Batavia Daily News for Friday: Area auto sales "strong despite downturn"

"We believe the auto industry is the most important single manufacturing industry in the country, and for the government not to take seriously the livelihood of millions who derive income from that industry is shameful."

The American automobile industry has consistently shown its disdain for the U. S. government, the U. S. worker and the planet. The auto-makers have ignored the EPA mandates on emmisions for decades. They have closed domestic plants and forced workers out of employment. They market their best vehicles, exclusively, overseas. They produce more than the market demands. They leverage their dealerships and other industries such as steel and after-market parts outfitters. They exemplify the worst traits in U. S. industry. Try this Ford and GM: the federal government buys your current inventory at fleet price, selects random SS numbers and awards the vehicles to taxpayers. Now that's a bailout!

I like your bailout plan, C.M.

Check this post from Popular Mechanics -- <a href="http://www.popularmechanics.com/automotive/new_cars/4292379.html">5 reasons GM is in crisis</a>.

I have a strong opinion on this bailout. We do not need to help the rich auto companies out. Let them go bankrupt. I'm willing to bet that most of that money ends up in the hands of the guys at the top, not helping the worker.

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Hilly-If we don't provide some assistance, as many as over a million employees that are some way connected to the Auto industry are going to lose their jobs, as if many of them haven't already. Although I don't think that the CEOs landing at Dulles in Luxury Jets was the best way to beg for money, it is clear that given their arrogance that we should regulate how that money is spent.

I like a suggestion that I heard on CNN this afternoon though, link any assistance with the big three closing factories in China and moving most of the work back to the US.

What would happen if Toyota and other car companies pulled out of the US and went home? How many Americans would lose their jobs?

Dont these government officials,congress and the house of representives who are berating GM Ford and Chysler for mismanaging there companies and riding around in corporate
jets,and and for giving retirees a pension with health care.Also the ones who have screwed up this country and cause alot of these problems we are in now,arent they allowed to retire with fat pensions and health care for life.Dont they fly around on taxpayers money..In fact most anybody who works for the government get pensions that are equal to or greater than those of the auto worker..

With all the government debt, is the governemnt going to take any of these pensions away.I dont think so..All i heard the auto company's say is they need a loan to keep going until things pick up..Because they cant borrow on the open market because no one is lending out business loans..

Is it all right to give 300 billion to banks and wall street with no chance of getting all that back..

We need to do what ever it takes to keep jobs right now.Not play games .We have never seen things as bad as this except during the 1920 and 30's.So i would think that when things get back on track the auto sector will also get back on track and payback what they owe..

John, that won't happen, in Japan they have universal health care which keeps their costs low, neither the unions or companies pay those costs there so they can afford to reach into other markets without many problems. They won't either.

Mark, again I'll point out why companies in Japan and South Korea aren't suffering, they don't have a burden of providing health care to their employees, they pay a slightly higher tax rate so their profit margins can go through the roof. Secondly, those pensions are earned and need to be guaranteed, unless you want potential consumers with no income having to live off government benefits. I think that if we tie some necessary regulation to the bailout of the big three some good can come of it.

You are hungry

Your favorite pond still has some fish in it but its getting tougher to catch one and when you do catch one it's usually smaller than you're accustomed to

There is a field 5 miles away that you know will provide for you provided you work it

What do you do when someone hands you millions of dollars
you dine out and stock up your pond with fish from elsewhere

I seriously doubt this 1 job touches 8 others -in any truly significant way- garbage
Maybe owning 3 vehicles is shameful
maybe building megafactories and buying up businesses while you're broke is shameful
Live by the sword
Die by the sword

Dan,
Toyota and other companies that opened auto plants here, in the US, are doing well. Our auto companies have no plan to go head to head with them, sale numbers do not lie.
Remember, they are here, in this country. How many Americans would lose their jobs if they went back to Japan, or Germany. They came here and Americans have jobs.

Dan, it costs GM $75 per hour to build a car in Detroit. It costs Toyota $45 per hour to build a car in Alabama.

Universal health care won't fix that disparity.

Toyota operates 10 plants in the United States employing 45,000 American workers (they plan to open five plants more by 2010, and here's an interesting story about Toyota reopening three of its truck/suv plants to build vehicles to <a href="http://news.theage.com.au/business/toyota-will-reopen-three-us-plants-2… to Saudi Arabia</a>).

So this has nothing to do with Japan's tax structure or health care.

Detroit made deals with the unions years ago that allowed them to pay lower wages then in exchange for lifetime health plans and better pensions later. Now they're paying that price.

