Automotive News, Media & Press - Bush Rules Out Aid to Ailing Ford and GM...

WASHINGTON (Reuters) - President Bush said General Motors Corp. and Ford Motor Co. should develop more appealing products rather than look to Washington for help with their heavy pension burdens, The Wall Street Journal reported Thursday.

In an interview Wednesday, Bush said he had not talked to the struggling companies about their finances but hinted that he would take a dim view of a government bailout of the top two U.S. automakers, the newspaper reported.


http://money.cnn.com/2006/01/26/news/companies/bush_autos.reut/index.htm?cnn=yes

So... when did we become content to sit back and let our domestic industries be ravaged by foreingers to their benefit at our detriment? When did it become really cool to buy only foreign cars?

I've been reading political discussions of US auto industry aid and many on both sides seem content that our government should do absolutely nothing to counter Japan's currency manipulation or South Korea's subisdizing Hyundai both of which aim to dominate globally.

They really believe we will all be better off if Ford and GM simply disappear and that sound economics dictates that any sort of help would be a horrible idea. Of course there was no shortage of people who believed the government should support all the workers who are left jobless and without retirement when their employers disappear.

Does this actually make sense to anyone? What does everyone think about this?

There are a ton of arguments to be made here... capitalism is a free enterprise, social darwinism rules. GM has been shit in the opinions of most people for the past decade... if there's a better product, it will succeed.

At least, that's the hope that all who believe in our system place in capitalism... unfortunately it's not always true IMO.

At least, that's the hope that all who believe in our system place in capitalism... unfortunately it's not always true IMO.

It's certainly not the case here. It seems most people assume the playing field here and globally is completely level when it fact it really isn't. They also seem to assume the governments of other automakers follow the same economic philosophy the US does.

If attitudes don't change it's going to cost us our domestic automobile industry and trickle down from there. It won't stop with just autos either.

So you prefer a Socialist system coupled with trade barriers?

So you prefer a Socialist system coupled with trade barriers?

You prefer our government allow an entire sector of our economy to evaporate?

It's certainly not the case here. It seems most people assume the playing field here and globally is completely level when it fact it really isn't. They also seem to assume the governments of other automakers follow the same economic philosophy the US does.

If attitudes don't change it's going to cost us our domestic automobile industry and trickle down from there. It won't stop with just autos either.Exactly.
They don't buy ours, I won't buy theirs.
GM and Ford FOR LIFE! :headbang: :usa:

Imagine if tarrifs didn't force the Japanese to sell their cars/trucks at what they could actually afford to sell them at!

The government has done enough to protect the U.S. auto industry, their failings reflect the product they produce in the main, and the social reality of labor unions in the U.S. to a lesser extent.

An entire sector of 'our' economy. The foreign car companies that produce here are not part of 'our' economy? Further, what is the point of pumping money into a company that has reported heavy losses and who's stock is considered junk? Certainly doesnt sound like a sound investment to me. If that is where my tax dollars were going, I'd be pissed. If you want the Gov to do anything, perhaps they should back the pensions of the current people who are eligible for and who already have retired--pour some money into occupational re-training for the rest of the employees. The bottom line is the bulk of the market has spoken, and they feel there dollar goes further with product produced by foreign companies. Now you want to take the tax dollars from those very people and slide over to help sustain the production of a product they dont want?!

The funny thing is some of the same people who I guarantee are against welfare, and other social "handouts" are very much in favor of GM/Ford getting assistance from federal tax payers(even more than they already do_)....

The government has done enough to protect the U.S. auto industry, their failings reflect the product they produce in the main, and the social reality of labor unions in the U.S. to a lesser extent.

Absolutely and I understand that. But I do not believe that our country will be better off if the government refuses to do anything to help them in bankruptcy (ala Chrysler, airlines, etc.) and just sits back twiddling thumbs instead of leveling the playing field or helping our home teams.

The governments of Japan and South Korea will do whatever it takes to ensure their companies dominate here and globally. Japan has been manipulating the value of the yen for years to give their companies a big edge in costs and pricing. South Korea subsidizes Hyundai, enabling them to spend more on R&D, expand quickly globally, and release all new vehicles at a furious pace. Do you think China is going to play fair when their automakers start dumping here in the US and abroad?

