Briefly, I heard Barney Frank on NPR talking about this, I personally think that the Automobile industry built the middle class in America and helped us all go to college and remain free from student load debt (at least for undergrad). Representative Frank said something interesting as well, it was all fine and dandy to bail out AIG and other white collar job employers, but bailing out employers who employ blue collar workers is cause for debate? He also talked about the demand for larger vehicles (SUVs and large trucks) that has fueled GM, Ford etc making them.
That's exactly what I (Rusty typing on Meridth's account) told my mates in Decatur when Jay brought the NYT article to my attention and agreed with it.
i've been in arguments with people about this topic, and i typically support a bailout. the question i have is whats the worst that will happen with filling chapter 11? gm will not cease to make cars or function for that matter. its my understanding that there will be governmental oversight (problems galore with this one) as well as drastic cost cutting measures, but what does this mean in the long run?
a more stream lined company? yup. insane unemployment? i don't like it, but a potential necessity towards a more profitable company. a general motors run by bean counters? i sure as hell hope not, we're just starting to make some phenomenal cars (cobalt ss, malibu, solstice, corvette(awesome for a while i guess), G8, etc). remember the cars from the 80s? bean counters. employees will lose benefits/pensions? maybe, but i can't think of a business other than the government that has decent health care. this gets into the whole country's health care issues. something the auto industry has taken to washington only to get shot down.
who knows. i think alternatives should be discussed, and i have a bad habit of playing devil's advocate.
ps. from what i've heard, the 700b bailout money may not be getting to the financial industry like they (banks) had planned as the government is noticing they are setting a precedence.
health care! Don't get me started...seriously, GM and other Auto companies offered great affordable health care (again, one of the only blue collar employers who does) and they get punished for it?!?! Drives me crazy.
Seriously, if the government didn't shift the responsibility for health care costs to the employer, the auto industry wouldn't be in such trouble.
Ed told me as well that the union is making a lot of compromises on health care, pensions, and pay for new hires. Which leaves me wondering, why is the union the bad guy?
Again, I get all riled up because I feel really grateful for Ed's great job and all the amazing benefits he received because of it.
Just to answer Ryan's question (and I know Dad will have a lot to say about it, too, tonight), we stand to lose everything we've ever worked for. Dad's pay will be cut in half--he'll be working for $14.00 an hour, he'll lose his pension, and he'll lose his retirement insurance benefits!
mom, is that fact or speculation? i know the delphi thing went to crap but will this be that bad as well? should unskilled, uneducated line workers make 60k a year? again playing devils advocate. i understand the importance of a strong middle class for a healthy economy, and i understand the personal hit towards dad specifically.
i keep thinking about stuff to write after i post. i also think your probably right about the pension and medicare thing. the wage thing i don't know about, but i doubt your far off.
I get pretty defensive about it as well. Of course everyone at Honda just sits there and says it's all the union's fault, while we get paid what we do because Honda has to compete with the union. At the same time, I've spent time at GM and know the attitudes of some workers is "us versus management" and helpful in no way.
Betsey, that's an interesting take on the financial bailout versus a potential auto bailout. NPR rocks!
It's hard to say what would work. If there was a clear right decision they would have made it by now. I thought Mitt Romney had some good points about the D3 needing change and restructuring. Of course, this restructuring is induced by the financial crisis and also made almost impossible to do by the financial crisis too.
Ryan, I get what you're saying about GM going into chapter 11 and I somewhat agree, but who knows what would happen. If they go into bankruptcy who is going to buy cars from a bankrupt company? Who will give them financial aid right now? If no one buys their cars, they can't survive. It would be a role of the dice, essentially saying that they can hold on until this recession is over.
Although I work at Honda, this stuff really makes me nervous too. If one of the D3 went under Honda would no doubt feel the effects. I'm not sure how many common suppliers we have, but the infrastructure of the whole industry could really get damaged and cause problems for any automaker (not to much tons of other jobs and industries). Other Honda plants just announced production cuts today. I hope I'm not next!!!
