See the USA in a Chevrolet Loan Delay?
I doubt it. I suspect the Feds will indeed loan at least the $25 Billion being requested by GM, Ford, and Chrylser Monday. I wonder if it will be an even three-way split of if the company that's done the worst will get the greatest reward?
I do appreciate the auto industry and hope it remains a part of Michigan's economy. I worked my way through college thanks to a great job at Ford for four summers in a row. I have close family who still work there. I know this will tick off all my union buddies, but I hope the Feds put two conditions on this "loan":
First, I suggest they impose a maximum cap of $250,000 on any annual salaries, bonuses, or other residual income at all levels of ownership, management, and employment until the loan is paid off. Update Monday: This is what I'm talking about. No way!
And second, the Feds should force the UAW to loosen its grip on the current contracts. Renegotiate. It should be very willing to go back to the drawing board in light of the realities of decades of "over-reaching." The most loyal hard-working employees should get highest priority in the process. I know one of them very, very well. Update Monday: This is what I'm talking about. The UAW is in denial!
How do I know about waste and "gravy train" in the auto industry? I watched if for four summers. Sure things have improved since the Seventies, but there are a lot of cuts that can be made to help the plants save themselves. We talk about "pork" in government--believe me, there's tons of "pork" in the auto industry. I dare say, these to suggestions alone could generate a "match" for the $25 Billion loan.
No more waste. No more pork contracts and bad-year bonuses. No more "gravy train" jobs and hours. Cut the "champagne perks" for what's basically "beer" work at many levels. Those who keep their jobs should be thrilled to have them, and thrilled that Uncle Sam extended this loan and these conditions until it's paid off.
In the meantime, watch this video and you'll see why this loan is probably a necessary "evil" as we take one more step toward socialized industry.
Update Monday night: In light of the two Updates above, it's less surprising that the response so far may be "sink or swim" for the Big 3. If this doesn't happen before January, what do you think the odds are that Obama, who basicly owes winning the state of Michigan to Detroit and the UAW, will not come to Governor Granholm's side?
Year-end update: This took much longer to resolve than I thought it would. There is a disconnect between the auto industry and the consumers it hopes to retain. Take for instance that the United Auto Workers (UAW) owns a $6 million dollar golf course on its $33 million dollar "retreat." If we're going to "bail out" the auto industry, as we now have, I suggest that they sell this and use the $40,000,000 to help pay the unemployment of the thousands of UAW workers who will be laid off as the 17 Billion dollar bail out fails and some of the Big Three go broke in the months ahead.
6 comments:
"First, I suggest they impose a maximum cap of $250,000 on any annual salaries, bonuses, or other residual income at all levels of ownership, management, and employment until the loan is paid off."
A friend of my daughter's who works for the airlines tells how lower level employees agreed gladly to take a cut in pay across the board in order to save the industry from collapse as a result of the 9/11 attack. The CEO's of these airline companies made sure their own pay went up though.
When I learned that the CEO's of the auto companies flew into D.C. on expensive private jets, rather than fly coach, in order to beg Congress for money, I decided that the reason the auto companies are in trouble might be due to the obvious poor judgment of these CEO's. Can you think of a more stupid thing to do when you are begging for billions of dollars from U.S. citizens of which most fly coach?
SQ.
So far I've been somewhat surprised that the Dem majority didn't just jump in to bail out all those UAW votes. I did find it symptomatic of the problem to see three different corporate jets used to bring three guys from the same town to sit at the same table and beg for the same 25 billion. That was perfect! AndI'm glad it was pointed out to them while they were on the hot seat.
I do think the Dems will find a way to "sock it to the industry" without putting off their union vote. Not sure how, but somehow the money will come and the strings attached will not weaken unions of ask them to sacrifice. I could be wrong, and hope I am.
I'm not usually biased but I have mixed feelings on this one. My brother-in-law in Michigan is an executive with GMAC. He is pretty far up the ladder but doesn't fly around in the private jets. I look forward to talking to him during Thanksgiving. They will be in NC.
Nancy,
I have mixed feelings, too. If my brother who has worked 30+ years at Ford reads this, I may not get any Turkey Thursday. GMAC is feeling the crunch of both the financial markets and the auto crisis so be kind when you bring this up. One thing is for sure: the "for profit" CEOs find themselves asking for money the way "non-profit" leaders do, it may be good for them to think like non-profit leaders. If it was known that the leaders of the Salvation Army, for instance, were flying around in jets and taking expensive junkets for meeting their fundraising goals, a lot less people would feel like putting money in the red kettles. Likewise, these big corporations need to know what it means to have "hat in hand" during hard times. The unions, too, need to know the days of bullying for unrealistic benefits and passing the cost on to the consumer are not going to work in times like these.
To my surprise, the response to this request for 25 billion has been more "measured" than I expected. I still say something's fishy. =)
Not sure where to post this as I'm "new" to this blog but NOT the other one that PI is affliated with (there I'm known as WSL. btw)
Yesterday my husband and I had an opportunity to chat with a conservative politician from another state. He spoke in our morning service as he's related to one of our pastor's wives. He tells us that we "need" to pray for our leaders as mandidated by our creator. Also that our country indeed is in deep trouble with the "liberals" in power. Our country is indeed in perilous times with the economy, the threat of terror and more. I can't pretend to know how to comment on this post as I'm sure there's two sides to the issue.
WSL,
missed this comment for over a week.
It's a complicated matter for sure. I had Thanksgiving dinner with my brother who works at Ford and he assures me that all sorts of measures are being taken (closing plants, etc.) on the part of the industry. He was transferred to another plant for that very reason (with about 25 years seniority).
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