Cool Editorial from a Ford Dealer

[TZ250]

As I watch the coverage of the fate of the U.S. auto industry, one alarming and frustrating fact hits me right between the eyes. The fate of our nation's economic survival is in the hands of some congressmen who are completely out of touch and act without knowledge of an industry that affects almost every person in our nation. The same lack of knowledge is shared with many journalists whom are irresponsible when influencing the opinion of millions of viewers.


Sen. Richard Shelby of Alabama has doomed the industry, calling it a dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the '70s, '80s and '90s. You and the uninformed journalist and senators that hold onto myths that are not relevant in today's world.


When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world's No. 1 automaker beating Toyota by 3,000 units.


When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers.

Did you realize Big Three's gas guzzlers include the 33 mpg Malibu that beats the Accord. And for '09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize, beating the Camry Hybrid. Ford's Focus beats the Corolla and Chevy's Cobalt beats the Civic.


When you ask how many times are we going to bail them out you must be referring to 1980. The only Big Three bailout was Chrysler, who paid back $1 billion, plus interest. GM and Ford have never received government aid.


When you criticize the Big Three for building so many pickups, surely you've noticed the attempts Toyota and Nissan have made spending billions to try to get a piece of that pie. Perhaps it bothers you that for 31 straight years Ford's F-Series has been the best selling vehicle. Ford and GM have dominated this market and when you see the new '09 F-150 you'll agree this won't change soon.


Did you realize that both GM and Ford offer more hybrid models than Nissan or Honda. Between 2005 and 2007, Ford alone has invested more than $22 billion in research and development of technologies such as Eco Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.


It's 2008 and the quality of the vehicles coming out of Detroit are once again the best in the world.


Perhaps Sen. Shelby isn't really that blind. Maybe he realizes the quality shift to American. Maybe it's the fact that his state of Alabama has given so much to land factories from Honda, Hyundai and Mercedes Benz that he is more concerned about their continued growth than he is about the people of our country. Sen. Shelby's disdain for "government subsidies" is very hypocritical. In the early '90s he was the driving force behind a $253 million incentive package to Mercedes. Plus, Alabama agreed to purchase 2,500 vehicles from Mercedes. While the bridge loan the Big Three is requesting will be paid back, Alabama's $180,000-plus per job was pure incentive. Sen. Shelby, not only are you out of touch, you are a self-serving hypocrite, who is prepared to ruin our nation because of lack of knowledge and lack of due diligence in making your opinions and decisions.


After 9/11, the Detroit Three and Harley Davidson gave $40 million-plus emergency vehicles to the recovery efforts. What was given to the 9/11 relief effort by the Asian and European Auto Manufactures? $0 Nada. Zip!


We live in a world of free trade, world economy and we have not been able to produce products as cost efficiently. While the governments of other auto producing nations subsidize their automakers, our government may be ready to force its demise. While our automakers have paid union wages, benefits and legacy debt, our Asian competitors employ cheap labor. We are at an extreme disadvantage in production cost. Although many UAW concessions begin in 2010, many lawmakers think it's not enough.


Some point the blame to corporate management. I would like to speak of Ford Motor Co. The company has streamlined by reducing our workforce by 51,000 since 2005, closing 17 plants and cutting expenses. Product and future product is excellent and the company is focused on one Ford. This is a company poised for success. Ford product quality and corporate management have improved light years since the nightmare of Jacques Nasser. Thank you Alan Mulally and the best auto company management team in the business.


The financial collapse caused by the secondary mortgage fiasco and the greed of Wall Street has led to a $700 billion bailout of the industry that created the problem. AIG spent nearly $1 million on three company excursions to lavish resorts and hunting destinations. Paulson is saying no to $250 billion foreclosure relief and the whole thing is a mess. So when the Big Three ask for 4 percent of that of the $700 billion, $25 billion to save the country's largest industry, there is obviously oppositions. But does it make sense to reward the culprits of the problem with $700 billion unconditionally, and ignore the victims?


