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Trading Blame After Bailout Collapses

By Ben Pershing
The 110th Congress came to an ignominious end late last night, as auto bailout talks collapsed in the Senate and both parties did what they've done for much of the past two years -- blame each other.

Harry Reid said Republicans are "are more interested in settling scores than solving problems." Mitch McConnell called the original deal crafted by Democrats and the White House "simply unacceptable" to his party. Bob Corker, an unexpectedly important player in the process, blamed the United Auto Workers for being unwilling to agree to a specific date for pay cuts. The union blamed Corker, and around and around it went.

Now, world stock markets are down, the dollar is falling, and the way forward is uncertain. Democrats and the Big Three still hope the Bush administration will relent and carve out some money for automakers from the existing financial/housing bailout fund, but GM is also reportedly considering whether to file for bankruptcy.

Continue reading at Political Browser»

By Ben Pershing  |  December 12, 2008; 8:05 AM ET
Categories:  The Rundown  
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Comments

I wish the Republicans had shown guts and scuttled the initial bank bailout. You mean to tell me that the Auto industry does not have enough capital to get them through 2 months! Then they will have 58 Democratic Senators and Obama as president. Why do they want a lame duck president to take the fall for an auto bailout? More importantly, why does a lame duck Republican president seem so hellbent on delivery a bad bill to his political "enemies"?

Secondly, who cares what percentage of the cost of a car wages consume? We are talking about the MANUFACTURING of the car. All goods are sold on a margin or mark-up if you will. The industry I am in typically has as low as a 2% margin. Therefore, we constantly look for more efficent ways to deliver our product. If overall costs increased by "just" 5% we could be sunk.

Finally, since Obama is a citizen of the World, why should he care whether cars are made in the USA, Mexico or Japan?

Posted by: ajeffrey824 | December 14, 2008 6:24 AM | Report abuse

The banking system doesn't care about us. They scared us into this givaway by saying our checks would bounce and the economy would collapse.

We should work together to form mutually beneficial co-ops to replace them. NACA has been doing just that with mortgage loans for years. Phil Gramm hates them, which also makes them look good.

Posted by: rooster54 | December 13, 2008 3:37 PM | Report abuse

Bank of America and Mr. Higgins missing $millions, It can happen to you, my fellow Americans


More info: http://mrhigginsbank.blogspot.com/

Posted by: srmaxhiggins | December 13, 2008 12:11 PM | Report abuse

Rewrite:

I would be happy to watch C-SPAN for you and simply invest your money the exact opposite of what he says.

Posted by: JakeD | December 13, 2008 8:30 AM | Report abuse

JRM2 Ditto!

A memo from the Rethug leadership in the Senate was recently intercepted urging their membership to take a shot at the unions. How disgraceful! What traitors! To take a shot at the US economy for the sake of politics. Shame on them!

Posted by: nwsjnky1 | December 13, 2008 3:02 AM | Report abuse

Harry Reid seems to have this stock market thing down pat! Does anyone know how I can get him to manage my portfolio?

Posted by: Rewrite | December 12, 2008 9:34 PM | Report abuse

Even those companies with manufacturing plants in the South use services, products, and suppliers from around the U.S. (as well as Canada and Mexico):

http://www.bmwusfactory.com/uploadedFiles/Factory/Manufacturing/Suppliers.pdf

Posted by: JakeD | December 12, 2008 6:47 PM | Report abuse

JRM2:

Foreign auto makers employ AMERICANS too. Not just in the South: http://www.toyota.com/about/our_business/operations/operationsmap_usa/index.html

Posted by: JakeD | December 12, 2008 6:42 PM | Report abuse

So the UAW workers want to hold on to the big paychecks, excellent pensions, great Healthcare for life.

Get paid for the whole year and just work part time.

Who do they think they are????

Senators

Posted by: dickward1941 | December 12, 2008 4:06 PM | Report abuse

"JRM2:

If law firms were going bankrupt, the same would apply to my retirement (I've got a gold-plated annuity with enough to get by, if needed ; )

Look, there will be lots of pain going through this fire, no doubt. I hope to see from the ashes a more powerful and progressive American auto company that will re-take the throne in manufacturing, engineering and design. That title is currently in the hands of the Japanese. But we can re-claim it; America can do ANYTHING she sets her mind and strength to.
Posted by: JakeD | December 12, 2008 3:13 PM"
---
OK, fair enough, let the pain begin!

