BlogHer - Against the Auto Industry Bailout? But Are You As Smart As A US Senator? - Comments

a fresh, rational perspective

beyondjustmom — Thu, 04 Dec 2008 21:28:09 -0600

Erin, I'm coming into this conversation a bit late, but thank you so much for providing some fresh facts, myth-busting and rational conversation. I'm really amazed at how uninformed the public (and congress) is about the changes the industry has made in the past several years.

The hypocrisy between the blank check for the banks being rewarded for egregious, intentional robbing of the american people and the manufacturers has been driving me crazy. Mitch Albom wrote a great editorial on this a couple weeks ago, and I've included a few posts on my blog about a personal perspective.

Today's grilling seemed a little bit more sane. It will be interesting to see what happens next.

BeyondJustMom

Thanks for the discussion (and the link!)

RavinPictureMaven — Thu, 20 Nov 2008 08:55:27 -0600

Yes, I'm in agreement with Kady in our article that you linked to and believe (as she and Joanne Bamberger do) that Congress needs to restructure bankruptcy and the automakers need to take that option.

But in fairness, I was 1000% against the bank bailouts, too, and look where that is now (proving, I believe, my opposition was very well-founded).

I worry for the workers---believe me.

But bailing out is not the answer.

For the record, neither are electric cars. Frankly, green building can achieve a lot more than any additional efforts on cars. That said, there does need to be improvement in miles per gallon and fuel source, among other things. We spent many years focusing on safety improvements, then gadgets---all of which marketing and advertising made essential to any car. Fuel efficiency never was *made* as important...by the automakers.

The current business model has continued to cater to the demand of the market. While that seems resonable, it's actually a poor practice. Look at other technology---this market needed to innovate similarly and drive the market forward (err no pun intended, for once).

We can't keep bailing everything out.

Do you know there was not one single bond initiative for public schools in my area in this month's election?

While government is busy bailing out business, schools are cutting back more. Who does this affect? First, the students. No new schools, which means more crowded classrooms. Also, more driving for parents because bus routes are being cut back. It also means layoffs in architecture firms, which afects all the contractors and subcontractors too.Second, it affects the future. Badly.

It's bad all over. I fear for all of us, financially. We're all going to have to make unpleasant sacrifices.

Bailing out banks and automakers won't solve that.

I just had lunch with a banker who put house buying on hold, alogn with many other things, waiting daily for a layoff notice.

Julie
Using My Words

And what about horse shoe

msjen — Thu, 20 Nov 2008 00:22:08 -0600

And what about horse shoe makers in the 1920s... Did we give them big loans to continue making horseshoes while Henry Ford was cranking out the Model A?

No. Maybe it is time for Detroit to innovate 100 years later. What would Henry be doing today if he were alive?

He would be innovating and not looking back to some grand glorious past. He would be inventing the future and putting folks to work in with that vision, not looking back at 20, 30, 50 years ago and trying to put folks to work on what worked then.

Detroit has dragged its heels and lobbied against real innovation for the last 2 decades. If we rescue them, fire the executives and bring in new ones with an eye to how to move the industry forward not stay in 1965. Maybe get some new executives from Brasil, Japan and Europe, who know how to make an innovative and economical autos while keeping folks employed.

Black Phoebe :: Ms. Jen

And about the electric cars

msjen — Thu, 20 Nov 2008 00:14:52 -0600

And about the electric cars they discontinued and recalled a few years ago and then GM's Chairman or CEO bragged to the press that they didn't need to go green. Yeah. Right. So they want a loan from the gov't to continue what they discontiuned in their arrogance a few years ago?

More like a Bridge loan to build more Suburbans & Hummers.

Black Phoebe :: Ms. Jen

Electrical Cars are NOT Environmentally Friendly

MLOKnitting — Wed, 19 Nov 2008 23:26:29 -0600

::threadjack::

Um... NO WAY! Do you guys even realize that most electricity in the USA comes from COAL and NATURAL GAS? I am sickened whenever I hear about how "environmentally friendly" electrical cars are. No, they are not. I am so sick of hearing people who know nothing about how energy actually works go on and on about how cars are evil. Please see http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html to learn more about the realities of energy usage. Cars are a very small portion of both energy consumption and pollution.

:: end threadjack ::

The fact is that, at this point, without the BRIDGE LOAN, the only people who will be out of luck are GM and Ford domestic divisions, partners, and suppliers. Not to mention all of the bartenders, cosmetologists, store clerks, construction workers, dry cleaners, etc. who will be driven out of business because no one will be left who can afford to buy their products or services.

