6 ms·

Auto bailout bill dies in Senate

32 points by jasonlbaptiste 18y ago

mdasen 18y ago
Well, the UAW doesn't want to accept parity with foreign auto-maker wages. The article states a $3-4 disparity, but it's really more than that due to the great benefits accorded to UAW workers. While I generally like unions, in this case no matter how much bailout money the US auto-makers get, they're headed for bankruptcy unless they can bring their labor costs in line with those of foreign firms. UAW, if you're listening, you have two options: get off your rump and drive the wages up at Honda and Toyota (unionizing their plants) or resign yourselves to never having any say in anything ever again.
- bkbleikamp 18y ago
  American auto companies cars cost, on average, $2,000 more to make than those of foreign competitors. Until that difference is gone, they will never be competitive. They lose $2,000 of quality or features and are expected to be competitive? Yeah, right. In any other industry this would force a company out of business, but for some reason we think the automakers deserve our help? If an iPod was $50 more per unit to produce than a Zune they would never be able to compete and the iPod would fail because they are losing $50 worth of quality per unit - whether that quality is gone from the software, hardware, or both, it would be impossible to compete.
  - danteembermage 18y ago
    Ahh, but with a 25% tariff on your side that $2000 is well within the bounds of your cushion on a truck or SUV. http://www.cato.org/pub_display.php?pub_id=3155 http://www.cato.org/pub_display.php?pub_id=3155
  - programnature 18y ago
    health care costs per vehicle are between 1000-1700. We collectively, and the auto industry in particular, are at a big disadvantage until these costs are brought under control http://www.detnews.com/apps/pbcs.dll/article?AID=/20070227/AUTO01/702270372/1148 http://www.detnews.com/apps/pbcs.dll/article?AID=/20070227/A...
    - patio11 18y ago
      While I know Toyota is staffed mostly by robotic ninjas, presumably they need health care once and a while, too. Japan enjoys a standard of healthcare right up there with the US. Toyota also manages to pay American worker's healthcare expenses and still profit handsomely. Find another scapegoat?
      - jimbokun 18y ago
        "Toyota also manages to pay American worker's healthcare expenses and still profit handsomely." I think it's pretty well established that Toyota pays less for health care for their U.S. employees than the Big 3, and a large part of the reason for this is that the Big 3 are paying for health care for a lot of retirees who are no longer making cars. The NY Times had an analysis showing that most of the difference in "labor costs" between Big 3 and foreign makers was due to higher retiree benefits.
  - tocomment 18y ago
    Bad analogy, the Zune is harmful at any price/quality.
- me2i81 18y ago
  The benefits you're talking about are those that were promised as pension and healthcare obligations to already-retired workers. The difference between UAW and non-UAW wages and benefits for current workers isn't that large.
  - KWD 18y ago
    Exactly. If you remove the pensions that are lumped in with all the reported hourly rates, it is not that big of a difference, and what is there is in the healthcare benefits not hourly pay rate. I think the Republicans were just happy that their spin factory came up with a way they could pin an excuse on someone else for not passing the bill. I wasn't really in favor of the bailout plan (mostly after the idea of a car czar was introduced), but I think these guys need to be honest in why they were against it.
deleted 18y ago
[deleted]
newt0311 18y ago
Thank god. Heres to hoping that Obama never gets around to bailing these industries out either so that they finally declare bankruptcy and let the market work out its own (significantly more efficient) solution.
- deleted 18y ago
  [deleted]
- programnature 18y ago
  573,000 jobs lost last month and people want to dance on the grave of a MAJOR national industry?? This not good news for people like me who worry things are gonna get a lot worse before they get better. Anyway, with all that capital just floating around it should be a snap to recreate a heavy manufacturing based industry. Maybe those free market geniuses can make it as awesome as the financial industry or the health care industry.
  - deleted 18y ago
    [deleted]
    - programnature 18y ago
      The executives and the union bosses, sure. But the people who are gonna suffer the most are the 1) run of the mill workers, 2) the contractor subeconomy, and 3) the rest of us In a good economy, sure let them fail. Though I find the lack of consideration and compassion for the human pain this would cause pretty appalling. "Yea, lets optimize them away" is not an attitude we need more of in this country.
