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Author Topic: Employee Ownership, Bailout, & Auto Makers' Viability  (Read 2313 times)
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WhiskeyGirl
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« on: November 13, 2008, 12:49:51 PM »

Bailout Turns on Auto Makers' Viability

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House Financial Services Chairman Barney Frank (D., Mass.) said Wednesday that he plans to hold a hearing next Wednesday, during a lame-duck session of Congress, with the chief executives of the Big Three auto makers and the head of the United Auto Workers union. It is unclear whether the executives will be grilled on the industry's problems, or asked to just formally present their requests for money.

http://online.wsj.com/article/SB122654044416323137.html

Why not ask the employees to take ownership of these failing giants?  Employee ownership or failure?  Ask senior executives to kick in some money?

Invest in the future of your industry.  Invest in success.

IIRC, there have been a number of companies that moved to employee ownership.  United, Chicago Northwestern, etc.  Employees contributed a percentage of their paychecks to pay off the investment.

The wiki even maintains a list of employee owned companies.  I am sure there are more than on the list -

http://en.wikipedia.org/wiki/List_of_employee-owned_companies

jmho
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WhiskeyGirl
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« Reply #1 on: November 13, 2008, 12:56:21 PM »

from the WSJ link above -

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A key factor in winning support for an auto bailout will be the conditions demanded of the manufacturers that take the money. Tennessee Rep. James Cooper, a fiscally conservative Democrat, said Congress must take a "tough love" approach and criticized "management and boards of companies that have shown arrogance since the 1950s that they never needed to change in a fundamental way."

Quote
Tony Cervone, a GM spokesman, said Wednesday that "it doesn't do anybody any good to speculate" on conditions the government might tie to financial help. "We have been careful not to be prescriptive with respect to terms of any loan program, but we do believe in the restructuring GM has undergone and don't believe it would be constructive to make a management change," Mr. Cervone said.

How much is GM management willing to contribute to the future sucess of the company?  Unions?  Workers? 

Why look just to the US taxpayers?  A third world debt nation?  Taxpayers?

I can just imagine a future documentary -  maybe in 2010 -

"Bailout fatcats partied on borrowed tax dollars while Americans got in line for soup and a place to sleep."

When will the party end for AIG?   I wonder what's under the Christmas tree (or any religious end of year gifting) for AIG families this year? 

When does the party really begin for taxpayers?
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WhiskeyGirl
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« Reply #2 on: November 13, 2008, 01:03:53 PM »

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"Detroit has had a lot of time to understand what it takes to compete. They wouldn't stand up to the labor-union bosses, and now they're facing the consequences," said Rep. Jeb Hensarling, a three-term Texas congressman and chairman of a group of fiscally conservative Republicans. "We can't be in the business of picking winner and losers. What's next, the airlines? What about Starbucks or all of the other struggling small businesses out there?"

Another Republican, Rep. Scott Garrett of New Jersey, said that "the real problem with this is that [a bailout] is not going to change the company, but simply to perpetuate the same business practices that created the problem in the first place."

"You will be asking the average middle-class taxpayer that doesn't have as rich of a benefit package to subsidize buyouts," Rep. Garrett added. "There are a lot of jobs on the line, but a bailout does not permanently solve the situation. Who's to say we won't be facing the same crisis in 2009?"

http://online.wsj.com/article/SB122645259107919397.html?mod=googlenews_wsj

Who is going to bailout employees that work at Walmart?  Will the taxpayers pay for their rich benefit package too?

How many Walmart, child day care workers, or non-union workers can afford a new GM, Ford, or Chrysler product?  How many can afford the gas that goes along with it?  Can I get leather on my McJob pay?
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WhiskeyGirl
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« Reply #3 on: November 13, 2008, 05:37:17 PM »

Rewarding the guilty at our expense

Posted Thursday, November 13, 2008, at 4:08 PM

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What are your thoughts on the bailouts at taxpayer expense?

I think the government is in the process, as usual, of rewarding those who have been the basic cause of many of the problems we are facing now.


Quote
To what extent should we be ordered to bail out the auto industry? While the auto industry is a key part of out overall economy, they haven't helped themselves at all by building vehicles for show and not much else. ...

To what extent do you feel the auto industry and, yes, the UAW, should be asked to help in this problem rather than putting ever more on our backs?

Quote
How can the government even think of asking us to fork over billions in our tax money to help save many giant corporations, including those in the financial businesses, who are losing money yet paying multi-million dollar bonuses to top executives? Why? For lousy business practices?

http://www.t-g.com/blogs/bomelson/entry/22140/

From what I've seen -

$105,000,000,000 asked for = $20,000 for 5,250,000 American to help stimulate the economy.   Buy a new car, pay off a student loan, house, etc.

Why not give that money directly to the American's that are struggling to pay their bills?

Has the trickle down theory worked before?  The benefits will just trickle down from Wall St. and Motor City to all of us?

Does Mr. Paulson see the trickle down theory working for the $700 billion already in place?
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WhiskeyGirl
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« Reply #4 on: November 13, 2008, 05:48:25 PM »

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"The financial straits that the Big Three find themselves (in) is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labour force," said Senator Richard Shelby, the top Republican on the Banking Committee.

"The financial situation facing the Big Three is not a national problem, but their problem," Shelby said.


http://www.earthtimes.org/articles/show/241579,democrats-back-down-from-bail-out-for-automakers.html

I have to wonder if the current financial condition of the Big Three is a prophecy of what is to come under the Obama plan. 

Will the US some day be looking for the global community to forgive 84 trillion dollars in debt?  Perhaps after the collapse of the US dollar, $84 trillion will just be the cost of a loaf of bread in China?
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WhiskeyGirl
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« Reply #5 on: November 13, 2008, 06:09:56 PM »

Analyst: Auto aid should require reduction in retiree benefits

Quote
WASHINGTON -- Any government aid to keep General Motors Corp. solvent through the next couple of years should force deeper cuts on the automaker's cost, including a reduction of UAW health care benefits for retirees, a Wall Street analyst said today.

Quote
"In our view, D.C. should provide a near-term loan to cover 1-2 quarters of cash burn," Patel said in a research note, "but a second sleeve of additional aid should be contingent on a re-cut of both financial debt and UAW legacy liabilities, and after GM draws up a plan to accelerate dealer network/brand cuts."

Quote
...He suggests the UAW could reduce the money the automakers had agreed to pay for retiree health care, make current workers pay more for their health care and take wage cuts.


http://www.freep.com/article/20081113/BUSINESS01/81113026/?imw=Y
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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