General Motors on Life Support???

[Guest imported_Thriller]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: 1948Lincoln</div><div class="ubbcode-body">I wonder if he or Obama has any idea about the ramifications of all of this. But, honestly the economy is the American People's fault, they created a situation where they went out and bought, bought and bought, buying a 600,000 dollar house, then buying a 30,000 car buying everything from t.v.'s video games, etc. and the newest stuff on credit, not buying American, and making poor investments and following the group cattle mentality, whatever their friends do they do. The economy from the 90's and forward and especially the last 9 years has been fake, because everyone was buying on credit not cash. </div></div>

Forgive me if I'm wrong, but isn't the tax deductible status of mortgage interest also playing a part? As I understand it, many people never pay off their mortgage, instead adding on to it, because the interest is tax deductible. So, it may not be a $600,000 house that does one in, but the $200,000 house, and a pair of $50,000 cars...or some other similar combination.

Here in Canuckistan, the interest on a mortgage isn't tax deductible, so there is a greater tendency to pay off the mortgage so that those mortgage payments could then be turned into savings or some other purchase.

So, another question...is the $700B plan that I've been hearing about all set up as loans? Or is the financial industry being bailed out while the automakers are being held to some other different standard? If that is the case, then I think the political leadership is really messed up...service industries like banking, lawyers, accountants, and the like don't build genuine wealth. Something has to be produced to produce wealth. Are the folks who bought IBM stocks at $200/share back around the late 80s wealthier for it? The playing with paper money (or should I say money on paper) creates a big mess. Putting a house on paper doesn't give you a home...building a house does. I'm not saying everyone should go back to being hewers of wood and haulers of water, but it does seem that the North American economy has moved a bit far from stuff that genuinely matters.

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Thriller</div><div class="ubbcode-body"> Forgive me if I'm wrong, but isn't the tax deductible status of mortgage interest also playing a part? </div></div>

Therein lies the downfall of recent economics... and the promise contained within Obamanomics... It goes against what we know of human nature...

To wit: If you want people to spend, incentivize spending. A good way is to make debt interest tax deductible. Better yet, make home equity mortgage interest tax deductable, so you can buy that $50,000 car and write off the interest. Nevermind that you'll likely be paying for it long after the tin worms have reduced it to scrap.

Another way is to remove consequences for foolish behavior with mortgage writedowns, easy bankruptcies, bailouts, and the like. Falling on your face is an humbling experience, and it builds character.

To wit: Want a pathetic national savings rate? Disencentivize saving behavior by taxing (as regular income) the interest earned on savings accounts and other savings vehicles. Then, if you do well, get taxed again on the growth in principal value as capital gains.

Want to keep doing it? Don't teach financial principles in high school. Then you wind up with a citizens that:

1. Think it's great when they get a tax refund from the Goverment (assuming they actually worked and paid taxes) without grasping that it is their money they are getting back (without interest, by the way)

2. Take that morgage deduction without realizing that even in the highest marginal tax bracket, they're only getting back about 34 cents on the dollar of interest paid out. Cool.

3. Get a big mortgage and a low rate... forget who said it (Harwood?), but if you've got a mortgage payment that's less than your Lexus payment, you should wonder...

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Thriller</div><div class="ubbcode-body"> I'm not saying everyone should go back to being hewers of wood and haulers of water, but it does seem that the North American economy has moved a bit far from stuff that genuinely matters.</div></div>

We're closer than you might think!

Cheers,

JMC

[Reatta Man]

John,

You sound like a Dave Ramsey fan! If you are not, you would REALLY enjoy the common sense and savings logic many of us have been talking about in here.

I guess the real shock to all of this hasn't sunk in for many people yet. I'm seeing 40-50% off sale ads for after-Thanksgiving sales, yet supposedly, we are in this super-duper crisis that the Dems claim Bush caused and they will fix. The newsies every day show families with no job, but everyone in the family has a new cell phone and iPod, a $25K SUV in the driveway that has $500/month payments, living in a 3 year old house financed on an ARM. Sounds like two trains on the same track heading towards each other at full speed to me.

When we grow up and gauge our quality of life on the value of family, friends and spirituality rather than the size of the HD TV we just bought on sale at Wal-Mart, maybe some of this other stuff will sort itself out.

