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They are not going to get the money. Bankruptcy protection is the best option for resturcturing...

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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:45 PM
Original message
They are not going to get the money. Bankruptcy protection is the best option for resturcturing...
Bottom line, I don't believe they (the big 3) are going the get any money. To date the best any one of them has come to the table with is a reduction in OPEX (operational expenses). None have shown any desire or insight as to how they would change their fundamentally flawed business model which has precipitated their current financial crisis. No its not the workers/unions that are at fault, its the companies underlying business model.

So no, they don't deserve any money because they don't understand that their model is broken. I think this is the major point of resistance on the hill toward granting them the bridge loan(s) they are seeking.

I think one or more of them need to seriously entertain filing for bankruptcy. Entering into bankruptcy protection will allow the company and the workers to continue producing product under direct supervision of their creditors and the courts. This worked well for United Airlines (UAL) who spent more time under bankruptcy protection than any US company to date. When they were finally allowed to emerge, many years later, they had devised a solid business model that all eyes agreed would allow them to be a viable business.

We can argure all day about what workers cost, how much a CEO is being paid, etc..etc. But at the end of the day, what they are doing is not working. Giving them more money now, without a plan that clearly defines a shift in their business model, will result in them pissing away that money and being back in DC with their hand out before we see 2010.

Bankruptcy is the best option. It keeps workers working (for a while at least) and forces the business to re-think how they do business if they want to stay in business. If they can not or will not do that, then they need to fold.

just my $.02
Peace,
MZr7

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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:47 PM
Response to Original message
1. I still don't understand why banks get money handed to them with no hearings and no oversight,
but manufacturers get screwed.
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ContinentalOp Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:50 PM
Response to Reply #1
3. Really? It's pretty simple.
The Secretary of the Treasury is not a former CEO of a Big 3 automaker.
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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:52 PM
Response to Reply #3
4. Yep. That would explain it.
:banghead:
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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:57 PM
Response to Reply #1
7. Loan guarentees are different than a direct infusion of "cash" for OPEX
While I may be mistaken, I'm pretty sure that Citi and others only received "guarantees" for their loans if they should go bad. Meaning that if one or all of those loans "go bad", the government will pony up the money. However, if those loans don't go bad, then the government (you and I) owe nothing.

MZr7
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DJ13 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:05 PM
Response to Reply #7
11. Citi recieved $300 billion in loan guarantees, but also a direct $60 billion in addition
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On the Road Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:14 PM
Response to Reply #11
18. The First Wave of TARP Money is Described in Wikipedia
as primarily devoted to "equity injections." I would like to know the details, but interpret that phrase to mean that the feds get an ownership stake a la Bear Stearns that allows the government to profit (possibly quite a bit) if the financial sector recovers.
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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:08 PM
Response to Reply #7
15. No, there've been direct infusions of cash as well. nt
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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:34 PM
Response to Reply #7
22. Thank-you all. I stand corrected they did get cash. n/t
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question everything Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:11 PM
Response to Reply #1
16. Bank have "products" that consumers want - loans
These 3... maybe.

Last time we had an American made car in our household was a 1973 Ford Pickup that we got from my father in law after he had a stroke and a 1980 Ford Mustang that - the irony - we purchased because we wanted to buy American during the 1979 gas shortage.

It was so troublesome that we had Volvos and Toyotas since then.

And now we are not in the market for a car, not in the next five years, at least.

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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:17 PM
Response to Reply #16
20. I've never owned anything but Fords. Had a Taurus that was a lemon,
but my Focus is a 2002 and has never needed any service but regular maintenance. My first car was an Escort that lived to 300,000 miles. I can't imagine ever buying any car but a Ford. I don't get all the bitching about American cars. Good quality, union-made. What more could a progressive want?
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question everything Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:36 PM
Response to Reply #20
23. I can say the same thing about my Toyota Camry
both of them, the 1986 which was a compact and the 1998 which is a standard.

