hahaha...this is awesome!!

Quote :

" "There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses," Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee. "It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious." He added, "couldn't you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it.""

http://www.cnn.com/2008/US/11/19/autos.ceo.jets/index.html

[Edited on November 20, 2008 at 9:42 AM. Reason : ,]

11/20/2008 9:15:54 AM

http://info.detnews.com/video/index.cfm?id=1189

11/20/2008 10:28:52 AM

^^ way to read the thread and post something that had not already been posted.

11/20/2008 11:13:34 AM

damn how did i miss that!!

11/20/2008 11:23:57 AM

http://thewolfweb.com/message_topic.aspx?topic=548030&page=4

Quote :

"The UAW called on Congress to provide a low-interest bridge loan to get the companies through the end of the Bush administration until President-elect Barack Obama can put in place a bigger bailout package that will help restore General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler to solvency. "

WOW. So the UAW is under the impression that Obama is going to be giving them A LOT more money. So the 25B they were loaned isnt enough.. now they want 25B MORE to HOLD THEM OVER until Obama comes in with the real money? WTF

11/20/2008 2:06:26 PM

I was wondering where that 'money bridge' was leading to...

11/20/2008 2:18:18 PM

The unions saying that the companies need a bailout in order to become fiscally solvent, is like Rex Grossman saying if Chicago had only had a defense they would have won the superbowl.

But clearly Rex isnt as dumb as these unions goons.

11/20/2008 2:37:52 PM

i am still in favor of a bailout for GM & Ford, with preconditions on drastically improving management structure, renegotating overly burdensome union contracts, making the taxpayer senior & convertible debt holders, and giving incentives to build more fuel efficient/free energy based cars.

Both GM & Ford are already making improvements in their supply chain, making commitments to fuel efficiency, and even though they're late to the game, they're trying in earnest to improve. We can blast them for making trucks instead of making better sedans, but Toyota fell into the same trap - they built too many plants making trucks (specifically in Texas) and its hurting them. Even Honda got in the truck game with the Ridgeline - blame consumer demand and cheap fuel (this is why i bring up the ugly truth of blood for oil that everyone tells me to STFU about).

Chrysler doesn't get any help this time around - they had their slice a few decades ago, Nardelli is one of the worst CEOs known to man, and Cerberus Capital is a bunch of douchebags.

11/21/2008 11:00:26 AM

So why should taxpayer dollars be used to insure against bad business decisions?

Let capitalism work. People do stupid things, they suffer the consequences. We've already seen that loaning out taxpayer money does nothing. The more the gov meddles in the economy, the worse it seems to get. I pay taxes to support the government *governing* and ensuring safety and security for everyone - not to help stupid people profit from their poor business decisions.

11/21/2008 12:15:20 PM

Oh Obama.... what on Earth will you do with this mess?

11/21/2008 1:31:06 PM

If the big 3 implicitly knows that bankruptcy would probably absolve them from their dealings with the UAW, why don't they just go ahead and let this happen?

I mean, short of being "that guy" who tanked GM, you would at least be able to help the business in the long run.

Just take your ball, move under the mason-dixon line, and hope the unions don't follow you into the South. Rebuild and prosper. NC could be a boon for the auto industry.

11/21/2008 2:37:54 PM

If they went bankrupt, all the top management would go buh-bye more than likely, and without a golden parachute no less. They want to keep their positions.

11/21/2008 3:07:38 PM

Bankruptcy is rarely good for the company CEOs

but I dunno... what on Earth are those CEOs thinking? Really, this is far beyond what they can reconcile themselves. If it was up to anyone other than their boards, they'd probably replaced.

How can a few million in a golden parachute even matter to them at this point? But then again, I think you probably have to have some pretty messed up values to get to that position.

11/21/2008 3:36:52 PM

I don't understand your post at all.