Boeing is facing a similar problem with Airbus, which is being supported by their governments as well.

The funny thing is some of the same people who I guarantee are against welfare, and other social "handouts" are very much in favor of GM/Ford getting assistance from federal tax payers(even more than they already do_)....

I agree, corporate welfare is still welfare. I don't think the Gov. should be in the business of subsidizing private industry. That already occurs way too often in the farming sector. I would prefer not to see it expanded.

Certainly doesnt sound like a sound investment to me. If that is where my tax dollars were going, I'd be pissed.

I meant in the event of total bankruptcy. Are we better off to let the sole remaining US automaker evaporate at that point or give them a loan to resume operations and retain the jobs?

Would you argue we'd be better off without Chrysler today who was loaned money and paid it back?

If you support using tax money to pay the workers retirements and pensions than why would you not support it to keep the employer in business as well? If the business is responsible for bankruptcy how are the employees any less responsible for not diversifying their retirments with this employer?

I would like to see both companies succeed without government help, but that is not guaranteed. Though I would rather see GM and Ford survive.

James

Absolutely and I understand that. But I do not believe that our country will be better off if the government refuses to do anything to help them in bankruptcy (ala Chrysler, airlines, etc.) and just sits back twiddling thumbs instead of leveling the playing field or helping our home teams.

The governments of Japan and South Korea will do whatever it takes to ensure their companies dominate here and globally. Japan has been manipulating the value of the yen for years to give their companies a big edge in costs and pricing. South Korea subsidizes Hyundai, enabling them to spend more on R&D, expand quickly globally, and release all new vehicles at a furious pace. Do you think China is going to play fair when their automakers start dumping here in the US and abroad?

Boeing is facing a similar problem with Airbus, which is being supported by their governments as well.

I hear what you're saying, but nobody plays fair. The U.S. auto industry didn't play fair to become the bloated pig that it is today.

In any event, how do you propose that the govt. levels the field, as it were? You can't force the Japanese of Koreans to pay their laborers more, you can't force them to set up big pensions and health programs...so, that leaves you with what? Free money to U.S. auto makers? Cut wages and benifits for U.S. workers? Break up unions? Raise tarrifs and start a trade war?

This is a situation that can really only be solved by FIRE(in the analogous sense). Detroit and the U.S. auto industry needs to play by the same rules as every other business, they need to put a better product out at a price consumers will pay, while finding a balance between profits and worker pay. No handouts.

I meant in the event of total bankruptcy. Are we better off to let the sole remaining US automaker evaporate at that point or give them a loan to resume operations and retain the jobs?
It's very unlikely they would just evaporate in the event of bankruptcy. They would probably just be restructured and possibly bought by someone else.

It's very unlikely they would just evaporate in the event of bankruptcy. They would probably just be restructured and possibly bought by someone else.

Automotive empires don't rise out of nowhere however, and can't be completely replaced in a day. When entire industries go down a huge vacuum is left that isn't filled and it trickles everywhere. Is allowing that really good for all of us or do we have nothing to worry about?

This might just be me, but I really don't think we'll be in a good place as a country when we have no US cars, no US planes, and very little US manufacturing left.

Ill tell you whats driving away buisness to China and Japan, these damn unions! For gods sake, people who barely are didnt finish high school are making 20$ an hour to screw in a bolt or clean the bathrooms! They are only causing their own demise. The CEOs getting million dollar bounses are bullshit too!

Also NAFTA, and globalization is desroying the little man. We need to focus on our own economy before handing out billions of dollars to every damn country on the planet. Otherwise we are fucked and our economy will go down the toilet as well!

No handouts.

You disagreed then with the Chrysler bankruptcy loan as well as aid for US airlines, etc?

Ill tell you whats driving away buisness to China and Japan, these damn unions!

This is definitely a huge and complex problem, but what I'm referring to specifically is that in the event of total bankruptcy would we be better off letting Ford and GM die or loaning them money to totally restructure and start all over again like Chrysler?

Is the President making the best call when he says he won't give any aid?

Automotive empires don't rise out of nowhere however, and can't be completely replaced in a day. When entire industries go down a huge vacuum is left that isn't filled and it trickles everywhere. Is allowing that really good for all of us or do we have nothing to worry about?

