Me neither, but it may come to that, and many will say do it if that is the price of preventing a depression.

Do you have Snap-On on mind? Because on an interview on CNBC, the CEO (Pithuner?) said that he does not want to see the Big 3 fail, but a bailout and/or Ch.11/7 really doesn't matter to him as he is mainly concerned with repair and independent shops.

Don't be so sure of that. I am at UF, a public institution, thus the prof's salaries are public record. Google "UF salaries". Note that is a 471 page pdf file. My prof makes $83K for 9 months of work. Now, I do not know how much UAW workers make, but keep in mind that is for 9 months of work and is last years payroll. The range of all professors I have had, from available records and my memories, range from $140K to 62K, most for 9 months of work and tenured. The biggest number in the pdf file is 400K for 9 months and the smallest is 4K for a recent grad student - probably a stipend. This also neglects any other jobs they have such as medical professors that also have a medical practice (said 400K person is one of these).

Someone mentioned people losing jobs as a fact of nature. A Bearn Stearns financial planner losing his job is in a better position than a UAW employee losing his job due to both higher income/savings and a better opportunity to find a better job.

For those of you blaming UAW, please keep in mind that the head honchos do the negotiations. I mean, you aren't blaming the secretary down at your local branch of AIG are you?

People know exactly what they want. They just don't what the can want, should want, or need.

Which leads me to direct people to the first link in my sig. :-)

I do fear a recession. In fact, I fear a depression. But there is some reason to hope. You mention Bernanke and Volker, but I mention Obama as our best hope right now. I'm familiar with some of his policy speeches and papers. He saw this **** coming a few years ago. He's prepared to respond vigorously and intelligently, and he quotes Krugman--"It's more dangerous to do too little than to do too mauch." So I think there will be a bailout, if the auto companies can make their case. And I believe it will have strong conditions and expectations for the execs, labor, creditors and finance institutions. They might convince private investors to help also, which would make the conservatives a little happier, I think.

Even tho I think a significant minority of motorists rude, insane.. I never expected the elimination of cars. All, I expect is decent infrastructure for bikes.. With the loss of up to 3 million jobs, they won't be biking ; they'll be walking- if not rioting.. You think those jobs can be re-created all that quickly without the economy sinking deeper into a huge morass. You are dreaming. ...
Besides... The auto market has plunged everywhere. This is a world wide sales slump.. Toyota included in that scenario.. EU governments are considering auto loans to their auto makers. Canada even floated the idea...
If Wall Street's failures and the credit crisis had not stopped credit, who is to say the auto industry would be in such dire straits.. Auto analysists say if auto sales would go back up to the normal 13 million, even now the auto companies would be solvent.

Ford predicts a profit and repayment of any loans in 2011. I don't think the other two have released their forecasts yet.

Well, we are in a recession - I just don't fear it. It happens. Must be tied to my outlook on life, but I do agree that is it not a good thing and fear is not the most irrational reaction.

Obama is for change, but did you know that according to N Greg Mankiw, who was appointed by Bush (W) for something economic in the 1st term, that Obama's economic appointments contain his (Mankiw's) teacher, student, and classmate? How much change can that really be - I know that my classmates, be it Republicans or Democrats, are learning and essentially believing pretty much the same thing.

"As a student of Alan Blinder, Larry Summers, and Stanley Fischer, I was trained to view the short-run effects of fiscal policy through the lens of Keynesian macroeconomic theory. I am sure that many of the economists in the new Obama administration share that intellectual framework. After all, they are being drawn from my teachers (Larry Summers), my fellow students (Christina Romer), and my own students (Jason Furman)."

-from Mankiw's blog

Dr. S. Fischer was also the doctoral advisor for Dr. Bernanke. My textbook is by Dr. Bernanke and I can say first hand it very much reflects what Dr. Mankiw wrote.

As a side note, economists have a fondness for never ever noting the fact that they all have PhDs...

