Give Them The Money

Give Them the Money!

Who am I talking about?  Why the United States Auto Manufacturers of course.

America, you've got it all backwards. The outrage should be directed at the financial bail out, not at the automobile manufacturers.

A poll says 61% of Americans oppose the bail out of the auto industry and Senate Majority Leader Harry Reid says the Auto Bail Out bill is dead, they don't have the votes.

More interesting in the poll, people do not believe the collapse of the auto industry will affect them. Well, I have news for you, it will affect you, probably more than you can imagine.

The CAR group issued this report (pdf), which generated many a denial of course. In it they say if the big 3 fail it would be 3 million jobs lost immediately. Now think about the concentration of jobs in Detroit, with an unemployment rate already of 10.1%.

In economic terms, the rapid termination of Detroit Three U.S. operations in 2009 would reduce U.S. personal income by over $150.7 billion in the first year, and generate a total loss of $398.2 billion over the course of three years. The impact of this personal income loss on fiscal government operations at the local, state and federal levels include an increase in transfer payments, a reduction in social security receipts and personal income taxes paid. The net impact of all three of these categories is negative on the government balance sheet, resulting in a loss to the government of $60.1 billion in 2009, $54.3 billion in 2010, and $42.0 billion in 2011—a total government tax loss of over $156.4 billion over three years.

Jobless Men Keep Going

Think about auto workers making $14 dollars an hour. That's just how much the UAW has already given in concessions. What is $14 dollars an hour yearly? $29,120, $21,000 dollars below the median U.S. salary.

The union is already giving up the wages payout to members who were laid off and even some of their health care benefits.

Business Week outlines some of the plans for cost cutting. Some of them involve reducing the number of brands and models of cars, which is probably a good idea but they obviously will be laying off older workers to cut costs too.

Is this the America you want, where older workers lose their jobs because they are perceived as more expensive and all jobs cannot support a family or have real benefits?

What about bankruptcy? Well, while one could argue those holding corporate bonds probably can afford to lose their money, the auto manufacturers have a huge supply chain, thousands of third parties, dealerships and all of that means those businesses, large and small rely on being paid. Restructuring of GM debt by the court could mean those suppliers would not get paid.

A third option, by J. Ronald Trost is to take key elements of a Chapter 11 bankruptcy and write a special bill to give some of these features but without a bankruptcy. Trost gets the ramifications of bankruptcy too.

So, while you are all pissy about taxpayer money going to corporations, please put your rage when it belongs. Your outrage at being plain ripped off should be over the $8.5 trillion in pledges and the banks getting money who do not need it. Use your disgust to support legislation that stops the taxpayer money giveaway to the banks, who outsource and then raise credit card interest rates. Just recently the GAO said the TARP is a glorified corporate pig fest, but the auto bail out ain't part of that.

Just please don't add an economic tsunami to workers, small business, which is what failure of the auto industry will do.

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pre-arranged bankruptcy

It looks like GM and Chrysler are in deal making for a pre-arranged bankruptcy.

I think the GM CEO is right (and this is a rarity for me) that the minute they would enter bankruptcy no one would buy their cars for all sorts of after market, service, warranty fears.

So, if they create a pre-arranged bankruptcy, they sure better not call it that.

What's next? Shall all GM dealerships be replaced with auctions on ebay?

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I just don't get it

Washington passes a $700 billion bailout for Wall Street inside of a week without almost no debate, but can't pass a $30 billion bailout for Detroit.
To put it another way: we can't bail out auto workers making $40 a hour, but CAN bail out banksters making $40,000 an hour.

America's values are on display right now, and they are ugly.

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exactly!

On top of it, Congress right now could put out there almost any condition, including tying the money to hiring US workers, not offshore, and frankly if they fixed some of the bad trade problems, that alone would make these companies highly competitive.

This is pure bullshit and we have FAUX news and all of the media poo pooing the auto bailout while they all pimped for the financial sector bail out!

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Too Big To Fail

overview of some of the positions in Congress on the auto bail out.

A fundamental question is why are financial institutions too big to fail, yet the obvious ramifications for the entire U.S. economy if the auto industry is liquidated isn't?

This is f**king insane and it's obviously only if you are pals with someone in government do you get the money.

So, what? GM's big crime was they didn't buy off enough in our government? That they didn't get enough well placed government officials in their pocket or get a big enough revolving door into the administration and Congress?

It's just sick!

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AFL-CIO Action Alert, click here

The AFL-CIO has put out an action alert, a request, all done for you, all you have to do is click and send, to try to get Congress to help the auto industry.

Give the auto industry a bridge Loan

If you click on the above link it will take you to an automated system to easily contact your Congressional representatives.

The AFL-CIO is right in this case (they often are) and why I wrote the above so please be supportive of labor and take a couple of seconds and send this for the AFL-CIO.

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The Financial Industries are

The Financial Industries are not too big to fail, Paulson is looting the Treasury. Paulson has applied "malicious compliance" to do everything he can to put a floor under housing valuation -- which is exactly the wrong thing to do.

Many of these homes cannot be foreclosed, the promisory notes have been lost in the shuffle.

http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/

Investors pulled the Subprime plug when we refused to accept Comprehensive Immigration Reform. We are now being paid back for killing the (CFR) NAFTA Highway and North American Union.

This is scorched earth policy.

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How "American" are the"Big 3" ?

After watching the "Big 3" U.S. automakers (Ford, GM & Chrysler) offshore outsource and even utilize foreign replacement workers in the U.S. as a result of outsourcing deals with companies like TATA/TCS, I am more than a bit cynical when the execs, pols and union leaders wave the American flag and urge us to support "American companies" and "American jobs". It's not as simple as that.

I want to know if GM, Ford & Chrysler will commit to keeping middle class jobs in the U.S. Or, do they plan to *continue* to follow the paradigm of Honda and Toyota whose U.S. "assembly plants" put together parts manufactured offshore by foreign workers? If that's the case, the Big 3 are "American" only in their nation of incorporation and corporate history: I really don't care where their headquarters offices are.

In fact, if the "Big 3" are going to move most manufacturing/production/engineering out of the U.S. or into the hands of imported "guest workers", I hope they move their headquarters offshore to make it abundantly clear to all Americans they aren't *American* -- just foreigners who want to exploit the American market.

Yes, the imperative of keeping jobs in the U.S. and forestalling the end of a real industrial/manufacturing/engineering base is compelling.

Yet, I weary of the lies and distortions the free traders and labor arbitrage propagandists have sold Americans since Bill Clinton's administration. (Yes, Democrat politicians and their allies in the DLC bear tremendous responsibility for this present mess; it isn't just the creation George Bush. That myth needs to be stamped out for us to get on with *real change*.)

At times I really do wonder if perhaps Americans would finally awaken to the lies of the political, academic, media and business classes if they had to endure the pain and devastation of a gut wrenching depression...

Please don't misunderstand me: I am neither advocating a "bailout" nor opposition to a "bailout". I am presenting the view of a frustrated citizen who has sought constructive political change and seen first-hand the grotesque hypocrisy of both Democrat and Republican politicians. I have ceased to believe that the majority of elected politicians will act in the best interests of nation and citizenry. And, I am not in the least impressed by most in the management classes where patriotism is used as a subterfuge to gain money and advantage.

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Info Tech Guy

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Yes, I completely agree with you and considering Citigroup and the financial sector also offshore outsource jobs in droves, I think we need to tie taxpayer money to jobs in the U.S. for U.S. citizens, perm residents.

I'm only advocating for an immediate short term fix but they need to do so much more and not just for the auto industry, for state, local government jobs.

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