November 17, 2008
So….
I was going to blog about Cory Doctorow’s Little Brother–and if you haven’t read it, you should. Everyone over the age of 12 should read it. Don’t whine about it being a YA novel. Just go buy and read. Anyway…I’m getting ahead of myself. And I’m about to get political so if that sets your teeth on edge, I won’t mind if you skip this one.
Do you think we should bail out the Big 3 automakers–especially AFTER we (and by we I mean us, taxpaying *Joes*) already loaned/gave them 25 BILLION dollars? Don’t get me wrong. I feel horrible for everyone working the assembly lines who fears for their job/security/future, but as Ashton Kutcher said on Bill Maher on Friday….let the oil companies bail ‘em out since they’ve been in bed together for years. I guess that old addage about laying down with dogs and waking up with fleas still holds true. I have long believed the reason it took us so long to finally get (and improve upon) eco-friendly vehicles is because of the relationship between oil and the car makers.
And furthermore, where do we draw the line? Do we just tell Circuit City to suck it cuz that’s the price of doing business? Why would we contemplate bailing out the automakers and not a retail store? Again…where’s that line?
In other news Citigroup is laying off 50,000 people. I just like wow…
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*Edited to add link to Michael Moore interview. I have to say, it’s hard to feel sorry for a co that screwed their employees so bad.
Michael Moore: When I made that film, there were still 50,000 people working at General Motors in Flint. I mean they had eliminated 30,000 jobs, but there were still some jobs there.
Today, I think there’s less than 12,000 working in the area, so it has devastated Flint. Flint was one of the first towns to go. When I made that movie almost 20 years ago, I hoped that the film would be a warning to other cities that this corporation was intent upon removing jobs from this country and taking them to Mexico and Brazil and other places.
When I made that movie that year, General Motors made a profit of over $4 billion, and they were still laying off people simply to make a bit more money, the people who helped to build the company, the workers in their hometown of Flint, Michigan, they just forgot about them and took the money and ran.
I guess I have mixed views about this one.
If the “big three” go under, the number of jobs to be lost will be tremendous (the Citigroup news is AWFUL!). That, in turn, would not only affect the average Joe, but make a flailing economy even worse.
On the other hand, I hate the idea of bailing these mega-corporations out just because they’ve been badly managed. With that, plus the Union contracts they agreed to in the past, hell, they’ll need bailing out again in another five years or so (unless there’s a Wonder Car they’re hiding that everyone will want to buy).
Where do we draw the line? Hell, I could use a bail out myself. Anyone in Congress wanna step up and do that for me?
And love the idea about the oil companies bailing ‘em out, lol. With the profits they’ve made recently, I’d say it’s a plan.
how in the hell am I supposed to teach my kids how to take responsibility, man up and live with your decisions when EVERYone is getting do-overs.
the coorelation while slim is still there. They hear the news every day and they can tell these big corps are going under and getting bailed out then see yet another AIG week at the freaking-4 Seasons….”The investors {being the big corporations} expect it.” :WTF: (I shit you not that was what the CEO said, when stopped by a reporter on his way back from the 4swasons gym. GAW!
No bank bailouts, no mortgage bailouts, no Insurance company bailouts… no bailouts period, and send everyone in congress with any hand in Freddie Mac & Fannie Mae to prison, just like they did with Enron. If the aforementioned entities want financial relief, stop paying people humongous salaries for driving your company into the toilet. I don’t know when the new paradigm of rewarding failure took over; but it makes no sense at all to bail out a corporation led by some moron who couldn’t make a profit selling ice in hell.
I’m against any bailout for big corporations. Mainly because they are missing the point. The reason they are crumbling is because while they were getting fat checks the people who give up their hard earned money weren’t getting any of those kick backs. None of it. It’s the old republican mindset that if you give the richer more money the poor will get the trickle down affect. But the big hole in that theory is expecting people to be honest and to ignore that greedy little angel on their shoulder.
I think the only way any bailout to work is that they have to keep their workers and give them raises and better benefits. PUT IT IN WRITING. Anyone who goes on a freaking vacation after the bailout needs to spend some time in Club Fed. 10 years minimum.
My brilliant response? Hell, if I know.
I definitely don’t have a soft spot for big corporations that have completely mismanaged their money, their products and their employees, but I do have a soft spot for factory workers who have their very lives hanging on the line if these industries fail. We’re talking about tens of thousands of blue collar jobs being lost in an economy that’s already f-ed up.
Any money given to the Big 3 should come with a HUGE contingent.
1. Complete financial overhaul
2. New business model
3. Total Green commitment
And if they don’t get a bail out? Hopefully the incoming president and his advisers are bringing some ground breaking ideas for new job creation. Otherwise, the economy will be even more screwed than it is now.
Bernard said: …send everyone in congress with any hand in Freddie Mac & Fannie Mae to prison, just like they did with Enron. If the aforementioned entities want financial relief, stop paying people humongous salaries for driving your company into the toilet.
Yeppers! I couldn’t agree more.
What they did is called STEALING.
Send them all to (quoting from the movie Office Space) “Federal-pound-me-in-the-ass-prison.”
I hate the thought of bailing out the big three. I really do. However, it isn’t just the folks on the auto assembly lines that will lose their jobs. It affects independent manucfacturers as well (did I spell that right?). Suppliers will suffer. Also, if GM goes BK so will Ford and Chrysler. Toyota, Honda, Nissan (who is in trouble anyway) will all be affected as will the European car companies. All car companies are hurting right now. I fear the government is going to have to step in but I do believe there needs to be strings attached.
