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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (45517)	11/22/2008 12:07:27 AM
From: TigerPaw	Read Replies (2) \| Respond to of 149319

Anyway this is not the time to let them go bk though. I don't think either the execs or the unions would approach a restructure seriously. They never have. I think it will take a judge. Maybe a panel of judges could reduce the risk of any one being either corrupt or unqualified. TP

To: Lizzie Tudor who wrote (45517)	11/22/2008 1:35:06 AM
From: stockman_scott	Respond to of 149319

The Detroit Automakers and the leaders in Washington D.C. have NOT handled the situation in a responsible way...Lets consider the following... 1) Washington is apparently filled with hypocrits who are perfectly willing to nearly force large banks to take TARP monies, with no strings attached, while not being willing to give a smaller loan (comparatively) to real businesses that actually make things and really need the money. Suddenly Washington looks like a bunch of bankers to me! 2) Politics has a lot to do with why Detroit didn't get their money. Many Republicans, seeing that the other 'bailout' isn't working and knowing they voted for it along with Dems want some breathing room from further bailouts. Many Dems are worried about the same thing, but realize that they can't duck it for very long. The UAW and large unions are with the Dems and helped Obama get elected. Expect Congress to give Detroit the Bridge Loan money by January or February. And yes, they are gutless wonders. 3) Detroit may have easily 'lied' about how quickly they needed the money, and they probably can hold on into early or mid 2009 without it. However, that's no reason to make them wait until the last minute - many suppliers and jobs are at stake. 4) Politicians are taking the exact opposite stance on Detroit than they did on New York City. $700 Billion wasn't needed to shore up banks, and still hasn't been fully spent. It did, however, build confidence in banks. Washington should have loaned Detroit $25 Billion in a back-room deal to avoid the opposite effect - sowing fear - that they now have dealt to Detroit automakers. Is anyone going to buy a domestic car anytime soon now that we all think Detroit automakers may be going bankrupt? The stupidity of this circus should infuriate everyone. Washington isn't giving any help to Detroit, but they are killing confidence in one of our largest and most important industries. Amazing!! I'm not talking about Washington giving ANY blank checks to Detroit - just like no blank checks should be given to AIG or Citibank. All execs in companies that receive billions in tax payer assistance / loans should be required to provide proof of sacrifices and a new summary of a turnaround plan...Regular monthly updates on progress and cash position will be provided to the Treasury Dept and to the leaders of the appropriate committee in Congress...No more than one corporate jet for each global Fortune 500 company that receives assistance - the rest must be sold...and no elaborate conferences at 5 star hotels...No executive bonuses during the time the company is using billions in government funds...In fact, every CEO of the large banks and the automakers could and should agree to work for no more than the salary that the president of the United States receives ($400,000) during the time they are using tax payer dollars for survival...Unions will have to accept major sacrifices beyond recent contract agreements too...and the auto companies need to agree to fast-track the rollout of some of their smaller, more efficient, green technology vehicles...this ALL should have been negotiated quietly with the executives -- the Treasury Secretary could have done this but Mr. Paulson didn't have the vision or leadership skills to do this quietly and efficiently behind closed doors (he had the broad authority to do this kind of thing under TARP)...then AFTER the agreements are in place make an appropriate announcement to the marketplace about the government investments. Confidence is an elusive quality but it's essential for our markets to operate properly.

To: Lizzie Tudor who wrote (45517)	11/22/2008 2:28:06 AM
From: stockman_scott	Respond to of 149319

If Bankruptcy Hits Detroit _______________________________________________________________ Lead Editorial The New York Times November 22, 2008 Congress has given Detroit’s flailing automakers less than two weeks to come up with a restructuring plan that would justify giving them tens of billions of taxpayer dollars and ensure that they have a reasonable path back to profitability. We hope it is a good plan, because the lame-duck Congress does not have a choice. Michigan’s three car manufacturers have said that they would go bankrupt this year without an infusion of taxpayers’ money. Failing to provide it would be a truly irresponsible act that could obliterate one or more companies, potentially causing other bankruptcies and costing many hundreds of thousands of jobs. Unpalatable as it seems to underwrite the proven record of failure of Detroit’s automakers, Congress must provide sufficient money to shore them up until the Obama administration takes office. Then, the new president and new Congress can decide how to manage either a rescue package with tight strings attached or a bankruptcy process that ensures the fallen companies have a reasonable shot at picking up the pieces. Bankruptcy proceedings are designed to allow ailing companies to be restructured into profitable businesses, but that is by no means guaranteed — and it requires infusions of credit. In the current financial environment, where even the soundest companies are having trouble getting loans, the government would have to guarantee that financing is available so that any car company under bankruptcy protection could keep operating and paying its workers and suppliers while it is restructured. A bankrupt carmaker would face another tricky problem: how to keep consumers from shunning its cars out of fear that it might not be around to honor its warranty. Any bankruptcy financing given to a car company should be enough to buy warranty insurance to cover its fleet. None of this guarantees an orderly restructuring. A company in bankruptcy proceedings could try to avoid making tough choices and coast through on the government dime. Insuring warranties might create an incentive for the company and its workers to relax on quality control. But these concerns might be addressed by tying worker and executive incentives to car quality and establishing a ceiling for government bankruptcy credit. To get America’s carmakers back on their feet, difficult choices will have to be made — including cutting labor costs and the cost of health insurance. That is likely to mean selling off some product lines, laying off workers and closing the least productive plants. It could mean renegotiating the deal with the auto workers’ union to pay billions into a fund to cover retiree medical costs. Taxpayers will end up with a big liability even if the company turns around and is able to repay its debt to the government. The Pension Benefit Guaranty Corporation is required to cover a substantial portion of the underfunded pension liabilities of any bankrupt company. Economists Luigi Zingales and Joshua Rauh of the University of Chicago estimated that if General Motors were to collapse, underfunded pension liabilities would cost taxpayers roughly $23 billion. It would still be our choice that the restructuring of blundering auto companies occur in an orderly way and be combined with a national strategy to deliver more fuel-efficient cars. Congress, so far, has failed in its duty to help make that happen. What must be avoided at all costs is for a big car company to spiral into liquidation. Copyright 2008 The New York Times Company