Axelrod: No Auto Bailout Until Execs Come Up With Plan

Just wanted to say a belated Thank You to George Stephanopoulos and Charles Gibson.
Their appalling shallowness in the Clinton/Obama debate made it clear that you're really a celebrity magazine, and I haven't watched a single Sunday morning show since. Thanks for the enormous savings of my precious time!!

No WORKABLE plan-a, no manna from the taxpayers for the Big 3 automakers. I watched those CEOs in the clips from their appeal to Congress. There wasn't a drop of humility among the 3 of them. All they projected was a collective sense of entitlement. Those 3 have their heads so far in the clouds it's pathetic. In spite of the deep inroads Honda, Toyota, Nissan, etc. have made in the Big 3s market share,these CEOs have made minimal, half-hearted efforts to be competitive with foreign automakers, sitting back in their ivory towers, raking in huge salaries, bonuses and perks while driving their respective companies to the brink of insolvency. The factory workers don't make $70/hr. -- that's a modern myth. The jets ALL have to go. Let the CEOs travel 1st class; if these guys are so fearful of their personal safety, let them be accompanied by an armed security guard - factoring in the salaries and expenses for these guards, it'd still be a fraction of the cost of
maintaining a fleet of luxury jets strictly for the use of these apparently useless and overpaid CEOs. When they come back before Congress in 2 weeks, they'd better have more than tin cups in their hands. They'd each better have detailed plans of exactly how they intend to use the loans they want from us, as well as exactly how they intend to repay it.

In the latest UAW contract starting workers make less than 15 dollars an hour with limited benefits. Also retiree health care benefits are going to be reduced through a VEBA administered through the union. If we really want to be fair let's just run our country like the Japanese run their country. Life time employment, government control of market and product, huge subsidies for export, closed markets to imports through regulation and red tape, and less than 2% foreign people.

marswind, the problem with GM and the UAW goes back a long time. Now that the union has finally realized they have overreached and killed the golden goose they are belatedly making concessions. It is too little, too late. Given their disregard for their company it is likely they will make similar, unreasonable demands in the future if GM is fortunate enough to survive. The UAW is a cancer and they must be removed for the long term health of GM and other American auto makers. Why should we give the UAW a second chance when they showed their singular motive for higher wages at any cost? If the UAW still exist there should be no bailout!

I have heard so many times that the Big Three should be condemned for building gas guzzlers for so many years. Nobody complained until gas hit $3.00 a gallon, and more. Everybody was buying those and not their cars. Now that no one wants a large vehicle the Big Three are ostracized. They built and sold what the people wanted, that,s it!

Coming from a large family with 3 generations of GM employees/retirees, I've seen this culture of entitlement at its worst. My father, grandfather, great-grandfather and uncles are all retirees of GM and have paid absolutely nothing for health care until now. A year ago, they were told that they would be responsible for a $5 copay at doctor's visits--$5!! The outrage that ensued was unlike any seen: "How dare the union do this to us?" "After all we've done for Them!" " This means war!". My response: "Welcome to the real world". That's something completely absent for the proceedings with the Big 3 today--reality.

The reality is that the financial crisis did not "decimate our domestic manufacturing capabilities" as your e-mail noted; the Big 3 and the UAW did it quite well on there own. Decades of autoworkers getting paid $60+ /hr. (and in too many instances, to read the Detroit Free Press and drink coffee all day...), buying the cottage up north, a new car every year, and other "toys" adds up, particularly when you save nothing and expect The Union to take care of you. There's something else absent here--personal responsibility; both on the parts of the Big 3 and the workers. As a taxpayer and child of a former autoworker, I don't want to pay for the sins of my father or anyone elses father for that matter.

Yes, if the Big 3 go under, it will more than hurt. But this is business and survival of the fittest is just that, lest we not forget about Toyota, Honda, and countless others who are somehow still making it.

