I am taking a 180 degree turn, in order to present an editorial that I wrote. This issue is very important to me, so if you agree with the following, pick up your phone and call your senators and congressmen and ask them to give GM, Ford and Chrysler the loans they are seeking. If you disagree, drop me a line so I can gain a greater understanding of the opposing view.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Many people in the United States are unaware of the reality faced by tens of thousands of Michigan families. If the domestic auto industry is allowed to fail, the result may resemble dropping an atom bomb. Michigan could see an area that currently houses five million people become a ghost town, then the poison will spread to the rest of the country like atomic fallout. Every state will be negatively affected, but even so, the American public has little sympathy for our auto industry these days.
“The cars coming out of Detroit are crap, they cost too much, and there are no hybrids available.”
According to Consumers Report, the best 3 cars for under $25,000.00 are the Chevy Malibu, the Ford Focus SES and the Ford Fusion. Ford and Chrysler are applauded for their quality that now meets or exceeds foreign competition, and GM’s approval rating is much improved. As for hybrids, there are plenty: the Chevy Tahoe, Volt and Malibu, Saturn Aura, Ford Escape, and the Cadillac Escalade, to name a few.
“Those overpaid union workers make too much money.”
How much is too much money to pay an honest, loyal worker? My brother-in-law retired after 38 years as a parts-puller for GM, with his base pay before taxes not quite 56K per year. Yes, this is a decent amount to live on. However, I wouldn’t say he and his family are rolling in dough, not to mention that his body now suffers permanent damage from all those years of repetitive motion.
“The companies deserve to fail because of all the mismanagement.”
As brought out in today’s congressional hearings, it is difficult for the Big Three to compete with the foreign manufacturers when state governments subsidize the competition in favor of the domestic auto companies. Alabama, for instance, granted over a billion dollars in tax breaks to lure the transplant car companies and suppliers. Import companies are based in countries that have nationalized health care, so those companies don’t carry the burden of providing health benefits for the non-US workers. Most US based employees of the foreign owned entities are not at the age of retirement, therefore retirement benefits currently are not an issue. Ironically, the foreign automakers are currently experiencing loss of sales of a similar rate as Ford, GM and Chrysler, despite those savings. Why is that? The answer is simple: the bailed out banking industry is holding on to their money instead of giving out auto loans.
Incidentally, that is precisely what the automakers are requesting; a LOAN, to be repaid with interest. This is a bit different than the bailout requested by and granted to certain titans of the banking industry. (I’m still wondering why the government bailed out some of the banks while others were allowed to fail, but that is a subject for another post.)
God bless America! Interestingly, although the government’s big catch word is “patriotism,” we are selling off our country in bits and pieces. Soon there will be no “America” left for us to be patriotic about. We become beholden to foreign countries in yet another industry if we no longer own our automobile manufacturers. The nation is emphasizing that American car companies need to create “greener” cars to end our dependence on foreign oil. It makes no sense for this country to trade one dependency for another.
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*As a postscript, I received the following today (12/13/2008) from somebody who works for a Crysler Dealership in Michigan. They received it along with their paycheck, and they are hoping it isn't their last paycheck.(Click the image to enlarge.)
14 comments:
Speaking as a foreign national with absolutely zero influence in Washington...
Your editorial is well written and does present some cogent arguments in favour of an aid package for the American automakers.
I will admit, though, that I am conflicted about this issue.
The reason is that these "problems" are being addressed one at a time, rather than taking into account the "big picture".
While somewhat related to the banking fiasco (which was caused, essentially, by unrestrained greed) the troubles in the auto industry are more related to the unsustainable nature of the North American lifestyle. It's my belief that we're all going to have to go through some painful times no matter what. It can be now or it can be later but it will come. The question then becomes whether prolonging what I think is the inevitable is just a case of throwing good money after bad.
About the bank failures...I saw an interview of and found a website for a guy named Max Keiser. You should look him up as he has some interesting perspectives. It's his opinion that the reason that some banks were "saved" was because it protected Chinese investments, while some failed (i.e. Lehman Brothers) because the investments were Venezuelan (Hugo Chavez).
Food for though all around today.
Rob
Thank you, Rob for your insight. The fact that you are a "foreign national" helps me to see a broader view of these issues. You have given me even more food for thought. Is it possible that even the bank bailout is a form of selling the US to preferred foreign nations?
I left out many personal stories so as to not bog down my points. As a product of a “blue collar” family from Detroit, I also feel the desperation of those who have worked hard only to see their lives crumble into ruins. Greed breaks the backs of those who have carried this country.
Take it from a Michigander.... WE NEED HELP!!!! I don't remember a time when I've been so frightened for the future. If the big 3 are allowed to collapse this state will go under. Please answer me this... Major banks and investment companies have mismananged their/our money for years and are going under, just like the situation of the big 3, THEY were given money without all of the pleading, They laid off thousands of workers and paid off their big CEOs. We won't see a dime of that nor will we feel a positive impact. I don't see how the gov't can deny a LOAN when they just gave 700 BILLION away.... GAVE IT AWAY!
Jessica,
It saddened me to see the CEO's of the Big Three crawling on their bellies, begging for loans, while being treated with disrespect at the hearings. I didn't notice the bigshots at AIG, etc. treated this way.
Massachusetts Congressman Barney Frank stated: "Frankly, there seems to me to be an inherent cultural bias...aid to blue-collar employees is being judged by a standard different than white-collar employees."
Could this be true?
I feel that GWB was raised a white collar thinker and he will of course bail out the companies that hold his money. What does he care, he isn't affected by this. He was never our president. He was the bush family president
I would, quite frankly, be surprised if some (many?) of the "bigshots" at the failed investment banks and AIG don't see jail time at some point.