Unfortunately, I'm afraid we are at the tip of the iceberg. My generation--the baby boomers--are still determined and planning to retire with a $250K motor home and a house in Florida--even if they have to do it financed on Visa because there isn't as much money in their retirement account as they expected. In other words, more of the same......

As for bailing out the Beg Three, I really have trouble understanging how this is going to work. As it looks now, we are supposed to loan freshly-printed money to GM at 7, 8 or 9 percent so they can build cars at or near a loss and then offer 0% financing thru GMAC for 60-72 months to people who are making 60% of what they used to make during the peak years. Meanwhile, the CEOs will keep their jets, UAW keeps their ridiculous contracts, and I am supposed to pay more taxes thru the Nobama tax plan to pay for all of this because Joe Biden says that is the 'patriotic' thing to do. Huh???????

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body"> You sound like a Dave Ramsey fan! </div></div>

Dave Ramsey rocks! We're well established on our debt free plan and expect to retire the balance of non-mortgage debt within the next 10 months and the mortgage in about eight years. To date, we've sold a house, paid off the cars, and eliminated all interest paying card debt, reducing outstanding debt by just under $400,000. Dave's sunk cost analysis woke us up and got us out of the Florida real estate market just in time. We missed selling at the peak, but took just a haircut instead of a fleecing.

At the risk (or, is it reward?) of causing appoplexy and gastric distress to the 'progressives' and the Obamabots, if we lived more as Dave and Dr. Laura adivse, we'd be far better off. Self reliance, personal and fiscal responsibilty, and a solid spiritual grounding are their own reward. Understanding the concept of "NO!" is essential to success.

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body"> ...the real shock to all of this hasn't sunk in for many people yet. I'm seeing 40-50% off sale ads for after-Thanksgiving sales... </div></div>

How 'bout the real shock of seeing your 401k/403b/457/TSP value at 40-50% off? If that doesn't get your attention, there is no hope. Forget the Winnegago and the 65" plasma. You want it badly now, that's how you'll be getting it... for the next five years, at least. Oh, wait, these folks don't have retirement savings... "somebody" is going to pay their gas and mortgage. That's fair, isn't it?

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body"> As for bailing out the Beg Three, I really have trouble understanging how this is going to work...</div></div>

I don't think anyone has a handle now, although the concept of a 'packaged' BK looks promising, we'll see...

Cheers,

JMC

[MarkV]

Isnt it ironic that this is happening exactly 60 years after the beg 3 screwed Preston Tucker?

[Reatta Man]

John, (and to anyone else who is determined to get out of debt)

WHATEVER you do, do not let anything keep you from getting out of debt.

Dave says a paid-for car drives differently; words don't begin to describe how it feels to not write a check for a depreciating asset every month. And, if a small problem comes up, you have NO desire to trade off a paid for car just because it needs a part or an adjustment.

It is GREAT to be able to buy anything you see or anything you want, but YOU don't WANT to do it just to go back into debt!

I guess the scary part of all of this is that these bailouts are heavily dependent upon the American companies and American consumers going back to spending what they don't have in order for someone's balance sheet to look good.

Joe

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body">

I guess the scary part of all of this is that these bailouts are heavily dependent upon the American companies and American consumers going back to spending what they don't have in order for someone's balance sheet to look good.

Joe </div></div>

Joe, what about the people with money,.... they should stop buying cars? Would you like to see them keep buying foreign cars as they usually do? Where does that leave us & our ecomomy?

[Guest imported_Thriller]

I just looked up Dave Ramsey as I can't say I've heard of him before...sounds a lot like Dave Chilton's "The Wealthy Barber"...common sense, no nonsense, practical advise.

My father was a farmer...he had to take on debt for some big stuff - land, equipment, and the like. He's been gone for a number of years, but I remember him saying how crazy it was for anyone to buy something small, like a TV, on credit. Don't buy what you can't afford.

I'm still on the fence with how things are going to play out...I see both sides of the argument as to whether or not to loan the companies the money. I also see irony in that the $25B is relatively small compared to other numbers bouncing around and I haven't heard about whether those are loans or not.

