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

To: RetiredNow who wrote (45598)	11/22/2008 11:57:54 PM
From: stockman_scott	Respond to of 149317

David Paterson: GM states its case network.nationalpost.com Posted: November 21, 2008, 9:20 PM The extraordinary impact of the credit crisis on U.S. vehicle sales has side-swiped the auto industry, draining companies’ cash reserves. The discussion as to whether governments should help our industry “bridge across” the largest drop in per capita U.S. auto sales since 1945 has ranged from insightful commentary to dogmatic diatribe. Not a few critics have opined on the past failings of the domestic auto companies, some offering it as their rationale for doing nothing. While it hurts to hear the rehash of past problems (which must be acknowledged), some critics also wrongly dismiss the importance of the auto sector and ignore the change that companies like General Motors are making toward a sustainable business model. So what does all this mean for Canada, where auto sales have been steady and the financial sector is stronger than in the U.S.? The North American auto sector has built a multi-billion-dollar integrated industry and supply chain. Canada’s auto plants now export 90% of their output to the U.S. market. GM alone purchases about half of Canada’s auto parts and services across Canada, and GM dealers are integral to their communities. Accordingly, every auto-assembly job creates seven additional jobs in the supply and service sectors. How should we ensure this critical sector keeps employing, supplying and building the cars of tomorrow? And if the United States and Canada do offer to facilitate or backstop loans, how do we know they will get us across the chasm? Our U.S. export market will eventually rebound, but we need to know that companies receiving bridge loan support are making the necessary changes to become sustainable. The answer is transformation — which can be painful. Since 2005, GM has announced 14 North American plant closures — including plants in the Ontario cities of Windsor and Oshawa. We have reduced our workforce by more than 60,000 people, and we forged transformative union agreements and other ongoing painful changes; all of which will help us reach a globally competitive cost structure by 2010. The job is not complete — but it is on track. At the same time, we made investments in quality, productivity and our products — with some $4-billion of new investments announced in the past three years. GM’s Oshawa Car plant consistently leads the industry in both quality and productivity. The quality gap with Japanese vehicles has long since been tackled. For the past two years, GM proudly won both North American Car of the Year and Canadian Small Car of the Year — for the Chevy Malibu, Saturn Aura, Pontiac Vibe and Saturn Astra. These cars (among others) are our response to critics who say GM cannot build cars that customers want. The fact is, GM sells more cars in Canada than any competitor. But transformation means more. We invest more in R&D in Canada than the rest of our competitors combined. Our R&D work is conducted with suppliers and universities across Canada to develop technologies of the future. The results are on the road today, with more 2009 hybrid models than any other automaker. The world’s largest fleet of zero-emission hydrogen fuel cell vehicles was assembled in Oshawa. And we are committed to production of the Chevy Volt — a revolutionary car that can go 65 kilometres on electricity alone. Our plan is for GM to be the fuel economy leader in every vehicle segment we compete in. We are well on the way. These are daunting days for Canada’s assemblers, suppliers, dealers and our families. Thankfully, the Ontario and Federal governments have shown true leadership. GM, Ford and Chrysler have asked for assistance to cross the bridge. “New domestics” like Honda and Toyota are supportive, as they also depend on the same integrated U.S./Canada auto parts supply chain. At GM, we understand it’s not enough to cross over. We have to be sustainable on the other side. _____________________________ David Paterson is vice-president, Corporate & Environmental Affairs, for GM Canada Ltd.

To: RetiredNow who wrote (45598)	11/23/2008 3:22:33 AM
From: stockman_scott	Respond to of 149317

Bet on The Big Three freep.com Editorial By Mike Cox The Detroit Free Press November 19, 2008 One of the more popular shows on television these days is "Deal or No Deal." So consider this deal: For a loan of $25 billion, you could create an industry that would directly and indirectly create 13 million jobs, one out of every 10 in the country; account for $690 billion of U.S. retail sales, roughly 20% of the nation's total; provide quality health care to hundreds of thousands of workers; become the leading purchaser of iron, steel, copper and computer chips nationwide; and generate billions of dollars in tax revenue to federal, state and local governments. Would the loan be worth the reward? This is what Detroit's Big Three -- GM, Ford and Chrysler -- are proposing to the federal government: a onetime, $25-billion bridge loan, to be carved out of the already approved $700-billion Treasury Department rescue package. In other words, the deal would involve no new costs to taxpayers. To safeguard the investment, conditions would be placed on the automakers, including guaranteeing the government an equity stake in the companies. Moreover, the only time something similar occurred, in 1979 with Chrysler, the government actually made money on the deal. That's a better track record than almost everything else the federal government gets involved in. Despite the many benefits from this onetime injection of capital, some critics would choose "no deal." They contend the government should not spend one thin dime to benefit the Big Three. But the reality is that if GM, Ford and Chrysler all fail, then government -- read: taxpayers -- will spend a lot more than a dime. The federal pension guarantee program would be inundated with mammoth retiree liabilities if GM, Ford and Chrysler terminated their plans. The federal government would also be obligated to pay for much of the health care costs of Big Three retirees. Just the cost of funding unemployment compensation benefits to hundreds of thousands of workers suddenly out of a job would be astronomical. And don't forget the lost revenues to government at all levels -- federal, state and local. Auto sales generate more than $10 billion in annual tax revenues, a loss that would come at a time when states across the country are already severely strapped for cash due to the economic downturn. The loss would also dramatically affect research and development. The Center for Automotive Research pegs the Big Three's R&D investment at $18.5 billion a year, a staggering sum unlikely to be made up by foreign carmakers. "The federal government cannot assume responsibility to prevent the failure of individual firms, however large." Sound familiar? That quote is from Gary Hart, at the time a U.S. senator from Colorado who opposed the Chrysler loan package in 1979. But the loan was approved, providing Chrysler the time it needed to develop the minivan and become profitable, ensuring that the loan from the federal government was paid in full, and early. Whatever Congress and the White House decide, let's be clear about one thing: This is not some radical request never before seen in the 200-plus years since America was founded. Congress throughout our history has intervened to benefit industries that benefit this country, most recently with the $700-billion bank bailout earlier this fall. The real question is this: Is saving the American auto industry, 3 million jobs and our manufacturing base worth 1/28th of that rescue package? If the television program "Deal or No Deal" drops in the ratings, it will go off the air and eventually get plugged into reruns. If Congress says "no deal" to the auto industry, there is no rerun for the hardworking families who will lose their incomes, for the suppliers and dealerships in every state from Maine to California. This is a good deal for America. Now is the time to say "yes." _________ Mike Cox is the attorney general of the State of Michigan. Write to him in care of the Free Press Editorial Page, 615 W. Lafayette, Detroit, MI 48226 or at oped@freepress.com.

