U.S. to give Chrysler, GM new aid

[Eugene]

Source: Reuters

U.S. to give Chrysler, GM new aid
Tue Apr 21, 2009 1:57am EDT

WASHINGTON (Reuters) - The Obama administration will make about $500 million available to Chrysler LLC through the end of this month as it seeks to reach an alliance with Fiat, and up to $5 billion through May to help General Motors Corp restructure outside of bankruptcy, an independent oversight report on the Treasury Department's corporate rescue fund said on Tuesday.

Separately, the United Auto Workers (UAW) union urged its members to lobby the White House by phone or email to ensure that workers and retirees are treated fairly in negotiations at both companies on new concessions, which are considered vital for the automakers' to survive.

"We need President (Barack) Obama and his auto task force to stand up for the interests of workers and retirees in these restructuring negotiations," the union said in an appeal on its Web site to members.

-snip-

Analysts and consultants have questioned whether the companies can close the deal and avert what most believe would be a certain Chrysler bankruptcy.

At the White House on Monday, Obama's chief spokesman, Robert Gibbs, would not forecast where the talks were headed but said the administration was working "with all of the stakeholders involved" and was hopeful a solution would be found to "continue the Chrysler brand" and strengthen the industry overall.

-snip-

Read more: http://www.reuters.com/article/topNews/idUSTRE53K0KU20090421

[saigon68]

1. Like pissing in the wind

[gauguin57]

2. Why don't we sell a bunch of American cars to Cuba?

Folks on the island keep fixing up their 1950s models ... the embargo has prevented them from getting newer models.

Let's give them some newer cars, and get some money for GM and Chrysler that doesn't come from our pockets.

[jmowreader]

4. Not a bad idea, and it would do three good things

It would first cause a nice influx of Cuban-earned money into Detroit's bank accounts.

It would then give Cubans cars that weren't nearly 60 years old.

And finally, you know there's a whole slew of US-based custom car shops who would LOVE to get their hands on all those Cuban cars.

There is of course a very large problem: the Cubans already got took once on a deal like this--when Castro decided to import 300,000 Haier refrigerators to replace the 1950s-vintage American-made ones. The only way Haier could produce a product that doesn't suck is if they started making vacuum cleaners.

[Vidar]

6. Makes a lot of sense. Good idea. Don't hold your breath.

[jmowreader]

3. I think this is the way we're going to have to go

The first problem with NOT bailing out the automakers is there are a brazillion Republicans out there who would just LOVE to kill off the UAW--well, all unions, but especially the UAW--once and for all. If the unions go, kiss things like the 40-hour week and the minimum wage goodbye. I hope there's no one here who believes that Ayn Rand bullshit about "the market" setting wages if the government took away the floor--I guarantee that if Walmart thought they could get away with it they'd pay $4 per hour, or less, and if you don't like it that's tough because every other retailer in town dropped ITS wages so they could compete with Walmart.

The second problem is if GM or Chrysler go into bankruptcy, any pension obligations they currently have will be vanished. Surprisingly enough, there are Actual Human Beings at the other end of all those pension obligations--human beings who have become accustomed to eating, living indoors and wearing clothes. What are these guys supposed to do, sell Amway? (And yes, I read Merchants of Deception.)

Problem three, unfortunately, is the autoworker retirees are a big driver in the retail economy of any area that has an auto-industry plant in it.

Problem four is we have put a hell of a lot more money into bailing out the banks than we have into bailing out any wealth-creating industry. You know what banks do for a living? Banks don't make anything. Banks give John's $100 to Mary, who gives $108 back to the bank. The bank gives $2 to John, then gives the remaining $106 to Harold, who repays $114. After John gets his $2, the bank gives the remaining $112 to Shari, who repays $120. Except for the little incremental payments to John (who actually owns the money the bank is passing around to everyone in town) everything above John's C-note belongs to the bank. According to the federal government, this is a more worthy industry than Helen paying $100 for fabric, notions, facilities and labor to make three shirts which she sells for $45 each to Mark, Mary and Frank, then using $133 of her $135 income to make four more shirts which she sells to four other people, giving her enough money to make five more shirts for her growing clientele... Well, you know, if Helen had a grain of brain she would fire Marti, Juli and Dorothy and offshore her production to Macau where people will make you perfectly fine shirts for $5 each (please tell me I don't have to stick the sarcasm tag in here) and then she could afford to buy herself a Congressman like all those hardworking, patriotic bankers did. We know it's a more worthy industry because the government gave the bankers free money when they gambled on naked credit default swaps and "CDO-squared" collateralized debt obligations then lost their asses, while offering manufacturers tax incentives to offshore production so they could make crap cheap enough to sell to Big Box Mart.

I would have ONE, and only one, stipulation on the automaker bailouts: You figure out how to increase non-fleet sales of cars that get at least 10mpg above your CAFE target by 10 percent per year, starting this year. It's got to be non-fleet sales, guys; anyone can do it with fleet sales by ju$t offering the right $ort of offer.

[2Design]

5. Yes I hate to see the republics win against unions - they are

working very hard to bust them - the teachers have been onslaught for years - we need growth in unions