Some thoughts from another Flint native on the plight of GM:
If GM were a horse I would call the vet and have it put out of its misery. I realize how a failed GM will devastate my family as well as this entire country. I get it probably more than most people because I grew up in Flint. But there has to be a better way then giving them our hard earned tax money.
Giving them what they want is only prolonging the inevitable. And, then who is next? Who else wants to go and beg to our government for free money? Steel companies, airlines, states like California? Heck, maybe I should drive to DC in my GM car and get in line?
I wish I had the answers and I realize what a tough job our politicians have on this one. I literally feel torn in half about this. After another blow up on the phone with my mom today I also realize that I can no longer talk to her about it.
I also have family who will be financially devastated by a complete failure of the company (and are already hurting — as she notes, parts of the city of Flint are becoming a post-apocalyptic nightmare). But the current plan is just delaying the inevitable, at taxpayer expense. Their only real hope is a legitimate bankruptcy.
[Update a couple minutes later]
Flint’s (lunatic) mayor to the rescue with a plan:
Williamson is sending City Administrator Darryl Buchanan to Washington D.C. next week to tout his big idea to save the auto industry as part of the Mayors Automotive Coalition lobbying Congress for the Detroit Three’s $34-billion loan.
Williamson said under his idea, each household with a registered voter would receive a $5,000 voucher to purchase a new car. He hasn’t calculated how much the plan would cost taxpayers.
Williamson said the government should use some of the $700 billion previously set aside to bail out the financial industry to fund the vouchers.
“They’re using the money for the wrong things,” Williamson said.
He said he realizes some people may not believe that his ideas would work.
“A lot of people are in shock when I come up with these ideas,” said Williamson, who has previously touted his 2006 “Save All of America” plan aimed at saving General Motors and Delphi Corp. “Many think they’re off the wall, but I’m thinking.”
People in shock when you come up with these ideas? You don’t say…
Will there be a chicken in every pot, too?
[Late afternoon update]
Why the auto bailout sux:
4. Where are provisions for dealing with rewriting the Big Three’s union contracts? Where are provisions for preempting state franchise laws so that dealer contracts can be cancelled or rewritten? The Big Three have to reduce labor costs. They have to shed brands, which means closing some dealers. They have to develop a modern distribution system, which means fundamental changes in their relationship with the dealers.
5. It’s interesting that Ford is asking only for a line of credit rather than cash in hand. I suspect that their reluctance to take the cash now has a lot to do with Dodd’s efforts to force Rick Waggoner out at GM. It’s no secret that the current generation of Fords are modest talents, at best. Yet, so long as the Fords have their super voting rights stock, they will exercise control. One wonders whether Dodd would try to force them to give up their voting control as a condition of taking the cash.
6. If Rick Waggoner has to go, why doesn’t Ron Gettelfinger? The UAW is just as much at fault here as management.
I think we know why. And I’d be a lot more impressed with Chris Dodd’s demand that Wagoner leave if Senator Countrywide would first set an example by resigning from the Senate over his shameful role in the much larger finance disaster.
How much do the Big 3 pay in corporate income taxes? What effect would an abolition (or just a holiday) on corporate income taxes have on their ability to cope with their current difficulties?
Either way the government is “giving” money to the auto manufacturers, but a tax holiday means they’re not taking the money from anyone else.
Well, when a company is losing money (on the way to going out of business), they don’t have any income (or at least profit) to tax, so the answer is presumably zero. A tax holiday doesn’t do them much good…
Giving them what they want is only prolonging the inevitable. And, then who is next? Who else wants to go and beg to our government for free money? Steel companies, airlines, states like California?
Some of us in other states already think this is a payout to Michigan (2008 swing state). Yeah, it also is a payout to the unions. It certainly isn’t a benefit to taxpayers. California is already saying “me too”, but nobody is taking their request seriously because they are already solidly blue.
As for Flint’s mayor, he seems oblivious as to what caused the credit crisis. The last thing we need to do is entice people to go into debt by handing them $5,000. Besides, GM and Ford both have offerred rebates as high as $5,000, and it ain’t working.
Of course, I put that out there, and I suspect someone with the IQ of Williamson would say, “it would work because GM and Ford would keep the $5,000 instead of giving it as a rebate, and that’s why they won’t have to go into bankruptcy.”
I don’t WANT a new car – the CRV I have is working just fine.
And $5,000 won’t buy a car – it will just entice people to go (further) into debt.
Let the lot of them declare bankruptcy, have the judge break the UAW “contracts,” and fire all of upper management, including all the Fords – with NO bonuses. I’ll bet at least one or two of the 3 survive, and maybe even make better cars.
I agree with Barbara, five grand just isn’t going to make a difference to GM — while still managing to cost taxpayers a bunch on April 15. Bad deal all around.
it’s a pity but, i see no way out other then Bankruptcy.
if you do that, you appoint a creditors committee
and oversight board, the court superintendent would
slash maangement salaries, dissolve equity, write down
bond paper, reduce union benefits and white collar pensions.
Now if the feds want to do something they could put money
in R&D and fix health care for the people in general.
pity GM had some very cool technology most of which they
have never used.
As a former Enron employee who almost lost his house, had to move to another city for a new job at a MUCH reduced salary, I want my retroactive bail out. Oh wait, I’m not eating out of the trash or living on the street.