Posted by: JRM2 | December 12, 2008 3:16 PM | Report abuse

JRM2:

If law firms were going bankrupt, the same would apply to my retirement (I've got a gold-plated annuity with enough to get by, if needed ; )

Look, there will be lots of pain going through this fire, no doubt. I hope to see from the ashes a more powerful and progressive American auto company that will re-take the throne in manufacturing, engineering and design. That title is currently in the hands of the Japanese. But we can re-claim it; America can do ANYTHING she sets her mind and strength to.

Posted by: JakeD | December 12, 2008 3:13 PM | Report abuse

"JRM2:

No surprise, I favor a restructuring of the UAW contracts (judicially, if needed).

Posted by: JakeD | December 12, 2008 2:50 PM "
---
So while we are at it should we restructure your pension too?

Posted by: JRM2 | December 12, 2008 3:03 PM | Report abuse

JRM2:

No surprise, I favor a restructuring of the UAW contracts (judicially, if needed).

Posted by: JakeD | December 12, 2008 2:50 PM | Report abuse

This is nothing more than a Republican war on labor by a small group of politicians that come from states in the south that are home to foreign (non-union) auto makers.

Labor is equal to 10% of building an auto, Toyota pays about $30.00, GM $29.00 per hour. GM gives better benefits and why not?, these are family people, fabric of America people, they are not off flying private jets and vacationing in Paris, rather, they're going to Disney world and maybe a football game or two. Taking care of their families is good for the American society.

If they would start building cars that A: Weren't junk, and B: Got really good gas mileage then maybe they'd stand a chance but the foreign auto makers make better cars with higher gas mileage.

Posted by: JRM2 | December 12, 2008 2:23 PM | Report abuse

Ok,
First, labor is equal to 10% of the cost of building an auto, so if they take a benefits cut (Toyota pays slightly higher wages, the extra cost is in the UAW benefits) then they save about 5%..whoop dee do! that's not gonna save them so how do we save them?

Give them a loan, help them retool for the 21st century.
America used to make the best autos, let's bring that back because they are crap right now.

In 2010 vote for a filibuster proof Senate so politicians in the south with foreign auto makers in their state can't obstruct measures that have been passed in the house.

Posted by: JRM2 | December 12, 2008 2:13 PM | Report abuse

sallyards:

I agree.

Posted by: JakeD | December 12, 2008 12:55 PM | Report abuse

BOYCOTT THE BAILOUT
We all need to unite and send a strong message to the Bush Administration, the automakers and the union as they conspire to move forward in defiance of the US Senate. Each of us has a duty now to do our part to make sure the madness stops NOW. If you act NOW you can play a very integral part in stopping the madness. But you can’t delay. Take a 30 minutes and make your voice heard on as many newspaper forums and blogs as possible. We urgently need to get the word out that WE ARE MAD AS HELL AND WE ARE NOT GOING TO TAKE IT ANYMORE. Your voice and a united message that ENCOURAGE EVERYONE TO BOYCOTT GM and Chrysler if they accept bailout funds. If we stand united it will force the automakers and the unions to make the hard sacrifices that are critical if the industry is going to survive. PLEASE JOIN US WE DESPERATELY NEED YOUR HELP TODAY!!!

Posted by: radioceleb99 | December 12, 2008 11:05 AM | Report abuse

Of course.....McConnell says the WH and Dem plan is "unacceptable," although he declined Reid's invitation to propose one that would be acceptable.
Obstruction is the name of the game now and will be so in the next Senate session. Just to try to paint the Dems as unable to do anything.
How childish.
But, who's surprised?

(An ex-straight ticket Republican voter...until bush converted me to my senses.)

Posted by: mowout11 | December 12, 2008 10:21 AM | Report abuse

Unreal. When GM collapses next month, a million people lose their jobs, and the economy inches closer towards depression, I want everyone to remember who it was that stalled these talks. To throw out the whole bill because the unions wouldn't lower their wages SOON ENOUGH? How badly to Republicans hate unions to risk economic meltdown because the auto unions aren't punished sufficiently in the bailout?

