A half million people lost their jobs in November.
Henry Paulson’s brother made $3.7 billion dollars last year running a hedge fund.
I guess our Justice Department was too busy investigating Martha Stewart and Mark Cuban these last 8 years.
A half million jobs lost, right before Christmas.
I’m afraid my feelings of disgust for the current administration will go on long past January.
Ralph
And they are worrying about the few thousand that are UAW members…
John Bouck said:It's not just the 120,000 working for the Big 3. It's the 3 million jobs connected with the auto industry. Auto sales are down a third. The many parts suppliers to the auto industry are already hurting from these reduced sales. GM is the largest automaker. If these suppliers don't get paid because of a GM bankruptcy, you will see many more bankruptcies and jobs lost. The federal govt. estimates revenue losses to the Federal Treasury of $150 billion dollars in three years if GM goes into bankruptcy. China would love the opportunity to buy GM's tooling and machinery and move it to China. This is the one area of manufacturing where China has not been able to compete. Ralph
And they are worrying about the few thousand that are UAW members.................................
This was a conversation on one of the sites I participate in. I’m not saying it is gospel, but certainly something to study further.
"First person –
“My point is the former Big 3 Auto makers are now in a similar business environment that the Big 3 locomotive manufactures, faced back in the 30’s. “Their failure to embrace technology changes, especially those involving quality, and more important, failing to response to customer demands”.
It is kind of ironic that GM’s EMD Division introduction of their diesel locomotives were the major cause for demise of the Big 3 Steam Locomotive firms.”
Second person’s reply –
Where were the bailouts for Baldwin, Lima, and ALCO Locomotive Works?
Do you believe that Baldwin, Lima, and Alco should have been bailed
out? All three companies had their fortunes tied to the steam
locomotive. When the railroad industry shifted to diesels, the
companies tried (and failed) to make the transition. Things like this
happen all the time. When the business world changes, some companies
can make the change, while others can’t and they fail. It happens all
the time.
From the 1920s and into the 1940s all three companies felt that “Steam
was King”, and railroads would always buy steam locomotives. Sure,
Baldwin and Alco spent money on diesel locomotive research during this
time. But at the same time they were spending huge amounts of money
trying to perfect the 4-8-4, 2-8-4, 4-6-6-4, etc. All they were doing,
though, was improving an old, ineffiecient technology.
Meanwhile, the folks at EMC were developing a brand new technology (the
diesel-electric locomotive) that would make the old steam technology
obsolete. And after years of tinkering and experimenting, in 1939 EMC
brought out the FT, which proved capable of replacing steam locomotives
out on the mainline. The railroads saw the light, foresake their old
dirty steamers, and embraced the new technology.
Alco and Baldwin tried to play catch up, but it was woefully too late.
Lima was doomed almost from the start, since they didn’t introduce
their first diesel-locomotive until 1949, IIRC, on the same day they
out shopped their last steam locomotive.
Dozens of book and articles have been written on this subject and how
EMC/EMD gained the edge over its competitors. But, in general, it
offered a superior product than its competitors. No amount of
government intervention can change that.
First person reply –
That’s correct. The situation was “where a major industry could not adapt to changing market conditions”, during a period of economic hard-times. It is history repeating itself.
Second person –
You make excellent points.
The former Big 3 Auto Makers Managers appear to be taking the same path as the former ill-faithed Big 3 Locomotive manufacturers firms."
As to the economy and the loss of jobs, I’m still amazed at the people looking at Barney Franks and Chris Dodd for the solutions.
Ric,
It’s apples and oranges.
GM products are as good as anybody’s, and better than many.
The 2003 Buick Century my wife used to drive was getting 40mpg here in the mountains and sat 6 people.
There is not a Honda, Toyota or Nissan made that will seat six and get anywhere near the mileage. I wish I still had the car. Not one problem from it in 100,000 miles.
You are right about Congress. They will try to micro-manage the automakers and muck things up.
Give them a large enough loan to turn things around. Take an equity stake and leave them alone.
President Bush warns about protectionism. Hell, we need to protect our jobs. At the very least we need to insist our own Federal government purchase American made goods.
I’ve been trying for months to find an American made pair of work boots. Even Chippewa and Danner are now made in China. Red Wing too. Companies that just a couple years ago were still making boots here.
Ralph
Ric -
I agree that the parallel between the steam loco manufacturer’s and today’s auto-makers is an interesting comparison. The market conditions / customer demands are very similar. The major difference is the economic impact of failure. Baldwin, Lima and Alco employed a lot of people, but no where near the number of people directly and indirectly employed in the auto industry.