Oh, and make no mistake, the Japanese will help their keiretsu's interests while Washington will leave our companies to twist and turn - just like putting healthcare on the corporate interests instead of recognizing it as a Common Good and allowing an even competitive field. But, the responses here - and at other sites I frequent - have confirmed for me how nasty Americans have become under 30 years of the Greed is Good religion of Reagan. Nothing good came from that man. The fall of the Soviet Union lead to 9/11 if you actually understand anything about sociopolitics, you know that, but I digress.

Socialism is evil. (Unless it is for the oligarchs in banking.)

Greed is Good.

That is what this boils down to. Americans have decided to reward oligarchs instead of helping the common man. The worship of wealth in this country has become disgusting. The bankers are criminals. The automakers are not - with a few exceptions.

Yes, there are issues with GM, Chrysler and Ford having non-auto guys in high places. The company I trust most to do right is Ford. Ford, no matter what others are in position, is run by the Ford family as they have the only votes that count. Ford has a long history of doing right by its employees when it could. (The old man was a racist idiot in some ways, and a busybody, but he believed he owed his employees loyalty, and some of that exists to this day.)

So, to all of you who have decided to vent your hate on the auto industry, you are just misguided by oligarchs who are winning the class war.

MLO / Melissa

The CEOs/Execs of these

jdg from sweet juniper — Wed, 19 Nov 2008 19:15:36 -0600

The CEOs/Execs of these companies are rarely auto industry insiders. they are typically b-school hotshots brought in from other corporations to solve problems and earn multi-million dollar bonuses for increasing the companies' share values or floating away on their golden parachutes if they don't. these men don't live in detroit and they don't care about detroit or the workers at these companies. they do care about their own reputations in the business world. waggoner, GM's CEO has personally donated shitloads to the republicans and now look at what they are doing for him. nothing. I do enjoy the irony of that.

I'm in no mood for finger-wagging right now. if you're going to attack the poor decisionmaking of these men and women who represent the leadership of the industry but don't necessarily represent the interests of the people building the cars we drive I would at least ask that you acknowledge the huge historical and cultural role these companies have played in the United States, as I've already said, building the middle class in this country, building a culture of promise and mobility and building some pretty fucking beautiful automobiles over the years. they have taken care of their workers and their families. you don't have to drive an American car to appreciate this rich history. congratulations, yuppies and free-market nutjobs, now you can dance on the graves of the Big Three and their stinky union-made gas-guzzlers! huzzah! I hope you're still this happy when the fallout hits.

Labor Didn't Force Bad Management Decisions

Gena Haskett — Wed, 19 Nov 2008 18:56:17 -0600

Let's get real here. When the upper management of the three American car companies go to Washington and ask for a loan it is not because they handled their business affairs in the more prudent fashion.

Yes, using American workers cost more. You can't pay people $30 dollars a day anymore. With or without unions. Health costs are also a factor that all businesses are struggling with, so let's deal with that elephant in the room as well.

I do agree with you, tax dollars should not reward failure. That is what is happening in the banking industry bail out. Those SOBs are paying each other bonuses for performance. Poor performance. Who stuck it to you more they or the one or two goofs in the break room?

This is a little different. The auto industry is asking for a loan. They intend to pay it back. You ain't gonna see a dime back from those bonus to upper management and sales, performance bumps and rewards for meeting quotas with methods that eventually got people kick out of homes.

Gena - Out On The Stoop

Where Do They Move On To? Where Are The Jobs?

Gena Haskett — Wed, 19 Nov 2008 18:43:34 -0600

Labor intensive industries have been moved to other countries. Corporate and other U.S. farmers are setting up farms in Mexico and other countries and then exporting the food into America.

The 99 Cents Only Store gets vegetables from China and other countries. Textile industry, gone. You have whole cities that have been industrially abandoned. We have limited manufacturing and those digital televisions they want us to buy? They weren't made around here, probably from Korea.

Customer service jobs have been exported to India, the Philippians and parts yonder.

Where do these folks go? Not everyone will be able to transition into tech, health care or low paying service and retail positions. Budget cuts mean those that want to re-train will not find seats in community college classes or vocational training that they need.

I hate corporate welfare too but here is the deal; it will destroy whole communities and have a jolting effect on an already shaky financial infrastructure.

