• 11 Dec 2008 at 10:47 PM
  • FOREX

Dealbreaker Afterdark: Big Auto In Big Trouble

The Senate compromise looks dead at the moment. CNN is reporting that bipartisan talks have collapsed and the Senate bill looks dead.
The pressure actually falls back to Pelosi now, who played a bit of legislative brinkmanship with the Senate and has now lost (baring some miracle tomorrow).
GM will likely be the first victim, and the news will likely step up counterparty pressure on GM tomorrow.
GM is running out of options quite quickly.
UPDATE: Fox News is reporting that the sticking point was with the UAW, who were to take wage cuts to put them in line with Japanese rivals.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the United Auto Workers was willing to make the cuts, but not until 2011.

UPDATE 2: This has to be the best bit of nonsense I’ve heard on the topic courtesy of Senator Jim DeMint wherein he speculates that a bailout would equate to riots.
UPDATE 3: CSPAN: By a vote of 52 to 35 the Senate voted not to proceed to a bill to aid the U.S. automobile industry. Related?: The Dollar has hit a 13 year low v. the Yen.
Hopes that GM will last until the birth of the Obama administration are dimming, despite some pretty desperate cost cutting:

Factory supervisors who are seldom at their desks have had their landline phones and voice mail yanked. Elevators and escalators are shut down at night at GM’s headquarters towers in Detroit.
The slimmed-down choice of pens in office supply cabinets: one each of black, red and blue.

Perhaps just the red would have done fine.

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Comments (78)

  1. Posted by guest | December 11, 2008 at 10:54 PM

    See ya.

  2. Posted by guest | December 11, 2008 at 10:58 PM

    The UAW is willing to make cuts in 2011? Seriously? What are these guys smoking? They have no bargaining power right now. The companies they work for will literally die unless they make massive, across the board cuts. Unbelievable the audacity these idiots have. I can’t decide which is more appalling between the UAW and Blagojevich…

  3. Posted by guest | December 11, 2008 at 11:06 PM

    They are not that dumb. They know that deliverance is just a little over a month away.
    GM will somehow plug away till inaggauration day. Once Herr Messiah and his motley socialist band are seated, it will be happy hour all around and money will flow freely for the unions.
    Why on earth should they even talk about pay cuts now?
    Do any of the bleeding hearts here realize that the only people who seem to talking sense here have an R after their names? Bob Corker was villified during the 06 elections but it would be a crying shame had he been defeated by the Messiah’s pre-release version Harold Ford.
    Hearing Corker at least gave some comfort that there were a few smart people in the senate. Nothing that he said was mindless bashing (of the kinds the D folks like to indulge in when interrogating oil companies) but sharp insighful questioning delivered respectfully and clearly.

  4. Posted by guest | December 11, 2008 at 11:07 PM

    Ok, this begs the question- who are big holders of GM subordinated debt? I smell Citigroup/SunTrust-style tarp re-ups incoming.

  5. Posted by guest | December 11, 2008 at 11:07 PM

    Relax – Congress is spineless. They’ll cave in before markets open or Bush will compel Paulson to use TARP to provide a temporary bridge to the bridge.

  6. Posted by guest | December 11, 2008 at 11:12 PM

    By 2011, UAW will claim that the economy has turned around already and they are not going to take the cut any more.

  7. Posted by guest | December 11, 2008 at 11:23 PM

    If I were GM I would start the bankruptcy filing tomorrow. Republicans will not cave in. Start shutting down plants and stopping payments since GM needs cash now and not even wage concessions at this stage will do it. Waiting until after Jan. 20 is probably not feasible. Let counterparties scramble, the dollar tank, and the markets crumble. That’s the nuclear option that few realized. But it’s the only option left. And don’t expect anything from Bush, unless he’s playing a good cop bad cop game.
    Lets see who blinks first, though it looks quite late in the game already.

  8. Posted by Anal_yst | December 11, 2008 at 11:24 PM

    I”m taking off work tomorrow and heading to the Caddy dealership, I’m willing to put 0% down and $299/month for an Escalade (need a good winter ride) with all the bells & whistles.
    Who the fuck are they to turn anyone down at this point, I bet if you threaten to go buy a Range they’ll even give you a solid ZJ to hang around till they can get “approval”.

