Mitt Romney View New York Times

[mettech]

"...Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.."

 

New York Times 19 Nov 08.

 

 

:reading: :reading:

[lfeg]

You know, he does make a point. If GM could just eliminate any and all payments to anyone who is not actively working and get rid of all marginal dealers and the associated duplicate marketing costs required to support divisions that only exist to supply dealers with product to sell, they would be in much better shape. But think about it - even if they tried to do do this by way of Chapter 11, could you imagine the howling from the UAW, congressional democrats, and the dealers left out in the cold? GM would be accused of singlehandedly ending the middle class and the american way of life

[Bored of Pisteon]

What else is there to say?

 

I like Romney, but I'm still trying to understand where exactly he is coming from on this. I think that Massachusetts mentality has gotten to him a bit.

 

The party has been over for a long time and now we need to decide what to do next. One thing for sure. I'm just glad that I; personally am no longer a Ford employee and wouldn't want to be one right now.

[Bored of Pisteon]

You know, he does make a point. If GM could just eliminate any and all payments to anyone who is not actively working and get rid of all marginal dealers and the associated duplicate marketing costs required to support divisions that only exist to supply dealers with product to sell, they would be in much better shape. But think about it - even if they tried to do do this by way of Chapter 11, could you imagine the howling from the UAW, congressional democrats, and the dealers left out in the cold? GM would be accused of singlehandedly ending the middle class and the american way of life

 

It's just a matter of time.

 

By the way: I forgot to tell you folks. There is no such thing as "middle class". That's just another happy sounding term politicans use to make the consumers in this country think they are important. BULLSHIT. You are either rich or poor, that's it. NO ABSOLUTES. NO GREY AREAS.

 

When are these people gonna take off their rose colored glasses?

Edited November 19, 2008 by Bored of Pisteon

[goinbroke2]

crap......i'm poor then.....damn it

[Ron W.]

When are these people gonna take off their rose colored glasses?

 

Never, they're fixed for life.

 

crap......i'm poor then.....damn it

 

Me too.

[mettech]

It's just a matter of time.

 

By the way: I forgot to tell you folks. There is no such thing as "middle class". That's just another happy sounding term politicans use to make the consumers in this country think they are important. BULLSHIT. You are either rich or poor, that's it. NO ABSOLUTES. NO GREY AREAS.

When are these people gonna take off their rose colored glasses?

 

 

You are sooooo right about that. Pay day I'm rich... Day after pay day, I'm poor. :shades:

[NickF1011]

It's just a matter of time.

 

By the way: I forgot to tell you folks. There is no such thing as "middle class". That's just another happy sounding term politicans use to make the consumers in this country think they are important. BULLSHIT. You are either rich or poor, that's it. NO ABSOLUTES. NO GREY AREAS.

 

When are these people gonna take off their rose colored glasses?

 

Hmmm. I comfortably support myself. I'm not rich. I'm definitely not poor though.

[Rob052067]

I rarely, if ever, agree with anything that Mitt Romney has to say, but he does make a good case for (Chapter 11) bankruptcy - if it is done right. KeyPoint:

"The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk."

With federal guarantees, Chapter 11 reorganization could work out well for Detroit in the long run. But, without federal assistance, the likely result would be Chapter 7 liquidation.

 

 

***********************************************

 

Beyond the conservative ideology that favors free market forces above all else, regardless of the outcome, it seems to me that the Republicans in Congress are eager to see Detroit fail, if for no other reason than it will put a nail in the coffin of organized labor.

 

Regardless of all past mistakes by the Big 3, I believe the only real reason they are in such dire straights today is directly the result of the financial and credit crises. The auto industry is completely reliant on their customer's ability to access credit in order to sell their products. When customer's can't get loans, the auto companies cannot sell vehicles. It's that simple.

 

Detroit is spending their cash reserves just to keep the lights on, and federal loans would help them stay in operation until the credit market improves and consumer confidence is restored. That would be my preference, but I can see Romney's side too.

