Hurray for union contracts!

GM is running out of cash because its products suck.

Let's let the free market decide.

Ridiculous. There's no reasonable argument that can be made for propping up bad management, a crappy union, terrible products and a dishonest dealer base.

Let them fail. They deserve it. There's a huge automotive industry in this country that's doing just fine without Detroit or the UAW. There's no reason to bail out a failed company, especially when there's no anticipation that they're going to change anything for the better.

Not that that'll happen, since The Messiah is due to pay off the UAW for all those confiscated dues that were turned into donations.

To quote the immortal JR "Bob" Dobbs:

Buh-bye.

"GM Almost Out Of Cash, Looks To Washington For [Another] Bailout"

There, I fixed it for you.

I say let the company die. It's nobody's fault but their own for building their business on a sure to fail business model for the past decade. Did they honestly think soccer moms would continue buying SUV's and other underperforming gas wasters forever? Yes, the job losses in the mean time would be catastrophic, but we just need to wait for the market to turn around, and have another auto company to step in to fill the gap. Or, *gasp* maybe the workers just need to adjust and find a different job, possibly in an entirely different sector of the economy.

These companies don't need handouts. Certainly not ones given by the government funded entirely on borrowed taxpayer money. They need lessons in smart business management, how to adjust to changing consumer trends, and how to better manage and invest their finances.

Haven't they been bailed out before, sometime in the 80's? I know that the workers would suffer if they were to dissolve, but seriously... treat this company like a horse with broken legs...find the shotgun and lets move on.

@Canino: Totally agree - in a time when unions are pretty much obsolete (from an economic perspective, anyway) I'm taking great pleasure in seeing the unions negotiate themselves out of jobs. It's unfortunate that unsuspecting auto workers who thought the unions were only looking out for them (yeah, right) will have to suffer as a result of poor management, negotiations and foresight.

@GavinEstecado: The auto industry is like the airline industry. They're pretty much constantly getting "bailed out".

@GavinEstecado: that was Chrysler 1979.

We've seen this movie before - it was called the 70's. Domestic automakers sold large gas guzzling cars that weren't quality/price/mileage competitive with imports - flash forward 30 years and it's still the same thing. Let them sell themselves to Cherry or some other Chinese automaker that's dying to get a foothold in the American market.

If Congress bails GM out, I might consider you-know-what-icide.

@blackmage439: I agree. Would a big Two be better for the economy than a big Three?

Sure, selection would suffer; but every mismanaged company does not need to operate in perpetuity.

They are running out of cash NOW because Bush is still in office, and GM knows Bush supports the Corporate handouts.

well, would it not make sense for there to be some "payroll" cuts to slow down the burning threw of cash reserves? Let the managers take a 5-10% reduction, that will make up the 6.8 billion real quick :)

Chrysler was given loans in the 80s, which they repaid early, actually. However this time, I give UAW and GM management equal marks for this cluster fail, thinking they can sustain multiple brands of the same car...if they'd have cut loose Buick, Pontiac and GMC when they axed Olds, they might have had a fighting chance, but with $1,500 out of every car sold going just to retiree healthcare...its unsustainable, no matter how red, white and blue your blood runs.

This has been a long time coming. Seems like they threw caution to the wind and hoped for a bailout instead of dealing with their problems.

@Bertmanintx: That is one of the most logical and smartest business decisions I have ever heard.

Unfortunately, the world's business just don't operate that way. CEO's may not be immune from criminal prosecution, but they'll be damned if they take even a 0.01% reduction in pay.

@catcherintheeye: It's unfortunate because at the same time the unions are disappearing, we're also losing a lot of the progress they once made. Wages are stagnant, pensions are gone, and the 8-hour workday is a fond memory for a lot of people.

@catcherintheeye: This is why I believe the Detroit auto companies are going to disintegrate. Obama is very pro-union so I doubt he will do anything to help the companies de-unionize. So the only way that the "Big" 3 can survive is if the government socializes them...

I'm not pro-union, and I'm typically a "let the chips fall where they may" kind of person when considering these things, but keep in mind:

Directly or indirectly GM supports 900,000 US jobs. If GM goes under do not expect Ford, or the US plants for other manufacturers to up production in a significant way. 900,000 additional unemployed.

When GM shut down for 2 months in 1998 the US economic growth rate fell by 1%.

