[pocketmidget]

Automakers seek additional $50 billion in loans
By KEN THOMAS – 14 hours ago

WASHINGTON (AP) — Struggling U.S. automakers are requesting an additional $50 billion in new loans from Congress to help them survive tough economic conditions and pay for health care obligations for retirees, officials said Friday.

A day after the leaders of Detroit's auto companies and the president of the UAW huddled with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., participants in the meeting said the figure discussed was double the $25 billion they want to cover future health care payments for about 780,000 retirees and their dependents.

Automakers want the new loans included in an economic stimulus package that is now more likely to come together early next year rather than in a post-election lame-duck session of Congress later this month. The $50 billion would be in addition to the $25 billion in loans that Congress passed in September to help retool auto plants to build more fuel-efficient vehicles.

The requests come as auto companies are bleeding cash and jobs. General Motors Corp. and Ford Motor Co. reported Friday that they spent down their cash reserves by a combined $14.6 billion the past three months. Ford said it would slash more than 2,000 white collar jobs.

President-elect Obama said Friday his transition team would explore policy options to help the auto industry. He didn't specifically address the industry's new loan requests but said their hardships affect small businesses and auto suppliers.

"The auto industry is the backbone of American manufacturers and a critical part of our attempt to reduce our dependence on foreign oil," Obama said, speaking in Chicago in his first news conference as president-elect.

Obama's economic transition team includes two allies of the U.S. auto industry — Michigan Gov. Jennifer Granholm and former Rep. David Bonior, D-Mich.

"We are going to be working on how to make sure over the next short period of time and longer period of time this industry succeeds," Granholm said.

During Thursday's meetings, the top executives of General Motors, Ford and Chrysler LLC and the president of the UAW discussed up to $50 billion in loans, participants said. The loans would include $25 billion to help the companies withstand the weak economy and another $25 billion for future.

If Congress approved more loans, it would come with strings attached. Potential protections include limits on executive compensation, awarding the government preferred stock in the companies and a suspension of dividend payments to investors.

Rep. Sander Levin, D-Mich., said lawmakers are focusing on the immediate infusion of $25 billion to help the companies maintain their business operations in the tough economy. He said House leaders are considering amending last month's $700 billion financial industry bailout so that automakers could access it.

"It was a very full and frank discussion which I think ended on a positive note — that action is essential and essential this month," Levin said.

Two business groups, the U.S. Chamber of Commerce and the National Association of Manufacturers, urged Congress to provide immediate support to the industry.

In Chicago, Obama also urged the Bush administration to "do everything it can" to speed up the distribution of $25 billion in loans approved in September to help automakers retool factories for fuel-efficient vehicles.

Congress approved the low-interest loans for U.S. automakers and auto suppliers to help them build more fuel-efficient cars and meet tougher fuel economy standards. But the funding is not expected until sometime next year.

Energy Department spokeswoman Healy Baumgardner noted the agency announced interim rules for the program on Wednesday and said the agency "has done its best to accelerate funding within the confines of the law Congress passed."

Asked about the automakers' meetings on Capitol Hill, White House spokesman Tony Fratto said they were concerned about the "health of the auto industry" but Congress would need to decide whether to provide more help beyond the $25 billion loan program for fuel-efficient cars.

Why should we give struggling companies money because they failed to adapt to the market and poured shitty cars down our throats that got horrible MPG. You don't see the foreign manufacturers doing bad.

This car was made back in '98 that got 70+ MPG. Sure it looks bad, but driving a 20 MPG car won't get you very far for cheap compared to this thing.

Mercedes C250 (CDI)
Acceleration: 0-60 in 7 seconds
Top Speed: 155 mph
Fuel Consumption: 45 mpg


Supporting these big "three" companies because they churned out crap cars and failed to adapt or revolutionize even when times were good is their fault and we should not support giving them any money at all.

 

[hobbitman]

i would say...

that it isnt the best thing if the big three went out of business(Americans losing jobs), but i agree with you on that. The big three forced cars down our throats that we didnt want, so when we were offered what we wanted from Japanese manufacturers for less money, of course we're going to take it. I'm not sure I like government spending on this either. More money down the toilet.

 

[Ventolin]

GM will declare bankruptcy, get rid of all the baggage of retirement accounts, streamline their operation, and rebuild.

Sucks for all those people, but its the best thing they can do.

 

[Tim McGraw]

Some big important person needs to just come out and say it:
"The union is dragging down US automakers."