  9. Posted by guest | December 11, 2008 at 11:28 PM

    Oh Lord, won’t you buy me a Mercedes Benz ? My friends all drive Porsches, I must make amends. Worked hard all my lifetime, no help from my friends,
    So Lord, won’t you buy me a Mercedes Benz ?

  10. Posted by guest | December 11, 2008 at 11:29 PM

    Can’t imagine the wage issue was the only deal stopper. An earlier Corker compromise that I read about had bondholders receiving 30.

  11. Posted by guest | December 11, 2008 at 11:37 PM

    “I love the smell of bankruptcy in the morning”

  12. Posted by guest | December 11, 2008 at 11:37 PM

    No, what’s that? Oh, ok you don’t want to take the wage cuts to be competetive? fuuuuuuuck you then.
    Fuckin’ lazy flyover state fat fucks.
    When I’m sitting in a rental I look around, feel the shitty plastics and can’t help thinking about some asshole at a Nascar race and thinking…. if not for the outrageous overhead and liabilities, they could have made this product competitive.
    No matter, no one is buying cars anyway…they’re all fucked.
    Buckle up.

  13. Posted by RamblinWreck | December 11, 2008 at 11:39 PM

    Seems to me like the steel mills are gone, textiles, pulp mills have been declining in the U.S. for years, etc. with nary a whimper for money to be extended from the govt. on behalf of the taxpayer. Pick a heavy industry and my guess is they were long ago sent overseas. So why again is the domestic auto industry so vital?
    For too long the UAW was more than just biting the hand that feeds them; they were clamping down and thrashing ferociously like Michael Vick’s best friend. I guess every dog does have his day, but for the UAW, that day has come and gone. Good riddance.

  14. Posted by Anal_yst | December 11, 2008 at 11:45 PM

    Ladies & Gents, lets not kid ourselves here, while the extortion from the UAW has far from helped the Big 3, management incompetence, institutionalized bureaucracy, and other such problems deserve their fair share of the blame as well.

  15. Posted by RamblinWreck | December 11, 2008 at 11:48 PM

    Agreed. These companies have been failing since the 70s, so I don’t know why they are so important all of the sudden. I just can’t believe the testicular fortitude of the UAW willing to possibly let the 3 go into Ch. 11 which then raises the possibility of them actually going under. Take a pay cut and be glad you have some form of employment (job banks don’t count).

  16. Posted by guest | December 11, 2008 at 11:51 PM

    Anal_yst @14: you mention the extortion from the UAW and management incompetence as though they’re unrelated.
    Two sides of the same bankrupt coin, at this point.

  17. Posted by guest | December 11, 2008 at 11:52 PM

    Something big happening at Citi. Anyone know?

  18. Posted by Anal_yst | December 11, 2008 at 11:53 PM

    I think it is important (to a point, of course) to keep “heavy” manufacturing capacity (or more appropriately, capability) in the US for a variety of reasons. However, the issue with organized labor is that they don’t see the big picture, just as those who at the other extreme say “let ‘em fail” don’t.
    Everyone has to compromise here; labor, give up the cushy bs to which you’ve become accustomed.
    Diametrically opposed anti- Big 3 dbags also must conceed that significant progress HAS been made in the past 5-10 years, and if allowed, nay, forced to continue, CAN result in a viable domestic Auto industry.
    Step 1: Remove head from ass…

  19. Posted by guest | December 11, 2008 at 11:55 PM

    @17
    what are you referring to?

  20. Posted by RamblinWreck | December 11, 2008 at 11:58 PM

    How can they be viable when they not only produce inferior products in some form or fashion (your choice of styling, fuel efficiency, etc.) but they also have virtually no foothold in other parts of the world? Even Afghans roll around in Nissan trucks, which is just an absolute embarassment to the Detroit 3.
    I don’t want them to disappear from the business world altogether, but writing them a check that will be flushed down the toilet in a matter of months when they’ve shown no creative solutions to their current problems is troubling to say the least.

  21. Posted by guest | December 11, 2008 at 11:58 PM

    Gvt either provides DIP financing or guarantees it to get them a reasonable rate (shockingly easy solution). Business continues while someone with brains goes and rejiggers it to make it work, just like the other car companies building vehicles here in the US and not cannibalizing their global profits to do it.
    I really don’t understand why so many don’t view this as a logical option. These companies are not going concerns in current form. Even when things were good they had major issues. Figure it out.