As a Ford dealer, I feel our portion of the $25 billion will never be touched and is not necessary. Ford currently has $29 billion of liquidity. However, the effect of a bankruptcy by GM will hurt the suppliers we all do business with. A Chapter 11 bankruptcy by any manufacture would cost retirees their health care and retirements. Chances are GM would recover from Chapter 11 with a better business plan with much less expense. So who foots the bill if GM or all three go Chapter 11? All that extra health care, unemployment, loss of tax base and some forgiven debt goes back to the taxpayer, us. With no chance of repayment, this would be much worse than a loan with the intent of repayment.


So while it is debatable whether a loan or Chapter 11 is better for the Big Three, a $25 billion loan is definitely better for the taxpayers and the economy of our country.

So I'll end where I began on the quality of the products of Detroit. Before you, Mr. or Ms. Journalist continue to misinform the American public and turn them against one of the great industries that helped build this nation, I must ask you one question. Before you, Mr. or Madam Congressman vote to end health care and retirement benefits for 1 million retirees, eliminate 2.5 million of our nation's jobs, lose the technology that will lead us in the future and create an economic disaster including hundreds of billions of tax dollars lost, I ask this question not in the rhetorical sense. I ask it in the sincere, literal way. Can you tell me, have you driven a Ford lately?


Jim Jackson

Elkins

[k062693w]

Somebody beat you by about 7 hours LOL

http://www.stangbangerz.com/forums/showthread.php?t=49329

[Greg Seibert]

That still doesn't reduce the importance of the message, repeated, or not!
One must wonder why the media continues with the negative slant on this issue.
When comparing the profits of the Japanese companies verses GM, the playing field is no-where even when considering operating expenses and legacey costs.

[02mingryGT]

That still doesn't reduce the importance of the message, repeated, or not!
One must wonder why the media continues with the negative slant on this issue.
When comparing the profits of the Japanese companies verses GM, the playing field is no-where even when considering operating expenses and legacey costs.

And who got GM into those cost? The management of GM not the government. The only way to fix GM and Chrysler is to go to bankruptcy to bring the labor dollar cost down. I am totally against lending MY money to GM to pay some bastards pension. Screw that. The UAW is totally against going to bankruptcy. You know why? Because the labor contracts would be null and void then. I say bust them.

[cobrajoe]

And who got GM into those cost? The management of GM not the government. The only way to fix GM and Chrysler is to go to bankruptcy to bring the labor dollar cost down. I am totally against lending MY money to GM to pay some bastards pension. Screw that. The UAW is totally against going to bankruptcy. You know why? Because the labor contracts would be null and void then. I say bust them.

What's the UAW done? Bust them? Are you kidding me? Are you one of those that think they make $78/hour? and think the "Legacy Cost" is to blame?

[02mingryGT]

What's the UAW done? Bust them? Are you kidding me? Are you one of those that think they make $78/hour? and think the "Legacy Cost" is to blame?

It's not thinking it is fact. How come GM and Ford make money in Europe, Asia ect? Why does Toyota and Honda make money here? There are workers in Georgetown who now make comparable UAW wages without the generous pension added on top of it. The way a business works is this simple: If you don't sell enough product to sustain your business then you must cut cost. The first thing every other manufacturing company does is cut labor because it is your single biggest cost. GM and the rest are forced to cut material cost which is your next biggest cost. That's why they are always trying to get by on the cheap with their suppliers. I know because I worked for one. Their business model is a failure. Their legacy costs was based on a continual market share which no longer exists. The bailout didn't pass because the UNION, being the greedy bastards they are, REFUSED to renegotiate their contract. Fine let them go to bankruptcy.

Don't get me wrong I think all bailouts are foolish. This isn't a sudden market issue that just popped uyp. It is the result of bad business for years. You tell me why the hell my money should pay yours or anybody's pension? I don't think the American taxpayer should have to subsidize anyone's paycheck. The market will take care of itself. As I stated previously the demand for vehicles will not go away. So the 2.5 million job losses that are being tossed around is disingenuous. They will just move to some other company be that Ford, Toyota or Honda.

