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Frederick Engels and Karl Marx would be proud.

Hello Honda – Toyota. After 3 generations of buying GM cars, never again. Buy GM, support labor unions, Democratic Party & Obama – no way!

Tom in CA

Just keep drinking the kool-ade boys and you can agree with each other all day long. If corporations were doing so well the way they are then why the need for the massive corporate WELFARE, personally I would have much preferred that they went into receivership. If I were in charge most of them would not be able to just walk away, there would be prison time for some.

Now is the time to march, folks!!!!!!!!!!!!!!!!!! A U.S. president fires the owner of a private company!!!!! I’m mad as hell, and I’m not going to take it anymore!

If GM has ANY integrity, they will refuse this usurption and immediately file for bancruptcy. They can reorganize, tell the unions what they will do and how they will be dealt with, and then go on and reorganize. This will be the final solution, anyway, so why not get it done and over with.

And a hint to other companies, DO NOT TAKE GOVERNMENT MONEY! First, it is our (taxpayers)money, and second, your company will never be yours again.

What to we do? Where can we march?
Joanne

@Joanne: See if there is a Tea Party near you. It’s the protest phenomenon that is sweeping the nation.

Mike, There is one on the 15th that I’ll be attending! It just seems so little for all the wrong that is being done to our country. Prayers and a good drink will bring me back to earth! Appleton, WI tea party, here we come!

@Joanne: It’s more than just attending one event. Tea parties should be a springboard to a greater political movement that will bring this nation back to sanity.

See my post below for more:

Basic Training for the Conservative Comeback!

Dennis in NY: They need the corporate WELFARE because they were forced by the government to get on their knees in front of the UAW and give them a Clinton. That, combined with the fact that they have been forced to meet egregious regulations both by Congress and by California has cost them many more billions than they have received in bailout money. If the government WOULD stay out of business, then they COULD stay out of business.

No doubt Wagoner will have a big fat pay off for his 8 years of incompetence.

I guess you would rather the auto-industry went bankrupt than accept billions from the government. If certain private industry companies are unable to stand on it’s own two feet then there should be strings attached to any bailout including a change of management. If a private firm took over or injected billions of cash into another failing firm – then one of the first things they do is remove the upper management.

@GaffaUK: As you no doubt recall from British history of the late 20th Century, the nationalization of industries was a HUGE mistake. It took Margaret Thatcher to put things as right as she could and still she was blindly opposed by socialists every step of the way.

I used to feel bad for all the workers who would have tough times if GM went under until I realized they are complicent in it’s down fall as well. THEY demanded the tons of benefits far above what most workers in the US received. The consumer paid for it and now they are reaping the benefits of their greed.
I know of two former Dodge employees who recieved over 100K on their termination.. who paid for that?
As you sow so shall you reap.

And why is the obamanation doing this in the first place???? Socialism pure and simple.. that idiot should not be involved in any business..

I guess you would rather the auto-industry went bankrupt than accept billions from the government

Yes

@Mike

I dislike nationalization as much as you do. Look at the disaster that was DeLorean (who was give 35million by Thatcher). However the British don’t have much of a car industry left.

So – would you have given any companies – car, banks or insurance any bailout money – or would you have let them collapse?

@GaffaUK: “the British don’t have much of a car industry left. “

EXACTLY!

Obama’s bailout of GM will be the death of it.

So if the big three went bankrupt and all the other companies who rely on them also laid off their workers – over a million people unemployed – then what would you do? Hope there are enough jobs around for them to fill? How would that impact the US economy?

Gaffa, we’ve already had many airlines declare bankruptcy… they are still flying, still employing staff. Bankruptcy is often just a restructuring, but without the taxpayers bailout money. This is why most are suggesting they declare BK. Saves the taxpayers bucks, but they are still around – perhaps in a leaner/meaner operational mode.