We lived in Iowa in the 80s and while, in the dead of winter, my Mustang would start OK to go to work, and in the evening to go home, if I had to use it in between, before the engine got cold again, I would have hard time starting it again. A co-worker, who loved everything about cars and motorcycles, then visited one of those newsletters -this was before the Internet - and found out that, yes, this was a know mystery about the Mustang.

And this was the last American car we had.

Besides, we figured if Detroit customers were the SUV crowd who loved pickups, Suburban, Tahoe, Escalade and Jeep Cherokee, then we were not among them.

Similar when Pat Buchanan, in the 1992 Republican Convention determined who should belong to that party. We would not "pass" that criteria, either.

As for Union-made, I asked on DU, several times about people who work for Toyota and Honda in Alabama and Indiana and Kentucky and there were few testimonials that the employees loved their jobs so except the Union label - why is this so important?

We are professionals, never belonged to a union, never worked in a unionized place, lost our jobs several times in a down cycle of the industry or just due to the stupidity of the owners and this is true for most Americans.




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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:41 PM
Response to Reply #23
25. Unions allow workers a voice in their own workplaces and their own future.
Unions demand respect for workers.

Again, I see no advantage in a Japanese car over my Focus (hardly an SUV). My car is just as good, gets great mileage...and was made by workers who had collective bargaining rights.
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question everything Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:47 PM
Response to Reply #25
26. This was true when we were a manufacturing society
but once we shifted to a service based economy, where we have to purchase "stuff" just to keep the economy humming, where so many have lost jobs or have been under employed, this demand for unions is irrelevant for most Americans.

Not to take away the Union place in establishing work conditions like a 40 hour work week, paid holidays and sick days and vacations and child labor laws.

Having said all that, I do think that we need to do something for Detroit because not doing so will have a major impact on all of us. Just as I still agree with helping the banks - and we should have added strings that they had to start offering credits and cut down on their parties.

But the fact that, according to CNN, about 60% oppose any help - you can see what you are up against.

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pretzel4gore Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:47 PM
Response to Original message
2. why not commit to electric car?
all this gas guzzler crap...it's 2008, ferchrissake, and one would think the need for 1/2 billion electric vehicles would solve the auto makers' immediate problem, but NOOOOOO!
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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:53 PM
Response to Reply #2
6. Look around you. Americans buy SUVs. I see more SUVs than anything.
They're building for the market. It's not the manufacturers' fault.
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pretzel4gore Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:04 PM
Response to Reply #6
10. nope. Like Mike Moore said, if profits were the issue
GM sell crack....
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MzYvonne Donating Member (30 posts) Send PM | Profile | Ignore Fri Dec-05-08 07:52 PM
Response to Original message
5. I agree completely
Who wants to buy a car right now? I'm betting not many.
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leftofthedial Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:00 PM
Response to Original message
8. they could give them a brazillion dollars
and almost no Americans could afford to buy a car anytime soon.

it's a circle jerk.

the ONLY thing the country needs is redistribution of wealth back downwards and job (read "demand") creation.
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DJ13 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:03 PM
Response to Original message
9. Be prepared..... a GM bankruptcy will drive our country into a depression
At that point, no company is safe, no worker is safe, no bank is safe.

Remember those Congress men & women who refuse to loan the automakers money, and be sure to thank them when you're standing in a bread line.
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Critters2 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:07 PM
Response to Reply #9
12. Yep. One of the largest employers here is a glass factory that makes
windshields for Ford. The Glassworkers, Potters, and Molders Union is holding a meeting Monday to discuss "concerns".
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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:07 PM
Response to Reply #9
14. How so ?
UAL kept flying, most of the workers remained employed, and today they are viable. How would restructuring of GM under bankruptcy protection dive the country into a depression ? I just don't see it since unless they fail to emerge from said protection.

MZr7
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DJ13 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:12 PM
Response to Reply #14
17. The suppliers will go under in addition to the Big3
In the rush to stick it to those evil car companies their suppliers actually employ 5x as many workers, and they will be out of work as well.

The airline example that the MSM likes to use isnt a real comparison because the airlines are service providers, NOT a manufacturer.
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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:33 PM
Response to Reply #17
21. No, they keep producing product under "Bankruptcy Protection"
Very few will be out of work...