As per Ryan's discussion of the Delphi debacle, GM was the wealthy relative that paid off all the debts, and smoothed over the workers' pay decreases. They also secured future pensions and insurance responsibilities. Without GM's involvement, there would have been a far greater disruption in the supply chain. They also tucked several hundred former Delphi employees in at other GM plants (including the FW plant).
A GM bankruptcy would be more like a United Airlines bankruptcy in that pensions liabilities would be jettisoned to the government which would only pay 60% of pension benefits, with no medical coverage at all. Our retirement plan from a year ago had me receiving $3000 a month with medical benefits completely supplied. Under Chapter 11 (or worse Chapter 7) I might get $900 a month in pension benefits, MAYBE, and NO medical benefits. According to NPR, yes, bankruptcy would allow GM to dissolve or renegotiate EVERY contract, including their contracts with dealerships, suppliers, and union workers. Everyone will lose!
The new GM contract only pays $14.38 an hour with NO pension benefits, only a 401K $40 weekly matching investment. New contractees get reduced medical benefits, and would be hard pressed to ever afford one of the vehicles they produce. Bye-bye middle class--it was nice knowing you.
This crisis was brought about more by the credit crunch than ANY unwise decision made by management. They only produced the vehicles demanded by the greedy consumers. Every company would have done the same thing by catering to consumer demand. That is free enterprise. I still can't get over those Washington DC politicians forking over $700 billion, sight unseen, but subject the heads of the Detroit automakers to the most humiliating questioning!
End of soapbox. We all know it's wrong. Wagoner is correct when he predicts a tsunami of economic proportions sweeping over this country. Are we ready?
By the way, that shot at the top of the initial post (the Suburban coming down the line) was shot in Janesville. I guess Four Wheeler magazine did a tour/shoot there some time ago. I googled "GM assembly" and found it. Small world.
12 comments:
Briefly, I heard Barney Frank on NPR talking about this, I personally think that the Automobile industry built the middle class in America and helped us all go to college and remain free from student load debt (at least for undergrad). Representative Frank said something interesting as well, it was all fine and dandy to bail out AIG and other white collar job employers, but bailing out employers who employ blue collar workers is cause for debate? He also talked about the demand for larger vehicles (SUVs and large trucks) that has fueled GM, Ford etc making them.
Just my two cents late at night.
Clearly I'm defensive about it.
I like Rep. Barney Frank
That's exactly what I (Rusty typing on Meridth's account) told my mates in Decatur when Jay brought the NYT article to my attention and agreed with it.
i've been in arguments with people about this topic, and i typically support a bailout. the question i have is whats the worst that will happen with filling chapter 11? gm will not cease to make cars or function for that matter. its my understanding that there will be governmental oversight (problems galore with this one) as well as drastic cost cutting measures, but what does this mean in the long run?
a more stream lined company? yup. insane unemployment? i don't like it, but a potential necessity towards a more profitable company. a general motors run by bean counters? i sure as hell hope not, we're just starting to make some phenomenal cars (cobalt ss, malibu, solstice, corvette(awesome for a while i guess), G8, etc). remember the cars from the 80s? bean counters. employees will lose benefits/pensions? maybe, but i can't think of a business other than the government that has decent health care. this gets into the whole country's health care issues. something the auto industry has taken to washington only to get shot down.
who knows. i think alternatives should be discussed, and i have a bad habit of playing devil's advocate.
-ryan
ps. from what i've heard, the 700b bailout money may not be getting to the financial industry like they (banks) had planned as the government is noticing they are setting a precedence.
-ryan again
health care! Don't get me started...seriously, GM and other Auto companies offered great affordable health care (again, one of the only blue collar employers who does) and they get punished for it?!?! Drives me crazy.
Seriously, if the government didn't shift the responsibility for health care costs to the employer, the auto industry wouldn't be in such trouble.
Ed told me as well that the union is making a lot of compromises on health care, pensions, and pay for new hires. Which leaves me wondering, why is the union the bad guy?