Most of the biggest mistakes were made 15-20 years ago, including the ridiculous UAW labor agreements, pathetic reliability ratings and poor performance. Most of the guys who made those decisions are long gone. In the past decade, quality standards have improved substantially from the big 3 and they recently negotiated a new labor agreement which is much more fair to the companies. They have been suffering under the weight of poor decisions from decades past, as well as getting blindsided by the oil price spike. What do you want them to do, fire themselves for the mistakes of their predocessors?

The problem with bankruptcy is that they may never emerge from it, because due to the credit crunch there is a dearth of Debtor-In-Possession financing available. Hell, Rick Wagoner already said that if he needed to leave as a requirement for a bailout, he would gladly resign. But they have already examined bankruptcy and determined that it would likely be a death blow in this credit climate.

[Edited on November 21, 2008 at 5:51 PM. Reason : 2]

11/21/2008 5:48:37 PM

My post was musing at the situation of the CEOs, being nearly hated or at least distrusted by everybody.

11/21/2008 6:22:54 PM

Oh OK. I thought you were blaming them squarely for the mess that their companies are in right now.

11/21/2008 6:30:56 PM

well, i don't doubt that some of they could screw up the bailout trying to improve their own compensation. But what's more likely, is they'll take heat for having the golden parachutes, etc. in place. I mean, they are under the heat lamp.

Obviously, given the background here, they're going to get blasted for just about any 'normal' CEO expense.

And really, the situation is so far beyond their control. They have lots of options and they'll be hated for any of them. It really is an interesting thought experiment to consider exactly what they're thinking.

If one was a true hedonist, they would quit work after making a few 10s of millions. The CEO of a multinational company either likes what they do, or has some power complex.

But in all seriousness, even perfectly competent leaders sometimes have to be replaced when the ship is sinking such a disastrous manner. Just for image.

[Edited on November 21, 2008 at 7:31 PM. Reason : ]


I'm sayin: Maybe sometimes they should act more like politicians, when it's their image that's hurting them so bad.

[Edited on November 21, 2008 at 7:36 PM. Reason : ]

11/21/2008 7:30:35 PM

So, if our whole economy at this point is predicated upon the survival of companies with failed business models, then, well, isn't our economy pretty much fucked anyway? What good would it do to save a failed business? Seems to me that we should let it die and rebuild. If your car has a failing engine, do you say "hey, we must pour more gasoline into the engine so that it will run longer!"? No, you replace the fucking engine or get a new car.

11/22/2008 5:44:57 PM

http://www.freep.com/article/20081123/COL01/811230371/1210/BUSINESS

He has a point from the hypocrisy angle.

11/23/2008 10:47:44 AM

OH HOW FUCKING QUAINT

CITI GETS ANOTER $20 BILLION OVER THE WEEKEND

AN FORD AND GM ARE STILL NOT WORTHY

11/24/2008 9:02:56 AM

But....the market would tumble into deep despair if we let them fail! Surely there is a way to slowly liquidate these crap companies? The FDIC can handle small ones in mere hours without problems but they aren't touching the big ones with a 10 foot pole? I think it's pretty clear that a plutocracy of rich aristocrats is running the show and using taxpayer money to fund it all. Why aren't we more irate about this?

11/24/2008 11:22:23 AM

Quote :

"a plutocracy of rich aristocrats is running the show"

Is this another synonym for the Illuminati?

salisburyboy? Is that you?

11/24/2008 11:41:23 AM

plu·toc·ra·cy /plu't?kr?si/ Show Spelled Pronunciation [ploo-tok-ruh-see] –noun, plural -cies.

1. the rule or power of wealth or of the wealthy.
2. a government or state in which the wealthy class rules.
3. a class or group ruling, or exercising power or influence, by virtue of its wealth.

Origin:
1645–55; < Gk ploutokratía, equiv. to ploûto(s) wealth + -kratia -cracy

You should check the dictonary before making dumb statements ... I think plutocracy applies to this whole scandal

11/24/2008 12:21:52 PM

LOL at BoBo

The Illuminati is a purported shadowy organization of ultra-wealthy aristocrats who control world affairs through connections in government and corporations. It's pretty much the same concept as this plutocracy nonsense.

