Union Pitches In, But Bailout Hopes Dim

Senate Majority Leader Reid Says Carmaker Bailout Doesn't Have Votes To Pass

(CBS/AP)  Senate Majority Leader Harry Reid says the Democrats' plan to tap the Wall Street rescue fund to save U.S. automakers doesn't have the votes to pass.

One day after Detroit's Big Three sent survival plans to Capitol Hill in an urgent plea for $34 billion in government aid, Reid said there's still not enough support in Congress for using some of the $700 billion bailout to help the teetering carmakers.

He told The Associated Press in an interview, "I just don't think we have the votes to do that now."

The Bush administration and auto-state Republicans and Democrats are pushing instead to take a $25 billion program to help the carmakers produce green vehicles and convert that into emergency loans.

Earlier Wednesday, United Auto Workers President Ron Gettelfinger announced that the union is willing to change its contract to help save the Big Three, letting them delay billions of dollars in payments to a union-run health care trust.

Gettelfinger also said the union will modify the jobs bank, in which laid-off workers are paid up to 95 percent of their salaries while not working, but he did not give specifics.

Some 3,500 UAW members are currently receiving an average of $50,000 a year under that program, CBS News' Dean Reynolds reports, something the union acknowledges is difficult to explain.

"There's a perception problem, there is. I don't question that," Gettelfinger said.

Those kinds of perks - negotiated decades ago when the Big Three were facing almost no competition - today add almost $2,000 to the sticker price of every car Detroit produces when compared to their now very real competitors.

Take-home pay at U.S. automakers now averages $28 an hour - close to what Toyota, Honda, and Hyundai pay their workers, Reynolds reports. It's the Detroit-negotiated health and pension benefits that have changed the equation. Factor them in and labor costs are $73-dollars an hour for Detroit, but only $44 for non-Detroit producers.

"We're going to sit down and work out the mechanics," Gettelfinger said at a news conference after meeting with local union officials. "We're a little unclear on some of the issues."

One local union member who was in the meeting said the changes to the jobs bank would nearly eliminate it. The member asked not to be identified because the details had not been made public.

Gettelfinger stopped short of saying the union would reopen contract talks with General Motors Corp., Chrysler LLC and Ford Motor Co. but said it would be willing to return to the bargaining table to change some terms.

The UAW's efforts to help the Detroit Three get up to $34 billion in government loans come after GM and Chrysler said they are perilously low on cash and need government help before the end of the year.

A top General Motors executive repeated claims Wednesday that the auto giant may not make it to New Year's Day if Congress doesn't approve a federal bailout for the beleaguered industry.

"That's what we believe we need in order to run our business through the month of December," said GM's chief operating officer Fritz Henderson on CBS' The Early Show.

"We've seen … not only continued pressure in our business but the pace of deterioration has accelerated. October and November were just the worst levels we've seen post-World War II."

Henderson said Tuesday that "there isn't a Plan B," for General Motors if Congress doesn't act.

Jim Press, Chrysler's vice chairman, also said Wednesday the U.S. automakers were "down to months left," as industry officials ratcheted up a fierce lobbying push to persuade Congress to approve an emergency aid package.

"We're on the brink with the U.S. auto manufacturing industry," Press told The Associated Press in an interview. "If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it's a huge blow. It could trigger a depression."

Congressional leaders are reviewing three separate survival plans from General Motors, Chrysler and Ford Motor Co. as they weigh whether to call lawmakers back to Washington for a special session next week to vote on an auto bailout.

Henderson said GM acknowledges the need to "size our company much differently," if it hopes to stay viable in a hostile economic environment that has seen a precipitous drop in car sales.

"We developed a plan that would allow us to be robust and pay back the loans, even with a very difficult set of economic assumptions," said Henderson.

In blueprints delivered to Capitol Hill on Tuesday, both GM and Chrysler said they needed an immediate infusion of government cash to last through December, and both said they could drag the entire industry down if they fail. Ford is requesting a $9 billion "standby line of credit" that it says it doesn't expect to use unless one of the other Big Three goes belly up.