@GaffaUK

If they had been allowed to fail 30 years ago, they would have either shaped up or been replaced by newer, smaller companies. Instead, they took the bailouts and interest free taxpayer backed loans and bought out all of their smaller competition. Many of the brands you see the big three selling today used to be smaller competitors. The government has taken sides over the decades and picked the winners, propped them up and set them up for the fall. A true free market would thinned the heard based on performance rather than politics, and there wouldn’t even be talks about bailouts now.

If anything, it’s time for all of the nations CEO’s to consider walking away. To be honest, my family has been discussing walking away from our business, despite the fact that we are operating strong. We are tired of being under appreciated by those we employ and those we serve. We could cash out tomorrow and all retire yet we all continue to work hard, create jobs in our community, and each pay more than our fair share of taxes. We support the local charities, we support our local athletics programs, and most my family have been volunteers for one program or another. For what? So our President can stand up there and tell us that we haven’t done enough? I’m sick of it. There just doesn’t seem to be a safe place in the mountains of Colorado to disappear to. They can find us anywhere.

Mike, the UAW has already agreed to lower labor rates to those competitive with the Japanese auto makers with US factories. They also have to trade some cash for equity with the retirement plans. Had most of this in my tag team strategy to control auto industry post a couple of days ago.

The unions are also having to make concessions, swapping equity in the companies for 50% of the companies’ cash contributions into a union-run trust fund for retiree health care. In addition, they must agree to work rule changes and reducing hourly labor costs to be competitive with the US facilities of the Japanese auto manufacturers.

Can’t find the quote in the news yet today – but on Cavuto this afternoon, I heard Obama ranting about how the auto industry can’t keep making SUV gas guzzlers, and that they have to accept some strict changes. This is why I think they are tag teaming the auto industry. Geithner and Obama (also thru the auto czar panel and Larry Summers) on the financial end, and the Congressional two-prong legislation for upped fuel standards, and the new House bill that’s demanding no less than 80% of cars sold or produced in the US are flex-fuel vehicles.

Bottom line, they will be using this money to control not only the finances and leadership, but the production line.

And California is planning to ban the sale of black cars! There’s a good use of government time. How many government jobs will they have to create to enforce that?

Wake up America! We are getting a stark look at what we can expect from this administration. The arrogant Emperor is a great deceiver.

I would rather see the Big 3 got thru bankruptcy and fix their organization and get the UAW to actually control their wanton disregard for operational effects from their gigantic benefits they are demanding. Yes, they lowered the pay, but still have a couple Billion in benefits that they are paying their retired workers. Think about SS is going to be also. When you have more money going to the retired than to actual workers, you are going to run out of money. And when the UAW owns a golf course and gets the big 3 top pay for the maintenance for that golf course, you have problems also.

“Given the history, a change in management could hardly hurt and might do some good,” Sen. Charles Schumer, D-N.Y., said Sunday.

The unmitigated GALL of these people in government! As if this same statement, times about 1,000, wouldn’t apply to them!

The Obama administration calls its task force “a cabinet-level group that includes the secretaries of Transportation, Commerce, Labor and Energy. It will also include the chairman of the President’s Council of Economic Advisers, the director of the Office of Management and Budget, the EPA administrator, and the director of the White House Office of Energy and Climate Change. The Task Force will be led by Treasury Secretary [Tim] Geithner and [National Economic Council] Director Larry Summers.”

Why not add Bobby Kennedy and Nancy Pelosi’s son as well? What the heck, they’re good “car men” too, aren’t they?

Madness. Pure madness.

On the other hand, I look forward to watching their guidance of GM/Titanic, under their watch. But no doubt, this same crew will continue to blame it on W for years to come.

