Bush gives $17 bil loan lifeline to GM, Chrysler

Doomed to failure... they have three months to have massive and complete turn around and during a recession? It takes years to come up with the kind of eco-cars that Toyota and Honda churn out, what does Chevy currently have? the Volt: a token gesture to shut up the hippies (quote stolen from "Ironman") GM and Chrysler are a disgrace (Ford close behind), bloated idiotic companies churning out garbage cars for years, the have long missed the boat, in fact as far as boats they are now on the Titanic with a $17Bil deckcahir shuffle going on Was watcihng BBC last night, one commenator said it was like trying to get a man with pneumonia to run the 100m at the Olympics.

Never ceases to amaze me when someone gives a hand out or a leg up its never enough. I would have told them this is it take it or leave it. When the UAW got snooty I would have taken the offer off the table and seen how well the wages were then.

These company's are just as much to blame. Selling cars to people that couldn't afford them as well threw their own credit company's. Come on we have all heard the commercials ( bad credit, NO credit we will get you financed) this was to turn out sales numbers thats all.

Well, I'm for assistance for GM and Chrysler. I don't want to see 2,000,000 more people out of work. Don't want to see the government having to pickup retiree pensions and health benefits. Don't want.... list continues.

Chrysler was bailed out many years ago. I was against that bailout. The US made a profit on it and jobs were saved.

I'm for this bailout now. < :-)

I agree I dont want to see a million homeless but for the UAW to define the terms of a Gov. sponsored loan to the company is BS.

I remember how Iaccoca (SP) saved Chrysler with the Mini van and some help, but the UAW weren't deciding the bail out it was the company and its creditors.

Maybe they should all change up and do a Delorian bail out.

Phew! The CEOs can breathe a sigh of relief that they can keep their exhorbitant salaries for another year or so while they do NOTHING to change the companies and work up the next scheme for more quick cash.

The big-three should have, as DXXJP said, been told 'take it or leave it'. You're going to see them asking for more within six-months, with the exact same 'if you don't we'll go bankrupt!'

Shame on bush for, once again, running the US into the ground. Guess he wants one last chance to stick it to you.

American Autos are garbage really or in Japan called "sodai gomi"! This is garbage that one has to pay to get rid of. There problem is they produce cars nobody wants. The demand for this crud is down 1/2 from last year. The companies blame the Unions and its loyal employees. They need to look in the mirror and understand that they made all of the wrong decisions for at least 30 years. The American government will soon understand that 17,000,000,000 dollars has been wasted and come March things will be the same as today. Perhaps the owners and management of these firms will discover a method of taking and leaving with a large amount of this money. President Bush is giving in to madness! As to buying an American car in Japan? The obese things will not fit into my 10,000 yen a month parking spot! It would scrape the cars on both sides. Yet the American Auto companies blame the Japanese government and Japanese people for their lack of sales. The head of the American auto firms need to get a grip, share the pain with all of the "stakeholders" and move ahead. They are broke and this loan is nothing but a "ponzi" trick to enrich the few over the majority!

Its not always been just the big threes fault. Remember thay still have some controlling interest from the oil co's, as well as government subsidies. As long as they fit inside of the week US guidelines for MPG ratings then they can crank out anything that will keep consumers half interested until they cant afford the gas. Since when did we need them huge escalades, excursions. Now look japan has been able to meet foriegn consumers wishes, and now Korea is catching up.

I know of about 100 people waiting for the new Hyundai genesis coupe, something the US hasnt even dreamed of offering. Dont get me wrong there are some US cars I would like to have but not as a daily driver as I know they are for fun. But with a japanese auto you can have both. Whats even worse is that the US economy is hurting japan who actually cared about what US drivers wanted, and wasnt inadvertently controlled by the oil company's.

flammenwerfer,

I don't think anyone expects or requires massive and complete turnaround within three months. I think what people are demanding is that within 3 months the automakers and all other interested parties be able to present a credible plan for turnaround.

DXXJP,

The UAW is not trying to define the terms of the government's loan to the company. It is trying to ensure that the government does not redefine the terms of a pre-existing contract between labor and management.

If there is any BS here it is the pretense that a short-term loan demands long-term union sacrifices. If the auto industry is to be salvaged I have no doubt that the union will have to make concessions. However, it is not up to the government to predetermine what those concessions must be.