Change the tax laws and let America compete. There are reasons we don't make things in this country. There is a reason Japan and Chinese each hold a trillion in U.S. dollars each. They would love nothing better than to totally dominate the U.S. by eliminated our last sole industrial giant. If you are spouting of a lot of stuff you know nothing about then I can't argue with each of you. But it is my hope that some of you are patriots and you understand the magnitude of the problem. That you value the American middle class and that you believe in making money and not just borrowing it from Japan and China. The domestic car companies produce wealth and pay a great deal of taxes. They pay collectively, with their workers, far more in taxes than what they are asking to borrow.

Marswind, while our tax structures are unfair to many business, you have missed the point completely. Toyota, Hyundai, Nissan, and Honda all make cars in US plants. They pay taxes just like GM and Ford. The problem is GM is paying $71/hr for labor while Toyota is only paying $47/hr. Other foreign auto makers also pay less than US brands. This cannot continue. Each car made by GM has its price inflated by $2000-$2500 based on this disparity in labor costs. This is a direct reflection of unions seeking to extract every concession they can from the US auto makers. Bankruptcy is the only means by which GM can undo the union contracts and restore their labor cost to competitive levels.

I repeat.I have heard that Toyota sold two million cars in Japan last year? And isn't it true that American car companies are not allowed to build factories there by Japanese law? And isn't it also true that to export cars to Japan one has to go through about six months of government red tape and inspections per car? And isn't it true that the legacy costs to Japanese manufacturers in Japan are as great or greater than in the U. S. because they have what is called lifetime employment? Is it not true that Toyota and GM have parity in total worldwide production numbers? And because Toyota was able to sell two million cars in it's own closed market, would not that imply that GM sells two million more vehicles everywhere else? Does anyone know what percentage of vehicles sold on Japanese soil are foreign made? Do Japanese automobile manufacturers enjoy monopoly power in Japan? Would it not be true that by giving those companies monopoly power the Japanese government is subsidizing those companies at the expense of the Japanese consumer? And since Japan is subsidizing their auto industry does that not put American domestic brands at a competitive disadvantage (since one half or more of all Japanese branded cars sold in the U.S.A. are made in Japan)? Is it worth it to us to forever cede our manufacturing base to Japan (and others) for a brief downturn, easily bridged, with a relatively small amount of capital? Is it not true that the American domestic brands pay as much as 147 billion in taxes per year? Would it not be unwise to give up these taxes forever in the future, for lack of financing now?

My point is that the foreign car companies DO NOT pay taxes like the domestic companies do. The 700,000 retiress the big three are supporting are included in that 71 dollars an hour figure. The upper management in Japan is not included in the Toyota figure. Are we talking apples and oranges? Where is this data collected. Does anyone know where these figures are coming from?

Why is it so hard for all of these analyst and talking heads to get it. Take that 750 or should i say 950 billion and dis purse it to every LEGAL AMERICAN CITIZEN In the USA, with instructions as follows:
You have 2 years to spend this money as a deposit on a new home, a new AMERICAN CAR ,and any AMERICAN PRODUCTS. The balance to be financed by Citigroup, and insurance to be supplies by AI BIG.
Depression Over! Wake UP

Why is it that everyone seems to forget thet the domestic automakers ARE the taxpayers? They aren't asking for more than they pay. They just want to borrow some of THEIR OWN MONEY back! How stupid to tax someone to death and then say they did it to themselves. Does anyone realize that fully a third or more of those supposed 71 dollar labor costs are TAXES??

Unbeliaveable, Congress/Governtment people telling CEOs of the Automaker Companies, that they are a bunch of no good for nothing. In others words, because they haven't made good decisions for their Companies....Wow, this coming from the people that run the Federal Governtment....Are they sound and look smart now that they are looking into someone else. They are a bunch of hipocriates, This Congress people are to be ashame of telling anyone that they are incompetence. No one is buying what they said and what the media report....again the (Media)is dancing at the beat of the Governtment music .....(Irak Invasion allover again).

