bailout for GM

[Gwizz]

I listened to a commentary this morning about GM's Union, given by an ex GM employee from middle management.

If the company has a layoff, the Laid off employees still get full paid, paid by the company.

Many employees, that are on the payroll, are assigned to what is called the rubber room.

The rubber room could be the local bar or just a place to hid until it is time to punch out for the day.

If an employee violates the rules and is sent home for a month as punishment, he still gets full pay.

The cost of the GM work force, including benefits, runs about $90 dollars per hour per employee.

For Toyota's plants in US the cost is around $46 dollars per hour per employee. 

Retirees are among the highest paid pensioners.  Most have moved from Michigan to Florida.

GM has receive a 25 billion bailout.  That has been used up.  Now they are asking for another 25 Billion bailout.

As the Commentator said: Giving them more money is like send an arsonist with a can of gasoline to put out a fire.

She said, GM needs to go into bankruptcy, reorganize to become competitive and start up again.

The problem is: Our liberal congress is afraid they might lose too many votes and want to dump more of our tax dollars into another bailout for the auto industry. 

We have a major auto rail loading dock South of Seattle where the rail cars are sitting idle. 

A local auto related company said business is down to 1/4 of what it used to be.

The news is full of companies planning layoffs.  Even the Post office is planing a major layoff after new years.

I would not be surprised to see the start of a major depression during this coming year. 

[Hawk]

There's some 12,000 laid-off GM employees receiving 95% of their salary to do nothing. I guess they need the bailout to pay those non-working employees.

Thank you UAW!

[Gwizz]

I heard a repeat of the first post.  This time they said 25 million and not 25 billion.  I don't know what is correct.

It would not take long for a large company to use up 25 Million.

The UAW stated the cost per employee is not $90 per hour but only $76 per hour.  I don't know who is correct.

I am sure that this cost is added to the total cost of a new car.

[thomasjordan]

The correct figure is around $76 for the Big Three.  And that is grandfathered figured.

Since 2002, the Big Three have negotiated lower benefits (etc) for NEW hires, which brings their figure down to around $55.

The figure for "foreign" cars built in the US is around $48.  Detroit is getting better, but still higher.

Detroit is using a figure of 3 million people would be laid off if the Big Three went out of business (note, that is not bankrupt, but completely shut down, out of business).

I have no idea how many cars Detroit builds in the US and elsewhere (it does have foreign markets, and I know Ford at least has plants in Mexico and Brazil).  Let's just say between them they build and sell 15 million cars annually in the US.  Now some car company(s) is going to fill that void.  All those Big Three plants that are fairly modern (and some are) will get bought up.  Many of those laid off works will get hired by the new owners.  Will there be a serious short time downturn, most definitely.  While things level themselves in a year or three, probably.  Will the unions finally get the hint that they cannot keep raising prices (the price of their labor) without driving their employers out of business?  Maybe.  They did it to the steel industry, nearly did it to the railroads, are doing it to the Post Office, and only non-union trucking firms are still turning a profit.  Heck, even cities and states have caved in and are demanding bailouts because of the civil service union contracts.

All this bailout will do (and it is 25 billion, gwizz, that's billion with a B) is postpone the reckoning day.  GM is losing over 1 billion (again with a B) a month.  Ford and Chrysler aren't in much better shape.

[urisism09]

it will ruin us. MA has already taken free healthcare to affect and it is failing really hard. People who live in MA are going to other states to see medical attention ..

[Gwizz]

I heard a few days ago that GM paid back the stimulus money (The tax payer's money) that it received from Obama's government.

Well guess where GM got the money to pay back this stimulus money.

The government gave GM more stimulus money so it could pay back the first stimulus money.

It didn't cost GM a penny to do that.  That is called cooking your books or a Pansy scam.

Didn't someone just go to jail for doing that in the financial world, talking money from new investors to pay old investors.

With this guy it was called fraud.  When the scam went bellow up, the guy turned himself in to the authorities thinking he would just get a slap on the hand.  Since his investors lost a lot of money, he got a lot of jail time instead.

It will be interesting to see how this plays out with GM.  I'm sure GM (Now called Government Motors) is just following orders to make press for someone else.