When will nattrngnabob start blaming the Jews for this mess?

11/24/2008 12:27:29 PM

I don't know who salisburyboy is or what his politics are (haven't seen him post that I can remember?) and I don't know anything about the illuminati. But, so far, the first reaction from our fearless leaders is to prop up stock prices and they are claiming bread lines if we don't. How is that any different than terrorist fear mongering? The sad fact is the MBSs and CDOs are touching EVERY financial player across the globe. The painful pill would be to expose all the toxic debt onto the balance sheet, let the market hemorrhage another few thousand points and erase all this fake wealth we have created, and then pick up the pieces and move on with our lives. House prices aren't going up any time soon, thus, neither are the MBSs and CDOs.

But no, the first reaction is to give give give without any oversight, without any exploration of ways to put these bad banks out of business. And it's just a bit too suspicious that a former GS head is running this clown show. They are doing everything they can to prop up the fake wealth that top dogs at these investment houses have created for themselves, even if it means dragging the rest of the country through a prolonged and retracted recession and a kicking of the problem WAY down the road to be handled by future generations.

However, be an automaker asking for pennies compared to these guys and you get the cold fucking shoulder. Why? Because folks with billions invested in the financial houses didn't have shit invested in the automakers. So fuck em, let em burn right?

11/24/2008 12:37:22 PM

Memo to Automakers: Follow Cisco's Lead
http://seekingalpha.com/article/107400-memo-to-automakers-follow-cisco-s-lead

This time it's only coincidence that i'm cisco employee, whether they use Chambers as the model or not, I completely agree with the gist of the article.

Quote :

"During the dot-com implosion, Cisco Systems (CSCO) CEO John Chambers took an unusual step that set the tone for appropriate, responsible executive leadership during bad economic times. Now, the executive leadership at Ford (F), General Motors (GM) and Chrysler should follow the example Chambers set back in 2002. Amid the dot-com fallout, Chambers received a $1 salary in 2002. That’s right: One dollar. Chambers also declined his bonus and gave back 2 million in stock options that year, according to CNet. Alas, auto industry executives haven’t set a similar example. GM CEO Compensation According to the Wall Street Journal: GM CEO Rick Wagoner got a 33% raise for 2008 and equity compensation of at least $1.68 million for his performance in 2007, a year for which the auto maker reported a loss of $38.7 billion. The salary increase puts Mr. Wagoner’s salary for this year at $2.2 million, compared with $1.65 million in 2007. Moreover, the Journal says: Mr. Wagoner was awarded 75,000 restricted stock units valued at $1.68 million, based on GM’s closing stock price in March. He was also given stock options representing 500,000 shares. GM told the Journal that Wagoner’s total compensation is down sharply from $8.3 million in 2006. My perspective: Yada, yada, yada. Why is this guy still running GM? Ford CEO Compensation According to the Journal, Ford CEO Alan Mulally received $2 million in base salary, a $4 million bonus and more than $11 million of stock and options in 2007. His base salary was unchanged over 2006. Mr. Mulally has earned nearly $50 million in compensation since taking the helm of the auto maker, according to The Wall Street Journal. My perspective: Sounds like Mulally runs Ford about as well as Ford runs the Detroit Lions. Pathetic. Somebody sack this guy. Chrysler CEO Compensation Less is known about Robert Nardelli’s CEO package at Chrysler LLC because the auto maker is privately held, notes The Journal. My take: Somebody dial Lee Iacocca. Fast. The Bottom Line I cover the high-tech industry for a living on TheVarGuy.com and I don't know much about the auto industry. But the situation in Detroit is pathetic. According to the Associated Press: The leaders of the Big Three automakers have painted a grim picture of their financial position. They burned through nearly $18 billion in cash reserves during the last quarter — about $7 billion at GM, almost $8 billion at Ford and $3 billion at Chrysler. GM and Chrysler have said they could collapse in weeks. If John Chambers was running one of those companies, he would have declined his paycheck, bonus and new stock options months ago. Instead of asking for government handouts, high-tech companies innovate -- again and again -- to stay in business. Apparently, Detroit automakers don't know how to do the same. "

11/25/2008 8:33:55 AM

Well, let us think about this logically from the perspective of the CEOs.

