Obama makes his move on Detroit

The Obama administration has pressured longtime General Motors CEO Rick Wagoner to resign, and he has done so. That high-profile decision — the first of several as the government tries to force Detroit to restructure itself — will no doubt generate complaints that the federal government is overreaching.

Let’s review the situation:

First, the federal government is not requiring GM to fire its CEO. It has no such power or authority. Instead, the federal government is pressuring GM to fire its CEO AS A CONDITION FOR GETTING TENS OF BILLIONS OF FEDERAL BAILOUT DOLLARS.

That’s a very important difference.

In private enterprise, a distressed company facing bankruptcy will often beg outside investors to rescue it with an injection of cash. However, the company understands that the bailout will come with conditions. The outside investors or lendors will almost certainly demand changes in company operation and management. They may want control of the board. They may insist on a new CEO. That’s just how such things work. The assumption is that if the company was well-run in the first place, it wouldn’t be needing outside investment.

The federal government is doing the exact same thing. GM and Chrysler came to the government seeking huge sums of taxpayer money to keep operating. Barack Obama responded just as private investors would. He had outside experts comb through the automakers’ books and operations, and then he demanded changes as a condition of saving those businesses. To do anything less — to simply hand the money to Detroit without forcing changes in management, operation and labor contracts — would be grossly irresponsible.

Conservatives always complain that government ought to act like a business. In this case, it has.

It is fine to argue that the government should not bailout Detroit or Wall Street, that we should let those companies and institutions fail and deal with the consequences. I think that’s an overly purist and largely impractical approach in the face of this historic crisis, but I do acknowledge that it’s a logically consistent approach and I understand its appeal.

However, if you believe the bailout is necessary, you also have to accept the necessity that there will be strings attached to that money.

123 comments Add your comment

I Report/ You Whine

March 30th, 2009
11:53 am

Spoken like a true socialist, Bookman-

Instead, the federal government is pressuring GM to fire its CEO AS A CONDITION FOR GETTING TENS OF BILLIONS OF FEDERAL BAILOUT DOLLARS.

Geez, you don’t have to get so excited.

Besides which, the TARP funds, which OneTerm is digging into, IS SUPPOSED TO BE A LOAN, DAMMIT!!

Hahaha, “here, before you kill yourself, sign on the dotted line, duh.”

I Report/ You Whine

March 30th, 2009
11:58 am

Federally sanctioned show trials, why not, when you know the intelligence of democrat voters, bloodlusting psychotics all-

Jeremy Anwyl, chief executive of the automotive Web site Edmunds.com, called the move “political theater” to appease an increasingly bailout-weary public.

“American taxpayers are not happy,” Anwyl said. “But this way you’re able to point to Rick and say he’s gone, and that creates an environment where the loans become politically palatable.”

ew

I Report/ You Whine

March 30th, 2009
12:01 pm

Interviewed Monday on NBC’s “Today” show, the governor of Michigan (democrat Jennifer Granholm) said Wagoner is a “sacrificial lamb.”

ew

@@

March 30th, 2009
12:02 pm

jay:

GM has been nothing more than an “insurance” provider that just happens to manufacture vehicles for quite some time. Why wasn’t the “CEO” of the union fired as well?

Let’s see how Obama’s “expertise” has impacted “the engine” that fuels the American vehicle, shall we?

Dow Jones down 282.83 points.

Should have let GM file for Chapter 11…..wouldn’t have cost the taxpayers a dime. It’s headed that way anyhoo under the clumsy “mechanical hands” of government.

Joey

March 30th, 2009
12:04 pm

I do not believe the auto-maker bailout is necessary or wise. As I recall not to long ago you posted a similar opinion.

But the big problem here is that our Federal government has failed to demonstrate its ability to operate a business that must make a profit in order to survive.

I Report/ You Whine

March 30th, 2009
12:11 pm

‘Starting today, the United States government will stand behind your warrantee’…-Oblahmi’s Teleprompter

Cool, either give me four new tires or I’ll sue your liberal as-s for discrimination, bwa.

caz1158

March 30th, 2009
12:13 pm

Jay- I don’t care how you spin it,Obama fired Wagoner!!! Now if the Govnmt is going to venture into these bailouts(which I dont agree with).Then being able to pressure or put stipulations as terms of the bailout is not uncommon,and I agree with that. But call it what it is. I think the majority of us believe that changes in the Auto industry are long overdue. Can Obama fire the Union’s next? Now that’s CHANGE I would LOVE to SEE!!!!!!!!

Dave R

March 30th, 2009
12:17 pm

So, you fire the rich CEO, but you don’t fire the head of your auto worker’s union, which is REALLY the reason why most of Detroit can’t build a car Americans can afford to buy, right?

DANGER ! Selective, creeping Socialism at work.

Way to try to justify the unjustifiable, Jay.

Brad Steal

March 30th, 2009
12:19 pm

the fact that their is no private capital at all available for detroit is in itself an indubitable indicator that detroit is dead.

too bad the gov’t gonna keep them on life support. well, at least they have good health care.

Red

March 30th, 2009
12:27 pm

It seems to me that the union CEO has done a fine job of making worker concessions during this mess. Why would he need to be fired?

Oh right, the average worker doesn’t make $250,000 or more a year and therefore, doesn’t matter since they can’t run a company.

