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An Auto Bailout? OK,
but it will be painful for the auto industry.

November 12, 2008
Sean Lewis

They caused the problem themselves by
not responding to market conditions.

The Auto industry wants to have a turn at the
bailout trough.

OK, no problem.

It will cost all involved.

Obama needs to assign a group of financial
experts to fix the Auto industry.

The group will be small and have a mandate
to complete the mechanics of the turnaround in
less than a year.

The numbers need to be crunched and a bottom-line found.

The Big Three need to become the ONE and the
slashing of costs to the bone needs to begin.

Legacy costs need to be rolled up and paid off.
Lump sum compensations for retirees.

Each car model must make a reasonable
profit or discontinued.

Each auto plant must make a reasonable
profit or closed.

Each worker must be expected to give up wages
and benefits, management will be expected to
do the same.

Bonuses are gone.

The Big Three will become divisions of the ONE,
with a central plan to make a select line of cars.

The best seller of each line will continue, the other
two lines will be discontinued.

I have no sympathy for greed or incompetence.

You want help it comes with a very high price.

The US taxpayer will receive 50% of the profits
before taxes and expenses until the US government
is paid off.

This Is a quick thumbnail fix. There are other details
of course.

Originally posted to VirtualTruth on Thu Nov 13, 2008 at 12:51 PM PST.

Poll

Should we help the Auto Industry

33%16 votes
12%6 votes
25%12 votes
8%4 votes
4%2 votes
16%8 votes

| 48 votes | Vote | Results

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Comment Preferences

  •  It is time for responsibility again, (2+ / 0-)
    Recommended by:
    highfive, Support Civil Liberty

    responsibility and accountability.

    Time will Tell all the Truth VT, Virtual Truth

    by VirtualTruth on Thu Nov 13, 2008 at 12:52:45 PM PST

  •  since you have it all figured out (3+ / 0-)

    as to what must be done why get a bunch of experts together to determine the restructuring.

    And making individual companies too big to fail into one bigger company is the solution?

    •  Giving taxpayer money should come at a cost (0+ / 0-)

      a very high cost.

      The limits of profitability should
      reduce the ONE company down considerably
      in size. Perhaps to a third of the combined
      three.

      The alternative is allowing all three to
      fail.

      I do not have the SOLUTIONS, I am just
      offering my ideas to an open forum.

      Time will Tell all the Truth VT, Virtual Truth

      by VirtualTruth on Thu Nov 13, 2008 at 01:07:54 PM PST

      [ Parent ]

      •  I agree it should come at a cost (0+ / 0-)

        but if the cost damages the people who are the only reason we would consider the bailout, employees and retirees, it seems self defeating.

        •  Helping will LIMIT the suffering (0+ / 0-)

          No help would mean that ALL would suffer. All would lose their jobs, and ALL would lose their benefits.

          This way those who do suffer will not face 100% lost of all benefits. There will be some relief.

          Time will Tell all the Truth VT, Virtual Truth

          by VirtualTruth on Thu Nov 13, 2008 at 01:50:06 PM PST

          [ Parent ]

          •  but if the bailed out companies (0+ / 0-)

            could in fact return to profitability and pay out all benefits and retirement, but you forced them to end those benefits, you've hurt employees who weren't 'at fault' for the business decisions.

            The point of the bailout is that the government decides the car companies can be saved, not just deciding to create an expensive form of unemployment benefits.

            •  These are hard times (0+ / 0-)

              Taxpayers MUST be paid back FIRST.
              For that to happen ALL costs must be cut.

              The Retirees will get a lump sum payout, this is better than what they would get if the Auto companies go out of business.

              Which would be nothing and pennies on the dollar for their pensions IF the Pension Insurance Fund isn't already broke itself.

              Time will Tell all the Truth VT, Virtual Truth

              by VirtualTruth on Thu Nov 13, 2008 at 02:07:21 PM PST

              [ Parent ]

              •  I don't trust your reasoning (0+ / 0-)

                lump sum payout better than pennies on the dollar is a huge up front expense.  It will also mean millions more without even the small stipend toward health care costs, millions more in poverty and needing government aid.

                I think you're right, you need the experts to come up with real solutions.

                •  You however want BOTH the bailout AND the legacy (0+ / 0-)

                  costs. THAT is a huge expense.

                  The model is broken. If it wasn't they would not be asking for help. If it wasn't they would not be looking at record loses.

                  I have common sense and 19 years being a Broker and reading red herrings.