[Bored of Pisteon]

You are sooooo right about that. Pay day I'm rich... Day after pay day, I'm poor. :shades:

 

My statement about rich or poor will definitely go into my famous quote hall of fame in my signature for sure!

[disabled]

You know, he does make a point. If GM could just eliminate any and all payments to anyone who is not actively working and get rid of all marginal dealers and the associated duplicate marketing costs required to support divisions that only exist to supply dealers with product to sell, they would be in much better shape. But think about it - even if they tried to do do this by way of Chapter 11, could you imagine the howling from the UAW, congressional democrats, and the dealers left out in the cold? GM would be accused of singlehandedly ending the middle class and the american way of life

think about this. It seemed to me that the senators and the congressman were virtually telling the big 3 to go into chapter 11 now and they would make provisions and money available to get them through the reorginization and process. If you think about it even though confidence in warranty would be lower they stressed that provisions could be made to alleviate that. Also even though the big 3 said refinancing would be a problem the government basically said go ahead and fed funding will be made available to you. I believe that all 3 are back in detroit planning on how to accomplish this and it will only be a matter of time before all 3 agree to do it. They would be applauded as heroes by the majority of americans and businesses. They will plan on how to include suppliers to maintain the supply of parts and it will be one big reorganization plan that the government will GLADLY back. Sales will hurt but they are hurting now and now would be the time to suffer the setbacks.

[Pioneer]

Any automaker that enters bankruptcy will never exit, and will drag the supplier base down with it. Not to mention the lack of credit to restructure, even though we gave the Wall St. crooks $700 Billion, whose companies I might add have a higher average salary that a UAW represented worker. Funny how nobody brings that up.

 

Thus, GM entering bankruptcy = game over.

[7Mary3]

Interesting comments from a man that was a successful businessman, and who's father ran Rambler/American Motors in the late 50's-60's (when it was a profitable auto manufacturer).

[RangerM]

All this talk of bailout, or bridge loans, however you want to call it, it seems there is something forgotten

in this whole thing.

 

Who are we bailing out?

 

Are we bailing out the workers? No. The workers, from the assembly line worker all the way up the food chain, work in exchange for a wage and a set of benefits. The workers are no more entitled to their jobs, anymore than I am entitled to mine.

 

Are we bailing out the suppliers? No. The suppliers' business exists as part of the larger economy. Just like a farmer who puts 'all his eggs in one basket' a supplier who depends upon a single client is insufficiently diversified to survive a downturn of that client. He is at fault, just as I would be if I invested my entire 401(k) in Enron shares.

 

Are we bailing out American industry? No. There are plenty of healthy, American industrial giants who produce goods in this country. The Big 3 is a minority.

 

Are we bailing out the economy at large? No. Although 3 million (theoretically) lost jobs is a tragedy, we already have a program that supports out of work people in the form of Welfare. Perhaps paying the workers directly, instead of bothering to pay to operate assembly lines would be the cheapest option?

 

 

Who are we talking about bailing out? Answer: the shareholders.

 

Corporations exist for one reason only; to maximize shareholder wealth. People purchase stock in Ford/GM/Chrysler with the expectation that the CEOs (who the shareholders hire and pay, btw) will increase their wealth through stock price or dividend. It's that simple. And why do we want to protect the BIG 3 shareholders? Do they deserve to be protected? What makes them different from the shareholders of KMart or Texaco?

 

Should any one of the Big 3 declare Chapter 11, business will continue. The auto industry represented approximately $427 Billion total sales in 2005. No one would walk away from that, and there is no way Toyota (and all the others) can possibly accomodate. And Toyota is just as scared of a Big 3 failure as the Big 3 (themselves) are. Once in Chapter 11, the Federal Government can provide the loan guarantees to provide consumer confidence, and protect the suppliers.