Sez I understand that but with a choice of taking a pay cut or joining the unenjoyment line I think they should step back and look at the pro's ,and con's of each. How come japanese manufactures dont have all this problem with the UAW. Right now any job is worth keeping. Maybe they should turn on the NHK and see what japan is doing to stay in business, which I might add isnt a bailout from the gov just yet.

Japanese car makers are predominantly in the UAW-free poorer Southern states, where the workers are just happy to have a job.

Their execs, while well-paid, do not have the same massive difference in compensation between labour and management, which has led to a lot of the US problems.

Maybe if GM, Ford and the others focused on making and selling good cars for a profit, and not financing cars to people who could not really afford them, they could get healthy again.

It has also been a long time since there has been a panel beater, designer, or engineer on the boards of these companies, they have been dominated by MBAs for too long....

DXXJP,

I agree with you that the union should step back and look at that. However, I think that is one of the things that it will be doing, along with management, during the window in which the auto industry tries to reorganize itself.

I don't think that it's appropriate for the government to mandate wage ceilings. While the government whinged about excessive executive salaries at the bailed-out financial industries, we certainly didn't see it mandating that those executives and managers accept the benefit levels associated with their counterparts at Japanese institutions.

Japanese manufacturers are mostly located in right-to-work states. I personally support the right to work without being required to join a union. The problem with that comes, however, when right-to-work laws are actually written or enforced to prevent the right to unionize.

Also, as wanderlust said, the workers are happy to have a relatively well-paying job. However, one of the reasons that they have such good wages is because of the wages and benefits that have been bargained for elsewhere. Take away the union's advantage and I would expect to see benefits and salary levels drop in Tennessee as well.

Finally, just where is it and how is it that the Detroit UAW workers should cut back on their bargained compensation? Perhaps I'm out of touch, but it's my understanding that--given cost of living differences--the wages are already nearly in parity. The differences is primarily benefits. Should the workers give up their pensions or their health care for their families or what?

I think it is far too glib for well-to-do presidents, cabinet members and congresspeople (none of whom will ever have to have a financial worry in life) to ask a certain segment of blue-collar to take a pay cut in order to secure a benefit that will benefit every American.

Govt bail/buy out to meet union demands. The exact opposite of market economics. Socialist extortion by the unions, billed to Uncle Sammy’s dumbed/numbed down over taxed tax payers.

However, it is not up to the government to predetermine what those concessions must be.

Sezwho... Your kidding right? The government is providing the loans... it has every right, just like any financial institution or bank, to set the conditions of the loans it gives. MORE since this is taxpayer money, and they are getting OUR money. EVEN MORE because they are getting it in tough economic times for ALL of us, not just hard times for the mismanaged companies and the over paid workers.

30061015 has got it right. We are being extorted to reward mismanagement by both the companies and the UAW.

LET THEM FAIL and file bankruptcy. Then the onus of the restructuring is on THEM. If they fail to do what they need, they lose everything. If they do what they need, they gain everything. It's called motivation.

What is their motivation, under the current situation of Bush giving them our money, to do anything different than they have in the past? The UAW has already told them to pack sand, they aren't changing anything, so what makes you think that giving them FREE MONEY for them to continue operating is gonna change any thing?

They'll be back asking for more money. You'll hear the good ole "Just a little more time/money is needed" speech. And within a couple more years, we'll be back to square one.

It's THE PRODUCT. It costs to much, it's crap, and those that build it are overpaid. Those that manage the process are idiots. Those that support it (UAW) are just as greedy as those that mismanage it. If there was EVER a case for letting them fail, this is it.

GM should have been forced to close when they bought all the streetcars and closed them.

YuriOtani at 11:09 AM JST - 20th December

Earth to Yuritani... come in please.

American cars are built just fine and have just as high ratings in durability, longevity, and customer satifaction as Japanese cars.

Also American cars are not Larger then the Japanese cars in general. If you consider a toyota Crown wouldnt fit in your (10000 yen) parking spot. I guess you dont live in Tokyo considering the amount of non Japanese cars here is staggering, and that most parking spots here are 20000-40000 yen a month minimum.

Maybe you should take some time and research a bit about vehicles before you spout, maybe you wouldnt sound so ignorant about them.

I guess you dont live in Tokyo considering the amount of non Japanese cars here is staggering, and that most parking spots here are 20000-40000 yen a month minimum." I just checked outside today. More than half the cars on this fairly large street is not a japanese car. Otani, I think you are angry with yourself. America has gown down in terms of cars, but the Japanese DO NOT make the best cars in the world mind you. They do however make them cheap enough, where GM could not, to get them sold to white trash in the states they operate in.