GM's pension, as I understand it, is not a free-standing investment plan, like state plans, etc. That is, GM funds their employee pensions in part from operating expenses, not from an invested pension fund. I couldn't begin to guess the number of people who rely on GM pension and retirement benefits. 2 Million? These people lose, if not all then a good portion of their retirement funds and benefits.

So, while you are gleefully dancing on GM's grave understand how bad this would be for the US. 900,000 newly unemployed with millions of people losing their only source of income in retirement, and millions more without health insurance.

This is not to say that we should bail out GM. This is only to say that we should not be happy to see GM go under.

History repeats itself...

"I'm changing my name to Chrysler
I am headed for that great receiving line
So when they hand a million grand out
I'll be standing with my hand out
Yes sir I'll get mine.."

Thanks Tom Paxton.

@Bertmanintx: Yes, and then we can cut 20% of the blue collar union workers (no big loss) and cut their wages by 20%. They have been hacking at the white collars and R&D for a while now.

@TecmoTech: Infanticide? Herbicide? Spermicide?

@tedyc03: The thing is, GM's products have improved markedly in the last few years, and they haven't exactly been resting on their laurels. The Cadillac CTS-V is a world-class car that can stand up to anything BMW makes. The Volt is a revolutionary design that they look to be on the verge of actually producing. The fuel-cell version of the Equinox is, by all accounts, a reliable vehicle that anyone could drive if the infrastructure to fuel it existed.

It's just too little, too late. The bottom fell out of the SUV market before the other stuff was ready to go.

I think it would be a disaster long-term for the U.S. to lose its automotive industry. Cars are the most complicated things anyone mass-produces on a large scale; having people around with the knowhow to build something like that is important strategically. The financial meltdown has shown us the folly of having an economy that depends on moving money around instead of actually building things.

@FrugalFreak: Obama supported the $700 billion bailout as well... I'm pretty confident that Obama will support the bailout of the auto companies as well. He has chosen Governor Granholm (D-MI) as one of his economic advisors for his transition team; she obviously supports bailouts of the auto companies since it's the only major industry in Michigan. I don't think he would have picked her if he disagreed about that. He will support the bailout saying that it's to help the factory workers, not the executives...

Solution:

Throw out the union contract. Restructure the jobs without the insane rules enforced by the union*. Offer the jobs to the best current workers. Tell the UAW to go truck itself.

People will want their jobs.

*Did you know that on Broadway, there are minimums to orchestra jobs? So even if your production doesn't need the minimum number of musicians, you are still required to pay a cellist here or a percussionist there to meet the minimum?

*Friend of mine works in a factory. Over the years, a process has been improved and automated to the point where someone needs to just press a button to kick it off, and come back 4 hours later to refill the hopper. Because of union rules, they can't let someone else on the floor add this to their daily duties. There is a guy who gets paid for pushing the button, hanging out in the break room for 4 hours, refilling the hopper, pressing the button again, and going back to the break room to finish his shift. Union rules won't allow for elimination of that position.

Unions are important to look out for the safety and well-being of the workers. But their over-reach is going to kill them, their companies, and our economy.

@Canino: Yes, it is clearly the fault of the unions, and not the gross incompetence and refusal to realize that gas was not a limitless commodity that is causing the American Motor companies to fail. I would accept unions as a part of a larger problem, but to pass off unions as the sole source of their financial woes is disingenuous.

@Farquar: Retirees? Don't worry, the Federal government has set up the Pension Benefit Guaranty Corporation, which bails out private-sector pension plans. No worries!

Oh, wait: seems like PBGC is running out of cash almost as fast as GM: [www.washingtonpost.com]

@Farquar: no, i think we'd rather build a bonfire, throw a crash test dummy on top, hang a "UAW KILLS BABIES" sign around his neck & dance around it while it burns.

gotta love how everyone blames the workers for the poor strategic decisions of the executives.

Does this mean it's harder to buy a car from them? My dad and I have been trying (yes, I know, against all logic, but they are cheaper) and they don't want to deal. Part of that could be my dad, though.

On NPR yesterday a representative for the auto makers pointed out that the closure of one or more automakers would not only put the staff of that company out of business, but also signal a reduction in force for dealerships.

We're talking DEALERSHIPS here, people! Those stalwart mainstays of honesty and transparency that we all look upon fondly, thinking warm thoughts regarding the great treatment they always provide their customers.

While GM is a crappy company, you can't just let GM die as other people have pointed out. The last thing Obama can do in the beginning of a presidency is let 1 million people go on the unemployment line.