The big three INSIDE the US are the most pathetic automakers world-wide. Ford and Holden(GM) make better cars overseas than they do in their home country! The union is screwing them; it would totally be worth their resources to go bankrupt, loose the already dead weight, and start over. I think that if Ford and GM could restart without the union that people would be willing to invest but as it is, investing in the union is like giving a lazy person money to better themselves.

 

[Ventolin]

Some big important person needs to just come out and say it:
"The union is dragging down US automakers."

The big three INSIDE the US are the most pathetic automakers world-wide. Ford and Holden(GM) make better cars overseas than they do in their home country! The union is screwing them; it would totally be worth their resources to go bankrupt, loose the already dead weight, and start over. I think that if Ford and GM could restart without the union that people would be willing to invest but as it is, investing in the union is like giving a lazy person money to better themselves.

True. Starting over without the union as well as the retirement baggage. I knew I forgot about something.

 

[4x4le]

Come on guys I cant believe how wishy washy some of you are. Wishy washy just like the people most of you voted for.

You blame unions and the retirement that they offered. At the same time your against government health care. So what are people supposed to do? Work till the day they die for chump change so they can afford to live? Is that what you really want to do? How many of you actually work at an auto factory that is non union that offeres little benefits and treats you like shit on a daily basis like me? Ill tell you something if you didnt already know, they are suffering pretty bad right now too, even without a union or badass retirement plan. They pay us like shit and treat us like shit.

Some of you hit it on the head though, the problem the big 3 have is they didnt make economic cars. Why didnt they make economic cars though? The government gave them money not to. Why would they do this? Because certain big dog republicans have their hands in the oil business.

So I have a good idea, lets just keep voting republican, keep voting to take away our rights and we will just keep blaming democrats for everything. God all might, I cant believe some people want to try to make our quality of life better and give us the chance to retire!

Have any of yall ever lived in the north where the union is strong? People made good money, retired when they are supposed to and had a great quality of life, way more so than down here from what I have seen.
Peoples greed is what is making this country go down the shitter. It dont matter how much you bail out big companies, it dont matter how cheap you make it for them to produce a car, none of that matters because if the people cant afford to buy the damn things once they are produced we are in the same predicimate. When people are struggling to pay their bills and dont know when their asshole bosses are going to fire them at a whim due to the right to work laws and the lack of rights employees have the last thing they want to do is pick up a 6 year loan payment on a new vehicle.

Right now we got what we need. A democrate in office (well in january) that will hopefully do what he is supposed to do and help out the middle class (the majority of the united states).

Sure, I know Im going to get flamed for this because Im a minority in tennessee as far as my views. Oh well, more then 50 percent of the united states feels the same way as me however.

 

[Ventolin]

This has nothing to do with democrat or republican. American Automakers gave out some of the best retirement benefits in the Nation, and didn't have the sales or income to back it up. Yes, people were comfortable, but who is going to be comfortable when The Big Three go out of business?

Get real, theres a balance between helping our people and being ridiculous. The Union is a good thing, but these are times of crisis for the Big Three. They have to make big decisions to stay afloat, and in situations like this, everyone can't come out on top. Yes, it sucks, but jobs are going to be lost, lots of them, and everyone's stake is at risk here.

The Big Three will not succeed paying out the huge sums to retirement accounts, and they will not make it if they keep having to pay wages and benefits much higher than the standard of anyone else in that area. It was fine back in the day when these companies were successful, but if something isn't done, then -everyone- loses.

The statement about republicans paying the automakers not to be efficient - are you kidding me? We have more policy pushing our automakers to build more fuel efficient, environmentally friendly automobiles than ever right now. The problem is trying to compete with foreign automakers who have excellent business plans, plenty of income, and overall extremely well designed cars.

Just some interesting stuff here - Read up on the "Toyota Production System". They're pioneers in "Lean Manufacturing" and the last place I worked at completely redid their manufacturing system with the same goals, and this year have seen a huge increase in profit. Its pretty impressive, really.

 

[4x4le]

Id just assume not see them exist as a company anymore if it means that the way they accomplished staying a company means they get to back out of the retirement plan that their previous employees were promised and worked to earn. If they go out of business, some other company will fill their shoes, hopefully doing things right instead of seeing what was the final straw. They should offer the union and good retirement, just not make pigs of cars that get horrible mpg.

 

[Ventolin]

GM is very, very important to our economy. Its a symbol of American Industry, and it directly or indirectly supports nearly a million jobs here in America. Thats General Motors alone. According to an article I read last week, when GM shut down for 54 days during an 1998 labor action, it knocked a full percentage point off the U.S. economic growth rate that quarter.

Whats good for General Motors, is good for America and our economy. That is, besides a fucking bailout. The business doesn't need a crutch, it needs to be turned around.