But Chrysler said it needed $7 billion by year's end just to keep running. And GM asked for an immediate $4 billion as the first installment of a $12 billion loan, plus a $6 billion line of credit it might need if economic conditions worsen. The two painted the direst portraits to date - including the prospects of shuttered factories and massive job losses - of what could happen if Congress doesn't quickly step in.

In their first round of pleas for a government rescue last month, the Big Three executives arrived in Washington on separate private jets and enraged lawmakers who said they failed to take responsibility for their companies' troubles or justify a federal bailout.

"I think we learned a lot from that experience," Ford CEO Alan Mulally said.

He, as well as GM CEO Rick Wagoner and Chrysler chief Bob Nardelli, are all road-tripping the 520 miles from Detroit to Washington in fuel-efficient hybrid cars for hearings on Thursday and Friday.

Mulally and Wagoner both said they'd work for $1 a year - something Chrysler's plan said Nardelli already does - if their firms took any government loan money. Ford offered to cancel management bonuses and salaried employees' merit raises next year, and GM said it would slash top executives' pay. Ford and GM both said they would sell their corporate aircraft.

All three plans envision the government getting a stake in the auto companies that would allow taxpayers to share in future gains if they recover.

Still, an auto bailout remains a tough sell on Capitol Hill.

Sen. Arlen Specter, R-Pa., said the mood in Congress "candidly is not supportive" of the automakers, although he called the consequences of just one of them failing "cataclysmic."

Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, said the automakers still need to prove they can survive and be profitable. "If these companies are asking for taxpayer dollars, they must convince Congress that they are going to shape up and change their ways," Dodd said in a statement.

His panel is to hear testimony Thursday from the auto executives, Gettelfinger, and the head of the Government Accountability Office on the companies' plans.

The House Financial Services Committee is to hold a similar session on Friday.

[david393071]

Let''''s see we Bailed out the Financial Institutions so that they could increase the cash flow and give out loans. And they do not want to loan the Obese 3 any money. That says something in itself.

They want a loan, I want the Corporate Board Members international money and property as collateral. That includes their "prefered" stock options.

And yes, I would charge a usary interest (credit card interest rate) on the loan as allowed by the Delaware Court of Chancery, where they are incorporated:

Delaware: Freddie Mac, Fanny Mae, Bank of America, Wilmington Trust, First USA / Bank One / JPMorgan Chase, AIG, Citigroup, Deutsche Bank, Barclays plc, GM, Chrysler, Wachovia, ExxonMobil, Chevron, ISDA, and those States with Corporations Incorporated at Delaware.

Source: Encyclopediae 1990-2007

[howard2356]

Congress should not bail out the Automakers. Unless they agree to take paycuts. Thanks to the Union must employees make three times more then the average American. Also if we give them a bail out where does it stop? If Congress goes through with it we should all get a bail out.

[walt1944-2009]

It was announced yesterday that Ford would not be looking for any bailout money, as the CEO at Ford came up with a "belt-tighting" plan that would make the company survive without taxpayer money.

Mulally at Ford said he would work for $1 a year, scrap executive bonuses and perks, freeze wages for EVERYBODY, and sell the corporate jet. GM''s and Chrysler''s CEO''s have said they would do the same.

Sounds a lot like what Iococca did with Chrysler when he took over Chrysler back in the 1980''s. One thing Iococca did that the other CEO''s haven''t said anything about, is that he poured a lot on money into R&D, ultimately developing the "K" car, that put Chrysler back in the black.

The belt-tightening is a start and it might really make a difference and probably turn the country around if the "fat cats" in Financial America would do the same!

SIG HEIL, I LOVE CORPORATE GREEEED!!!, BUSH!!!!

[talkingham]

Right, let''s do whatever we can to destroy the few remaining manufacturing jobs in the US. Certainly it''s OK with all the righties that we bail out the defense industry to the tune of a trillion dollars during the Bush admin but let''s flush the rest of us down the toilet. The greed at the top and ownership levels of the car industry is far more to blame than the rank and file worker and the unions. Without unions we''d all still be working 60 hour weeks with no benefits and no retirement.