I’m not saying that I support a bail-out. In general I believe that free markets should remain free to shape themselves without government interference. On the other hand, look back a few years when the airline industry was in trouble. The government loaned United enough money to maintain operations, restructure and pull themselves out of bankruptcy.
In an ideal world, the banking industry would have enough faith in a large corporation’s ability to turn themselves around to be able to loan them the funds to do it. Unfortunately the banks don’t have this faith, especially after they proved to themselves how risk taking in the mortgage market could bite them.
http://news.yahoo.com/s/ap/20081207/ap_on_go_co/congress_autos
Dodd is already trying to micro manage the automakers.
GM’s CEO should resign, according to Dodd. Why? Financial annalists have said that GM has taken the right steps to become a highly profitable company in the future.
Steps that include the Union taking over responsibility for retiree’s health care costs in 2010.
Did they call for the resignation of any of the banking heads? Did they ask the management of Citigroup to resign? Hell no. These are the people responsible for our current financial fiasco. We are guaranteeing $300 billion in Citigroup loans, besides the billions we have given them. But nobody in Congress has asked Citigroup’s management to step down as a condition of the arrangement. Nor has Congress placed any other conditions on Citigroup.
Dodd also says Chrysler needs to merge with another automaker. Chrysler is in the mess it is in now because of the decisions made when it was owned by Daimler Benz. None of the domestic automakers are capable of taking on Chrysler’s problems. So what good is another foreign owner going to do Chrysler?
Dodd claims Ford is the strongest automaker. Bull bleep! Ford was only smart enough to borrow $26 billion before the credit tap was shut.
The Big Three are in trouble if, as part of a loan agreement, they are going to have to allow Congress to run their business.
Ralph
I just erased about 20 minutes of typing, cause, it just isn’t worth it…
Everyone wants something for nothing… All the CEO"S should be replaced, they got the companys into this mess… They had the position of responsibility, it was their decision… Now they want government money, so they can ““Hopefully”” make the right decision??? Their decisions are the ones that are taking the other company’s down with them… It’s all the ““attitude””, give us money and we will fix it… Sorry, bud, you had your chance, and look where you went… adios… To them, it’s nothing more than a monoply game, and we are all the pawns, being used and tossed aside…
The whole attitude in this country, is going to kill it… People don’t want to work anymore, it’s gimme or I’ll take what you have for my own… There’s no respect for other poeple or property, and it’s only getting worse…
Just my 2 cents worth…
Why do GM, Chrysler, and Ford empoyees not buy their own products, instead of buying the competition’s…(No loyalty)…Why did GM sell EMD, when it was making money for them and continues to do so today, for the new owners ?
If employees won't buy the product of their own labours, then why sould they expect anyone else to ?I’m not smart enough to know any of the answers but here is my 2 cent view of the situation anyway.
Free Market= US exports 5,ooo vehicles but allow 300,000 foreign cars to be imported. Fair?
Pensions & Health care= Big Three have been around a long time, have many retirees to take care of.
Honda & Toyota fairly new in this country, hasn’t had to pay out for retirees.
Not exactly a level playing field.
UAW agreements with Big 3= some of which are quite crazy ( 90% pay for layoffs), most of us if laid off draw a meager unemplyoment check and can’t wait to get back to work, however the CEO’s participated in the signing of these agreements.
CEO’s= I can’t understand how a company can be near bankrupsy and the head officers still have their jobs, complete with a out of line salary & bonuses, if I screwed up on my job I’d be out of a job!
The economy of this country depends on the auto companies to survive, too many smaller suppliers, dealers, and even mom & pop eateries need plants depend on their business.
LOAN them the $$$$, don’t just hand it out like they did to Wall Street!
The talking head (moron) on the radio this morning suggested that the laid off people aren’t “trying hard enough” tp find work because a couple meat packing plants were raided by INS recently and about 1/3 of their workforce was carted off. He feels “Americans” SHOULD be seeking out these kinds of jobs (average $11.50 to play in guts and gore, yay!). A caller suggested maybe he should take it, because he was a lousy host… hehehe.
Same talking head also suggested that a good way to cut gubmint spending was to decrease lawmaker’s pay to the average wage of their constituants… Somebody also suggested that maybe we simply not pay them anything AT ALL and let them live on whatever graft and kickbacks that they can get… he missed the point on that one too.