Why doesn't Bob Nardelli idiot CEO that tanked Home Depot take now tanking Chrysler to a higher level with the money he stole from Home Depot?! I swear I don't know why he's allowed to breathe.

All the man is good for is to bag groceries at the supermarket.

Carlos has it exactly right. Congress complains about how the automakers SPEND MONEY. HA, THAT'S A HOOT!!

Why doesn't Bob Nardelli idiot CEO that tanked Home Depot take now tanking Chrysler to a higher level with the money he stole from Home Depot?! I swear I don't know why he's allowed to breathe.

All the man is good for is to bag groceries at the supermarket.

Re: Kuttner's comments on Round Table that GM killed the electric car in the '90's and it proves that they are out of touch: the GM electric car was a TERRIBLE car! It had less room than a Miata, and on the test drive they wouldn't let us go over 30 mph. They told us the car had a range of 50 miles, if I remember right. Anyway, I wouldn't have bought one for $10. A Yugo was a better buy.

For those Chemists out there demanding an electric car, go to Wikipedia and look up "Lithium-ion battery." Maybe after reading that, one might gather some insight as to how hard it is to build a battery that lasts ten years, fully discharges every day, doesn't blow up in flames, and works in extreme hot and cold. It turns out that a 400 pound battery equals one gallon of gas at 40 miles per gallon. Yesterday I bought gas at $1.53 a gallon at Kroger.

Before we throw mud at the big 3, we should take stock of this: They gave us exactly what we wanted- very good, safe, reliable vehicles. The SUV's, vans and trucks we're driving don't get great fuel mileage, but we told the dealers that's not what we're looking for. The fault is OURS, folks. WE bought 'em. ..And as for the corporate jets, did you really expect them to carpool to Washington in a Focus? Get REAL.

The car companies are asking for a revolving line of credit. They may not even need it. They just need to know they can get it if they need it. They set up lines of credit months and years ahead. A Capitalist system has to provide capital. This is a test of Capitalism.

Are the big 3 CEO's going to have a legitimate plan or is it going to be some sales pitch they developed the night before meeting with congress? They came unprepared the last time and they never listened to the consumer before and they don't have the scientific staff to build the car of the future. sense of entitlement=ruin. Also, If a country is going to excise high tariffs on American goods expect the same in return here. Unfair trade practices should be also be addressed in competing with the rest of the world.

It's as if the auto execs went to a casino, drank heavily, bet big, and played badly. Now, having lost on every bet, it is OUR responsibility, despite their bad calls, to make them - without any real plan -and their companies whole?

Three execs (THEIR AVERAGE WAGE IS $250,000 A WEEK!) ARE out of touch they fly in their three corporate jets "with tin cups in hand," as one Senator put it, appear asking for money but offering no plan in exchange, blaming their company troubles on everything and everybody but themselves.

General Motors says it's been burning through cash at a pace of more than $2 billion a month and that it could run short of money by mid-2009 without federal help. Chrysler told the NYTimes it would lay off about 1,825 workers at year-end, saying that it lost about $660 million in the second quarter, including $570 million from its automotive business.

The privately held Chrysler, citing differences in international accounting standards, disputed a report from its minority owner, Daimler, that put the quarterly loss at about $772.5 million.

Before they get to pick the taxpayer's pockets, some soul-searching needs to occur.

American auto industry problems were apparent back in 2005. Even then, GM was losing BIG money.

GM, described as “the best of the Big Three,” needed 32.36 hours to produce a vehicle compared with just 29.93 hours for Toyota.

Japanese profits per vehicle were significantly higher than GM which lost money on every one. Toyota made $1,433; Honda, $1,250; Nissan, $1,603. Ford had the highest profit per car among the Big Three, at $620; and GM LOST on every car -- $1,436 per vehicle in 2006, not a sustainable long-term strategy.