So I blame the greedy a-holes with their 5 or 6 homes, billion dollar retirements, etc. etc., not people who actually go to work and get something done.

Like I said, it''s OK with the Bushies to install a radical Shiite regime in Iraq at the cost of a trillion dollars and thousands of lives isn''t it?

[koyt1]

Sure, they are working for $1 per year. How about the perks, the bonuses, the stock (sorry, the stock is almost worthless). Bottom line, GM and Chrysler are going down whether they get the money or not. Ford is to be admired for where they are. Let the other two go into bankruptcy, reorganize, get out of rediculous labor contracts, and start over. Then, give them the money for ownership in the company, not a "loan".

[mayfieldjd]

People should get their facts straight before running off at the mouth.

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world''s largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Consumer Reports recently found that "Ford''s reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands'' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

[mahdeealoo]

How much have they put into their own pockets, requiring more "bailout" funds?

Like AIG, who rewarded the top 10 execs. with bailout money celebrations at a spa to the tune of $440,000.00

Bailout, shmailout indeed!

These executives have robbed these companies blind and here they come with a plan to save everything. They are thieves, where is a Lee Iccacoa when we need one?

[tomanyt]

Let them go out of business.

[pirmin3]

My heart bleeds for them. Let ''em go under. *** management, *** products, poor planning ...

[gowens1]

Consumer Reports recently found that "Ford''''''''s reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands'''''''' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.
@@@@@@@@@@@@@@@@@@@

Were these cudos paid for by Ford and GM ?????

[cariboubarbi]

The unions better give concessions or it''s game over.

[mastersgts]

It is amazing to me that the 3 companies are asking for 34 billion and congress is all over them, but citibank gets 25 billion no questions asked. Does citibank have corporate jets, did congress require them to come up with a plan to not enter into anymore bad debt. If citibank went under who would care? If the big 3 go under and about 1 million are unemployed, what will happen, all those homes forclosed, unemployment benefits paid out and no taxes taken in, I believe we would go into a depression, but I guess a bank is more important.

[spadeisspade]

I''ve never heard of this "jobs bank". What in the heck is the point of laying off employees if they''re still collecting a paycheck? Go to the effing unemployment line like every other laid off person, that''s what it''s there for! I am starting the think that many US auto workers see their companies as running as a charity rather than a BUSINESS. You can thank UAW for a lot of the mess the US auto industry is in right now.

[mastersgts]

Lets see the big 3 ask for 34 billion to stay solvent and keep the country from going into a depression.... and congress is all over them.

Lets see now didnt congress just give 700 BILLION away with NO ACCOUNTABILITY!!!!

But I guess if you are a bank you do not need to be accountable, just rob the country.... I wonder how much of that 700 billion winds up in congress relection accounts?

[cariboubarbi]

The unions have to give major concessions and management needs to take a serious reality check.

[mastersgts]

brilliant!!! lets let banks go under and save the auto industry.....then no loans for cars, so who will buy the cars ? how old are you? Posted by jamesm12341

Brilliant!!!! What happens when over 1 million are out of work? How will they pay for their houses? How much will the government have to spend for unemployment benefits? How much less will the government receive in taxes? How much more will BANKS require for all of these again forclosed houses because these 1 million plus cant pay their mortgages? WHAT ACCOUNTING DO WE HAVE FOR THE 700 BILLION?? NONE? NOBOMA SAYS IT WILL TAKE ANOTHER 500 BILLION LATER, FOR WHAT???
HOW OLD ARE YOU?

[getoffmine1]

ok, see ya. Your product is inferior anyway. BYE

[cariboubarbi]

Don%u2019t help them with our tax dollars! Let them suffer the fate of their sloppy management and bad business decisions.

That%u2019s the free enterprise system. If you make it then you make it. If you fail then you fail.

When it%u2019s all over, these companies will be leaner and meaner, but only if the government stays out and lets them suffer the fate that the created for themselves!