      - mattmaroon 18y ago
        It's not about lack of compassion. It's about whether or not it will really save jobs.
        programnature 18y ago
vaksel 18y ago
Seems to me, that the auto industry is paying for the mistakes, made by congress when it came to the Wall Street bail out. The financial industry got a blank check for 700 billion bailout almost overnight w/o any questions, they produce nothing tangible, and there is nothing preventing another bank from replacing any of the big ones. Its an industry that scales easily. The auto industry on the other hand, is getting grilled left and right over a measly 15 billion. The money comes with a ton of strings attached. Even though unlike the financial industry they produce a tangible product. And there are no other competitors waiting to fill the big boy's shoes, because it takes billions to scale. So it seems to me that the Congress is being penny smart and pound foolish, they give away vast sums w/o a second thought, and then turn around and penny pinch when it comes to a tiny amount.
- programnature 18y ago
  I don't think its the amount so much as who it is going to. The republicans are itching at a shot to break the backs of these unions, and this is their golden opportunity.
  - SwellJoe 18y ago
    The unions broke their own backs. Republicans (and Democrats) didn't make the big three into horribly managed, debt-laden, corporate pigs producing products that no one wants, but they both helped--but the ways they helped make them soft-headed and inefficient are probably things you approve of (like protectionist tariffs on imports, stricter immigration laws, trade restrictions of various sorts, etc.). The management and the unions at those companies worked hard for many years to destroy the US auto industry. Neither bailout is a good or fair solution, but deciding that every broken industry ought to be able to extract limitless funds from innocent taxpayers in order to continue with business as usual, merely because one broken industry is getting a bailout, borders on evil. Two wrongs don't make a right.
- mattmaroon 18y ago
  The difference is our financial industry may be salvageable, and not trying is disastrous. Whether or not that bailout is a good idea is certainly debatable. But it has nothing to do with a different bailout that, without some serious provisions to ensure long term viability, has no chance of working. FWIW, most economists seem to be for the financial bailout and against the auto one. Also the financial one is not a give away, it's an investment. They're taking equity stakes in bailed out companies and enforcing rules to ensure long term viability. The Senate wants the same exact thing with the auto one.
jdbeast00 18y ago
everyone loves obama / democrats until a bill actually comes up that they care about. thank god for republicans! we're gonna miss you these next 2 years.
nihilocrat 18y ago
Why are people so concerned about major industries collapsing? There will always be entrepreneurs to take their place. They will not be able to replace the industry overnight, but it will all work out and give a better result than trying to barter or bail out with people who are devoted to making crappy products. The problem here is inherent in the car companies: it is simply a case of them making products no one wants. They either need to reinvent themselves or cease to exist so other, more capable people will take their place. There are clever, motivated people who are going to notice these opportunities and capitalize on them. There always have been. I hate to sound pigheaded, but calls of "well... well... what if the world ends because we didn't bail these guys out?!?!?" are just FUD.
- Retric 18y ago
  If they had zero debt they would not be in trouble so it's not just them but everyone who they owe money to (including retired people) that stands to lose money. PS: This bailout if it worked is far less costly than taking over their pension plans would be.
pasbesoin 18y ago
The following essay was cited over at reddit. Don't let "Marx" in the title put you off; it is well worth the read. Boiled down, a bailout buys time when it is desperately needed. Even if there is failure in a couple of years, that time would come as a bargain. Second, the "$72" figure doesn't include legacy health care costs. Foreign manufacturers in the U.S. benefit from long term social planning in their native countries. Of course, the author is more thorough and a lot more eloquent. http://news.yahoo.com/s/huffpost/20081129/cm_huffpost/147114/print http://news.yahoo.com/s/huffpost/20081129/cm_huffpost/147114... cited over at reddit http://www.reddit.com/r/reddit.com/comments/7j1kg/it_is_critical_to_recognize_that_the_72hour/ http://www.reddit.com/r/reddit.com/comments/7j1kg/it_is_crit...