[cobrajoe]

It's not thinking it is fact. How come GM and Ford make money in Europe, Asia ect? Why does Toyota and Honda make money here? There are workers in Georgetown who now make comparable UAW wages without the generous pension added on top of it. The way a business works is this simple: If you don't sell enough product to sustain your business then you must cut cost. The first thing every other manufacturing company does is cut labor because it is your single biggest cost. GM and the rest are forced to cut material cost which is your next biggest cost. That's why they are always trying to get by on the cheap with their suppliers. I know because I worked for one. Their business model is a failure. Their legacy costs was based on a continual market share which no longer exists. The bailout didn't pass because the UNION, being the greedy bastards they are, REFUSED to renegotiate their contract. Fine let them go to bankruptcy.

Don't get me wrong I think all bailouts are foolish. This isn't a sudden market issue that just popped uyp. It is the result of bad business for years. You tell me why the hell my money should pay yours or anybody's pension? I don't think the American taxpayer should have to subsidize anyone's paycheck. The market will take care of itself. As I stated previously the demand for vehicles will not go away. So the 2.5 million job losses that are being tossed around is disingenuous. They will just move to some other company be that Ford, Toyota or Honda.

Where the hell you getting your facts? Rush, Savage?

Here read this and watch your so called facts VANISH!

http://news.cincinnati.com/article/20081213/BIZ/812130340/1055/NEWS

No. 2: Their union workers are lazy and overpaid

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Big Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Detroit Free Press analysis.
Your fact----BUSTED!

So according to what you say. Someone who bust their hump for a company for 30+ some years contributes to a pension fund (I guess you think the company pays all of it:rolleyes:) is not entitled to their money? Are you kidding me. You have some sort of retirement/pension? I'm guessing it might be tied into one of the so called banks that got bailed out. So I'm gonna take your stance. F the banks and their arrogant SOB's, let them go out of business. You know what will happen to the retirement/pensions? They won't be there either.

[Pops Fun]

Here is something else to chew on:
This is a video of a new Ford plant in Camacari, Brazil . One look at this and you will
instantly be able to tell what is wrong with the manufacturing plants of the US car makers and why there will probably never be another one built in the US .

It will also point out why more will go off shore to escape the spiral death grip of US unions, sad but true.



http://info.detnews.com/video/index.cfm?id=1189 (http://info.detnews.com/video/index.cfm?id=1189)

[1986GT]

The unions of the US once stood for something I will say that. They also originally were a good idea. But the unions of today are corrupt, way out of hand and just rediculous. I have a lot of freinds and family who once worked at GM who aren't union brain washed who will all tell you they were over paid and got away with murder. I won't even get into the list of things they told me walked off the premises on a daily bases.(stolen) This is a very common thing at these places too. I have heard all the stories.
Now let me say that I worked at honda in anna ohio a while (not my cup of tea, assembly line, too easy and boring). The employees there make awesome money are happy and have great benefits. If you don't do your job 100% from the time you clock in till you clock out, have good attendance and so on (typical non union stuff) you are gone. No ifs ans or buts. YOU! are the only one who can save your job not the union and all it takes is to DO it. The security is unreal too. Nothing walks off the property they don't know about.
I also worked at a union shop called LEAR Corp. in sidney. Made big money and the benefits were like nothing I ever had. The company made less and less profit and the union wanted more and more shit. They fired WORTHLESS people all the time who would only be brought back with all missed pay including any OT they could of had. Everyone was acting like the little kid in walmart rolling on the floor crying lol. Well guess what they laid everyone off and shut down. I wonder how they like the real world! Most of those people deserved nothing but wanted everything.
Don't get me wrong there are some really good people out there in unions doing there part the way it should be done. But I think most everyone knows how bad things have gotten. I'll shut up now.

[BigBadStang]

Don't forget to factor in the tax abatements that the foreign car manufacturers receive from state and local governments to build in the US. The domestic manufacturers do not receive such handsome abatements. The foreign manufacturers also pay inflated prices to suppliers (usually corporately located in the same country as the manufacturer) showing that the plants are not making huge profits to escape paying US corporate taxes, then take kickbacks in foreign lands in which the US has NO jurisdiction in enforcing any tax laws. ;)

[1986GT]

I agree and it is a shame. Never the less the big three are stuck doing what they have to do to compete with that. And if the unions care about america as much as they say they do they would ease up a bit so they could stay afloat. And if they joined forces with their companies and put as much union money toward fighting for more fair tax laws as they do on keeping worthless peoples jobs and trying to get more more more for those worthless people we may find a solution to that.