It is not just Detroit. Look at Philadelphia, Chicago or any of the former industrial cities. Cities that have been devastated by the loss of industry and going on 10 to 20 years of nothing.

I don't wish that on anybody or any city.

Gena - Out On The Stoop

unions

Erin Kotecki Vest — Wed, 19 Nov 2008 18:01:13 -0600

THAT union you speak of also makes it possible for my grandfather to live in an assisted living center right now.

I'm proud of what they have done to make sure american workers are taken care of. Does it go too far and should they give a little? That is entirely possible, but we should also be HONORING and holding UP companies that treat their workers so well.

And those agreements were accepted by management. Takes two to tango.

Your tax payer dollars will be used one way or another if this industry goes down or stays alive. The question we all should be debating is which will hurt taxpayers more...saving them or not...

Politics & News Contributing Editor
Queen of Spain

Let Them Burn

undersundog — Wed, 19 Nov 2008 17:43:06 -0600

Let big labor sleep in the bed it made. There are auto workers who can get paid $30 an hour for sitting in a room playing rubics cube, literally, thanks to union bargaining.

U.S. Auto was in big trouble before the economy went to hell.

When we spend our money propping up failing industry, we're wasting money that could go into innovation and new industry.

Our tax-payer dollars shouldn't reward failure.

Bias is all around us

CityMama — Wed, 19 Nov 2008 17:02:32 -0600

Jim, I mention those movies for two reasons: 1) to show that this problem has been brewing for years. 2) to illustrate the way some in the auto industry have attempted to stifle innovation. Are they the gospel? Of course not. Does it give me a reason to be suspect of what is happening behind closed doors? Yes. There is bias from all sides. The slick Obama-esque website that GM just launched and has been shuffling out to bloggers presents one side. The mythbusters article presents another. What isn't propaganda at this point? It is very hard for me, as a citizen of this country, to listen to CEOs ask for money who flew private jets to Washington DC. Forgive me, that looks bad. Their employees are sacrificing. Where is their sacrifice? I want to know what was being done in the interim to take care of employees. I want to know what was being done to care for workers all along. How easy was it to maintain their insurance coverage? Were they able to get retrained if they lost jobs? Did they receive help in finding new jobs? How did they plan for innovation? Why weren't their hybrids brought to market sooner? I very much resent the notion that those of us who are liberal (proudly in my case) and/or who live outside Detroit lack compassion for the auto industry workers and/or are being shortsighted about the future of manufacturing in this country.

My parents run a company that proudly manufactures all of the products it sells around the world right here in the US of A. They have done so for over a quarter of a century. They personally/financially/corporate-wise have made lots of sacrifices to keep it that way and have never had layoffs or had to ask the government for a bailout. True you can't compare their industry to the auto industry, but there are right ways and wrong ways to do business. There are right ways and wrong ways to care for your employees.

We care. That's why we have so many questions.

Stefania Pomponi Butler

I blog:
CityMama
Kimchi Mamas
MOMocrats

Yes! Yes! and YES!

Erin Kotecki Vest — Wed, 19 Nov 2008 16:52:52 -0600

and hug that town for me, please.

Thanks.

Politics & News Contributing Editor
Queen of Spain

good discussion here folks. . .

jdg from sweet juniper — Wed, 19 Nov 2008 14:24:59 -0600

I find it so strange that liberals are using the whole "environmental" angle to attack the proposed bridge loans and right wingers are flinging about "free market" accusations to condemn the loans. strange bedfellows.

I'm not sure a couple of thought-provoking but inevitably biased pieces of propoganda (roger & me, who killed the electric car) should be used to seal the fate of an extremely complicated and important American industry. these companies have made a lot of mistakes, but unlike the convestional wisdom I don't think it has anything to do with fuel efficiency or union contracts. as someone pointed out, GM has diligently been completing work on the 100+ mpg Volt that will actually never require a drop of gas for anyone who commutes under 40 miles per day. I think that says a lot more about this company than a 25-year-old documentary by Michael Moore. Honda and Toyota make SUVs. The Big Three makes hybrids.

While I agree these American companies have made a lot of bad decisions, they have made one good one: as I point out in my post linked above, they have continued to manufacture their products here in the United States. They have a 100 year history of doing so. they helped build the American middle class. for more than half a century they have provided union wages to American workers and provided health care benefits to those American workers and their families. They have invested in American communities.