A company must be run by someone at some pay. Whoever is CEO of a company at the time of complete failure will be hated throughout history. Meanwhile, the CEO of a company at the time of a complete rescue will be loved throughout history. As such, a human being should be eager to be CEO of the latter but avoid being CEO of the former. As such, it seems to me the same person might be willing to be CEO of an easily salvageable company such as Cisco for $1 but demand many millions to be CEO at a guaranteed failure company such as GM.

11/25/2008 9:26:42 AM

"easily salvageable" and "guaranteed failure" are a matter of opinion.

and even assuming those to be the case, these are the same people who are responsible for their respective situations.

11/25/2008 9:48:16 AM

Not at all. As is the point, they can quit and avoid the costs/benefits of being there when it happens. Hence, I believe, why the CEO of GM demanded a 30% pay increase to stay aboard the sinking ship. Had he not gotten the raise he would have quit. However, if GM was doing fine then he would not have demanded the raise.

[Edited on November 25, 2008 at 10:30 AM. Reason : .,.]

11/25/2008 10:28:58 AM

Just think of the logic of the company that hires him after the 30% was not offered and he quits.

Lets see... this candidate is abandoning his failing company after demanding more compensation when the situation was at its worst. But his resume is impressive and we want the big name. I'm sure he would stick around to get us through hard times.

Our corporate culture often rewards a self-serving rationale. Even when it doesn't make any sense to do so.

--
Oh, but if you want to blame it on someone... the boards.

It's the boards.

[Edited on November 25, 2008 at 11:48 AM. Reason : ]

11/25/2008 11:48:35 AM

Well, our boards do often have a conflict of interest when deciding on pay packages for executives. They know that the better they treat those executives, the more secure their jobs are.

That's why Europe's system is superior, with a separate compensation board that executives don't have control over.

11/25/2008 11:53:25 AM

http://www.popularmechanics.com/automotive/reader_rides/4293188.html

11/25/2008 3:06:09 PM

There is no European or American system, there is only the shareholder system. If the shareholders of a company want a separate compensation board then they get one.

Quote :

"Just think of the logic of the company that hires him after the 30% was not offered and he quits."

Not so. He can simply say "I quit because the board was running the company into the ground." Either way, is it better to have quit your last position or be fired due to incompetence?

11/25/2008 6:16:34 PM

Quote :

"There is no European or American system, there is only the shareholder system. If the shareholders of a company want a separate compensation board then they get one."

Which SEC rule provides for this?

11/25/2008 7:57:46 PM

The one granting shareholders the right to vote out management. "Mr Garfield, your slate is elected!"

11/25/2008 11:20:17 PM

complete simplification, but funny nonetheless:

Quote :

" THE TRAGEDY OF THE AMERICAN AUTOMOBILE INDUSTRY:A Play in Three Acts Dramatis Personae BIG THREE, a manufacturer of automobiles UAW, Big Three’s employee MITT ROMNEY, an idiot ACT ONE BIG THREE: I have plans to build automobiles, but I need labor to do so! UAW: I will labor for you if you will pay me $40 per hour. BIG THREE: I will not pay you $40 per hour. UAW: But I need to save for my inevitible retirement, and any health concerns that may arise. BIG THREE: I will pay you $30 per hour, plus a generous pension of guaranteed payments and health care upon your retirement. UAW: Then I agree to work for you! ACT TWO UAW: I am building cars for you, as I have promised to do! BIG THREE: I am designing terrible cars that few people want to buy! Also, rather than save for UAW’s inevitible retirement when I will have to pay him the generous pension of guaranteed payments and health care that I promised, I am spending that money under the dubious assumption that my future revenues will be sufficient to meet those obligations. ACT THREE UAW: I have fulfilled my end of the deal by building the automobiles that you have asked me to build. BIG THREE: Oh no! I am undone! My automobiles are no longer competitive due to my years of poor planning and poor judgment! MITT ROMNEY: This is all UAW’s fault!"