Well, the UAW doesn't want to accept parity with foreign auto-maker wages. The article states a $3-4 disparity, but it's really more than that due to the great benefits accorded to UAW workers. While I generally like unions, in this case no matter how much bailout money the US auto-makers get, they're headed for bankruptcy unless they can bring their labor costs in line with those of foreign firms. UAW, if you're listening, you have two options: get off your rump and drive the wages up at Honda and Toyota (unionizing their plants) or resign yourselves to never having any say in anything ever again.

bkbleikamp 18y ago
American auto companies cars cost, on average, $2,000 more to make than those of foreign competitors. Until that difference is gone, they will never be competitive. They lose $2,000 of quality or features and are expected to be competitive? Yeah, right. In any other industry this would force a company out of business, but for some reason we think the automakers deserve our help? If an iPod was $50 more per unit to produce than a Zune they would never be able to compete and the iPod would fail because they are losing $50 worth of quality per unit - whether that quality is gone from the software, hardware, or both, it would be impossible to compete.
- danteembermage 18y ago
  Ahh, but with a 25% tariff on your side that $2000 is well within the bounds of your cushion on a truck or SUV. http://www.cato.org/pub_display.php?pub_id=3155 http://www.cato.org/pub_display.php?pub_id=3155
- programnature 18y ago
  health care costs per vehicle are between 1000-1700. We collectively, and the auto industry in particular, are at a big disadvantage until these costs are brought under control http://www.detnews.com/apps/pbcs.dll/article?AID=/20070227/AUTO01/702270372/1148 http://www.detnews.com/apps/pbcs.dll/article?AID=/20070227/A...
  - patio11 18y ago
    While I know Toyota is staffed mostly by robotic ninjas, presumably they need health care once and a while, too. Japan enjoys a standard of healthcare right up there with the US. Toyota also manages to pay American worker's healthcare expenses and still profit handsomely. Find another scapegoat?
    - jimbokun 18y ago
      "Toyota also manages to pay American worker's healthcare expenses and still profit handsomely." I think it's pretty well established that Toyota pays less for health care for their U.S. employees than the Big 3, and a large part of the reason for this is that the Big 3 are paying for health care for a lot of retirees who are no longer making cars. The NY Times had an analysis showing that most of the difference in "labor costs" between Big 3 and foreign makers was due to higher retiree benefits.
- tocomment 18y ago
  Bad analogy, the Zune is harmful at any price/quality.
me2i81 18y ago
The benefits you're talking about are those that were promised as pension and healthcare obligations to already-retired workers. The difference between UAW and non-UAW wages and benefits for current workers isn't that large.
- KWD 18y ago
  Exactly. If you remove the pensions that are lumped in with all the reported hourly rates, it is not that big of a difference, and what is there is in the healthcare benefits not hourly pay rate. I think the Republicans were just happy that their spin factory came up with a way they could pin an excuse on someone else for not passing the bill. I wasn't really in favor of the bailout plan (mostly after the idea of a car czar was introduced), but I think these guys need to be honest in why they were against it.

deleted 18y ago

[deleted]

newt0311 18y ago

Thank god. Heres to hoping that Obama never gets around to bailing these industries out either so that they finally declare bankruptcy and let the market work out its own (significantly more efficient) solution.

deleted 18y ago
[deleted]
programnature 18y ago
573,000 jobs lost last month and people want to dance on the grave of a MAJOR national industry?? This not good news for people like me who worry things are gonna get a lot worse before they get better. Anyway, with all that capital just floating around it should be a snap to recreate a heavy manufacturing based industry. Maybe those free market geniuses can make it as awesome as the financial industry or the health care industry.
- deleted 18y ago
  [deleted]
  - programnature 18y ago
    The executives and the union bosses, sure. But the people who are gonna suffer the most are the 1) run of the mill workers, 2) the contractor subeconomy, and 3) the rest of us In a good economy, sure let them fail. Though I find the lack of consideration and compassion for the human pain this would cause pretty appalling. "Yea, lets optimize them away" is not an attitude we need more of in this country.
    - mattmaroon 18y ago
      It's not about lack of compassion. It's about whether or not it will really save jobs.
      - programnature 18y ago