This might just be me, but I really don't think we'll be in a good place as a country when we have no US cars, no US planes, and very little US manufacturing left.

The thing is that GM and Ford won't just disappear. If they file for bankruptcy they'll shed debt(healt costs/pensions/factories/etc) and reorganize and emerge as a better and more profitable company than before.

Obviously they are trying to do the above without filing for bankruptcy, hopefully they will succed, but I wish for them to do it on their own merits, as you or I would be expected to do.

I meant in the event of total bankruptcy. Are we better off to let the sole remaining US automaker evaporate at that point or give them a loan to resume operations and retain the jobs?

Would you argue we'd be better off without Chrysler today who was loaned money and paid it back?

If you support using tax money to pay the workers retirements and pensions than why would you not support it to keep the employer in business as well? If the business is responsible for bankruptcy how are the employees any less responsible for not diversifying their retirments with this employer?

First, who loaned Chrysler the money?

Big difference between pouring money into a failing business and bailing out some people who are obviously in need. And that is only in respect to the notion that the Gov acts with monetary intervention at all

You disagreed then with the Chrysler bankruptcy loan as well as aid for US airlines, etc?

What happened to both of those companies?

Edit: misread the airline part. I wouldn't compare the airlines and their situation to Chrysler. Still, several are now gone, and my point about Chrysler stands.

First, who loaned Chrysler the money?


US government in the early 80s when Chrysler was completely toast.

I wouldn't compare the airlines and their situation to Chrysler. Still, several are now gone, and my point about Chrysler stands.

Prior to 9/11 they all were ailing, and it's been many years since and they still are. When Ford and GM face their destiny I think it would be absolutely foolish not to help them restart business, especially since it worked for Chrysler and they repaid all the money. I don't think anyone in their right mind could argue we would all be better off without Chrysler today.

It didn't work for Chrysler in the context that you were presenting for GM/Ford...they were bought by a foreign automaker. Which is exactly what would(worst case) happen to GM and Ford...they won't just dissapear, but they don't deserve to be propped up by tax payers to be made a more profitable investment for foreign OR U.S. investor takeover.

Prior to 9/11 they all were ailing, and it's been many years since and they still are. When Ford and GM face their destiny I think it would be absolutely foolish not to help them restart business, especially since it worked for Chrysler and they repaid all the money. I don't think anyone in their right mind could argue we would all be better off without Chrysler today.

Unfortunetly I am not familier with the books for the Chrysler of the 80's. Curious in what kind of shape they were in, in comparison with GM. If the company appeared to be salvagable at the time--or at least if it were a better bet than GM. I am curious to see if there was a Standard & Poor rating on the health of Chryler in the 80s, with that of GM and Ford today

I also agree that the Unions are a driving force in the demise of the US Manufacturing companies. You have an abundance of low skilled workers earing huge wages in respect to their education.

I'm not in favor of the Federal Government bailing out any company but the problem I have here is the inconsistency. Why bail out the airlines and not the automakers?

FWIW, notice what happened when the Government bailed out the airlines the last time. What was gained? Some still went out of business and the rest are just as inefficient.

^^ Is it more difficult to save an airline than an automaker?

Just as well, maybe they will stop repackaging the same SUV's over and over.

Well if Delpha(.sp?) goes on strike like they are threatning to, GM will go under quick, stupid Union workers, go on strike knowing that if you do u wont have a job when the company goes under....wtf????

This might just be me, but I really don't think we'll be in a good place as a country when we have no US cars, no US planes, and very little US manufacturing left.No, it's NOT just you.
What's next, no U.S. jobs, no U.S. money, no U.S. freedoms, no U.S. military?! :eek2: :nono:
Japan (Japan Incorporated) is in bed with/helps out their own (Toyota, Sony etc.) so I don't see what the big deal is here.
Level playing fields my ass. :eyes:

Bottom line Ford and GM dug themselves a hole. Do you seriously think if Bush offered aid to them, it would result in discounts, incentatives, or a return on the investment to the american people to buy their products - highly unlikely.

Since Ford and GM got themeselves into this mess, than can get themselves out of it without any financial aid whatsoever.