At any rate, I'm beginning to think things will be a bit goofy for a while...time to work on becoming more self-sufficient...big garden going in at the farm next spring for sure for us...hopefully it doesn't get too out of control while we're in Colorado.

I must admit I generally like the concept of the protectionist measures, although I don't like to see them going against Canada (and trust me, there are plenty of things that lean in that direction). If what you all say about tariffs in other nations is correct, then I'd suggest that turnabout is fair play. I'm not sure it should be a set amount though - make it a percentage of the value of the vehicle. That way, the Lexus has a higher tariff than the Honda Civic or similar Kia. It also becomes, like our GST (a sales tax) a tax on luxury. You are going to pay 5% GST on a car, but you'll pay double or triple the amount if you choose a Cadillac or Lincoln over a low end Chev.

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Thriller</div><div class="ubbcode-body">

I must admit I generally like the concept of the protectionist measures, although I don't like to see them going against Canada (and trust me, there are plenty of things that lean in that direction). If what you all say about tariffs in other nations is correct, then I'd suggest that turnabout is fair play.

</div></div>

Derek, rest assured anything that I've been reading hasn't been discussed what we been talking about. One thing our government seems to do repeatedly is give other nations our hard earned tax dollars, and most don't even like us. Whether it being a loan or gift we really never know. Like I stated in this thread or another, they all got us here, now it's in their lap to turn this mess all around, but unlikely.

[Reatta Man]

Bob,

I DO wish people with money would buy cars. I have owned more than 50 cars in the last 25 years. And, in the last 5 years, I haven't had a loan on any one I bought.

But I can't wish for people to sign up for a $25-35K loan on a car that looks virtually just like a 2006 or 2007 model (or even a used 2008) for 40-60% of a new car price. Can you?

Keep in mind that people signing up for over priced houses with over priced mortgages that they never intended to pay out is what got our entire country in trouble.....in other words, far, far too much bad debt.

[jscheib]

+Interesting quote on the last post, re Peter Drucker. I wonder how many business schools and politicians these days remeber his writings??? Thanks for reminding me.

John

[Guest Reatta1]

Well, looks like I have to re-submit my last post since it got zapped. I'll leave out the sarcastic political rant this time.

I would be ok with a LOAN for the Big 3. BUT how many of you actually believe it would be a LOAN. How many months/years down the road would they start complaining about how it wasn't enough or it didn't work and they just can't pay it back? Do you think all those sleasy politicians would get an iron clad, written, signed, sealed and notarized contract saying they had to pay it back in X amount of time? If you trust those politicians to do that, well, ---- I got a bridge for sale. I still think it's time for them to bite the bullet. Thought the same about the 700 BILLION bailout for the banks and loan outfits too. This country is certainly in the 'throw good money after bad' mode and to hell with the taxpayer. We'll just raise taxes and drive more business abroad. Yeah. Works for me. Right!!!!

[Guest my3buicks]

I hope GM gets it soon as far as what to build. I like the Buick line just fine. I think as Buicks go the entry into the segments it is in fit well and with the Enclaive it even excells in it's class. But with the economy, gas prices (down now, but surely will go up again) I think the axing the Rendezvous and having nothing similar to it for the multitude of Rendezvous owners to go into was a mistake. I for one didn't want to opt up into the bigger Enclaive (although I love them) and also didn't want to go down the GM step ladder to a Saturn View(Would have loved to see a Buick version of the Vue) or similar. I left the GM line for a Volvo XC 70 as it gave me all I needed and wanted and GM doesn't really have a Wagon crossover on the market.

[MarkV]

Money is just paper now, so you can print and print and print. As for the politicans, the voters are dumb and they keep putting the same old crew in to fix problems which they caused themselves, they vote for tax hikes on themselves, and then everyone wonders why they have bad leadership and high taxes- Because they voted for it!

[MarkV]

"But with the economy, gas prices (down now, but surely will go up again"

Hate to sound like a conspiracy theorist, but, isnt it interesting how the gas kept going up and up and then now it is going down, it was a ploy to get everyone against the Republican party, because though the economy is bad, it does not affect most people on a daily basis, but what does? -GAS! and gas is still needed now more than every, so, demand is really not going down, I have seen as many cars around now as I have during the entire situation and before, So, people blame the party in power. Technically gas prices should remain unchanged, but, in reality gas could have only been 1.90 a gallon anyway. They will not go up as they did before, maybe a little here and there, but, not like it was.