All the American workers do is take, take, take, get sick, and then take some more. They don’t give back any value to the company and in fact, most companies would be better off if they could figure out a way to fire all the workers so the CEO’s and principles could run the business without encumbrances like safe working environments and wage laws.

Copyleft

March 30th, 2009
12:33 pm

It is funny to watch the working-class rise up in defense of the executives, isn’t it? Especially AFTER they’ve driven their companies into the ground, trashed the economy, and gone begging for bailout funds.

Working-class conservatives are the perfect example of media brainwashing at work, courtesy of talk radio and Faux News.

Swami Dave

March 30th, 2009
12:34 pm

Will these changes (largely decorative) resolve some of the systemic problems at GM & Chrysler? Most likely not.

Is it likely that government bureaucrats and wonks many of whom having no experience in the operations of a private sector organization will better manage the operations any better than the current management? Probably not.

Would it have been better for the companies to go to bankruptcy and reorganize elminating many of the constraints to profitable operations under which they currently struggle? Possibly.

However, the salient point (which I would argue is Jay’s foundation) is that one would have to be silly to feign surprise that politicians are connecting conditions with the taxpayer money that they are controlling. After years of watching Washington tie transportation money to seatbelts and secondary (see: “unfunded) mandates required for participation in specific federal programs, one would have to be a lunatic to have been surprised by this action.

This highlights the true cost of dependence which is, by definition, the surrender of control.

-Swami Dave

caz1158

March 30th, 2009
12:45 pm

Red-Get rid of the Unions would be good start. They’ve outlived there usefullness for a good while now. Overpay for underwork is the motto of today’s union’s.

Corporal

March 30th, 2009
12:49 pm

Jay:

It’s called “political extortion”. He probably learned that from Jesse Jackson.

I’m sorry, but this guy is really starting to give me the chilly willys …. and believe me, if “I” feel that way ….. real trouble is brewing …… big backlash coming ……..

G

March 30th, 2009
12:50 pm

When will the Rushpublicants in Congress who presided over the ruination of our economy summon the honor to resign?

caz1158

March 30th, 2009
12:51 pm

Copyleft-How absurd of a notion”the right being brainwashed by talk radio & fox”. I guess the left wing isn’t told how to think by majority of the media)ABC,CBS,NBC,CNBC,CNN,PBR&95% of printed press. Nice Try,but the only one’s buying that load of cr*p, is the rest of left wing SHEEP.

Corporal

March 30th, 2009
12:52 pm

caz1158:

I used to be a member (very young – age 19 – had no choice) of the Brotherhood of Railroad Trainmen. I could tell you some real horror stories …. they were out of control.

Let’s all sing together now:

“Everyone stand up and holler for the Union,
Let’s give the brotherhood a cheer.
Everyone stand up and holler for the Union,
We ain’t hit a lick all year!”

G

March 30th, 2009
12:53 pm

Wagoner’s departure is long overdue. Under his leadership, GM suffered from a shortage of vision and an abundance of arrogance. A final point- corporate culture must change. Making the CEO the Chairman of the Board is a huge mistake. It’s the equivalent of putting the fox in charge of the hen house.

G

March 30th, 2009
12:55 pm

Look for Wagoner to have his own talk show on Fox right after Suckabee.

Shawny

March 30th, 2009
12:55 pm

Overstepped his bounds, this Obama did (said in my best Yoda voice). They should have let GM file for bankruptcy last year. If the company was so poorly ran, it should have went bankrupt, like any small to midsize company would have done. I understand that there should be conditions for receiving large chunks of cash, but there should be no cash to start with and we wouldn’t be having this blog.

Obama is failing economics, from CNN page: http://www.cnn.com/2009/POLITICS/03/27/navarrette.obama.economics/index.html

Shawny

March 30th, 2009
12:57 pm

ok, some concessions from management to get the money to continue to exist. So, where are the union concessions?

Bueller?

G

March 30th, 2009
12:58 pm

Wagoner was incompetent, too old, and part of the problem. He presided over the worst of GM’s failures. He almost destroyed GM with his lack of vision and his refusal to change the GM culture of behemoth, gas guzzling, unreliable and poorly constructed road hogs.

In order for GM to survive, he had to go. Good for President Obama.

Shows that the Obama administration believes that GM can make it through, but not without new leadership that will make the required changes in order for GM to make American cars that are competitive.

Chrysler is another story. See ya Chrysler.

Eric

March 30th, 2009
1:00 pm

They should have been forced into a structured bankruptcy 6 months ago. Instead, we poured billions down a hole and wasted 6 months, and they will end up exactly where they should have been in the first place – bankruptcy.

They cannibalized future demand with all of their deals of the past few years. The economy simply cannot support 3 American automakers, and the longer GM and Chrysler are allowed to sleepwalk towards Chapter 11, the more likely they will take Ford with them. Ford is obviously the best run of the 3, so let the others fail and let Ford pick up the slack.

Corporal

March 30th, 2009
1:02 pm

caz1158:

Don’t forget someone who is “brainwashed” doesn’t know it. You’re arguing with a wall.

G

March 30th, 2009
1:03 pm

Let’s get real: GM has to change their wrongheaded culture and President Obama came to some of the same conclusions that this consultant did -

http://www.umtri.umich.edu/content/RetoolingGM.pdf

mm

March 30th, 2009
1:04 pm

Same old talking points from the trolls.

The automakers have 2 weeks to put a plan together or file bankruptcy. The unions somewhat hurt the companies, but the execs ran them into the ground.

