Big Three Bailout? Not So Fast

http://www.cbsnews.com/stories/2008/...plesmoney/main
4595068.shtml

One of the best reasons why Detroit automakers should not receive a
bailout can be found in a General Motors "Jobs Bank" program that,
bizarrely, pays employees not to work.

A beneficiary of that program was someone named Jerry Mellon, who worked
for GM until his division merged with another in 2000 and he was no
longer needed. Except for a brief period in 2001, Mellon received his
full salary for not working, which reached $64,500 a year by 2006.
Include benefits, and the annual cost to GM exceeds $100,000.

To earn his pay, Mellon was given the formidable task of showing up in a
windowless shed, sitting at a table, and doing nothing for eight hours a
day for six years, according to a profile in the Wall Street Journal.
Jobs Bank employees have the option of attending classes teaching such
important manufacturing skills as dealing blackjack and poker. Mellon
spent part of his time reading Reader's Digest, learning how to play
Trivial Pursuit, napping on a makeshift bed of chairs pushed together,
or simply staring at the wall for hours at a time.

During those six years, Toyota surpassed GM as the world's largest car
manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan
developed the GT-R, a technological marvel with a 0 to 60 time of 3.2
seconds and a lower sticker price than the Corvette ZR1. Honda kept its
focus on smaller cars such as the Civic and Accord, and saw its sales
continue to increase this summer while GM, Ford, and Chrysler have slid.

The United Auto Workers union and Detroit executives concocted the Jobs
Bank idea in the early 1980s. Now these same economic whizzes are
lobbying for handouts in the form of your tax dollars. UAW President Ron
Gettelfinger said in a statement last week that the Feds must "provide
liquidity to auto manufacturers so they can get through the difficulties
caused by an across-the-board decline in auto sales."

Not quite. Detroit's problems aren't caused by a one-time slump. They
can't be fixed by another infusion of cash. One cause is that union
labor and legacy costs are too high and make the so-called Big Three
companies uncompetitive. Another is that their profitability is tied to
large, heavy trucks and SUVs that Americans no longer want to buy, at
least in such large numbers.

That's just common sense. Unfortunately, such a virtue is in short
supply in Washington, D.C., where politicians are scurrying to find
excuses for a handout.

President Bush has made plenty of missteps, as I wrote about last week,
but at least seems somewhat skeptical this time. Democrats, on the other
hand, are eager to loot taxpayers -- and reward unions and domestic
automakers which made choices that benefited them handsomely in the
short term, at the expense of long term competitiveness.

President-elect Barack Obama apparently agrees, saying at his first news
conference that he supports "additional policy options to help the auto
industry adjust" and "weather the financial crisis."

Meanwhile, House Speaker Nancy Pelosi and Senate Majority Leader Harry
Reid are drafting legislation that would direct a $25 billion torrent of
cash from the U.S. Treasury to bank accounts in Detroit; Pelosi said on
Tuesday that a vote could happen in a lame-duck session next week. (See
a related video from CBS News.)

The better solution is a simple one: Allow automakers to declare
bankruptcy.

Contrary to popular belief, that will not mean the end of a company such
as GM, which has indicated it may run out of cash by the end of this
year. Under Chapter 11, a bankruptcy judge will weigh the different
interests of GM's creditors, labor unions, shareholders, and so on, and
the resulting company will emerge leaner and stronger. Many current
customers of United Airlines, Texaco, Global Crossing, and Pacific Gas
and Electric probably don't even know that those companies once filed
for Chapter 11.

Chapter 11 also would let a judge alter gold-plated union contracts and
benefits that have hamstrung the Big Three and crippled their ability to
compete against Japanese and European car makers. Toyota, Honda, and
other non-Big Three manufacturers that employ over 100,000 Americans,
mostly in right-to-work states, have shown that they can make money
building cars in the United States. The best way to keep U.S. auto
workers employed in the future -- tens of thousands already have lost
their jobs -- is to make it profitable to keep them on the payroll.

