countless other automotive OEM's throughout the Midwest during the past 30 years and what I've seen over those years in these union shops can only be described as disgusting.

Troy Clarke, President of General Motors North America, states: "There is widespread sentiment throughout this country, and our government, and especially via the news media, that the current crisis is completely the result of bad management which it certainly is not."

You're right Mr. Clarke, it's not JUST management.

How about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass so they can come in on the weekend and make double and triple time for a job they easily could have done within their normal 40 hour work week?

How about the line workers who threaten newbies with all kinds of scare tactics for putting out too many parts on a shift and for being too productive?

(We certainly must not expose those lazy bums who have been getting overpaid for decades for their horrific underproduction, must we?!?)

Do you folks really not know about this stuff?!? How about this great sentiment abridged from Mr. Clarke's sad plea: "over the last few years, we have closed the quality and efficiency gaps with our competitors." What the hell has Detroit been doing for the last 40 years?!? Did we really JUST wake up to the gaps in quality and efficiency between us and them?

The K-car vs. The Accord? The Pinto vs. The Civic?!?

Do I need to go on? What a joke!

We are living through the inevitable outcome of the actions of the United States auto industry for decades. It's time to pay for your sins, Detroit .

>>>>>>>>>>>>>>>>
.............click link to read the entire letter. (text exceded board limits)

Gregory J. Knox, President Knox Machinery, Inc. Franklin , Ohio45005

 

[Thunderhorse]

Thanks Bud. That article brings back some fond memories. I drove a Falcon and a '71 Ford PU for years. About 260K miles on the truck before it finally went to rest. All were maintainable for the most part by a backyard mechanic. A far cry from the majority of products auto marketeers push today. If they are not going concerns let 'em join the ranks of others in the history books.

GM posts deep loss, auditors may question viability
http://www.reuters.com/article/newsOne/idUSN2653343220090226


DETROIT (Reuters) - General Motors Corp posted a loss of nearly $31 billion on Thursday for 2008 and said its auditors were likely to cast doubt on its viability as it seeks an expanded federal bailout to stay afloat.
GM burned through $5 billion in the fourth quarter and ended the year reliant on the first $4 billion in loans from the U.S. Treasury. Quarterly revenue plunged by more than a third to $30.8 billion.

The automaker, which asked for up to $30 billion of U.S. government aid, also warned that its pension plans were underfunded by about $12.4 billion as of the end of 2008.

GM's loss for 2008 was the deepest among Detroit-based automakers as industry-wide auto sales dropped to 16-year lows. Ford lost $14.6 billion. Chrysler, controlled by private equity firm Cerberus Capital Management, lost $8 billion.

The grim results came as GM Chief Executive Rick Wagoner and other executives met with members of the autos task force headed by U.S. Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.

"They are in fact-gathering mode right now, and so we are here in order to respond to their questions," GM Chief Financial Officer Ray Young told reporters on a conference call from Washington ahead of the meeting on GM's aid request.

Shares of GM, which have lost almost 90 percent over the past year, were down 1.6 percent at $2.51 at midday.

GM said it could receive a "going concern" notice from auditors when it files its annual report for 2008 with U.S. securities regulators by the middle of March.
...

 

[Guest2]

Thanks Bud, that was Great reading !

 

[budnipper1]

-(common sense still lives)

-Article by Cal Thomas-
General Motors made my first car. It was a 1955 two-tone Chevrolet with stick shift and black tires.

It had an AM radio and air-conditioning, if I hand-cranked the window down in summer. It came with bench seats, the better to have your date close to you. I bought it used (this was before cars were “pre-owned") in 1961. My Dad co-signed the $750 note, which I paid.


Those were the days when you could fill up for pocket change. Somewhere I have old Esso receipts that show a full tank of regular gas cost me $3 dollars.

Chevrolet, Buick, Pontiac and Cadillac were the mainstays of GM, as Fairlane, Crestline Skyliner, Falcon and later Galaxie were for Ford, some of which I would own as an adult. I would also own some Chrysler products, so I have contributed to the profits of all the “Big Three.”

Ford is fending for itself without a bailout from Washington, but GM and Chrysler have filed their restructuring proposals with the government to receive additional billions to keep them solvent.

On Tuesday, GM received the final $4 billion on a $13.4 billion federal commitment. Chrysler, also getting $4 billion, has already requested an additional $3 billion. The money is conditioned on GM and Chrysler coming up with comprehensive restructuring plans that will prove to the government that they have made “aggressive” progress since they pleaded with lawmakers last December for financial aid. Members of Congress told the company CEOs that everyone had to make sacrifices, including management, unions, suppliers, investors and bondholders.

Here’s a better idea: Let them die a slow death, with the emphasis on slow. Tell workers (management always seems to land on its feet) that they have a fixed amount of time to look for new jobs. Government will help them with training and education, but government cannot prop up companies that no longer make products people want to buy in large enough numbers for them to remain profitable.

There are many reasons the car companies are in trouble, all of which have been reported in the major media, but that is the past and it is way too late in the game to do much about guaranteed pensions and health care that ended up crippling GM, even after the company successfully negotiated with UAW members to decrease retirement benefits, which, honestly, is a little like quitting smoking after being diagnosed with lung cancer.

Some of the cars of my childhood are no more. Kaiser-Frazier was the biggest postwar challenger to the Big Three. Models included the 1949 Kaiser Custom Vagabond, the 1948 Frazer Manhattan four-door sedan, the Dragon sedans and Henry J coupes. In 1970, Kaiser, then known as the Kaiser Jeep Corporation, was sold to American Motors Corporation.

Other auto companies either went out of business or were bought. These included Packard (“ask the man who owns one”), Studebaker (“first by far with a postwar car”), and Hudson, which began making cars in 1909 and, like other automobile companies, in early 1942 was ordered by the U.S. government to stop making passenger cars and concentrate exclusively on fulfilling war contracts. In 1954, Hudson eventually merged with Nash-Kelvinator to become American Motors, a company that lasted in one form or another until 1987 when Chrysler gobbled it up.

None of these companies (and many more before them and after with names such as Tucker, DeLorean and Duesenberg) received government bailouts. If they couldn’t sell their products at a profit, they either sold out, or went bust. People who worked for them found other jobs. No one starved to death.

Americans have benefited from capitalism. Our government should not be undermining an economic system that has produced more prosperity for its citizens than any nation on earth. It cannot forever prop up companies that make products not enough people wish to buy. If a growing number of people prefer cars not produced by GM and Chrysler, how will a government rescue plan make them more likely to buy them?

The “going out of business sale” sign should go up now. Taxpayers should not be expected to underwrite dying companies, unless we get a free car for our money. But that only happens on “Oprah.”

http://columbiadailyherald.com/articles/2009/02/24/opinion/03thomas.txt