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55% of Americans are against a federal bailout of U.S. automakers. This, according to a Washington Post/ABC News poll of 1,003 randomly-selected adults nationwide that was conducted by phone last week between December 11 and 14 (we didn't get a call, did you?). 42% of those polled express support for the measure, which died in the Senate late last Thursday night. The poll results show that respondents place 75% of the blame for the current crisis facing Detroit on the shoulders of management, with 22% blaming the economy. On the question of whether automaker bankruptcy filings would be good, bad or make no difference in the economy, the majority (43%) feel that bankruptcy proceedings would have no effect. 34% feel it would be bad, and 17% of those polled believe that it would be a good thing for the broader economy.

In related news, an announcement on a new White House-backed bailout deal for GM and Chrysler using money from Hank Paulson's magic TARP slush fund could come tomorrow, according to Senator Carl Levin, the Michigan Democrat. Levin hopes/believes that whatever deal comes out of the current negotiations will be in line with the original, failed package brokered between President Bush and House Democrats. Republican Senator Bob Corker of Tennessee, whose Senate compromise deal fell apart when the UAW walked away from the table, is pressing the White House to impose "tougher" conditions on all involved parties as part of any potential agreement. However this pans out (last week's events should serve as a reminder that regardless of what's reported, a deal is not a "lock"), expect roughly half the population to be plenty ticked off once the smoke clears.

[Sources: The Washington Post, Reuters]


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  • 46 Comments
      • 6 Years Ago
      GM has previously stated that their operating expenses are roughly $12B per month. Obviously, cutting production reduces expenses, but even if they are able to cut that number to $6B per month, the $9B they are asking for gives them all of 1.5 months of operating revenue. At that point, we are back to where we are right now, which means we have gained nothing. Yes, the union has given in on wages for new employees and has agreed that people won't have to get paid 95% of their wages for doing nothing in the Jobs Bank, but the fact of the matter is that it is the legacy costs that are adding $1,000 - $1,500 per unit to GM's costs. And let's not forget, that figure is based on the number of vehicles sold in '06 / '07. With current sales 30%+ lower, that means the legacy cost as applied per vehicle becomes even higher.

      Just giving money to GM doesn't make the problems they are suffering from go away, it only prolongs the inevitable. All the years of kowtowing to the UAW, producing less than stellar product and having to meet standards set by politicians who know nothing about manufacturing, engineering or the automotive industry in general, has created the mess we have today.

      That said, if giving the auto industry a bridge loan for roughly 45 days (at best) of operating capital, and GM clearly can not right itself in 45 days, should more taxpayer money be loaned to them in another 45 days? It's great to say we need to bailout GM, but just giving them money will not change the inevitable.
      • 6 Years Ago
      Does anyone here see that there is something larger at stake than the auto industry?

      If the White House flouts the Congress, they will be ripping the US Constitution into little tiny shreds. Not just tearing at the corners.

      The enumerated powers are that CONGRESS controls appropriations. The direct representatives of the people, not the single chief executive, or his un-elected subbordinates.

      The Constitution has been torn for a long time, and we keep seeing it torn even more, and in big tearing swipes.

      Granting Paulson the money and power that the Congress granted him, back in October was completely against the enumerated powers, also. An underling that is APPOINTED, not even elected, does not have the power to make the policy that Paulson is making. BUSH doesn't even have that constitutional power.

      The TARP program itself is unconstitutional.

      Then the Congress entertains bailing out private industries at taxpayer expense, and they have done that before, as well. AGAIN, not part of Congress' granted powers to seize taxes from private citizens for other private citizens or corporations to use.

      In the non-gub'ment world, that is called extortion, or racketeering, and the government won't let YOU do that. Only THEY can. Organized crime, possibly including Union leadership, WISHES they were as efficient and scot-free as the government is, with taking other people's money and their liberty.

      So, now, the representatives of the people have blocked this, for the time being, for secondary concerns of having a bailed-out american industry actually play by the rules that most other businesses have to abide by, rather than the more intrinsic aspect of not stealing from hard working peter to pay failing paul, via government force of law.

      But that isn't good enough.

      Failing paul is still asking, and instead of the representatives of the people, who are largely out of touch already, the president, the chief executive, NOT the chief legislator, is deciding to FLOUT the will of the people's representatives, when he was of the opposite opinion just days ago. And the president is going to leave it to an unelected subordinate administrator, with nothing to truly lose, to decide how to further undermine the free market system, and shred the constitutional protection of the people, by making it even less accountable to the people.

      A government of the people, by the people, and for the people, no longer. The founders would be ashamed of what people have done with the gift of liberty that they codified into the foundation of this country.

      That is FAR more important than any single or group of businesses failing of their own accord, and having to rebuild and regenerate themselves, as the history of this country has shown to work, by allowing people to be free to succeed or fail. Without failure, there can BE no success. Socialism and Communism have taught that object lesson over and over through modern history.
      • 6 Years Ago
      Between the people that don't think the bailout would have an affect and the people that think it'd be a GOOD thing, that's 60%.

      How can people remain that ignorant?... Then I remember the majority of responses to Autoblog whenever the auto bailout is mentioned. That must be some good tasting koolaid.
      • 6 Years Ago
      you probably didnt get a call because you were at work.

      And so, those who received a call probably dont have a clue what the impact would be one way or the other or 2) they want their personal bailout before the automakers receive theirs.