[02mingryGT]

Where the hell you getting your facts? Rush, Savage?

Here read this and watch your so called facts VANISH!

http://news.cincinnati.com/article/20081213/BIZ/812130340/1055/NEWS

No. 2: Their union workers are lazy and overpaid

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Big Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Detroit Free Press analysis.
Your fact----BUSTED!

So according to what you say. Someone who bust their hump for a company for 30+ some years contributes to a pension fund (I guess you think the company pays all of it:rolleyes:) is not entitled to their money? Are you kidding me. You have some sort of retirement/pension? I'm guessing it might be tied into one of the so called banks that got bailed out. So I'm gonna take your stance. F the banks and their arrogant SOB's, let them go out of business. You know what will happen to the retirement/pensions? They won't be there either.

Hilarious that you think a news article with no evidence or offering of where it got it's numbers from is fact. You are entitled to YOUR money NOT MINE. Get it? Why should Americans pay YOUR PENSION? If you could READ which you obviously can't, I stated before that no business should be getting a bailout.

I pulled the original article off the Detroit Free Press. Hmmmm..... article written by Detroit reporter.....hmmmmm....he covers the auto industry and has done so for years......hmmmmm.......wonder what pay he gets on top for favorable articles......hmmmmm.......

http://www.freep.com/article/20081205/COL14/812050400/1095

In the comment section below I found this comment left by someone. Read it and watch your productivity go bye-bye.

If you read the Habour Report at

www.oliverwyman.com/content_images/OW_EN_Automotive_Press_2008_HarbourReport08.pdf

you will find it measures the productivity of the plant overall, not the worker's alone. What the report is actually saying is the automation and processes have lowered the time and cost to produce a component or complete vehicle. The report also said that plants located in Mexico are very lean and competitive with high quality, even with less automation.

As far as the hourly wage dispute -- the legacy costs do matter to the bottomline -- and they should be included when comparing UAW costs vs non-UAW costs. If you take away the UAW and it's costly bureacracy you can see how it impacts labor costs

As part of your rant against Myth #7 you say new hires at the Detroit Three get $14 an hour. Again, refer to the Habour Report, which said this pay rate is for GM worker's that perform "non-core" work. Ford and Chrysler put a 20% limit on those pay rates.


SO DO THE MACHINES COUNT AS UAW MEMBERS??????????

As I said before which you didn't reply to, how come Ford and GM make money overseas? The only difference I see is the UAW.

BTW, so you know my Grandfather worked and retired at Ford. Management. I do have a friend who is in maintenance at Ford in Sharonville who tells me stories about the "work ethic" of the union.

Again if you don't collect enough revenue you MUST cut cost. If we give the automakers money what is their plan? Sell more cars? Really what is it? Their current business model is a failure, plain and simple. I suggest the UAW commits to contract changes or goes the way of the dinosaur.

[mustang8998]

Where the hell you getting your facts? Rush, Savage?

Here read this and watch your so called facts VANISH!

http://news.cincinnati.com/article/20081213/BIZ/812130340/1055/NEWS

No. 2: Their union workers are lazy and overpaid

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Big Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Detroit Free Press analysis.
Your fact----BUSTED!

So according to what you say. Someone who bust their hump for a company for 30+ some years contributes to a pension fund (I guess you think the company pays all of it:rolleyes:) is not entitled to their money? Are you kidding me. You have some sort of retirement/pension? I'm guessing it might be tied into one of the so called banks that got bailed out. So I'm gonna take your stance. F the banks and their arrogant SOB's, let them go out of business. You know what will happen to the retirement/pensions? They won't be there either.