  22. Posted by guest | December 11, 2008 at 11:59 PM

    i dont get it. even if they got the money they needed — NOBODY is buying their cars… so wouldnt theey just go bankrupt in a few months after they burn thru the gov’t cash anyway? i mean seriously, they are not going to be able to turn around their businesses. FYI, honda is down 15% in asia trading.. i would think with 3 competitors about to disapear, the asian auto co’s. would rally.

  23. Posted by Anal_yst | December 11, 2008 at 11:59 PM

    @16
    Thought that was a bit too obvious to point out, but apparently its worth mentioning. Management actions driven by labor issues, labor issues enabled by management, blah blah, ad nauseum.

  24. Posted by guest | December 11, 2008 at 11:59 PM

    Ahh, another industry destroyed by unions. Who’d a thunk it — if you’re forced to pay above-market wages, you lose money and go out of business! Unions are the parasites that kill their host organisms. Steel companies, airlines, auto companies. Time for unions to die a quick death. They serve no purpose except to extort higher wages from companies — companies which eventually end up like GM.

  25. Posted by guest | December 12, 2008 at 12:09 AM

    A better rescue plan would’ve been to buy every U.S. soldier serving in Iraq a nice GMC pickup truck. That might’ve had the political sauce to make it through.

  26. Posted by guest | December 12, 2008 at 12:09 AM

    FX markets went absolutely batshit crazy, even more so than the Bear/AIG/Lehman weekends, must be very little liquidity out there..

  27. Posted by guest | December 12, 2008 at 12:13 AM

    don’t know if anyone noticed but failing to pass this will f*ck the markets and likely deepen and prolong the recession. so tell me again why it was worth going to the mat on a few overpaid union workers???

  28. Posted by Anal_yst | December 12, 2008 at 12:14 AM

    @ Ramblin #20
    They’ve (finally) started to make significant progress on the quality, design, efficiency, and product mix fronts (20 years too late no doubt). How about this:
    Spin off Cadillac from GM, roll GMC and Chevy together, gimme a break anyone who gives a fuck which label is on the same exact vehicle is either about to die, or will get over it.
    Buick, tossup and frankly I don’t care either way. They’re kind of a little bit starting to make progress, but short of bringing back Harley Earl (http://en.wikipedia.org/wiki/Harley_Earl for those not in-the-know) I don’t see the brand being worth squat anytime in the next decade if ever.
    @24
    Interesting how things come full-circle: Unions formed because the evil Corporations were abusing and quite literally killing their employees. Fast forward a hundred or two years and the roles have reversed. Who woulda thunk?

  29. Posted by guest | December 12, 2008 at 12:21 AM

    Honda shares many parts suppliers with GM. They are worried about their supply chain.

  30. Posted by guest | December 12, 2008 at 12:25 AM

    @27 no, failing to pass it will mean that we won’t waste $30B producing cars that no one wants, and can take some capacity out of the industry so that the remaining (decent) players have a chance at survival. Meanwhile the laid off workers can get relocated to a more productive area of the economy, and get paid what they’re worth: $15/hour, not $75/hour.

  31. Posted by guest | December 12, 2008 at 12:25 AM

    see ya @ zero papa

  32. Posted by guest | December 12, 2008 at 12:30 AM

    @28 unions were formed because of socialist agitators and left-wing propaganda — no other reason but that. Yeah, conditions were harsh early in the industrial revolution, but guess what: they were even *harsher* before the industrial revolution and factory system came along that for the first time gave millions a chance to not die from starvation.

  33. Posted by guest | December 12, 2008 at 12:41 AM

    At least Honda, Hyundai and Nissan in Asian markets are taking a dive, tumbling, tanking, etc. The KY, TN and AL GOP senators are going to start seeing some serious layoffs in their foreign owned auto plants very soon as their suppliers start going under. And of course, they are not immune to the auto sales slump, it’s not just the Big 3 that are suffering in sales…

  34. Posted by guest | December 12, 2008 at 12:41 AM

    Oh god, tomorrow is going to be another one of _those_ days. Can’t we just have one huge day of panic and then get on with our lives already?

