Exactly. I consider myself a conservative and tend to stick by the core principles of capitalism because that is what this country was founded upon and what has worked for roughly 230 years. I am not blinded to the fact that this is a very unique situation however. The automakers need the money, and they should get the money - but not without some hard inquizitions first.

Fellas, the gov't breadlines are getting longer now. The City of Detroit's council just passed a resolution asking for a $10B bailout, and they're only running a $125M deficit right now. How they passed this thing with a straight face, I have no idea. But I think you start to get the picture.

More and more industries/companies are approaching the Fed with their hands out. The thought of a huge bureaucracy having its hand in every nook and cranny of our economy gives me the chills. It's time to at least step back and evaluate, hard.

 

As much as I would like to see that...it would be political suicide for the Democrats

 

I don't see GM surviving without removing their legacy costs (or at least bringing them down to a manageable level and I don't see how they can do that so long as the UAW and its pensioners are in place at current levels.

All three of the Big Three are going to have to learn how to survive as much smaller companies overall (as in capacity/employees/pension expense, etc.).

 

Unfortunately you may be right.

 

Bob, the retiree pensions are guaranteed by law. They aren't going away. Best case scenario, the government takes over the responsibility. Even though the UAW is now managing the health care of retirees, if the auto industry goes under, those will also by law fall to the federal government.

Legacy costs for current employees are under control, and new hires have an entirely different program that's based on co-pay and 401ks.

 

The pension issue is not quite the "done deal" some would like to think...the PBGC is insolvent - while it has the legal obligation to take over pensions in the case of a BK, they do have maximums/caps that may well reduce what some retirees see each month.

As for the the other costs now being "in line"; no matter how "in line" they might be, if the company they work for is effectively bankrupt (whether they file or not) every employee up to the CEO should be willing to take a significant pay cut NOW in exchange for Federal money and in exchange for still having a job.

 

Caps for pensions, you are correct.

I have no pension, and although it's a moot point for me I still realize some folks handled the planning of their lives according to some assumptions. Tough s*** is not the preferred reply from my perspective.

 

We all plan our lives based on beliefs and assumptions and sometimes those assumptions don't always work the way we had assumed...that's not saying "tough s***", it's just the way life works.

I may have two pensions when I retire and may or may not have Social (in)security but I'm certainly not counting on any of those to actually see me through.

It's unfortunate for retired GM workers to be facing this but it isn't the taxpayer's fault they are facing this crisis; it's their company that has let them down.

 

How many people these days even get the option of a pension plan as a new hire? The lucky and fortunate, thats who (). The rest pay into social (in)security to watch it vanish, never to be seen again. To think that so many still have a *guaranteed* pension is outrageous in this day and age, cap or otherwise. Nothing of mine has ever been guaranteed and never will be.

Not to be a total jerk, but even unemployment on this scale is "unfair" to the taxpayers. Unemployment insurance too? Outrageous! Its not like GM went under while fighting tooth and claw for 5 years - GM pretty much sat there and watched itself die. Take it out of the investments, assets and bank accounts of the rich executives that got fat salaries to sit around and let GM die.

They want enough funding to function in their current deficit spending for 80 years? I can understand if some of it is for saving if the big 3 go under or loose a lot of jobs, but the big 3 arent dead yet!

Maybe its time for the Civilian Conservation Corps to make a comeback

 

Given GM (unlike Ford) are hopeless at nurturing their 'international' brands, I say, sell Opel. Maybe BMW might find a nice niche for Opel and position it above Mini and below BMW. Opel traditionally compete with VW so Opel might be a good fit for the German luxury marque. Just my 2c.

Chevrolet could be used as GM's mainstream Euro brand. It would also give GM an avenue to export American Chevs to Europe.

 

I feel exactly the same way. We need to bail out the Big 3, we just need to be careful how we do it.

 

Sorry to bring this thread back on topic...

Originally I tried posting late Monday (thread was blocked for moderator approval because of quotes and never approved) after stories started popping on the German government bailing out GM-Opel. I speculated what if other governments start looking at bailing out their local GM divisions. (e.g. Sweden - Saab; UK - Vauxhall; Australia - Holden; etc.) Less than 24 hours later (again before the thread was approved), the news comes out on GM-Saab, so I started this thread.

Back to the topic... with Germany and Sweden considering guaranteed loans (bailout is a lousy word, as GM is going to have to pay everyone back eventually), I cannot fathom other overseas governments not coming to the rescue of their local auto manufacturers. (Canada is the latest rumored to be looking into it.) The US government is not going to look stupid by not helping out Detroit, are they? Otherwise we'd be certain to have a future where the majority of cars and trucks for consumer use are built overseas and shipped here. (Separate topic, sorry ) Therefore, with help for GM coming from all points and beyond, isn't the US government's investment in GM a little more reasonable than we were first led to believe? In other words, isn't it just a little less risky?

That said, while all along we have been saying that GM is in the worse shape financially (and they still are) doesn't the aid coming in from abroad level the playing field (with Ford and Chrysler) ever so slightly?

 

For many people, the issue isn't whether the U.S. would look "stupid" for not helping.

Talk/listen to any constitutional lawyer who believes the constitution says what it means (and intentionally doesn't say what it didn't want to say) and you'll hear that there is simply nothing in the constitution that allows the Federal government to step in and take over/give money/loan money to a privately owned company (don't misunderstand; I don't for a moment expect the courts to step into this mess).

But perhaps more importantly, the U.S. is supposed to believe in and support free market capitalism...not "private business" run in whole or in part by a central government.

Conversely, it shouldn't come as a surprise (in fact it should be expected) that socialistic democracies like Germany, Sweden, Great Britten, France, etc. would step in and involve themselves because their form of government not only allows it but to a great extent, expects it.

 

I'll give you my mother as an example. She was a computer programmer for 30+ years, my late father worked as an engineer for GM for 30+ years. When she retired, she had income from the GM pension, Social Security, as well as a large asset base. She was well diversified. Now with the economy tanking she's seen her retirement funds drop by over $250,000 and her GM Pension is in trouble. She did things right and planned conservatively, I have a hard time saying to people like this tough s***. She's in her 60's now and has had to go back to work. She's worried about loosing her home. Its a shame.

 

Well, my father worked for a steel company as a crane operator for 40 years before he "retired"...the Japanese company that bought his former American company changed the pension plan (virtually eliminating it) and he wound up with almost nothing compared to what he was "promised" when he started working there after coming back from WWII.

We all are (or at least are supposed to be) subject to our freely made decisions and assumptions aren't we? When we decide who to work for or where to invest our money, aren't we responsible for those decisions...do we only get to reap the rewards and never face the negative results when they happen?

I'm sorry for people that are hurting or will be hurt, including you Mom but does being subject to our decisions/choices really equate to a "tough s***" response???

With regards to my father, myself and my two siblings stepped in and made sure he and my mom were Ok...isn't that the way it should be done or should the Federal government have stepped in and told my Dad's company that they couldn't change the pension plan?