http://www.balloon-juice.com/?p=14260

12/2/2008 5:12:38 PM

I heard on NPR today that at least Mulally (Ford) and Wagoner (GM) are offering to take just $1 in compensation next year. I suppose its a start...

Ford claims that they're in trouble but could theoretically muscle through on their own.

12/2/2008 8:36:56 PM

Quote :

"ACT ONE BIG THREE: I have plans to build automobiles, but I need labor to do so! I am offering $20 per hour! UAW: That is more than we can earn anywhere else, so we'll take it! ACT TWO UAW: In accordance with the laws of city, state, and federal jurisdictions, we here-by form the United Auto Workers Union! You are legally bound to sign labor contracts only with us and in accordance with these monopoly powers we demand $40 per hour! BIG THREE: I will not pay you $40 per hour. The stockholders would liquidate the company if we agreed to such. UAW: But I need to save for my inevitible retirement, and any health concerns that may arise. BIG THREE: I will pay you $30 per hour, plus a generous pension of guaranteed payments and health care upon your retirement. UAW: Then I agree to work for you! ACT THREE UAW: I am building cars for you at monopoly compensation, as I have promised to do! BIG THREE: I am designing terrible cars that few people want to buy! Also, rather than save for UAW’s inevitible retirement when I will have to pay him the generous pension of guaranteed payments and health care that I promised, I am spending that money under the dubious assumption that my future revenues will be sufficient to meet those obligations. ACT FOUR UAW: I have fulfilled my end of the deal by building the automobiles that you have asked me to build. BIG THREE: Oh no! I am undone! My automobiles are no longer competitive due to my years of poor planning and poor judgment! MITT ROMNEY: This is all UAW’s fault!""

I felt like fixing that for you. As you can see, while management was incompetent, UAW was evil. Had management been clairvoyant they would have read the laws, seen that they did not extend past Michigan's borders, and liquidated the company right then, sending the machinery south and re-openning there.

12/3/2008 2:05:51 AM

Quote :

"I heard on NPR today that at least Mulally (Ford) and Wagoner (GM) are offering to take just $1 in compensation next year."

I always wonder, how does that work exactly? Executives always pull this stunt but wouldn't they at least have to be paid the minimum wage? Also as I understand it, usually the IRS frowns on officers of corporations (especially those with large ownership stakes) taking lower-than-reasonable salaries -- since usually it amounts to dodging W-2 taxes, opting instead to take all compensation as dividend income. Assuming they have dividend income, of course.

I'm just sayin' ... all this talk of $1 is a clever way to dodge the real issue of how much the CEO of a company like Ford "should" be paid. These executives don't want to answer the question straightforwardly because that would involve a market-based approach to problem solving which the public cannot stomach right now.

12/3/2008 2:46:33 AM

can we all stop abusing the damn ceo's for a minute? yes, they are both:

-less competent than they ought to be
AND
-grossly overpaid

BUT:

this problem is on a scale of tens of BILLIONS. getting mullaly, wagoner, and Nardelli to work for free might save a few tens of millions. GM, Ford, and Chrysler don't have jets to brag to one another, they have them because when they need to go, the various costs involved have led accountants to come to the conclusion that at the scale that these multi-national corps operate upon, it's better business for them to charter jets, no matter how bizarre that might sound to the typical american that can only think about how much it costs out of their individual annual taxpayer's income to move their ass across the country on vacation, not how much it costs a team of cooperating professionals to do the necessary macinations of international trade that incur relatively tremendous travel cost, but only because it helps to make the progress necessary to yield profit-making deals in the long run!

