[sgarnett]

The Senate, UAW, et al, just gave up (ie failed) on reaching a compromise a few minutes ago.

I don't know how GM will come out after bankruptcy (they just hired the bankruptcy lawyer), but the stock market futures are looking ugly tonight. It actually held up well through some dismal recent employment numbers, but I suspect tomorrow is gonna be ugly. Rebuilding my retirement is going to mean austerity and no new cars for a very long time, and I suspect that will be true for many others. That can't be good for any automaker.

I'll admit I wasn't convinced that bridge loans to March could solve the problems for GM, so I don't claim to know what the right answer was. Nevertheless, this is going to be a big kick in the teeth for the economy.

This post has been edited by sgarnett: Dec 12 2008, 04:07 AM

[00 Trans Ram]

Bring a little levity to the situation:


(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree1.jpg)

(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree2.jpg)

(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree3.jpg)

THE RIGHT WAY
(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree4.jpg)

THE WRONG WAY
(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree5.jpg)

[T.O.Dillinder]

Bring a little levity to the situation:


(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree1.jpg)

(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree2.jpg)

(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree3.jpg)

THE RIGHT WAY
(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree4.jpg)

THE WRONG WAY
(IMG:http://i119.photobucket.com/albums/o145/mpatterson1410/Bigthree5.jpg)

Did you know that when GM had the last round of plant closings, if the TOP THREE EXECS would donate their salary for one year, they could have kept all those plants going for another three.
Quit bashing Union Labor with Full Assembly line Pay at $ 30.00 ($ 62,000 per year salary) Per hour, and target the real Greed Problem. The Presidents and CEO's of Large Corporations, Banks, and even the National Executive Committee of the UAW.
Who the Hell needs a 8 to 10 figure salary a year with such an outragous "Golden Parachute"?
It seems some of you may have never worked at the ground level before.
Try it sometime and see if you can raise a family of five on $ 11.50 an hour.
Even my late cousin Gerald Knight (Fuel System Engineer for Cadillac that retired in the 80's) said that the "Newbs" probably never changed a spark plug in their life the way they were designing the vehicles.

[94bird]

Todd, I realize this can become a very emotional issue, especially when you have relatives who are factory workers, UAW, or the like. However, plant closings haven't been solely to lessen their labor costs. Plants closings have been frequent the past few years because the OEs need to shrink their capacity.

Also, I think you'll find the CEOs of the Big 3 don't have golden parachutes in their contracts. Other industries do, but I have heard nothing of this in the auto industry. Richard Wagoner testified as such in the grillings by Congress earlier this month. Granted, he did make $16 million last year. That may seem like an exhorbitant sum, but compare that with the CEOs of companies like Goldman Sachs and AIG and it's a paltry sum.

There are still issues with UAW contracts which hurt the competitiveness of the Big 3, but the gap became much less last year with the new UAW contract. Things like the jobs bank and VEBA funding are an issue, but they are being dealt with now, under Bush's terms for the bridge loan.

What are still left are:

1. Legacy costs for having approx. 1 million retirees with their pensions and healthcare. That's a much tougher issue to solve, since none of the transplants have such a "handicap".
2. Overall debt - last I heard GM owes about 66 billion dollars. My understanding is they have to reduce that by 2/3 by getting debtholders to accept equity and other bargaining chips for their debt.
3. Reducing dealerships by 33%. When GM stopped the Oldsmobile brand, IIRC, it took them about 3 years from when they made the first announcement to when they made their last Oldsmobile. This was largely because dealerships are independent franchises, with state laws protecting their franchises. Each dealership can demand a buyout from GM before they can be forced out of business. To close a plant, new negotiations with the UAW have to happen. By the time GM shut Oldsmobile down it had cost them almost $2 billion, almost 5 years ago. That would likely cost more now, if it weren't being done under the threat of bankruptcy. The theory is debtholders are likely to take pennies on the dollar to settle a debt rather than being left out in the cold if Chapter 7 is the result. We'll see if that works in this instance.