Big 3 - Thumbs Up or Down?

The issue is not how much they have cut their business.

The issue is the lack of a plan going forward. The CEOs should be presenting a detailed plan on how they propose to change their business to survive a prolonged slump without having to come back in another quarter to ask for another $25 billion.

The CEOs didn't even say how they plan to curtail their $6 billion per month cash burn rate.

Would you lend money to someone who wouldn't tell you what they are going to do with it? Look where that got us with AIG-- In the hole for $180 Billion.

Again, no plan, no bailout.

 

Actually, a very simple plan

1. Fire every last criminally incompetent President, CEO, and member of the Board of Directors. They put their respective companies up on the rocks

2. Recognize the union leaders for what they are: criminal con artists. Fire them.

3. Get back to reality with wages. I needed a B.Sc. with +4 years experience to earn what a semi-skilled high school dropout was earning on assembly lines. They've been living in a fantasy world too long, get out there in the real world to see what it's like

4. Build vehicles that the average under-employed, potentially unemployed, person actually needs. That means a small car, not a full size pickup. Good thing GM can count on South Korea to do that, they sure as s*** can't do it here

As you can tell, as a taxpayer I'm getting very angry over how criminally incompetent large corporations can expect to suck on my teats, while I'm expected to pay more taxes, do with less, suck up, etc.

You keep going on and on ad nauseum about the evil imports, us Communist consumers buying all that overseas crap, etc. Let me clue you in on something: your precious large corporations set this ball rolling almost four decades ago, with the full support of all major political parties

We were sold out by the large corporations - and our own government - a long, long time ago. This is just the very tip of the iceberg, much worse will come.

Hell, gas could drop to 35 cents a gallon. Won't do you much good if unemployment is 45%, not too many homeless folks can walk into your dealership and buy a new Hoe

Well, maybe a few of them did during the height of the Easy Credit debacle. Look at where that got us

 

Huge savings will come in 2010 with the negotiated UAW agreements. No auotomaker will not be burning through cash in 4th qtr 2008 and 2009. NONE.

 

The senators were not asking the automakers to burn no cash. They were asking how the CEOs and UAW propose to SLOW DOWN the burn rate. No concrete answer.

And the 2010 number savings might not even be enough to sustain the automakers if we are in for a multiyear recession, which is a very real possibility here. We heard nothing about what further changes they propose to survive without further bailouts in such a situation, and THAT is a critical issue which Wagoner, Gettelfinger, Nardelli and Mullally couldn't address.

As I said, I was sympathetic because I don't want the severe job losses. But at this point, without any plans or guarantees to the taxpayer, a bailout sounds more and more like flushing money down the toilet.

 

They can file Chapter 11 Bankruptcy. If the bank won't lend them money, call Paulson and tap some of the $700 B. he already has to loan to the banks.

Now if they survive long enough to be able to "retool," that $25 B. will be there for them. If not, the others will.

There is less than 60 days remaining for the current administration so find your friendly bankruptcy court now.

Bob Wilson

 

Sorry, but Bull. They are way overpriced egotists with a horrible sense of entitlement. Is it "I'm to busy to fly commercial"? No, it is "I'm too 'important' to fly commercial". They can hop a United flight for $265 in Detroit at 7:30 PM and be in DC by 9. Ready to hit the sack and go to the Senate to beg for money in the morning.

Did they at least 'jet pool' to the beg-o-thon? According to an NPR story just now, apparently not.

 

No it is " It costs us too much to let him fly commercial". Wagoner alone makes $1057 per hour and that is just base salary. That doesn't even count the rest of his staff that flew with him.

Past companies I've worked for will charter a jet if enough people are going. It only took about 6-8 people to pay for a private jet compared to commercial and you get there so much faster. No security and direct point to point flights.

 

Does anyone think they flew alone on the flights and didn't have other execs and support with them?

