If We Let GM, Ford , And Chrysler Fail?

[DemocratSinceBirth]

If we let GM, Ford, and Chrysler fail what is going to happen to the 3,000,000 people who are employed directly or indirectly by these corporations and rely them on for a middle class existence and to the retired folks from these corporations who rely on them for pensions and much of their health care?


That and that alone is the only reason I support a bail out.

[Kolesar]

1. The pensions are 80% funded, but retirees will lose ALL medical benefits

Pensions will be turned over to PBIC, but retirees will have their retirement paychecks reduced on account of the incomplete funding. It's called a "cram down"

[doc03]

2. GM, Ford and Chrysler have already failed, the question is to

give them more money so they can keep failing or let them go belly up and reorganize into a viable industry. I am a victim of the PBGC "cram down", I didn't know they had a name for it, I just thought I got screwed. One thing for sure they can't keep shutting down plants and still keep the employees on the payroll.

[Blarch]

3. I agree.

the bailout won't save the big 3 ...it will just be a waste of money.

[tritsofme]

13. Do the contracts call for retiree health insurance to pay primary

over Medicare for retirees over age 65?

[Kolesar]

23. Sorry, but I don't understand your question...eom

[shotten99]

4. You're talking about killing a lot of cities.

The GM factory in my hometown, Janesville, WI is due to close next month.
That coupled with the depressed housing market is a death sentence.
From what I hear, people would be jumping out of the city like rats from a
sinking ship, only there's no way to get rid of their homes.
The entire city is dependent on that damned factory.

If they all go down, multiply that by dozens.
This isn't a one dimensional problem.

This doesn't mean that GM and the others don't need to pay
for being stupid. I never liked SUVs and figured this would
be the end result.

But Wow..It's bad. This can't happen.

[doc03]

5. Look at Cleveland, Youngstown Ohio and dozens of other towns

dependant on steel and what damage the loss of the steel industry caused. Back a few years ago the steel industry was begging for help while the auto industry was in D.C. lobbying Congress to let the steel industry die so they could buy cheap steel from China. Sorry but like they say what goes around comes around.

[Thothmes]

6. In what years was the auto industry lobbying for

the demise of American Steel so they could by Chinese steel?

[doc03]

9. Back in 1999, 2000 The steel consuming manufacturers

including the auto manufacturers and other companies such as Caterpillar for one I remember. The steel industry went to President Clinton begging him to put sanctions on illegal steel imports. The steel industry and union went to ITC and filed dumping charges on several Asian and Eastern block Countries and won the case. The steel consuming companies fought tooth and nail to prevent us from getting assistance, they were perfectly willing to let the steel industry die so they could purchase the cheaper imported steel.

on edit: President Bush promised that if the ITC ruled in our favor he would tax the illegal imports. After a lot of foot dragging he finally did put taxes on some products then the consuming companies started picking it apart and he ended up exempting most steel products from the tax. I think it was around 40 steel companies went bankrupt and liquidated during those years. That is one of the reasons Democrats have had such a hard time in Ohio since then and even this year with all our problems they didn't exactly win by a landslide.

[doc03]

10. They technically may not have wanted to buy Chinese

steel themselves but they wanted the illegal dumping to continue to keep steel prices depressed. We were selling steel at like $250 a ton when it cost us $350 a ton to produce it for example.

[Lerrad]

19. And now since China has control...

.. scrap steel is selling between $500 to $600 per ton and it cost $800 to $1,500 per ton to produce it.

Whos getting rich now? CHINA!
and they are winning the War!

[doc03]

21. You know the steel production capacity in the USA

is a little over 100 million tons a year today and China produces over 500 million tons a year. A lot of their steel capacity comes from little mom and pop shops that still use 19th century technology, pay less than 50 cents an hour and they have absolutely no environmental or safety standards. The only thing that saves us right now is they produce so much junk over there for export to the US they consume what they produce. In the last two months the American steel production dropped from about 90% capacity to 65.2% as of last week. Back in the late 90s the Asian and old Soviet states economies weren't so good and they were dumping their steel here cheaper than production costs to keep their mills running. Our government wouldn't put taxes on their imports because they were more interested in keeping the Chinese working than us and they thought our jobs were expendable.

[Lerrad]

22. Sad isn't it..

I'm working on a project at work right now that requires getting some large cylinders machined. We can not find a machine shop in the US capable of machining these vessels.

We built some thirty years ago, and they were machined by Alis-Chalmers in Akron, Ohio. Someone had to buy their large mills and equipment when they went under. I did a lot of digging and found out that the machines went to China.

I guess I need to learn to speak Chinese.

[doc03]

24. The company that made our rolling mill was Blow-Knox

I think it is gone along with Wean and Mesta. We put a new Electric Arc Furnace in 4 years ago, it was made mostly in Italy and China. Of all the material they used in the $115M project I saw one piece of 24" pipe about 20 feet in length that was made in the USA. I asked one of the pipe-fitters about it and he said the reason they still had it it had been laying in their yard for about 10 years. I mean everything from the furnace itself down to the building AC units came from overseas. To top it off this was all paid for by a US government guaranteed loan from the Byrd Bill. Oh our company paid off 100% of that loan a few months ago, so thanks to Senator Byrd.

