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marinejcksn
11-19-2008, 09:25 PM
Finger-Pointing Begins As Senate Cancels Bailout Vote

WASHINGTON A Democratic Congress, unwilling or unable to approve a $25 billion bailout for Detroit's Big Three, appears ready to punt the automakers' fate to a lame-duck Republican president. Caught in the middle of a who-blinks-first standoff are legions of manufacturing firms and auto dealers and millions of Americans' jobs after Senate Democrats canceled a showdown vote that had been expected Thursday. President George W. Bush has "no appetite" to act on his own.

U.S. auto companies employ nearly a quarter-million workers, and more than 730,000 other people have jobs producing the materials and parts that go into cars. About 1 million on top of that work in dealerships nationwide. If just one of the auto giants were to go belly up, some estimates put U.S. job losses next year as high as 2.5 million.

"If GM is telling us the truth, they go into bankruptcy and you see a cascade like you have never seen," said Sen. George V. Voinovich, R-Ohio, who was working on one rescue plan Wednesday. "If people want to go home and not do anything, I think that they're going to have that on their hands."

The automakers hobbled by lackluster sales and choked credit are burning through money at an alarming and accelerating rate: about $18 billion in the last quarter alone. General Motors Corp. has said it could collapse within weeks, and there are indications that Chrysler LLC might not be far behind. Ford Motor Co. has said it could get through the end of 2008, but it's unclear how much longer.

For now, however, with the federal emergency loan plan stalled in the Senate, lawmakers in both parties are engaged in a high-stakes game of chicken, positioning themselves to blame each other for the failure.

Senate Majority Leader Harry Reid, D-Nev., scrapped plans Wednesday for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund.

It's really up to Bush's team to act, he said.

"I don't believe we need the legislation," Reid said. Treasury Secretary Henry Paulson can tap the financial industry bailout money to help auto companies, Reid said, but "he just doesn't want to do it."

Not our responsibility, countered the White House.

"If Congress leaves for a two-month vacation without having addressed this important issue ... then the Congress will bear responsibility for anything that happens in the next couple of months during their long vacation," said Dana Perino, the White House press secretary.

She said there was "no appetite" in the administration for using the financial industry bailout money to help auto companies.

The White House and congressional Republicans instead called on Democrats to sign on to a GOP plan to divert a $25 billion loan program created by Congress in September designed to help the companies develop more fuel-efficient vehicles to meet the auto giants' immediate financial needs.

Voinovich and Sen. Kit Bond, R-Mo., along with Democratic Sen. Carl Levin of Michigan, were at work on that measure Wednesday, trying to placate skeptical Democrats by including a guarantee that the fuel-efficiency loan fund would ultimately be replenished.

"It is the only proposal now being considered that has a chance of actually becoming law," said Republican leader Mitch McConnell of Kentucky.

If an acceptable deal emerges, Reid said it could be passed as part of a measure to extend jobless aid to unemployed workers whose benefits have run out. A vote on that bill is likely on Thursday. Negotiators were discussing a scaled-down aid package of $5 billion to $8 billion to help the automakers survive through year's end.

But there was little sign that Democratic leaders would go along.

"We have to face reality," Reid said.

They are vehemently opposed to letting the car companies tap the fuel-efficiency money set aside to help switch to vehicles that burn less gasoline for short-term cash-flow needs.

All of which leaves the Big Three bracing for a bleak winter without government help.

GM CEO Rick Wagoner told a House committee Wednesday that the downfall of his industry would ripple through communities around the nation. Pressed by lawmakers, Wagoner wouldn't say precisely when GM would run out of money without a government lifeline, but he disclosed that the company now was burning through $5 billion a month.

Still, with the $25 billion emergency package, "we think we have a good shot to make it through this," Wagoner said.

Many lawmakers in both parties are now openly discussing whether bankruptcy might be a better option for auto firms they regard as lumbering industrial dinosaurs that have done too little to adjust their products and work forces for the 21st century.

The carmakers argue that bankruptcy would devastate their companies, but proponents say it would give them a chance to reorganize and emerge stronger and more competitive.

It's unclear, though, whether Democrats controlling Congress are willing to risk being blamed for letting one of the Big Three symbols of the nation's once-mighty manufacturing sector go under.

Bailout-shy lawmakers got an earful from jittery constituents last month when the House let an early version of the Wall Street rescue fail, sending the Dow Jones industrials tumbling and erasing more than a trillion dollars in retirement savings and other investments. Congress took a deep breath and reconsidered, passing the plan a few days later.

Faced with a similar collapse in the auto industry, the Bush administration might yet decide to step in to help the auto companies, or the Federal Reserve could step in though both have steadfastly refused to do so.

If not, lawmakers have left themselves a contingency plan: Come back to Washington in December for yet another postelection session where they might be able to strike the deal that now seems beyond reach.

Democratic leaders are planning to gather for an economic conference the week of Dec. 8, noted House Majority Leader Steny H. Hoyer, D-Md.