To: RetiredNow who wrote (45598)	11/23/2008 3:44:06 AM
From: stockman_scott	Respond to of 149317

This was written by John Torinus who is chairman of Serigraph Inc. - a privately held Wisconsin company that is one of the largest specialty printers in the world...Serigraph has annual sales close to $200 Million and almost 1000 employees around the world...At least 25% of Serigraph's business comes from the automotive companies... jsonline.com Big Three bailout would make sense for everyone Editorial By John Torinus The Milwaukee Journal Sentinel Nov. 22, 2008 For economic pundits, the case that the former Big Three automakers should be allowed to go bankrupt is a matter of conjecture. For me and 250 co-workers at Serigraph who make auto parts, it's not an academic or political debate. The same goes for thousands of other employees at numerous auto parts companies in Wisconsin. They are watching the political gamesmanship in Washington, D.C., with a high level of dismay and disgust. If the politicos can dole out $700 billion to their buddies on Wall Street and to bankers who bought and sold undercollateralized, high-risk investment instruments, what's the issue with $50 billion to try to save the three American companies in the biggest industry in the country? There's plenty of blame to go around at GM, Ford and Chrysler for the weakened condition of the auto industry. But the meltdown of the financial and housing sectors was not their doing. Nor was the rise in oil prices to $147 a barrel. It is relevant that the automakers had made strides toward getting their houses in order through overhead reductions, two-tier wages, some management of health costs and a belated shift to higher mileage cars. None of it happened fast enough, and some of the changes don't take place until 2010. Still, they had a good shot at making it prior to the nightmare of the last quarter. In the sense that they are victims of the mismanagement of the economy, they have a claim on a slice of the bailout money. Some stipulations That is not to say there shouldn't be strings attached to any cash infusions into the three struggling companies. The turnaround business plan they will have to submit to Congress and the administration will need to include milestones for improving the mileage of their car fleets. It also should contain constraints on executive bonuses, so they only get paid on improvements in profit or cash flow, not volatile stock prices. Some incentive is necessary to keep the best talent. Any upside performance also should be split with workers in the form of profit-sharing. In return, union leaders, who have dug in their heels on any more concessions, need to understand the changed dynamics they are facing. If any or all of the Detroit automakers file for Chapter 7 bankruptcy, union members will be the biggest losers. If any of the three go into reorganization, the unions and bondholders could end up owning the companies. Their pension claims and bonds could be converted to equity. The common stockholders, trade creditors and other lenders will get flushed. Only trade creditors with critical leverage in the supply chain will have a chance at collecting their receivables. Whatever the unions do from that point forward will not constitute "concessions." They would be bargaining with themselves. The same goes for health costs. By absorbing the management of health costs for retirees, the UAW already is in the position of payer instead of just payee. The union will find itself in the management game. Wouldn't it be astute to cut a deal now that transforms the fundamental relationship between auto workers and management? The Japanese model Toyota and Honda enjoy a huge competitive advantage over Detroit because of the compact they have with their work forces. There is a differential on wages, but that's not the fundamental advantage. Workers at the Asian car plants in America use lean principles to work in concert with management. The thick books of work rules kneecap efficiency. The rule books should be scrapped as part of the new business plan. In addition, health costs for auto workers ought to be converted into employee-empowered plans with high deductibles and personal health accounts. Up to half of their bloated health bill could be saved, as has been proven at private businesses across the country, including the major players in the health care industry. Billions of savings are at stake, and with no loss of coverage. In one important dimension, the American auto manufacturers have proved they can transform their operations. After a decade of intense effort on quality disciplines, the performance ratings for GM, Ford and Chrysler now rival their Asian competitors. The gap of the 1970s and 1980s has mostly been closed. It is too much to ask that a complete transformation can be worked into the bailout legislation, but if the union and auto executives include enough language in that direction, Congress and the administration should release first draws on the bailout money. Further draws would depend on turnaround progress. If they don't do a bailout, and soon, current levels of unemployment and pension default in the country will get a lot worse. And neither political party will be able to get away with blaming the other guys. -John Torinus is chairman of Serigraph Inc. of West Bend. Contact him at torcolumn@serigraph.com.