You can drive something other than one of the Big 3's products and still have the compassion to hope these companies won't fail. And I surely hope you can live outside Detroit and not be callous and shortsighted about the future of manufacturing in this country.

I don't think those who

cooper — Wed, 19 Nov 2008 12:15:53 -0600

I don't think those who bail-out ( taxpayers who have also lost parts of their retirement) should bail-out the legacy healthcare and pension plans off others, bailing out the industry on some level I can understand, and though the union has made many concessions over the last few years there will have to be more.

These industries are going to have to try harder, yes they are going to have to go green and that is because that is where the money will be in the future and it's time they figure it out, and they will have to start producing better quality cars for less money.

Workers on some level have to take responsibility for their own lives and realize times have changed, jobs are no longer lifetime jobs and they sometimes need to move on

Don't mind saving the workers on some level either but if we are saving them only for them to go back to work for an unproductive company which continues to make stuff nobody wants it's a bad idea.

but they have been, and they are

Erin Kotecki Vest — Wed, 19 Nov 2008 10:04:55 -0600

the industry has made HUGE strides, but no one seems to care or notice.

Politics & News Contributing Editor
Queen of Spain

Against the Auto Industry Bailout? But Are You As Smart As A US Senator?

Erin Kotecki Vest — Tue, 18 Nov 2008 20:49:12 -0600

I've been watching the Senate Banking Committee ~~talk to~~ grill the top executives from GM, Chrysler and Ford for three hours now, and I'm angry.

Even our Senators are perpetuating myths about the Auto Industry and Detroit.

Mark Phelan at the Detroit Free Press sums it up better than I can with his 6 Myths about the Detroit 3 article:

Myth No. 1

Nobody buys their vehicles.

Reality

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2

They build unreliable junk.

Reality

The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

The list goes on with 4 other myths including the lie that Detroit doesn't build hybrids and only makes gas-guzzlers. I know, you're shocked right- you thought they were only making SUV's and Light Trucks? You thought they lacked innovation and new tech? Yeah....WRONG(pdf).

One of my favorite Detroit bloggers said it so much better than I ever could today. Sweet Juniper writes,

"I'm no apologist for the Big Three or their ridiculous missteps and lapses of judgment. But I do care about the regular people who work for these companies and played no role in those poor decisions. Consider, too, the charities that receive donations from both corporations and individuals connected to the auto industry and the people those charities help. Some of the moments when I was most proud of my fellow Americans were when people stopped in the wake of natural disasters like Hurricane Katrina or the Asian Tsunami and gave what they could to help fellow human beings who were suffering. Three years after Katrina, New Orleans is starting again to look like New Orleans again.
It hardly looks like Detroit at all anymore...
One thing I like about GM, Ford, and Chrysler is that they are companies that still make something. What do the vast majority of the Fortune 500 companies even do? What does Goldman Sachs do? What do all those companies in Silicon Valley make? They shuffle paper, sure, transmit blips of binary code, attend important meetings, and make "deals." Maybe brown people somewhere across an ocean will make whatever it is they're selling or shuffling on paper or e-mailing each other about. But in Detroit, and in plenty of other industrial cities across this country there are still people making things without exploited labor, and believe it or not that still means something."

But let's get back to the grilling auto execs got in DC today, with more to come tomorrow. Ford, GM, and Chrysler are asking taxpayers for a 25-million dollar loan and the United Auto Workers union stood next to management.

I have to admit- that alone was a powerful sight. Seeing Ron Gettelfinger, president of the UAW, agree and stand beside management in many of the discussions. It was a powerful reminder to me just how many jobs are at stake.

There was a protester during the hearing holding up a sign reading "No more corporate welfare" and I wondered if she understood just how many of my friends and family would be collecting welfare if the Big 3 stop making cars.

Trading Goddess Stock Blog notes the ripple effect, "Little was I aware this morning that the stock market was going to be held hostage by a Senate hearing on the auto industry this afternoon to discuss a bridge loan to rescue them."

NADA's AutoExec magazine has the full economic impact reports, just from the retail side of things.

Let's just say it can't be ignored.

Much like the buzz over GM's viral video on the need for federal help can't be ignored:

I'm not saying there are any easy answers to an Auto Industry bailout. I know many of you think bankruptcy is a better option. But I am wondering if YOU have all the facts, if even our own Senators didn't.

How many of those myths did you think were true? And how many of those Senators still won't know by the end of the day tomorrow, as they possibly decide the fate of my family and friends...

Erin Kotecki Vest also Queen of Spain blog