GM and Automakers Bailout:
I’m actively interested in your poisition on this matter. Feel free to sound off inside *politely*.
My own struggles on this:
- My mom, dad and mom’s mom were all GM people in Dayton-area plants, along with various relations and many friends. Dayton was a BIG GM town. When GM started its decline when I was in college, and after my Dad retired, the economy in the Dayton area started going to hell in a handbasket. In a recent visit to Dayton, some 30 years later, the collapse of the local economy was screamingly awful; much of the core city is now a slum. A lot of working class and middle class neighborhoods I spent a lot of time in are rubbish heaps.
Every major city in the Midwest used to have a part of the auto making action. Many have been hit hard by the general collapse, and a total collapse and burn of what’s left would leave many millions with no jobs, no pensions and no health care, not to mention a huge number of foreclosures. And the suppliers for the factories will go plunk, along with a lot of car sales places. No new parts for existing cars. Many unsellable cars with no support for the future.
And as I saw in Dayton, once the manufacturing wage-earners go plunk, the stores and businesses that depend on those wage-earners for their business will shrivel and die. And when those businesses go under, the people and businesses they deal with will crash, and so on. Many many dominoes fall. We then watch as tax payments from all of those businesses and individuals crater as well for state, local and national governments. (Please note as well that a lot of auto industry places are outside the USA, such as in Canada or Europe.)
So it’s a big deal. Already, GM has hacked away at their retiree health care benefits for white-collar workers, but union contracts forbid this for blue-collar factory workers. Of course, if the automakers collapse, everyone’s out on the street for any bennies. Non-US-owned auto plants in this country pay around half of what the Big Three do per person in the factories.
The right blames the unions and the expense of benefits hard won at the bargaining table many years ago when people had cheap gas and plenty of money for new cars. Many others say that the management of the big automakers fought off regulation tooth and nail to make their cars more economical and safe, and was so intent on short-sighted ideas to produce high-octane muscle cars for The People Who Wanted To Vroom Around At Max Warp Speed that they lost sight of where cars *should* be going. They also cut too many corners, and people saw US cars as crap - expensive/difficult to maintain and run.
Sales dropped for the Big Three because of all of that, and the real bottom fell out when gas prices soared (making the US cars totally uneconomical to run or buy), the economy started to really tank (who can afford the gas, let alone a car) and credit to buy the things dried up (sorry, we’re not loaning to anybody, we already loaned to everybody and it bit us in the butt).
All of those factors hurt anyone trying to sell a car, but the big US auto makers didn’t have a real cushion of continuing sales to rely on, seriously foolish managment who didn’t understand how to deal with the present situation, and a huge debt and obligation load. There’s peanuts in new cars sale money coming in, and they’re burning massive amounts of cash they really don’t have to keep going.
Without a loan, GM is in danger of running out of cash. It is going through $2.3 billion a month, up from $1 billion a month earlier this year. The automaker is taking a variety of steps to conserve cash - including scaling back production, cutting jobs and benefits, putting divisions up for sale. It still expects to have barely the minimum amount of money necessary to operate its business through the end of the year. Next year looks even bleaker.
So what’s to be done? They want $25 billion to keep going, and aren’t interested in strings being attached. That’s simply not going to happen. Nobody trusts management to be able to count to five on one hand. Labor doesn’t want their people to get more cuts or be on the street. Shareholders are gasping at the old blue-chip GM stock evaporating. Taxpayers don’t want good money handed over to go right down the rathole as the Same Situation persists until the next need for money comes up.
No plan will satify everyone. Someone (porbably everyone) is going to have to do something major. Workers will get laid off. Plants will close. Managment will get taken to brick walls and offered a blindfold and a cigarette. The question will be - where do we draw the bottom line? Who’s going to be the adult and tell everyone that we all have to live in the real world?
And what about the flippin’ climate crisis elements in all of this, not to mention the obscene amounts of money going to the oil companies and the foreign countries who supply our oil? (Yes, the price of oil is down now, but if you don’t think it’s going to go back up sometime not too far away, guess again.)