Repercussions of failed automaker bailout spreading quickly
Nekkei index plumments, GM retains the services of bankruptcy advisors
Late Thursday evening, the U.S. automaker bailout bill failed to pass through the Senate. The legislation is dead and there are no plans for another bill to go through the process until the end of the year. To quote Senate Majority Leader Harry Reid, this will be "a very, very bad Christmas" for many Americans.
Over the past day, Senators have tried to resolve the House-approved bill so it could pass Senate Republican muster, but reports suggest that the UAW was unwilling to accept GOP demands that workers agree to parity in pay and benefits.
News of the failed bill has already spread to markets across the Pacific, with the Nikkei index nose-diving over 6%. Things on this side of the world are bound to be worse when trading on the New York Stock Exchange begins tomorrow.
According to reports, General Motors has got bankruptcy and restructuring advisors on speed-dial in preparation for the bad news and Chrysler has already retained CH11 counsel.
Countless economists and industry analysts are warning that if any one of the Detroit 3 goes under, it will spell disaster for an economy already suffering in a recession. Video of the vote is embedded after the jump. More to follow tomorrow.
[Sources: Reuters, Detroit News, Automotive News - Sub. Req.]
Late Thursday evening, the U.S. automaker bailout bill failed to pass through the Senate. The legislation is dead and there are no plans for another bill to go through the process until the end of the year. To quote Senate Majority Leader Harry Reid, this will be "a very, very bad Christmas" for many Americans.
Over the past day, Senators have tried to resolve the House-approved bill so it could pass Senate Republican muster, but reports suggest that the UAW was unwilling to accept GOP demands that workers agree to parity in pay and benefits.
News of the failed bill has already spread to markets across the Pacific, with the Nikkei index nose-diving over 6%. Things on this side of the world are bound to be worse when trading on the New York Stock Exchange begins tomorrow.
According to reports, General Motors has got bankruptcy and restructuring advisors on speed-dial in preparation for the bad news and Chrysler has already retained CH11 counsel.
Countless economists and industry analysts are warning that if any one of the Detroit 3 goes under, it will spell disaster for an economy already suffering in a recession. Video of the vote is embedded after the jump. More to follow tomorrow.
[Sources: Reuters, Detroit News, Automotive News - Sub. Req.]
Reader Comments (Page 1 of 8)
Crackberry Addict 11:59PM (12/11/2008)
WTF!
Reply
Domestic 6.0 12:53AM (12/12/2008)
ITS THE END OF THE WORLD AS WE KNOW IT !!!!!!!!
SteveRB 1:01AM (12/12/2008)
Dear GOP Senate Claus -
Thanks for the Dow hitting 6000. Now that my Daddy and his friends have been laid off, they are now able to spend quality time with their families. Also, thanks again for the great job you've been doing to America for the past 8 years. This is going to be the best Christmas since 1932.
Timmy, Cleveland, OH
jor 1:07AM (12/12/2008)
seriously! WTF! The republicans want UAW employees to get paid the market price for unskilled labor? Heaven forbid they should get paid the same as other people doing the same job in the same country!
Dave 1:28AM (12/12/2008)
The American Senate is extremely stupid yet they don't care because their jobs won't be affected in their minds. Any one of the American companies dies, the economy is just shot and I don't understand why they wouldn't. General Motors has shown it is developing many alternative fuels. Toyota is behind the game in reality, but in the minds of the blind people in this society, Toyota leads everything. They are just into developing hybrids right now and personal transportation that will stand no chance on our roads. They had hydrogen but last time I checked they weren't concerned in developing it at all. Yet General Motors has used E85, hybrids, plug-in hybrids, hydrogen vehicles, turbine vehicles (failure but still an attempt), and electric cars as well as CNG vehicles. I appreciate GM because they aren't just a one-hit wonder with this. They take hybrids and progress with them faster even though the EV-1 could be seen as further along the path and a setback at the same time. The EV-1 was GM's "Moon Landing" and I believe that the Volt is GM's "Moon Landing, for the Common People". If they fund now, the American companies will progress as Chrysler has released their EV products. I see the American Senate at this current time to be a disgrace to American History as America built this industry for the common people. Our society is based on industrialization and if one company falls, suppliers go, jobs are lost, houses are lost, income will be greatly reduced. It would be a giant chain effect as not just the auto industry would be collapsing. Any goods industry would collapse simply because without so many jobs, people can't buy other products. So the government boneheads making a good choice? I think not. Destroying the nation, they get their gold stars there. With an economic meltdown caused by these events of bankruptcy, it is sad and maybe a bit farfetched to say that the US and Canada will not be first-world countries for long.
noz 3:14AM (12/12/2008)
Amazing...you blame the senate for not caring about jobs yet you have no problem accepting that corporations like GM, Ford, etc and hundreds of other "profitable" corporations in the US have been shipping jobs overseas for years and displacing hard working Americans...but that's the senate's fault right? Oh and the UAW's fault too for trying to keep it's employees American?
Seriously...some of you people have really warped values or perceptions. Blame everyone but the corporations....
Nick 3:34AM (12/12/2008)
GM is doomed to fail.
Moving all the eggs from the SUV basket to the Volt basket is a horrible idea.
yakapo 7:40AM (12/12/2008)
they gave AIG 85 billion but they can't give the big 3 anything?
maybe they didn't ask for enough to give the senators a big kickback.
JC 8:18AM (12/12/2008)
The spiteful unions didn't make wage/labor concessions that were needed to make the bill happen.