vaksel 18y ago

Seems to me, that the auto industry is paying for the mistakes, made by congress when it came to the Wall Street bail out. The financial industry got a blank check for 700 billion bailout almost overnight w/o any questions, they produce nothing tangible, and there is nothing preventing another bank from replacing any of the big ones. Its an industry that scales easily. The auto industry on the other hand, is getting grilled left and right over a measly 15 billion. The money comes with a ton of strings attached. Even though unlike the financial industry they produce a tangible product. And there are no other competitors waiting to fill the big boy's shoes, because it takes billions to scale. So it seems to me that the Congress is being penny smart and pound foolish, they give away vast sums w/o a second thought, and then turn around and penny pinch when it comes to a tiny amount.

programnature 18y ago
I don't think its the amount so much as who it is going to. The republicans are itching at a shot to break the backs of these unions, and this is their golden opportunity.
- SwellJoe 18y ago
  The unions broke their own backs. Republicans (and Democrats) didn't make the big three into horribly managed, debt-laden, corporate pigs producing products that no one wants, but they both helped--but the ways they helped make them soft-headed and inefficient are probably things you approve of (like protectionist tariffs on imports, stricter immigration laws, trade restrictions of various sorts, etc.). The management and the unions at those companies worked hard for many years to destroy the US auto industry. Neither bailout is a good or fair solution, but deciding that every broken industry ought to be able to extract limitless funds from innocent taxpayers in order to continue with business as usual, merely because one broken industry is getting a bailout, borders on evil. Two wrongs don't make a right.
mattmaroon 18y ago
The difference is our financial industry may be salvageable, and not trying is disastrous. Whether or not that bailout is a good idea is certainly debatable. But it has nothing to do with a different bailout that, without some serious provisions to ensure long term viability, has no chance of working. FWIW, most economists seem to be for the financial bailout and against the auto one. Also the financial one is not a give away, it's an investment. They're taking equity stakes in bailed out companies and enforcing rules to ensure long term viability. The Senate wants the same exact thing with the auto one.

jdbeast00 18y ago

everyone loves obama / democrats until a bill actually comes up that they care about. thank god for republicans! we're gonna miss you these next 2 years.

nihilocrat 18y ago

Why are people so concerned about major industries collapsing? There will always be entrepreneurs to take their place. They will not be able to replace the industry overnight, but it will all work out and give a better result than trying to barter or bail out with people who are devoted to making crappy products. The problem here is inherent in the car companies: it is simply a case of them making products no one wants. They either need to reinvent themselves or cease to exist so other, more capable people will take their place. There are clever, motivated people who are going to notice these opportunities and capitalize on them. There always have been. I hate to sound pigheaded, but calls of "well... well... what if the world ends because we didn't bail these guys out?!?!?" are just FUD.

Retric 18y ago
If they had zero debt they would not be in trouble so it's not just them but everyone who they owe money to (including retired people) that stands to lose money. PS: This bailout if it worked is far less costly than taking over their pension plans would be.

pasbesoin 18y ago

The following essay was cited over at reddit. Don't let "Marx" in the title put you off; it is well worth the read. Boiled down, a bailout buys time when it is desperately needed. Even if there is failure in a couple of years, that time would come as a bargain. Second, the "$72" figure doesn't include legacy health care costs. Foreign manufacturers in the U.S. benefit from long term social planning in their native countries. Of course, the author is more thorough and a lot more eloquent. http://news.yahoo.com/s/huffpost/20081129/cm_huffpost/147114/print http://news.yahoo.com/s/huffpost/20081129/cm_huffpost/147114... cited over at reddit http://www.reddit.com/r/reddit.com/comments/7j1kg/it_is_critical_to_recognize_that_the_72hour/ http://www.reddit.com/r/reddit.com/comments/7j1kg/it_is_crit...