Again, depends on where you look!

http://www.freep.com/apps/pbcs.dll/article?AID=200881212117

Anyway it goes, the tax payer will be on the hook for the legacy costs. Either by the bailout (which is supposed to be a loan :rolleyes:), or bankruptcy (in which the government insures the pensions).

[TZ250]

Here is something else to chew on:
This is a video of a new Ford plant in Camacari, Brazil . One look at this and you will
instantly be able to tell what is wrong with the manufacturing plants of the US car makers

What happens to the older workforce? The video talks about hiring only young people. Naturally, the don't have insurance because they don't need it. What do you do when you do need it or you get older?

What happens to the jobs that the robots are now doing? Where do the peope go? The rest of the economy won't absorb all of them. That means there more and more people with less money.

The United States economy has always been tied to the auto industry. What happens to this economy when the auto industry is sent overseas? Sure, you may not be affected right now. It's easy to have such opinions when money is easy and this topic is just a thread. For some people it's much more than that.

[cobrajoe]

You know what happens when a business goes bankrupt? What you think is gonna happen to your car warranty? That's right POOF! They won't have to honor it. I'm sorry but :flipoff: AIG. It has not affected me and they showed how they are in it for themselves with their big trips they took AFTER they got the money but swore up and down it was paid for BEFORE the bail out.:rolleyes: Right! Like your company needs 450B plus and you didn't know this when you scheduled a four star resort trip(s)? I want my warranties that I paid for!

[firestang70]

I won't get into the conversation of a bailout etc. I own two new ford vehicles. An 06 GT Mustang and 07 Freestyle. Between both it has returned to the dealer once for TSB. American vehicles quality has been on par for quite awhile. They just haven't got that good press from the auto mags. I wonder why???

[02mingryGT]

Because most of the press has a foriegn flavor. Ford and Gm have both done well in recent years. The only thing holding them back is simple economics. I will post below another editorial explaining that once again. I don't believe in any bailout in any shape or form. I believe on this website we all discussed the mortgage crisis and the majority consensus then was "well too bad those people knew what they were signing". This situation is no different in my mind. But read the article below, especially the part about the job bank. It is obvious a restructuring to cost will do the automakers great benefit. Yes they all still sell cars but not the amount they need to survive. There is way too much competition to due business the way it was done thirty years ago.

BTW, Ford is doing better because of it's buyouts it started the last couple of years.

http://www.gmu.edu/departments/economics/wew/articles/08/BailoutsAndBankruptcy.htm


Bailouts and Bankruptcy



Let's not allow Congress and members of the bailout parade panic us into allowing them to do things, as was done in the 1930s, that would convert a mild economic downturn into a true calamity. Right now the Big Three auto companies, and their unions, are asking Congress for a $25 billion bailout to avoid bankruptcy. Let's think about that a bit.

What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate. What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.

Chapter 11 of the U.S. Bankruptcy Code, where the control of its business operations are subject to the oversight and jurisdiction of the court, gives companies a chance to reorganize. The court can permit complete or partial relief from the company's debts and its labor union contracts.

A large part of the problem is the Big Three's cozy relationship with the United Auto Workers union (UAW). GM has a $73 hourly wage cost including benefits and overtime. Toyota has five major assembly plants in the U.S. Its hourly wage cost plus benefits is $48. It doesn't take rocket science to figure out which company will be at a competitive disadvantage. Then there's the "jobs bank" feature of the UAW contract where workers who are laid off workers get 95 percent of their base pay and all their benefits. Right now there's a two-year limit but in the past workers could stay in the "jobs bank" forever unless they turned down two job offers within 50 miles of their factory. At one time job bank membership exceeded 7,000 "workers." GM, Ford and Chrysler face other problems that range from poor corporate management and marketing, not to mention costly government regulations.

Two vital marketplace signals are the profits that come with success and the losses that come with failure. When these two signals are not allowed to freely function, markets operate less efficiently. To be successful a business must take in enough revenue not only to cover wages, rents and interest but profits as well. In order to accomplish that feat executives must not only satisfy customers but they must do it in a manner that efficiently utilizes all of their resources. If they fail to cover costs, it means that resources are not being used efficiently and/or consumers don't value the good being produced relative to some other alternative. When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital become available to someone else who might put them to better use. When government steps in with a bailout, it enables executives to continue mismanaging resources.