The high cost Detroit must pay to build cars means they have to build more and encourage more Americans to buy big trucks and SUVs. Those are higher margin vehicles. GM couldn't survive if made only small, fuel efficient cars.

Is this really a company we want to save? One that has failure built right into its basic structure?

The only bright spot for GM is that they are working hard on building a good electric car that they want to get on the road by 2010.

Dan,
Sorry, I missed that Honda just opened a new auto plant here in the US. Should they go home and lay off the workers?

GM and the other auto companies made deals with the unions because they could afford to at that time. They lobbied Congress and the current administration to loosen CAFE standards so that they could make more SUVs and increase their executive bonuses and share price. GM's new labor contract takes effect in January. It will pay different rates for new hires than for existing workers. This will put their labor costs at or below Toyota America's costs.

While Toyota is claiming they're planning on exporting Tundra's to South America and Europe, they temporarily shut down plants in Alabama and Georgia this quarter because of slumping demand. They also announced that they're delaying their plant expansion in the US for the time being. It can be expected that the improving US dollar will make US exports even less attractive as time goes by.

The rosy pictures being painted about Toyota's success in order to demonize the UAW as the largest cause for Detroit's disaster is a little overblown.

http://www.tradingmarkets.com/.site/news/Stock%20News/1696961/

http://www.woai.com/news/local/story.aspx?content_id=07a51f48-3260-4af3…

http://wardsauto.com/ar/toyota_russian_plant/

http://www.ibtimes.com/articles/20080512/toyota-says-new-us-auto-plant-…

The UAW is a part of the problem, but not the major one. You can not blame the UAW for doing what its members wanted, that's why its a union. The blame is with the companies. They did not and still do not manage well. Giving them more money will just delay the end.

If we give them 25 or 50 billion tax dollars, that we have to borrow from China, and they still go under, then what?
We owe China and get nothing? What is the plan the auto companies have? If they want my money, I have a right to know the plan. Sad part is, based on how Congress screwed up the bank bail out, they'll screw this up also.

John they are asking for a loan ,isnt that how all businesses operate.Small or large .They do it for all sorts of reasons,to buy new machine's,update plants,get over rough spots in a bad economy.

Are all these government unionized employees contracts bad for us .Where is all the outrage over these contracts.

If we were in a strong economy would the big three be asking for a loan right now.

Where does Toyotas profits go..Back to Japan..What do all the taxes breaks that these companys that built plants here
add up too over the years.

Do we trade on a even playing field?

All three have lots of loans already and stock outstanding. Where will we be in the line of people asking for their money if they fail? We know the answer with the banks, we get screwed.

More UAW concessions are considered unlikely, but more importantly, unworkable.

http://www.glgroup.com/News/UAW-Concessions-Unlikely-to-Address-Auto-In…

And Toyota has its own problems. This is a global problem, to be sure.

http://blog.wired.com/cars/2008/11/gm-and-ford-may.html

Is there a single target for blame?
The list of failed choices is staggering. A change in business as usual is long overdue. The mega-industries that were icons of American success: Railroads and big steel were the first to flop. ...Now the investment houses and auto industry. These giants had all dug in. They dropped-anchor, presuming eternal reign.
Companies set themselves up god-like, commanding loyalty, prepping for immortality. Status quo is deadly... remember the dinoaurs- too lumbering to adapt. It's the product- not the logo. Heard anything from RCA, lately?
Our currency bears a notation- This note is legal tender for all debts, public and private. Not since 1964, our bills bore a different notation. "This certifies that there is on deposit in the Treasury of the United States of America X dollar(s) in silver payable to the bearer on demand." Take a one-dollar "silver certificate" into a bank before 1968 and claim a silver dollar. In 1960, it was clear that the one-dollar silver coin had a value greater than one dollar. People were melting down the coins and cashing them in.
The United States has valued its currency based on gold and silver. Stable prices allowed both metals to serve as currency throughout the 1800s. In 1900, passage of the Gold Standard Act singled out gold. In 1933 President Franklin D. Roosevelt outlawed private gold ownership, effectively negating the Gold Standard Act. From 1946 - 1971 a system of fixed exchange rates allowed governments to sell gold at $35/ounce. By 1971 there was no longer enough gold to cover paper money the Federal Reserve had printed. Richard Nixon ended fixed gold prices and forever severed real commodity-based links between the major world currencies.
So what is our currency based upon? Nothing. We exist in the Fiat system. Speculation determines the value. Our currency has real value in the sense that it is accepted by the IRS in payment for taxes.
We pay our bills with Monopoly money. Silly geeks play with our worthless money on Wall Street. We throw our empty money at cars, TVs, football clowns, tasteless beer, deep-fried food. Prices go up. More empty money is printed. The boss gives me a 4% of nothing raise. Health insurance premiums go up 300%. The IRS stimulates me with 600 useless dollars. Since our "valuables" have no intrinsic value, we can afford to throw them out and replace them. (Note: You can still buy a functioning 1927 GE refrigerator on EBay. Don't search for the 1977 unit.)
So where does the blame go? War debts- beginning after WW I. Remember the Soviet Union? Reagan did not fell the USSR. War debts killed the USSR. They made missiles instead of washing machines. You can't wash clothes with a missile.

