Bailout Discussion

[elNastioBananaHando]

Just read this article.

http://www.cbsnews.com/stories/2008/...n4595068.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.


WTF?

[Deff Gordon]

crazy man.

the dems are the ones wanting to bail them out.

[Sinner]

Originally Posted by elNastioBananaHando

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.

how about the other reason of the GM cars are teh suck?

[Hubb]

they need to dismantle that clusterfuck of a company and move on. Shitty cars and shitty finance programs

[Deff Gordon]

i like my tahoe.

[J. Fees]

its hard to let a entire manufacturing industry just completely die. its a pretty tough situation to say the least.

[C-fer]

10 bucks says this was due to Unions.

Blame them, not the company.

Edit: Wow didn't even read the article and I was right. Reading it now..

[J. Fees]

UAW is the source of a lot of this failure.

[elNastioBananaHando]

Originally Posted by DjKrispy

10 bucks says this was due to Unions.

Blame them, not the company.

Probably right but the company had to agree with it to an extent. They allowed for it to go through.

If I was the big boss I would't haven't agreed to a deal. If I felt I was threaten by a strike I would kill one of the Union Boss and hang his corpse in some public spot where everyone could see it. You know set an example that I won't tolerate that kind of bullshit.

[elNastioBananaHando]

Originally Posted by Deff Gordon

crazy man.

the dems are the ones wanting to bail them out.

The whole effing system is blame here not just the dems. I mean the whole bailout thing is a major clusterfuck.

[david austin]

failure of 2 of the 3 would result in about 2-3 million jobs lost

its not just the actual assembly line process employees that go with the ship

[J. Fees]

Originally Posted by david austin

failure of 2 of the 3 would result in about 2-3 million jobs lost

its not just the actual assembly line process employees that go with the ship

yup, its not even an option to not bail them as far as i can see.

same for the airline industry, who we bailout from time to time.

[david austin]

it does show some inherent problems with our system though.

for one... big auto/unions/lobbyists/etc were incredibly slow to see the writing on the wall to move toward a more efficient lineup of vehicles

the idea of forever cheap oil led us to an ever expansive lineup of big gas hogs and now we are tied in many cases to products we dont even want anymore

and its not just the big three here. ALL auto makers are struggling. even the mighty honda/toyota brands are having severe years

gm has done pretty well over the past few years to develop better lines of smaller efficient cars and trucks while slowly paring back on the large scale trucks and suvs. i know it doesnt seem as apparent on the roads but the numbers show them moving in the right direction. its not very easy to retool a company as massive as gm in a few years. youve got unions, pensions, and lobbyists all putting up massive ammounts of red tape towards reconstruction and then you add in one of the worst inflationary periods for the one thing autos are most tied to...oil... coupled with one of the worst economic downturns in decades. its a very tough postion

[tricky]

Originally Posted by david austin

failure of 2 of the 3 would result in about 2-3 million jobs lost

its not just the actual assembly line process employees that go with the ship

I move for a compete government takeover of all major industries that are too big to fail and integral to our economy. Autos, finance, airlines, anything else? Only through complete government funding can we assure that these companies follow sound business practices and make products the world wants to buy. All business will be run by the merged Department of Commerce and Labor which will set business plans and policies for all government corporations. Americans will reap the profits of these strong and growing companies through dividends paid yearly.

[Deff Gordon]

Detroit Is Tanking, But Toyota's in Trouble, Too

http://blog.wired.com/cars/2008/11/gm-and-ford-may.html

Everyone knows General Motors, Ford and Chrysler are in deep, deep trouble. Cratering sales, credit downgrades and cash reserves that are dwindling faster than a keg at a frat party have some analysts saying we may see one or two of the Big Three go down for good. Critics like to say Detroit's getting what it deserves because the Japanese build better cars, but guess what -- Toyota isn't looking so great these days, either.

Toyota's stock nosedived 17 percent last week -- its greatest decline in 18 years -- after the company announced it will see an operating profit of just $6.9 billion, a 73.6 percent decline over last year. That's far worse than expected, and it underscores not only the dismal state of the domestic auto market but some strategic mistakes Toyota made on its way to becoming the biggest automaker in the world.

"Toyota has become used to carrying excessive investment, and this has left it vulnerable in a downsizing," Takaki Nakasishi, a J.P. Morgan Securities analyst, told Reuters. "It's important to recognize that the current steep decline in Toyota's earnings is not only a cyclical problem -- the downturn has been exacerbated by its own structural problems."

If Toyota's in trouble, it means a global economic meltdown that has sent auto sales tumbling 32 percent in October alone could shake the entire auto industry to its core.

Toyota has been showing Detroit how it's done for almost two decades now, racking up eight consecutive years of profit growth and consistently delivering profit margins that make competitors drool. For years it seemed the company could do no wrong, cranking out successful cars like the Camry and Prius. Taking advantage of the big three's relative weakness, the company ramped up its sales and marketing operation and aggressively plowed its profits into new North American plants (it now operates 10). It paid off, allowing the company to push its market share from 7.5 percent in 1990 to 16.3 percent today.

But some missteps along the way mean the economic slump is hitting Toyota harder than its Asian rival Honda. Part of it is a timing issue. Seeing a hole in its lineup, Toyota rolled out the full-size Tundra pickup in 2007, just as gasoline prices started skyrocketing and U.S. consumers started abandoning trucks and SUVs in favor of more fuel efficient cars.

Now that the economy is on the skids, the company's breakneck expansion of its U.S. operations isn't looking all that smart, either. The soaring value of the yen hasn't helped, because it's made Japanese exports less competitive and undercuts the value of earnings made in American and elsewhere.

Also hurting the company is its unwritten but understood policy of not laying off permanent employees. It's a wonderful practice, but this year it will cost Toyota $300 million to keep workers on the payroll while its factories sit idle. Nissan, Daimler, GM, Renault, Ford, Volvo and Chrysler don't share Toyota's altruism -- they've all announced layoffs in the last month.

In a way, Toyota is a victim of its own success. It has over the past 20 years transformed itself into one of the two biggest fish (the other being GM) in the pond. But now that pond has turned into a festering swamp of freaked out consumers and eerily quiet dealerships, and it's not such a great place to be.

Toyota won't go the way of Bear Stearns. It has a fat $18.5 billion cash cushion, almost no debt and a big lead in clean technology led by the Prius. Demonstrating its flexibility, it announced earlier this year that it would flip its new plant in Mississippi from building Highlander SUVs to Prius hybrids. And it's speeding up the roll out of new hybrids, with plans to launch four new models next year.

That said, no one expecting things to turn around anytime soon. Toyota's in for some lean times. And that's a big change for a company that for years looked like it could do no wrong.

POST UPDATED 10:00 a.m. PST.