Wow. GM needs $4B just to stay afloat until the end of the year. $4,000,000,000 for just one month. And what would that get them/us? More of the same next year? Chrysler needs $7B by the end of the year. And Ford “needs” the money, but may not have to tap into it? Sorry, Ford. Go away.
Now, is there anyone but me seeing some huge hypocrisy in the fact that the banks get bail-outs without restrictions or oversight and these guys are begging, hat in hand, to save their companies? Being one who doesn’t trust the government’s purpose and can see from the past 2 decades that one huge goal of Big Money is to cripple and destroy unions, I have to wonder if the rationale is to break organized labor (which was not effected by any bank bail-outs)?
As much as some may have a disdain for unions (the UAW has been particularly abusive in its own right), you should remember that without the ability to unionize labor, Big Money just gets richer, the workers poorer and less able to fend for themselves. Abuses from management was horrendous in the days before labor unions and they were a much needed entity for the common man. What we must do is control their abuses, just as much as we control the abuses of ownership and Big Money.
But, my bet is that they “play chicken” and one will lose, if not both.
As for the congress, we aren’t blind to the obvious hypocrisy of your actions and covering of the banks, while allowing the sector that most affects normal everyday Americans to die with your faux outrage. If you ask me who needs more preferential help, it would be the automakers. The bankers have shown what crooks and liars they are. It is high time we said “fuck them” and helped the real Americans stay afloat.
On its front page, the Wall Street Journal (12/3, A1, Stoll, et al) reports, “Detroit’s Big Three automakers presented turnaround plans to Congress on Tuesday that indicate both General Motors Corp. (GM) and Chrysler LLC could collapse by the end of the month unless they get billions of dollars in emergency government loans.” GM stated that “it needs an immediate injection of $4 billion to stay afloat until the end of the year, a fact it hadn’t before disclosed. In total, the company said it needs $18 billion in loans — $6 billion more than it said it would need just two weeks ago.” In addition to the proposal for “$6 billion from a Department of Energy program aimed at promoting fuel-efficient vehicles,” Chrysler said that it needs $7 billion by Dec. 31. “Ford Motor Co. seeks a $9 billion line of credit from the government, though it adds it may not need to tap it. In addition, Ford wants $5 billion from the Energy Department program.” Autoblog (12/2, Lavrinc) carried Chrysler’s “13-page document outlining the aid it seeks from the Feds and how it plans on spending our hard-earned cash.”
Also in a front-page story, the Washington Post (12/3, A1, Marr, Mufson) adds, “Together the three auto giants sought at least $28 billion and as much as $38 billion in government assistance, more than the $25 billion they requested just two weeks ago. Battered by the lowest car sales in a quarter century and tight credit conditions, the companies said they needed the money just to survive the next year.”
The New York Times (12/3, A1, Vlasic) points out in a front-page story that GM “will drastically cut jobs, factories, brands and executive pay in a desperate effort to persuade Congress to give it $12 billion in loans to stave off a financial collapse. … Without help, the nation’s largest automaker could topple into insolvency within weeks and drag down the other two members of Detroit’s troubled Big Three.”
According to the Detroit News (12/2, Snell), in hopes of receiving federal aid, GM is offering “to eliminate 30,000 jobs, shutter nine plants, reopen the United Auto Workers contract and either shrink, sell or possibly kill three additional brands. The cuts range from symbolic — ending corporate jet travel — to substantial — closing 1,750 dealerships — and are aimed at transforming one of America’s largest and most storied companies into a leaner, profitable and more competitive automaker.”
USA Today (12/3, Carty), the Financial Times (12/3, Simon, John Reed), MarketWatch (12/3, Schroeder, Langlois), AFP (12/3), Dow Jones Newswires ((12/3, Wisnefski), the AP (12/3, Davis, Krisher), Forbes (12/3, Muller, Wingfield), the Seattle Times (12/3, Harrop), and USA Today‘s (12/2, Winter) On Deadline blog also covered the story.
UPDATE from Michael Moore:
1. Transporting Americans is and should be one of the most important functions our government must address. And because we are facing a massive economic, energy and environmental crisis, the new president and Congress must do what Franklin Roosevelt did when he was faced with a crisis (and ordered the auto industry to stop building cars and instead build tanks and planes): The Big 3 are, from this point forward, to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail (a corresponding public works project across the country will build the rail lines and tracks). This will not only save jobs, but create millions of new ones.
2. You could buy ALL the common shares of stock in General Motors for less than $3 billion. Why should we give GM $18 billion or $25 billion or anything? Take the money and buy the company! (You’re going to demand collateral anyway if you give them the “loan,” and because we know they will default on that loan, you’re going to own the company in the end as it is. So why wait? Just buy them out now.)
3. None of us want government officials running a car company, but there are some very smart transportation geniuses who could be hired to do this. We need a Marshall Plan to switch us off oil-dependent vehicles and get us into the 21st century.
This proposal is not radical or rocket science. It just takes one of the smartest people ever to run for the presidency to pull it off. What I’m proposing has worked before. The national rail system was in shambles in the ’70s. The government took it over. A decade later it was turning a profit, so the government returned it to private/public hands, and got a couple billion dollars put back in the treasury.
This proposal will save our industrial infrastructure — and millions of jobs. More importantly, it will create millions more. It literally could pull us out of this recession.
In contrast, yesterday General Motors presented its restructuring proposal to Congress. They promised, if Congress gave them $18 billion now, they would, in turn, eliminate around 20,000 jobs. You read that right. We give them billions so they can throw more Americans out of work. That’s been their Big Idea for the last 30 years — layoff thousands in order to protect profits. But no one ever stopped to ask this question: If you throw everyone out of work, who’s going to have the money to go out and buy a car?
These idiots don’t deserve a dime. Fire all of them, and take over the industry for the good of the workers, the country and the planet.
What’s good for General Motors IS good for the country. Once the country is calling the shots.