C.M., "Money For Nothing" isn't just a Dire Straits song.

Central banks vs. the gold standard, is that the only choice?

Inflation is the hidden tax on our lives, on every dollar we earn. I believe that.

The current Federal Reserve system is the cause of inflation.

But is the gold standard, or any commodity standard, or a market without limits the right answer?

<a href="http://www.huppi.com/kangaroo/L-ausmain.htm">Here's a pretty convincing take down of Misses and the Austrian School</a>.

My point on health care was that Japan and South Korea had UHC when the big three were signing onto the current deals, Toyota has never had to shoulder any of the current legacy costs for that reason.

If the governments in Japan had to bail their auto industry out, then you had better believe that they would be mandating the closure of factories in foreign nations, it was just an idea that I found to be very interesting.

Mark-Think about not just the auto workers themselves, but of the communities that are based around factory workers incomes, the barber shops/beauty salons, grocery stores and other businesses that are going to be in very big trouble if we see a massive closure of auto factories.

Bankruptcy doesn't necessarily mean closure. It means restructuring, elimination of debt, canceling contracts (such as union contracts), and developing a plan to survive, if possible.

There's a bigger economic cost to be considered over the long-term to propping up a failing business. You only prolong or delay the pain.

Toyota workers in the U.S. are subject to the same health system as GM workers in Detroit, so, again, any comparison to conditions in Japan doesn't fly.

First off ill clear a few things up..I worked for GM.Got a pension from GM..So i think i know what im talking about here..GM sold us ..We were bought up by a French company.GM did this to save costs..We also as GM sold products to
Toyota..Those parts that were made in USA are now being made in Mexico..We had a three tier wage system..So even with lower cost labor it still wasnt good enought.It wasn't about quality..It was about how much money could be made..

While we were owned by the French company they deceided they wanted out of the contract and wanted to move the whole operations to Mexico and overseas to asia.The union contract wouldn't allow it..So they filed chapter 11. Got a judge to throw out the contract.Screwed the vendors over on what they were owed and closed up the plant up here and now make every thing out of this country..We were profitable up here ,made a get bunch of products but it wasnt enought..They came out of chapter 11 in 10 months..Right after they broke the contract..It was all about greed..The laws make it possible.So Howard chapter 11 does mean closure.I'm glad there was a union to look out after our interest thought the years.

If GM goes down it will be bad for the USA..We need strong american companys to get us through this mess..Tied to the big three are many tier 1 and 2 suppliers that well go out of business.This seems to be all about breaking unions in the country.I pay for part of my health care now as do many auto workers..

Do we have to adjust our wage to those of third world countrys..It that what free trade has brought us..we have
labors laws and work rules that are in place to day because of unions.

Should we bail out any business? That's the question. Most people here on this blog did not think we should bail out the banks, but now the Auto companies are ok?

Should we bail out Insureance companies? Where do you draw the line? We have bailed out companies and banks before since the 1970's, and each time we end up doing it again.

And again, since we don't have the money, do you think we should keep borrowing from China and Abrabia?

We'll just print more money. Then taxpayers will be on the hook both for the debt and for the inflation it creates.

A lot of people in the newspaper industry think Congress should bailout newspapers.

Mark, I agree with you on free trade, in retrospect not having tough environmental and worker protection clauses has done much harm to the American economy.

Howard, the health care costs are higher for union members because the plans are generally more expensive, Toyota isn't locked into the same rates that the UAW and Ford is, I don't think that the UAW should make any concessions in this go around though, if we had good and quality universal health care (not socialized medicine) then costs would me much lower.

John, sometimes it's necessary to prevent the fallout of the overall economy.

Is this a bailout or a loan program..During normal economic periods,Doesn't the fed loans money to the banks,were do we get capital to grow our economy.Isn't the whole system based on lending from one person to another,Was the money ever really there..They say the stock market lost 2 trillion dollars..Who has it, were is it..Is this not just a game about printing money..Who has all the money..