Do these guys deserve 21 million dollar salaries? These guys have apparently done nothing more than oversee the near collapse of of their companies. Mulally says that he'll skip his 21 million dollar salary and work for 1 dollar if they get the loan. This is a perfect example of how crooked these guys are. The guy has millions of dollars in the bank already and these guys are looking to make the same killing when they convince the shareholders that the single handedly saved the auto industry by securing taxpayer money. Does anyone really believe that this guy not getting paid for a year is a hardship? Anyway, can anyone honestly argue that it would not be possible to find competent management for these companies under 21 million a year.
No, No, No, they get the picture now, they came to DC this time in cars instead of the private jets so they get the big picture now..... the dog and pony show in washington is a joke.
Job loss is near record high. 1.3 Million jobs lost in the last 3 months. A ton of companies are going to go broke at years end and that # will climb dramatically. Already the 3rd highest 3 month # since WWII. 1.9 Million jobs lost since December 2007 when the recession began. I don't like a free bailout either and hope they attach a ton of stipulations that require the businesses to do things differently going forward. That being said if the businesses go under we will be in the worst recession for sure since the great Depression and it will pretty much be automatically extended another 2 years.
Let me say a few things. "bailout" is the most over used, useless word that the media might have ever used. Bailout seems to say that these guys are going to get money with no terms or repayment. This is absolutely false. The term that the CEO's of the Big 3 prefer is 'bridge loan.' It would be a loan to get them through these rough times, and they would repay it. I was against the 700 billion dollar 'bailout' because it was just that... money approved to be spent with no clear terms of restructuring amount recipients nor of repayment. It wasn't even (and still isn't) clear who will get these funds. Most of them are financial institutions who wrote bad paper, and are getting money to prop up what never should have been written to begin with. Now, the Big 3 make a product. They also have a history of being profitable, and have presented a clear plan to congress. Now, the points of merit in those plans should (and are) being vigorously challenged. Yet, here are 3 companies that do make viable products (actually FAR beyond cars), and it actually makes sense to give them money for the short term. The Big 3 have even pointed out that this is a loan that they would have tried to get through more traditional lending institutions if loan money wasn't to tight right now. There are reasons to be against this loaning of money, don't get me wrong, but please get some of the basic facts correct. BTW, I am a lay person as well, so if I am wrong on any of the above points, please correct me.
This is why you let them go under. If CEOs know they can take whatever salary they want with no consequences, then why wouldn't you do it?
hookem, you do realise that 2 of those CEO's have been there for a short time, right? Nardelli has been the CEO of Chrysler for just over 1 year. He was named CEO on Aug. 5th of 2007. Mulally became Ford's CEO on Sep. 5th of 2006, so just over 2 years. and the longest tenured CEO is Wagoner...in April of 2005. 3 1/2 years is the longest tenure.. Now Wagoner is somewhat of an insider at GM, while Mulally came to Ford from Boeing, and Nardelli came to Chrysler from GE then Home Depot... So you are really talking about at least 2 of those guys who have a very short time to turn things around.
And you wonder why they're struggling...check out this chron article: Job Bank system at GM Wow, that's unbelievable how that works. Almost full pay up to 48 weeks after being laid off. Unions are destroying these companies and the Gov. needs to take action and regulate their ridiculous demands!
The product: something millions of Americans are guaranteed to purchase every year. The industry: has hemorrhaged market-share to foreign-run companies and forfeited a previous reputation for superior quality over a span of decades. The marketplace: America, where innovation and hard work are supposed to be prized, where no new company has gotten past the establishment's blockade in over 70 years. The CEOs: when interviewed on NPR, GM's could/would name no mistake he had made aside from having bad luck and being in a tough market. How can he fix what he doesn't know he is doing wrong? The "solution:" designate these proven failures as "too big to fail." Set the precedent that no screw-up on their part can be allowed to mean the end. Formally announce that while the salaries and profits are private, the risk of doing business is socialized. Further entrench the status quo, making it harder and less likely for a startup to replace a failure. Any business deemed too big to fail (1) is not, and (2) needs to be broken up immediately by the government so that no one part is any longer too big. Is our plan to let GM get bigger before it fails? Loans above market terms (a la what the big 3 desire) are like sales below market price and are gifts; they are bailouts.
Feivel, To answer your question about the Camry v. a Pontiac. I am assuming you mean a G6 as that is probably the closest car to compare. I would have to drive one. I have driven several Camry's and I can promise you it is a car I would never buy. It reminds me of my grandmother's Buick from about 10 years ago. Now, this was not the lastest Camry that is out, but the previous generation. It floats like a damn hoovercraft. I bet I could make it squeal tires at about 15 mph around a 90 degree turn. I can honestly say that the Toyota Camry is the worst driving car 'new' car that I have driven. I really don't see why people like them. They are just a Japanese Buick. Even saying that the new Buick's are much better. Now.. back to your original question.... I would have to drive a Pontiac G6, but I assume it drives better than a Camry and if it did, I would buy one over a Camry. If you really asked flat out, which 'family sedan' would I buy between 20k-30k, what would it be. I would check out 3. 1)Ford Fusion. great build quality and price for the amenities 2) VW Passat. Best drive in the segment, but high cost of ownership and purchase. 3). Mazda 6. Great new car. the looks are great and if it drives like the previous generation.. Zoom. Zoom... Oh yea... did I fail to mention that 2 of those 3 are Fords and have the same platform? lol....
