Let me explain why the automakers need a "bailout", as I see it

[JohnnyRingo]

When I started at Packard Electric Division (Delphi) in 1972, I was a 19 year old kid hired on at $6.50 an hour to build wiring harnesses for GM cars. At the time, they were hiring 100 people a day, and eventually local 717 was 15,000 strong. I often have people tell me that "that was a lot of money back then", to which I usually reply that "It's sad Republicans still think it's a lot of money".

Anyway... Back then a new Camaro cost about $3,000, and as I mentioned, I was making $6.50 an hour. I could buy one on a three year loan for about $100/month. It hurt, but I could do it and still raise my family. At the time I considered quiting there and joining the Fisher Body stamping plant nearby that was building those Camaros. That's how easy it was to get a good job back then.

I stuck it out however, and after 31 years of service in 2003, I was finally earning four times that amount... but that new Camaro was then selling for almost ten times as much. I didn't need a degree in mathematics to tell me how tough things really were for GM who shifted much of their manufacturing to low wage countries.

For the 50 years before, that included my father's career at GM, the unions worked hand in hand with the auto makers to the mutual benefit of both, and it wasn't until the late '70s when they found cheap labor outside our borders, did they declare the unions as a "drain" on their bottom line.

Since then, companies large and small, have followed suit in pointing out to their employees that "you're lucky to have this job". Unfortunately, they're right. It's a Republican wet dream.

My point is that it's now time to show Wall Street that Americans can build a world class product. A product that's as coveted as legendary German engineering, we just have to be given a level playing field. The companies need to be reminded what "Made in America" is worth to the rest of the world, and if that means government subsidies... then so be it. It's time to gear this country up for what we do best, if not cheapest.

Barack Obama promises to meet with the auto makers and the UAW to find a way to build cars in America once again.
My time is over, but I have grandchildren who hopefully will want to raise a family too.

They're going to need a living wage.

[ixion]

1. thus far, trillions in 'bailout' money has gone down a black hole into the pockets of billionaires

they've been very consistent about this. Why do you think this bailout would be any different? I understand about workers needing a living wage, but that is simply not how any bailout money would be used, IMO.

[depakid]

3. The federal government has gotten preferred stock in many of the institutions

so they've we've actually an ownership interest- it's not all gone down a "black hole," though people like to repeat that as if repeating it enough will make it true.

In the Chrysler bailout, not only was the money paid back, but the government made a tidy profit. From what little infomation is available about what Obama's proposing, that could well be the deal this time around as well.

[ixion]

4. yeah, I know... whenever someone calls for a bailout, you're right there to support it

:eyes:

It's funny, ya know... I was a taxpayer when Chrysler got their bailout, and I never saw one penny of the 'tidy profit' of which you speak. I know you'll scoff at that and tell me how the profit went for thus and so, and that the benefits to me were paid indirectly, but that's just so much hokum.

And much in the same way, though I'm responsible for thousands of dollars in these bailouts (my share of the handover) I'm skeptical that I'll ever see actual dividends paid by the equity purchase Paulson made in the banks, nor will anyone else but a handful of culprits who created the environment in the first place.

[depakid]

5. No, I just look at facts as they are and don't cheerlead for collapses

I also tend to look outside the US at what other nations are doing- instead of simply focusing on what goes on in the states and conclusing it's all a grand Republican scam.

PM Kevn Rudd is using comperable amounts of government money to boost Australia's auto industry- based on some of the same concerns expressed in this thread. It's an onerous thing to do- like many things in life, we wish we didn't have to be faced with the choices and the consequences.

[ixion]

6. GM is profitable in China... why do they need a bailout?

This is precisely the kind of smoke and mirrors I'm talking about:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4452098

And as for transparency, well, that's pretty much out the door.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x47404

Doesn't their unwillingness to discuss what is being done with our money send up any red flags for you at all?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x47402

And what about the fact that money that was supposed to go to free up credit markets was seen as a windfall and used to buy other banks and/or make investments OTHER THAN the lending that was supposed to be freed up?

For me, there are far too many strange "coincidences" and an overt disdain for transparency to believe this is being handled ethically.

[depakid]

8. Sticking to the case at hand...

Here's a brief bit about the Chrysler bailout:

http://uspolitics.about.com/od/economy/a/chryslerBailout.htm

and here's an outline of what might be on the table for GM:

Obama Pushes for $50 Billion for Automakers, Oversight Czar

President-elect Barack Obama is pushing Congress this year to approve as much as $50 billion to save cash-starved U.S. automakers and appoint a czar or board to oversee the companies, a move that would require President George W. Bush's support, people familiar with the matter said.

Obama's economic advisers are now convinced that if General Motors Corp. doesn't get a financial lifeline soon, it will have to file for bankruptcy by the end of January. And if the companies don't get almost $50 billion, Obama will be dealing with the issue again by next summer.

Any czar or board would be patterned after the bailout of Chrysler in 1979 and New York City in 1975. Advisers such as former Federal Reserve Chairman Paul Volcker and former Treasury Secretary Lawrence Summers are said to be telling Obama that the cash is urgently needed now.

<snip>

The failure of those companies would likely bring down parts-makers, dealerships and suppliers in addition to inflicting a deep psychological blow.

If the plan were to offer no strong guarantees against layoffs it would likely draw fire from unions. But Obama advisers have been persuaded that the impact on current workers and retirees would be staggering if the companies went into bankruptcy.

Any auto czar or committee would presumably have the job of overseeing a restructuring of the auto industry.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aBlCucXR33Jw&refer=home

[Sherman A1]

2. Agreed & Well Said

You hit the nail on the head "I stuck it out however, and after 31 years of service in 2003, I was finally earning four times that amount... but that new Camaro was then selling for almost ten times as much. I didn't need a degree in mathematics to tell me how tough things really were for GM who shifted much of their manufacturing to low wage countries.":toast:

[SmileyRose]

7. They need a bailout, but not handed a blank check - they need mandates

the money should be available to them ONLY IF they meet certain requirements by certain dates. GM and Ford have run their companies into the ground and flipped American consumers the middle finger for decades. Toyota only got market share in the 70's because American consumers were fed up with buying crap.

Even now, Ford's flagship vehicle, the F150, when it started blowing up people's houses because of the cruise control switch, Ford said "sue me, it's burnt to a crisp, you can't prove anything". A big FU to consumers. In contrast, Toyota's seatbelt catches funny and they recall every damn car but pronto.

My husband comes from a long line of UAW workers. I believe in unions, I believe in American manufacturing. Here in Atlanta, the workforce for Ford built the best quality, most cost effective vehicle in America, the Taurus - and Ford abandoned them after jerking them around in cruel fashion for 2 years or more. A big FU to America by first abandoning a decent car and then to it's workers by throwing them out.

If it weren't for so many people I love depending on Ford for retiree income and basic medical care I'd say FU sideways to Ford Motor Co. And I doubt GM is any better.