One explanation for Washington's haste is that while bankruptcy would
alter union contracts, a bailout probably won't. The labor movement
spent, according to Financial Week, a whopping $385 million to elect
Obama and other Democrats last week. Nobody writes such large checks
without expecting something: now it's payback time.

It's true, as bailout proponents argue, that GM employs about 263,000
people. But corporations including AT&T and IBM employ more, and by that
line of argument, WalMart (2.1 million full-time employees) would always
be far too big to fail. The Feds have already been profligate in doling
out cash; a GM bailout would invite a long line of supplicants, with the
most politically-connected companies muscling their way to the front of
the queue.

If you don't like this use of your tax dollars, now's the time to phone
your elected representatives. You can find contact information for your
House of Representatives member on their Web site, and the Senate has a
similar list. My e-mail address is below -- please let me know what you
hear.

https://writerep.house.gov/writerep/welcome.shtml

http://www.senate.gov/general/contac...nators_cfm.cfm

No UAW Welfare > wrote in
:

> http://www.cbsnews.com/stories/2008/...eoplesmoney/ma
> in 4595068.shtml
>
> ...
>
> To earn his pay, Mellon was given the formidable task of showing up in
> a windowless shed, sitting at a table, and doing nothing for eight
> hours a day for six years, according to a profile in the Wall Street
> Journal. Jobs Bank employees have the option of attending classes
> teaching such important manufacturing skills as dealing blackjack and
> poker. Mellon spent part of his time reading Reader's Digest, learning
> how to play Trivial Pursuit, napping on a makeshift bed of chairs
> pushed together, or simply staring at the wall for hours at a time.
>
> During those six years, Toyota surpassed GM as the world's largest car
> manufacturer, thanks to innovations like the fuel-sipping Prius.
> Nissan developed the GT-R, a technological marvel with a 0 to 60 time
> of 3.2 seconds and a lower sticker price than the Corvette ZR1. Honda
> kept its focus on smaller cars such as the Civic and Accord, and saw
> its sales continue to increase this summer while GM, Ford, and
> Chrysler have slid.
>
> ...
>
> Chapter 11 also would let a judge alter gold-plated union contracts
> and benefits that have hamstrung the Big Three and crippled their
> ability to compete against Japanese and European car makers. Toyota,
> Honda, and other non-Big Three manufacturers that employ over 100,000
> Americans, mostly in right-to-work states, have shown that they can
> make money building cars in the United States. The best way to keep
> U.S. auto workers employed in the future -- tens of thousands already
> have lost their jobs -- is to make it profitable to keep them on the
> payroll.
>

The article seems a bit inconsistent. First, the author seems to blame
GM's troubles on a lack of innovation, then on a labor costs.

Which is it?

Conditions :

1) Existing management must resign, leaving any
golden parachutes behind. Them who wrecked it
must not profit.

2) Anyone on the board of directors may not buy or
sell stock in an automotive-related company for
one year.

3) Everybody from CEO on down must accept a 25% cut
in salary, with no raises for at least one year.

4) The UAW ... my ... what DO we do about those thugs ?
MAY fall under the "them who wrecked it" catagory ...

5) "SUV"s may not constitute more than five percent of
the manufacturing output ever again.

On 2008-11-12, Blackwater > wrote:

> 5) "SUV"s may not constitute more than five percent of
> the manufacturing output ever again.

SUVs are what people were buying because the government legislated the
large passenger car almost entirely out of existence. People bought
passenger trucks instead. Thank the federal government for interfering
in the market and getting unintended results.

On Nov 12, 1:31 pm, Brent P >
wrote:
> On 2008-11-12, Blackwater > wrote:
>
> > 5) "SUV"s may not constitute more than five percent of
> > the manufacturing output ever again.
>
> SUVs are what people were buying because the government legislated the
> large passenger car almost entirely out of existence. People bought
> passenger trucks instead. Thank the federal government for interfering
> in the market and getting unintended results.