Even Cheney said last night that it's "Herbert Hoover" time if this doesn't pass. Let's remember that it's the Republicans who are playing Herbert Hoover of the 21st century.

Posted by: ManUnitdFan | December 12, 2008 10:06 AM | Report abuse

What a tragedy - the government should loan the companies the money and then stay out of the management of the companies. ...............

http://thefiresidepost.com/2008/12/10/why-government-management-of-auto-companies-will-not-work/

Posted by: glclark4750 | December 12, 2008 9:33 AM | Report abuse

As an American taxpayer, I thank the Republicans who opposed spending more of my money to support mismanaged automakers and financial institutions, even thought House Speaker Pelosi called them "irresponsible." So many taxpayer dollars have already been committed to bailouts that the widely projected deficit for 2009 is $1 trillion. Congress has already appropriated most of that amount in the FY 2009 budget. Therefore, we two parents of two dependent children will be $36.50 deeper in debt when I return home from work today than when I got up this morning. This is added daily to the family debt of $133,333, based on the national debt of $10 trillion and 300 million Americans. Do the math!!! Instead of giving the Big Three more taxpayer money, let them go into bankruptcy, so that they can get rid of poor management and lower the bloated wages from $73.20 per hour (their own figures) in total compensation to Toyota's U. S. workforce average of $48.00 per hour. It is ironic that most of the worst enemies of taxpayers were promoted or re-elected in last month's elections.

Posted by: sallyards | December 12, 2008 9:30 AM | Report abuse

The UAW doesn't want to play. This is developing into a big game of chicken. The union is going to see who blinks first - The President, the Congress or Obama, if the Big 3 are around when he takes office. The UAW is betting that the Democrats are going to save them. If they do and if the new congress and Obama give in to the union, then we will know that Obama's "change" mantra is a fraud. With no union wage concessions, giving the Big3 the 14 billion will amount to another waste of taxpayer money.

Posted by: saelij | December 12, 2008 9:26 AM | Report abuse

Not much else the White House can do except give the autos TARP money. Bush can’t have a GM/Chrysler collapse as his final act.

More interesting to me is how this comes back to haunt the GOP. Do they get justifiably hammered if Bush doesn’t give the cash and the auto industry collapses overnight?

http://www.political-buzz.com/

Posted by: parkerfl1 | December 12, 2008 9:24 AM | Report abuse

Maybe they want America to be only for rich people to live in.

First of all are you kidding me?

First let’s do a quick review: The bankers went on vacation at a pricey resort after they got there money. The banks or the government still has done nothing to help people losing their homes. I own a small business and was just told my loan was going to cost me more. I am not sure how this makes sense since the bankers have all this extra money.

The auto companies have fat cat executives making millions of dollars and the senates sticking point is for the middle class workers to take a pay cut. My only question is would anyone in the senate like to switch to crappy insurance and give up their pension in order to give the rich bankers ooooh I mean the fat cat auto executives ooooh I mean THE AMERICAN PEOPLE some help.

We have all this crap coming out of china with lead paint, safety hazards, and poor working conditions for their people. My pediatrician recommends don’t buy toys from china. Ya right, are there any made here. On that note, do we want our cars made there?

Why are we giving everything our troops sacrificed for away to other countries? We are losing our power, our jobs, our freedom, our security and our hope. This doesn’t take a rocket scientist to figure out. It takes a caring unselfish unified group of people to get what we deserve.

Save the auto companies it’s no longer about the mistakes the government made, or the auto executive made it I about America needing it.

By the way my husband or I do not work for the auto industry we just care about America.

With Love,
Shelley

Posted by: shejada | December 12, 2008 9:21 AM | Report abuse

Headlines in today's newspapers:

Governor Rod Blagojevich (D-Dead Meat) has yet to resign.

Congressman Rahm Emmanuel is believed to be intermediary from Obama transition team to have spoken with Blagojevich about Senate appointment.

50 billion dollar Ponzi scheme admitted to by Democratic fund raiser, Bernard Mackoff, in New York.

UAW refuses to make concessions and auto bailout bill collapses. This is after Speaker Nancy Pelosi stated everyone must take a haircut to get the bill passed.

I thought the Democrats were going to "Change" business as usual for the common good, but it appears I was wrong.

Posted by: mwhoke | December 12, 2008 8:21 AM | Report abuse

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