  35. Posted by guest | December 12, 2008 at 12:49 AM

    Tomorrow might be THE day we’ve all been waiting for. Time to BUY!

  36. Posted by guest | December 12, 2008 at 12:51 AM

    HAHAHAHAHAHAHAHA!!!
    *Maybe* in 2010, you can start tentatively thinking about buying…

  37. Posted by guest | December 12, 2008 at 12:57 AM

    Thank God. All these socialist bullshit bailouts of bailouts of Wall Street, AIG, etc are unconstitutional and illegal.
    Capitalism wins again.
    How will the dollar tank? If anything, the dollar WON’T tank further as the goverment won’t be able to print money out of thin air and sell debt to the Chinese and Arabs to fund these illegal and useless measures.
    Clowns.

  38. Posted by guest | December 12, 2008 at 1:56 AM

    Dow futures -309
    S&P futures -38

  39. Posted by trojan | December 12, 2008 at 2:34 AM

    would rather have a lexus or justice?
    a dream with some substance?
    a necklace, a beemer, or freedom?
    i don’t player hate, i just stay awake
    and it don’t stop til we get the popo off the block

  40. Posted by guest | December 12, 2008 at 3:13 AM

    Wow. @30 worried about $30B being “wasted” in saving America’s manufacturing sector. The Big 3 failing will result in hundreds of billions of dollars in economic losses, and possibly millions of jobs over several years. Can America survive without a manufacturing-based economy. Sorry, but no fucking way. How bad can it get? Really bad. And people outside the financial sector, in case ya didn’t know, think financial analysts are parasites – not masters of the universe. Not me, mind you, but most folks won’t be sad when 50% of Wall Street is out of work…why? you don’t give a shit about average people.

  41. Posted by guest | December 12, 2008 at 3:18 AM

    and….THE RACE TO THE BOTTOM BEGINS! Those who don’t support workers/unions are just plain ignorant!

  42. Posted by guest | December 12, 2008 at 3:26 AM

    The problem with attempts at equivalence between the Wall St bailouts and Detroit is that in the case of the financial bailouts, a shithouse full of people are losing their jobs.
    No such consideration, so far, on the overstaffed, overpaid auto workers.
    I support them, and everyone else, in their right to work. I don’t support their right to be overpaid on the taxpayer’s dime.

  43. Posted by guest | December 12, 2008 at 3:34 AM

    Look, I’m with you on the companies being poorly run, but what to do? Dingell and others made sure they were coddled for too many years, didn’t have to change. I think they are stupid companies, I just don’t know that letting them fail is the obvious answer. There will be a tremendous amount of suffering. Big-time suffering, not suffering like “oh dear, Buffie, we shan’t be going to Barbados again for Christmas”, but “oh fuck, it’s 10 out and we don’t have a home or food for the kids” kind of suffering. It’s not abstract. Sorry to sound preachy.

  44. Posted by guest | December 12, 2008 at 3:35 AM

    HEY I NEED HELP
    I got a stupid fucking Visa gift card for a present. One of those cards that someone has added cash to and you can spend anywhere.
    Well it has 500 dollars on it, and I want to add it to my schwab account to short the fuck out of some GM. I tried paypaling it to myself but because the stupid giftcard doesnt actually have a name on it (It says “A GIFT FOR YOU” as the cardholder name).
    Anyone have any ideas how to extract the money from here into my schwab account by opening bell?

  45. Posted by guest | December 12, 2008 at 3:45 AM

    Anal_yst @23- is that part of the “significant progress [that] HAS been made in the past 5-10 years” that you mentioned in #18?
    Going from -8 to -3 isn’t progress, it’s “not as inefficient.” Either assets are used efficiently or they aren’t. Companies can’t be forced into profitability or into a successful business model. That’s why the hand is invisible.
    The American taxpayer has made countless concessions over the past 30 years with numerous protectionist policies that benefited the few at the expense of the many. This is the only way to free up these valuable assets; let the UAW break themselves. Thank god the UAW is stubborn, stupid, and willing to cut off their nose despite their face. They did something nobody else could, they beat themselves. (OK that’s a lie, I beat myself all the time like a silly little freak.)The time for compromise came and went years ago.
    Lesson learned bitches, rip the band-aid off quickly and deal with it. None of this Nancy bullshit one hair at a time.
    As Ricky Carmichael would say, “get’r done.”
    SPODE

