Detroit Wants $25 Billion Loan From Congress To Help Cover Retiree Health Care Obligations

[Purveyor]

Source: Associated Press

WASHINGTON (AP) _ The leaders of General Motors, Ford, Chrysler and the president of the United Auto Workers union came to Capitol Hill Thursday to discuss billions of dollars more in financial help for the companies, which have struggled under a weakened economy.

House Speaker Nancy Pelosi was meeting with the chief executives of Detroit's automakers to hear their expected plea for an additional $25 billion in federal loans for future health care payments for retirees.

The executives also plan to seek help in accessing money from the Treasury Department or the Federal Reserve.

Congress last month approved $25 billion in low-interest loans for domestic automakers and suppliers to retool plants to build fuel efficient vehicles. But congressional allies of the industry have said the money will not be available fast enough to help the companies.

U.S. auto sales declined to their lowest level in more than 17 years last month, prompting some auto executives to predict dire consequences if the economy doesn't improve. The companies are hoping Pelosi will include funding for the industry in an economic stimulus package if she decides to call the House back in for a lame-duck session.


Read more: http://www.courant.com/business/ats-ap-congress-automakersnov06,0,3315260.story

[GodlessBiker]

1. If it can't pay the benefits, how is it going to repay the laon?

[krkaufman]

20. Yeah, I'd think these companies are seriously bad risks. n/t

[TNOE]

2. WTF?

As of February - GM retirees are no longer eligible for ANY health care benefits. I think they get maybe a $300 a month check. Their longterm healthcare (nursing home, etc.) which the employees paid into - IS GONE.

[rfranklin]

3. Looted, just like our Social Security payments...

Remember when Reagan raised the SS payments to cover it in perpetuity? Well, then they spent every fucking cent and more! On what? On stupid ass Star Wars boondoggles and wars of aggression and savings and loan bailouts and other Republican fuck ups.

Time to eat the fucking rich!

[tclambert]

8. I call the brisket!

[Donnachaidh]

4. dontcha think we should be investigating WHERE the previous monies

paid into the fund by the workers WENT TO - before we even allow these companies to ask for more?

Oh yeah -- how MANY jobs did they outsource to other countries in the past eight years? Perhaps they need to bring those BACK before they start asking for more money?

F*CK GM -- they got into the mortgage market and lost their shirts. :nopity:

[jwirr]

5. Instead of covering all these individually just get the national health

care program started. Every cent we give out like this means less for the health care plans.

[tclambert]

12. That's a big part of it.

A while back, GM estimated something like $1500 in the price of each of their cars is for health care. And all the foreign auto companies they compete against don't have that cost component because they are from countries with national health care.

Yet another way in which free trade is not necessarily fair trade.

[LisaM]

19. There is also the pension issue

when the Japanese car companies moved into the US market, they did not pay the pensions that the US companies did. Whether or not you agree with all the decisions the US companies have made, they have been put at a disadvantage in a number of ways (pension and health care being two of them). There have also been allegations that the government of Japan improperly subsidized research and development of the hybrid car. I don't personally have a problem with government subsidize of such R&D - but there should be a level playing field. If there are restrictions against that subsidy, then either there should be penalties, or the restrictions should be lifted against everyone and our government should get to subsidize our car companies too (fine with me).

[eilen]

34. Aren't retirees eligible for national healthcare (Medicare) anyway ? nt

[Telly Savalas]

35. They only become eligible at age 65.

So if they retire at age 60, they aren't covered.

Additionally, Medicare doesn't pay for 100% of medical expenses of its members (e.g. deductibles). Private retiree health benefits will cover the part of the bill Medicare doesn't pay for.

[eilen]

40. Thanks. I just assumed everyone retired at 65, my bad nt

[Kalifornia.Kid]

6. Insert Jimmy Hoffa joke here:

[droidamus2]

7. Question

When they talk about retiree health benefits does this include ex-CEO's and big wigs? If the do help bailout the companies I don't think these people should get anymore than the lowest level workers.