As for Krugman, Ph.D. (lol), he may be great as a Keynesian, but he seemingly failed in dealing with Japan's liquidity crisis that still is lingering and many are saying we are entering something similar - a perfect storm to say the least. Even so, I am not worried. Economics is making leaps and bounds and I am certain I can make some amazing discovery to save us all :-)

Is that how they worded it? I would assume "profit" is net income and repayment to be interest payments. Assuming any Big 3 bailout will be in form of a loan, then shouldn't they be paying it back regardless of if they are making a profit? I mean, I know student loans are sometimes deferred until you graduate, but...

No, I don't. You just want to spin it that way because you think it helps to advance your point, in contention with what you (erroneously) believe my point to be.

And to call me "arrogant or elitist" marks you as a fecal-agitating thrower-about of fighting words.

The media seems to have really latched onto the collateral damage issue of late - things like all of the related industries and jobs, and really centering on tax revenue. The problem is, they're making it sound as if local governments are dependent on this bailout to maintain their tax base. People will, barring a full-on depression, resume buying cars at some point. It's just a matter of whose cars.

My point is, that we have really done ourselves a disservice by allowing corporations to get so large that we cannot afford for them to fail. It puts the country in a horrible situation, and allows them to dictate policy even more than they already do.

All that said... why are we so fixated on the auto industry? We're dicking them around over 25/34 billion while we've already dropped over 4 trillion into the financial markets.

And both are a lot better off than the average worker, who earns a fraction of a UAW worker's hourly wage, who does not have a "jobs bank" that essentially pays laid-off workers their full salary (plus benefits) for up to two years, who does not have a pension, and who may very well not have employer-paid health insurance. I understand the desire not to have the UAW line worker pay a price when the executives who are primarily responsible for the situation are still rollin' in it, but the executives won't pay the price of the bailout -- the American taxpayers will. And who are the American taxpayers? It's those very same workers who are a lot less well off than the UAW workers. A bailout forces workers with no pensions to pay for the pensions of others. How can you claim that that's justice? And how can you claim that it's necessary? So the UAW worker can't survive without a pension -- just how are all the rest of us supposed to survive without a pension, then?

+1... Pensions are a thing of the past. Most companies offer matching 401K and stock options today, but few PROFITABLE corporations still offer pension plans. A bailout perpetuates this ancient practice. A big 3 employee costs $29 per hour more than a Euro/Asian car employee working right here in the USA. Not that they are bringing home $29 an hour more, they cost the company $29 an hour more.

The big three are not sustainable at present.

It'll take a LLOOONNNGGGG time for the slowdown to equal less cars on the road. 99% of new car buyers don't need a new car. They're replacing a perfectly good, practically brand new car.

Yeah, the UAW workers are WAY better off than "the average worker" that's why places like Flint, Michigan are such thriving, upper crust communities.

You weren't promised a pension so you didn't make decisions based on your pension. Once upon a time, pension contributions were put into an untouchable, conservatively managed fund. Now days management raids those funds, often to enrich themselves.

Personally I think the entire upper management structures of the "Big 3" should be out on their butts without a dime of severance pay.

Average high-school educated worker? Hell yes they are. The new hires? not so much, but then again I can't imagine there will be any new hires for a looong time.

Those towns are in no worse shape than any other town that builds up around a single industry... just a disaster waiting to happen.

I agree, in fact i don't think any relationship between the auto industry slowdown and cycling can be made for the reason stated above.

I also didn't sign up to pay for someone else's pension. Why should I be forced to? I wasn't part of that deal, not as a worker, not as a consumer, and certainly not as a Big Three decisionmaker. Why do you want to force me to pick up the tab now for something that I had nothing to do with?

My employer does not offer a pension. If my employer decides tomorrow to stop offering health insurance, that's it, we're done. If they decide to cut wages or lay off half the company, same deal -- we collect our last paychecks and we're out the door. Why do you think it's just for you to make me pay for security for others that I do not myself enjoy?

You mean like you do with social security? No, it's not just. It sucks pretty bad, but we really have no say in the matter.

Most people I know buy a new car because they are tired of the old one, or are jazzed up about the new model. Cars last a long time, nowadays, and that fact makes them more of a luxury item than ever before. Luxury items don't do well in a recession!