[JVS]

25. Ohh, You mean Blaw-Knox, I remember them.

[Hepburn]

8. Oh, yeah....

...I am originally from the "Great Rust Belt." I know exactly what you mean.

[Lerrad]

18. And that cheap steel in China is not all that cheap anymore..

I work in the steel industry and China has manipulated the steel market by buying up all the scrap steel, which is needed to make new steel. Once they had control the cost of steel doubled, and has now tripled what it was a few years ago. And the rest of the world is getting hosed.

It is a very volatile market more volatile then the stock market. When you get a quote for steel it is only good for 24 hours, because the price can change over night. No one stocks much steel making some of it difficult to find. They don't want to stock it because when the bottom falls out, (and it eventually will) they will go bust.

[yellowdogintexas]

7. for all practical purposes, this is far more important than other bailout proposals

for just that reason.

Remember the Chrysler loan in the pre minivan days? Of course Iacocca knew he had the minivan up his sleeve, got the gov't to give them the loan and then paid it back early.

If we could be certain that the gap in jobs would be taken up by Toyota, Mazda, Subaru, Nissan and Honda in their American plants then losing the Big 3 wouldn't be as bad of a hit. But we don't know that.

My uncle, who was a very senior financial person at GM, would be appalled at the state the company is in today. He was the point man for GM in the Zaragosa factory in Spain, lived over there for 4 years, from land acquisition all the way through two years of production, working out all the financial side of the plant. Started out as an accountant, fresh out of Business school in the plant that now makes Corvettes in Bowling Green. He would just be hating this.

[dcindian]

11. Did the world fall apart afte United?

If these corporations are too big to fail and we all have to fit the bill for their corporate greed and their officers opulent life style then they need to be broken up.

This corporate welfare at the expense of my family's future is a sickness.

[gmoney]

12. Wow, the collapse of the United States in my lifetime

Didn't think I'd live to see it...

[Lerrad]

17. Well you will...

... and guess what happens when China calls in their promisary notes?

I don't even wnat to think about it.
Get out your guns.

[bridgit]

14. Oh yes, jobs are one thing. But it's about to be made common knowledge...

that pensions and health care have made contributions to the dissolution of the middle class every bit as troublesome as Detroit's inability to produce a car Americans want to drive i.e. GM Spends $17 Million Per Year on Viagra, and that's just one item. Benefits can be heavy with PPO/DDO elective surgeries/procedures and high end health cares driving up costs. Pensions and routinely expected contractual raises in wages likewise; costs are never absorbed, or moved up or laterally, they're always pushed downward onto the consumer

So first of all it's not "we", it's they. They've contributed to their own condition. If "we" bail them out we'll be lending assist to our manufacturing base which is vital, but we'll also be bank rolling their pensions (many more of us doing so without pensions of our own), and their inclinations toward compounds that effect E.D. = Viva Viagra

I'll give you this though; if nothing happens and Detroit fails, republicans will be running in with their "small business is the core of the American economic system" gibberish which is stupid. It's the sum total, it's the GDP; it's manufacturing, or at least it was. They've shipped it all somewhere else and now they'd have us mixing Orange Julius & spooning chili onto hotdogs for minimum while they make big, huge money Hoovering up bailout bucks. Then selling the rest of America to Dubai.

It's going to be real shitty for another year maybe two; but I'm into this whole 'realignment thing'. Top to bottom. It has to start at the top.

[blue_onyx]

15. I support the bailout because

we bailed out the financial institutions that put the auto companies in this mess. I don't think people understand why the US auto companies need the money. It's because they can't get loans to keep their business going. The failures of the financial institutions created a credit crunch. They were bailed out and given money to start lending again, which they haven't done. Not only that but consumers can't get credit to buy vehicles so the auto companies are completely stuck: can't get money through loans and can't get money through selling their products. It makes no sense to give money to the financial institutions that created this mess (the credit crunch) but not the industries that are suffering from the problem. I say that since the companies who are suppose be lending again aren't, we should take the 700 billion and starting lending for them.

[Lerrad]

16. I thought the same way at first but a bail out will not work.

Sure the Gov can bail out GM, Ford and Chrysler, because all of the jobs would be saved.

But once they are bailed out, there will still be massive layoffs, because no one is buying cars. Auto sales are at an all time low, including sales of Toyota and Honda.

If the government bails them out they make thousands of cars that just sit in the lots. So the big three will keep the money from the bail out and lay all those people off anyway.

A bail out is a VERY bad idea.

[annabanana]

20. Why can't bailout money be used to re-tool?

Why can't our funds go directly to move toward production of vehicles that there are waiting lists for?