Anyway, Dear Mr Former President, As Mr. Smithinjapan states, you have bought our country down another notch and I join his crusade against you. What a stupid move for a president to get pushed around by a union. I have not heard anyone asking for the director of UAW to reduce his salary and give up on his treasures...

Until it failed its shaken, our German car was the only non-Japanese car on our street (not in Tokyo). Mr Cleo has agreed to listen to reason and we are now in the market for a small, dependable, low-running-cost car with space in the back for the dogs.

Cleo

Shaken is a government sponsored shake down for dealers to gouge more unnecessary maintenance out of you. Its a scam that was put in place by the gov. and Toyota back in the day along with the driving schools that bang you for 3g to get a license which most people get for next to free in high school.

Until you have been threw the shaken shake down do you realize that your getting scammed. Tell me how is some fool pounding on your lug nuts a safety concern. Im sure your car would pass as 9 out or 10 can with no repairs.

Like I said above the UAW should shut up or put up its TAX payers money if they want to go to work take the cut or get in a employment line. Im sure the unemployment benefits will cost less than a bail out.

The UAW should get the deal they negotiated with the Big Three? The government has no right to interfere with the existing labor agreement? The government is already interfering by bailing the companies out! This is not an issue of legal contractual fairness at all. You try going to court and saying "your Honor, the other party to my contract doesn't have money he owes me under our deal and if he goes bankrupt I'll have no claim against him, so please GIVE him money to pay to me. And mind you, make sure it is the full amount, don't cheat me out of my deal!" Utter nonsense, the judge would laugh you out of court.

Ask Americans who used to be in the steel, textile or electronics manufacturing industries how much their labor contracts with favorable terms kept them warm at night and put food on the table once the companies went bankrupt or moved all production overseas. I want the US auto industry to prosper and the workers to get a fair wage but the UAW has no leg to stand on from a negotiating standpoint, and that isn't being anti-union it's just a fact.

DXXJP -

No, ours was definitely on its last legs. It was the 1 out of 10 that didn't deserve to make it, and I'm sure it's now enjoying its retirement in that Scrap-yard in the Sky.

I don't think I've ever had my lug nuts pounded on. Does it hurt?

Maybe the need for public intervention will go some way to persuading Americans that unbridled capitalism all the way isn't the bee's knees. Socialism has its good points.

Hey! Introducing "shaken" under the guise of "safety" might do the trick and get cars moving out of the lots again.

"American cars are built just fine and have just as high ratings in durability, longevity, and customer satifaction as Japanese cars."

Heh, having spent my life in the auto-trade, that's one of the funniest things I ever read!

The quality and reliability of American cars is a joke.

Well it works like this.

They hit the lug nuts with a hammer to see if their tight. check your high beems to see if their pointed right check your parking brake with a drum under the back wheels check to make sure your speedometer reads a proper 40kph then they put your car on a shaker and check for god knows what.

And for all that they charge you up to 100000 yen plus what the dealer strapped you for under the guise you need the 12500yen frame paint to pass. They will smile in your face and steal your money for what is basic maintenance. Imagine if they pulled this in the states to get plates.

Incompetence.

Sheer incompetence. But, what else would you expect?

The quality and reliability of American cars is a joke." there is no denying that, but what Otani wants to point out is that J cars are the best and GM are the worse. That is simply not true.

J cars are grey and boring, even the sports models. But comparing American reliabilty to Jap is beyond patriotic ignorance IMO...

I was in a dealership the other day that has Mercedes and Toyota - the workshop was full of nearly new Mercedes that were ill, and there was a lone Prius - but that was in for servicing...

proxy: GM should have been forced to close when they bought all the streetcars and closed them.

Wow, I wasn't aware that people still actually believed that story.

Madverts: The quality and reliability of American cars is a joke.

If you say so. That's different than the opinion of JD Power and Associates and Consumer Reports, but hey, who are they to counter some guy on a message board? ;)

Wow, I wasn't aware that people still actually believed that story.

Wow, I wasn't aware that there was absolute proof it wasn't true.

http://en.wikipedia.org/wiki/Great_American_streetcar_scandal

There is even the idea that it was one of the many reasons trams disappeared. But GM was involved in a long anti-trust battle over it.

I'm among the 55% of Americans who don't approve of this bailout.

http://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy

Is that the story you're talking about? I like the opening... "This article needs additional citations for verification" and "This article or section may be inaccurate or unbalanced in favor of certain viewpoints."

