Let Detroit Go Bankrupt

Originally posted by Realtruth
reply to post by jefwane

 

The Big 3 will not go bankrupt. Here is my prediction, they will close ranks and kick all the a-holes out that are currently running the companies, this will be done by the workers actually personally stepping up to the plate and taking pay cuts. People will wake up and take more pride in their work ethics.

Detroit has many talented, trained skilled workers, actually generations of them all those years of production, schooling, trades are not a waste.

I also believe this will transpire on a nationwide level, because people are sick of the lazy fcks, that are bleeding the system. If someone doesn't perform they are history. I also don't believe that because someone has a higher level job they deserve more, if you put your time in you share equally in the corporate earnings, if the company losses so does the group as a whole.

I know there is a company here in the USA that runs this way and they are extremely profitable, and everyone takes pride in what they do, if someone does not perform it's by by. Can't remember the name right now, but i'll post it when it comes to me.

Believe what you want, but a superb auto tech is no where near as valuable as a superb exec or an interested board member. All positions are integral to the whole, that's true. And you can take any extreme angle you like, i.e. laborers are the foundation of society and if they go everyone goes, or that execs are the decision makers that bring everything and everyone together; neither stance proves anything.

You don't get an equal, or even a relatively similar, share in the profits. You get a share corresponding to the amount of production you are personally responsible for. If your job accounts directly for less production, then the company you work for can afford to hire many people in similar positions, thus driving down the price of your wage. But I do understand the cynicism many people show... You're a hard working and creative man. Do you really need managers? Do you really need executives to make financial and organizational decisions, especially when most of them are incompetent? That's more a question of character than merit. Hell, just take this to heart: if you're a better worker than your boss is a manager, then you're a better man. Ye, God! The fact is execs aren't as deep into the back pockets of their board members as many think. There are whole independent federal commissions responsible for the regulation of executive compensation. Exec pay is it's own independent market. The reason the government can't handle this issue is because the mortgage-backed securities fraud was the BIGGEST EVER perpetrated in human history. Nothing even compares to it. Just imagine the scope of it all. Sure there is going to be cynicism when there are a bunch of bad execs filling their pockets with all this stolen money. And now the government wants to TAX you? Of course you're mad. But the government isn't that smart. Taxing is the best they can think of. It's one of the few economic powers they really have. This whole fraud is way above and beyond them.

I know you don't mean getting paid "exactly" equal... that's obvious. But what are we talking here? "Higher positions" are "higher" for a reason... surely.

Anyway, this is slightly off-topic; so let me tie it in.

Americans are afraid of losing purchasing power. The national government, designed to protect its citizens' interest, is even more afraid of this shift toward foreign markets. National economic policy is plaguing this world. It has since the last decades of the nineteenth century... when the British abducted Chinese capital and infiltrated their markets. All the would-be entrepreneurs of China became extremists. They became increasingly socialist in nature until the formation of the first Communist parties. This in turn lead to a whole spur of nationalism in China itself, which has for all of its long history been of dynastic tradition. You paid homage to your King and Queen, but otherwise you associated yourself with the mountains or valleys you grew up in, the farm you worked, the cattle you raised, and not some arbitrary political border or identity.

By bailing out our industries, we fail capitalism. Capitalism is global by definition. Without national policy, you would see a massive redistribution of wealth to seemingly random locations on the planet; these new economic centers would not be aligned with the borders of any particular nation, but would exist within a domain produced by the commerce and exchange of the most industrious citizens from all sides of every border imaginable. America won't have any of this. It wants to keep this wealth in the hands of its citizens, and by extension, keep the power associated with that wealth in their own hands. This will give the federal government power because those citizens grant them that power; they show their support from having received all this wealth. This cycle has been going on and on forever since the Greek city-state leagues and the Athenian empire. They were all a bunch of greedy bastards.

We are so in-grained with the wealth and comfort we currently experience in our society today in America and we can attribute all that to national economic policy. I'm sure you protest about the living conditions and the work quality of people making Nike shoes in Indonesia, but the reason they experience that is because you enjoy the life you live. It's not like you could have provided for your family and own everything you own on your terms. Everyone in this country is responsible. But also, everyone in this country is obligated to show their support for those that brought them this wealth.