      I'll be SO happy when government makes decisions on economic policy based on celebrity and homemaker and out-of-work individuals. We'll be the first voted off of th global island and go back to our regular lives, farming and developing into a 3rd world country.
      • 6 Years Ago
      Just because 55% of americans are morons doesn't mean the bill shouldn't be passed.
        • 6 Years Ago
        Because a chance to reform the union contracts is something only a moron would want to do, obviously.
        • 6 Years Ago
        The senate's version only required UAW to make concession to bring their wages and benefits to be competitive with their competitors.
        Who would determine what's competitive? The car czar, to be appointed later by President Obama, or his Labor Secretary, who, we'd logically assume to be labor friendly. UAW turned that down. They are essentially holding a gun to their own head, asking us the taxpayers for $, or they'll pull the trigger.

        For comparison, consider the bondholders, the entities that loaned GM the billions it's now indebted to, they would swap out their outstanding debt for equities. They would be faced with a 70% loss in their loan portfolio value, and will only recover if GM stock recovers....so, they have every incentives to ensure GM's success. The current shareowners will see their stakes heavily diluted by this swap, and will also be even only if GM were to achieve long term success. Everyone took a haircut, but UAW was the sole entity who decided to extort.
        • 6 Years Ago
        @happy_penguin: In that case, what is the ratio of current (unaffordable) workers versus new (competitive) workers at a typical Big 3 manufacturing facility? How many more years will it take for the *average* Big 3 UAW worker to be cost competitive compared to non-union American workers at Toyota? With GM and Chrysler allegedly just months or weeks away from financial collapse, can these two companies afford to wait these many years for the workforce to slowly level out in labor cost? If you can honestly answer these questions, you will begin to understand the magnitude of the disadvantage imposed on the Big 3 by union labor.
        • 6 Years Ago
        "@happy_penguin: Union contracts have been reformed for future workers, but current workers would still enjoy pretty much the same level of unaffordable wages and benefits"

        Those "future workers" started working in the plants last year. In addition to that, the fabled broom pusher who makes $150,000/year was replaced as well. All of those services were cut even further by contracting the work. They too are in the plants now.
        • 6 Years Ago
        @Mitchttj: The will of the people is how a democracy is supposed to work. If you consider majority will to be moronic and dismiss it out of hand, there are plenty of totalitarian regimes still out there in other parts of the world.

        @happy_penguin: Union contracts have been reformed for future workers, but current workers would still enjoy pretty much the same level of unaffordable wages and benefits. The savings won't kick in until a sizeable number of current workers are replaced by new workers, which is too little, too late.

        Autoblog, Dec 12, 2008: "Gettelfinger claims the UAW was willing to make its wages and benefits competitive with those earned by non-union workers at transplant factories, but felt it must be done over time through the attrition of older, higher-paid workers and the hiring of new workers at a lower wage with less benefits."
        http://www.autoblog.com/2008/12/12/uaw-points-blame-for-bailout-failure-back-at-senate-republicans/
        • 6 Years Ago
        As I understood it, the reason the UAW wouldn't agree to the concession is because there was a refusal to define the concession. Does anybody have numbers? The UAW had already AGREED to wage concessions:

        "The tentative agreement reached with Corker also called for the proposed auto czar to ensure that wages and benefits paid to active UAW employees at domestic automakers would be competitive with compensation paid to workers at foreign-owned transplant factories.

        "It's unfortunate that Sen. Corker was unable to persuade his colleagues to accept the agreement we negotiated, which included substantial additional sacrifices by our members," said Gettelfinger.

        The stumbling block was a demand by the GOP caucus that UAW workers and retirees had to be treated differently from all other stakeholders, instead of requiring all parties to come to the table.

        "This demand is not only unfair, it is unworkable," said Gettelfinger. "Modifying wages and benefits alone cannot solve the structural and financial problems faced by the domestic auto industry." "

        http://www.uaw.org/auto/12_12_08auto1.cfm
        • 6 Years Ago
        No doubt people will suffer if the Big 3 go down, but someone will take their place eventually. It's the price of capitalism is it not?
        • 6 Years Ago
        @Happy:
        I unintentionally left out the part where the deadline for all stakeholders is set for Mar'09 I believe. UAW wouldn't agree to the Mar'09 deadline for concession to kick in, and wanted to wait until 2011. This is obviously incongruent with the need for the cash money, now.
        • 6 Years Ago
        Union contracts have already been reformed. Apparently the media outside Michigan doesn't want the public to know that.
      • 6 Years Ago
      Hey autoblog....why don't you take a poll?????????

      Lets see if the result is different (i kind have to believe it will be).

      Oh how much do i hate American media. So few are allowed to lead so many and those few rarely are intelligent (not what you know but who, the only problem is those people influence others). From cars to the economy everything gets skewed because some one sees $$.
      • 6 Years Ago
      No worries Detroit, since when has Bush listened to popular opinion? This also tells me that 55% of our nation doesn't understand economics.
      • 6 Years Ago
      For those of you looking for Chapter 11, be careful what you wish for you just might get it.
      • 6 Years Ago
      There's about 350,000 people employed by the Big 3. If everyone in the Big 3 lost their job, that's 350,000 less people that are putting money back into the economy. IF they kept their job due to the bailout, and they each spent 30k each year that went back into the economy, the 15 billion that they're asking for will be paid within 15 months.
        • 6 Years Ago
        And the people in the supply companies that won't be working, and the people who transport the stuff, and so on and so forth.
        • 6 Years Ago
        I thought I had read that the UAW numbered around 700K?
      • 6 Years Ago
      "Hank Paulson's Magic Tarp" = Great name for a band
      • 6 Years Ago
      Just because 55% of those polled are morons (Who probably drive Toyotas, and worship AlGore) doesn't mean 55% of Americans are against a bail out.
      • 6 Years Ago
      you know what really pisses me off?

      when the banks were failing, we couldn't throw money at them fast enough. But yet when the big 3 is asking for a small loan *compared to the banks* people go ape sh*t and say "whoa, wait a minute. we need time to think about this and you need a plan first"
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