Corporal

March 30th, 2009
1:05 pm

I predict the “Economic Talicrats” are in for a big surprise for the next Congressional election. Just make a note of this post, date and time, and we will discuss it again then. If I am wrong I will stand corrected. Don’t worry, I won’t forget.

Corporal

March 30th, 2009
1:06 pm

……… and the CEO of the US has never even run a business.

ByteMe

March 30th, 2009
1:06 pm

Another part of the reason Wagoner was told to take a hike was that he had 90 days to get concessions from the bondholders and unions that would make the company viable and reduce their debt by 2/3rds. Didn’t happen and he didn’t seem to know if/when it would happen. He became part of the problem at that point. The administration was right to make his departure (as well as getting those agreements) part of any agreement for future funding.

DB, Gwinnettian

March 30th, 2009
1:07 pm

It seems to me that the union CEO has done a fine job of making worker concessions during this mess. Why would he need to be fired?

And there’s the little matter of the UAW never having asked the taxpayers for a bailout.

But don’t bother getting in between a conservative troll and the shiny-new talking-point.

Midori

March 30th, 2009
1:07 pm

mm,

they know it’s all the union’s fault, cause Rush told them so.

Dusty

March 30th, 2009
1:08 pm

Well, wouldn’t you know? Jay Bookman is for extortion! Get going, CEO, or I will not give your company any money.

Kidnappers do this in reverse, i.e. hold the person until you pay us. Maybe GM should have tried that.

In the first place, government should never have been giving funds to private industry.

If GM fails, it should be on their own.

The President of rht USA should be running the government, not private business.

Now we have a man with no business experience being advised by a man who forgot to pay his taxes. That is whom is trying to run private business owned by American stockholders.

Jay Bookman, who is no business expert either, wants to say how great it is to have Obama meddle in a self-made mess aided by a liberal led Congress. Yep, that’s a liberal Nirvana if I ever heard of one.

caz1158

March 30th, 2009
1:08 pm

Corp- UAW never saw a STRIKE they did’nt like. When begining job training,new hires were taught was correct way to hold strike signs,proper abusive language to be yelled at those who chose to cross picket lines,& last but not least,moaning about hours & pay. Something to be proud of,and teach our children!

Midori

March 30th, 2009
1:09 pm

the last CEO of the United States ran SEVERAL businesses.

Right into the ground.

and the US as well.

Rush Limbaugh for President

March 30th, 2009
1:09 pm

I Report,

What is your point? You copy and paste and scream socialist without making a point. A few questions;

Do you think Wagoner should not have been forced to resign under any circumstances?
Do you think he should have been forced to resign if the plan he submitted for GM to get more money was unacceptable?
Wagoner has been at GM for 30 years and has be CEO since 2000. Is he part of the problem or part of the solution?
How does any of what Jay said make his position that of a true socialist?

Corporal

March 30th, 2009
1:12 pm

HEADLINE: “Obamas to use own cash to redecorate White House …”

This is somewhat “eyewash” (do you realize how much free food, travel, and other expenses they get?) but I commend them for it.

It a far cry better than the Clintons who tried to steal White House furniture. Remember when the U.S. Archives truck was sent to New York to bring it all back? Oooops!

Wyld Byll Hyltnyr

March 30th, 2009
1:12 pm

The problem is not in requiring Wagoner to resign as a condition precedent to a possible bailout, rather the problem lies in the public spectacle.

The Obama administration, from the lynch mob pursuing certain AIG employees to, now, Wagoner and, on soon, to others,has taken on the patina of post revolution France. Anyone with one shread of class and the desire to act in the most effective and productive manner possible would have asked Wagoner to resign and let him do so. Instead, President Obama creates a public spectacle that will ultimately benefit no one. Already, I have heard the cries for Gettlefingerstein, the union head. This is but an unnecessary side show that is not productive. No wonder the european press has taken to calling our president Ob-amateur.

Perhaps the president would be better served to use his bully pulpit to orchestrate public hangings for tax cheats (Rangel, Geithner, Daschle, and on…) or those sucking to heavily on the lobbyist teat (Rangel, Dodd, Frank, Rahmbo, and on…) or those who are McCarthy-like in their actions (Rangel, Frank, Conrad, and on….)

To see our great nation reduce to the “show trial” level of tinpan dictators and 1970s communist regimes is most distressing, but, all too unfortunately, the hallmark of the Ob-amatuer administration.

Corporal

March 30th, 2009
1:13 pm

caz1158:

I used to watch engineers drink beer all day while running the engines and throw the empty cans out the window. If management had tried to fire them, the Union would have fought it all the way.

Wyld Byll Hyltnyr

March 30th, 2009
1:15 pm

Midori 1:09 pm

One of our family trusts had a small, inconsequential investment in the Rangers. That investment had an admirable return that was, I assure you, not indicative of a business run into the ground.

No matter how many times you bleat otherwise, President Bush was a fine and successful businessman.

Corporal

March 30th, 2009
1:15 pm

P.S.

I had to testify once in a termination hearing (just before I went in the USMC) as I was present one night as the front brakeman when a totally drunk engineer tried to pull two hundred loaded cars out of the yard without releasing the air brakes. They fired him. Two years later he got his job back with all back pay.

DB, Gwinnettian

March 30th, 2009
1:16 pm

I Report,

What is your point?

To get you to notice his imbecilic posts, of course.