Part of the problem is credit. Because of the banking industry’s meltdown people can’t get credit. Even if you wanted to buy a car right now the dealerships can’t find financing. You need a FICO score of somewhere north of 750 to get some of these loans. The astronomical gas prices this summer really sunk the auto industry as well. People are screaming for fuel efficient cars…but two years ago they were screaming for big ol’ Escalades. Its a fickle market. And if anyone remembers the 70’s, we were screaming for fuel efficent vehicles then. Ford does have a car out that gets 65 mpg and seats 5, but they will only sell it in Europe. It burns diesel and Americans don’t like diesel despite the newest versions of the fuel burn cleaner and more efficiently than gasoline. It would cost Ford too much money to retrofit a factory to make the diesel engine and it wouldn’t be able to compete with the Prius.
I do hope the auto industry recovers. I’m a car lover and I admire the beauty and craftsmanship of some of the old cars. I also drive Fords (we have 6 ) and I like them all.
>>but I do have a soft spot for factory workers who have their very lives hanging on the line if these industries fail.
Tanya… I feel the same. Quite a conundrum.
Rene’s right…it’s not just about GM but the people who supply parts, the salesman at the dealership, the mechanics working their service depts etc. BUT Rene…maybe Ford should have thought about retrofitting a plant a while back. People might look twice at a diesel car when they’re talking 65MTG. I know I would–despite the fact diesel is still pretty pricey.
>>I don’t know when the new paradigm of rewarding failure took over; but it makes no sense at all
Bernard WORD!!!!!!!!! It reminds me of my post about my son’s HS where failures are being hand-held and spoon-fed to get them through. It’s okay–here’s another chance. In real life you don’t get second chances.
Rene said: Part of the problem is credit. Because of the banking industry’s meltdown people can’t get credit. Even if you wanted to buy a car right now the dealerships can’t find financing.
Which is why they need to get this banking situation done toot sweet. It’s amazing how interconnected these industries are. Who could’ve known all these things were being held together by string?
About the car makers. I mentioned a New Business Model above. Part of what I think may need to happen over time is a gradual shift to a psuedo JIT (Just-In-Time) supply model where cars are produced by order which will cut down on inventory. Kinda like how Apple (and Dell) computers operates. You can build your computer online and then it’s shipped to you when it’s done. POD operates this way too.
Part of the problem during the Great Depression was inventory control. Manufacturers had sunk all their money into production and inventory. Then when folks lost their jobs and the economy died, there was no demand for the supply surplus.
Items just sat in warehouses and manufacturers lost their shirts because they’d sacked all their money into inventory that wasn’t moving. Maybe if consumers could get used to walking into a dealership without the expectation of driving home with a car that day, it would help. This way automakers aren’t stuck with a surplus of cars people don’t want to buy. That saves money all around. It’s all about changing the business model structure.
I’m torn. On one hand, I have issues with saying, “Hey, you screwed up your entire industry, but that’s okay! Here’s $35 billion to ‘fix’ things. Don’t forget your bonuses!” Major issues.
But then I also consider the estimated 3 MILLION jobs that might be lost if the Big 3 fail — approximately 300,000 auto workers plus the related jobs. That’s scary. Because I have first-hand knowledge of what it’s like to suddenly lose half your income through no fault of your own (it’s happened not once, but TWICE in our house in the last two years, once to a downturn in industry, once to an injury). I don’t want three million families (or even 300,000 or even ONE) to go through what we have.
What’s really ironic is that one of our vehicles is financed through Chrysler. When I needed to defer a payment because of our financial issues, they turned us down. No bailout for us, I guess!
I think what really, really, REALLY pisses me off with the whole bailout issue is that excecutives continue to take bonuses and junkets and their lives aren’t changing. And yet, we have children who go to bed hungry in the US still. And people living without homes. Our local soup kitchen/shelter is turning people away. There’s something wrong with that. When I think about that, my sentiments on corporate bailouts:
Quite frankly, I think that a HUGE paycut should be a condition of the bailouts (for all executives making over a certain amount of money).
THEN you have the jerk CEO of GM who makes 2.2 million a year base salary and who said if his resignation was a caveat of GM getting bailout money, then they wouldn’t take a bailout. Nice guy. Way to look out for your employees!
oh LINDA!!!!!!!! *shakes head* What a dick! I mean, really people, how much money do you need? REALLY!
LOL, Amie, you’re asking the wrong person: I don’t have any. We give living paycheck to paycheck a new meaning (or have for the past 18 months). So the whole concept of making 2.2 million a year is beyond my reality. But when I heard that on Headline News this morning (Monster #2 is home sick, so I had coffee in front of the news instead of my seniors), I had to pick my jaw up off the floor.
People might look twice at a diesel car when they’re talking 65MTG. I know I would–despite the fact diesel is still pretty pricey.
Problem is that diesel engines are illegal in new passenger cars in some states, including most notably California (or were until quite recently). The automakers just can’t afford to produce a car they can’t sell in California. It just doesn’t make economic sense.
Just thought I’d mention it, because really, this is NOT the automakers’ fault, but the fault of government. And may be ONE argument for the government giving the car industry a loan to get out of the mess IT helped engineer.
>>Just thought I’d mention it, because really, this is NOT the automakers’ fault,
Afraid I have to side with Michael Moore on this one–Not only did they send jobs out of the country, they did nothing toward putting out more economical/environmentally friendly cars until they HAD to because of the unGodly price of gas. They’ve been in bed with Big Oil for years, and now they got the STD’s
er or did you just mean the diesel thing wasn’t tehir fault