Posted by masterballs2 at 10:50 AM : Dec 03, 2008




I hope they can survive bankruptcy. If they don''t, the economy could take a loss of 3 million jobs in a couple of months. That would be devastating.

Anything goes capitalism is what''s brought all these failures about. The government has to play some role in businesses that can crush the entire economy if they fall.

[whatchange-2009]

Yeah, ok. So what? Next?

[cariboubarbi]

they can go get a different job....they have their educations to fall back on

Posted by jamesm12341 at 10:56 AM : Dec 03, 2008
+ report abuse



What are you talking about here?

[hitoyou11]

Let them fall. The car companies are no good, and the UAW is no good. They got the way they are, let them GO DOWN. No money, NO BAILOUT WITH MY TAX DOLLAR.
*****************************************************
jamesm12341; Who cares. Send them your maoney.

[mastersgts]

this guy must have just got turned down for a loan
Posted by jamesm12341

I am totally solvent, USMC retired, computer programmer by trade now, wife works for the government, dont need any loans, BUT I WANT ACCOUNTABILITY. I cant understand why everyone is looking at peanuts and does not care about 700 billion? There are banks at every corner, just on top of the starbucks. I am not saying that the big 3 dont need to change, and the unions certainly do, but to let them go under is stupid and would push us over the edge into a depression. The government can only print so much money before it is useless.

[mrmeatspin]

how much is an average UAW worker make???

there are millions of illegal aliens that has your job...its not the right time to be picky..

[mastersgts]

Gee, I guess I was wrong. The big 3 are bad. As for me, I am going to get a business license in my town to start a bank, then ask for 25 billion to say solvent. I will get it because I am a bank, no questions asked. Then I can get a new jet.

[firehose12]

GM Warns It Won''t See New Year Without Aid

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

Sooner they go under - the better

GM, Ford & Chrysler all need a new plan "AFTER" bankruptcy.

UAW is poison. Another example of how Unions can bankrupt companies. This does not excuse upper management and the Corp Jets. perks etc..

It time to die then restart again.

If Congress votes another bailout - they are toast.

[whatthe7700]

The top five executives from GM are making 1.14M-3.36M per year plus bonuses. The top dog brought home $3,836,809.00. Not a bad wage and this is after the pay cuts of Feb 2006. The employees, our neighbors are not getting rich but it is all of the non-revenue producing excutives that are. Trim the overhead and the company will be just fine. They could cut their overhead by = and function just fine. Make people multi-task and cut 500 jobs and save the jobs of a million.

[firehose12]

how much is an average UAW worker make???

posted by MrMeatSpin at 11:00 AM : Dec 03, 2008


$78.00 per hour.

Unskilled labor.

Time to oust UAW. Furthermore, no taxpayer wants to pay such ridiculous money to keep a losing formula.

[mastersgts]

When I get my business license to form a bank and then get my 25 billion bailout no questions asked, I will buy a corporate jet, I understand there are several on the market.

[firehose12]

When I get my business license to form a bank and then get my 25 billion bailout no questions asked, I will buy a corporate jet, I understand there are several on the market.

Posted by Mastersgts at 11:16 AM : Dec 03, 2008

LOL !!!

No doubt !!!

[mastersgts]

am not sure what maoney is Posted by jamesm12341

You know a good Turkey sandwich on Rye with maoney!

[benissimo-2009]

No bailout because the grabbing hands will only continue to grab... next thing we know every industry under the sun will be asking for the same thing.

Besides, they should have been concentrating on pushing non-gas guzzling cars/trucks anyway not to mention green technologies.

Let them fall and buy Honda/Toyata cars/trucks instead.

[tejasdemo]

Drop your prices.

Warranty every car you make for 10 years. Zero expenses. I''m bettin that will force you to make a top quality product.

Then, I will consider a GM car. Expecting that, I am buying Honda, Toyota, Or Nissan.