The opposite of love is not hate, it’s indifference. Just sayin’.

Corporal

March 30th, 2009
1:18 pm

President “Goodwrench” strikes again.

caz1158

March 30th, 2009
1:21 pm

Corp-I’ve been in the Auto Indusrty since 1979,both corporate and on the retail side. I can tell you that the least productive,me first,clock watchin,company hating,ready to walk at the drop of a hat employees were union members. Don’t miss them at all. Sad to say,but management help create this monster.

Bosch

March 30th, 2009
1:22 pm

Corporal,

Just because YOU used to be a member of a sucky union, and watch some bad things – doesn’t collectively make all unions suck. It just ain’t so.

One thing, unions don’t run the business – they don’t get to decide which things get produced – they don’t deal with the marketing, they don’t deal with R&D (I think).

I’m glad Wagoner is gone – now on to the others.

caz1158

March 30th, 2009
1:24 pm

Corp-If something had happen accident wise,you know the lawsuits would have been aflowin. But not at the union,nooooooooooooo, but at the company.

G

March 30th, 2009
1:24 pm

People railing against union workers don’t know what they’re talking about. They didn’t make the decisions about which vehicles to make, their design, and all the things which assist in making a company prosper.

Management did.

caz1158

March 30th, 2009
1:27 pm

G-It’s a toatal screw-up. You can’t just blame one group,I agree. But the unions have been getting a pass for years,and they ain’t no ANGELS!!

Dave R

March 30th, 2009
1:31 pm

DB Gwinnett, please. You actually think that the UAW didn’t ask the government for a bailout? What do you think all those union leaders were doing with VP Hope & Change down in Florida at their swanky meetings last month? This is payback time for Hope & Change, and he’d better produce. We all know it would be better for GM to go down the tubes and let another car company rise from the ashes – one without the chains of the union around their neck, but Hope & Change can’t say that without getting into hot water with his puppet-masters at the union.

And G, to your earlier question:
“When will the Rushpublicants in Congress who presided over the ruination of our economy summon the honor to resign?”

I think they’ll do so, right after we see Barney, Dodd, Pelosi and Reid go first.

Midori

March 30th, 2009
1:31 pm

I’m going to post this Frontline link again (Just for you, Wild Bill):

http://www.pbs.org/wgbh/pages/frontline/tentrillion/

Eleanor Rigby

March 30th, 2009
1:32 pm

Everybody wants to blame the unions for the automakers’ problems but if you are in the market for a car you will notice American cars are not that much more expensive than foreign cars, particularly Japanese cars. Apparently the problem is not that Americans can’t afford to buy American cars. There must be some other reason. Poor management I say.

RC

March 30th, 2009
1:33 pm

Only Government creates problems and then says we are the only one that can fix them.
CAFE standards, Union contracts, Foolish safety guidelines etc, Government mandated!
PresBO will run GM, Chrysler and the US into the ground. That is Change you can believe in!

DebbieDoRight

March 30th, 2009
1:35 pm

Jay: The federal government is doing the exact same thing. GM and Chrysler came to the government seeking huge sums of taxpayer money to keep operating. Barack Obama responded just as private investors would. He had outside experts comb through the automakers’ books and operations, and then he demanded changes as a condition of saving those businesses. To do anything less — to simply hand the money to Detroit without forcing changes in management, operation and labor contracts — would be grossly irresponsible.

Oh Jay, you sure stepped into a hotbed this morning!!! You and Wooten sure like to keep things interesting huh? Did you get a chance to read Wooten’s “answer” to the same topic? Very different viewpoint, to say the least!! Oh well, good luck ’cause this is going to be a very interesting day!!

@@: Should have let GM file for Chapter 11…..wouldn’t have cost the taxpayers a dime. It’s headed that way anyhoo under the clumsy “mechanical hands” of government.

I learn more from blogging than I do in class at school. I’m taking a finance class and we touched on the subject of GM before — NEVER did my teachers mention that GM was only an insurance holding company!! You’re right @@, maybe we should’ve allowed them to restructure under bankruptcy, ESPECIALLY since they don’t seem to understand that they will have to change radically to stay solvent! Last year, in the private jets, was bad enough; but now I truly believe that they just don’t get it!!

Red: All the American workers do is take, take, take, get sick, and then take some more. They don’t give back any value to the company and in fact, most companies would be better off if they could figure out a way to fire all the workers so the CEO’s and principles could run the business without encumbrances like safe working environments and wage laws.

Red, I hope to God you were just being facetious!! I mean, after all, aren’t YOU an American worker?

Corporal: ……… and the CEO of the US has never even run a business.

Well, the ex-CEO of the US ran the majority of the companies he ran into the ground…not to mention……….. Bio

Midori

March 30th, 2009
1:35 pm

RC,

If you would please tell us what is wrong or evil about CAFE stndards, safety guidelines and union contracts?

DebbieDoRight

March 30th, 2009
1:37 pm

Only Government creates problems and then says we are the only one that can fix them.
CAFE standards, Union contracts, Foolish safety guidelines etc, Government mandated!

Hey, how about a nice peanut butter sandwich for lunch?!

Paul

March 30th, 2009
1:38 pm

G 1:03

That paper read more like a college research project with a serious lack of substantiation. At the end we read “I have been a consultant for GM for 15 years and an employee for 9 years prior to that, and have worked at one time or another in almost every region and function. This paper has not been endorsed or supported in any way by anyone at GM”

Okay, make that a former employee writing a college paper.