I am not in favor of it, although I do have some good friends who are
auto workers. The auto corporations had the ability, the designers /
engineers to make an economical car, that 'would' sell and they
ignored all the signs that times were changing and kept making their
big gas guzzlers. But if they are going to loan them the money, the
car companies should present definite , concrete plans how they are
going to make cars that folks will want to buy in this economy.
I have a couple of buddies who were out for a whole year before
this and got 90% of their salary, health benefits, 401 and stock.
They've been back to work a couple of months and are going out again
for another year. Again I do not hate them but it makes no sense to
manufacture a product that you know damned well no one will buy..

On Nov 12, 10:57 am, No UAW Welfare >
wrote:
> http://www.cbsnews.com/stories/2008/...rpeoplesmoney/...
> 4595068.shtml
>
> One of the best reasons why Detroit automakers should not receive a
> bailout can be found in a General Motors "Jobs Bank" program that,
> bizarrely, pays employees not to work.
>
> A beneficiary of that program was someone named Jerry Mellon, who worked
> for GM until his division merged with another in 2000 and he was no
> longer needed. Except for a brief period in 2001, Mellon received his
> full salary for not working, which reached $64,500 a year by 2006.
> Include benefits, and the annual cost to GM exceeds $100,000.
>
> To earn his pay, Mellon was given the formidable task of showing up in a
> windowless shed, sitting at a table, and doing nothing for eight hours a
> day for six years, according to a profile in the Wall Street Journal.
> Jobs Bank employees have the option of attending classes teaching such
> important manufacturing skills as dealing blackjack and poker. Mellon
> spent part of his time reading Reader's Digest, learning how to play
> Trivial Pursuit, napping on a makeshift bed of chairs pushed together,
> or simply staring at the wall for hours at a time.
>
> During those six years, Toyota surpassed GM as the world's largest car
> manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan
> developed the GT-R, a technological marvel with a 0 to 60 time of 3.2
> seconds and a lower sticker price than the Corvette ZR1. Honda kept its
> focus on smaller cars such as the Civic and Accord, and saw its sales
> continue to increase this summer while GM, Ford, and Chrysler have slid.
>
> The United Auto Workers union and Detroit executives concocted the Jobs
> Bank idea in the early 1980s. Now these same economic whizzes are
> lobbying for handouts in the form of your tax dollars. UAW President Ron
> Gettelfinger said in a statement last week that the Feds must "provide
> liquidity to auto manufacturers so they can get through the difficulties
> caused by an across-the-board decline in auto sales."
>
> Not quite. Detroit's problems aren't caused by a one-time slump. They
> can't be fixed by another infusion of cash. One cause is that union
> labor and legacy costs are too high and make the so-called Big Three
> companies uncompetitive. Another is that their profitability is tied to
> large, heavy trucks and SUVs that Americans no longer want to buy, at
> least in such large numbers.
>
> That's just common sense. Unfortunately, such a virtue is in short
> supply in Washington, D.C., where politicians are scurrying to find
> excuses for a handout.
>
> President Bush has made plenty of missteps, as I wrote about last week,
> but at least seems somewhat skeptical this time. Democrats, on the other
> hand, are eager to loot taxpayers -- and reward unions and domestic
> automakers which made choices that benefited them handsomely in the
> short term, at the expense of long term competitiveness.
>
> President-elect Barack Obama apparently agrees, saying at his first news
> conference that he supports "additional policy options to help the auto
> industry adjust" and "weather the financial crisis."
>
> Meanwhile, House Speaker Nancy Pelosi and Senate Majority Leader Harry
> Reid are drafting legislation that would direct a $25 billion torrent of
> cash from the U.S. Treasury to bank accounts in Detroit; Pelosi said on
> Tuesday that a vote could happen in a lame-duck session next week. (See
> a related video from CBS News.)
>
> The better solution is a simple one: Allow automakers to declare
> bankruptcy.
>
> Contrary to popular belief, that will not mean the end of a company such
> as GM, which has indicated it may run out of cash by the end of this
> year. Under Chapter 11, a bankruptcy judge will weigh the different
> interests of GM's creditors, labor unions, shareholders, and so on, and
> the resulting company will emerge leaner and stronger. Many current
> customers of United Airlines, Texaco, Global Crossing, and Pacific Gas
> and Electric probably don't even know that those companies once filed
> for Chapter 11.
>
> Chapter 11 also would let a judge alter gold-plated union contracts and
> benefits that have hamstrung the Big Three and crippled their ability to
> compete against Japanese and European car makers. Toyota, Honda, and
> other non-Big Three manufacturers that employ over 100,000 Americans,
> mostly in right-to-work states, have shown that they can make money
> building cars in the United States. The best way to keep U.S. auto
> workers employed in the future -- tens of thousands already have lost
> their jobs -- is to make it profitable to keep them on the payroll.
>
> One explanation for Washington's haste is that while bankruptcy would
> alter union contracts, a bailout probably won't. The labor movement
> spent, according to Financial Week, a whopping $385 million to elect
> Obama and other Democrats last week. Nobody writes such large checks
> without expecting something: now it's payback time.
>
> It's true, as bailout proponents argue, that GM employs about 263,000
> people. But corporations including AT&T and IBM employ more, and by that
> line of argument, WalMart (2.1 million full-time employees) would always
> be far too big to fail. The Feds have already been profligate in doling
> out cash; a GM bailout would invite a long line of supplicants, with the
> most politically-connected companies muscling their way to the front of
> the queue.
>
> If you don't like this use of your tax dollars, now's the time to phone
> your elected representatives. You can find contact information for your
> House of Representatives member on their Web site, and the Senate has a
> similar list. My e-mail address is below -- please let me know what you
> hear.
>
> https://writerep.house.gov/writerep/welcome.shtml
>
> http://www.senate.gov/general/contac...nators_cfm.cfm