I say we bail them out. But I'm from Detroit and live in Cleveland, both heavily dependent on this industry. The banking deregulation started this--so in a lot of ways it's the government's fault. I suggest we give the big 3 a chance and go from there. Actually, I could see us letting Chrysler fail. They are private anyhow and are doing the worse. They could sell off Jeep and fold. Ford and GM's chances for survival are better without Chrysler.

Social security is a social safety net that, at least in theory, I will draw on when my time comes. There is no comparison with auto industry worker benefits. Thanks for playing.

How does the auto industry having problems lead to less cars on the road? It's a complete non-sequitur. They'll buy foreign cars, or used cars. The only result would be maybe more older cars putting out more pollution.

Personally, I'm done with buying new cars anyway; I think it's a sucker move. Anyone who's at all handy (and if they're not, they can teach themselves) can buy a used car for pennies on the dollar and keep it running until it rusts away for not much money. I've got a friend who's been driving a $400 Saturn for 5 years now. It looks like ****, but he (and I) don't require our possessions to scream to the world how great we are. I actually kind of like to drive old heaps, they have personality.

Classic comment from some one completely uninformed and knows nothing about.
Even if the funding goes through, detroit has shed thousands of jobs already from their white collar work force at a level that has never been seen, and it can be traced back to nearly 7-8yrs of having to consistently sell vehicles off at 0% financing to keep product selling (example: the camaro stopped selling. Why? due to 0% financing a corvette is almost the same cost, hence that is what the customers bought) .
On top of a vehicle market that is increasingly stagnant due to even more people not purchasing vehicles, the big 3 have large and heavy legacy costs that span back for decades of retired employees pensions and health care. Up until GM's recent decision to cut that legacy cost of retirees health care the company had not been an auto manufacture for years, they were a healthcare provider that just happened to build cars to pay for it. It was to the point where GM had more retired employee's +dependents than actual people working for the company. When $1300 of each vehicle you produce is having to go directly to healthcare costs you cannot survive and sell a cheap low cost product, you are screwed no matter what.

These problems are common though out the US auto industry, with decades upon decades of having to shut down plants due to decreasing amount of product sold they also had to push higher margin vehicles to keep products flowing for both blue collar and white collar jobs, hence the american flood of SUV's which were the vehicles with the highest rates of return on both investment and time.


Area's of the US that have been most effected by this are indeed the great lakes area and michigan, half if not more than half of the state is completely reliant upon the auto industry in some way, may it be through service industry, child care, health care, schools, universities, the whole economy of the state.

Besides current job losses/possible bankruptcy in the auto industry, nothing is actually that different here in Michigan (we're used to plants shutting down all the time), we've had high unemployment, low growth, stagnant and slowing economy, an intellectual and generational exodus from this state for many many years.

The money is needed for a large part to just stay afloat and keep hundreds of thousands of people in jobs, GM themselves have chevy volt ready to hit the market, the other auto makers have products extremely close to come out already (vehicle development can take 4-5yrs), and with how long it takes to get a product such as a car into market, none of us knew 4-5yrs ago we would all be hitting this wall.

HAHAHA wow. Yes i agree UAW workers have it pretty well off. BUT you have pretty much no clue about Flint or the UAW from anything other than Michael Moore.

Flint - stagnant, rotting, gangland anarchy, a resident population that has no job skills, 80% of residents are renters, a bankrupt city, lack of police enforcement. GM pulled it's large plant(buick) out of there about 4-5yrs ago, but the city was already dead. Flint died with the 70's, it's mfg&engineering work force moved out of the city to the outskirts of flint and oakland county and the people that were left didn't care and still don't that they are living in a city that is so rampant with crime that they think it is alright the way it is.

Grand Blanc/Fenton/Clarkston/Upper Oakland County - Populated primarily big 3 employee's, White and Blue collar, an area with some of highest amount of intellectual knowledge in regards to engineering and manufacturing in world. Good schools, low crime.