I graduated from a university in Los Angeles and one of my urban planning classes was taught by a lady who wrote her thesis on the myth of how GM dismantled the mass transit in Los Angeles. For now I'm going to take her word on it.

If you say so. That's different than the opinion of JD Power and Associates and Consumer Reports, but hey, who are they to counter some guy on a message board? ;)

Who are they? JD Power? Consumer? they are two American firms there. Two American firms surveying American goods...hmmm fishy. Thats like taking seriously something that Fox news reports. If an independent survey from a reputable international agency came back with stirling marks I would be most impressed. Recently on Top Gear Clarkson test drove a Ford pick up truck and proceded to show all its glaring faults and shoddy workmanship, granted he hates Americans cars, but even Mother Teresa would have bashed the offending vehicle in the road test.

Not all Japanese cars are great either - need I say Mitsubishi.

Madverts is on the money.

Well my grumpy old mate, having owned and worked on my fair share of 'em - you can take my word for it that American cars suck ass ;D

To be honest, I know little about the one's produced this century, but I doubt much has changed. Look at the LT1 I sent you pics of - built in the nineties with fifties technology and a 1980's injection system....

The US automakers lived in Denial for so long that simply making things bigger was not the best answer....

Oddly enough I happened to run across this article in the LA Times after I left Japan Today:

http://www.latimes.com/business/la-fi-neil19-2008dec19,0,1742816.story

"Wait, so, has somebody invented the car of the future and didn't tell us? It's a worthy question. The scolding undercurrent of recent congressional hearings on the auto-industry bailout was the notion that Detroit had failed to invest in next-generation technology that could help wean us off foreign oil. Not so. What they did fail to do was sufficiently commercialize this technology so that it was ready and waiting at dealerships when people got stampeded this year by spiraling gas prices."

flammenwerfer: Trucks have been the weak spot of Ford in terms of quality, but their passenger cars are equal to the Japanese:

"Almost all Ford models are now average or better, with the exception of some that are truck-based. Excluding those, Ford's reliability is now on par with good Japanese automakers."

http://www.consumerreports.org/cro/cars/used-cars/reliability/best-worst-in-car-reliability-1005/reliability-findings/reliability-findings.htm

Madverts - You have obviously never owned a Ford Maverick. I never had any trouble during the 200,000 plus hard miles I put on that sucker.

Loki520,

Your kidding right?

Wrong. The government here seems to be demanding permanent benefit retrenchment in exchange for a temporary loan. This is absurd on its face and it treats the auto industry unequally as compared to others that the government has chosen to bail out with little rhyme or reason.

The government's offer amounts to the most brazen kind of union busting. The loan has never been expected to stabilize the industry. The purpose of the loan is to give the industry a short period of time to work out a plan to stabilize itself.

If you want the UAW members to suffer, don't worry. They will. Whatever happens--whether its an industry turn-around, an orderly bankruptcy, whatever--the Big 3 work force is going to be smaller than before. Workers will lose their jobs (as they already have) no matter what course is taken.

The entire point of trying to save the auto industry is to prevent massive unemployment among the Big 3 and a shrinkage of the economy which will adversely affect almost all Americans. And the purpose of a short-term loan is to give the industry time to work out a plan for viability. As poorly as they have managed their business up to now, I tend to believe they can still do it better than the administration.

So, I think it is pointless to impose wage and benefit demands on the UAW at this juncture. Those are precisely the things that management and labor will have to work out together in the next several months. If they cannot do that by themselves, then I would favor letting them just slide right in to bankruptcy--unless you would prefer nationalization of the industry.

So, no. Not kidding.

I applaud the President for this action. This maybe one of the top things he has done in his administration. Helping to save American jobs when the far right republicans on the Hill were praying for us to lose more American jobs.

Bravo Zulu President Bush!

Wonder what his evil half thought of this plan?

30061015,

The unions aren't extorting anyone. They have a contract and like anyone with a contract they can expect the contract to be honored. Obviously contracts can be renegotiated, but they cannot be renegotiated quickly. The mix of wages, lay-off pay, health and welfare benefits and pensions affect too many different people in too many different ways.

The administration is asking the union to take a hatchet to something that needs to be dealt with by a scalpel. More importantly, it is not asking high-flying dealers and traders to give back the vaporous bonuses that they earned over the years nor is it asking financial institutions to adjust their compensation levels to Japanese scales. Why not? Could it be that the answer is that there isn't a significant union membership to punish?