The UAW has not had a strike at GM for over two decades due to wanting a pay increase or benefits increase. The National agreements that have been agreed to by the two parties have come up with an agreement months prior to the dead line of these contracts. The strikes that have taken place at GM in the past two decades by the UAW have been for safety reasons and to retain jobs in this country. What is sad is that GM was allowed to buy these jobs by offering retirement incentives and to invest their money outside of the US and that is why GM is in the trouble it is in now. So no one at the UAW has held a gun to anybody at GM every four years to force them to give/continue the current pay scale for the work force.

As far as the Delphi issue goes, I agree that a strike is the worst thing that could happen to Delphi/GM/UAW and the US . It would be hard to recover from the effects it could have.

A figure I saw recently, shows that $2100 out of every single new GM car, goes towards pensions and/or benefits. That is ludicrous. I know a gentleman here in Texas that retired from GM at a fairly early age drawing full benefits, and has started a second career. He laughs every time I see him! GM is headed the same way our Social Security systm is...DOWN. They should both fail about the same time. Iaccoca saved Chrysler, not our government. If GM doesn't change personel and policies, there's not enough money on earth to "bail them out".

I don't know much about the Chrysler deal years ago, and maybe some of you can help me. When Chrysler did their turn around, did the hourly UAW workers take a pay cut or benefits cut? What is the current pay at Chrysler UAW plant compared to a UAW GM/Ford emp.?
The problem also at GM is that they have 750,000 retirees and only 300,000 current workers, It's like a giant mushroom where the retirees are the head and has grown so large the stem(current worker) can no longer support it.
Thanks
Tom
A figure I saw recently, shows that $2100 out of every single new GM car, goes towards pensions and/or benefits. That is ludicrous. I know a gentleman here in Texas that retired from GM at a fairly early age drawing full benefits, and has started a second career. He laughs every time I see him! GM is headed the same way our Social Security systm is...DOWN. They should both fail about the same time. Iaccoca saved Chrysler, not our government. If GM doesn't change personel and policies, there's not enough money on earth to "bail them out".

TriSheild, I'm with you. The government gives support (in many forms) to the vast majority of corporations that declare bankrupcy, so why would Ford or GM be any different?

Still, as had been said many times, GM and Ford have each caused a number of their own headaches, which they should have to pay for, but there is a very unlevel playing field in almost all industry, not withstanding the auto industry.

Personnally, instead of trying to subsidize USA industries, I'm a big fan of levying significant tarrifs on all imported parts/vehicles in all industries, even against American owned companies such as GM and Ford (each of them have numerous imports of parts and fully assembled vehicles). There is nothing produced outside the US that Americans cannot produce, so why shouldn't we provide incentive (in this case, proximity would be the incentive) to allow us to produce everything we consume? Bring all production and assembly back to the US, and make us an Industrialized nation once again, which would give us one of the strongest/stablest economies in the world.

I don't have a problem buying something manufactured by a foreign held corporation, if the majority of profits are going into American pockets.

I blame it all on the UAW.

TriSheild, I'm with you. The government gives support (in many forms) to the vast majority of corporations that declare bankrupcy, so why would Ford or GM be any different?

Still, as had been said many times, GM and Ford have each caused a number of their own headaches, which they should have to pay for, but there is a very unlevel playing field in almost all industry, not withstanding the auto industry.

Personnally, instead of trying to subsidize USA industries, I'm a big fan of levying significant tarrifs on all imported parts/vehicles in all industries, even against American owned companies such as GM and Ford (each of them have numerous imports of parts and fully assembled vehicles). There is nothing produced outside the US that Americans cannot produce, so why shouldn't we provide incentive (in this case, proximity would be the incentive) to allow us to produce everything we consume? Bring all production and assembly back to the US, and make us an Industrialized nation once again, which would give us one of the strongest/stablest economies in the world.

I don't have a problem buying something manufactured by a foreign held corporation, if the majority of profits are going into American pockets.

What happens when other countries return the favor? It sound's good in theory but would never work.

I've heard people far smarter than myself say that the outsourcing of unskilled labor is a good thing.Something about replacing low paying(except in the auto industry) job's with a better educated,higher paid workforce.

I know I don't want my kid's working in a factory,even if it's a 80k a yr job.

