The Big Three (GM, Ford and Chrysler)

[sumondskull6]

The automotive companies in the United States are hurting due to the down turn in the economy. The Big Three (GM, Ford and Chrysler), are trying to obtain a loan of $34 billion from the federal government. However there are some people in the government who feel that they should not be given a loan. They feel that the Big Three should resolve their problems on their own, while others believe that they should be given the loan. The UAW, which is the main supplier of labor to the Big Three, has also been involved in the debate, but is concerned that a federal loan will force them to make concessions.

 

 

 

On December 10th the House of Representatives passed a $14 billion loan for the US auto companies. "The consequences of defeating this bill would be disaster for the economy that is already in trouble," (House Financial Services Committee Chairman Barney Frank, D-Mass). On Thursday the bill was defeated in the senate by a vote of 52 to 35 after Vice President [bleep] Cheney, Chief of Staff Josh Bolten and economic adviser Edward Lazear tried to get support from Senators the night before. "People are rightly concerned that the automakers and unions won't follow through," (Sen. John Sununu, R-N.H.). The bill required the US auto companies to improve how they run their businesses and to reduce the wages they pay the UAW employees.

 

 

 

The plan called for the appointment of an auto czar who would decide if the Big Three were able to improve their financial performance by March. If not the Czar would have the right to stop the loans and recommend that they file chapter 11. The plan also required the Big Three to reorganize and for the UAW to take wage cuts, so that they would get paid the same as the other non-union auto workers in the US. But the Republicans in the Senate felt that the bill was not strong enough. "We were about three words away from a deal," (Sen. Bob Corker of Tennessee). "In the midst of already deep and troubling economic times, we are about to add to that by walking away," (said Sen. Chris Dodd, D-Conn.).

 

 

 

The UAW has been working with the Big Three to get the loans, but they believe that some members of the government want the auto companies to file for chapter 11, so they can break the union. Senator Bob Corker who was leading the negotiations for the Republicans, wanted the unions to reduce their wages and benefits to match those of the other non-union auto workers by a certain date. This was a major issue that the UAW would not agree to. "This was just simply subterfuge on the part of the minority in the Republican Party who wanted to tear down any agreement that we came up with," (UAW President Ron Gettelfinger). Now that the bill has failed, the UAW and the Big Three are hoping that president Bush will intervene and provide relief.

 

 

 

There has been a heated debate in Washington for the past week over the bailout and there is still not an agreement. Whatever is decided it will have a huge impact on the automotive industry, the UAW, and our economy. The government feels that the Big Three needs to restructure in order to be competitive and survive against the other automotive companies. The union will also need to adjust their wages and benefits otherwise they will find themselves out of work all together. The automotive industry has been a part of the US for over a hundred years and it would be a shame to see it end now.

 

 

 

 

 

 

 

I wrote this paper for my 9th grade english class, thought i did i good job on it, decided to post.

 

I wrote this paper using the following article: http://www.baltimoresun.com/news/nation ... 2222.story

[Kenshinjapan]

What's the source that you copied that article from?

[Lenin64]

Dammit, it's Chrysler. There go those extra credit points I would have gotten on that test....

[Laura]

What's the source that you copied that article from?

[BlueLancer]

His source is http://www.baltimoresun.com/news/nation ... 2222.story

 

 

 

By the way, the US senate just rejected the bailout last Friday so it's not going to become reality & the House vote didn't count for much.

[Quoi_Tu]

Pic

 

Actually, Ford's probably going to be fine. They'll take a hit for sure, but will definitely survive. I could care less about GM and Chrysler.

[3rkid]

Pic

 

Actually, Ford's probably going to be fine. They'll take a hit for sure, but will definitely survive. I could care less about GM and Chrysler.

 

 

 

Switch Ford and GM around.

[Quoi_Tu]

Pic

 

Actually, Ford's probably going to be fine. They'll take a hit for sure, but will definitely survive. I could care less about GM and Chrysler.

 

 

 

Switch Ford and GM around.

 

 

 

Why do you say that?

[3rkid]

Pic

 

Actually, Ford's probably going to be fine. They'll take a hit for sure, but will definitely survive. I could care less about GM and Chrysler.

 

 

 

Switch Ford and GM around.

 

 

 

Why do you say that?

 

 

 

Here's me writing what I was going to say in this post:

 

 

 

:idea: 8-) :? :( :^o #-o :x

 

 

 

My post was much too opinionated so just ignore my previous post.

[sumondskull6]

What's the source that you copied that article from?

 

I wrote this paper (using the source BlueLancer provided), Originally for a school paper on a Controversial topic, thought it would stir up quite a discussion on the forums.

[Ginger_Warrior]

What's the source that you copied that article from?

 

I wrote this paper (using the source BlueLancer provided), Originally for a school paper on a Controversial topic, thought it would stir up quite a discussion on the forums.

