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Posts Tagged ‘big three bailout’

Republicans to U.A.W.-It’s Payback Time

A federal bailout for Detroit’s automakers appears close to dead, delivering a crushing blow to a Michigan economy reeling from high unemployment, skyrocketing home foreclosures and sagging tax revenue.

The obstructionists: Southern Republicans determined to use a financial crisis to rework corporate balance sheets and rewrite collective bargaining agreements on their terms and timetables.

Paybacks can be hell when business meets politics, as union leaders, their members and tens of thousands of folks associated with the Detroit-based auto industry are seeing clearly in the wrangling to craft an emergency bill to throw lifelines to beleaguered General Motors Corp. and Chrysler LLC.

Stripped bare and put in the regional context of union vs. nonunion and domestic vs. foreign, the toughened conditions pushed by Sen. Bob Corker, R-Tenn., are legislative cruise missiles aimed directly at Detroit’s business model, the UAW’s Solidarity House and 70 years of Big Three bargaining tradition.

How could they be anything else? Immediately match the pay and benefits of foreign-owned automakers operating in the South, his terms say. Reduce your expectations for Big Three contributions to the barely funded retiree health care fund and take some in stock. Eliminate the Jobs Bank and supplemental unemployment benefits.

And if UAW and company bargainers can’t get there by a March deadline — along with concessions from bondholders, management, shareholders and suppliers — GM and Chrysler must seek federal bankruptcy protection like almost every other private-sector player would under similar circumstances.

Detroit Automaker Bailout Getting Closer

WASHINGTON — The White House and congressional Democrats reached an agreement in principle late Tuesday on a $15 billion bailout to keep General Motors Corp. and Chrysler LLC afloat through early next year, but supporters still must get enough Senate Republicans on board to pass a bill.

The White House won a key concession that would essentially force the automakers to file for bankruptcy if they have not worked out long-term restructuring plans by March 31. The presidential appointee who would oversee the money, or “car czar,” would be required to call back the loans at the end of that period if he or she determines a company is not executing a plan for viability, a senior Bush administration official said.

The czar could grant automakers a one-time, one-month extension, to April 30, if they were making significant progress.

In exchange for aid, automakers would have to accept conditions. They would be barred from paying bonuses to top executives and dividends to shareholders, and could not own or lease corporate aircraft.

Apathy and Ignorance are Detroit’s Worst Enemies

WASHINGTON (CNN) — A national poll suggests that six in 10 Americans oppose using taxpayer money to help the ailing major U.S. auto companies.

Auto industry executives testify November 19 before Congress.

Sixty-one percent of those questioned in a CNN/Opinion Research Corp. survey out Wednesday are dead set against the federal government providing billions of dollars in assistance to the auto makers, with 36 percent favoring such a bailout.

“Only 15 percent say that they would be immediately affected if the auto companies went bankrupt,” CNN Polling Director Keating Holland said. “Seven in 10 say that a bailout would be unfair to American taxpayers.”

It is simply amazing that so many Americans still don’t understand the importance of the Big Three U.S. Automakers in this country.

The Big Three directly and indirectly employ millions of Americans who used to enjoy a middle class living. These are the same people who buy houses and pay mortgages. They also used to buy new vehicles, refrigerators, furniture, tv’s, home improvement supplies, and many other durable goods that make up the bulk of the U.S. Gross Domestic Product.

They are the same American Workers that used to be able to send their kids to college.

When is this country going to understand that we need labor unions and domestic manufacturing in the U.S.?

Bailouts for Bankers but Nothing for Detroit Automakers?

This is the part of our nation’s surreal economic crisis that seems particularly surreal:

The US auto industry, which employs 3 million Americans in auto plants, parts and supplier networks and dealerships nationwide is broadly understood as being essential to maintaining America as an industrial force.

It’s financial collapse, which even critics of moves to bailout the industry suggest is imminent, would devastate workers, retirees and communities in every state of the nation.

Despite the grumbling from anti-union zealots, the auto giants have radically retooled in a manner that makes the cost of producing a vehicle at a unionized plant of General Motors, Ford or Chrysler roughly equivalent to the cost of running a car off the line at a non-union plant.

And to top it all off: Auto plants actually produce something that most Americans consider to be useful.

Yet, proposals to provide what now seems to be a very small bailout — $25 billion — are currently stalled.

At the same time, the whole of the federal government is scrambling to buy as much as $50 billion in “toxic assets” — bad loans and other products of irresponsible financial practices that are of dubious value — from Citigroup, a global banking concern that makes money by charging working families exorbitant interest rates for credit.

Perhaps, in some wild calculation of American interest, Citicorp is worthy of a bailout.

But what mad calculus would make Citigroup more worthy than the auto industry?

Something is fundamentally wrong with a federal government that offers bankers a bailout and autoworkers as cold shoulder.

Congress Gives Citibank Bailout Cash But None for Detroit Automakers

The feds pump another $20 billion into teetering Citigroup Inc. and insure $306 billion in bad assets just days after Congress slaps Detroit’s automakers for failing to table “a plan” to justify $25 billion in loans and folks ’round here cry, “Double standard! Double standard!”

Double standard? You bet, but it’s more than a geographic cabal of coastal Democrats and anti-union, pro-foreign auto Republicans from the South that clearly has it in for Detroit. It’s money and political alliances, folks, neither of which the boys at General Motors Corp., Ford Motor Co. and Chrysler LLC have in abundant supply.

How come Citigroup gets a pass and a big fat check? First, failure of its sprawling operations truly would pose a mortal threat to the global financial system. Second, the banking giant is exceedingly well connected to the campaign wallets of the very same folks — and their allies — who are poised to foist draconian terms on Detroit to keep it afloat.

It gets better. This being Thanksgiving Day, launch Google and type in “Chris Dodd campaign contributions.” Up will pop a link to an interesting site called opensecrets.org, a product of the independent Center for Responsive Politics. Who was the top contributor to Dodd between 2003 and 2008?

Citigroup — or, more precisely, its political action committee, whose contributions totaled $316,494. In the 2008 election cycle alone, Dodd received $157,194 from Citigroup’s PAC. From AIG, he garnered $223,478 between ’03 and ’08, taking in $98,100 this year from the beleaguered insurer propped up by $150 billion of taxpayer money.

Big Three Automaker Bailout Meets Republican Resistance

WASHINGTON (Reuters) – A key Republican Senator said on Sunday it was “pretty clear” a $25 billion bailout proposal for U.S. automakers will fail in the U.S. Senate, while Democrats argued saving the industry was critical to the U.S. economy.

The Senate is slated on Monday to begin debating emergency legislation to General Motors Corp, Ford Motor Co, and Chrysler LLC in a special post-election session to deal with the economic crisis.

The leading Democratic plan would authorize up to $25 billion in loans from the Treasury Department’s $700 billion corporate rescue program to help Detroit survive its financial crisis. In return, the government would take equity stakes in the companies and impose limits on executive compensation.

The Cost of GM’s Death