Your earlier: “He presided over the worst of GM’s failures. He almost destroyed GM with his lack of vision and his refusal to change the GM culture of behemoth, gas guzzling, unreliable and poorly constructed road hogs.”

What, exactly? GM produced vehicles the American public bought in record numbers. Those gas guzzling behemoths were exactly what Americans wanted and provided healthy profits to the shareholders. Look at Toyota, Honda, VW, Audi, Porsche, Mercedes Benz, Volvo – they ALL jumped on the behemoth bandwagon in response to American buyers. Your ‘unreliable and poorly constructed” is supported by which JD Powers, Edmunds or other reports? Many of their models were more reliable than Mercedes Benz for the comparable time period. Cadillac didn’t begin producing the Escalade until the dealers pressured it to – management actually resisted!

So what, exactly, should have been done, say, throughout the 90s and on into the next decade? Remember, your objective is to make money, build vehicles that will sell and keep the unions from striking.

mm

March 30th, 2009
1:38 pm

Corporal at 1:12,

Did you ever see a wingnut driven lie you didn’t repeat?

Let’s go to factcheck.

DB, Gwinnettian

March 30th, 2009
1:39 pm

“You actually think that the UAW didn’t ask the government for a bailout? ”

For the UAW? No.

Midori

March 30th, 2009
1:40 pm

DB, Gwinnettian

March 30th, 2009
1:44 pm

People railing against union workers don’t know what they’re talking about.

Union Derangement Syndrome.

Rush Limbaugh for President

March 30th, 2009
1:48 pm

Wild Bill,

You speak eloquently with your eyes closed…

The entire country was totally pissed off about AIG… is that the lynch mob you are referring to?

President Obama esentially stopped the congress from writing a tax law to get the bonuses back.

How do you know exactly how Wagoner’s resignation went down? Were you there? How do you that when they said we don’t like your plan he didn’t say, “that’s my plan, take it or leave it”?

You think non-conservatives with tax problems are tax cheats and conservatives with tax problems just made a mistake?

Wild Bill you are insightful but biased.

G

March 30th, 2009
1:51 pm

The big CEOs bleed the companies dry, then retire and laugh about it. Back in the 70s & 80s, they asked the employees to take a pay cut or else the company would have to lay off workers. As soon as employees took the pay cuts, the CEOs gave themselves a big bonus…of $300,000 or so. They care very little about the companies or the country. It’s disgusting.

Paul

March 30th, 2009
1:56 pm

G 1:24

[[People railing against union workers don’t know what they’re talking about. They didn’t make the decisions about which vehicles to make, their design, and all the things which assist in making a company prosper.]]

Europe has high sales of fuel efficient, high mileage diesel cars. Why don’t we have them? It’s not all about certification – “In a masterstroke of special-interest politics, the UAW used CAFÉ’s “two fleet” rule to forbid Detroit from importing smaller cars from its foreign operations.” Why? UAW didn’t build them so they effectively blocked importation.

So, yes, all of GM – management and workers – bear responsibility.

DB, Gwinnettian

March 30th, 2009
1:57 pm

“Those gas guzzling behemoths were exactly what Americans wanted and provided healthy profits to the shareholders.”

Paul, just to add on a bit, it’s not quite as simple as that. American automakers (and the UAW) fought for tax code provisions that would make it much easier to sell over-6000 pound vehicles; we effectively subsidized a decent chunk of that “profitability” which was built on sand, putting vehicles on the road that were harmful to us in a lot of ways. I’m not just talking greenhouse gases, I’m talking danger to other normal-sized vehicles, along of course with exacerbating our dependence on oil.

Anyone wants to criticize the UAW, criticize them for their role (minor, but important) in this. But for negotiating the best deals for the workers they could manage during good times? What else is a union supposed to be doing if not that?

Paul

March 30th, 2009
2:01 pm

Hi Midori!

:-)

Read an interesting article while I was away – tracked US economic expansion to technologies, such as Internet-related, that weren’t even imagined when the projection scenarios were run. Now Pres Obama pushes investment in new technologies (some of which really are thought of but still in development) – which will have the added benefit of releasing us from mideast oil – as an investment in economic recovery, providing sustainable jobs. I rather think a lot of people gloss over that and don’t really comprehend the scope of what he’s doing.

Dave R

March 30th, 2009
2:02 pm

DB, you’re really off today.

Of course it was for the UAW. It just has to go through the middleman called GM. No GM, no middleman, no bailout for union workers.

You’re better than this.

From a study by a Professor of Economics at the University of Michigan, these are the average costs of salary and benefits for hourly (union) workers at the auto companies back in 2006:

Labor cost per hour, wages and benefits for hourly workers, 2006.
Ford: $70.51 ($141,020 per year)
GM: $73.26 ($146,520 per year)
Chrysler: $75.86 ($151,720 per year)
Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

Now, the U.S Bureau of Labor Statistics in 2004 showed that union workers earned about 22% more than their public and private counterparts in wages, so if you take the average uplift in benefits (healthcare, retirement, insurance, etc) that non-union companies have to pay (around 30%), your union worker now costs their company about 37% of their salary in benefits.

Higher salaries, higher benefits, higher costs to consumers or lower profits to keep a car company going in tough times. The unions dug their own grave on this one.

DB, Gwinnettian

March 30th, 2009
2:07 pm

Dave, when I said the bailout wasn’t for the UAW, I meant the. bailout. wasn’t. for. the. U.A.W.