Again, I get all riled up because I feel really grateful for Ed's great job and all the amazing benefits he received because of it.
Just to answer Ryan's question (and I know Dad will have a lot to say about it, too, tonight), we stand to lose everything we've ever worked for. Dad's pay will be cut in half--he'll be working for $14.00 an hour, he'll lose his pension, and he'll lose his retirement insurance benefits!
I'll let Dad write more tonight.
Claudia
mom, is that fact or speculation? i know the delphi thing went to crap but will this be that bad as well? should unskilled, uneducated line workers make 60k a year? again playing devils advocate. i understand the importance of a strong middle class for a healthy economy, and i understand the personal hit towards dad specifically.
ryan
i keep thinking about stuff to write after i post. i also think your probably right about the pension and medicare thing. the wage thing i don't know about, but i doubt your far off.
ryan again again again
I get pretty defensive about it as well. Of course everyone at Honda just sits there and says it's all the union's fault, while we get paid what we do because Honda has to compete with the union. At the same time, I've spent time at GM and know the attitudes of some workers is "us versus management" and helpful in no way.
Betsey, that's an interesting take on the financial bailout versus a potential auto bailout. NPR rocks!
It's hard to say what would work. If there was a clear right decision they would have made it by now. I thought Mitt Romney had some good points about the D3 needing change and restructuring. Of course, this restructuring is induced by the financial crisis and also made almost impossible to do by the financial crisis too.
Ryan, I get what you're saying about GM going into chapter 11 and I somewhat agree, but who knows what would happen. If they go into bankruptcy who is going to buy cars from a bankrupt company? Who will give them financial aid right now? If no one buys their cars, they can't survive. It would be a role of the dice, essentially saying that they can hold on until this recession is over.
Although I work at Honda, this stuff really makes me nervous too. If one of the D3 went under Honda would no doubt feel the effects. I'm not sure how many common suppliers we have, but the infrastructure of the whole industry could really get damaged and cause problems for any automaker (not to much tons of other jobs and industries). Other Honda plants just announced production cuts today. I hope I'm not next!!!
karl
Dad said:
As per Ryan's discussion of the Delphi debacle, GM was the wealthy relative that paid off all the debts, and smoothed over the workers' pay decreases. They also secured future pensions and insurance responsibilities. Without GM's involvement, there would have been a far greater disruption in the supply chain. They also tucked several hundred former Delphi employees in at other GM plants (including the FW plant).
A GM bankruptcy would be more like a United Airlines bankruptcy in that pensions liabilities would be jettisoned to the government which would only pay 60% of pension benefits, with no medical coverage at all. Our retirement plan from a year ago had me receiving $3000 a month with medical benefits completely supplied. Under Chapter 11 (or worse Chapter 7) I might get $900 a month in pension benefits, MAYBE, and NO medical benefits. According to NPR, yes, bankruptcy would allow GM to dissolve or renegotiate EVERY contract, including their contracts with dealerships, suppliers, and union workers. Everyone will lose!
The new GM contract only pays $14.38 an hour with NO pension benefits, only a 401K $40 weekly matching investment. New contractees get reduced medical benefits, and would be hard pressed to ever afford one of the vehicles they produce. Bye-bye middle class--it was nice knowing you.
This crisis was brought about more by the credit crunch than ANY unwise decision made by management. They only produced the vehicles demanded by the greedy consumers. Every company would have done the same thing by catering to consumer demand. That is free enterprise. I still can't get over those Washington DC politicians forking over $700 billion, sight unseen, but subject the heads of the Detroit automakers to the most humiliating questioning!
End of soapbox. We all know it's wrong. Wagoner is correct when he predicts a tsunami of economic proportions sweeping over this country. Are we ready?
I'm not.
By the way, that shot at the top of the initial post (the Suburban coming down the line) was shot in Janesville. I guess Four Wheeler magazine did a tour/shoot there some time ago. I googled "GM assembly" and found it. Small world.
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