Gaffa, we’ve already had many airlines declare bankruptcy… they are still flying, still employing staff. Bankruptcy is often just a restructuring, but without the taxpayers bailout money. This is why most are suggesting they declare BK. Saves the taxpayers bucks, but they are still around – perhaps in a leaner/meaner operational mode

Check this article out…

http://www.msnbc.msn.com/id/17858408/

Whilst I don’t mind out of control, over demanding – unions being cut down to size – there are still poor management decisions and excesses which are also out of control…

Under US Law, Chapter 11 Bankruptcy guarantees accountability and order to restructuring under DUE Process, which may be a foreign concept to those that are not familiar with US Law.

Industry that is nationalized is terminal. It just goes away.

@GaffaUK: There have been occasions when poor management has been replaced by the stockholders (though we are all still waiting for Jeff Immelt at General Electric to get the boot). But I can’t recall an instance of where Union bosses have been thrown out of office. Perhaps someone can, but I cannot.

To me at least the Unions are the ultimate Oligarchy. Leaders are elected for life, or at least until retirement age, and there is very little accountability to their membership.

I really feel sorry when I see all this happen.
This is really going back to where we were last time. It’s for sure not as bad, but it’s getting there….enforced volunteerism, private companies taken over by govt and forced to make so-called green vehicles…..

On a more primitive, extreme and brutal scale we are describing the mainland in the 70s.

Gaffa, in comment #15, you erroneously leaped to the conclusion that a BK results in the complete disappearance in an industry and it’s jobs. I pointed out to you that a BK is a “bailout” without the taxpayer cash, and done by our court BK trustee system, and not the POTUS and his self-appointed auto-czars who don’t know anything about that business.

Then you come back with an article by the MSNBC *travel* columnist who whines that the airline BKs were just another money grabbing scheme by the airline execs. Let’s get a few specifics straight here.

Mr. Leocha might well stick to talking about the different values of cruise trips than to wander into the BK area. He effectively condemns all BKs, laying the blame at the feet of the “court” in general. Obviously the man knows nothing about BKs. There is a trustee that is in charge of handling the proceedings. And while it is entirely possible that some trustees are better than others, it’s no reason to condemn a process that has keep many a business operating that would have otherwise failed… and without the taxpayers bailout.

At the heart of Mr. Leocha’s complaint is his misleading, populous headline – which was timed to piggy tail on refueling the AIG exec persecution.

Bankruptcy courts have just about rolled over and played dead for airline management. I can’t remember the last time I heard pilots, flight attendants or other union members had been favored in any court decision that involved a confrontation with management.

Consider the damage. Stockholders have been wiped out. Pensions have been abandoned by the bankrupt companies. Flight attendants have seen their work rules changed dramatically. Pilots are being squeezed for more and more flight time. Aircraft orders have been canceled. Contracts with suppliers have been torn up. Terminal leases with airports remain unpaid.

All of these results are part and parcel of *every* restructuring. And that includes what Obama and his know-nothing auto czars are demanding of GM and Chrysler. When a company is operating at a cost above it’s income (like our federal government…) it has to streamline.

Whether the banks, the auto industry, or any other company, we have to face that fact that some are going to have to severely cut back. There will be pensions lost, their labor regulations changed (mentioned above in a suggestive “attendants have seen their work rules changed dramatically”) However all this can happen *without* another $20bil of taxpayers money, and without a President who insidiously inserts his unConstitutional power into micromanaging business affairs by bypassing our bankruptcy court system.

Here’s the real corker that shows this guy’s populous, “hate the rich” mentality…

The only parties in the current spate of airline bankruptcies that seem to be flourishing are the airline executives, the lawyers and a handful of bankruptcy financing firms. This greedy triad has been working the bankruptcy system to line their pockets — and to hell with the rest of the players.

Do we hear this guy’s rage for the attorney’s getting rich off healthcare lawsuits, driving up the costs? Does he even have a clue that those in Congress hold a special place in their hearts for trial lawyers as most of them are law grads?

Nope… I’ve long said these companies need to go thru our BK court system to restructure, and let a BK trustee make the decisions. I have no idea what power Obama is using to assume the power of a BK court, as well as a human resources department head for these companies. But this stuff is unbelievably bad juju overall.