 

After all the arguments pro and con, it comes down to a few simple things:

1. Even if they get the $25B, they will need to lay off tens of thousands of people in their 'restructuring' so don't get all excited that no one will lose their jobs if we fork it over.
2. If they get the $25B, what guarantee do we have that they will pay it back. Are we giving them a $25B SECURED loan? Or will they just spend it wherever, go bankrupt and we are left holding the bag, again? As justlurkin keeps asking, where is the PLAN?? Congress is with you bud, Nancy Pelosi just said "Until they show us the plan, we can not show them the money"
3. Where are the cars made that they CAN sell? If not in the U.S., why should we give them money to make cars elsewhere and import them, we still lose a ton of U.S. jobs, just not the executives' jobs.
4. They claim the problem has NOTHING to do with their planning and execution, but EVERYTHING to do with the economy and vehicle sales have dropped from 16 M to 12 M because of it. Why aren't they asking for money for ALL the other auto makers as well? If it is ONLY the economy, they should get their fair share to make it through. Oh, maybe they have viable businesses, not already hanging their future on a different $25B in loans to 'retool' to make fuel efficient vehicles? Maybe they already did that with their prior profits? Or, maybe, they are on their knees at their governments as well, I don't know.
5. Like everyone else, my 401K and personal savings have taken a huge hit in the last year, where do *WE* go to get a bail out for *OUR* future retirement?

When they have sold all of their mansions, vacation homes, toys, etc, liquidated their kids' /grandkids' trust funds and given their many millions back to their companies and live like the average $50K pre tax U.S. family, then let them come begging for money. When they have sold, or at least mothballed, the corporate jets, fired the corporate chefs, etc, they can ask for money. Like others, I am CERTAIN the execs will get HUGE bonuses for firing a lot of people and 'restructuring' their companies whether or not the $25B shows up and whether or not their companies go in the dumpster. Why, well because it is a HARD job and you have to pay a lot of money to get high quality execs who can get rich while their companies fail. :loco:

Fortunately John Dingle just lost his Chairmanship of the Committee on Energy and Commerce. Talk about the fox watching the hen house.

 

It is even easier: GM , ford and Chrysler are american companies that are responsible for 1 out of every 20 dollars in the economy. Don't give the loan and we will enter a depression for at least 8-10 years. Maybe longer. Those are the facts. You don't want to hear that but those are the facts. The Dow will be at less than 6000 by the next time congress deals with this. Would you like to bet on it? This is the most seriious crisis in our lifetimes.

 

Hmm, looks like we have found at least one reason other than the general economy for their financial woes.

Add up all excessive remuneration (of all sorts) paid to the CEOs', CFOs', COOs', Presidents', Senior Vice-Presidents', Board of Directors', etc. Add in the money they spent on lawyers and lobbyists to fight increased cafe standards. Money spent on advertising to drive demand for BIG (or over powered) and guzzling for the last 35 years and it adds up to a lot of money. Too bad they didn't spend it on R&D instead. We might all have been buying 'Big 3' autos instead of foreign because the 'Big 3' didn't make what WE want.

 

That is exactly the line that Wagoner, Gettelfinger, Mulally and Nardelli have been parroting to Congress.

Problem is, these guys didn't say what further changes they will be making to ensure that they won't need to come back to beg for more money. They didn't do their homework and put together a detailed plan to present at the testimony.

We can very well throw $50 billion at them with no strings attached and they still go bankrupt, in which case you get Dow at 6000 AND the country is short another $50 Billion with nothing to show for it.

If the choice is between the Dow going to 6000 versus the Dow at 6000 AND $50Billion up in smoke, I can tell you right now which choice Congress will go with.

No plan? No bailout!

 

My wife and I both watched the House spanking on C-Span last night. Man it was rough. Those CEOs looked so clueless at times we almost felt sorry for them. And that Gettelfinger guy was such a joke. Good thing he flew in on a commercial airline. The committee was so busy grilling the other three, they kinda let him off the hook on the Jobs Bank.

Brad Sherman had me almost rolling on the floor when he asked them to raise their hand if anyone would sell their jets and fly back commercial. What a surreal hearing.

If I were Wagoner I would have offered to let the other two CEOs car pool with me to the Capitol in my brand spanking new Volt. Or in my shiny hybrid Escalade if comfort and safety were a concern. The road trip would've provided a great opportunity to exchange notes and do a little bit of male bonding...

 

Yes Wagoner makes way too much money, as do all US CEO's.

Yes the big 3 spends lots of money on fighting CAFE regulation, as did every automaker with Honda as the only exception.

Yes GM spends lots of money on advertising, as do all automakers. Advertising money is spent on products that are not selling well. Currently that is trucks and SUV's. (Note: most local Toyota commercials are for Tundra's and Sequoia's which are marked down $8,000)

 

Detroit goes down and the Dow will be at 2000, not 6000. Mark my word.