[Guest Frenchy32]

I feel that you have too many on the corporate level that has put the big 3 in trouble if they were not so much for themselves getting pay checks in the million including big bonuses and about these lear jets they have. Sell all of them and lower all of these jokers Corporate manager payroll in put the money where it should be maybe than they would not be asking for that 25 billion loan. And put the money back into the factory.

Frenchy

[MarkV]

Stop Pontiac, Hummer, Saturn and Saab, that will fix the problem

[MarkV]

Concentrate on Chevy, Buick and Caddy

[Steve Braverman]

Last year, we decided that we needed a mini van. I look at cars like this as appliances. I was determined to look at everything. All the crap I read indicated that the Toyota and Honda vans were the best, so I looked at them. I also looked at Hyundais and Kias. Ford killed off their mini van, the salesman telling me that nobody wants them anymore and I should buy an SUV instead. The GM mini vans were non-contenders to me, too ugly.

The Toyota salesman was a big a__ h__, and the Honda guy refused to actually give me a price on the van or a value on my trade. He actually insisted on walking me around the Odyssey and showed me the revolutionary features such as the maintenance-free battery and the tethered gas cap. Ooohh.

The one van I wasn't really interested in because I felt it was too boring were the Chrysler products. I walked into the Chrysler/Dodge/Jeep dealer and told the salesman that I felt that all the minivan are basically the same (kinda like toasters), and that I just wanted the most van for the least money. We LOVE our Grand Caravan! And it was considerably less money than anything else.

Interestingly enough, a year later my father decided a mini van would be just right for him also. We went back to the C/D/J dealer to see what they had on the used lot, but prices had gone up for some reason. I got my 2007 in April of 2007 as a certified pre-owned with 13k miles for $19k. Now there was nothing for less than $25k on the lot. Dad wound up with a 2004 Mercury Monteray with 30k miles for $12k. The reason for the low price is that Ford has killed their mini van line so the values dropped.

The funniest part is that my friend somehow feels that his $36k Sienna is cooler than my $19k Caravan with the same features. Oh, and I got a better warranty. Guess who's laughing?

Yet somehow the American people flock to foreign cars that are almost always more expensive than the domestic counterpart. It's all marketing and people's perception of what's better.

[Guest BJM]

Steve,

That's the rub. Tell those Honda and Toyota dealers to go [you know what]

As a Mazda master technician from 1999 to 2005, I learned that ANY modern car is superior to what was built 20-35 years ago.

NO modern manufacturer can afford poor quality. Does an occasional problem still occur? Yes! But overall you will get good quality from a Chrysler, Buick, or Ford.

When I started reading your post, I could see where it was headed. Then you threw me for a loop. Personally I like the newest iteration of Chrysler minivan styling (kind of squared up) but I want a top of the line Chrysler Town and Country and so I don't even bother going in to look. $$$$

SUV's are not the end all be all. The sliding rear doors on minivans are awful nice, as is the configurations offered. The light bright interiors. Some SUV's with their tinted windows are like dungeons back there, I just want to fall asleep!

Minivans place their riders in the platform not over the wheels as much as SUV's so you get a better ride for passengers. FORD was stupid, things swing around and now they don't have a product.

Minivans offer slightly better handling then SUV's and the same ride height. How often do you really need 4wd?

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Steve Braverman</div><div class="ubbcode-body">

Yet somehow the American people flock to foreign cars that are almost always more expensive than the domestic counterpart. It's all marketing and people's perception of what's better. </div></div>

Steve, in '06 my son bought his first new car ever, an '06 Dodge G/Caravan. He needed something bigger than a car for his family. He saved thousands over a Honda or Toyota. He is extremely happy with his Dodge.

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: BJM</div><div class="ubbcode-body">

NO modern manufacturer can afford poor quality. Does an occasional problem still occur? Yes! But overall you will get good quality from a Chrysler, Buick, or Ford.

</div></div>

If you think about it, <span style="font-style: italic">most </span> all components today go into all cars, unlike years ago.