Travis 10:06AM (12/12/2008)
so the Republitards demanded the Unions make concessions to bring their pay into line with other non-union shops, but no concession with regards to:
1) Management pay - want to bet that GM's management is making more $$$ than their Japanese equivalent?
2) Corporate jets - Last I checked ToyotaUSA didn't have a fleet of corporate jets flying around the country...
3) ANY cost-cutting measures by management whatsoever.
4) ANY concessions on management, perks, travel, stock options, bonuses,
This was a poison pill, meant to do nothing but PISS off the Democrats in Congress. If they were serious about a bill they would've offered something, ANYTHING worthwhile, but this is just ridiculous...
Travis 10:35AM (12/12/2008)
rodan32 - riiiiiiiiight, it's the UAW's fault for the combined TWELVE corporate jets between Ford and GM, the multi-million-dollar-salaries of the top management, choosing to build trucks and SUVs that people don't want, and total lack of planning in making their plants flexible to build various models of vehicles so that if the public opinion shifts from SUVs to small fuel efficient they're able to adjust accordingly.
think about it: if ALL US vehicles were $1000 cheaper (figure the cost of UAW benefits, although I'd be surprised if that were even the case) would you run out and buy one instead of the foreign competition? I certainly wouldn't... Foreign car companies are making the vehicles I want to buy, US companies aren't. It's that simple. And (at least) in my case, that's not the fault of the UAW.
Auari 12:04AM (12/12/2008)
I got this from CNN can you explain this.
the Big Three could still wind up getting government funding. Bush officials warned wavering GOP senators earlier Thursday that if they didn't support the legislation, the White House will likely be forced to tap the Wall Street bailout to lend them money, two Republican congressional officials told CNN.
Reply
Alex Nunez 12:11AM (12/12/2008)
Yes. basically, it's what Reid asked for in his remarks after the vote, which is to give the automakers money out of the $700B TARP fund immediately since the separate auto bill failed.
Berto 12:10AM (12/12/2008)
Let the Congressional finger pointing begin.
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drew 12:13AM (12/12/2008)
I am soooo sick of the UAW. They are a plague. Wal-mart has it down good---NO UNIONS. I mean come on the average gm and ford employee gets 75 dollars an hour, that adds to an extra 2500 per vehicle compared to toyota and honda says cnn. I guess i can only dream of a day without the UAW and their bull-sh*t demands.
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JN 12:28AM (12/12/2008)
Yes, the UAW is screwing the pooch this time around, but I think most of the blame lies at the feet of Corker, Shelby and my least-favorite Senator of them all, Addison Mitchell McConnell of my home state, Kentucky.
Obviously, "Ditch Mitch" doesn't give a damn that GM and Ford are major, major employers here in the Bluegrass State. After all, those of you who salivate over the Corvette surely know it's a product proudly made here, in good old Bowling Green.
Ford's superb Super Duty trucks? Made in Louisville.
The Explorer? Yep, it's made here too.
But heaven forbid the Senior S**thead from Kentucky does something that might save the jobs of thousands of good Kentuckians. He'd rather find something to benefit Communist China and his Wall Street buddies.
God, I'm glad I voted for his opponent last month. Even though the guy lost, I can still say, "Don't Blame Me ... I Didn't Vote for Mitch!"
nadnarb 12:39AM (12/12/2008)
Ah yes all those Wal Mart employees makiing 7 dollars an hour. They are the life blood of America, making minimum wage and using state gov't for health care. God damn unions keeping wages high and standards of living above poverty. They sure are useless.
You do realize that unions got the American middle class moving and gave employees rights dont you. Or would rather have slave wages and kids working in coal mines. You most be some multinational corp executive to have your kind of thinking. Otherwise nobody in America would earn more than 10 dollars and work less than 60 hours.
I dont agree with the excess pension and legacy costs of the Detroit 3 and think the companies can be restructured to do away with those. But normal unions dont usually have those kinds of ridiculous perks. The average UAW worker makes 29 and hour, 1 dollar below Toyota, dont blame current workers for the failed policies of the Big 3 and UAW 20 years ago.
Carlos 1:43AM (12/12/2008)
I'm sorry but I have to agree, true the unions brought the middle class out of a ditch. But at the point they have worn out their welcome.
The middle class is supported enough. I don't think a person deserves $40-$70/hour to turn some screws and push a heap right on down the line. I really don't, those of us who truly made something of ourselves, sought out an education, and truly bettered ourselves are the real middle class. If the only thing you can do besides tack weld a fender on a car is start stocking shelves at Wal-Mart, then you're about to be in the exact place you've deserved to be this whole time.
Had to end sometime, dont' feel bad and I wouldnt expect anyone to feel bad for me if my skills were no longer needed or could be gotten elsewhere for cheaper. Capitalism is about staying ahead of the curve
jv2k 1:48AM (12/12/2008)
7 dollars an hour?
Lol the people at my local wall-mart make around $9 an hour.
KLR 2:31AM (12/12/2008)
UAW workers do not make $75/hour. That's a bull anti-union talking point.
Wal*mart? Wal*mart pays their employees poverty level wages and teaches them how to get on Medicaid for their health benefits.
Shame on the Big 3 for having the virtue of trying to provide their employees with a living wage and health care instead of dumping on the taxpayers.
Now, of course, if the Southern GOP jerks succeed in forcing them into bankruptcy the load on the US taxpayers these same GOPers claim they are trying to protect will be substantially more than the loan amount the Big 3 requested.