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Let Detroit Go Bankrupt

nytimes.com

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Re: Let Detroit Go Bankrupt

#61

Post by fallentimes »

dionidium wrote: post #50
fallentimes wrote: post #45

Earlier quoted context omitted.

That's a strawman; I never said it was wrong to ask. Anyways... The company should have invested more of their marketing budget in R&D and produced quality cars. Empirically (consumer reports, Car & Driver, et al) U.S. cars have been subpar compared to their foreign counterparts for many years. Though some of my friends & family insist they're rapidly catching up nowadays. In the present, I don't know one way or the…

"The company doesn't have any obligation to share high earnings with their employee. " I never suggested that they do. In fact, I think I rather explicitly argued that they paid those wages because it was the best deal they could negotiate at the time. If they could have negotiated a better deal, they would have. More generally, if I agree to do a certain amount of work for a certain pay, it does not imply that I des…

Right, but you asked why they didn't. If they collectively negotiate above market wages the company will die in the long term.

Re: Let Detroit Go Bankrupt

#62

Post by mtw »

patio11 wrote: post #52
teaquaffer wrote: post #37

Earlier quoted context omitted.

I don't follow- what do you mean?

Presumably, he mean that the NYT is a floundering company which has been devastated by a refusal to adapt to new business realities over the last decade. 5 years ago their stock was trading at $47. Now it is at $6. http://finance.google.com/finance?q=NYSE:NYT (For what it's worth, if they collapse I wouldn't bail them out, either.)

the difference is that there are known solutions for automakers (more efficient cars, using japaneese production systems etc.) whereas there isn't one for print media companies

Re: Let Detroit Go Bankrupt

#63

Post by crabapple »

yummyfajitas wrote: post #27
blackguardx wrote: post #25

Earlier quoted context omitted.

This post smacks of jealousy. What is wrong with zero deductible healthcare? I don't fault someone for trying to climb society's ladder. I want everyone in America to be able to earn a living wage. Being in a union doesn't make one lazy or overpaid. How do you over pay someone anyway? Who deems what a job is worth to society? It is very unfortunate that the big three made the agreements they did, but they made them.…

Person A, a waitress at Dennys, making about $8-10/hour with high deductible health care. Person B, an auto worker at GM, making $30-40/hour with zero deductible health care. [edit: see response to this post, auto worker gets $73/hour.] The bailout: tax person A in order to help person B, with 3 large corporations taking a cut of the proceeds. Does this make any sense? Incidentally, the original poster did not descri…

what about person C - a nonunion honda plant employee. he has beaten the competition fair and square, and now he must subsidize them. perversely, the harder he works, the more money he can potentially contribute to a government underwriting his competition.

Re: Let Detroit Go Bankrupt

#64

Post by crabapple »

sethg wrote: post #56
crabapple wrote: post #11

one must ask why a waitress at denny's who makes minimum wage and has no healthcare must bail out union workers at gm who make 8x the wages, do less work, have ZERO DEDUCTABLE healthcare (do you? i doubt it), and full pensions. or why should a succesful worker at honda in ohio subsidize not only a failed competitor, but in essence have his own taxation used to undermine his own hard work? as for saving jobs and inves…

Because if the Big Three go under, a very large number of workers (folks working for the Big Three and for their suppliers) will suddenly be collecting unemployment insurance instead of paying taxes; given the current state of the economy, they may be collecting it for quite a while. So it would be cheaper for the government to keep those employers afloat. The obvious counterargument to that is that the auto companie…

Because if the Big Three go under, a very large number of workers (folks working for the Big Three and for their suppliers) will suddenly be collecting unemployment insurance instead of paying taxes

and they will also paid in taxes if bailed. so GM is going to become a giant money laundering operation for the IRS?

cut out the middleman and put them on unemployment...then they can actually find PRODUCTIVE work

Re: Let Detroit Go Bankrupt

#65

Post by crabapple »

yummyfajitas wrote: post #19
crabapple wrote: post #13

Earlier quoted context omitted.

and one wonders why bankruptcy is suitable for any other company in america, including airlines that have gone in and out of bankruptcy numerous times over the years...yet this same option is not permissible for the big3? this is exactly why ch.11 exists - to allow freedom to restructure