Nobody is asking the Feddle Gubmint to keep the UAW solvent. The Feds aren’t looking to nationalize the union. Thus it’s a little buffoonish to speak about “firing the union leaders” as some righties in here are doing.

Although I’ll give you style points for resurrecting ye old “shiftless 70 dollah/hour N—–s” meme that was so popular some months ago. I’m supposed to believe you actually aren’t aware that Toyota, Honda, and Nissan wouldn’t have the retiree legacy costs because they weren’t doing business as manufacturers here while today’s UAW retirees were working.

But you are, of course.

Brian

March 30th, 2009
2:08 pm

If GM was pinning all their hopes on a 40K electric vehicle that most folks won’t be able to afford anyway, then maybe Wagoner did deserve to go. Other than that, I think it’s a power play by Obama. If he can force out CEO’s of privately held non-financial companies, then who’s to stop him elsewhere? It’s all about stemming rage against the government to privately held mega-companies.

Bosch

March 30th, 2009
2:09 pm

Off topic but awwww. Heartbreaking picture on the cover of the ajc.com.

Paul

March 30th, 2009
2:12 pm

DB

I tend to keep some things to a point or two and note there’s rarely a single causative factor in any of these topics, in spite of how some like to find the ‘magic bullet’ and assign blame.

You’re right about those tax code provisions – aided by (guess which party?) Congressmen to give credits to purchase of minitanks. I’ve mention I’ve a neighbor who’s about five one (height and width) who drives one of those – she can barely see over the steering wheel – but as a business owner with one employee those tax credits were too good to pass up.

I’ve never been a fan of those vehicles but my point is, they may gulp gas, roll over and kill occupants, cause frustration for others (like me) because people can’t park them – but look at the sales and profit numbers.

But that business about blocking importation of high-mileage engines wipes out a lot of good will.

BTW – I pulled into a crowed parking garage this past week at the hospital. I stopped as I rounded a corner because up ahead I could see backup lights as a Mistubishi SUV began backing up. Opposite him was a longbed Toyota pickup truck (see G? A Japanese SUV and a Japanese pick-em up truck!) sticking waaay out into the lane. Bam! SUV hits right bumper a glancing side blow and drives off (no, I couldn’t make out tag numbers at that distance). I didn’t pull into the spot vacated by the SUV as I thought the pickup would do the same to me. But the space next to the pickup was open. When I pulled in I saw there was an easy THREE feet from the truck’s front bumper to the wall. So I left him a note:

“I just watched an SUV back into your truck. If you would have just pulled foward even two feet when you parked he wouldn’t have hit your bumper and damaged your fender.”

I know, not the nicest thing to do, but if people would just learn how to park they could avoid all sorts of grief.

DB, Gwinnettian

March 30th, 2009
2:17 pm

It’s incredibly off-topic, but I didn’t want to sign off without mentioning that I’d been over to the old “whitehouse.org” site and saw Bush’s farewell address posted there.

You’ll laugh, you’ll cry. It’ll become a part of you.

A taste follows:


Tonight, with a thankful, if otherwise empty, heart, I have asked for the lastest opportunity to distort, lie, shuck, jive, moisten my armpits with shame sweat, star blankly into space as some Ivy League pr–k’s fancy patter rolls by on the Teleprompter and share some carefully phrased thoughts on the journey that we have traveled together – oh, who we kidding? I’ve traveled. You all just tagged along, like a dog tied to the bumper of my bulletproof limo, just a bloody stump on a leather leash by the time I pulled into the parking lot at the Dallas National Bank.

DB, Gwinnettian

March 30th, 2009
2:23 pm

Paul, you write “aided by (guess which party?) Congressmen”

I know you know, but when I was griping about the UAW’s role in this, it’s specifically because of their support given to such Congresscritters who voted on just such boneheaded legislation.

You also mention the undeniable profit of such gargantuans, but again I ask: At what cost? Detroit got real good at coaxing a lot of dollars out of buyers of crummy, truck-based drek, gussied up with leather and chrome and sporting huge margins because they were based on platforms that had barely been improved since the Eisenhower administration. Fat lot of good it did us for long term global competitiveness.

I could go on–I could probably write a book, this is a topic that’s fascinated and enraged me for decades–but I must bid farewell for now.

Mrs. Godzilla

March 30th, 2009
2:25 pm

Dave R

You numbers are wrong.

for the umpteenth time on this topic:

“media outlets have used data that combines the average cost of current wages and benefits and future benefits to falsely assert or suggest that autoworkers make $70 or more per hour. But, as analysts and some media outlets have noted, the figure includes not only future retirement benefits for current workers, but also benefits paid to current retirees”

read the rest here:

http://mediamatters.org/items/200811220004

If you are afraid of MediaMatters

same info can be found here:

http://www.factcheck.org/askfactcheck/do_auto_workers_really_make_more_than.html

Dave R

March 30th, 2009
2:25 pm

DB, you’re the one missing the point.

No union jobs at GM, no union dues at the UAW. No swanky meetings in Florida.

This bailout is for the unions, plain and simple.

Dave R

March 30th, 2009
2:30 pm

Mrs. G, they still count as costs the companies have to pay in order to keep the unions happy. That is the cost for all workers (including retired) that is built into the cost of every car.

Government, management and unions are to blame for this bailout and government action. The only difference here is that the rational ones see all three as the issue.