  46. Posted by guest | December 12, 2008 at 4:35 AM

    @ 44 – you can go onto Visa’s website and set it up with your name I think. I know I got one of those cards to work on itunes for me by doing something with it. Instructions are in the package for the card I think.
    As for shorting GM: the only problem here is that you will short at open (I assume). The stock will already see most of its fall by the time your order makes it to the table. Furthermore, it really doesn’t have that much further to fall. And as with anytime you short, your upside is limited to doubling your money, but your potential loss is unlimited.
    It sounds like you don’t have much cash in your account to short it as is:, and if you had it in the bank, you would be using your debit card to make the deposit. So if GM doubles (let’s say it opens at $1, and goes to $2), how will you cover your margin call?

  47. Posted by guest | December 12, 2008 at 5:15 AM

    @44 Thank You for showing us that giving the automakers money is not actually the dumbest thing that could be done with available funds.

  48. Posted by VOL IS KING | December 12, 2008 at 6:46 AM

    Oh yeah, this mess is totally the fault of the UAW and the analysts at Citi blew up the bank and its the fault of the grunts that the Taliban is resurgent.
    The as far as I can tell the UAW are the only intelligent people in the whole fucking auto industry.
    Oh jesus is this country doomed. HA the UAW is to blame!, that’s it, that’s definitely the answer…

  49. Posted by guest | December 12, 2008 at 7:24 AM

    did anyone just see/hear Gasbag’s inane fucking comments about the Madoff ponzi scheme?
    “yeah this thing was huge and leverage was huge and madoff was such a trusted guy. i mean, guys it’s hard to say how trusted this guy was, and if this is true, it’s just huge. because leverage made it $50b and not $17b”

  50. Posted by AJ | December 12, 2008 at 7:34 AM

    Unrelated question, why the hell is CNBC still running the Donny Deutsch ads?

  51. Posted by guest | December 12, 2008 at 7:35 AM

    This is what happens when you make free trade agreements with countries that are far below our level of economic development. In reality there is next to nothing that we can make here competitively unless we are willing to pay our own people a poverty wage. It’s Neo-Slavexploitation. Actually…there is one thing we make well here…debt. And it will be our undoing.

  52. Posted by AJ | December 12, 2008 at 7:40 AM

    @51, you’re an idiot

  53. Posted by guest | December 12, 2008 at 7:46 AM

    @51 but when they make it other places its sooo much cheaper and then my credit card lets me by so much more and only have to pay 30 bucks a month and they only charge me 15% interest on the carried balance so then i can use that extra money that i don’t pay down my debt with to justify my 1500 a month mortgage payment even though i only make 1800 a month but i did get a 0% loan on a sweet suburban so i can bring my kids to soccer practice, and i can put gas on a credit card too. And then in 2 years when my mortgage payments go to 4500 a month i’ll just refinance or sell my house and pay off all my other debt too. It’s a good thing i took all my money out of the market and put it into this house, otherwise I would have lost a bunch this year, suckers.

  54. Posted by guest | December 12, 2008 at 8:01 AM

    @51 Look up an article entitled the $750,000 steel worker, then retract your statement. The real cause of this is that 99.999% of the population does not understand economics, math, or the idea of risk/reward. Until people learn about these things, nothing will ever change. ever.