[Guest imported_Thriller]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Steve Braverman</div><div class="ubbcode-body">The Toyota salesman was a big a__ h__, and the Honda guy refused to actually give me a price on the van or a value on my trade. He actually insisted on walking me around the Odyssey and showed me the revolutionary features such as the maintenance-free battery and the tethered gas cap. Ooohh.</div></div>

Back in 1999, I was going to be trading in my old F-150 on a minivan...we did the same as you in keeping an open mind and checking out the various options. The Toyota salesman had a measuring tape to prove to us that the Sienna was the only minivan not capable of holding a 4'x8' sheet of plywood / drywall flat on the floor as it was only 44" wide in the back. Since I would not have a truck, this became a low level requirement for me...his sales tactic lost him a sale.

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The funniest part is that my friend somehow feels that his $36k Sienna is cooler than my $19k Caravan with the same features. Oh, and I got a better warranty. Guess who's laughing? </div></div>

It's impossible to option a Sienna over $31K unless it's 4WD (nla on Grand Caravan), and at that it totally maxes out at barely over $37K with near-Mercedes C-Class-like equipment. The Dodge's base price stripped is nearly $23K. $19K was a GREAT deal even for a potential orphan car no matter how it's equipped!

The Dodge does have an unlimited drivetrain warranty, but the rest of the warranty is actually poorer than the Toyota. Also as no less than Jim Cramer (this week) on NBC has predicted the imminent demise of Chrysler before the end of the next year, that's likely a moot point.

The Dodge is a very good minivan, but nobody's this much worse/better/overpriced--"import" or otherwise. You don't have to make the other guys into worms to talk up your guys. They just have to exist.

[imported_buick5563]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: 1948Lincoln</div><div class="ubbcode-body">Stop Pontiac, Hummer, Saturn and Saab, that will fix the problem </div></div>

Why kill three car lines that offer convertibles to concentrate on Buick? Kill the Solstice to save the LaCrosse? That doesn't make sense from a brand excitement point of view.

All of the Dave Ramsey theories are good, too. Except we want people buying new GM, Ford, and Chrysler products, don't we?

And no, "W" hasn't got a clue. Blaming future politicians for possible further downfalls is just plain silly, while Dubya goes to Peru to further push global free trade.

[MarkV]

"And no, "W" hasn't got a clue. Blaming future politicians for possible further downfalls is just plain silly, while Dubya goes to Peru to further push global free trade."

He obviously has an idea, Obama does have the idea to, but are either willing to do anything? No! Is Obama going to repeal NAFTA? NO! Is he going to raise the tariff? NO! They are both bad news. Think what you wish, but, w/o a repeal of NAFTA and a hike on the tariff front, that will be it for the U.S. industry

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: buick5563</div><div class="ubbcode-body">

All of the Dave Ramsey theories are good, too. Except we want people buying new GM, Ford, and Chrysler products, don't we?

</div></div>

It's really amazing how many Americans want GM, Ford & Chrysler to fail. Let's all go back to 1941 when these companies were building armor that was helping us fight & win a war. What a sick generation we have now!!! Shame on America!

[Steve Braverman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body"> It's impossible to option a Sienna over $31K unless it's 4WD (nla on Grand Caravan), and at that it totally maxes out at barely over $37K with near-Mercedes C-Class-like equipment. The Dodge's base price stripped is nearly $23K. $19K was a GREAT deal even for a potential orphan car no matter how it's equipped!

The Dodge does have an unlimited drivetrain warranty, but the rest of the warranty is actually poorer than the Toyota. Also as no less than Jim Cramer (this week) on NBC has predicted the imminent demise of Chrysler before the end of the next year, that's likely a moot point.</div></div>

Yes, you caught me. My friend's Sienna is AWD, so I guess it's not a fair comparison. My Caravan came with a 8/80 bumper to bumper warranty as a CPO car.

The CPO Odyssey was $25 in stripped down form. My Caravan is loaded. Even on brand new vans, Chrysler had a $4k discount right up front. Toyota and Honda were charging full sticker price, and they made it seem like they were doing me a favor.