How much congressional involvement do we want with the Big Three auto companies? I'd say none. Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about the automobile business than they know about the banking and financial businesses that they've turned into a mess. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers. The belief that Congress poses the major threat to our liberty and well-being is why the founders gave them limited enumerated powers. To our detriment, today's Americans have given them unlimited powers.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2008 CREATORS SYNDICATE, INC.

[cobrajoe]

Because most of the press has a foreign flavor. Ford and Gm have both done well in recent years. The only thing holding them back is simple economics. I will post below another editorial explaining that once again. I don't believe in any bailout in any shape or form. I believe on this website we all discussed the mortgage crisis and the majority consensus then was "well too bad those people knew what they were signing". This situation is no different in my mind. But read the article below, especially the part about the job bank. It is obvious a restructuring to cost will do the automakers great benefit. Yes they all still sell cars but not the amount they need to survive. There is way too much competition to due business the way it was done thirty years ago.

BTW, Ford is doing better because of it's buyouts it started the last couple of years.

http://www.gmu.edu/departments/economics/wew/articles/08/BailoutsAndBankruptcy.htm


Bailouts and Bankruptcy



Let's not allow Congress and members of the bailout parade panic us into allowing them to do things, as was done in the 1930s, that would convert a mild economic downturn into a true calamity. Right now the Big Three auto companies, and their unions, are asking Congress for a $25 billion bailout to avoid bankruptcy. Let's think about that a bit.

What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate. What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.

Chapter 11 of the U.S. Bankruptcy Code, where the control of its business operations are subject to the oversight and jurisdiction of the court, gives companies a chance to reorganize. The court can permit complete or partial relief from the company's debts and its labor union contracts.

A large part of the problem is the Big Three's cozy relationship with the United Auto Workers union (UAW). GM has a $73 hourly wage cost including benefits and overtime. Toyota has five major assembly plants in the U.S. Its hourly wage cost plus benefits is $48. It doesn't take rocket science to figure out which company will be at a competitive disadvantage. Then there's the "jobs bank" feature of the UAW contract where workers who are laid off workers get 95 percent of their base pay and all their benefits. Right now there's a two-year limit but in the past workers could stay in the "jobs bank" forever unless they turned down two job offers within 50 miles of their factory. At one time job bank membership exceeded 7,000 "workers." GM, Ford and Chrysler face other problems that range from poor corporate management and marketing, not to mention costly government regulations.

Two vital marketplace signals are the profits that come with success and the losses that come with failure. When these two signals are not allowed to freely function, markets operate less efficiently. To be successful a business must take in enough revenue not only to cover wages, rents and interest but profits as well. In order to accomplish that feat executives must not only satisfy customers but they must do it in a manner that efficiently utilizes all of their resources. If they fail to cover costs, it means that resources are not being used efficiently and/or consumers don't value the good being produced relative to some other alternative. When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital become available to someone else who might put them to better use. When government steps in with a bailout, it enables executives to continue mismanaging resources.

How much congressional involvement do we want with the Big Three auto companies? I'd say none. Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about the automobile business than they know about the banking and financial businesses that they've turned into a mess. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers. The belief that Congress poses the major threat to our liberty and well-being is why the founders gave them limited enumerated powers. To our detriment, today's Americans have given them unlimited powers.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2008 CREATORS SYNDICATE, INC.

I don't believe in any bailout in any shape or form.
Not denying that you don't, But you've cried more about this one (that still has not happened yet) than you have about AIG and they basically was handed their ridiculous amount of money and then went on 4 star trips and came back and asked for more!

What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate.
What will happen to the warranties? They will not be entitled to honor them.

What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.
Who? Foreign interest? Do you really want a foreign interest owning a company that converts over to or is already manufacturing equipment for the military?