By bailing out our industries, we are reducing production possibilities and economic growth elsewhere, both abroad and in our very own country. Well, that's a pretty weak conclusion... since everyone's a nationalist these days. But it just precipitates and precipitates until we can no longer handle it and all out war breaks loose. And if not through military conflict, then severe depression, widespread famine and human suffering will bring about a hell on earth.

I can't stress enough how all of history is written today, and all of today is written in history. All the world's problems lie in the history books.

[edit on 19-11-2008 by cognoscente]

In a capitalist society, it should be survival of the fittest.
Give the $25b to someone who can make a car people will buy, and stop paying union members $80 an hour.
God, have a university competition, and the winner sets up a plant and production line. There's 500,000 people down here would work it for $20 an hour, and be happy!
Have a referendum! Put some options on the table and let the tax payers decide what happens with their money.

Here's the deal, as NPR so eloquently put it:

If the Big 3 go bankrupt, guess what? You will not be able to buy any new cars for perhaps 6-8 months or more. Maybe even longer than that. And don't even bother with used cars.

Why?

Because of this: Each car, no matter who the manufacturer is, comprises anywhere from 8,000 to 14,000 parts. The automakers DO NOT make every part for every car. There are several thousand independent car parts suppliers in the US. Their major clients are the big 3 automakers. Those small American companies also supply Toyota, Nissan, BMW, Honda and Hyundai.

If these small businesses lose their major clients (i.e. the Big 3), then these small parts manufacturers GO OUT OF BUSINESS. Toyota, Honda and the other foreign car makers are just not big enough in America to keep these small American companies in business. They cannot survive just off the revenues of the foreign automakers.

Cars are complex machines. If you cannot get a single bolt that is specified by a maker, then you don't get a car. AT ALL. JUST ONE missing piece, and the car DOES NOT WORK.

This means that not only will you not have parts for your American cars, you wont have parts for many foreign cars either. You won't be able to get that spring fixed for your BMW. You wont be able to get that turn signal fixed for your Camry. That is, until an INDIAN or CHINESE company come to the rescue and supply those parts.

So now, this is what happened: You just transferred thousands of jobs from America to India or China.
Happy now?

Losing the Big 3 means losing thousands of small parts manufacturers. Losing them means the end of AMERICAN car parts suppliers. You won't be able to get that replacement brake pad. Why? Because the small company in Ohio that makes that brake pad just went out of business. Because their major client went bankrupt.

[edit on 19-11-2008 by astron1000]

reply to post by nyk537


People need to realize that 1 in 5 jobs in America are directly or indirectly dependent on the U.S. Auto industry. Detroit needs a check and a turnaround but don't expect it from our dysfunctional government anytime soon.

Think of it this way. Think of the window switch in a 2009 Chevy Tahoe. You have 2 plants that employ 100 people. All the materials that place gets from other places that employ people. The materials they get from places that employ people. And think if those people loose there jobs how they won't be buying TVs, computers, food, houses, cars, clothes, eating at restaurants, etc. It's a spider web that will cause a massive chain reaction.

They will get the bailout, but they need to change the way they do business from here on out.

I understand how it involves the corporate irresponsibility, the fiscal mismanagement, and the CEO's greedy inability to budge on demands for the bailout. It sucks, I'm a laidoff robotics employee turned carpenter once again in my life. I live right down the street from Chrysler's world headquarters and know MANY friends who work within the finely woven web of the big three. None exactly blue collar, not executives either, just workers. My best friend lacking a degree worked his ass off to get up within a small vendor of Chrysler. I can feel the tension and the broken voices on the phone after I got laid off.

"So man how do you do it?"
"What can I expect?"
"$%^( do I do?"

I have no children and am not married.. It sucks and If your from Michigan you can feel it in the air here. ALOT , I mean a TON of people are screwed.