                  You can read my other posts and my blog and decide for yourself if I know what I am talking about. There is 5 years of predictions and posts that will either prove my credibility or disprove it.

                  I have been correct more times than i have been wrong.

                  Read and judge for yourself.

                  Time will Tell all the Truth VT, Virtual Truth

                  by VirtualTruth on Thu Nov 13, 2008 at 02:36:07 PM PST

                  [ Parent ]

                  •  no I want a bailout (0+ / 0-)

                    that doesn't do more damage than no bailout.

                    And health care reform that makes the legacy costs more affordable.  

                    And a bailout that supports the pro-labor, pro-middle class ideals of progressivism.  

                    If we don't save the employees with good benefits and good salaries and don't help the retirees, we don't need the bailout.

                    I too have common sense, a professional career and started my career writing those red herrings so they didn't say jack shit.  And that was some 27 years ago.

                    •  Do you really think guys like me (0+ / 0-)

                      didn't know those Red Herrings were full of shit?
                      Why do you think I read them then embarrassed CEO's and CFO's who had their hands out for money with questions the red herrings did not address?

                      Health Care Reform is another issue and one I also wrote about by the way. If done correctly it will be a safety net made available to the unfortunate with out health insurance.

                      This made no sense?

                      'If we don't save the employees with good benefits and good salaries and don't help the retirees, we don't need the bailout.'

                      If you can't have it the way you want it, you don't want it? This sounds like an initiative from the Bush Administration.

                      The choice is no help and no benefits or help and lost of some benefits.

                      Life is not fair and not the way it is written in the school books.

                      Book smart is not real life smart. Book smarts help, but without practical real life applications is actually more dangerous than no knowledge at all.

                      You heard of the axiom, a little knowledge is dangerous?

                      Time will Tell all the Truth VT, Virtual Truth

                      by VirtualTruth on Thu Nov 13, 2008 at 03:13:42 PM PST

                      [ Parent ]

  •  So, you are willing to (1+ / 0-)
    Recommended by:
    wondering if

    break the unions (which will happen if they go BK) and put as many as 1 million of your fellow citizens out of work to punish the fat cats?

    That is what you are talking about. If you have no compassion just think about the follow on of all those people being unemployed on the economy.

    Obama will win 364 EV's to 174 - For Dora, Get The Vote Out!

    by Something the Dog Said on Thu Nov 13, 2008 at 12:56:31 PM PST

    •  and the alternative? (0+ / 0-)

      how many will be out of work and without
      benefits if all three fail?

      I am being realistic, not idealistic.

      Time will Tell all the Truth VT, Virtual Truth

      by VirtualTruth on Thu Nov 13, 2008 at 01:09:19 PM PST

      [ Parent ]

      •  They will not fail if (0+ / 0-)

        they are supported through a transition. Don't you remember Chrysler in the early 80's?

        Obama will win 364 EV's to 174 - For Dora, Get The Vote Out!

        by Something the Dog Said on Thu Nov 13, 2008 at 01:43:42 PM PST

        [ Parent ]

        •  This is SYSTEMIC (0+ / 0-)

          not an individual situation. The ENTIRE industry is facing the consequences of incompetence, irresponsibility, greed, and accountability. The last 8 years protected all those who were guilty of these offenses.

          This is NOT a transition, this is the end of an era.

          Chrysler was the early ringing of that bell. We just choose to muffle the sound until the bell broke and now it is too late to fix it easily.

          Time will Tell all the Truth VT, Virtual Truth

          by VirtualTruth on Thu Nov 13, 2008 at 01:53:28 PM PST

          [ Parent ]

  •  Let them go into the sunset (1+ / 0-)
    Recommended by:
    Tracker

    I say take 10% of what the auto industry wants as a bailout and use it to transition the Big Three auto workers into other jobs/skills and let the companies fail.  It is no good to subsidize prehistoric monsters that can't survive in today's market.

  •  NO TO BAILOUTS! (0+ / 0-)


    The reason why the Auto Industry failed has nothing to do with a problem over the free market.  They have failed because these Automakers never ever innovated. They keep making the same damn gas-guzzling cars with the same old technologies.

    Meanwhile, small startup businesses in California have been trying to innovate, but they are forced to charge high prices, and cannot possibly compete with these giant government subsidized businesses.  That's the wrong model. A non-manipulated marketplace would properly reward the innovators and punish the junk products.