 

The biggest elephant in the room for me during the entire hearing is that we are being asked to bail out shareholders, from 3 people who failed to identify themselves as their shareholders' agents, and one guy who does not have shareholders best interest and should have no role in obtaining lines of credit from the Government (Gettelfinger).

 

If giving the Big 3 $25 Billion is such a good idea, then we should simply buy their stock, and accept the risk as the other shareholders did. (Then we have also have the right to dictate CEO pay, btw)

 

If loaning the Big 3 $25 Billion is such a good idea, then why are the taxpayers the only source? Why not let the shareholders (who stand to gain the most) do it?

[lfeg]

All this talk of bailout, or bridge loans, however you want to call it, it seems there is something forgotten

in this whole thing.

 

Who are we bailing out?

 

Are we bailing out the workers? No. The workers, from the assembly line worker all the way up the food chain, work in exchange for a wage and a set of benefits. The workers are no more entitled to their jobs, anymore than I am entitled to mine.

 

Are we bailing out the suppliers? No. The suppliers' business exists as part of the larger economy. Just like a farmer who puts 'all his eggs in one basket' a supplier who depends upon a single client is insufficiently diversified to survive a downturn of that client. He is at fault, just as I would be if I invested my entire 401(k) in Enron shares.

 

Are we bailing out American industry? No. There are plenty of healthy, American industrial giants who produce goods in this country. The Big 3 is a minority.

 

Are we bailing out the economy at large? No. Although 3 million (theoretically) lost jobs is a tragedy, we already have a program that supports out of work people in the form of Welfare. Perhaps paying the workers directly, instead of bothering to pay to operate assembly lines would be the cheapest option?

 

 

Who are we talking about bailing out? Answer: the shareholders.

 

Corporations exist for one reason only; to maximize shareholder wealth. People purchase stock in Ford/GM/Chrysler with the expectation that the CEOs (who the shareholders hire and pay, btw) will increase their wealth through stock price or dividend. It's that simple. And why do we want to protect the BIG 3 shareholders? Do they deserve to be protected? What makes them different from the shareholders of KMart or Texaco?

 

Should any one of the Big 3 declare Chapter 11, business will continue. The auto industry represented approximately $427 Billion total sales in 2005. No one would walk away from that, and there is no way Toyota (and all the others) can possibly accomodate. And Toyota is just as scared of a Big 3 failure as the Big 3 (themselves) are. Once in Chapter 11, the Federal Government can provide the loan guarantees to provide consumer confidence, and protect the suppliers.

 

The biggest elephant in the room for me during the entire hearing is that we are being asked to bail out shareholders, from 3 people who failed to identify themselves as their shareholders' agents, and one guy who does not have shareholders best interest and should have no role in obtaining lines of credit from the Government (Gettelfinger).

 

If giving the Big 3 $25 Billion is such a good idea, then we should simply buy their stock, and accept the risk as the other shareholders did. (Then we have also have the right to dictate CEO pay, btw)

 

If loaning the Big 3 $25 Billion is such a good idea, then why are the taxpayers the only source? Why not let the shareholders (who stand to gain the most) do it?

 

Because the "shareholders" who have already lost huge amounts of value will not loan more money to GM. They will sell, book the loss, and move on. The shareholders have in effect already loaned GM the money - they traded a certain amount of money for a share of GM. The dividend that used to be paid was in effect interest for the use of the money. Right now, the workers, retirees, and anyone else getting a paycheck or benefits from an automaker or supplier would be helped the most by a bailout/bridge loan/or whatever you want to call it. Personally, I do not care if they survive as is, go 11, or go 7. I am very concerned about the net effect on our country though. We keep giving everything away and try to be the nice guys, while our leaders are selling us down the river, telling us that they know what is best.