In a situation like this, companies need to reduce their workforce, streamline their operations, and contract until they can balance their budget and start focusing on improving business.

Do you know why GM can't do this? Because of the Union. They can't make a workforce cut without facing extremely stiff penalties due to the Union. They have factories all over the country operating at low efficiency rates, but can't shut them down due to having to face immense penalties to the Union.

Not to mention, any laid off employee still gets one of the most generous benefit and healthcare packages in the nation paid.

 

[Ventolin]

Life is good for GM workers, but not for GM. Unfortunately, life is going to be bad for 900,000 workers soon if something isn't done.

I think a more standard, real world benefit and healthcare package is acceptable in these situations.

Also, $1600 per vehicle is given back to retirement accounts and paying benefits to workers who are no longer employed. Theres are known as legacy costs, and GM has more Legacy Costs than any other company in the Nation.

 

[4x4le]

All I have to say is good. The union is protecting the people like its supposed to. These people have given GM their lives just so gm can fire them if times get tough due to their own bad decisions. Tough shit. Im glad the union is there, that is why people vote it in. How many fucking cars does gm plan to sell if no one has jobs?

I mean I really cant believe everyone thinks all the companies should just fire everyone and everything will get better because they arent having to pay out much money in labor. Who the hell is going to buy the product then? If companies let everyone go, the economy dont get any better because people have no money to spend and now people are un employed and going to have to resort to getting money from the government in order to feed their family, that is if the government dont give all the money to the big businesses first.

I still feel that the gas prices are what cripled the country. People couldnt hardly afford to get to work, they didnt have the extra money to buy stupid shit that makes the economy better, they damn sure wernt about to go buy a gas guzzling vehicle brand new ect.
It was the gas people. All I hear is people bitch about all the other things that are here for us in order to have a good quality of life as the reason for the bad economy. No, its corperate greed.

 

[Ventolin]

What you're not getting is ALL the employees are going to suffer soon. More people would lose their jobs if they continue the way things are going, as opposed to if they actually ran a better business and made cuts where needed. Its the nature of business! When you aren't making as much, you have to start making cuts. Also, if you blame it on the cars produced, they can't make better cars if they can't afford R&D because they can't streamline their operation and run efficiently.

The Union helps the employees, but it also makes things difficult for the company. This wouldn't matter in the case of a large, profitable business, in that situation they'd be looking out for the good of the worker. In a situation like this, all the workers are going to suffer if the Union doesn't negotiate a better contract and the companies don't start giving a more standard retirement benefit.

When business starts to suffer, you have to make cuts somewhere. Instead of paying for a bunch of factories to stay open even at 50% operating capacity, they could've been putting that money to R&D to make better cars.

I'm not blaming anyone, what I am saying is that something has to be done or -everyone- loses.

If Toyota was in the same situation with their business, they'd be making phenomenal cuts. They aren't limited by the Union to make cuts when needed, or to streamline their operations. Does their means of business hurt us? No, because when you run an operation like that, you can suceed and grow, hiring more in the process.

Toyota has started plenty of plants here in America, when alot of American business is running across the border.

Its all in running a streamlined business, with a lean manufacturing goal. You can't do that when you can't run efficiently without fear of immense penalties from the Union.

 

[4x4le]

I guess the reason It hurts me so bad to hear this is because I work at a automotive factory without a union that is doing just this right now. That is why I asked how many people actually work at one that is doing this. People throw that out there and act like its the best thing to do but I dont think they have any idea how stressfull it is and what kind of bullshit they are doing to peoples mothers, fathers, grandparents ect. Everyone that works there. They are getting treated like shit in hopes that they just quit instead of laying them off like they should just because they want to prevent them from getting un employment. Its complete bullshit. They have me looking for another job for sure. Im going to end up in jail for killing someone if I continue working there.

 

[Ventolin]

I understand that, its not just the auto industry. The last job I worked at, we had terrible pay for what we did, they were upping premiums for health insurance, and I saw 1/3 of my coworkers lose their jobs in one layoff.

It sucks, but these companies are struggling to get by in today's economy. Sure, our rights need to be protected, we should be offered health insurance, a safe work place, and some form of benefits.

At the same time, the Union is the other end of the spectrum. Union employees have it made, and there is room to cut back. When I say cut back, I don't mean cut their benefits completely, or cut their pay completely, but these are tough times for GM, and they have to do things that they don't like, and employees don't like, to streamline their business. The Union is preventing this from happening.

Yes, it sucks that people will be losing their jobs, or getting less retirement, or getting less pay...

But if nothing is done, everyone loses their jobs, everyone loses their retirement, and nobody gets paid.