What if the goverment had bailed out AMC

[Dave K.]

This is from the UAW site . . . . I stand corrected on a basic level if these stats are true--the little dig towards the execs is typical of course.

http://www.uaw.org/barg/07fact/fact02.php

"Between 2003 and 2006, the wages of a typical UAW assembler have grown at about the same rate as wages in the private sector as a whole – roughly 9 percent. Part of that growth is due to cost-of-living adjustments that have helped prevent inflation from eroding the purchasing power of workers’ wages."

Nice, I don't know of a lot of people getting this kind of bump every year . . . Has inflation been 9% on average in the US over the last, say, 10 years? I think not . . .

 

[twmattox]

If anyone remembers a few years back, Chrysler (US MOTORS) was bailed out by the Feds. If the big three are bailed out now, they'll just do the same thing again in a few years.

Yeah, but...

What you are calling a bail out was actually a loan from the govt. Chrysler paid it back, with interest. So, in a sense, we were more functioning as a guaranteed/glorified bank...and we were paid for it (well, the govt was paid for it).

 

[scott anderson]

it is still $75/ hr for big 3 and $42/ hour for toyota...how does the union expect the big three to compete when the labor cost are over 50% higher....these things ebb and flow..the union was necessary when it was formed..and it will probably be again...but right now it is nothing but a drain on productivity..

 

[twmattox]

Let's not kid ourselves. Even if the big-3 are able to eek more out of their workers for less pay, the cost of the vehicles will not budge (except for probably up). Take a look at the trend. Factories move to Mexico/asia/etc...the labor rate goes down, the environmental expenses go down, taxes go down...car cost goes up???


The fundamental issue is not entirely with the laborer. It is the entire business philosophy. I would personally be in favor of a govt. loan if they can demonstrate a change in their core business plans that would make them more competitive, pull jobs back to the US, and prove to be sustainable...

 

[scott anderson]

there is some irony to asking the US for money..when they are sending jobs to mexico as fast as possible...I think that one of the conditions for getting the money would be that vehicles like the Avalanche be pulled from mexico and built in the US...Maybe the mexican goverment would like to share in the bailout

 

[scrangler]

Another culprit is your good ole visa card company. I mean the pres of this corp made 170 million last year alone. Ten other morrons under him making at least 10 mil apiece. Thats over 279 million to eleven guys and were paying 25% on cards. I as a business have to pay 2.6 percent on all customers transactions just to take the damn card. I pay them over $2500 a month to take cards. I'm not asking for credit. They should be paying me back a percentage for collecting for them. Then there is the ole debit card bullcrap. Charge the same amount when you run a debit unless you punch in the pin number. Then it's just a .25 cent transaction. Cash from your account to mine. I'm ok with that except the bank tells everybody to run it as a credit so they can be put into a pot for a thousand drawing every month . Of course they can. there making alot of cash doing transaction from one account to another without actually extending any credit at all. Charging 3% for a cash transfer from one account to another. Should be illegal. You see all these commercials by visa showing people going through food line and such and everybody swiping a visa card and the whole scene runs like a good machine. Then all the sudden somebody wants to pay with cash and the whole scene comes crashing to a halt, and the world looks at them as if they are criminals for having cash. Subconsciously they are making people feel bad about paying for things without them making there millions in the middle. I'm a republican through and through and am all for free enterprise and making as much as what you can. But you can't get on a plane,rent a car,stay in a hotel in the world anymore without these a-holes making money. They have a strong hold on a good share of the money in this country and they need to be stopped. not to mention how many people they have ruined by making credit so easy. Then those people write it off in a bankruptcy and we pay for them anyway.Off my soap box.

 

[donaghy]

CASH IS KING (or at least should be)

They should be paying me back a percentage for collecting for them. Then there is the ole debit card bullcrap. Charge the same amount when you run a debit unless you punch in the pin number. Then it's just a .25 cent transaction. Cash from your account to mine. I'm ok with that except the bank tells everybody to run it as a credit so they can be put into a pot for a thousand drawing every month . Of course they can. there making alot of cash doing transaction from one account to another without actually extending any credit at all. Charging 3% for a cash transfer from one account to another. Should be illegal.

AMEN !!!!