"That is available," Hoyer said this week. "The year has not ended."

marinejcksn
11-19-2008, 10:32 PM
"GM CEO Rick Wagoner told a House committee Wednesday that the downfall of his industry would ripple through communities around the nation. Pressed by lawmakers, Wagoner wouldn't say precisely when GM would run out of money without a government lifeline, but he disclosed that the company now was burning through $5 billion a month.

Still, with the $25 billion emergency package, "we think we have a good shot to make it through this," Wagoner said."

Okay, I'm no genius here but lets do a little simple math. $25 Billion dollars, divided evenly among the Big Three auto makers.....that's 8.33 Billion each.

Now, Wagoner admits that GM is burning "5 billion a month". So......the bailout will provide them relief for LESS THEN 2 WHOLE MONTHS?!?!?!

Oh Joy! :rolleyes:

Seriously, these schmucks need to fail. Never have I thought I'd actually be happy that Congress is about to take a 2 month, sit-on-our-asses vacation. Hopefully GM files Chapter 11 before then.

Nubs
11-19-2008, 11:16 PM
5 Billion a month????

They can cut overhead fast enough. They best have been pre negotiating Chapter 11 yesterday

marinejcksn
11-20-2008, 02:03 AM
Mitt Romney was just great this morning talking on the news about this and how we need to let them fail.

But for every Mitt Romney we have, we've also got a moron like Barney Frank. :(

PoliCon
11-20-2008, 02:30 AM
Mitt Romney was just great this morning talking on the news about this and how we need to let them fail.

But for every Mitt Romney we have, we've also got a moron like Barney Frank. :(The american people need to make sure our voices are heard and we stand up and say loud and clear - OH HELL NO!!

marinejcksn
11-20-2008, 04:15 AM
The american people need to make sure our voices are heard and we stand up and say loud and clear - OH HELL NO!!

2010 baby....2010. It's our only shot really. We need to get behind strong conservatives and get back as many seats as possible.

And we need to throw out the leftward leaning Republicans too! Lindsey Graham, your ass is on the curb in 2014. John McCain, 2010 we're throwing you out too. I'm tired of these idiots who vote for the "R" or "D" rather then principles. Graham's democrat opponent was more of a Conservative then that moron! :rolleyes:

3rd-try
11-20-2008, 08:01 AM
And just to underscore the point, the 3 CEO's quite possibly leaving from the same Mi. airport, each took their own private jet to the same DC airport, then, no doubt got into separate limos to be taken to the same building for a meeting at the same time.
If flying 1st class was just an unthinkable horror for them, couldn't they at least just have buddied up and rode in the same freakin' jet?! Just for appearances sake? i mean DAMN! these people would need a million a month to operate a lemonade stand.

Speedy
11-20-2008, 01:05 PM
And just to underscore the point, the 3 CEO's quite possibly leaving from the same Mi. airport, each took their own private jet to the same DC airport, then, no doubt got into separate limos to be taken to the same building for a meeting at the same time.
If flying 1st class was just an unthinkable horror for them, couldn't they at least just have buddied up and rode in the same freakin' jet?! Just for appearances sake? i mean DAMN! these people would need a million a month to operate a lemonade stand.

LIke I said yesterday, if you are you going to bitch about this, but not demand that Pelosi fly coach then you are a hypocrite. The way Congress burns through money and only asks for more, they have no right to point at anyome and say they are not being frugal enough.

ralph wiggum
11-20-2008, 01:18 PM
And just to underscore the point, the 3 CEO's quite possibly leaving from the same Mi. airport, each took their own private jet to the same DC airport, then, no doubt got into separate limos to be taken to the same building for a meeting at the same time.
If flying 1st class was just an unthinkable horror for them, couldn't they at least just have buddied up and rode in the same freakin' jet?! Just for appearances sake? i mean DAMN! these people would need a million a month to operate a lemonade stand.

They could use a lesson in frugality from the new congressman from Utah, who's sleeping in his office on a cot rather than moving into a home or apartment. (Story is elsewhere at CU)

Speedy
11-20-2008, 01:31 PM
They could use a lesson in frugality from the new congressman from Utah, who's sleeping in his office on a cot rather than moving into a home or apartment. (Story is elsewhere at CU)


It is congress who should learn from that example, not CEOs of anything.

noonwitch
11-20-2008, 01:37 PM
My state and city are so screwed. The Warren Stamping plant is right around the corner (Chrysler) and the GM Powertrain plant is a mile north. Most of my neighbors work at one or the other, or at the Ford plant in Sterling Heights. I anticipate more vacant houses coming, in addition to the four on my block.


I'm not saying I support a total bailout, but there needs to be some type of plan to help the industry get it together-loans, maybe some incentives like letting taxpayers claim the interest on car loans on their tax returns, if they buy an american-made car. I don't think Chrysler is going to be saved, regardless, but Ford has a smart CEO at the moment, and GM is such a big company that the impact of failure in this region is stunning.

Speedy
11-20-2008, 01:42 PM
I'm not saying I support a total bailout, but there needs to be some type of plan to help the industry get it together-loans, maybe some incentives like letting taxpayers claim the interest on car loans on their tax returns, if they buy an american-made car.