The marginal cost of making "them," by which I mean the CORPORATIONS, not the ceos, give up their private airplanes will either be negligible or zero or actually a net cost. So, all this political posturing has so far accomplished is to trim:

-(with making 3 visible ceos work for free), >1/1000th of the real cash shortfall, but at least congress has definitely trimmed this much of the problem. Good work guys. a month of stammering for basically the definition of pissing into the wind...
AND

-(by embarassing the companies' use of travel and making them give up a method of doing business on the basis of a mere assumption that it must be decadent and not actually cost:benefit efficient), probably netted no net benefit while causing american buyers to have another reason to think that american corps are just evil empires out to hedonistically pamper a few billionaires while imprisoning the rest of the country.

Everyone just needs to shut the fuck up and give the goddamn manufacturers loans. Here we are talking about the need for lenders to start to give money, and then, when presented with the top of the food chain of corporately-intertwined-businesses, we're holding out until they give us some confidence.

Christ. Someone tape these senators and reps to a desk chair and make them read through the last 6 months of autobloggreen. There's stuff coming. Give 'em money so they can replace the bs. They can plan it. Nobody knows why the saturn ion, dodge caliber, dodge avenger, chrysler sebring, and various other stupid models happened, but it isn't like the manufacturers can't tell that those models need replacing. They can only get there through funding.

Don't fund 'em and the economy tanks when they are forced into bankruptcy and then stay there for a decade. It will be a goddamn depression. All this money we're throwing at the banks will be for nothing because there won't be anyone who can pay their bills. You might as well force GM to sell all their assets to chinese management. They're the ones with all the dollars anyway.

12/3/2008 4:41:14 AM

Uncle Sam PLEASE bail out our substandard shittily designed car companies that have the reliability of a crack head.

Quote :

"they have them because when they need to go, the various costs involved have led accountants to come to the conclusion that at the scale that these multi-national corps operate upon, it's better business for them to charter jets"

you are right about the so called private "charter jet". I think they are selling them more out of a sign of good faith and to give the appearence of "saving costs" in the wake of their adversity. Realistically the charter jets probably have very little if any net cost to the company when u factor in variables such as lost productivity, airline costs, and misc other variables.

The Wilmington division of my company by itself has 3 airplanes (one jet and two props); and we are not even the HQ or biggest production site. Factoring in the airline costs of shipping various engineers/managers/admin people to Corning, NY or various other places, and the lost productivity time to take an airline (6 hours) versus a direct flight on our jet (2.5 hours ) to Corning NY it was decided that it is actually cheaper to just having our own airplane.



[Edited on December 3, 2008 at 9:21 AM. Reason : a]

12/3/2008 9:15:34 AM

Quote :

" Don't fund 'em and the economy tanks when they are forced into bankruptcy and then stay there for a decade."

The causality here is unclear. Companies that employed more people directly than the Big-3 have declared bankruptcy before without nationwide catastrophic results. Why would now be so special? If GM goes beyond bankruptcy and closes shop Americans will still be buying cars, so the demand for dealerships will be unchanged. All the loose GM dealers will just rebrand to some other company.

Now, it would make the disaster in detroit substantially worse, but maybe it would be a good thing in the long run if it convinces Michigan and a few other states to change their laws.

12/3/2008 9:54:33 AM

Quote :

"The causality here is unclear. Companies that employed more people directly than the Big-3 have declared bankruptcy before without nationwide catastrophic results."

Who? No company that not only directly employs as many people as these companies, but at any given time has thousands more parts suppliers dependent strictly on them and also provides the day-to-day work for hundreds of contractors has ever gone bankrupt, not to mention service jobs that lose their customer base when the drawing forces in some cities go belly up. When they give that number in the millions, it's not just a generous estimate.

Quote :

"Why would now be so special? If GM goes beyond bankruptcy and closes shop Americans will still be buying cars, so the demand for dealerships will be unchanged. All the loose GM dealers will just rebrand to some other company."