A large part of the problem is the Big Three's cozy relationship with the United Auto Workers union (UAW). GM has a $73 hourly wage cost including benefits and overtime. Toyota has five major assembly plants in the U.S. Its hourly wage cost plus benefits is $48. It doesn't take rocket science to figure out which company will be at a competitive disadvantage. Then there's the "jobs bank" feature of the UAW contract where workers who are laid off workers get 95 percent of their base pay and all their benefits. Right now there's a two-year limit but in the past workers could stay in the "jobs bank" forever unless they turned down two job offers within 50 miles of their factory. At one time job bank membership exceeded 7,000 "workers." GM, Ford and Chrysler face other problems that range from poor corporate management and marketing, not to mention costly government regulations.
Wow all that in that paragraph and the last sentance mentions the other problems!!!:rolleyes: Sounds awful ANTI-Union to me!!!!:rolleyes:

They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers.
There's that $73/hr again! Where they keep coming up with this figure?

[02mingryGT]

Not denying that you don't, But you've cried more about this one (that still has not happened yet) than you have about AIG and they basically was handed their ridiculous amount of money and then went on 4 star trips and came back and asked for more!


And on the same hand your crying about the possibility that it may happen. So who has more at stake here and biased? The main reason is because no one on this site jumped in and stuck up for poor old AIG either. I like how you and the 8union keep bringing them up as justification though. Two wrongs don't make a right. Hey, remember this?

http://www.entertonement.com/clips/2709/American-Presidents/John-F-Kennedy/Ask-Not-What-Your-Country-Can-Do-For-You



What will happen to the warranties? They will not be entitled to honor them.

Typical Union scare tactic. It is extremely doubtful that GM will fail completely if forced into bankruptcy. That would be the point of going into bankruptcy. I would say the warranties WILL disappear if they don't go through bankruptcy nor restructure their cost.



Who? Foreign interest? Do you really want a foreign interest owning a company that converts over to or is already manufacturing equipment for the military?

You would probably be astounded to know how much of a percentage foreigners already own of GM, Ford and Chrysler. ANOTHER typical union scare tactic that has no place in the world economy. And as for the second part of your question, this isn't the pre WW II era when this country was isolationist and ranked probably only 15th as far as military power in the world. Again, typical union scare tactic. And exactly what does GM actually make for the military? Here are a couple of examples where the common perception is wrong:

In December 1999, AM General and General Motors Corporation finalized an agreement to jointly pursue product, marketing and distribution opportunities for HUMMER. GM acquired the exclusive ownership of the HUMMER brand name worldwide and the current HUMMER was renamed the HUMMER H1. In 2002, AM General began assembling the HUMMER H2, a new "next generation" sport utility vehicle designed by GM, at a new factory in Mishawaka. GM now has responsibility for marketing and distributing all HUMMERs. Although GM acquired the HUMMER brand, they do not own any part of AM General.
Another example:

MIA Abrams Battle Tank and Stryker personnel carrier:

General Dynamics Land Systems was formed in 1982 when General Dynamics acquired Chrysler Corporation’s defense operations. In March 2003 the assets of GM Defense were purchased by General Dynamics Corporation and combined with General Dynamics Land Systems. General Dynamics Land System's principal products are the U.S. Army's M1A2 SEP Main Battle Tank and Stryker armored wheeled vehicle, the U.S. Marine Corps' Expeditionary Fighting Vehicle (EFV), and various robotic initiatives.

Another:

The M2 Bradley IFV (Infantry Fighting Vehicle) and M3 Bradley CFV (Cavalry Fighting Vehicle) are American infantry fighting vehicles manufactured by BAE Systems Land and Armaments, (formerly United Defense).

So what exactly does the automakers make? It's really a shame that the knowledge of the American public is so low that these untruths espoused by the union are taken as fact.



Wow all that in that paragraph and the last sentance mentions the other problems!!!:rolleyes: Sounds awful ANTI-Union to me!!!!:rolleyes:

There's that $73/hr again! Where they keep coming up with this figure?