Oh by the way , the powers that be, are real picky about who posts on
the stl.general group. So some of you might get verbal warnings for
intruding into their sacred space.

"Globalist" > wrote in message
...
> On Nov 12, 10:57 am, No UAW Welfare >
> wrote:
>> http://www.cbsnews.com/stories/2008/...rpeoplesmoney/...
>> 4595068.shtml
>>
>> One of the best reasons why Detroit automakers should not receive a
>> bailout can be found in a General Motors "Jobs Bank" program that,
>> bizarrely, pays employees not to work.
>>
>> A beneficiary of that program was someone named Jerry Mellon, who worked
>> for GM until his division merged with another in 2000 and he was no
>> longer needed. Except for a brief period in 2001, Mellon received his
>> full salary for not working, which reached $64,500 a year by 2006.
>> Include benefits, and the annual cost to GM exceeds $100,000.
>>
>> To earn his pay, Mellon was given the formidable task of showing up in a
>> windowless shed, sitting at a table, and doing nothing for eight hours a
>> day for six years, according to a profile in the Wall Street Journal.
>> Jobs Bank employees have the option of attending classes teaching such
>> important manufacturing skills as dealing blackjack and poker. Mellon
>> spent part of his time reading Reader's Digest, learning how to play
>> Trivial Pursuit, napping on a makeshift bed of chairs pushed together,
>> or simply staring at the wall for hours at a time.
>>
>> During those six years, Toyota surpassed GM as the world's largest car
>> manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan
>> developed the GT-R, a technological marvel with a 0 to 60 time of 3.2
>> seconds and a lower sticker price than the Corvette ZR1. Honda kept its
>> focus on smaller cars such as the Civic and Accord, and saw its sales
>> continue to increase this summer while GM, Ford, and Chrysler have slid.
>>
>> The United Auto Workers union and Detroit executives concocted the Jobs
>> Bank idea in the early 1980s. Now these same economic whizzes are
>> lobbying for handouts in the form of your tax dollars. UAW President Ron
>> Gettelfinger said in a statement last week that the Feds must "provide
>> liquidity to auto manufacturers so they can get through the difficulties
>> caused by an across-the-board decline in auto sales."
>>
>> Not quite. Detroit's problems aren't caused by a one-time slump. They
>> can't be fixed by another infusion of cash. One cause is that union
>> labor and legacy costs are too high and make the so-called Big Three
>> companies uncompetitive. Another is that their profitability is tied to
>> large, heavy trucks and SUVs that Americans no longer want to buy, at
>> least in such large numbers.
>>
>> That's just common sense. Unfortunately, such a virtue is in short
>> supply in Washington, D.C., where politicians are scurrying to find
>> excuses for a handout.
>>
>> President Bush has made plenty of missteps, as I wrote about last week,
>> but at least seems somewhat skeptical this time. Democrats, on the other
>> hand, are eager to loot taxpayers -- and reward unions and domestic
>> automakers which made choices that benefited them handsomely in the