(The losses reflected a variety of factors, including the large difference in health care and pension costs, as well as rebates and low-interest-rate financing, according to Motor Trend)

And then there are those union contracts. GM's UAW labor force makes $78 an hour in wages and benefits, while the company is losing $3 BILLION A MONTH.

America's biggest autoparts maker Delphi declared bankruptcy. Steve Miller a turnaround specialist who is steering Delphi's restructuring process dispelled the "myth of America's "endangered" union manufacturing jobs, saying "We cannot continue to pay $65 an hour for someone to cut the grass and remain competitive."

Grass cutting? As defined by the current UAW contract negotiated with the "Big Five" (GM, Ford, Chrysler, and top parts makers Delphi and Visteon), an auto "production worker" is a job description that covers anything from mowing grass to cleaning the toilets.

In the real world, the grass and toilets could be outsourced to $8 an hour, no-benefit wage earners, but on Planet Big Five, people doing those jobs get the same wages as any auto line-worker: an average of $60,000 a year plus benefits that bring the company's total cost per worker to a staggering $65 an hour.

But at least the grass cutters actually do a bit of work for their pay, because the current UAW contract also guarantees that 12,000 autoworkers get full wage for doing nothing.

The Detroit News reports: "12,000 American autoworkers, instead of bending sheet metal, spend their days counting the hours in a "Jobs Bank.." These aren't jobs. And they certainly aren't being "lost" to China. "We just go in (to Ford's Michigan Truck Plant) and play crossword puzzles, watch videos that someone brings in or read the newspaper," one UAW worker told the News. "Otherwise, I've just sat."

American taxpayers being asked to help are having our own financial worries, and If you held a national referendum on it, they aren't likely to vote to make "good" the long series of bad bets made by high-flying, low-talent auto execs with help from the union Prez they're so chummy with.

BUT - every auto job supports up to a dozen jobs in related supplier industries, so there's considerable risk if we don't in some sensible way help the automakers.

Pelosi and Reid and Obama's soon to be chief of staff this week that the Big Three needs help -- but first, they need to help themselves, and come to Congress with a plan that does not reward the captains and crew that steered the ship into the iceberg. And it should not reward stockholders for having joined the cruise.

It's as if the auto execs went to a casino, drank heavily, bet big, and played badly. Now, having lost on every bet, it is OUR responsibility, despite their bad calls, to make them - without any real plan -and their companies whole?

Three execs (THEIR AVERAGE WAGE IS $250,000 A WEEK!) ARE out of touch they fly in their three corporate jets "with tin cups in hand," as one Senator put it, appear asking for money but offering no plan in exchange, blaming their company troubles on everything and everybody but themselves.

General Motors says it's been burning through cash at a pace of more than $2 billion a month and that it could run short of money by mid-2009 without federal help. Chrysler told the NYTimes it would lay off about 1,825 workers at year-end, saying that it lost about $660 million in the second quarter, including $570 million from its automotive business.

The privately held Chrysler, citing differences in international accounting standards, disputed a report from its minority owner, Daimler, that put the quarterly loss at about $772.5 million.

Before they get to pick the taxpayer's pockets, some soul-searching needs to occur.

American auto industry problems were apparent back in 2005. Even then, GM was losing BIG money.

GM, described as “the best of the Big Three,” needed 32.36 hours to produce a vehicle compared with just 29.93 hours for Toyota.

Japanese profits per vehicle were significantly higher than GM which lost money on every one. Toyota made $1,433; Honda, $1,250; Nissan, $1,603. Ford had the highest profit per car among the Big Three, at $620; and GM LOST on every car -- $1,436 per vehicle in 2006, not a sustainable long-term strategy.

(The losses reflected a variety of factors, including the large difference in health care and pension costs, as well as rebates and low-interest-rate financing, according to Motor Trend)

And then there are those union contracts. GM's UAW labor force makes $78 an hour in wages and benefits, while the company is losing $3 BILLION A MONTH.