 

Without going into depth as to why - give a clear opinion/interpretation. Describing a situation in an essay is pointless, and later on in your academic career, you'll be slated if you do.

[Nom]

^What Ginger said. I thought it was a copypasta until I read the last two lines. Doesn't qualify as an essay, so you better pray that your teacher wanted a report instead.

[sumondskull6]

What's the source that you copied that article from?

 

I wrote this paper (using the source BlueLancer provided), Originally for a school paper on a Controversial topic, thought it would stir up quite a discussion on the forums.

 

Without going into depth as to why - give a clear opinion/interpretation. Describing a situation in an essay is pointless, and later on in your academic career, you'll be slated if you do.

 

 

 

This is exactly how my teacher told us to write it, find a quote or two for each body paragraph and discuss/state the facts on the quote/subject, but without directly telling my audiance (her and anyone who clicks on this post) which side i take; should they have goten the loan/should they get a loan?

 

 

 

I'm not the best writer, but for a 14yr old in the 9th grade, i believe it to be a fairly good paper.

[pryomancer]

Pic

 

Actually, Ford's probably going to be fine. They'll take a hit for sure, but will definitely survive. I could care less about GM and Chrysler.

 

Are you serious?

 

 

 

GM is huge. It's the parent company of Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall, and Wuling.

 

If GM goes then say goodbye to cheap cars and cheap running, since spare parts will become expensive, and the depreciation of a car purchase will be huge, you'll probably lose more than 50% in just 18 months.

[Quoi_Tu]

Pic

 

Actually, Ford's probably going to be fine. They'll take a hit for sure, but will definitely survive. I could care less about GM and Chrysler.

 

Are you serious?

 

 

 

GM is huge. It's the parent company of Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall, and Wuling.

 

If GM goes then say goodbye to cheap cars and cheap running, since spare parts will become expensive, and the depreciation of a car purchase will be huge, you'll probably lose more than 50% in just 18 months.

 

I believe Sweden (some European country) is bailing out Opel and Saab, which will help GM. And is Vauxhall having any significant issues(I haven't heard much about Britain as of late)? GM has made some bad choices regarding their US market and need to change their car line. The Volt is not going to cut it. If they bring their Euro designs over to the US, then they may have good competition with Ford who is already working on that. Ideally the bail out was going to help them pay for that, but I don't know if it will be enough. Really, I don't want any of those companies to go under, but I've never been a particular fan of GM and the way they do business.

 

 

 

Does Daewoo even make cars anymore?

[pryomancer]

Vauxhall cars are very popular here, their smaller models like the Corsa are the most common choice for a first car.

[Sand_Hill]

I think that it's necessary for the U.S. to rely on something other than car companies on which to base a large sum of our economy; why not invest in precious metals and technology, as well as public healthcare and education instead? That 35 bil can go a long way. And even if they got the loan, who says that the companies wouldn't go under in another few months anyway?

 

The Big Three should file for bankruptcy and restructure just like any other U.S. company.

[1_man_army]

^^ and then you say goodbye to 3 million jobs that are in, or reliant, on the industry. Those 3 million also vote, pay taxes & have families. The knock-on effect would be tremendous and that is just looking at it from a practical perspective, you can also look at it as a moral issue - "should I stick to my ideals and let those people lose out?"

[Quoi_Tu]

I think that it's necessary for the U.S. to rely on something other than car companies on which to base a large sum of our economy; why not invest in precious metals and technology, as well as public healthcare and education instead? That 35 bil can go a long way. And even if they got the loan, who says that the companies wouldn't go under in another few months anyway?

 

The Big Three should file for bankruptcy and restructure just like any other U.S. company.

 

Er, precious metals?

 

 

 

GM and Ford are going to use the money to restructure (I don't know much about Chrysler's plan). Significantly cheaper to loan them money than have them go bankrupt.

[Sand_Hill]

I think that it's necessary for the U.S. to rely on something other than car companies on which to base a large sum of our economy; why not invest in precious metals and technology, as well as public healthcare and education instead? That 35 bil can go a long way. And even if they got the loan, who says that the companies wouldn't go under in another few months anyway?

 

The Big Three should file for bankruptcy and restructure just like any other U.S. company.

 

Er, precious metals?

 

 

 

GM and Ford are going to use the money to restructure (I don't know much about Chrysler's plan). Significantly cheaper to loan them money than have them go bankrupt.

 

 

 

Lol sorry - meant to say rare metals, e.g. gold, platinum, copper, silver, titanium, et cetera.

[Laura]

^^ and then you say goodbye to 3 million jobs that are in, or reliant, on the industry. Those 3 million also vote, pay taxes & have families. The knock-on effect would be tremendous and that is just looking at it from a practical perspective, you can also look at it as a moral issue - "should I stick to my ideals and let those people lose out?"