I find it interesting that you still think the UAW is getting the shaft. Getting paid 90% of your wage for two years is a joke. Here's a story from 2007 where it is mentioned the disparity in labor cost was $25 when compared with Toyota, Honda ect. How come no one from the union disputed it then????

http://www.npr.org/templates/story/story.php?storyId=14715890

This is a story by the NPR so it's not biased towards the union. Read the sidebar on the left where it will again stipulate "upwards of $70 per hour for labor cost" AGAIN I ASK WHY NO ONE DISPUTED IT THEN. Probably because it's the truth.

I would like to add that since I didn't write the article that you questioned, it would foolish for me to presume what exactly Walter Williams thoughts were to come up with the article. So those answers are entirely my own. I would like some kind of rebuttal to this or I'm done. I've pretty much shredded everything you've put forward as fact. All that is left is opinion.

[cobrajoe]

And on the same hand your crying about the possibility that it may happen. So who has more at stake here and biased? The main reason is because no one on this site jumped in and stuck up for poor old AIG either. I like how you and the 8union keep bringing them up as justification though. Two wrongs don't make a right. Hey, remember this?

And I like how you are bashing the people that built this country! IE: the Union worker. I guess in your OPINION ALL unions are the devil right? Why is it you presume that I am backing the unions? I'm gonna keep bring up AIG as long as ANY other bail out effort for ANY industry is met with this same utter disrespect and untruths being perpetuated as TRUTH by the Mass MEDIA (TV, Print or otherwise).


Typical Union scare tactic. It is extremely doubtful that GM will fail completely if forced into bankruptcy. That would be the point of going into bankruptcy. I would say the warranties WILL disappear if they don't go through bankruptcy nor restructure their cost.

I don't remember any scare tactics being spoke of.:rolleyes:
You keep mentioning GM like they are the only ones who have a dog in this fight. First of all this "Bail out" is a loan that the mass media is still portraying as a bail out like AIG received. Now not once have I heard that AIG was gonna repay there "GIFT".



You would probably be astounded to know how much of a percentage foreigners already own of GM, Ford and Chrysler. ANOTHER typical union scare tactic that has no place in the world economy. And as for the second part of your question, this isn't the pre WW II era when this country was isolationist and ranked probably only 15th as far as military power in the world. Again, typical union scare tactic. And exactly what does GM actually make for the military? Here are a couple of examples where the common perception is wrong:

So your "OPINION" is that you feel is a war was severe enough that three companies (BAE, GD, AMG) can handle production of ALL needed military equipment?


So what exactly does the automakers make? It's really a shame that the knowledge of the American public is so low that these untruths espoused by the union are taken as fact.

Hey I guess if the suits at GM said it it must be true!:rolleyes::lol:


I find it interesting that you still think the UAW is getting the shaft. Getting paid 90% of your wage for two years is a joke. Here's a story from 2007 where it is mentioned the disparity in labor cost was $25 when compared with Toyota, Honda ect. How come no one from the union disputed it then????

I don't think they are getting the shaft, but they ARE being misrepresented by the mass media. Like I said above if GM says it's true it must be. :rolleyes:

http://www.npr.org/templates/story/story.php?storyId=14715890


This is a story by the NPR so it's not biased towards the union. Read the sidebar on the left where it will again stipulate "upwards of $70 per hour for labor cost" AGAIN I ASK WHY NO ONE DISPUTED IT THEN. Probably because it's the truth.

Hell if I take what our retirees make and divide it by our current work force I'll be showing a hourly wage alot higher than I am "ACTUALLY" making too.


I would like to add that since I didn't write the article that you questioned, it would foolish for me to presume what exactly Walter Williams thoughts were to come up with the article. So those answers are entirely my own. I would like some kind of rebuttal to this or I'm done. I've pretty much shredded everything you've put forward as fact. All that is left is opinion.

Wow a thing I do agree with. You have your "OPINION". I have mine. You obviously do NOT like unions. That's your choice. We are beating a dead horse. Your set in your Views I'm set in mine. I will tell you I too do not support ANY bail out (Help the middle class first I say). I'm just tired off hearing all this bullshit about how the Blue collar worker is expected to keep sacrificing and the suits in their Ivory towers keep their Golden parachutes and ridiculous salaries (especially when they have ran their company straight into the ground)

[HDmstng]

Pretty good...