Auto Makers Force Bailout Issue

[Black Swan]

Government Finds It Difficult to Deny Aid to Detroit in Wake of Wall Street Rescue
By GREG HITT in Washington and JOHN D. STOLL in Detroit
November 10, 2008


The auto-industry crisis is forcing a broader debate over how far the government should go to prop up ailing industries, as the Bush administration resists Democrats' request to use part of the $700 billion financial-rescue fund to aid Detroit's three struggling car makers.

<Snip>

So far, the administration has balked at pleas from auto makers and their allies on Capitol Hill to use money from the Treasury's Troubled Assets Relief Program, or TARP, to help companies outside the financial sector.

"It was not set up for anything else," said Bush spokesman Tony Fratto. He said the only assistance authorized by Congress for the auto industry is a $25 billion loan package meant to help the industry retool to meet higher fuel-economy standards.

<Snip>

Car makers would likely use federal money to subsidize these job cuts, buying out older workers to make room for new, lower paid replacements.

WSJ

Pigs all of them.  I wonder if any of this will go to GMAC or will that be yet to come? How much is Union benefit?  Will we ever see what really is behind all this money?  TARP is a good name.  I use a tarp to protect or hide what I don't want people to see.  How fitting.

[Vagabond]

Let 'em go into chapter 11.

Until the Detroit-3 reorganize their processes and jettison the unions, they are not going to be able to compete.  I have a Japanese make SUV.  The American models just didn't stack up, same HP/lower fuel mileage, service/mileage, chassis and powertrain, and cost. 

If you automatically have a $4,000 mark up on your vehicle, to pay the union and it's pension, versus it's competition in the same class guess what is going to happen.  If your vehicle will not last as long, or look as good, or resale as well as the competition, you lose. 

Americans can make cars, and we do, they are made in Tennessee, Kentucky, Alabama, Texas, North Carolina, and Missouri.  Of course they are all "foreign" makes.  My last car was a Celica.  Comparing it directly to a Mustang was a sheer surprise to me.  It had better take-off and braking, the Celica's cornering was vastly superior to the Mustang.  It was also more American than the Mustang.

(Mostly just my rant.)

[rich_t]

Let 'em go into chapter 11.

Until the Detroit-3 reorganize their processes and jettison the unions, they are not going to be able to compete.  I have a Japanese make SUV.  The American models just didn't stack up, same HP/lower fuel mileage, service/mileage, chassis and powertrain, and cost. 

If you automatically have a $4,000 mark up on your vehicle, to pay the union and it's pension, versus it's competition in the same class guess what is going to happen.  If your vehicle will not last as long, or look as good, or resale as well as the competition, you lose. 

Americans can make cars, and we do, they are made in Tennessee, Kentucky, Alabama, Texas, North Carolina, and Missouri.  Of course they are all "foreign" makes.  My last car was a Celica.  Comparing it directly to a Mustang was a sheer surprise to me.  It had better take-off and braking, the Celica's cornering was vastly superior to the Mustang.  It was also more American than the Mustang.

(Mostly just my rant.)

Exactly!

[DumbAss Tanker]

Subsidizing the avalanche of union debt the gold-ploated UAW retirement and benefits system (agreed to at virtual gunpoint by the Big Three in ever-richer "model contracts" where the union would shut down one of them every time the old contract expired as an example to the others) could eat up 25 billion a quarter for as long as the government was willing to pay it.  Total restructuring under Chapter 11 to rewrite the cancer that is killing these companies is the only cure for the disease. 
They also made various bad strategic decisions along the way on their product lines, but those are not irretrievable, if that were the only problem a bailout would be feasible...but it's not, the strategic decisions are a pimple on the ass of the UAW's part in the disaster.