Senate Kills Auto Bailout but money still to go to UAW and Big 3

What has happened during the night and this morning

Union balks and $14B auto bailout dies in Senate

Bush changes mind, may save auto giants

Wall St. bailout targeted for Big 3

UAW: TARP is ‘only resolution’

So the Democrats, UAW and the big 3 will most likely get what they want taxpayer money to hold them over until the Democrats are in total control and as a Bonus they make Bush look like a fool with no principals, and have the media calling the republican senators the problem.

When in reality the republican senators are the one’s with the best interest of the taxpayers in mind.

Politically tone deaf Bush Administration

I was watching some of the House debate on the Auto Bailout Bill Wednesday Night near the end of the debate. The one comment that really hit me as the core of this policy. One of the democratic congress people was clarifying the bill and ask the chairman of the committee (Barney Frank, since he authored the bill) to verify that this wording is correct. Barney Frank got up and said I am just a co-author. George Bush is the real author of this bill so I am not really responsible for it.

If this is not a telegraph that the democrats know that this bill will fail and that they are going to put the failure on the Republicans is as clear as day. This will leaving the democrats responsible for nothing as always.

The democrats remind me of Sargent Schultz “I hear nothing, I see nothing, I know nothing!”.
While the Bush administration is

See No Evil Hear no Evil Speak No Evil Monkeys

This federal government is a joke

Sanity in the Auto Bailout

Because this plan is actually sensible, has the potential to actually result in a successful private business and it holds the people who create the problem responsible there is 0% chance that the democrat leadership in Congress and President Bush will implement it.

The American Automotive Reorganization and Recovery Plan

The American Automotive Reorganization and Recovery Plan
Working families throughout our country are struggling to pay their bills and facing economic anxieties not seen in America for generations. Employers are finding themselves torn between staying in business and laying off people over the holidays. Nowhere are these challenges more acute than in states that are heavily dependent on auto manufacturing. It is essential that Washington address these challenges not through taxpayer-funded bailouts that prolong working families’ pain and put taxpayers’ money at risk, but by fixing problems and removing barriers that make it harder for working families to prosper.
Washington has failed this basic test with respect to the American auto industry. Republicans want to make certain that in its response to the resulting crisis, Washington does not fail American taxpayers as well. A responsible plan should do two things: it should protect taxpayers, and it should help auto workers and their families by allowing the Big Three to become competitive again. The Democrats’ plan does neither. Congress should not be stampeded into rubber-stamping a plan that guarantees failure at the taxpayers’ expense.
The Democratic Bailout proposal has three fundamental flaws:
•The only thing crazier than trusting the same management and union officials who got the Big Three into this mess to get them out is trusting a bunch of Washington politicians and bureaucrats – the very same people who ran up a $455 billion deficit last year. American auto workers and their families deserve better.
•If no private investors believe the Big Three restructuring plans are realistic enough to support with their own money, why should we put up taxpayer money? American taxpayers deserve better.
•The Big Three restructuring plan and the Democratic proposal lack accountability. There is no guarantee that once they get taxpayer money the restructuring they promise will occur. Once the taxpayers prop them up once, there will be a big incentive to keep bailing them out – keeping the industry dependent on government aid and further denying American auto workers the security of a viable industry that is back on its feet and ready to compete. American auto workers and their families deserve better.
What We Should Be Doing: The American Automotive Reorganization and Recovery Plan
Hard Benchmarks:
On December 2, the Big Three presented to Congress their plans for restructuring. While the plans included laudable goals, too few details were provided as to how the companies will actually achieve the restructuring and the savings they have promised. In some instances new agreements to achieve the savings would not be entered into for months or perhaps years.
The Big Three must lock in the restructuring they have promised in a matter of weeks, not months or years. Congress should instead establish firm benchmarks and a tight timeline for
restructuring. Such benchmarks will include for example requiring that by March 31, 2009 each company should reach agreement whereby:
•The companies’ creditors agree to a framework to reduce each company’s indebtedness by at least 1/3.
•The UAW holds to concessions already made and further:
o Concedes the elimination of Supplemental Unemployment Benefits;
o Concedes elimination of the Jobs Bank Program;
o Agrees to either reduce company retiree health care obligations or otherwise convert a portion of such obligations into equity; and
o Agrees to reduce wages and benefits to the levels paid by non-Big Three manufacturers.
A Process for Reaching Expedited Agreement, Instead of Nationalizing America’s Auto Companies
Because of the many legal and contractual hurdles to restructuring, the companies are urged to accomplish their restructuring through the use of a pre-packaged bankruptcy or another mechanism to bring all stakeholders to the table for an agreed-upon determination of their future. It is important that these stakeholders reach reasonable compromises amongst themselves. Creating a government bureaucracy or a “car czar” to arbitrarily pass judgment on the thousands of details involved with a restructuring is akin to nationalizing the auto companies.
Interim Financing: Insurance, Rather than a Taxpayer-Funded Bailout
The Big Three may need some form of interim financing as they finalize their restructuring. In normal economic times, if their restructuring plan is considered viable, such financing should be available in the private market. Because of the current credit crisis, limited assistance may be appropriate in the form of insurance, rather than a taxpayer-funded government bailout that replaces private investment. We propose that the government provide insurance, funded by the participants with a modest FDIC-like fee, which would cover up to 50 percent of the losses of new investment in the case of default, helping to unlock immediate private investment (not unlike debtor in possession financing). Such insurance would expire on March 31, 2009. This proposal ensures that taxpayers are protected and provides a powerful incentive for the Big Three to quickly implement their restructuring plans.

Auto Bailout request #2

The big 3 were asking for more taxpayer money to postpone their eventual demise into the future, 6 months, 1 year, who knows, but they will fail with the current business model. The date has just not been written.

As soon as someone explains why the taxes paid by a $15/hour employee at a different company with no benefits or retirement package should bailout the $40-$70/hour employee with great health benefits and retirement packages the bailout can go forward.

The situation the Big 3 are in is a result of short term, immediate gratification, do not hold me responsible, don’t say what I did is bad because so and so did something worse, I am a victim of something, American society that exists today.

Companies that make good products at non-competitive costs either change their cost structure or fail. The UAW needs to do the same, the gravy train is over, America has improved the rest of the world through capitalism that their products are more cost competitive. Americans is now dependent on cheap imports which result in American companies failing.

America has been in this bad cycle for a few of decades now, it is the elite political classes fault due to over regulation, over taxation, poor long term planning, short term thinking. These policies permeate the America Psyche which has resulted in the current economic situation. The kick the problem down the road a few months or years mentality for the last 40 years has infected America.

How many advertisements for big ticket items actually show the price of the product or just the monthly cost if it is financed? If one can make the monthly payment you can afford it, do not worry about the long term, give it to me today.

It all comes down to personnel responsibility, personnel integrity, doing the right thing when no one is watching

Bankruptcy would be the best thing for the auto companies. Either change or die, Evolution taken to its most harsh form.

It is a harsh reality but it is reality. Any bailout will just be flushing good money after bad.

Why the government should not bail out GM

Without a re-structuring of the way GM does business any money to GM is a waste of money.

Important part of article

Total compensation per hour for the big-three carmakers is $73.20. That’s a 52 percent differential from Toyota’s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59.

Full Article
Larry Kudlow column