A big 3 bankruptcy will be bad for auto workers, since the bankruptcy judge will rewrite their contracts. Since they currently get way above market rate, the judge will probably give them a pay cut, and authorize the layoff of many (1). Take a look at which politicians support the bailout. Then take a look at which politicians get UAW money: http://www.opensecrets.org/orgs/summary.php?id=D000000070 Coincidence? (1) D…

A big 3 bankruptcy will be bad for auto workers

yes, i think that is understood. they're going to live in the real world one way or another

get them out of the big 3 and they can find work that the economy values. will they find it soon? no, but then again maybe trying to compete in the global economy with a high school education wasn't such a bright idea after all

this is just about a huge chunk of our economy that has been living in the 70s finally forced to join the rest of us

Re: Let Detroit Go Bankrupt

#66

Post by crabapple »

patio11 wrote: post #52
teaquaffer wrote: post #37

Earlier quoted context omitted.

I don't follow- what do you mean?

Presumably, he mean that the NYT is a floundering company which has been devastated by a refusal to adapt to new business realities over the last decade. 5 years ago their stock was trading at $47. Now it is at $6. http://finance.google.com/finance?q=NYSE:NYT (For what it's worth, if they collapse I wouldn't bail them out, either.)

the nytimes isn't asking the government to deliver their papers.

Re: Let Detroit Go Bankrupt

#67

Post by chris11 »

jimbokun wrote: post #6

"At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat." Unions will not take management seriously until this happens. However, I als…

And recently today the heads of GM and Ford both refused to take a one dollar annual salary as Lee Iacocca did when Chrysler was bailed out in the 80's. So I really don't see top management in either Ford or GM to do anything to symbolize sacrifice.

Re: Let Detroit Go Bankrupt

#68

Post by mattmaroon »

yummyfajitas wrote: post #51
mattmaroon wrote: post #48

Earlier quoted context omitted.

The problem is that person A doesn't pay any taxes. You're certainly taxing some people to pay for it, but it's not person A. Also, the idea behind bailouts like this is that they are a loan. Ideally the government is profiting from this sort of thing, especially when you consider the overall economic impact of laying off thousands of GM employees, or allowing thousands of pensions to swirl down the drain. I'm agains…

Heh, I noticed that (and edited my post to reflect it), apparently while you were writing your post. However, there are plenty of people who make less money than auto workers who do pay taxes. One reason the bailout is morally wrong is that it is a regressive tax. It takes from the (relatively) poor and gives to the (relatively) rich.

Well, a very high % of taxes come from either businesses or people who make more than the average GM worker. Plus a $25 billion dollar loan to GM isn't the same thing, from the taxpayers perspective, as giving them $25 billion. Presumably it will be paid back with interest. Of course, it won't get as much interest as people could earn investing their own money in the private sector, or they'd all be buying GM bonds already, but the actual loss is orders of magnitude less than $25 billion.

I don't think there's a lot of moral hazard there in terms of taking from the poor and giving to GM workers. The real issue is whether it's better for everyone involved than just allowing them to restructure in bankruptcy. I can't see how the answer to that could be yes.

Re: Let Detroit Go Bankrupt

#69

Post by byrneseyeview »

I think we should allow the car companies to form a union. They can collectively agree that unless every single auto worker accepts $10/hour and no benefits, they all fire everybody. It would be very interesting to see how this works out.

Re: Let Detroit Go Bankrupt

#70

Post by chaostheory »

antidaily wrote: post #9
fallentimes wrote: post #5

Earlier quoted context omitted.

This might sound crass, but companies who knowingly and actively pay people to do nothing on a perpetual basis deserve to die: http://www.detnews.com/2005/autosinsider/0510/17/A01-351179....

Ok, but how about the hundreds of small businesses and suppliers that depend on the Big 3 for work?

forgot to mention this but most of the Big 3's parts aren't even American:

http://www.cato-at-liberty.org/2008/11/18/what-is-an-america...

Not to mention:

"Cars.com found only four cars and six light trucks with a domestic content (meaning US or Canadian) above 75%. That list includes the Toyota Tundra and Sienna and the Honda Odyssey. Other Honda’s have a 60-70% domestic content, barely missing the cut"

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