Bush gives GM & Chrysler bailout money

[domokun]

Bush announced a 17.4B Emergency Loan Package today for GM & Chrysler from TARP.

They have until March 31 to prove they're viable (in other words, cut retiree benefits and pensions to 0, cut current worker's pay in half - thus making import manufacturers able to cut pay to their workers as there's no more reason to keep them high, dump most current workers' healthcare benefits, and maybe turn a profit - at least that's what I expect it means to most) or the loans have to be repaid immediately.

So basically, there's going to be 400,000+ old people who retired from GM applying for jobs at Walmart, Lowes, Home Depot, Meijer, K-mart, etc. That doesn't include all the other retirees who will be losing just about everything and looking for work. I can't see those kinds of changes being good for the economy either.


Discuss!

[Goat Roper]

I unfortunately do not know all the specifics yet about what they are looking for exactly out of the companies but it would be safe to say that it will be painful for the company's employees. But one does have to admit that the current way of them doing things (which has been grandfathered in) is by no means a viable way to do business in the 21st century.

[Karps TA]

So if it's not viable for companies to contiue to have retirement benefits and pensions, when will the govt, which is run even worse then any of the big 3, follow suit?

To me that's the biggest joke of this whole thing. Our govt telling someone else on how to run financially responsible.

[Windsors 03 Cobra]

The gubmint will put those who lost health care or pensions on the dole.

Funny a republicrat bailed out bigtime demicans.

[Yooformula]

to me that's the biggest joke of this whole thing. Our govt telling someone else on how to run financially responsible.

so f'ng true!

[GTSLOW]

How can they fuck with someones retirement if they're already retired. Isn't this stuff drawn up in a contract or something??????

[Prince Valiant]

They have until March 31 to prove they're viable (in other words, cut retiree benefits and pensions to 0, cut current worker's pay in half - thus making import manufacturers able to cut pay to their workers as there's no more reason to keep them high, dump most current workers' healthcare benefits, and maybe turn a profit - at least that's what I expect it means to most) or the loans have to be repaid immediately.Actually, it doesn't say THAT.

-The deal DOES give the companies to immediately begin seeking wage parity with it's non-union competitors. They still have to negotiate, they can't simply dictate by fiat the union's compensation.

This likely means that they'll begin to offer benefits that are more inline with what most employers offer in way of both retirements (say 401K's vs Pensions) and Healthcare (more options that share greater cost to the employee).


-It also gives companies the immediate ability to restructure the deals with suppliers and dealerships.

-It seeks to restructure future pension and healthcare payments. It does not eliminate the benefit to current retiree's...though it may change what's available to them (to me it's asinine to offer healthcare benefits to retiree's).

While not as powerfull as bankruptcy would be, it does offer much of the benefit of bankruptcy.

What pissess off the UAW though is that it's forcing them to do what they refused to do when congress tried to pass a similar bill earlier; more or less begin their concessions now.

From the Wall Street Journal

It sets targets for the companies to hit in determining their financial health, such as reducing debt and current cash payments for future health care obligations. But according to a White House fact sheet, the targets "would be non-binding in the sense that negotiations can deviate from the quantitative targets...providing that the [company] reports the reasons for these deviations and makes the business case to achieve long-term viability in spite of the deviations."

One potential move that could help the companies achieve some savings: the companies will be required to reach new agreements with major stakeholders, including dealers and suppliers, by March 31.

Overall, the deal appeared to represent a modest step in the administration's efforts to put the auto makers on a long-term path to viability. By forsaking a trip to bankruptcy court, the White House gave up its most powerful weapon to extract concessions from the companies and their workers, suppliers, dealers and creditors.

As a condition of the Treasury loans, the White House has told the auto makers they must reduce their debt and wages to levels that are competitive with what foreign auto makers pay their non-union workers in the U.S

"Unless Chrysler's labor costs can achieve parity with the foreign transplants, and without the restructuring of Chrysler's debt, Chrysler cannot be restored to long-term health and the government loan will be unlikely to be fully repaid," Cerberus said.

[Goat Roper]

So if it's not viable for companies to contiue to have retirement benefits and pensions.

Certainly not saying to get rid of retirement benefits and pensions but certainly their wage structuring can be updated to reflect the nature of the business as it exists today.

[JC70SS]

How can they fuck with someones retirement if they're already retired. Isn't this stuff drawn up in a contract or something??????

My Father retired from A.O. Smith in 97 or 98 and a few yrs after they cut his pension amount down a few yrs after that kicked my Mother's health ins off of it.:flipoff2:

[subliminal1284]

The government telling the automakers how they should be financially is kinda like the blind leading the blind.

[lordairgtar]

Actually, it doesn't say THAT.

-The deal DOES give the companies to immediately begin seeking wage parity with it's non-union competitors. They still have to negotiate, they can't simply dictate by fiat the union's compensation.
Someones dictating in a Fiat?:rolf

[michelle]

Because comics are so fun...

http://i58.photobucket.com/albums/g244/reupertm/noname.jpg
http://i58.photobucket.com/albums/g244/reupertm/noname2.jpg
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[Silver350]

So what piss off all the workers so they quit so gm and chrysler are forced to send their manufacturing over seas.

They shouldnt screw current employees like that. Maybe grandfather them in to recieve their pension and what ever benifits they were getting and have the new employees having to invest into a 401k.

[GHOSST]

Ford?