Ford and GM's legacy cost's are not sustainable in today's market.By the time 07 rolls around the fecal matter will be hitting the fan.

do u people think ????? only some it seems....think.....
Whos the genius that said to give GM and ford money since we gave it to the airlines???
The airlines got screwed because of 9/11....PERIOD.....it scared everyone and slowed the entire economy but the airlines the worst....GM and Ford Caused and still cause their own problems.....they have too many brands, too many models and too many god damn pension bills.....They produce GARBAGE!!!! The majority of their cars are crap, when the car design isn't crap, the materials are CRAP and CHEAP. You want to give them more money to waste as if they dont have money now to fix their own mess...Money isnt going to buy new styling, new designs, restructuring of the pensions .....ONLY a goddamn CEO or CFO making that choice will.....Want to give him a raise? This whole post is ludicras......GM has something like 22 billion in cash if you didnt know that......They have Lots of cash as does Ford......Dont confuse credit rating with cash reserves.....two different things...

lets think here for a minute...22 billion dollars...750,000 retirees...300,000 employees...no income....so 1,050,000 payouts each month lets say each of them get 1000 bucks a month...That is a low Low LOW payout...thats $0 in less than 20.9 months. So yah they may have $22 billion, but thats less then 2 years of cash in just paying employees a grand a month. Not including production costs, benefits, pensions, etc...Don't act like this isn't a big deal because it is...

As I posted earlier, the UAW has not forced a strike at GM due to a pay increase or benefits increase in over 20 years. The strikes that the UAW has had in the past 20 years at GM was due to health and safety reasons and to try and retain jobs in the US which to date they haven't been real sucessful at doing. The UAW has not held a gun to GM's head in those 20 years asking for higher wages, but if you blame them for saying OK we'll take that then I guess your right. :eyes:
I blame it all on the UAW.

Comparing the airlines is also an unfair comparison, as noted they did get screwed for 9/11. The key difference is that ALL airlines were/are suffering, with the exception of Southwest which i believe were the only ones on the black, not a few that provided a lesser product. Even though the economy isn't purley one of capitalism social darwinism, generally, rules, the rule is to provide a competitive quality along with a competitive price, if you fail to meet either you will not suceed, period. GM really needs to work on getting its act together, not making cars more and more expensive w/mediocare quality. For the first time in US history a foreign company, toyota, out sold a domestic, ford, last year, and unless domestic companies step up their products they will fall to more. My .02

Arguing that we should have pure capitalism is ludicrous. Pure capitalism like pure democracy is anarchy and rule by the powerful against the weak. Hence why we have a federal republic and not a democracy. The big three should be helped out. We are sending so much of our economy overseas that we will not have the production base to win a major war against China. We waste billions of dollars assisting war mongering arabs in the Middle East. Let us put our aid money to good use, helping Americans in America.

As I posted earlier, the UAW has not forced a strike at GM due to a pay increase or benefits increase in over 20 years. The strikes that the UAW has had in the past 20 years at GM was due to health and safety reasons and to try and retain jobs in the US which to date they haven't been real sucessful at doing. The UAW has not held a gun to GM's head in those 20 years asking for higher wages, but if you blame them for saying OK we'll take that then I guess your right. :eyes:

Will they do anything with the ship sinking? They will bail and see how useless on the job market they really are. $25 an hour is excessive for unskilled labor. Averaging $1600 per car health care costs. PARASITIC!!

Just please do not let toyota buy out GM. I sware if toyota tries to buy gm im going to fucking lose it.
-Joel

In the fall of 2005 the UAW and GM came to a agreement that was voted on and passed by the UAW current GM workers that saves GM around $15 billion dollars in the next few years by having the retirees pay for part of their health benefits and the current work force took a 15-18 month pay freeze and both have higher co-pay on their medicine and doctor visits. The agreement is said by GM to save them around $4 billion in the year 2006 alone. GM praised the UAW for their efforts in helping them out when they needed the most.
Will they do anything with the ship sinking? They will bail and see how useless on the job market they really are. $25 an hour is excessive for unskilled labor. Averaging $1600 per car health care costs. PARASITIC!!