I'm not bashing the Asian carmakers, I am just pleasantly surprised by my satisfaction with my domestic. I have owned a string of foreign cars. Mostly German (BMW and VW), with one English car (MINI) and a world car (Suzuki - Korean car with Australian engine, German transmission and a Japanese name, all made by GM).

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">It's really amazing how many Americans want GM, Ford & Chrysler to fail. Let's all go back to 1941 when these companies were building armor that was helping us fight & win a war. What a sick generation we have now!!! Shame on America!

</div></div>

That is entirely too simplistic an analysis of the situation. I doubt there are 5 people in America that want to see anybody go out of business or lose their job, let alone see the country's industrial base weakened by losing the auto industry to foreign control like in the U.K.

The people who don't want to spend your tax money to save GM/Ford/Chrysler are more of a mind to let them take the medicine they've created for themselves. For people of that mind it's better to let the poisen run it's course than to mask the symptoms, lest the Big 3 succumb to it's temptations again. As they see it this is somebody using the public till to make up for years/decades of improper living, no different than people on welfare, in prison education programs, receiving publicly funded drug treatment and/or abortions, living off of our foriegn aid, or any of the myriad of other things people complain about on AM radio.

It's a cruel & heartless way to view the situation, <span style="text-decoration: underline">but that's what capitalism is.</span> Those who are surprised by that aspect most likely never thought they'd see or have to deal with the other side of that logic in their lifetimes. Being seduced into a complacency that says you'll always be a winner is all too easy, and all too American. Shame on America indeed.

Lets hope capitalism doesn't prevail.

[Reatta Man]

Ah, Dave, there you go again!

"Let's hope capitalism doesn't prevail" sure sounds a LOT like your wishes for $30 per gallon gasoline a few months ago just so you could push your own agenda. Your true colors never change, and eventually show through in these discussions.

What DOES need to prevail are two things:

1. People need to get out of the mindset that bankruptcy equals stopped production. Few companies stop producing their goods or services during bankruptcy. If people will stop thinking that BK means everyone is out of a job due to ceased production, then a BK isn't automatically ruled out of consideration.

2. The UAW-induced labor costs have GOT to go. Yes, they also need to park their private jets and stop paying ridiculous salaries to a very small percentage of leadership, but that is just a diversion for some people to use as a distraction for the high labor and benefits costs.

http://www.heritage.org/Research/Economy/images/wm2135_chart1.gif

[Dave@Moon]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body">http://www.heritage.org/Research/Economy/images/wm2135_chart1.gif

</div></div>

Auto workers are well paid, and that is part of the problem, but be careful who you believe. I'm not the only one who takes offense at the <span style="text-decoration: underline"><span style="font-weight: bold">constant repetition</span></span> here politically motivated groups as accurate information sources, like this one. The Heritage Foundation is not an accurate source of information, and neither are the AM radio people, 2-bit politicians, & below the fold editorialists it services.

Talk about there <span style="text-decoration: underline">I</span> go again.

$75.86/hour equates to an income of $155,513/year. I, like most of us here, have auto workers in my family. They don't live better than eye surgeons. The numbers The Heritage Foundation are pretending to be true for you to keep voting for their clients include some or all of the legacy costs, which are subtantial. If you want to blame the state of the world on too many old people, fine by me. I didn't.

[Steve Moskowitz]

Dave, if you think there is not a perverse sense of glee in seeing the Big 3 fail or people lose there jobs you need to read some different newspapers or listen to different radio shows! It is repugnant to me and equates far more than 5 people! I am amazed by what I read and hear. Politicians on both sides of the aisle should be ashamed of themselves playing games that can affect so many lives.

I will be the first to stand in the line of people who will criticize the American manufacturers for waste, etc.(although a lot of that waste just went back into the economy) I have seen it first hand and it was and is appalling. Corporate salaries, not sure they or professional athletes are worth that kind of money but it is far from the biggest culprit. I find it interesting now though that Congress wants to review automakers business plans. This is from a group of people that have us trillions of dollars in debt, stick us with pork barrel projects and give new meaning to the term of waste! Amazing!

I hope we never have to find out the answers to what will happen to the US if the domestic manufacturers go under. A strong and competitive auto industry is good for this country and if it becomes less crowded, we ALL will pay somewhere down the road.