Breaking: Apparently a down thread says they are indeed going to get the money...

Mark my words its just a band-aid.

Peace,
MZr7
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question everything Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:07 PM
Response to Original message
13. Will you buy a car from a company under bankruptcy protection?
It is not like the airlines where you purchased a ticket, flew and that was the end of your transaction with it.

You purchase car based, among other things, on future performance, service, even recall.

(which is why so many of us moved to buy Japanese..)
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w4rma Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:15 PM
Response to Original message
19. They're getting the money. It's breaking news, now.
Edited on Fri Dec-05-08 08:16 PM by w4rma
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ogneopasno Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:37 PM
Response to Original message
24. Except bankruptcy voids a company's contracts, including collective bargaining contracts, and that
Edited on Fri Dec-05-08 08:37 PM by ogneopasno
would basically mean the end of the unions, because I just don't see people willing to fight the way they were in the 1920s and 1930s. And that means there'll be hell to pay for all of us for years to come.
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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:54 PM
Response to Reply #24
27. If the economic "downturn" gets bad enough they'll fight alright. That's why we're
dedicating U.S. Army troops to domestic "security".

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ogneopasno Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:58 PM
Response to Reply #27
28. Troops have always been dedicated to domestic security. It's called the National Guard.
And I'm not interested in busting unions just to get people to fight.
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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 08:30 AM
Response to Reply #28
36. That is correct, ogneopasno, except now we have active-duty military that are designated
for that purpose--something we have not had before.
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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Dec-06-08 11:45 AM
Response to Reply #36
37. Active duty, NON-N.G. or Reserve military units, to be precise.
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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:59 PM
Response to Reply #24
29. That didn't happen with the Pilots Union when UAL filed ? - why would this be different? n/t
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ogneopasno Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:04 PM
Response to Reply #29
31. Because the pilots agreed to huge pay cuts and to losing their pension, on the hope that they would
someday negotiate them back. Which they haven't.

I wasn't clear in my first comment. If concessions aren't bargained, a bankruptcy court has the right to throw the contracts out.
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MazeRat7 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:17 PM
Response to Reply #31
32. True that. But they did keep working and bringing home "something"....
Your point is well taken, mine being that entering bankruptcy and continuing to work for "less" is better than not working at all. I hope they do come back to the table in the future and renegotiate with UAL to get back what they sacrificed to help that company through hard times.

One thing is for sure... this is a complicated mess.

Peace,
MZr7
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ogneopasno Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:26 PM
Response to Reply #32
34. I see what you're saying.
Edited on Fri Dec-05-08 09:26 PM by ogneopasno
I don't agree with it so much, but I do see it. And you're right -- it's terribly complicated, with strong emotions on all sides. Peace to you, too.
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stillcool Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:00 PM
Response to Original message
30. How'd the airline industry bail-out work?
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annabanana Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:20 PM
Response to Original message
33. yeah.. get rid of all those pesky old "legacy" pensioners...
Old people are expensive.
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unkachuck Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:38 PM
Response to Original message
35. "They are not going to get the money. "
....a classic rope-a-dope show....auto executives appearing desperate, congress hand-wringing, worried, concerned and of course, impotent, Obama being supportive--sort of, the chimp willing to contribute but not from his $720 billion repug/wall-street/banking slush-fund....

"They are not going to get the money."....and why not?....because not one of these corporate-owned institutions or lackies care....this is not about saving Detroit-iron, they're going to survive....this is about destroying Northern Unions and good paying UAW jobs....

....bankruptcy--why the Big-3 and not wall-street or banking? what's the moral difference? if the Big-3 are forced into bankruptcy then the rich, traitorous scum and their political lackies that created this mess will fulfill one of their wildest dreams; destroy the UAW and New Deal Unionism once and for all....

"They are not going to get the money."....then the blood of every Union member who ever fought or died for this country will be on their hands....every hungry, homeless, uneducated child produced from Union families driven into poverty will owe this system life-long retribution....
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