GM's dealership glut has been mentioned some during this debate. Honda isn't dumb enough to think it will be worthwhile to have such a massive glut of dealerships as GM has.

12/3/2008 11:31:48 PM

Well, just a few weeks ago Circuit City went bankrupt. Winn-Dixie went bankrupt in 2005. K-Mart went bankrupt in 2002. Delta went bankrupt yet again in 2005. Worldcom went bankrupt in 2002.

Now, it may be that GM and its dealerships employ more people than even K-Mart, something I doubt, but it does not seem to me that GM bankruptcy by itself would be more disruptive than the K-Mart bankruptcy.

Remember: "bankruptcy" and "liquidation" are two drastically different situations, especially given the capital intensive nature of GM's activities.

But, that is a stop-gap argument: let us assume GM declared bankruptcy a year ago and just now the creditors are giving up on restructuring and are liquidating the company. That would mean they have already repudiated GMs debt, fired unproductive workers, replaced everyone with mexican laborers, cut back production to the most efficient, and still cannot break even at any point in the future (if it is just a matter of waiting for the market to turn around they will). As such, if the creditors choose to liquidate that would mean one more car maker will in all likelihood never be profitable, as such keeping these workers and contractors working for GM would wrack up even more losses for American society. It would make everyone on-average better off to liquidate.
1. "but at any given time has thousands more parts suppliers dependent strictly on them and also provides the day-to-day work for hundreds of contractors"
These parts suppliers usually provide parts to more than just one car assembler. Especially when you realize that car buyers will not stop buying cars just because GM is not there to sell them. These buyers will still buy cars, they will just be from toyota and honda. As such, these car makers which have recently idled their own factories would respond to the boost in demand by ramping up production to fill it, increasing their demand for parts, contractors, and auto workers. Those fleeing GM will need to leave detroit and relocate south, but many Americans already do just that every year.
2. "not to mention service jobs that lose their customer base when the drawing forces in some cities go belly up"
People do not stop shopping at foodlion just because they lose their job. Service customers keep consuming when they lose their job, so the customer base follows the customers, if they remain in Detroit then these service jobs will remain in Detroit. However, as stated in an earlier post, it is possible that the shock of liquidation would encourage Michigan to make policy changes to curtail union powers. As such, faced with a tooled assembly plant in Detroit another car company, such as one that does not already have its own transplant factories in America, would buy the factory at fire-sale prices and resume production under a new name (think the movie Gung Ho from 1986). If detroit auto workers find themselves willing to accept low wages in exchange for not moving to a southern state then this will happen.

Not to mention that at any point in this tale the union already has enough cash reserves to buy GM outright and avoid liquidation. As such, my argument is two fold: 1. if liquidation happens then it was in the best interest of the country 2. liquidation is unlikely because even if it would be in the best interest of the country it is not in the best interest of either GM's creditors or workers.

12/4/2008 11:04:56 AM

any of yall watching these proceedings on cnn right now?

fucking retarded

12/4/2008 12:41:09 PM

You gotta love all this. For 700 billion (and ultimately much more than that), we pass that almost overnight (on the second try), no hearings, no oversight, nothing.

For a mere 25-34 billion, we call the heads of 3 big companies, union heads, employees, suppliers, the GAO head to come to hearings...everyone is saying oversight will be needed, and so on and so on.

This...this is absurd.

12/4/2008 1:52:39 PM

I agree. the 700 billion was stupid.

12/4/2008 2:20:56 PM

Amazing to me, but apparently a major argument for this has been - "Congress did something stupid, why can't they continue to do stupid things?"

12/4/2008 2:36:17 PM

combine into 1 and nationalize?

12/5/2008 2:51:22 AM

http://money.cnn.com/news/specials/storysupplement/stateautoworkers/index.html

How many people are employed by the auto companies per state, their salary. Its wayyyy more people than I thought.

NC has 59,276 jobs because of the auto industry.

12/5/2008 8:11:19 AM