Big 3, no bailout for you!

by John Wilker in Business, I am a Consumer, politics

I’ve little sympathy for the big 3, less for the unions. The failure of the bail out seems to reinforce my grim outlook for both bodies. I know it will suck for the economy, and suck for most of us in some way or another, but really, they made their beds. Did the government step in for Home Grocer? Or any other start ups that flopped? Did they step in when Apple stock was 8 bucks and less a share?

Sure we let the auto makers get as big as they are, big mistake, hopefully we learn from it, but protecting and bailing out bad business practice, not a wise decision.

If my reading of the news is correct, the UAW wasn’t willing to make concessions as part of the bailout package. I mean, why do their part to help their employers? Why should the union bosses let their people take pay cuts, which lowers dues, which lowers union boss pay? Why can’t the American people just give more? Why should the screw turners take a pay cut, or lose the cushy retirement they’ve earned that few other employees anywhere, even get?

Don’t get me wrong, the UAW isn’t the only one at fault, apparently someone (I talk more about this below) thought the bailout package should include a pay raise for federal judges, cuz you know, they need a raise, and this was a best way to get it.

From the Forbes article:

McCaskill said judges’ pay raise, inserted by Reid, “sends the wrong message to the United States of America at this scary moment.”

Well duh. Yeah it sends the wrong message, it sends a message that in troubling economic times, our politicians are still interested in injecting whack crap like this into emergency bail outs. What do judges have to do with it? Nothing as far as I can tell, certainly it’s not the place, let alone time for that kind of junk!

Labor, lawmakers and the auto industry bargained in unprecedented private talks at the Capitol Thursday night…

I think it’s funny that these talks take place in private. After all it’s my money, shouldn’t I know what deals are being brokered? Shouldn’t those doing the dealing be held accountable? Wouldn’t the process go smoother if all parties knew we were watching that they had best act in good faith, lest we see how scummy they are? Is it just me that thinks that?

The House-passed bill would create a Bush-appointed overseer to dole out the money. At the same time, carmakers would be compelled to return the aid if the “car czar” decided the carmakers hadn’t done enough to restructure by spring.

Really? do we need more Czars? an IP czar, a car czar. Yeah that’s a solution. Appoint a fall guy, that way we have some one to draw and quarter when things go south!

Pushing to convert skeptics in both parties, Democrats agreed to drop at least one unrelated provision that threatened to sink the measure, a congressional official said. They were eliminating a pay raise for federal judges after Democratic Sen. Claire McCaskill of Missouri, who represents an automobile manufacturing state, announced she would oppose the carmaker aid unless that provision was removed.

Good for Sen. McCaskill! I’m ashamed it was my own party that put such a turd on this package. I may be opposed to the bail out, but really? Adding crap like this is just embarrassing.

The auto industry and their union cronies had no problem during the big years, maybe we see how they handle the lean ones. As far as I’m concerned, if I (as a taxpayer) bail out the big 3, I want ownership. I want shares, I want them to answer to me (us, the people giving them money for being lame businessmen, and greedy union mongers) in exchange for my money!

Fat chance, I know, but a guy can dream

12 Responses to “Big 3, no bailout for you!”

  1. It's really interesting that this bailout nonsense really shows the government for what it is. The actual people, both republican and democrat OPPOSE this junk, but both parties in washington are going along with this crap. I think we've finally found a unifying issue. Now if we could just find a politician…ANY politician…who is willing to represent the people.

  2. Josh Clauss says:


    That's a lot of fire you've got there. But you should know one thing about the UAW – they were willing to meet with the automakers for concessions, but only if all facets of the supply chain were present – meaning that everyone connected to the health of the auto industry had to make similar concessions. What Senate Republicans (and really, Bob Corker, Tennessee must be so proud) are saying is that they want labor to unilaterally absorb this blame. The fact that *everyone* had agreed to this concessions meeting down the auto food chain (I really wish I had a source on this, but alas, it was unsearchable) did nothing to sway the Senate Republicans from pushing antiquated, anti-labor ideology. The elephant in this room is obviously privatized healthcare, which is what costs the Big 3 so much money, and they'll be the first to say so. That being said, there is certainly an argument to be made for a conditional bailout starting first with A) The employees' overall well-being, and ending with B) The restructuring of the business models around competitive introduction of sustainable technology. Unfortunately, because time is of the essence when it comes to their business livelihood, and You Know Who still makes these decisions, it will be perilously difficult, if not out-and-out impossible, to put these stipulations into place beforehand.

    Sad all around. But the fact that Congressmen even have this big of a qualm over $15bill when a $700bill TARP was fine is absurd – and points to the fact that other motives (i.e. the death of labor unions – remember all those potential Colorado Amendments this year???) are top of the agenda for a small group of self-serving Republicans.

    I don't like it either, but it needs to be done to keep us from depression conditions.

  3. Ethan Estes says:

    Well, yes for sure the auto industry made mistakes. I question the logic of letting them fail though. The UAW asked all stakeholders to come to the table and negotiate, when asked to match the foreign, southerern factories pay rates they simply asked to see the books (pay, benefits, bonuses, raises, etc) so they could get what "competitive" meant (would you accept someone asking you to price competitively without any info on how the competition is structured, and accept the clients word on what the rate is?) The Senators denied that request. The current new union hire does not make 72/hour-that represents all benefits for active and retired workers (… Also if the big 3 go to chapter 11 then the pension liability falls to the gov't and to you and me-your taxes are going there one way or another.

    I do think the job bank has to go, supporting out of work workers should come from a fund based on their union dues. I also think our tariffs need to be revisited-why do we charge 1% on imports but china hits us with 23%, same with Japan, Germany, and Korea-they ALL protect their local economy. They are simply laughing at how stupid American citizens are at electing officials who do not have their financial well being in mind.