While the crisis was seen to be coming by some, many didn't know and the government knee-jerk reacted to "save" the entire financial system.
There was a lot of negative feedback (from the citizenry) on the Wall Street bailout and the remnants of this backlash may partially explain the treatment the automaker execs are getting right now.
Rob, you make some excellent points. Being from Detroit I have some significant skin in this game. That said, the American lifestyle is unsustainable and money that would go to Detroit, whether loan or "gift" is one more add-on to the national debt. Where does it stop?
I have no pension promised or heathcare at retirement, like most in this country, so the lack of sympathy for the UAW is not unwarranted. Classmates at my 5-year reunion in 1980 thumbed their noses at me: they skipped college and were making big bucks at an auto assembly plant. I was working my tail off with an engineering degree and could not afford a home or extras. People make decisions and must live with the results, short and long term. Perhaps the UAW should spend some time addressing the "myths" regarding their past and current members' compensation packages. If half of what is reported is true there is no wonder animosity exists.
This country needs manufacturing, no doubt, but not necessarily American Auto manufacturing. These assets do not disappear in a bankruptcy, they are deployed in a different manner.
Finally, Jessica, the election is over. Move on. Your presumed candidate and my President-elect will have his shot at executing his ideas very shortly.
Thanks for your input, TC.
Regarding the union salaries, I am wondering if you read what I wrote about my brother-in-law. In addition, the new hires are now coming in at $14 per hour with no benefits. I am wondering where the next cuts are going to come from.
You may be interested in reading this: http://www.uaw.org/auto/11_25_08auto2.cfm
I respectfully disagree with your point that we do not need America auto manufacturing. It seems that what you are saying is it is all right for this country to have all their businesses foreign owned as long as we get paid wages from those companies. So... our forefathers fought to become independent from the British in order for us to be owned by Chinese and Japanese?
I understand what Jessica is saying... until Obama is in office, GWB is still in charge, and holds the trump card in his hands. Mr. Obama doesn't get to be in charge until January. I hope that isn't too late for this country! :)
Stella,
Thank you for the link to the New Replublic article. While I have listened to the hearings in Washington, it would appear that this type of information is not getting the attention it deserves. One argument that I would support would be that significant changes have been made to the American Automotive model and they need time to take effect.
Regarding the American Revolution, our remaining independent is a function of both a strong economy and strong military. Manufacturing on our soil must remain a core competency and it will if we make investment in these technologies a priority. This comes from a President presenting a vision and we the people making the sacrifices to see it through. The auto industry will survive until January 22nd so let's not get too dramatic. Much of the market instability stems from over-the-top predictions.
Many, if not most, of America's secular challenges are a result of a lack of appreciation for education. Greed is definitely at play and this needs to be addressed formally in the courts. However, ignorance of economic principles is the root cause of many of the appearances of greed.
TC,
I agree that sometimes there are too many "The sky is falling" warnings. Unfortunatley, it may become like the boy who cried wolf; the time we don't listen is the time we get eaten up by the wolf.
One thing that I would like to see, particularly if the auto companies do get the loan money, is Americans buying American made products from American companies. There are still many quality products made here. Since I am not a financial expert, perhaps I am missing something, but wouldn't that help build a stronger America?
Stella,
Excellent point on buying American but I would add when quality is comparable and price is reasonable. A local radio station devoted a three hour show to bring quality "made in Texas" products to everyone's attention and I was impressed. I am sure there is enough national pride for someone to set up a website to advertise these companies too.
I guess I'm getting into this conversation a little late. But there are a few things I feel I need to say.
First: The auto companies are willing to make huge concessions to acquire their proposed loan. News reports indicate that the bailed out bankers gave up virtually nothing for their bailout and are now asking for more. The bank bail-out was supposed to help shore up our flagging economy, but if the bankers won't let go of any of it there will be no improvement in the economy.
Second: I know it is very popular to bash the American auto companies for not producing "green" automobiles. Let us not forget that GM did produce and lease the EV1 in 1998. They were sleek little two seaters, and the 1000 Californians who leased them fell in love! But the American public in general blew the EV1 off as too small, and too short range (at the time you had to charge it up in your garage). It was "no SUV." The government contributed to the demise of the EV1 as well, by rolling over and playing dead for the oil companies and "pulling the plug" on their deal to subsidize the building of charging stations so that the EV1 (or any other electric car) could be charged on the road, making the car's range comparable to that of internal combustion engine cars.
Third: No matter who was responsible for the demise of the EV1, be it the government, the consumers, or the head honchos at GM, it certainly was not the 1000's of American auto workers who have bills to pay and children to feed, just like the rest of us. They are simply trying to make an honest living. They are not asking for higher wages, and they are not asking to get a paycheck for nothing. All they are asking for is the ability to continue the back-breaking work they have been doing for years, to support their families. America was built on the backs of blue collar workers, they deserve a bit of a break now.
By denying a loan to the auto companies after bailing out the banks, our government is sending a clear message. The message is this; our government, of the people, by the people,and for the people, refers only to rich people.
Kathy, This "conversation" will be going on for quite some time so you are not late. Check out the blog below for a little perspective. Manufacturing in this country involves more than just automobiles.
The UAW has a huge PR problem with people sitting around a room playing video games at 95% of their pay. True or not, this is not helping matters with your fellow citizens, most of whom are not rich people.
http://louminatti.blogspot.com/2008/11/will-congress-bail-out-exxon.html
Thanks for your input, Kathy, and yours TC. I did read that blog post and pondered on the points made.
Well, as of this morning all of this has become moot, (at least for now)since President Bush signed to provide the loans to GM and Crysler. I am very happy about that, although I know that there is a long way to go before the car companies are out of the woods.
I found the following editorial interesting:
http://www.freep.com/article/20081219/COL04/812190328/?imw=Y
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