    So bailouts punish the innovators, and reward the failing gas-guzzling makers. Furthermore these bailouts are stealing money from American Taxpayers, and then giving it to filthy failed CEOs and stockholders. This is socialism for the rich at the expense of the poor.  

    It is bad business and bad economics.

    Taxpayer Money should never be confiscated from the public to reward bad products and bad companies.  

    •  Agreed, however (0+ / 0-)

      I am a realist and pragmatic.

      The country has inherited a very bad situation.

      Incompetence, irresponsibility, greed and unaccountability was not only rewarded but protected for the last 8 years.

      To fix this problem means that everyone have to sacrifice, however those responsible have to sacrifice the most.

      That would be upper management that made the bad decisions. No bonuses and a cut in pay equal to the
      percentage lost of profits.

      Those who leave must give back their bonuses for the last two years, and all pay will be tied to profits, not performance.

      Time will Tell all the Truth VT, Virtual Truth

      by VirtualTruth on Thu Nov 13, 2008 at 01:22:54 PM PST

      [ Parent ]

  •  You would discontinue the Volt (0+ / 0-)

    Each car model must make a reasonable
    profit or discontinued.

    The Volt won't make a profit during the first generation at least, and that's the most important car in America.

  •  such a great notion -- screw the people (0+ / 0-)

    whose contribution to this country was to work.

    Legacy costs need to be rolled up and paid off.
    Lump sum compensations for retirees.

    The retirees did what, to deserve being written off so crudely?

    Oh, wait -- the same thing the current workers did: live up to their contracts.

    Each worker must be expected to give up wages
    and benefits, management will be expected to
    do the same.

    I call bs on this "fix".

    One America does the work, another America reaps the reward. One pays the taxes, another gets the tax breaks." John Edwards

    by BlackSheep1 on Thu Nov 13, 2008 at 02:33:49 PM PST

    •  Easy to criticize (0+ / 0-)

      how about some positive input?

      The world has changed and unfortunately so have the lifetime deals to workers.

      They have their pensions, and they have the ability to get health insurance coverage.

      Reality now trumps ideology.

      I choose to live in the real world, and the real world is going to be a hard place to live.

      Remember the choice is something or nothing.
      Which would you choose?

      Time will Tell all the Truth VT, Virtual Truth

      by VirtualTruth on Thu Nov 13, 2008 at 02:41:32 PM PST

      [ Parent ]

      •  To do the right thing. (1+ / 0-)
        Recommended by:
        jfromga

        The people who made the mistakes are not the workers.
        They are the stock traders and the executives.

        Oh, and the world being a hard place? Damn that sounds Repub to me.

        One America does the work, another America reaps the reward. One pays the taxes, another gets the tax breaks." John Edwards

        by BlackSheep1 on Thu Nov 13, 2008 at 09:37:14 PM PST

        [ Parent ]

        •  The stock traders? (0+ / 0-)

          They pointed out the problem, don't blame the messenger.

          Management and the workers are to blame.

          Legacy costs and unrealistic labor demands coupled with incompetent management has lead to this problem.

          Protecting everyone even more will only ADD to the problem.

          Dealing with reality has not been a recent republican trait The world IS becoming a hard place
          to live in, we are in a recession that will be long and painful.

          I will not lie to you or sugar coat it. I will simply tell you the truth.

          Time will Tell all the Truth VT, Virtual Truth

          by VirtualTruth on Fri Nov 14, 2008 at 09:03:52 AM PST

          [ Parent ]

  •  Well you could (0+ / 0-)

    let them fail, put 2 million out of work, wreck many communities, have some 10 million GM retires and dependents lose their health care. Do not forget losing the money the UAW spends on elections and troops for get out the vote. You would also run the risk of losing some 10-12 million democratic voters as a backlash.

    "The most virtuous hearts have a touch of hell's own fire in them" Tennyson

    by Void Indigo on Thu Nov 13, 2008 at 03:12:58 PM PST

    •  This is a painful or extremely painful solution (0+ / 0-)

      We are in it deep,
      and the Car makers want the
      US taxpayers to ignore their
      incompetence and paper
      over their massive mistakes
      with money with no strings
      attached.

      I say no, I say you want the money
      then it comes with a high price.

      Total restructuring of the industry.
      The model is broker and a new one needs
      to be constructed.

      Time will Tell all the Truth VT, Virtual Truth

      by VirtualTruth on Mon Nov 17, 2008 at 01:15:33 PM PST

      [ Parent ]

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