[piercetheval]

...AW, GEE...and just when they were about to bring back that anachronistic icon the CAMARO too...tsk, tsk...Oh Well, better fire up the ol'' Studebaker or the Packard.

cue to music..."Motor City Breakdown...Detroit Shakedown"...J. Geils...[I believe]

[tejasdemo]

Ooops, i meant to say EXCEPTING THAT.....

sorry gang

[downtowner97]

Let the dinosaurs fail. New innovative companies will rise in their place to meet the demand, and the better of the employees will be hired. The workers, of course, will have to leave their union cards at the door.

[evian_ycnan]

Good-bye. You can now join the ranks of the automobile manufacturers that were driven out of business by GM`s unfair business practices.

Junkyards to do booming business in recycled parts.

[ladyalthea]

I think they should take a page out of Ford''s book of ethics.
Ford top exec''s have agreed to work for $1 for the whole year to save their company. They have even done away with all bonuses for the exec''s for the year to keep the company running.

I think there is a lot to be said for a CEO willing to give up his pay for the company. And truth be told a bonus is just that a bonus when the company is doing well. If they need to seek the U.S. government assistance to keep the company afloat, they really should be looking inward to find another route to prevent it from sinking.

We are all on hard times and I know personally I am finding ways to work harder, not gravel to the government asking them to pay my bills.

I just want to tell them...''Sucks doesn''t it!''

[koyt1]

How nice that the UAW will"postpone" the billions of dollar payments for the health care plan. How about "do away with". These guys have to get real. The Big Three collapse and they are out of work and our of business. Period.

[old300d]

The country is starting to go into "bailout burnout".

Or bail out, schmalout ! ! ! We are done ! ! !

[cariboubarbi]

Both the union and management are living in a fantasy world. They''ll have to get real or lose their jobs.

[bailthisout]

Sen. Arlen Specter, R-Pa., said the mood in Congress "candidly is not supportive" of the automakers, although he called the consequences of just one of them failing cataclysmic.
------------------
I thought Arlen Specter was still investigating the Patriots for illegal use of a video camera? Ladies and gentlemen, idiots like Specter are the reason the country''s economics went south - no oversight exscept for personal gain.

[brianp55]

GM burned through $18B in the previous quarter and now they are asking for $12B. That amount will only sustain them for 2-3 months. How is that supposed to save them? I suspect they may have a more "robust" funding scheme in mind.

[antoniof123]

Here is a little tid bit for you that think it is just the union.

The top 10 exec''s at Honda and Toyota make less than 1 exec at the big three.

There is your reason for problems. They make their millions and more and the companies fail. Fire them they are worthless the managent at the big three are out of date by about 50 years.

And please stop with the we will work for a $1 for the year that is garbage and everyone knows it. They need to fix the mess they have made they are responsible for making the cars that no one wants anymore. The slow dime over the fast nickle. The smaller cars have been on the road for years but the big three wanted to make big bucks.

They are worthless managenent always have been and always will be.

[shanev137]

GM Warns It Won''t See New Year Without Aid

------------


cool

[missingamerica]

Does it reassure you to remember that the Republican Party has spent three decades doing exactly what people such as the CEOs of the Big Three have wanted them to?

(Just in case you didn''t understand why our economy is going to hell in a handbasket.)

[bailthisout]

Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, said the automakers still need to prove they can survive and be profitable. "If these companies are asking for taxpayer dollars, they must convince Congress that they are going to shape up and change their ways," Dodd said in a statement.
-----------------
Yet Senator Dodd did not apply these same principles to the Bailout of the even more corrupt Banking Industies.

[cariboubarbi]

I just don''t understand why, as the big three have continued to lose market share over the past 3 decades, they continued to operate the same way.

[earache4]

"GM Warns It Won''t See New Year Without Aid"

G''Bye.

[matrixrx2003]

GM Warns It Won''t See New Year Without Aid

GM sure is doing its best to push the Govt and The American Tax Payer between a Rock and a Hard Place so there is NO CHOICE BUT to Bail GM OUT.

Its GMs own fault they rode the SUV WAVE and Bubble Until it Burst and got caught with their pants down and now they want help. The should have been making smaller cars 10 years ago. NO BAIL OUT !