[Mithreal]

9. They failed to innovate, there are other American auto companies

that represent the future of the automobile. Sorry, automakers, you were your own worst enemies. Damn Congress for propping them up and taking their payouts that ironically allowed them to weaken themselves as corporations. Doesn't help that average Americans like myself are losing jobs and cannot afford to even buy a new car. IF YOU WANT TO BAIL THEM OUT, use taxpayer dollars for universal single payer health care. Frag health insurance and all these MEGAcorporations asking for handouts. Don't ya know there are cleaner and greener auto companies in the US that could use that money?

[tclambert]

Size does matter in auto companies.

A tiny company may not even be able to bring out one new model a year. A couple of misses and they're gone. A big company can bring out 10 or 12 new models at a time. Much greater chance of having a popular hit. It's actually very hard for a small car company to innovate, unless their cars are extremely expensive.

[Mithreal]

14. Umm, I grew up a few miles from Detroit, all my family

and it was large, worked in the auto industry. I know of what I speak. They have had failed leadership, nothing less. And they have had a complacent enabling Congress.

Watch "WHO KILLED THE ELECTRIC CAR".

Check out these companies.

http://www.teslamotors.com/

http://www.zapworld.com/about-us

There hafta be more. IT IS NOT ABOUT SIZE. IT IS ABOUT INNOVATION. It is about VISION. If America wants to support an auto industry, support innovators!!!

This is the same thinking with loosening lending, we gave how much to COLOSSAL banks and we could have given that money instead to CREDIT UNIONS and other banks that have proven themselves a value to their communities.

SIZE, come on.

[NickB79]

30. Sorry to be the bearer of bad news, but Tesla is hurting, badly

http://latimesblogs.latimes.com/uptospeed/2008/10/telsa-musk-ev.html

Cutting production, laying off workers. They might not survive the next year, unfortunately.

[Mithreal]

33. Can't see how you are breakin bad news.

The economy is crashing everywhere practically.

Also does not change my point, we need to support innovators. Are you saying they cannot use the support? If anything, you are strengthening my argument.

[PassingFair]

10. Detroit wouldn't NEED the 25 Billion if we had National Health Care.

How 'bout you give us a billion now, and
National Health in 3 months?

[Mithreal]

13. Damn straight! nt

[tclambert]

11. Presidential election over, but economic voting goes on

We vote with every dollar we spend on where we want jobs to go, on what kind of future we want for America, and what kind of future we want for the world. When we buy Chinese and Japanese goods, we vote for them. We vote to transfer wealth out of our country and we vote to transfer jobs out of our country.

When Lee Iacocca said in those old commercials, "Buy American," I realized he was on to something, and went one better: "Buy local. Buy from friends and family." Since then, I won't buy a Japanese or a German car. I'll only buy cars made by companies where friends and relatives work, and I'll only buy from a dealer where my neighbor works. The Japanese and the Germans might be nice people, but I'd rather give jobs to friends, neighbors, and relatives.

And I would prefer that American car companies survive. They got caught with too many big SUVs in their lineups when gasoline prices soared. It takes them some time to respond, but they will. I hate to think what it would mean to America to be without any domestic car company.

[Anywho6]

15. The Big Three need to be taken over by the government

All three need to be made smaller and more efficient and make ONLY fuel efficient cars/trucks and they sure as hell aren't going to do it on their own. I know this would mean a loss of jobs, but not nearly as many as there would be if all three went bankrupt. By the way, I don't wish unemployment on anyone--I've been without a job for four months. Shame on all three for such an epic failure of leadership, management and innovation. This is all just friggin' ridiculous.

[krkaufman]

21. And a massive purging of their upper management.

The Big3 have failed miserably, and shouldn't be propped-up merely to continue the same practices. A change has gotta be made.

[Psephos]

22. Just like British Leyland n/t

[last1standing]

16. No money to those who outsource our jobs!

I just asked a repub client of mine to name one single benefit to the U.S. to be gained by giving this $25 billion to the auto companies and she couldn't think of one. I live in the Detroit suburbs and I know that my livelihood would be devastated by the loss of the auto companies - at least it would be if it already wasn't devastated by their increased offshoring and wage cuts.