>> short term, at the expense of long term competitiveness.
>>
>> President-elect Barack Obama apparently agrees, saying at his first news
>> conference that he supports "additional policy options to help the auto
>> industry adjust" and "weather the financial crisis."
>>
>> Meanwhile, House Speaker Nancy Pelosi and Senate Majority Leader Harry
>> Reid are drafting legislation that would direct a $25 billion torrent of
>> cash from the U.S. Treasury to bank accounts in Detroit; Pelosi said on
>> Tuesday that a vote could happen in a lame-duck session next week. (See
>> a related video from CBS News.)
>>
>> The better solution is a simple one: Allow automakers to declare
>> bankruptcy.
>>
>> Contrary to popular belief, that will not mean the end of a company such
>> as GM, which has indicated it may run out of cash by the end of this
>> year. Under Chapter 11, a bankruptcy judge will weigh the different
>> interests of GM's creditors, labor unions, shareholders, and so on, and
>> the resulting company will emerge leaner and stronger. Many current
>> customers of United Airlines, Texaco, Global Crossing, and Pacific Gas
>> and Electric probably don't even know that those companies once filed
>> for Chapter 11.
>>
>> Chapter 11 also would let a judge alter gold-plated union contracts and
>> benefits that have hamstrung the Big Three and crippled their ability to
>> compete against Japanese and European car makers. Toyota, Honda, and
>> other non-Big Three manufacturers that employ over 100,000 Americans,
>> mostly in right-to-work states, have shown that they can make money
>> building cars in the United States. The best way to keep U.S. auto
>> workers employed in the future -- tens of thousands already have lost
>> their jobs -- is to make it profitable to keep them on the payroll.
>>
>> One explanation for Washington's haste is that while bankruptcy would
>> alter union contracts, a bailout probably won't. The labor movement
>> spent, according to Financial Week, a whopping $385 million to elect
>> Obama and other Democrats last week. Nobody writes such large checks
>> without expecting something: now it's payback time.
>>
>> It's true, as bailout proponents argue, that GM employs about 263,000
>> people. But corporations including AT&T and IBM employ more, and by that
>> line of argument, WalMart (2.1 million full-time employees) would always
>> be far too big to fail. The Feds have already been profligate in doling
>> out cash; a GM bailout would invite a long line of supplicants, with the
>> most politically-connected companies muscling their way to the front of
>> the queue.
>>
>> If you don't like this use of your tax dollars, now's the time to phone
>> your elected representatives. You can find contact information for your
>> House of Representatives member on their Web site, and the Senate has a
>> similar list. My e-mail address is below -- please let me know what you
>> hear.
>>
>> https://writerep.house.gov/writerep/welcome.shtml
>>
>> http://www.senate.gov/general/contac...nators_cfm.cfm
>
> Oh by the way , the powers that be, are real picky about who posts on
> the stl.general group. So some of you might get verbal warnings for
> intruding into their sacred space.

