Friday 12th December 2008

UPDATE: US Bailout Bill Fails

Oval office is last chance saloon for ‘Big Three’

---

The automotive industry, world financial markets and hundreds of thousands of workers around the world are waiting on a statement from the White House today, following the Senate’s failure to back the Big Three bailout bill in a vote last night.

The failed bill means President Bush and the Treasury Department can provide the only possible salvation for GM, Chrysler and Ford, possibly by redirecting funds from the enormous $300bn budget already earmarked to rescue US financial institutions.

Yesterday before the Senate vote, the Bush White House made clear its view on the possible collapse of the auto industry. Responding to US jobless figures that last week reached their highest level since 1982, a White House press said: “The economy is in such a weakened state that adding another possible million jobs is something our economy cannot sustain at the moment.”

After the vote, another White House spokesman described the result as ‘disappointing’, and said options would now be evaluated.

With share prices sliding in Asian markets and Europe as a result of the vote, pundits in the US say an early response from the White House is required to prevent carnage when Wall Street opens later today.

The rescue package failed because the Big Three’s labour unions failed to agree to Republican demands for a swift move to pay parity with workers at foreign-owned car plants in the US.

Chrysler and GM both say they need immediate access to bailout funds to keep the lights on in the New Year, although Ford is a little better placed to weather the storm. The company has attempted to distance itself from the crisis saying it will only need access to taxpayer $billions if one of the other US makers fails.

[Mr Whippy]

Package fails because unions won't take a pay cut.

OK then, one million people lose their jobs instead.

I'm sure it's not as simple as that, but I'd rather take a pay cut than lose my job!

[N10k]

Mr Whippy said:

Package fails because unions won't take a pay cut.

OK then, one million people lose their jobs instead.

I'm sure it's not as simple as that, but I'd rather take a pay cut than lose my job!

Whats worse, bailing out banks or car manufacturers?
Should we (US) be bailing Ford, GM ect?

[Podie]

Mr Whippy said:

Package fails because unions won't take a pay cut.

OK then, one million people lose their jobs instead.

I'm sure it's not as simple as that, but I'd rather take a pay cut than lose my job!

Epic. You couldn't make this sort of stuff up, could you.

Unions... where's Maggie when you need her..?

[Dr Imran T]

true, however one cannot ignore that these three car makers are extremely inefficient; and probably are going to go to the wall at some point..

[N10k]

Dr Imran T said:

true, however one cannot ignore that these three car makers are extremely inefficient; and probably are going to go to the wall at some point..

Just like some of the banks, should we have let northern rock fall? should we let Ford or GM fall? both the banks and car companies have a lot depending on them.

fkit LETS SAVE WOOLIES.

Edited by N10k on Friday 12th December 11:12

[427James]

Not sure that the big 3 can do a huge amount about their inneficiencies. I suspect that they are facing the same problems as Longbridge etc. They dont have the funds to actually revamp their operations to increase efficiency. In addition, once unions are involved, its always curtains.

[dpbird90]

N10k said:

fkit LETS SAVE WOOLIES.

Amen to that.

But on a serious note, I hope that the US car industry gets back on its feet. Would be a shame to lose such good cara like the Corvette ZR1. I still haven't won the lottery, but when I do I want a ZR1, and if they don't get back on their feet it ain't gonna happen!

[nonplussed]

UAW are playing a high stakes game. They know the US gov't can't let the automakers fail, so they're sticking to their guns on pay, until they approve the package anyway. stty thing to do in this situation, and as blinkered and short-termist as only unions can be, but that's what's happening.

[Jasper Gilder]

This seems to me to be a negotiation game of chicken. Do we know when the Auto Makers are actually going to run out of cash - or are they using this as a means to pressurise the Unions and the Government. In the on-going game of Smoke and Mirrors on Capitol Hill is it likely that the lawmakers have realised that? Bearing in mind that Ford, GM and Chrysler are very different businesses and that Chrysler has always been the weakest of the three it's weird that they're all going to run out of cash at the same time

In times like these - who knows where the truth lies?

[randomman]

American cars have been ste for years, would it be really that bad if they dissapered?

[russellwatson17]

Such a shame if we do loose these makes, just as american cars started to get good aswell..