@Gaffa,

The government’s intervention wold not be necessary if the free market was allowed to function properly. Bankruptcy has always been THE tool for misallocated capital to be reallocated. If an automobile manufacturer kills itself by not constantly adjusting to meet a volatile market, it is an overall drag on the economy.

You aked if we should let a huge auto manufacturer to ***** of be artificially boosted for a period of time by the government. Maybe the following analysis of a simulated model will help explain how a free market responds to the downfall of a major institution: The simplified model makes it easier to see the effects, but the model scales up as the complexity of the situation increases.

The scenario: Two auto manufacturers (Alpha and Beta) exist in a fictional economy, and they have equal market share, but Alpha hasn’t kept up with changing times, and for other reasons has to cease operations. Since both companies made all the cars for the economy, all new car sales will go to Beta. Beta can’t make enough autos to keep up with the increased demand, so it invests in more manufacturing space and hire enough workers to meet the increased demand. Most of the people who lost their jobs when Alpha went bankrupt will stand a good chance to work for Beta. The same events occur for the companies that supplied parts for Alpha and Beta. Beta’s suppliers have to supply twice as many parts, so they expand just like Beta did, or Alpha’s suppliers change their product lines to be able to supply parts for Beta.

The system is self-correcting, as long as government doesn’t decide it needs to “help.” In general, as long as demand can be met by supply, it doesn’t matter if the number of suppliers changes. If overall efficiency, costs, demands, etc. do not change significantly, the system is completely auto-adjusting and self-correcting. If Alpha decides to restructure, it will correct its mistakes, even INNOVATE and become more COMPETITIVE, and has the ability to win back its customers and its workers. As long as demand doesn’t decline, and other manufacturing and economic metrics don’t change significantly, a company that is able to adjust to the ups and downs of an active (even volatile) economy will be able to make the necessary changes to stay in business.

I know I’m being repetitive, but it bears repeating: in a free market society, as long as government or other entities do not interfere and impose unnecessary obstacles and costs, the market can self-correct. The simple model/scenario above shows how it can happen. And for the most part, the U.S. market has functioned much like this for decades upon decades.

It’s only when unnatural (i.e. man-made) obstacles develop that the market suffers. There are a lot of factors that can tip free market economies toward expansion or contraction, but the suppliers and customers who act wisely and build in buffers to ride out highs and lows are what improve the health of the economy. Excessive intervention from government or any other external agency can stress markets past the point of recovery. Bankruptcy (as shown above) is the most expedient way for unhealthy entities in a market to get flushed out. To the extent that outside agencies attempt to control any but the simplest of markets, they inevitably delay or prevent the healing effects of bankruptcy and other free market tools from restoring the economy to its normal state of dynamic stability.

We can have a separate conversation about the various factors that have kept our economy from functioning as a healthy free market economy. The above simulation was intended to dispel some of the myths surrounding the adverse affects of bankruptcy in a free market economy, particularly the issue of unemployment during bankruptcy. In most cases, as long as the market is allowed to correct itself, unemployment due to bankruptcy can be kept low without artificial means.

Jeff V

Interesting.

So now after Obama’s interference, we have one rich, probably pissed off Republican with an axe to grind. Said pissed off Republican has mucho economic chops, and coupld probably easily take on the congressional drone in his district (or buy a house in any damn district with a vulnerable Democrat; which they all will be in 2010).

Keep it up, President Obama. When you sow the wind, you’ll reap the whirlwind. 🙂

@sigmundringeck: Obama intends nothing less than an American version of the Chinese Cultural Revolution.

We do hope it is less violent than the original but there is no guarantee.

When a rent a mob of 40 ACORN troublemakers can get massive worldwide media attention for their protest outside AIG executives homes and the tens of thousands of people attending Tea Party protests are ignored it is clear evidence that the media will support whatever form of witch burning Obama has in store for the rest of us.