I hear people bickering about whether or not its a recession, a depression , the next Great depression. Up here its shock. I read The Grapes of Wrath, its that bad. Its families who have never learned how to survive. They are not like us here on the boards, not at all. These are the people who are getting the shock of their life and never saw it coming.

Ill be the first to admit my friends are the sheeple. Kinda. They're just thirty somethings trying to live the american dream like the rest of us, and now theyre in for the ride of their lives because of the greed of so few.

Sorry for rant , my second job as a finish carpenter is under fire now because of this mess. Im moving south. It sucks and i know ill love it but its scary as hell up here. I dont support any kind of bailout that involves just handing out taxpayer money , thats revolting. What i REALLY dont support is the greed of some unchosen few being rewarded by riches I could never see in my lifetime while my friends starve. Im sickened by corporate america and The now laid off , tomorrow "are buying guns"... This is bull and we all are friggin stupid to even pass it off as anything else. ITS A DEPRESSION. Im seeing it for the first time in my 36 year old eyes.

Its Steinbeck and Rockefeller and a great dustbowl here. My head is spinning. I want to agree with a bailout for obviously personal reasons, but I understand the dilemna... It hurts.

reply to post by astron1000
That is not accurate. The Big 3 all or any if Bankruptcy is filed can obtain DIP Financing (Debtor In Possession). This would allow for creditors to be paid in pre packaged settlement the value of their available debt owed. This allows suppliers and other creditors to maintian their operations. However, I'm sure under capitalized suppliers and vendors would collapse even with their portion of debt repayment paid up front through DIP financing. That won't matter though because there will only be room for the healthy suppliers in the auto market at that point with the Big 3 gone anyway.

So Bankruptcy will not stop all auto production, it will only weed out the over surplus unhealthy suppliers and vendors, which will be necessary with the decreased auto demand and output capability.

Originally posted by FX44riceThat won't matter though because there will only be room for the healthy suppliers in the auto market at that point with the Big 3 gone anyway.

The point is, there is no such thing as a "healthy supplier." American suppliers of auto parts depend on American auto manufacturers for most of their business. Eliminating, say, 50% of your revenue because of American automaker bankruptcies sure makes you vulnerable to bankruptcy yourself.

The US car market depends on UNIQUE suppliers, not generic ones. The fact that foreign car parts suppliers would be much more responsive to filling the void quickly rather than taking time for new American suppliers to ramp up their production (and again, given costs, why would they?) means that thousands of jobs would be lost to overseas concerns.

Is anyone here seriously suggesting that the bankruptcy of the Big 3 would NOT result in the loss of American jobs to foreign businesses???

To be clear: I am NOT necessarily a fan of unions. I am NOT advocating that Detroit continues its self-destructive course with a free bail-out. I AM in favor of Barney Frank's approach that Detroit gets an infusion of cash, as a loan, and would be required to pay it back to the government with the stipulation that Detroit has a rock-solid plan of alleviating their long-term debt issues.

[edit on 19-11-2008 by astron1000]

Originally posted by Jim Scott

I love America. I am not in the auto industry. I am in insurance and home improvement industries. I would hope that if the problem hit me harder, you would want to help me out, too. Where is the Christian attitude of love thy neighbor, anyway?

I think you're looking for the USSR. They did not allow freedom of religion there.

The amount of ignorance on this subject is astounding.

First, GM and the other domestics do make products that people want. GM has pretty much always been and still is number one in sales in the US. Fords F150 has been the number one selling vehicle for 17 years strait. Toyota has actually seen a larger decrease in sales this year than GM.

Second, they do make great product. The new Malibu beats the Camary and Accord in almost every comparison done on them and its number one in J.D. Powers 2008 initial quality survey. Other than that GM has the most models with 30+mpg and the Volt makes the Prius look silly.

Now on to the real problem. GM has been building cars here for over 100 years. The foriegners have only started building cars here seriously in the last decade. GM has amassed a much larger pool of retirees, many of those brought up in the days of corporate pensions. Most estimates put the cost of these retirees at $2,000 per car. Thats not mismanagement or bad products. No, thats the product of GM creating and supporting the middle class in our country for over a century. Who built planes and tanks in WWII? Who moved to help boost our economy after 9/11?