[vetteheadracer]

Legacy costs per vehicle for the "big 3" are about $2,000 whereas Toyota it's about $300. Big three need to cut labour costs to help but this won't solve the problem. UAW need to wake up and smell the coffee.

[Mr Whippy]

N10k said:

Mr Whippy said:

Package fails because unions won't take a pay cut.

OK then, one million people lose their jobs instead.

I'm sure it's not as simple as that, but I'd rather take a pay cut than lose my job!

Whats worse, bailing out banks or car manufacturers?
Should we (US) be bailing Ford, GM ect?

It seems that everyone wants the bailout to happen except the unions, who still, won't accept a pay/costs levelling with other foreign run manufacturing plants in the US.

You may as well ask the union leaders whats worse

It seems what is preferable to them is 1 million people not having jobs to go back to in the new year.

Dave

Edited by Mr Whippy on Friday 12th December 11:42

[427James]

vetteheadracer said:

Legacy costs per vehicle for the "big 3" are about $2,000 whereas Toyota it's about $300. Big three need to cut labour costs to help but this won't solve the problem. UAW need to wake up and smell the coffee.

+1

[Ex Boy Racer]

I'm no economist, but it seems to me that the mess we're in has been caused by playing smoke and mirrors and using more money to solve problems caused by the last stupid financial decision. At some point it all has to stop and everyone, whether car manufacturer or householder, is going to have to live within their means.
Which means stop the bailouts and live with the fact that the weaker institutions will die.
Yes it's gonna be hard, but at some point we have to stop throwing money around.

And when it gets really bad i'll buy myself a nice cheap F430 on a 5 year no deposit no guarantee huge balloon agreement...

[anonymous-user]

Well, well, well.

Another thread enabling the terminally stupid on PH (there are more than a few....) to vent their routine stuff that,

US cars are rubbish
US car industry is rubbish
US is rubbish

With the £ slumped by 25% against the dollar in recent weeks, the £ at an all-time low against the Euro and virtually no domestic motor industry it's clear good old UK can congratulate itself upon its resounding economic success.

[chevykevv]

randomman said:

American cars have been ste for years, would it be really that bad if they dissapered?

And British cars have all been brilliant haven't they?

If it carries on like this, we'll all be driving Chinese cars in a few years.

[RSJAS251]

You need to know where to draw the line and comparisons in a situation like that. Is the UK Government being approached by Woolworths for a handout NO!!

If you were to look at football clubs in this country a vast majority of them are run in the RED mainly because of greed by the Players for wages.

Back to the point!! If the US bailout these car manufacturers they will be sending the wrong message to every other business that if you get into trouble just ask For some cash, it is unsustainable to the economy to do that in any country.

It is unfortunate that every country is suffering but this is not really a recession but a realignment of businesses and the economy, the answer is to be more efficient scale back production for a few years until the business is again sustainable. Yes there will be alot of job losses but whos fault is that??

The old saying is true for the US at the moment "you made your bed now lie in it" Nobody can be wasteful or frivalous with cash and its true that BIG BUSINESS is the worst for squandering cash in huge sums now its come home to roost they expect the TAX PAYERS to help. I dont think they will be giving each of the US families a new car for free when and if it is all over do you. Much the same as the UK banks here our money bailed them out but are they passing the savings back to us in Interest Rates etc NO THEY ARE FKN NOT!!!!

My last point is what did all these BIG companies do with their cash when they were rakign in so called huge profits, we have 6 moths of gloom and every one is on the want and need help list for cash!!! Makes no sense!!!!

Please get me the FUC* OFF THIS PLANET PLEASE!!!!!!

[kambites]

chevykevv said:

randomman said:

American cars have been ste for years, would it be really that bad if they dissapered?

And British cars have all been brilliant haven't they?

If it carries on like this, we'll all be driving Chinese cars in a few years.

In a few years, Chinese cars will be better than European or American ones anyway.

[Fidgits]

nonplussed said:

UAW are playing a high stakes game. They know the US gov't can't let the automakers fail, so they're sticking to their guns on pay, until they approve the package anyway. stty thing to do in this situation, and as blinkered and short-termist as only unions can be, but that's what's happening.

yep - its what happens time and time again - Unions seem to be so stubborn they end up destroying a company/industry and all those people they 'represent', end up without a job.