[Reatta Man]

Dave,

I know you have blasted the so-called think tanks and centers for using that $73 figure, as well as blasting "AM Radio" sources whenever you can, but this number comes STRAIGHT from the GM media Web site:

TOTAL COMPENSATION

The total of both cash compensation and benefits provided

to GM hourly workers in 2006 amounted to approximately

$73.26 per active hour worked. This total is made of two

main components: cash compensation ($39.68) and

benefit/government required programs ($33.58).

http://www.media.gm.com/manufacturing/handbook/other_benefits.pdf

[Matt Harwood]

I agree 100%, Steve! I've been puzzling over why people are so pleased that the big 3 had to slink back to Detroit with their tails between their legs. I'm sure the cheering has to do with the astounding levels of "executive hate" going on, particularly since they were using private jets. What most people don't realize is that the executives salaries and perks are a tiny <span style="font-style: italic">fraction</span> of the cost of running a business like GM. OK, Waggoner decided to take a $1 salary until this clears up. Satisfied? He'll drive to meetings where prudent. Good enough? Of course not. He can't be punished enough for what Roger Smith did 20 years ago, right?

The guys at the helm today aren't the ones who ran the ship aground. With the exception of Nardelli (who is way out of his element after costing Home Depot millions), the guys running these companies are pretty smart and have the companies aimed in the right direction. All they need is time.

People seem to forget the big picture. We're so desperate to screw these executives because we see their gluttony (and forget that not all of them are so grotesque, of course), that we completely act against our own self interests. We want these <span style="font-style: italic">individuals</span> to fall so badly that we're willing to fall with them so that they have something soft to land on.

It's like the morons who are pleased by failures in Iraq because it makes W. look bad. Like it or not, we're all in this together and we're all boned if it falls apart.

Oh, wait, I just saw that Citicorp got $20B and nobody's complaining. It's just the automakers. Nevermind.

[Bhigdog]

I don't know guys. I'm not sure executive hate, union bashing, jet envy, or AM radio (whatever the Hell that means) has anything to do with a large number of people thinking a Detroit bailout is not a good idea.

Is it possible that a lot of folks are smarter than is given credit and realize that the big 3, both management and unions, are just plain incompetant and are demonstrably unable to compete in a very competative World. Perhaps a lot of folks wish it weren't so but realize that feeding a near dead horse isn't going to make it get up and work.

I personally would feel a lot better if I heard Ron Gettlefinger say something along the lines of "We will do whatever it takes to save these companies. We now realize that to be and stay competive we will need to make, along with managment, any sacrifice wherever and whenever needed".

Not gonna happen. At least not as long as there is ANY CHANCE of Uncle Sap pulling their bacon out of the fire......Bob

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dave@Moon</div><div class="ubbcode-body">Lets hope capitalism doesn't prevail. </div></div>

Dave, I have to wonder what you'd replace it with.

Like it or not, sooner or later all human cultural systems come down to survival of the fittest. Is that cold, or just real? How many Utopian, state-controlled schemes have worked productively for long?

There are two ways to approach the problem. One is to force control on the system through govermental planning, regulation, and assumption of risk and responsibility. The other is to allow the capitalist system to function with reasonalbe, yet minimal controls, aimed primarily at rules of conduct and establishing a legal rule set.

At some point in time, our society has to accept the concept of personal responsibilty and cease to resort to a non-productive nanny state to make everything better. Sadly, we've taken this fork in the road, at least ideologically. Governmental intrusion will necessarily follow.

We have, in our individual actions and collective efforts, the ability to make a system that really works, without massive governmental intervention. We only have to rustle up the cajones to do the work, some of which will be mightily unpleasant. We can't do it on an ever-increasing goverment entitlement base.

To do this, we have to get past the 'warm fuzzies' of the artifical self esteem, assumptive equality, and deridement of healthy competition/winners so popular in society at large, our learning institutions, and our govermental leadership today.

When sports teams stop keeping score and everybody gets a trophy, Communism isn't far behind. But at least, we'll all be equal in our state-provided misery. Perhaps the bad news will be printed in soft magenta ink to avoid injuring our self esteem.