GM has made great strides to correct these legacy costs. For example, the UAW made huge concessions in the most recent contract negotiations that include making them responsible for pensions and health care as well as drastically reducing the wages for incoming workers. This contract takes effect late 2009 and will save GM billions. Unfortunately this plan was derailed when our economy took a nosedive this summer and an industry that was selling 17 million units a year now is only selling 10 million.

Letting GM fail is not an option. If they fail, they will take Ford and Chrysler with them as well as pretty much the entire supply chain in North America. Not even Toyota will be able to build cars here anymore. The cost to our economy would be imense. So what do we do?

Option 1: Just give GM money - this will work as GM was already on track to turn themselves around. Problem is that the auto industry as a whole is getting its butt kicked with an accross the board 40% drop in sales. We would have to give GM atleast $100 billion to bridge the gap untill 2010 when many of their own measures take affect.

Option 2: Prepackaged BK - This would be ugly, but in the end will make the company much stronger and will cost the taxpayer much less. It would go something like this:
1) Pseudo-filing for Chapter 11
2) Debtor-in-possession financing provided by the Treasury.
3) All bonds backed by the Treasury. Anything short of this will destroy pension funds across the US
4) All accounts payable backed by the Treasury. If GM defaults on the money it owes to its suppliers, there will be a wave of additional bankruptcy filings
5) Board of directors gets dissolved.
6) New management assigned.
7) Substantial additional white-collar job cuts.
8) Dissolving of the union contract.

Detroit dropped the ball again, let them fail.

Their business model is extinct. They are not producing the cars we need. We can't afford the 13-17 mpg cars when the next wave of oil greed comes along. 100mpg cars have been around for years, but they refused to make them. Now we are all paying thanks to Detroit, the bankers & the oil barons.

Time to cut the fat cat parasites.

100+ Mpg car that the Auto Companies ignored

How about giving the 26 billion to the small companies making electric cars & air cars?





[edit on 19-11-2008 by verylowfrequency]

reply to post by nyk537


I live in a suburb near Detroit. It's sad to see some of my family and friends get laid off. The Big 3 defines not just Detroit, but all of Michigan. We need help from the government, before it is truly too late.

Let the Big Three fail and get ready for the ride. All of you who think that is a good idea to let them go down and then watch the American auto industry rebuild from the ashes are in for a rude awakening. There won't be time for it to repair itself. This country will go in the dumper so fast it will make your head spin. GM goes down and it going to drag half this country down with it. It's going to be like pulling the plug on a washtub. Pull the plug and watch the American economy swirl down the drain. It won't take long.
The automakers definitely have to change the way they are doing business. Any bailout money should have strings forcing them to make these changes. There isn't time to let them fail and rebuild. The whole economy is teetering on the edge right now. Letting the auto makers fail will be enough to push it over the edge.
All of you sitting back with what you feel are your safe non auto related jobs are going to be sucked down the drain with everyone else.
Anyone who sees this as an auto industry issue only will be in for a major surprise.

reply to post by astron1000
No one is implying that no jobs would be lost. Yes there will be pain of unemployment and failed subsidiary businesses all the way down to restaurants and bars near auto hubs and plants etc. So what?

Propping up failed businesses is not free market capitalism. Out with the old in with the newer, better, more eager and aggressive business model.

What you are proposing is Socialist Facism. You are afraid of a collapse, depression, adapting. It is needed to flush out our failures. Beleive me, the intelligent, aware, adaptive, and aggressive entrepreneurs see much opportunity on the other side of a collapse.

Adapt, get used to a new system, maybe not as good as the past. But it is inevitable and we can't stop it. Opportunity will still exist for those who are aware and learn the new game.

sorry but sometimes things need to go down in flames to come out of the ashes. a phoenix. will jobs be lost ? yes but sometimes risks need to be made in order for the rebuilding to occur. i see private companies buying up these 3 sectors anyway.

why doesnt the government just use that 25 bil to pay for the auto workers pensions if these companies do go out of business? way better than just giving it to the companies to stay alive for another 6 months.