 

I have not read all of the comments on this thread nor did I did see the Ted Turner's comments. I support GM, Ford and Chrysler restructuring/bailout/investment. I believe the executives of these companies flew to Washington in private planes knowing their arrogance would be revealed...why?
Who protected the american auto industry all these years from building quality cars while protecting non-union workers in Japanese and Korean auto plants in the US?
Why are we directing all of our rage we have toward executives of these companies on american workers, their families and the entire support network to the industry?
Why has the industry for years been so contemptuous that they layed off the workers in america for other countries while the company pocketed billons in profits and can we, America, make a statement via Big 3 restructuring these companies so it never happens again...ever!
Are all new american cars inferior to imports? Have there been improvements in quality? Consumer Reports says it has in some models.
Should workers and their suppliers assume the entire burden of the demise of GM, Ford, Chrysler while the arrogant executives that just testified to Congress leave their positions with severance packages that protect them, LEGALLY?
Can Congress expect more than a bail out if they become partners with the Big 3 and provide a vision for the industry and mandate quality while overseeing this vision....and STOPPING THE CEO PRACTICES OF SELF-REWARDS, unique to US executives and Oil Sheiks.
Finally, is this a real opportunity to make profound changes in the american auto industry with workers proud of the product they produce (like at the Camry plants in Kentucky) or do we HOPE the China, or worse, other opportunists, with unknown ethics come in and take over an industry that use to represent american spirit, and we just hope for the best?
There are a lot of culprits in this american car industry, political, oil companies and otherwise..
BTW, I have no investment in the industry whatsoever. I am not in a union and am a 25 + year Toyota buyer. But I have been F***ed by egomaniacal executives in the past...so I guess I am guilty of some bias..

 

No, perpetual bailout of Detroit as they come back time and again for additional $25Billion installments will merely postpone the Dow from going to 2000.

How many times will we allow Detroit come back to ask for more no-strings-attached money? Two? Three? At some point, they will have exhausted their credibility and Congress will finally say enough is enough and cut them off. At that point Detroit will collapse, Dow goes to 2000, and you as the taxpayer would have lost another few hundred billion with absolutely NOTHING to show for it.

Those Detroit corporate and labor managers need to go home, do their homework, come back with a credible plan for weathering this crisis in at least a 5-year timeframe so they won't need to come back for more bailout money.

They have until December 2 to do this. As I said, I don't want to see severe job losses either. Let's hope Detroit can actually deliver on December 2 to Congress a plan that shows A) how they will use the money, B ) how they plan to further change to weather a prolonged downturn, and C) how they plan to pay the taxpayer back.

Throwing money at Detroit with no strings attached is not the answer.

 

I understand and appreciate all of your comments. I think if you knew what i know about the industry you would feel a little different about the present. The leaders that hurt these companies are long gone. If GM and Ford still had the arrogance of years past I would agree, but that arrogance is gone. I have talked to Rick Wagoner and Alan Mullaly and they have a genuine passion for the car business and want these companies to succeed with every ounce of their being. Unfortunately mcuh of who they are and what they stand for has been blocked out by the fact they flew in private jets and political grandstanding by congressmen(surprise). They had a long line of predecessors who drove Detroit to the present situation, Roger Smith and Jacques NAsser, tow of which i can;t get our of my mind.
This is a crisis not only for Detroit, but for the united States but with crisis comes opportunity. Detroit is close to taking the lead in the alternative engine/ mpg race, hs closed the gap on quality, and in 2010 will have the same cost of manufacture as the transplants and imports. We will all suffer if Detroit does not get the bridge to the future it needs today.

 

I disagree with you about all of the new executives being passionate....Had the assigned Big 3 representatives that flew to Washington understood the utter disdain americans feel about the BIG 3 excesses all these years, they would admit fault, and have some insight. They had none, at least in the testimony I heard. This bailout and restructure I believe, would gut the good ole boy network you believe is 'misunderstood'. If the Big 3 goes under or NOT, I just hope they prosecute these executives like I hope they prosecute the AIG executives. .
I support a bailout with restructuring, only with MAJOR restructuring and the auto industry ASKING what government wants...not vice versa... The power structure in this relationship should be crystal clear.
Not doing so is like 'throwing the baby with the bath water'. And its an opportunity to get back a core industry that we invented.
As far as passionate executives you speak of in the US auto industry....let the restructured american car industry, government reps vigorously included, review each's executive's record...that should be fairly easy...,

 

I duno ... after the "mark my words" that gas wouldn't run up over $4 a gallon (prior to the credit crash), are you sure you want to be marking any more words?