**** 'em.

"Blackwater" > wrote in message
...
> Conditions :
>
> 1) Existing management must resign, leaving any
> golden parachutes behind. Them who wrecked it
> must not profit.

As one of my dire brotheren has of poinred out, if they would apply some of
the same rules to corporate types as they do to crooks on the street we
would see a less respecatable, but more affluent class of criminals doing a
little time for the state.

ie:
No profits from the fruits of the crime.
Forfiture of all items obtaind through the commission of a crime or with the
fruits there of.
At least a 10 year statute of limitations, and he clause covering
participation in an on-going criminal activity.

> 2) Anyone on the board of directors may not buy or
> sell stock in an automotive-related company for
> one year.

Not much of a limit there,, what about the duration of government subsidy
plus x number of years, and to include stock options and other perks.

> 3) Everybody from CEO on down must accept a 25% cut
> in salary, with no raises for at least one year.

Again, duration, plus one year less cost of living for those making under a
set amount. And again, let's not for get those perks, some companies have
had near zero profit years, but then gave executives 100' of thousands of
dollars in bonuses, stocks and other bennefits.


> 4) The UAW ... my ... what DO we do about those thugs ?
> MAY fall under the "them who wrecked it" catagory ...

Same deal as executives but with cost of living raises, based on the
national index. If your going to pin the dragons head you also need to pin
the tail.

> 5) "SUV"s may not constitute more than five percent of
> the manufacturing output ever again.

A bit ambiguous, why not look at some form of MPG to weight or payload
ratio. If you can build a SUV that gets 5(+) MPG per passenger seat, I
doubt there will be much of a problem selling them.

One reason SUVs are such a big item is that as a truck they fall under a
separate set of rules, vs. an automobile. Remember when the Japanese
automakers gout around the restrictions on passenger car imports by sending
all of thier smaller sports vehicles without a back seat so they were
classed as trucks and therefore exempt. Back seats were shipped separately
and installed here. Detroit just rolled that a different way and the SUV
boom was born.

On Wed, 12 Nov 2008 13:31:21 -0600, Brent P
> wrote:

>On 2008-11-12, Blackwater > wrote:
>
>> 5) "SUV"s may not constitute more than five percent of
>> the manufacturing output ever again.
>
>SUVs are what people were buying because the government legislated the
>large passenger car almost entirely out of existence. People bought
>passenger trucks instead. Thank the federal government for interfering
>in the market and getting unintended results.


Now they need to legislate SUVs out of existence too -
wording the rules to include anything LIKE them that
may be manufactured in the future.

Easiest approach - mandated average fleet-MPG requirements.

On Thu, 13 Nov 2008 16:02:17 GMT, (Blackwater) wrote:

>On Wed, 12 Nov 2008 13:31:21 -0600, Brent P
> wrote:
>
>>On 2008-11-12, Blackwater > wrote:
>>
>>> 5) "SUV"s may not constitute more than five percent of
>>> the manufacturing output ever again.
>>
>>SUVs are what people were buying because the government legislated the
>>large passenger car almost entirely out of existence. People bought
>>passenger trucks instead. Thank the federal government for interfering
>>in the market and getting unintended results.
>
>
> Now they need to legislate SUVs out of existence too -
> wording the rules to include anything LIKE them that
> may be manufactured in the future.
>
> Easiest approach - mandated average fleet-MPG requirements.

No, they do not need to legislate a thing like that. It figures that
the liberals want to tell people how to live. For those of us who can
afford them, it is our right to own and drive them. Don't like it?
Tough ****! Don't buy one then and stop worrying about what other
people do.