[tommy8768]

Because the "shareholders" who have already lost huge amounts of value will not loan more money to GM. They will sell, book the loss, and move on. The shareholders have in effect already loaned GM the money - they traded a certain amount of money for a share of GM. The dividend that used to be paid was in effect interest for the use of the money. Right now, the workers, retirees, and anyone else getting a paycheck or benefits from an automaker or supplier would be helped the most by a bailout/bridge loan/or whatever you want to call it. Personally, I do not care if they survive as is, go 11, or go 7. I am very concerned about the net effect on our country though. We keep giving everything away and try to be the nice guys, while our leaders are selling us down the river, telling us that they know what is best.

So why is it our responsibility to bail out a bunch of people who made a bad investment? Sounds like typical business to me- all 3 companies played their hand and now the are paying for it. They will all go Chapter 11 and restructure so that they can get out from under the UAW contracts, and emerge as a non-union employer.

[lfeg]

So why is it our responsibility to bail out a bunch of people who made a bad investment? Sounds like typical business to me- all 3 companies played their hand and now the are paying for it. They will all go Chapter 11 and restructure so that they can get out from under the UAW contracts, and emerge as a non-union employer.

 

Most of the shareholders that have had big losses have already sold, so a bailout will not help them. The biggest group that would be helped by a bailout would be employees, retirees, and their dependents. And GM as a non union employer? If they tried that the unions would go balistic and srtike anything they could just to bring everything crashing down

[tommy8768]

Most of the shareholders that have had big losses have already sold, so a bailout will not help them. The biggest group that would be helped by a bailout would be employees, retirees, and their dependents. And GM as a non union employer? If they tried that the unions would go balistic and srtike anything they could just to bring everything crashing down

Is'nt that already happening? What would they have to lose? They are going down anyway. They WANT to get rid of the UAW.

[povertyknob]

You know, he does make a point. If GM could just eliminate any and all payments to anyone who is not actively working and get rid of all marginal dealers and the associated duplicate marketing costs required to support divisions that only exist to supply dealers with product to sell, they would be in much better shape. But think about it - even if they tried to do do this by way of Chapter 11, could you imagine the howling from the UAW, congressional democrats, and the dealers left out in the cold? GM would be accused of singlehandedly ending the middle class and the american way of life

If I read it correctly,the single biggest cost disadvantage for the domestic automakers is related to retirees/dependents. The transplants simply do not have these costs. It appears that Mr Romney is suggesting chapter 11 bankruptcy as a way to get out from under those costs in any form of re-organization tied to a "bail-out". As an active employee, I might expect to be offered some sort of "buy-down" of my wages and that would be hard to swallow.As i understand the chapter 11 process,retirees pensions would be reduced by at least 70 percent. And unless the Veba is funded better than I think it is health care coverage would go away. I don't see any upside to this for retirees/dependents. Mr. Romney "forgot" to mention that. I could be mistaken in my thinking-I hope so-but it looks like Mr Romney is pretty comfortable throwing retirees under the bus.

[disabled]

If I read it correctly,the single biggest cost disadvantage for the domestic automakers is related to retirees/dependents. The transplants simply do not have these costs. It appears that Mr Romney is suggesting chapter 11 bankruptcy as a way to get out from under those costs in any form of re-organization tied to a "bail-out". As an active employee, I might expect to be offered some sort of "buy-down" of my wages and that would be hard to swallow.As i understand the chapter 11 process,retirees pensions would be reduced by at least 70 percent. And unless the Veba is funded better than I think it is health care coverage would go away. I don't see any upside to this for retirees/dependents. Mr. Romney "forgot" to mention that. I could be mistaken in my thinking-I hope so-but it looks like Mr Romney is pretty comfortable throwing retirees under the bus.

The sad part is not only Romney but all the senators and representatives as well as the american public. They just do not care one iota about their fellow citizens. Politicians should talk they are guaranteed their pensions after 5 years and lifetime cadillac healthcare. The government is in trouble why don't they put their pensions with the pbgc

[lfeg]

Now that the election is over, yes, there is much sentiment on both sides to throw retirees and anyone else who gets in the way under the bus. And a foreign bus at that. The Republicans would do this gladly, and the Democrats would do it and hope that the unions would forget about it within 2 years.