 

They put themselves in that situation. It's not like a computer, where they can just come out with something new and exciting every two years that makes people buy a new one. I suppose they could, but the average American isn't going to buy a new car unless it becomes inefficient to have an older model. This is seemingly the biggest problem with cars, is that they cost to much, thus limiting the market. But then, auto industries could work to produce that we want to see, not something the gas market wants to see (eg: 20mpg cars).

[Ginger_Warrior]

^^ and then you say goodbye to 3 million jobs that are in, or reliant, on the industry. Those 3 million also vote, pay taxes & have families. The knock-on effect would be tremendous and that is just looking at it from a practical perspective, you can also look at it as a moral issue - "should I stick to my ideals and let those people lose out?"

 

The whole principle behind capitalism, especially in America, is that capitalism makes itself stronger in a recession by shedding the "bad" companies which weaken the economy, providing a gap for stronger companies to come forward. Giving a bailout to every Tom, [Richard] & Harry who gets in trouble is clearly undoable and overrides that basic principle, which has made the economy so prosperous over the last ten years. There is a danger here that we can overreact and end up messing the system up even more with unsustainable bailouts, which we'll have to pay off either through increased borrowing or higher taxes later.

 

 

 

3 million jobs won't go. Anyone in the media saying they will is either being sensationalist, or lazy. It's like Woolworths here. 30,000 jobs are not going to evapourate into thin air, no matter how many times BBC News wants to say so. The stores will still need security guards, no matter who (if indeed anyone), is occupying the building. Whoever takes over the store will likely keep on any previous trained staff members, instead of going through the interview and training processes all over again.

 

 

 

If you have capitalism, then accept that weak companies will die, and jobs will go as a result. That's the price you pay for having that system. This idealism that you can somehow have the safeguards socialism provides, AND still have the financial prosperity capitalism provides, especially when we're in a trillion USD's worth of collective debt is ridiculous.

 

 

 

You cannot have your cake and eat it.

[1_man_army]

Let my clarify my position slightly, I don't advocate an unadulterated, unconditional bail out. I do advocate using some of the original bailout money to the industry to help them through this time, this would come at the cost of them streamlining their practices, reduce costs & output and make provisions on them investing in more renewable options once this economic period has run its course. Yes, this would involve some job losses but a lot less then allowing them to go under (I know I quoted the press's bloated figure of 3 million - I'll concede laziness on my part there however, there would still be a large number of people who will become unemployed if they go down.

 

 

 

Letting them go down will only increase the number of people needing welfare and decrease the number of people contributing to the economy via their taxes and their spending. The economy runs in cycles, no doubt the industry will pick up again and this moment is a useful period to exploit by forcing measures in order to prevent such a bust in the auto-industry in the future. I do concede there is a tendency to over-react but that really is the nature of the beast at the moment, the mixing of perception and reality is making this period worse than it might have been.

 

 

 

If bailing out isn't viable then consolidation is the only way I see forward. However, this would still have to be carried out with strict provisions and would have to be judged on an individual basis depending on the proposals that come in. If this is the way forward then it is better to do it sooner while they are still surviving rather than let them go completely bust and leave them to the vultures. A little pain now might be better than than the pain of a full-scale collapse of the big 3.

[Quoi_Tu]

 

The whole principle behind capitalism, especially in America, is that capitalism makes itself stronger in a recession by shedding the "bad" companies which weaken the economy, providing a gap for stronger companies to come forward. Giving a bailout to every Tom, [Richard] & Harry who gets in trouble is clearly undoable and overrides that basic principle, which has made the economy so prosperous over the last ten years. There is a danger here that we can overreact and end up messing the system up even more with unsustainable bailouts, which we'll have to pay off either through increased borrowing or higher taxes later.

 

The idea of a recession "purging the rottenness out of the system" ended with Hoover 70 years ago (Hoover had misguided advisers). The idea of weak companies going under is ok and will happen, but during a recession can make things worse. GM going under will make a bad situation worse, where as if it wasn't a recession, the economy could take the hit.

 

 

 

If you have capitalism, then accept that weak companies will die, and jobs will go as a result. That's the price you pay for having that system. This idealism that you can somehow have the safeguards socialism provides, AND still have the financial prosperity capitalism provides, especially when we're in a trillion USD's worth of collective debt is ridiculous.

 

 

 

You cannot have your cake and eat it.

 

Addressed above, but also the US is not a purely free market system, so why treat it as so? And the US has been in worse debt, we'll be fine especially now that we don't have a Reaganomics-esque president (soon anyways).

[NoMoreDead]

Why do we feel the need to bail out companies who did themselves wrong?

 

 

 

The car companies make cars with poor gas mileage. People no longer want to buy them. It's either they make a more fuel efficient car or they go under. Why should tax payer dollars go into keeping companies afloat who continue to put out the same poor product?

 

 

 

I'm sorry that tons of jobs are at stake. It's tough luck. It's life. I can't say anymore than that. It's not fair, and it's not right, but it is what it is.