  55. Posted by vbierschwale | December 12, 2008 at 8:24 AM

    The media tells us that unemployment is about 8 percent
    Eight percent of 200 million is 16 million.
    The whisper number that includes the people not counted or those that have given up is about 13 percent
    Thirteen percent of 200 million is 23 million.
    I think that unemployment is about 20 percent.
    Twenty percent of 200 million is 40 million.
    Now lets put that into dollars and how it affects America and how it Affects our retailers, manufacturers and raw material producers
    Using an average salary of 50,000 dollars
    16 million people out of work would take 800 BILLION out of the economy, of which 240 BILLION would be taken from your town, your county, your state and your countrys budget and 560 BILLION would be taken from our retailers, manufacturers and raw material producers
    23 million people out of work would take 1 TRILLION 150 BILLION out of the economy, of which 345 BILLION would be taken from your town, your county, your state and your countries budget and 805 BILLION would be taken from our retailers, manufacturers and raw material producers.
    40 million people out of work would take 2 TRILLION out of the economy, of which 600 BILLION would be taken from your town, your county, your state and your countries budget and 1 TRILLION 400 BILLION would be taken from our retailers, manufacturers and raw material producers.
    Now do you see why GM is having a tough time making ends meet ?
    And no amount of bailouts are going to solve the problem.
    It will take jobs.
    It will take our political and corporate leaders waking up and realizing that their insistence on sending our jobs overseas is destroying the whole world’s economy.
    Why the whole World’s economy ?
    Because American consumers are the biggest spenders in the World and they want things and as long as they have money, they will buy these things.
    A lot of them are made in other countries.
    So when the American consumer has to stop buying because they no longer make what they used too, the trickle down effect, affects the whole World.
    Right now, our experts and our political and corporate leaders are in denial.
    They say that what is good for them is good for America.
    We need to work together to get them to see what they are doing to America and the rest of the World.
    If we can’t do that, we need to use our vote and get somebody in there that will put their town, county, state and country first.
    Virgil
    http://www.KeepAmericaAtWork.com

  56. Posted by guest | December 12, 2008 at 8:32 AM

    feel free to bail out the auto industry, but not with my tax money.

  57. Posted by guest | December 12, 2008 at 9:02 AM

    So is this the day we see the Dow go to 5000?

  58. Posted by guest | December 12, 2008 at 9:02 AM

    These kind of assumptions and ridiculous extrapolations are what got us into this mess. 20%? Do you realize the unemployment rate at the height of the great depression was only 25%? Like one of the posters said, 99% of the population doesn’t understand basic economics/math/statistics

  59. Posted by guest | December 12, 2008 at 9:07 AM

    @40 “The Big 3 failing will result in hundreds of billions of dollars in economic losses, and possibly millions of jobs over several years.”
    Umm, no. You badly, badly need to read Henry Hazlitt’s “Economics in One Lesson”.
    What it will do is free up those badly-used resources to be used in a a more valuable line of production, *saving* us hundreds of billions in losses, and making the economy more productive.

  60. Posted by chernevik | December 12, 2008 at 9:18 AM

    Not dead yet.
    They need 60 votes. Last night they were down four. Tthey got 10 Republicans (61) but lost three Dems (58). They lost a fourth (57) because Illinois’ junior senator resigned, methinks earlier than strictly necessary, in anticipation of his next office. Ahem.
    But I think the next Congress is seated on 4 January (it was in 2005), before the Inauguration, and they’ll gain at least 4 Dems on that date. If GM can hold on until then, they can pass this bill. If the Administration doesn’t use TARP, this might be Plan B.

  61. Posted by guest | December 12, 2008 at 9:22 AM

    suzuki > gm

  62. Posted by Madmartigan | December 12, 2008 at 9:38 AM

    Now that the whole economy is pretty much gone off a cliff and every major bank failed…can we please shut down Harvard Business School? Seriously? Please, whole Ivy league…?

  63. Posted by guest | December 12, 2008 at 9:49 AM

    @ 44, If you find out anything can you please help me in my situation. As I have a couple hundred thousand spirit points that I would like cash out into my my Schwab account so that I too can short GM

  64. Posted by AJ | December 12, 2008 at 9:50 AM

    @55 The workforce is ~150 million, not 200… and I’m not going to even bother with the rest of that…
    @58 You have to be careful quoting the 25% unemployment rate in the Depression since unemployment is a factor of how many people are actively looking for jobs. If the definition was expanded to include the number of people who were able-bodied and employable, but had given up on finding a job because there weren’t any, the percentage would have been much much higher.