America's biggest autoparts maker Delphi declared bankruptcy. Steve Miller a turnaround specialist who is steering Delphi's restructuring process dispelled the "myth of America's "endangered" union manufacturing jobs, saying "We cannot continue to pay $65 an hour for someone to cut the grass and remain competitive."

Grass cutting? As defined by the current UAW contract negotiated with the "Big Five" (GM, Ford, Chrysler, and top parts makers Delphi and Visteon), an auto "production worker" is a job description that covers anything from mowing grass to cleaning the toilets.

In the real world, the grass and toilets could be outsourced to $8 an hour, no-benefit wage earners, but on Planet Big Five, people doing those jobs get the same wages as any auto line-worker: an average of $60,000 a year plus benefits that bring the company's total cost per worker to a staggering $65 an hour.

But at least the grass cutters actually do a bit of work for their pay, because the current UAW contract also guarantees that 12,000 autoworkers get full wage for doing nothing.

The Detroit News reports: "12,000 American autoworkers, instead of bending sheet metal, spend their days counting the hours in a "Jobs Bank.." These aren't jobs. And they certainly aren't being "lost" to China. "We just go in (to Ford's Michigan Truck Plant) and play crossword puzzles, watch videos that someone brings in or read the newspaper," one UAW worker told the News. "Otherwise, I've just sat."

American taxpayers being asked to help are having our own financial worries, and If you held a national referendum on it, they aren't likely to vote to make "good" the long series of bad bets made by high-flying, low-talent auto execs with help from the union Prez they're so chummy with.

BUT - every auto job supports up to a dozen jobs in related supplier industries, so there's considerable risk if we don't in some sensible way help the automakers.

Pelosi and Reid and Obama's soon to be chief of staff this week that the Big Three needs help -- but first, they need to help themselves, and come to Congress with a plan that does not reward the captains and crew that steered the ship into the iceberg. And it should not reward stockholders for having joined the cruise.

As a retired auto worker of 6 years I have a lot at stake in this recent fiasco. I don't know what is right because I have seen, in my 36 years at Chrysler, a lot of waste, inefficiency and indifference in workers, the UAW and management. But....I honestly think they've tried to make things better recently and one thing they do that the foreign auto makers haven't had to face yet and that is they 'take care of their retirees'.

What I'm wondering is will the foreign makers be around to take care of their retirees when the time comes? I wouldn't bet on it.

One more observation. We wouldn't even be discussing these bailouts for anyone if the price of oil hadn't hit $140 a barrel. Who exactly is responsible for that?

Gary Haynes seems to have some answers. Maybe he can answer my questions? I have heard that Toyota sold two million cars in Japan last year? And isn't it true that American car companies are not allowed to build factories there by Japanese law? And isn't it also true that to export cars to Japan one has to go through about six months of government red tape and inspections per car? And isn't it true that the legacy costs to Japanese manufacturers in Japan are as great or greater than in the U. S. because they have what is called lifetime employment? Is it not true that Toyota and GM have parity in total worldwide production numbers? And because Toyota was able to sell two million cars in it's own closed market, would not that imply that GM sells two million more vehicles everywhere else? Does anyone know what percentage of vehicles sold on Japanese soil are foreign made? Do Japanese automobile manufacturers enjoy monopoly power in Japan? Would it not be true that by giving those companies monopoly power the Japanese government is subsidizing those companies at the expense of the Japanese consumer? And since Japan is subsidizing their auto industry does that not put American domestic brands at a competitive disadvantage (since one half or more of all Japanese branded cars sold in the U.S.A. are made in Japan)? Is it worth it to us to forever cede our manufacturing base to Japan (and others) for a brief downturn, easily bridged, with a relatively small amount of capital? Is it not true that the American domestic brands pay as much as 147 billion in taxes per year? Would it not be unwise to give up these taxes forever in the future, for lack of financing now?