    BTW: VW is building a factory in Tenn with 500million of your dollars that Sen. Cocker snagged-not a loan, just cash on the barrel.

    I think-having worked as a vendor for several of them (no longer in the industry at all), they need to look at the white collar component-that is where the inefficiency, bloat, stupidity, and wastefulness is. UAW is only worth 10 % of the car cost, it's not enough to fix this by itself. This idea that the UAW is the issue is purely talking points from the Republican inner circle who represent the multinationals-they are the ones who really hate unions.

    Honestly if the UAW implodes i do wonder about the benefits that the unions spearheaded over the last century-weekends off, 40 hour workweek, 2 weeks vacation, health insurance. Based on these things I support the bailout. Not to mention the fact of the TARP for the Wall St.

  4. Tom Gonzalez says:

    So I can't help but think if the government took the $34B that was being asked for to subsidize small business/startup loans that once the big 3 fail there will be a TON of equipment/tooling/factories/talent available on the cheap to revolutionize the business of building cars. I am no expert in this area (so my reasoning probably has tons of gaping holes), but what if cars got built like houses, customized to your needs and either built by "big" developers or one-off customs – with interchangeable parts. What if the government helped to regulate some standardization of specifications for parts etc, so cars could potentially be pieced together like PC computers? $34B would go a long way to jump start a lot of companies to compete in this space to create a new model for building cars and the types of cars that get built. I mean c'mon, if the idiots a West Coast Customs can do what they do in a week or two I have to imagine some well capitalized start-ups could make a real business out of it.

  5. jwilker says:

    yeah I totally agree that UAW isn't the only cuprit, and cuts should be across the entire industry. They are all part of the problem, they can all be part of the solutions. Most articles I read said (and I agree) that part of the problem is the timing. Christmas break coming fast, having just bailed out another industry.

    A very large part of me, wants the bail out to go to new auto makers. Ones that don't exist. They're out there waiting. Give them the money, let them do their thing, let us have 100s of auto makers, see what that's like. The big three need to go. They're out dated.

  6. jwilker says:

    The problem with bailing them out is 1. sets a precedent and 2. few if any other industry enjoys that type of protection. I definitely think unions served a very valid purpose in the past, I also think, like the tucker, and the 8 track, their time has past. We don't have scribes any more, we don't have type setters, we don't need unions. Today unions breed dependence and a complete (from where I am) lack of motivation. If I don't like my working conditions, I leave, I better myself etc. No one helps, no one speaks on my behalf, etc, etc. UAW workers are now 100% dependent on the union and the automakers. It's 2008, almost 2009

  7. jwilker says:

    EXACTLY! don't prop up the old out moded business model. Let the market make room for smaller, better businesses.

  8. Josh Clauss says:

    I'm all in for more competition. Like the telephone wars in the 90's, break them up into smaller entities. Obviously, the answer isn't an assisted merger, but rather the spinning off into separate entities. That's what I meant by "restructuring business models around competitive introduction of sustainable technology," although I realize it didn't appear that way. Making cars ad hoc, however, would be a bit too costly, I'd say. It takes awhile to make a model like that profitable, and now is not the time to require such a thing (not to say that one of the spun-off entities couldn't make that their platform and see how she fares). Hopefully what this will do is cause people to be alarmed by the rate of mergers and acquisitions of recent years, see this strategy's inherent, potentially disastrous flaws, and encourage more stringent antitrust laws. Hopefully.

  9. jwilker says:

    Josh, yeah I agree 100% on that. I hope that if nothing else, we (as Americans) and our politicians (unlikely since they rarely seem to act in our best interests) realize that allowing huge mega corps, is bad. Big banks, bad. Big auto, bad. Big anything, bad. When they fail they take us down, and it's not responsible business that our country be so tied to them, unless of course we nationalize those industries, LOL

  10. Ethan Estes says:

    I'd argue that unions provide a counter balance to the overwhelming power that the boards hold now to make decisions that have ripple effects to many people and communities. It also protects teachers, police, fireman from impulsive votes by communities, I'd not want to be at the whim of a town vote every November to know if i have a job or what courses would be available in the high school based on funding. I think that if workers want to organize then they have a right to (no matter what Wallmart thinks!). I do not understand the whole anti-union attitude. I see plenty of "lack of motivation" in white collar positions and they are not purged- my neighbor slept at his desk at Chrysler, but the company paid for 2 master degrees and then he left a month after he got the second degree. He was all about "getting his". Unions do not corner the market on "laziness" and working the angle, that is a mark of the individual not the group.

    In relation to the bailout i just really think that there is more of a union busting agenda going on and all the stakeholders contributed to this mess not just the UAW.

    As for the slippery slope we already did it with TARP, the paste is out of the tube.

  11. Ethan Estes says:

    Amen, the senator from Vermont likes to say "to big to fail means your too big to exist." We have handed all major policy ideas to what the multi-nationals want. They do not care about a local community that one of their facilities are in the way a company that has it's owners living in the community. We've abstracted everything so it's easy to lose the human component in these policies.

  12. jwilker says:

    True dat, Lazy is definitely not a union thing. Unrealistic protection is though. I do well in my career without a union, many many many others do to. and if I lose my job I find a new one, or learn a new skill. Unions seem to favor the "Go sit at home if you get laid off, we'll get your job back some day." mentality.

    The role of unions to protect jobs against politicians and voters is passe at best. Yes it made sense once. Slavery did to (to some one). times change and Unions seem hell bent on making sure they don't have to change with them. I wouldn't oppose unions if they weren't so interested in stifling change and innovation in order to remain relevant. Find new relevance or die.

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