I'm just wondering if anyone has considered - in lieu of a bail out, bridge loan or whatever they are calling it - the govenment issue $15k vouchers to middle and lower income families to buy a Ford, Chrysler or GM vehicle from current inventory. The discount would be calculated off the MSRP. Thus, a family could get a Malibu, Fusion, G6, etc. for around $10k. Also provide some money for favorable term financing. This would put money in the Big 3's pocket, put newer, more fuel effecient cars on the road and clear out existing inventory that's just sitting on dealer's lots.
i am with KGP on this (i rarely disagree with Theu actually)....why are we "loaning" money to companies that have proven themselves to be failures? there is NO good reason to think that we will ever see this money again. sure we can call it a "loan" but regardless, we won't see it again. it is time for these companies to file for chapter 11, push off the dead weight that is killing them (unions) and TRY to move forward on their own. if companies need MORE money than they are worth after decades and decades in business, something is very wrong. the government propping up failing industries seems like we are just putting off the inevitable....why don't we just pay the price now and rebuild from the ashes of bankruptcy?
Theu Your first post about bailout and it actually being a loan that would be repaid is false, how do they pay it back if they continue to go under in spite of additional funds that they requested? Ask for more funds? and more? and more? A poor business model is a poor business model and they have not given a specific plan to congress on how they will turn their business around. Oh and the Unions are at least half the problem. paying people that aren't working....where can i get one of those jobs? Also- you would pick a G6 over a camry most likely (you would have to drive it first though just to be sure but you are already leaning that way) Are you an american car salesman? just asking because you sound just like the big 3 CEO's blowing smoke...honestly. American auto makers have been losing share of the market because they don't build what people want and people have figured out that if you plan on keeping Toyota/Honda vehicle awhile it will cost less in maintenance than american which = spend their hard earned money on other things like a bigger house? Please don't pull out some magazine article that says the big three have "caught up" to Toyota/Honda because they haven't, i've got a jeep classic I'll sell you right now for below blue book if you are so proud of american and i'll stay with my little ol accord and be happy as a lark. Please buy my Jeep it's a year newer than my accord and 25k fewer miles on it and had tons more problems than my accord and my wife drives it a handful of the easiest miles a vehicle could be driven. I will never buy american again, it has failed me in my own drive way, the second it fails me while I or my wife is out it will be towed to a toyota dealership where i will walk away very happy with a solid vehicle that will last 10+ years with VERY few if any problems at all.
There is only one way out and that is govt induced bankruptcy. Govt forces GM-Chrysler merger. Close half the plants, fire half the workers. Break the union, eliminate the healthcare plan and the job bank. Fund the underfunded pension since we have to do it anyway. Create trust fund for warranties so people might buy the cars. Provide debtor in possession financing since there is no way they could get it on their own. Close 5000 of the 7000 dealerships that you cannot currently close under state law. Honda has 1500 dealerships. Control CEO pay or fire their ***. None of this will work mind you, because these companies are hopelessly broken and will be dominated by much better run car makers who make superior products. Anyone who would spend 30,000 on an American sedan over a foreign model is a mouth breathing idiot loyalist who doesnt know **** about cars. Or Grandpa down in Florida. Evidently there arent many of them left.
UTFan, I am in favour of repayment terms. I can't tell you for sure that the government would get their money back. I will say that I would assume if they were to liquidate what they have in assets the government and other creditors would be at least partially repaid. Also, I would rather the 3 get a traditional loan from traditional sources, although what they are saying is that they can't do that due to the current banking issues. Now, do I work for an American car company? No. Do I beleive what they blow up my skirt? No. Do I think the Camry is a horrible driving car? Yes. I think they drive like a mundane family sedan. I used to have have a Passat (until my wife wrecked it). and it handled like a sports car. Although illegal (and I would never *wink wink*), hypothetically one could drive that Passat into a 90 degree turn on a FM road at 90 mph... The handling was that great. It felt planted and secure at 130 mph. My mom has a Buick errr Camry, as did a good friend of mine. I seriously couldn't feel the road at 60 mph. On center was numb as hell and I couldn't feel the tires on the road!! SUCKS ***!!!! Now, some old people probably like that floating over the road on a cloud feeling... For me? It is awful. mop, This is my issue. I am not really for government loans or 'bailouts', but let me offer why I think this one is one that makes me say maybe so. Our congress just gave 700 billion to who knows who, with who knows what accountability. This would be a MUCH smaller amount of money, to a defined entity, that makes a defined product, has defined assets, and would have defined terms of repayment. I say take it out of the 700 billion already approved. Also, let us not forget the role of unions and our own government in this. When our car companies cried foul about the way it is nearly impossible (still true) to sell US cars in Japan, while the US has done nothing to assess tariffs on Japanese cars here. Please don't think I am saying that the big 3 should get a pass and NOT change their business structure. I am not saying that. I am just saying they are at least a defined entity which we could watch.
The unions are like a parasite that has grown so much it is killing the host. Break the unions, that's step 1.
jackray, Yes, the gov. helped Chrysler in 1979, and Chrysler REPAID the money. (At least this is my understanding). What is wrong with that? It worked for 30 years....