Things are bad here in Michigan, the worst of any state in the Union, because we have allowed an industry that is vital to our national security to move its means of production to other nations. There are no jobs here, not even the usual low wage crap. We are literally dying and no one is listening to our screams for help.

Regardless of party affiliation, we need support - quickly! However, throwing money at the auto companies without demanding a return investment in our state is useless to us. If the only concern is paying off health care obligations, put the retirees on an insurance plan, paid by the government and cut out the middle-man who will just take half off the top for "administration fees". It will do just as much good without wasting all the money.

[L0oniX]

17. Pay for my health care too while your at it n/t

[Hotler]

18. They paid in about four billion cash in a joint venture with

China to build a engine manufacturing plant there. Not much of your Chevy made in Amerika any more.

[Psephos]

23. Could it possibly have anything to do with the exploding Chinese market for automobiles?

Same goes for India. GM, like Ford and Toyota and Daimler and the rest of them, sell to international markets, and that means they must manufacture locally, too. North America is a mature market. All the growth potential these days is in Asia.

No US-market GM cars have Chinese engines, btw.

[Hannah Bell]

25. 5 million units in china, 15 million in the us - yet gm can make a profit

in china, but not in the us.

why is that, do you think?

the us was a mature market when the japanese entered it - btw.

[Psephos]

26. You honestly don't know the answer to that?

wow

[Hannah Bell]

29. i know *an* answer, but i'm interested in hearing yours.

[Hannah Bell]

24. There is something seriously wrong with the US auto situation.

The big 3 have been pleading poverty for 30 years, & getting all sorts of bennies from the gov, not to mention miscellaneous bailouts. They've used the $$ to move overseas (started moving to China in the 80's), lose jobs & screw their employees. They've been making big profits overseas for years, but somehow they just can't manage it in the US.

According to this, in '05 they had 460,000 retirees & 317,000 employees (world-wide). 777,000 employees + retirees.

http://www.accessmylibrary.com/coms2/summary_0286-9693173_ITM


According to this, they took in 181 billion in revenue in 2007.

http://en.wikipedia.org/wiki/General_Motors

So let's assume half of that revenue goes to cost of materials, overhead, etc. That leaves 90.5 billion. That still leaves about $129,000 per employee/retiree.

That would allow you to pay every employee/retiree 60K & still have 45 billion in profit.


I seriously think these businesses are being skimmed via fancy accounting, & the US auto slump is just one more screw-the-workers scam.

[No Elephants]

27. Obama will make this a Socialist country! Oh wait...it's Bush and corporations. Cool [sarcasm]

[olddad56]

31. don't get your message, but even socialism would be a breath of fresh air

compared to the facsist ways of Bush.

[ohio2007]

38. Bring in Mugabe for a consultation on how to steer an economy

he has the experience on how to remain in power also

[iceman66]

28. Was there ever a better argument for national health care?

Aside from the 40 million uninsured, of course.

Health care costs in this country are crippling the ability of US corporations to compete, as just about the entire rest of the planet has some form of national system.

"Socialized medicine" would actually be good for business!

[curse of greyface]

32. Don't worry a private firm has offered their help.

[Trillo]

36. Maybe all those patents and blueprints for current and future models

should be "open sourced".

However, I like the National Health Care plan better. It would put all companies on an equal footing, whereas now there's this feeding frenzy of pigs at the trough, and the biggest, most aggressive pigs are getting all the food. Of course, if the national health care plan such as universal and single payer medicare were adopted, these aggressive pigs would decide to creatively account another "need" for $25 billion.

What would $25,000,000,000 do for the homeless? Assuming homes cost $250,000 then $25 Billion would buy 100,000 homes outright. Would that buy enough homes to solve the homeless issue?

[KakistocracyHater]

37. Claw-back that from CEO pay-packages

quit with this bs & get it from where it went-the CEO, the CFO, it should be illegal to get taxpayer handouts when the money is already enough to cover such things, it's just been stolen by a CEO who happened to pile-drive the coprs. into the ground & got a huge pay bonus anyway.

[sarcasmo]

39. This is why the bailout was a bad idea. Let the Corporate begging begin.