@mac-phisto: I know. It's so easy to blame the unions. People seem to think that these massive, multinational companies are somehow powerless in the face of people holding signs on sticks.

Unions are the only hope workers have of getting any say at all, as companies become more and more powerful and more and more cozy with the government.

If GM goes under and the government doesn't grant them a bailout, we can expect many Americans to lose their jobs. But wouldn't that mean other auto makers increase production to fill in the gap in the market? Companies like Toyota have plants that put together cars in the states in order to bypass certain tariffs and quotas. While the demand for cars are declining, people still need to get their cars from someone.

@ecwis: Doesn't matter what Obama thinks because it wont be his call. The automakers need the money by the beginning of December, and Obama doesn't take control until the end of January.

@rockasocky: I think he means Spermicide

Obama should do to GM what the IMF does to foreign countries and give them a "do it our way or go broke" deal.

Lend them the money, not give it, and tell them it has to be used to build small, fuel efficient cars that the public wants. If they don't like it, they can go cap in hand to Ford or a foreign automaker or just go belly up.

@Bertmanintx: The funny thing is, when companies get this way the Ceo's and board members say they need a pay raise - to ensure that they can keep people from leaving - as if it would be a bad thing to lose the team that got the company in its current bad situation.

@Canino: Or "hurray for excessive executive pay and excessive pay for engineers that have failed miseribly to address the needs/wants of our countries automotive buying population.

Unions gave us a middle class. Their erosion will remove it. Blame greedy execs for companies' downfalls, since they're the ones causing them. Any industry that is seriously hurting will see its unions take cuts for the benefit of the company, how often do the uppers do that same thing?

@Orv: Blame YEARS of piss poor quality and and bad decision making for their downfall. I swore of GM when my Pontiac's head gasket went, I I found out that they ALL fail due to their design. GM knew it and not only failed to fix the defect in produced cars, but continued using the desing for years after.... All it would have taken was a change in material for the gasket, but they refused to address the issue...

@rellog: I sort of agree. While I think Unions have historically been corrupt and, in many ways, counterproductive, they did maintain a middle class and keep blue-collar workers in the US. The death of American manufacturing has coincided with the death of labor unions very closely.

If you find this stuff interesting, check out season 2 of HBO's The Wire. Actually, check out all season. Awesome stuff.

The job losses would probably be even higher than 900k, don't forget all the vendors they use for car parts as well.

Also don't forget you will have people losing their minds thinking they will not be able to get warranty work on their car so they will be dropping their GM cars to where anything with a GM label on it will be worthless. That effects used car dealers, or repair shops. I know most people don't have a positive image when they think of a car dealer, but you need to consider how much tax revenue is given to your state with each car they sell, how many people the car dealer supports, etc. GM is so far reaching that the financial crisis might be that much worse if GM were to go under.

@jdhuck: Chrysler ain't doing too hot either so we could be left with the big 1.

Just to inform some of you. 900,000 people out of jobs is a low number. The number would be closer to 1.5 million. You have to think about all the suppliers, the companies that sequence parts, and trucking companies. GM closing would have a huge domino effect all over the country and even outside the US.

@P_Smith: I agree.

@Mooshie: It's not a fear that there will be a gap in the industry, because everything you said was right. It's a fear that losing those jobs will put another strain on the economy and could increase the time it takes to fill that gap.

I'm guessing some short-sighted people in Washington right now are asking each other this: if we throw money at GM and slow this collapse, could we recover faster? Or, we could play it fairly and let them fail, but would that risk a longer return to normalcy?

@Murph1908: Truer words have never been spoken. Wagoner's total comp is a drop in the bucket compared to the ridiculous wages they pay the union jerkoffs to do menial labor.

So for those of you out there whining about unions, I have a simply way of fixing the issue. A law that requires executive to receive compensation based on the earnings of their employees. For example, a CEO may receive 50 times what the average non-management worker would earn. And that figure would extend to employees in other countries as well. So I doubt we'd see much overseas jobloss from it.

Seems fair to me...

Hurry corporate welfare seekers! Bush time is almost up!

@Farquar: I'm not happy that see GM go under. I just acknowledge that its GM's executives' willful decisions that are causing it to go under. They have deliberately built cars that won't sell at prices well below cost for years. They have been losing money on each consumer sale, yet hoping somehow that things would change.