I Report/ You Whine

March 30th, 2009
2:38 pm

Do you think Wagoner should not have been forced to resign under any circumstances?

Not by the “president” of the United States.

Do you think he should have been forced to resign if the plan he submitted for GM to get more money was unacceptable?

Unacceptable to whom?

Wagoner has been at GM for 30 years and has be CEO since 2000. Is he part of the problem or part of the solution?

Wagoner is responsible for the mortgage crisis? Wagoner is responsible for the US Congress banning domestic energy production?

How does any of what Jay said make his position that of a true socialist?

Gee, he thinks it was a good idea to for the government to replace a CEO of a major PRIVATE corporation. Duh. When will the whining commence about Rahm Emanual and how Freddie Mac collapsed on his watch? Wanna bet which one was the larger financial catastrophe? Where does Rahm work at now? We’re Third World, dude, Third freaking World.

G March 30th, 2009 1:24 pm People railing against union workers don’t know what they’re talking about. They didn’t make the decisions about which vehicles to make, their design, and all the things which assist in making a company prosper.

But yet, despite all of this “mismanagement,” GM sold more cars than anybody else in the entire world.

Do you libs even have a clue?

DebbieDoRight

March 30th, 2009
2:44 pm

Why doesn’t anyone remember that the unions gave to both the Obama campaign as well as the McCain campaign? Selective memories perhaps?

Corporal

March 30th, 2009
2:54 pm

Bosch:

They are a “necessary evil” but they have way too much power ….. and when they don’t get their way many of them use intimidation and even violence.

Bosch

March 30th, 2009
2:55 pm

Corporal,

Yeah, maybe in movies, and in the days of Jimmy Hoffa, but not now.

Dave R

March 30th, 2009
2:56 pm

Debbie, please. Of course they give to both. The difference is how they are being paid back. VP Hope & Change went down to Florida and dropped his proverbial drawers in from of union leaders to thank them for their help. Now, he got his marching orders and he and Hope & Change are delivering.

I don’t think for one moment that you would have had the same response to unions from McCain or Palin.

Corporal

March 30th, 2009
3:02 pm

mm:

Here’s a quote from your “fact check” …..

1) Almost one year later, after interviewing dozens of Clinton and Bush White House staffers, GSA employees, members of the Secret Service and others close to the situation, the GAO issued a report that stated that “damage, theft, vandalism and pranks” had occurred during the transition between administrations that year.” … (talking about the Clinton administration) !

2) I didn’t see any rebuttal of the “White House furniture going to New York” incident. If it was there please show me ……… bottom line – it happened!

jasper

March 30th, 2009
3:04 pm

Its all window dressing children. Demand management change to mollify the public so you can start sending bailout dollars by the mercedes truckload. Where’s this week’s outrage for last week’s debacle, AIG bonuses, Fannie Mae Bonuses, the forever deficit budget, cabinet tax cheats. Remember the Iraq war? And don’t forget we’ll be completely out of there in a year.

This isn’t about GM, its about the block voting of the blood sucking UAW.

Buy American – Merit Shop Made.

Corporal

March 30th, 2009
3:05 pm

Bosch:

You’re right on that “heartrending” photo.

Liberals – If you are sick of seeing this ….. too bad!

IT IS THE SOLDIER

It is the Soldier, not the minister
Who has given us freedom of religion.
It is the Soldier, not the reporter
Who has given us freedom of the press.
It is the Soldier, not the poet
Who has given us freedom of speech.
It is the Soldier, not the campus organizer
Who has given us freedom to protest.
It is the Soldier, not the lawyer
Who has given us the right to a fair trial.
It is the Soldier, not the politician
Who has given us the right to vote.
It is the Soldier who salutes the flag,
Who serves beneath the flag,
And whose coffin is draped by the flag,
Who allows the protester to burn the flag.

Corporal

March 30th, 2009
3:07 pm

Bosch:

Disagree about unions and “now”. That’s what all of this controversy is about “card check”. Do you think whether or not to have a union should be by secret ballot ??

Corporal

March 30th, 2009
3:07 pm

Has any one seen or heard from Al Sharpton or Jesse Jackson since the Inauguration ?

Are they on vacation or “something” ?

Dusty

March 30th, 2009
3:08 pm

Well, my last post is lost in space so here’s another one.

Bosch,

Yes. it is sad to see a photo of a little girl crying because her father in the military is leaving for Afghanistan. It is almost as sad as some of the family pictures after 9/11.

(Note..now there is a picture there saying it is his seven year old daughter but shows a lady wearing a wedding band giving a soldier a farewell hug! hmmm Does Bookman post pictures also?)

DB@2:17

Anybody who would post that farcical “Bush’s Farewell Speech” is an example of pure lowlife. Do you have to show your pettiness in front of everybody?

Bosch

March 30th, 2009
3:13 pm

Corporal,

I don’t know that much about it to be honest – not enough to say whether or not to say yes or no.

caz1158

March 30th, 2009
3:14 pm

The same people that don’t believe that the unions have been a player in the downfalls of the big 3 are the same blind people that don’t see a problem with other stronghold unions such as the teachers union!! If the union was’nt part of the problem then why is Barry Obie and gang asking ror consessions? It’s always’s big bad management that’s the problem.Come on,does’nt common sense ever come into play with the left? Both sides were just as greedy as the other.And if you don’t think Union Officials have been lining their pockets for decades,please do everyone a favor & crawl back under that rock.