As a business owner (GR8TOPS) too, this really grinds at me the whole merchant account ordeal. This is probably off on a soapbox as well but all well. Just this little piece of business is insane when you really stop to think about it like mike has put it. These merchant account companies are making WAY too much money for doing next to nothing. On the debit side of a transaction, it is merely just a money/wire transfer. I'd stop taking credit cards for my business and only do debit cards strictly for the moral/ethical factor of it. But, I would very soon go out of business because AMERICA LOVES CREDIT and buying things we can't afford.

If people come to the shop and I install and they have cash, I give them a discount just to not have to deal with the VISA/MC monkeys and saving that merchant fee.


9% raise .....right...thats a laugh... Govt job here in SC got me 2% cost of living/etc raise last year.

 

[Randyzzz]

9% raise? I've never seen a 9% yearly raise. Actually, I haven't seen a yearly cost of living raise since 1999.

It's interesting living only on cash. When I got laid off, my wife and I decided not to use any more credit. It's only been 5 weeks, but using cash (or debit) makes you think alot more before spending. So far, so good.

Bail out the banks? That worked so well in the Depression. Bail out the auto companies? Maybe, with stipulations. But what about the average guy who has a house with a $220k loan on it and now it's only worth $150k? The same guy that has way too much on credit cards? The same guy who pays to support the banks and the auto companies? The American consumer- he's the guy who needs support, and guidance too. Would it really be so terrible if there was no more "easy" credit issued? Isn't that what got us into this mess in the first place? Isn't it the availability of "easy" credit that falsely inflates the price of consumer goods? Pick any source and look at the rate of income increase versus the cost of consumer goods increase in the last 50 years. Why? Because we can afford it thanks to "easy" credit. It's got to stop!

Ok, I'll get off my soapbox now.

 

[BOBCAT]

Yeah, but...

What you are calling a bail out was actually a loan from the govt. Chrysler paid it back, with interest. So, in a sense, we were more functioning as a guaranteed/glorified bank...and we were paid for it (well, the govt was paid for it).

Are you sure they paid it back????

 

[BOBCAT]

Bail them out with a loan. But do it like everyone else, if your a high risk, higher interest rate. I say lend them the money with a interest rate of 38% because they are a super high risk. Plus make them lower the price of each car because half the parts are made in Mexico with extremely low labor cost. And make them move all maufactoring of parts back to the US or a high Tariff added to parts being shipped in to make it more cost effective for them to make it here in the US.

 

[Cincyjeeprs]

Are you sure they paid it back????

Sure did. 5 years early and with interest.

 

[twmattox]

Are you sure they paid it back????

By 1983, seven years earlier than the scheduled deadline, Chrysler had paid back its loan with the aid of the guarantees from the U.S. government. The corporation bought back the 14.4 million stock warrants given to the government in exchange for the loan guarantee. Because Chrysler's finances had improved and its stock had bounced back -- it reported $1.7 billion in profits for the second quarter of 1984 -- the government netted a profit of more than $660 million from its bailout investment.

http://www.propublica.org/special/bailout-aftermaths#chrysler

Bail outs are not a "new" concept. Typically, they were only reserved for defense, financial institutions (linked by FDIC), etc. Recently, they have grown into this government backed restructuring loan thing that the big 3 are asking for. Even GM (who is asking for the most $$$) is promising to pay it back by 2012. If they make it, the govt will make money on the deal. The risk is them going belly up... Unfortunately, the company is so large and needs so much money to float they can't find commercial lenders able to meet the need...so, they approach the govt. All they are asking for is a loan...because of the term "bail-out" and the way it is covered in the media, people think it is a handout.


I can see both sides of this. On one side, they are so large and encompass so much of our overall manufacturing and trickle down economy that their loss would drastically affect our entire society. On the other side, by supporting them through this (without demanding strict and stringent action) we are enabling their behavior and setting them up to do it again.

 

[rizz05]

but what if AMC had been bailed out?

I have the 'ultimate encyclopedia of american cars'. Not very comprehensive (oddly enough!), but it does list every us car company ever to exist, and let me tell you it is FULL of failed ventures. Far more failures than successes. So my proposal is to let the cards fall where they may and strongest of the three will be left standing when the dust settles. Prolly wont happen that way because no one should have to be accountable for poor business practices.
Anyway, IF AMC had been bailed out:

a "retro" javelin would just be coming out with a big block v8 making 400+hp
the gremlin would be a front-drive four cylinder turbo for boy-racers
the pacer would be getting the hybrid treatment
the eagle would be an soccer mom awd cross-over

And why has EVERY SINGLE COMPANY that has owned JEEP gone under?

