Auto Loan comes through

13.4 Billion...

Discuss

http://edition.cnn.com/2008/POLITICS/12/19/auto.bailout/?iref=mpstoryview

Seems like a drop in the bucket to me. Is it better to make them keep coming back for more, or dump a huge sum of cash on them at once?

berkeley them

I just hope they really do make them come up with a viable plan first, like they said.

I honestly think they should force them to a "re-org", which would be almost exactly the same as a bankruptcy but with a more politically correct name. Maybe call it a "Freedom Fix", "Patriotic Shuffle", or "Liberty Re-Alignment".

"Free Market Support Mechanism", "Capatilism Correction", "United Suport Repair", "Keep America Rusting", "People's American Automotive Industrial Repair And Reorganization Buy In", "My Dashboard Fell Off When My Transmission Exploded, Why Didn't I Buy A Toyota Realighment".

"'If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury,' a White House statement on the loans said."

Good luck with that, the money will be gone.

You knew it was coming so you can't say it is a surprise, but I sure wish there had been some strings attached with this portion instead of waiting for the second installment - which we all know will happen too.

berkeley the Big 3 and the UAW. And that's coming from someone intimately involved in the industry.

I have had more than one customer tell me they won't buy a Chrysler if there's a bailout, I guess we better practice locking the doors.

Yeah, time to start planning the Bailout Spa/Party in Cancun or somewhere warmish!

I wonder what the APY is for that and if they left any room at the back end for the extended warentee.....

carguy123 wrote: "'If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury,' a White House statement on the loans said." Good luck with that, the money will be gone.

That was my reaction exactly.

So, Bush has punted this to Obama to handle? Fan-berkeleying-tastic.

Exactly. In an effort to make sure they didn't fail on his watch, he just threw them some money. I'm hearing that the UAW is coming out saying they aren't happy with the deal.

One analyst called it a "Bridge to Obama." I'm sure he'll push the unions hard... yeah right.

I hope the people boycott to show their displeasure with this "deal."

CrackMonkey wrote: So, Bush has punted this to Obama to handle? Fan-berkeleying-tastic.

Not exactly. Obama is the one who's promised to take care of the union and the car industry and they all know that after the first of the year they'll be taken care of. Bush just moved up a portion of the bail out so he'd get some credit too.

I'm not sure it's the kind of thing I'd want 'credit' for.

Ya know, I hear of comparisons drawn between this and the mortgage company bailouts, basically: if the mortgage industry can get a bailout, why can't the car industry? My take: due to government mandated easing of credit restrictions (they were directed to by Congress, look it up!), they helped push the mortgage companies into a dangerous spot. Therefore some assistance could be justified. As long as it gets paid back, that is.

The Big 3 and the UAW berkeleyed things up all by themselves.

Yeah I could see that. I think that holding out for Obama was the idea behind the big shutdowns that the Big 3 are announcing. That and it makes for good press. Of course it has little effect on the workers as they get 80% of their pay regardless...

Sing along...

"It's the most, socialist time, of the year!"

I should have known. I had ample warning yesterday via omen when the ignition coil pack on my company car quit functioning on 2 of the 4 cylinders. Buy a Dodge? Not on your life, when a 200,000 mile Subaru can do what a 73,000 mile Stratus can't.

Welfare for the rich. Course, we did ensure that multi-million dollar home payments will get made in NYC as well. Why not also ensure that Chrysler and GM can keep cranking out the stuff no one wants?

Also, congress voted themselves a pay raise. Everyone of those rich jerks makes over $100k. Which is great because every Senator and Congressman I know of is poor as a church mouse already.

Let's have a parade in favor of nationalizing the automotive industry! Nothing like a vast display of cars from nationalized auto companies to convince government it's a good idea and nationalized auto industries can be competitive. It will be open to '75 and later British Leland products and all postwar Renaults.

Xceler8x wrote: Welfare for the rich.

If by rich, you mean someone making $40 an hour to pop on hubcaps, then we agree. This is 100% a gift to the UAW.

[loud TV announcer]

"No money down!"

"We'll finance anyone!"

[/loud TV announcer]

DILYSI Dave wrote:

Xceler8x wrote: Welfare for the rich.

If by rich, you mean someone making $40 an hour to pop on hubcaps, then we agree. This is 100% a gift to the UAW.

People keep referencing "Outragious" UAW wage scales. Does anyone know if they are published online somewhere?

http://www.heritage.org/Research/economy/wm2162.cfm

The charts were supplied by Chrysler, maybe that makes them biased?

Keep in mind this is supposed to represent ALL costs, including paying into the pension funds but does NOT include retirement benefits being paid to current retirees.

There's a figure being tossed around which claims that labor is only about $1100.00 per car. $1100.00 divided by $75 is 14.6 hours per car. Hmmm.

I Googled my azz off, only thing I could find was this article (hope it links properly) which says that in 2002 it took approximately 24 labor hours to build a Liberty. http://www.detnews.com/2004/specialreport/0402/22/a14-70493.htm.

Clip from the article:

"Gains at Toledo North have helped Chrysler improve productivity. Companywide, Chrysler workers spent an average of 28 hours assembling a single vehicle in 2002, 9 percent faster than the previous year, when Toledo North was not counted. Workers at the new Toledo plant spent 24.02 hours to build each Jeep Liberty in 2002, making it among the company’s most productive factories."

For the moment, we will ignore the 28 hour figure in this article concerning other Chrysler products and concentrate on the Liberty.

This means labor costs (not including current retiree benefits) were $1800.00 per Liberty.

According to the Heritage article, it's necessary to add another $30 an hour to cover current retiree benefits (not to be confused with the pension prepay included in the $75/hour). That's another $720 per vehicle, meaning an actual labor cost of $2520.00 per vehicle.

And that does not include the labor costs built into the suppliers' price, the UAW has unionized Lear, Visteon, Delphi etc meaning there's another big hidden labor and pension cost built into each vehicle.

Something that Toyota, Nissan etc have not run into yet is their US retiree number 'bubble'. Toyota currently has 258 US retirees, the 25 year bubble won't hit until 2013. But Toyota is planning ahead for that without the UAW's interference so they will be in much better shape than the Big 3.

Holy E36 M3! I'm in the wrong business.

That's the thing.. it's NOT hourly wages. The hourly wages are somewhere between 23 and 40 bucks or so, depending on who you ask. I have no idea what the actual numbers are... it's when you add in the retirement and health care costs that it balloons out of control.

Our current health care system is bad for business.

Of course, the UAW hasn't done much to help either. I'm not giving them a pass.

But the hourly labor cost is the actual cost per hour to have an employee, making it the relevant figure to the business.

I still don't get it, if they can't build decent cars that people want to buy why are we paying to keep them alive.

Businesses live or die based upon their ability to produce something the consumer wants, providing the product, backing the product and making a profit after the deal is done, if you can't do this, well you are not viable. This lack of viability comes down to management who let the unions increase the labor costs until they are not longer profiting.

Simply put produce or die. Same idea as any small business.