[edit on 19-11-2008 by Swatman]

Originally posted by verylowfrequency
Detroit dropped the ball again, let them fail.

Their business model is extinct. They are not producing the cars we need. We can't get afford the 13-17 mpg cars when the next wave of oil greed comes along.

So you are in favor of losing thousands of American jobs to other countries, eh?

I agree that Detroit has failed us. But to abandon Detroit means all of our cars will come from Japan, China, Germany and India. There's nothing inherently wrong with that. but American industry should be able to compete.

What's needed, if we want an American car industry to survive, is that WE put strict requirements on an infusion of cash to Detroit. Make them create cars with a certain MPG or a certain performance standard as a requirement for a bailout. Otherwise, I agree...Let them rot. But don't complain then that we've lost all these jobs.

I AM NOT advocating free money to Detroit. I agree with you that the US auto industry has wasted years and billions of dollars on gas-guzzling ego-loving mega-cars. Detroit MUST give up it's back-seat love affair with the oil industry.

[edit on 19-11-2008 by astron1000]

reply to post by astron1000


And I don't think it's an issue that those industries are transferred to other nations. This is the first step in a long leap towards globalism. As things are heading, there will be a massive redistribution of wealth to other parts of the world. Only by embracing globalism, free trade, and competition (we've forgot what this means) can we ensure the financial success of our country. The only other option, which has already manifested in the recent Gulf Wars, is military conflict and imperial expansion. That just can't be tolerated in a modern world. That would mean World War III.

For America, this is simply an opportunity to prove that we can still compete. America is the kid at the back of the class who fell asleep because he got a couple A's in the math course he's taking. That kid is getting a free kick in the back of the head, a reminder that complacency doesn't produce success. Time to wake up or flunk out.

ONLY bankruptcy will solve this problem. You can't fix bad human qualities by patching them up. The whole yarn will shred up into little bits and pieces over time. There is only so much integrity you can build up for someone else, the rest has to be self inspired.

What we need is a new cut from a new cloth.

National economic policy is the thing of the nineteenth century.

[edit on 19-11-2008 by cognoscente]

for those of you who dont think the big three offer quality products, here are a few links. (besides chrysler)

blogs.thecarconnection.com...

www.jdpower.com...-anchor

www.jdpower.com...-anchor

Last year, toyota had the camry and tundra dropped from there "recommended" cars because they were below average. ( i believe they are recommended this year though)

blogs.consumerreports.org...

www.edmunds.com...=123049

[edit on 19-11-2008 by tdubz]

reply to post by duster
No one is letting them go down. They let themselves go down. A bailout will not prevent them from failing, maybe delay it, not even a year. That is your fundamental misconception of economic survival. Yea, it will drag the economy down quite a bit further. We are headed into a very bad depression as it is anyway. Car sales are crashing due to credit slashing of consumers, unemployment, and the rest of our global financial and economic meltdown. Throwing good money on top of bad is completely foolsih.

Understand this. Whichever of the Big 3 go down without receiving a bailout were going down anyway. period.

tdubz every person in my family has owned a honda or toyota for as long as i could remember. and not one has ever needed a major repair ever. friends that i know that have ford or gmc have had to have transmissions fixed before 90,000 miles is even hit

you cannot compare japanese cars to american, Japanese cars are the A students and american cars are the C students. the quality just isnt there.

reply to post by Question

You know, I just heard at Rush Limbaugh's show, a caller said that there's a group of college students demanding that the govt. forgive their loans and bail them out (free ride college here we go! WHOOO!)

Huh. I did that myself- I wrote my NC rep and 'politely' asked for him to lobby me some bailout cash. Even told him what I needed it for.

Then I told my friends. They have acted like I lost every last BIT of my mind. I suggest they do the same thing. "No, no" they said. "Good luck with that", they said.

And that, boys and girls is why we got robbed. And stay robbed.


BTW- I own a 70 VW beetle. I shall stand and salute when the big 3 sink below the waves.