Just please do not let toyota buy out GM. I sware if toyota tries to buy gm im going to fucking lose it.:werd: :nono:

Personnally, instead of trying to subsidize USA industries, I'm a big fan of levying significant tarrifs on all imported parts/vehicles in all industries, even against American owned companies such as GM and Ford (each of them have numerous imports of parts and fully assembled vehicles). There is nothing produced outside the US that Americans cannot produce, so why shouldn't we provide incentive (in this case, proximity would be the incentive) to allow us to produce everything we consume?What happens when other countries return the favor?They already do, we cannot sell as many vehicles in most overseas nations as they are allowed to sell here.
Now there are other products that we export that can be hurt of course but I'm talking about vehicle versus vehicle here.

They already do, we cannot sell as many vehicles in most overseas nations as they are allowed to sell here.
Now there are other products that we export that can be hurt of course but I'm talking about vehicle versus vehicle here.I'm aware they already do, but the tarrifs are not in significant amounts and we don't have any trade agreements restricting imports based on exportation rates. As the largest worldwide consumer of the majority of products, that is how you leverage tarrifs against other countries without it hurting your exports. One such example would be to set a minimum required ratio of sales:

ex. exports/imports >= 0.5 would require that dollars earned could not exceed dollars spent by a trading nation. (Japan sells $20b cars to US, we sell $20b chickens to them). It has worked for us in the past, and as I see it is necessary for survival of our economy.

Those that think it is not important to have production State-side don't understand economics (yes, even some economists don't understand this one). You cannot base your economy on services, because services are not tangible, just as you shouldn't (though we do, in spite of our money being illegal according to the Constitution) base your dollar on a principle, but on something of value (i.e. gold/silver/precious metal etc.). Products have value, and while I understand that those jobs may seem menial, it is much better to have a menial, reliable job than to not have one at all, or to have a job market that is oversaturated with highly skilled people who have to compete for the opportunity to flip burgers.

do u people think ????? only some it seems....think.....
Whos the genius that said to give GM and ford money since we gave it to the airlines???
The airlines got screwed because of 9/11....PERIOD.....it scared everyone and slowed the entire economy but the airlines the worst....GM and Ford Caused and still cause their own problems.....

Maybe you should research the extent of the financial trouble the airlines had created before 9/11 and how the bailout did nothing to help them. 9/11 was just the final stroke. GM is following suit. BTW the genius said not to give anyone money. :rolleyes:

The fact is we (Meaning US citizens) are killing ourselves. Cost of living here with the high taxes we pay IE: 30% right off the top and the we are taxed when we spend it another 8.25% and some states have an income tax etc... I bet we don't see 40% of what we make! Taxed when we make it and when we spend it and taxed on what we own IE: Property etc... Then throw in all the foreign competition who work for pennys on the dollar. Well to try and make the most of what we make well by the cheaper good from the other country instead of supporting US companies! Who profits the foreign companies do and out US companies cut jobs etc... to try and compete but can't do enough to be competitive so then they go under leaving us job less and the cycle goes on and on until we are all out of good paying jobs. I mean they brag about how unemplyment is down, but what are the jobs people are working (Walmart, Mc Donalds, Toco Bell etc...) I see people working two low paying jobs to scrape by. Now a lot of this will not seem true for a lot of people because it hasn't gotten bad enough for the majority to realize it. The goverment leaves our boarder open because they want more worker to pay taxes just like a good company would want to raise profits so we end up paying more to the lawmakers and officials and more welfare programs etc... I could go on all day about so many aspects of this, but why no one listens or does anything about it. Bottom line we need to buy from US companies even if the products cost more that supports our economy and not the foreigners! We need to close the boarders and concentrate on things here in the US rather than other countries also.

Should we help them, yes because it would have a severe impact on our economy. But things need to change in this country regardging the auto industry. A fact that has been proven time and time again (and not only in the auto industry) is that unions have ruined what was once a great industry in the united states. It is far to expensive to operate they way Ford and GM have had to and still maintain the ability to build a quality product at a reasonable price. Why buy a CTS or Lincoln LS for over $40k when you could buy an A6 or TL and get far more for your money. It truely is a free economy, and it should tell these guys something when just about everyone in this country wants to buy a Toyota over a Ford or GM product. They can do it cheaper and at a higher quality and you can bet your life you will get 150-200k miles out of the car if you change the oil every 5k miles. This should be a wakeup call for Ford and GM.