Corporal

March 30th, 2009
3:16 pm

UNBELIEVEABLE …………..

“Starting today, the United States government will stand behind your warranty…”

Bosch

March 30th, 2009
3:16 pm

“not enough to say whether or not to say yes or no”

Good Lord, could that part of a sentence be anymore stupid?

caz1158

March 30th, 2009
3:18 pm

Corp-Does that include Home,Appliances,& others warranties? Or are they to follow?

Rush Limbaugh for President

March 30th, 2009
3:19 pm

I Report,

As I have always known you are less than informed on the issues and your latest response.

There is a board of advisors (experts) put in place to help decide if the auto companies should get more Gov’t help that reviewed the plans submitted by the automobile companies. They made the judgement that the plans submitted were not acceptable and that Wagoner needed to go. Obama didn’t make those decisions the board did. He just implements based on their feedback.

In my third question I was referring to Wagoner’s impact on GM not the economy as a whole. I don’t know how you missed that one.

Freddie Mac did not collapse on Rahm’s watch. You been watching FOX news to much. That is pure hyperbole.

What difference if GM sold the most cars in the world if their business model is not viable?

bugger

March 30th, 2009
3:28 pm

Their were two options for the Auto Companies. One was the traditional option of bankruptcy. The second was a government bailout. Under option one, the courts would oversee the restructuring of the company. Under option two Obama would oversee the restructuring of the company.

A little more than two months into his presidency and he is controlling two thirds of the us auto industry, and through Geitners newly bestowed power to sieze, virtually all of the financial industry.

And Jay. I know you’re saying, “golly gee guys” he’s just doing what any other businessman would do. Any other businessman would not force healthy banks to accept bailout money, then go in and impose compensation limits after the fact.

If you actually think a president basically firing the CEO of a company is just like any other business deal you are totally lost.

Peadawg

March 30th, 2009
3:31 pm

“First, the federal government is not requiring GM to fire its CEO. It has no such power or authority. Instead, the federal government is pressuring GM to fire its CEO AS A CONDITION FOR GETTING TENS OF BILLIONS OF FEDERAL BAILOUT DOLLARS.

That’s a very important difference.”

Ya, the 2nd part is pretty much blackmail. Not much better Bookman.

Taxpayer

March 30th, 2009
3:39 pm

They could let GM go into bankruptcy and the first thing that would happen is that their pensions plans get taken over by the PBGC. Unfortunately, the PBGC cannot afford to take on any more burden at this point. Then, there are all of those promised healthcare benefits that GM is saddled with and no money to cover them either. So, the Medicare and Medicaid would have to pick up more of that tab and the rest would get dumped on us in the roundabout way of more folks standing in line at the emergency centers, etc. And, then there are all those support businesses that would go belly-up real fast as well. Obama is just trying to keep what could be a worst-case scenario from happening.

I Report/ You Whine

March 30th, 2009
3:40 pm

Obama didn’t make those decisions the board did

{{{{Obama formally announced Monday morning that ——>he<—— was rejecting restructuring plans submitted by GM and Chrysler because they would not make the two automakers viable.}}}}

In my third question I was referring to Wagoner’s impact on GM not the economy as a whole. I don’t know how you missed that one.

You honestly believe that the mortgage crisis does not have an affect on the economy as a whole, and is causing consumers to scale back on large purchases such as automobiles?

Really?

Freddie Mac did not collapse on Rahm’s watch. You been watching FOX news to much. That is pure hyperbole.

Technically, since we are apparently applying our opinions now, GM didn’t “collapse” on Wagoners watch either, bozo.

{{{{Emanuel Was Director Of Freddie Mac During Scandal- New Obama Chief of Staff, Others on Board, Missed “Red Flags” of Alleged Fraud Scheme- ABC News}}}}

You spell “Fox” with an A?

What difference if GM sold the most cars in the world if their business model is not viable?

What are you freaking talking about, my man? Are you lost? GM sells more cars than anybody else in the world and they don’t sell them cheap, either, they are comparable to any other car manufacturer. So what do you think they do with the money, klown, snort it up? Burn in a big pile? Executive bonuses?

Really?

How about Union costs, duh?

Hillbilly Deluxe

March 30th, 2009
3:41 pm

It’s ok to make the GM CEO resign for them to receive a bailout yet the Wall Street execs were kept in place and many got bonuses. Doesn’t make sense to me.

Corporal

March 30th, 2009
3:42 pm

I have a serious question for President Obama’s next press conference (unlike the last one where all the question askers worked in his campaign):

Mr. President.

My right front tire is wearing badly just on the inside. Would that be a problem with the toe-in, camber or caster?

Thank you.

Corporal

March 30th, 2009
3:49 pm

caz1158:

I just bought a Ruger LCP (Lightweight Carry Pistol) .380 caliber. I hope it covers that.

Corporal

March 30th, 2009
3:51 pm

Bosch:

I hear you and I am not trying to be a jerk but that is a cop out.

You are an emplyee in a huge business. Union people come in (they have that right by law) and want to organize a union. They make their best pitch and then it’s time for the employees to vote yes or no.

Should that be by secret ballot or show of hands ? This is not a hard one.

Yankee

March 30th, 2009
3:52 pm

The guy led G.M. to a 70 milllion loss over the last four years. He should have lost the job three years ago. What the —- are you thinking.