  65. Posted by Joseph di Jersey City | December 12, 2008 at 9:51 AM
  66. Posted by guest | December 12, 2008 at 10:09 AM

    We didn’t bail out the steel mills in Pittsburgh and the rest of the rust belt. I don’t see how this is any different. It wasn’t as if the government was asking the unions to work for free. They were asking them to work for the same pay that the Honda workers in Marysville, OH (a fairly short drive from Detroit) earn. These workers aren’t starving; far from it. And it is probably a pretty safe bet that Marysville is at least as expensive as Dearborn. Lamborghini has a dealership in Marysville, and Dublin, probably Columbus’ nicest suburb, is just a few miles down the freeway. Many of the Honda workerslive in cookie-cutter houses in a planned community, but they are bigger, newer, and nicer than the ones in Dearborn.
    I have friends whose parents work at Detroit plants, and friends whose parents work at Honda. The Detroit folks are always complaining. The only complaint I’ve heard from Honda is that my friend’s dad is mad all smoking on the property must be done in his private vehicle in the parking lot.
    The unions were asked the question: would you rather take a 30% wage cut and still have a job (with a six-figure compensation package no less for relatively low skill labor) or would you rather take a 100% wage cut because you lose your job? The unions chose the latter…let them rot.
    Management is at fault to the extent that they allowed the unions to have their way of less work for more pay. By giving uncompetitive wages, they had to cut costs elsewhere to compete. They cut quality – so now you get $5000 less car for the same price. Who would want that?

  67. Posted by guest | December 12, 2008 at 10:10 AM

    UAW “workers” have been grossly overpaid for years, while living in one of the cheapest states in the country. If they weren’t smart enough to save up some of those $30+ per hour then FUCK THEM ALL.

  68. Posted by guest | December 12, 2008 at 10:52 AM

    Explain to me why WallStreet gets 1T+ and the big 3 get nothing so far. Spare me the too big to fail gibber, by that token the big 3 should leverage themselves to the hilt and write tens of billions in bad debt.
    The WS bailout vs. the Big3 is an extreme case of trickle down philosophy–save the rich (esp. Goldman) screw the poor. There are banks our there with firm balance sheets taking gov’t fund simply because they can. Any of us who have been involved in the industry the last decade or so know that it may not be a giant ponzi scheme but the game often fixed. If anyone can explain what WS actually produces beyond maybe 10% going to financing of tangible projects I would appreciate it. The rest is simply moving money around.
    The auto industry at least produces albiet an inferior product, a tangible product.
    There will sadly be unfortunate reprecussions to all of this, the worrisome part is that it will not simply be economic.
    -C

  69. Posted by chernevik | December 12, 2008 at 10:59 AM

    Nice while it lasted, but Hysterical Hank just threw Corker et al under the bus:
    “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” said Treasury spokeswoman Brookly McLaughlin.
    Friday December 12, 10:17 am ET
    http://biz.yahoo.com/ap/081212/treasury_autos.html
    Not White House. Treasury.

  70. Posted by guest | December 12, 2008 at 11:21 AM

    Unions totally fucked every industry in which they had large memberships. So why do we allow government employees to unionize? So stupid.

  71. Posted by guest | December 12, 2008 at 11:47 AM

    @8/Anal_yst,
    don’t go for the extended warranty

  72. Posted by guest | December 12, 2008 at 2:39 PM

    they called it TARP because they were going to be buying troubled assets.
    then they decided they were going to replenish banks’ capital. shouldn’t it have then been called CRAP (Capital Replenishment Assistance Plan)?
    now they’ll undoubtedly use it to bail out the automakers. what name is better now, TRAMP (Temporary Relief for AutoMakers Program) or BALLS (Bridge Auto Loan Liquidity Solution)?

  73. Posted by guest | December 12, 2008 at 3:36 PM

    Many of the cynics who bash labor unions, say glibly “let the Big 3 fail”, deride the idea that America needs to actually manufacture something to have a real economy, etc. will soon get the opportunity to go experience the implications of their philosophy first hand, as Wall Street is going to contract big-time. Lots of you will be looking for jobs in a new field. Some of you will go to work for operating companies making stuff – a new experience for most, having likely gone from B-school straight to Wall Street. Once you actually work for a real business making stuff, you will have more respect for how difficult it is. You might even realize that underneath the stock symbols and “deals” and “plays”, there are real people’s lives. Oh, and by the way, America has never had a free market. People advocate for a “free” market when it’s going their way.

  74. Posted by guest | December 12, 2008 at 6:40 PM

    Well said #73
    No problem giving $350b to an industry that basically is the rich man’s roulette but for an industry that actually produces something, they’re viewed as disposable.

  75. Posted by guest | December 13, 2008 at 12:08 AM

    @73 “deride the idea that America needs to actually manufacture something to have a real economy”
    Yeah, sure America needs to manufacture something — just not cars in Detroit made by UAW extortionists.

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