If the government gives in and bails out the car industry it should do so with no strings on anything but getting their money back. No dictating that they should be "alternative energy" vehicles or anything else. Either let them have the money or not. There is no imput from the government, other than an infusion of cash, that would amount to anything positive anyway.

The government had their fucking hand in the Mortgage Industry, the Banking Industry and look at what happened. Now they want a hand in the running of the auto industry? With their fucking track record?

PoliCon
11-20-2008, 02:32 PM
2010 baby....2010. It's our only shot really. We need to get behind strong conservatives and get back as many seats as possible.

And we need to throw out the leftward leaning Republicans too! Lindsey Graham, your ass is on the curb in 2014. John McCain, 2010 we're throwing you out too. I'm tired of these idiots who vote for the "R" or "D" rather then principles. Graham's democrat opponent was more of a Conservative then that moron! :rolleyes:problem is - in 2010 it's mostly republicans up in the senate. Those dems who are up are mostly in very blue states. It will have to take a serious issue to get them tossed out.

3rd-try
11-20-2008, 06:48 PM
LIke I said yesterday, if you are you going to bitch about this, but not demand that Pelosi fly coach then you are a hypocrite. The way Congress burns through money and only asks for more, they have no right to point at anyome and say they are not being frugal enough.


If I had my way Pelosi would would have to drive her damn Prius to DC. I'm not slamming one and not the other. DC is the worst example of placing no value on OUR money. The perks alone that the "public servants" are accustomed to should be criminal. This doesn't really change the fact that the big 3 hi-rollers came to DC to beg for bucks. Sure it's a drop in the bucket. But, at around $20K per jet as opposed to less than a grand for a seat in 1st class, consider it from a PR point. It doesn't inspire many to believe they're really going to concentrate on cost effectiveness.

Molon Labe
11-20-2008, 07:13 PM
Now, Wagoner admits that GM is burning "5 billion a month". So......the bailout will provide them relief for LESS THEN 2 WHOLE MONTHS?!?!?!

Oh Joy! :rolleyes:

Seriously, these schmucks need to fail. Never have I thought I'd actually be happy that Congress is about to take a 2 month, sit-on-our-asses vacation. Hopefully GM files Chapter 11 before then.

Ever notice how we have always been the leaders in inventions but sometimes others perfect the model? I think its because we get lazy and don't take innovation seriously...at least in the Auto industry.
for example:

Ford and GM: Assembly line and Automobiles: But then the Japenese perfected the car

Elvis and Buddy Holly: Rock and Roll : But then the Beatles, Rolling Stones,

Loose association...I know...but just an observation. :D

Seriously...As an American I hate to see something like GM go away...but shifts in the market are necessary...especially for irresponsible companies that continue to make a product that they know American's will buy even if it isn't quality. I hope this signals the end of corporate welfare.
I don't think in the future companies will be able to rely on Uncle Sam to fix their poor choices.

Phillygirl
11-20-2008, 07:32 PM
If the government doesn't bail them out they will have to file for bankruptcy. They will reorganize their debts...including their union contracts and obligations. This is something they need to do.

American auto manufactures have been building big cars because they can make a higher profit on them, which they needed to do in order to meet the demands of the higher labor prices of unionized auto workers. Instead of catering to the market, they were catering to the labor. That will never result in longevity for a company. Short term loss, long term gain.

marinejcksn
11-20-2008, 09:13 PM
Ever notice how we have always been the leaders in inventions but sometimes others perfect the model? I think its because we get lazy and don't take innovation seriously...at least in the Auto industry.
for example:

Ford and GM: Assembly line and Automobiles: But then the Japenese perfected the car

Elvis and Buddy Holly: Rock and Roll : But then the Beatles, Rolling Stones,

Loose association...I know...but just an observation. :D

Seriously...As an American I hate to see something like GM go away...but shifts in the market are necessary...especially for irresponsible companies that continue to make a product that they know American's will buy even if it isn't quality. I hope this signals the end of corporate welfare.
I don't think in the future companies will be able to rely on Uncle Sam to fix their poor choices.

You've definitely got that one right. We American's were the foundation of the automotive industry. The problem's just like you said, we got lazy and complacent while the Japanese worked on efficiency and putting out a quality product. Now, the GM vehicles of the last 7-8 years are VASTLY superior then the junk they put out in the 90's; and both Chevy & Ford both put out some nice looking vehicles that perform well and can counter the Japanese market. But the problem is the Big Three sat on their asses making sub-standard cars and blowing the good name & reputation they had while in the meantime the Japanese & Germans built high quality stuff and did it cheaper then us.

The good thing is, even if they file Chapter 11 (and I pray they all do), they wont be gone forever. They'll re-organize, re-tool production and come back (hopefully) stronger then ever. Yes, it'll be painful. But a bailout will only delay the inevitable collapse.

And don't worry. America wont let a classic like the Corvette stay out of the game for very long. :cool: