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Tuesday, November 18, 2008

Corporate Welfare

Between the financial institutions and now the "Big 3" (General Motors, Chrysler, and Ford) are threatening to file bankruptcy or get a $25 billion of this bail-out pie. I just want to know what anyone reading this feels about this. And remember, you can post ANONYMOUSLY.

Ok, now for my take. If it weren't for the HUNDREDS OF THOUSANDS of American jobs on the line (both manufactoring and retailers/dealerships), then I would say screw them, let them fall. Between the lack of innovation to keep up with countries like Japan for the last 25 years, the arrogance and the greed, I wouldn't mind the government not only let them fall, but taking everything from their executives just for the hell of it. I don't know how much of this is true, but I read that last year, GM’s CEO Rick Wagoner’s total compensation was $14.4 million, or about $40,000 per day! However, on the other side of the coin, you also have UAW (the union) requiring these companies to pay their employees up to $75 an hour, to paying them up to 96% of their salaries for years after they've been layed-off. Also, retirees receive at least 68% higher benefits than workers for other types of manufactoring jobs. Give me a break! How could any corporation keep-up with those demands?! So, I find both at fault.

Being a Libertarian, I'm not really big into government regulations, but if my tax dollars along with my kids and my great-grandkids are going to these greedy people, I WANT STRICT REGULATIONS!!! I want these CEOs, executives, UAW workers stripped-down to what the rest of us makes and gets! I want these companies to trade-in their damn lobbyists for engineers! No more ridiculous crap!!! If these people want a bail-out, then by God, they're gonna freakin' earn it!

After I heard about the $440,000 retreat AIG's execs took (http://www.cnn.com/2008/POLITICS/10/08/politicians.meltdown.aig.ap/), I'll be damned if I ever do business with them again! I once had an account with them a while back, but I'll never consider doing business with them ever again! Screw `em, I want our $440,000 back!

So, to me, the bail-out is an unfortunate evil, but doing so without harsh and strict demands would be a huge waste... a $25 billion waste! Wanna see someone else like AIG spending our money "wisely"? Now please post!


jennifer said...

I'm kind of in a conundrum about this whole bail-out thing... On the one hand, you have the banks, who do all the lending, and the government insures them, so it kind of almost makes sense for the government to bolster the banks right now. BUT, it does not make sense for someone who is still well into his first 90 days of employment at a failed finanicial institution to walk away with over seven million dollars. Here's a link: http://www.nypost.com/seven/10042008/business/wamu_execs_18_days_net_7_5m_132082.htm
As for the auto industry: I think it makes sense to get a little help from the government so that these people don't lose their jobs...As far as the rest of the money they owe, I think they should file for bankruptcy. If they file for bankruptcy, then they can re-negotiate what they owe to their creditors, and also re-negotiate with the Unions. Some have said, "these companies have been around for over a hundred years, they shouldn't file for bankruptcy, blah blah blah"... I say, just like any other business that makes bad decisions, you must pay the price! That means your execs do not get a multi-million dollar golden parachute as a great big thank you for running the company into the ground. If they filed for bankruptcy, re-negotiated their debts and the unions, then they could re-start production (backed by the government through tax breaks and incentives) on GREEN cars using green technologies, not gas guzzling SUV's and all luxury cars. That's where the country is headed, and the auto industry needs to help lead the way! This is probably their last chance to do the right thing, help the environment, help the economy,and to help themselves to get some of their dignity back. Once upon a time, people LOVED cars, they were sexy, they were somethin'. Now they're just a necessity. If these companies can make cars that are sexy again, and also cars that are economically accessible to most americans, they would be back on top again. If they can do all of this, and do it all with completely green technologies, they can be on top of the world, and we'd all be better off for it. Hey, sorry to ramble, but you asked!

Mickey said...

Yeah, I'm you on the bail-out thing. It's a necessary evil, but how some of these companies are spending it is outrageous!!! Doesn't seem some of them really need it (in regards to the New York Post article link you submitted).

I agree that perhaps the automotive manufacturers should file bankruptcy, but in the long run, I think would hurt them more than help. Would you buy a car from a company who filed Chapter 7? Even though the companies will still continue to warranty and service their vehicles, if they were to close the doors, then your warranty doesn't mean anything, and you're stuck with a vehicle that you'd have to pay for any and all repairs, even if you've only owned it for a few months and only a few thousand miles on it. That's why filing bankruptcy for these people is a last resort. No one's hardly buying their vehicles as it is, and filing Chapter 7 would only make it worse.

But new technology along with the most important aspect, making "green" cars is what will help people buy their vehicles again. I read that Cadillac is releasing their new 2009 Escalade that's a hybrid, but it still only gets less than 20 MPGs. Is this really the "new" direction they're going in? Really?! Looks to me it's the same direction with a few minor "tweaks". Where's the REAL innovation here?! Give me a break. I want one of those really little European economy cars that you saw on "Just Married"!!! Btw, they're called Smart ForTwo cars (just looked them up). Even the Kia Rio would be a heck of a lot better option than my gas-guzzling F150!!!

Thanks for the reply! ;-)

jennifer said...

I agree with you about the "new" hybrid blah-di-blahs, it's just not enough! Americans need to get over themselves w/ their giant fucking SUV's and drive something a little more practical.The technology is out there, they just keep coming up with different "biofuels" and Hybrid technology rather than the HYDROtechnology that's already been created. Go to Youtube and look up "Brown's Gas" and watch some vids, this stuff has been around for years. Imagine an attachment to add to your existing car that gives you the ability to run 100 miles off of one ounce of water, and the only emissions would be hydrogen and water. Think about what that would do to the environment just over a few years!!Those SmartCars are awesome! Jim Cates, who just ran for senate in NC and lost, unfortunately, drives one, and I see him around morganton all the time in his little yellow SmartCar. He's on my friends list if you wanna check him out, it's a shame he didn't win the seat...Anyhoo....
There's a certain kind of corporate bankruptcy that isn't a full-on bankruptcy, but one that allows the company to renegotiate w/ creditors. (kind of like, well, we can't pay you x amount right now per month, how about we pay y amount for the first few months until business picks up to a predetermined level, then we start paying back x+y per month)...that kind of thing where they're not going out of business per se, only changing the way they're paying their debts. Plus, if they re-negotiate w/ the Unions, then they won't necessarily have to pay their laborers $75 per hour. Yes. $75. Read this Wall Street Journal article from 2006: http://wsjclassroom.com/archive/06may/auto2_jobsbank.htm
Anyway, keep asking for my opinion, you know I've always got one, no matter what it is! LOL