Cheers,

JMC

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Matt Harwood</div><div class="ubbcode-body"> ...I've been puzzling over why people are so pleased that the big 3 had to slink back to Detroit with their tails between their legs...</div></div>

Matt, I agree with you points.

A lot of it has to do with how the MSM wants it to read. Right now, they have class hatred in mind, and there is blood in the water. Nevermind that we're cutting off our nose to spite our face. By golly we taught those rich CEOs something, didn't we!

The other thing I think is going on is the time worn concept that this is a 'zero sum game'... In other words, the concept of the pie is a set size and if 'he' gets a bigger piece, there's less for me. We (social collective) completely miss seeing the opportunity to make the pie larger. So, let's punish the punished, enact trade barriers/tariffs, and over regulate. Life will be fair!

Jets and salaries are a smokescreen. But. The CEOs created a PR Waterloo by showing up without an apparent plan. I'm startled that they sat there like they did and took that public whipping before the committee without being able to say: "Look we know it's a lot of money, but we need the loan to get us to this point. The money is not available from the traditional sources right now. We have taken the following actions to reduce cash expenditures to the greatest degree possible. Here is our plan on how we are going to use the money, here is the expected outcome, here is how long we think it will take, and here is how we plan to pay you back". And, "Yes, we did use corporate jets to get here. It is the most efficient way for us to travel and still do our jobs."

On the other hand, the prosecuting Congress members demonstrated a frightening lack of understanding about business. That is no surprise.

Cheers,

JMC

[Guest John Chapman]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body"> TOTAL COMPENSATION

The total of both cash compensation and benefits provided

to GM hourly workers in 2006 amounted to approximately

$73.26 per active hour worked. This total is made of two

main components: cash compensation <span style="color: #FF0000">(SALARY)</span> ($39.68) and

benefit/government required programs <span style="color: #FF0000">(FRINGE)</span> ($33.58)</div></div>

RM,

In the lexicon of industry, the 'big' number is the 'burdened rate'. The MSM and talking heads do not understand this part, let alone report it correctly. They just do the "Dave@Moon math", and figure that everyone is walking out on payday with the "40 hour times the pay rate" check.

'Burdened Rate' in addition to benefits and required programs include administrative overhead (AO) which wraps the total cost of providing that hour of labor. It is typically a fixed cost/hour and includes facility cost, management, administration, legal costs, etc. This is where legacy automakers in this country are getting killed, not on the hourly wage rate itself. In many industries, when the burdened rate begins to approach 50% of labor cost, serious changes start to happen at the top.

Cheers,

JMC

[Guest Skyking]

Is it me, or has anyone elsed noticed how the media switched from America building crappy cars to Ceo's making too much money that's killing the auto industry? I guess it's whatever fits the bill at the time. It's pretty sad, anyway, they'll keep feeding us and we'll keep listening and believing.

That's how we are............

[Bhigdog]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Like it or not, sooner or later all human cultural systems come down to survival of the fittest. Is that cold, or just real? How many Utopian, state-controlled schemes have worked productively for long?

There are two ways to approach the problem. One is to force control on the system through govermental planning, regulation, and assumption of risk and responsibility. The other is to allow the capitalist system to function with reasonalbe, yet minimal controls, aimed primarily at rules of conduct and establishing a legal rule set.

At some point in time, our society has to accept the concept of personal responsibilty and cease to resort to a non-productive nanny state to make everything better. Sadly, we've taken this fork in the road, at least ideologically. Governmental intrusion will necessarily follow.

We have, in our individual actions and collective efforts, the ability to make a system that really works, without massive governmental intervention. We only have to rustle up the cajones to do the work, some of which will be mightily unpleasant. We can't do it on an ever-increasing goverment entitlement base.

To do this, we have to get past the 'warm fuzzies' of the artifical self esteem, assumptive equality, and deridement of healthy competition/winners so popular in society at large, our learning institutions, and our govermental leadership today.

When sports teams stop keeping score and everybody gets a trophy, Communism isn't far behind. But at least, we'll all be equal in our state-provided misery. Perhaps the bad news will be printed in soft magenta ink to avoid injuring our self esteem.

Cheers</div></div>

The above is worth hearing again. The only thing I might add is......"Boy I wish I would said that"......Bob