Madverts: I actually have a Jeep Wrangler on the firm :D

DUDE! :P

Heh, and if there is one thing you can rely on it to do, it's to break down :D It also sucks petrol, is gutless and leave a patch of oil to wink at you every morning, but hey, the missus thinks it's cute without the hardtop in summer....

I have owned and still own a few cars most people dont or wont. The most dependable is the Honda miss dxxjp drives. Second would be my 95 rx7. I have boosted the power to almost 500rwhp and its still as relaiable as when it was stock. I also have had a Ferrari and I still have a diablo. Neather of thease can be dayly driven and need special care to keep them going. I have a late 80's camero and Vett, the vett its a pile of crap always breaking down and the camero well it just runs. I can honestly say that the honda has been the most efficiant, comfortable, reliable ( Wife drove it without oil for a while ), and value for money. If honda made something more apealing than the NSX that still ranked as a super car I would own it and give up all the others. When the US can build something as dependable, scratch that when the rest of the world can then they all might be on the right path. I drive a lexus when Im in saudi and its full of quality but its value for money is not balanced.

I believe were going to see what happened to US bike manufactures. We'll be down to one manufacture and be overtaken by cheep, dependable, value for money cars from other countries like Honda did with bikes in the US. If you look at how the Japanese bike manufactures have put a quality piece in every class its not hard to see that consumers will change there minds and become faith full buyers. Harley Davidson is now just a niche market of die hard its got to be American made, and they still lack the technology, and craftsmanship of the Japanese.

You don't like the current Corvette?

Ill admit I love the LSX series engines GM has been building, and the LS9 would be an awesome plant in something other than the vett. I hope the new camero isnt as big of a let down as the new challenger. The charger was just that WHY a 4door. I just finished building the first LS1 V8 powered subaru. People actually thought it was a hoax, said it couldn't be done.

UAW workers are terrible - the management at the not so Big Three know it and don't do anything about the problem. The bailout will fail and more borrowed money will be given to them by Obama on top of what Bush gave them just to help the Democrat's big campaign contributors at the UAW. It's best for the US automakers to file for bankruptcy, downsize, get rid of the UAW contracts, and come back smaller and much leaner than they are now. American auto workers can build cars - the transplants have proven that. But management needs to focus more on quality then quantity and the unions must be dealt with. This bailout will surely fail withoug fundamental changes - which are not required by this deal.

Madverts, considering my Father was the owner of many autorepair centers, and I owned my own repair and sales center for years I have to disagree with you. Considering it wasnt uncommon for american made cars in my area to have 200k + without major repairs, I find it hard to swallow your story. Also considering that I have worked on all makes of vehicles and have owned every major brand and find that reliablity of the vehicle is a vehicle to vehicle thing and not brand specific. When I retired my 64 valiant convertible it had 385k on its slant six and had no major work on it ever. When I retired my Supra it had 200k on it but had some major work done over the years. I also have owned multiple work trucks (tow trucks) and found the best one I ever had for reliability and ability was a Chevy 3+3 one ton.

I have worked on Honda's, Toyota's, Nissan's, Ford's, GM's, and Chrysler's and I have seen some of each brand with major miles and no major work and I have seen some of each brand that didnt make it to 50k without major work.

I owned a 67 Mustang for about 10 years and if I could have any car I wanted (say, under $30,000) I'd love to have a new Mustang. Sure, a Camry would be better in terms of reliability and quality, but I don't think anyone here would be caught dead in one.

I'm still shocked that you own a Jeep, Madverts...heh. I've never been a big fan of them and I'd never own one. Odd little twist.

state-based subsidies, does this comply with the wto?

let them keep the unions.

What? I thought the bailout talks were in the millions. Now they are in the billions? 17 of them? Obama is going to have to put Mount Rushmore on Ebay just to have some working capital.

All of America needs to start throwing shoes at its current president. His administration was once referred to as "the cash and carry Bush administration", and that was long ago. But I see that nothing has changed.

Nippon,

I've exported cars and 4x4's to the dark continent for years. That's the ultimate test for an automobile, and I've taken nothing but Toyota's and Honda's - and all these cars have lived their lives here in Europe and would almost be weighed in - yet they live their lives again in Africa...

Super,

Heh, it was cheap and had big wheels on it and a hi-lift kit, add a bit of company sign-writing and it does it's purpose... :D