 

[rizz05]

how long until Scramblers on rolling out on the Barret-Jackson blocks?

 

[canzo]

Chrysler DID pay back the loan. BUT that was because the government was buying their super-crappy K cars!! Remember those things? I was in the Marines then and we had to put up with those horrible things they called 'vehicles'. Thank God we were getting our tactical vehicles from someone else.

And if you disagree that those cars were horrible...how many do you see on the road today?

Don't kid yourself that if the Big 3 went bankrupt that all those people would lose their jobs. That would be a Chapter 7 - that ain't gonna happen. They will do a Chapter 11 and a bankruptcy judge will chop off all the parts of the companies that interfere with making a profit. Know why the workers want a bailout? Cause the first thing to go will be their UAW brokered, super expensive benefits. Know why the CEO's want the bailout? Cause the next thing to go will be their super expensive salaries and benefits. Then they'd have to change their business model to one that can actually compete, instead of just generate huge salaries.

I say it's communism (or at the least socialism) for government to bail out ANY business - banks, car manufacturers, airlines, whatever - and it's AGAINST THE CONSTITUTION!! There is no allowances in the Constitution or the Amendments that allows Congress or the President to take money from the taxpayers and use it to benefit any private person or entity - but that is EXACTLY what they are doing. Against the law.

Off my soapbox.

 

[scott anderson]

Just think if amc was still in business..i could trading in my gremlin for a pacer...lol

 

[donaghy]

holy cow.. marcus

welcome back. !!!

where you have you been?

 

[twmattox]

Don't get all caught up in the Constitutionality of anything the government does. After all, many of the things in the Constitution are very ambiguous (it is up to the Supreme Court to determine). For instance, Section 8 of Article 1 indicates that:

Congress shall have the power to...provide for the common defense and general welfare of the United States...

It could be interpreted that a general collapse of our entire economic system would jeopardize the common defense and not provide for the general welfare.

These kind of constitutional debates have occurred with nearly every major governmental move (Lincoln, Kennedy, Johnson, Regan, etc). In short the underlying premise of the constitution is that Congress passes the laws, President enacts the laws and the Supreme Court determines the validity and enforces the laws.

On a side note, AMC was privately held and not large enough to merit a bailout. Recall, they were back when bailouts were present but not that common (pre 2008) .

 

[groundworks3]

As a small business owner myself I tend to look at things a little different also.
My .02 is:

First off what balls it takes to fly down in one of your leer jets to beg for "free" $$ with NO plan of what to do with it, (which is why they were denied the first time), then have a personal spa day because of all the stress you are under while all the smaller people of the company are being layed off, and the day they walk away is the day their heath insurance and benefits diappear with their income, I totally aggree that they should have sold off some equity, and lowered their own pay to show SOME remorse, & good faith that they were at least trying!

As far as the little people, my wife has been a stay at home mom for 4 years now, & the last year, (for obvious reasons) has been the hardest, so yes I have refinanced the house, & yes I have more on the credit cards this year than most, but I'm not crying over it like the big execs, I own my debt & will pay it back, they keep kicking around the idea of some type of individual bailout as a personal percentage of your credit card debt also, imho, people will just rack it up thinking it will be free $$, instead if they want to help the economy & the little guy, take a combined debt, (mortgage, auto loans, credit card, etc..), and combine it all into one big loan @ a low interest, and one that the interest owed drops because the loan is payed down, dropping the mortgage interest in like half, this way it dramatically helps pretty much all of the americans, but they are still owning their debt and paying for what they "bought", lower interest helps them, but they are not taught to spend more $$ they don't have, because they are responsible for the debt they have aquired themselves, and this is coming from someone that has plenty of debt, but I don't expect a hand out like the average American, I just think this makes more sense than "giving" $$ away, that will not teach Americans anything, just that it is O.K. to keep spending!!!! FEEDBACK?

 

[canzo]

welcome back. !!!

where you have you been?

Wallowing in my own issues. Last year I moved to Alexandria VA, started a new job, and this year deployed to Iraq.

Just been really busy and trying to figure out what to do with Bertha, which is up for sale on here, and a bunch of parts, soon to be on sale, all of which is sitting at Carl's in Yorktown. Need to get rid of it all. No place to work on a Jeep at the townhouse in Alexandria and no time if I did have room. Did buy a 2005 Rubicon Unlimited, tho. And keeping the other Scrambler and having it done up.

Sorry for the hijack.