General Motors

[Partha]

Auto manufacturing is predicated on just-in-time manufacturing. Any interruption in business will idle those suppliers sure as you're born. And, no, no one will be building cars while the bankruptcy is in court and until the pieces are sold off or closed - which would take months.

You're assuming that GM operates in isolation. Last I looked there was more than one car company and if that company dissolves there's still the demand for cars, which means the components which are left of the parent company still have value to other companies.

You must seem to think that auto suppliers' parts are interchangeable among companies. It's not the case. Nor is it the case that 'demand will always be there' - lenders are not releasing money to individuals to buy new cars at the rate that you'd need to make up for 40 percent losses in sales at all members of the Big 3 - or 90 percent if they go bankrupt, seeing that very few people will buy a car from a company that might not be around tomorrow. Further, the wages of workers have not been rising to the point where they'll be able to buy these new cars that will magically appear from the Rainbows and Puppies Car Manufacturing Company.

It won't be seamless, but there also won't be a 100% unemployment from everyone associated with GM.

I would expect the government to provide DIP financing during the breakup - that would be a sensible approach to protect workers while tearing down such a large company. It's a far better use of money than a bailout.

Dd

Unfortunately, this is not a country with a strong national welfare system like Australia. What you propose guarantees to extend the recession, which just makes all automotive companies' problems worse in the US (and manufacturing as a industry).

The UAW.....of which my father was a member for 30+ years.....in past negotiations passed up raises to get more backend support. They pass on a raise to get more pension......they pass on a raise to get more health benefits.

Gee, Kulaf. Maybe if we had a nationalized health care system they wouldn't have felt the need to organize for stronger health benefits.

[Kulaf]

Not really Partha....as I said my dad's retired UAW and he had health benefits better than I ever had. No deductible.....100% coverage for everything for his entire family. That's a better package than "white collar" workers received. My dad liked the union in principle, but he hated all of the slack ass workers who got kept on because the union protected them. He hated things like not being able to clean up his area because that was "taking a job away from someone else". When a union fights for the rights of its members that's one thing.....when it fights a company to guarantee job levels beyond the need of the plant that's just greed.

[Embar Angylwrath]

When a union fights for the rights of its members that's one thing.....when it fights a company to guarantee job levels beyond the need of the plant that's just greed.

Yeah, that was my parents' and brother's experience too when they worked at a place with a union. There were four or five people to do one job. And union people with seniority were almost impossible to get rid of even if they were complete fuck-ups.

As for me, my company was going to display at a trade show. I was not allowed to bring my trade booth down (it was extremely portable, it was one of those things that folded up and could be rolled in). So they made me drive to a certain area, I had to get it out of the truck (the hardest part), and get it on the dock. From there, they wheeled it to my display spot and dumped it there. For that privilege I was charged $300. I also was not allowed to plug in the electric strip. Some other union team (there were two of them) had to come by and plug it in for me. That cost me $50. And the real kicker was the trash basket. Yes.. the trash basket. Another team (yes, there were two of them), had to place a 5 gallon trash can in my booth area. That cost me another $50. The only time I didn't see two union people working a one person task was the forklift driver, and that's because they don't build forklifts with two seats.

These were all listed on the final invoice as "Union pass-through charges"

I have other union stories as well. They're all pretty much the same... pissy people scheming to do the least amount of work while they build seniority.

Unions have become more about inflating the number of jobs needed to do the work, and protecting union members, even if those members are complete screwballs. That's been my experience with unions each and every time I've the distinct displeasure to work with them.

[Freecare Spiritwise]

I've done a lot of trade shows over the years, Embar. The unions there are universally despised. Most big companies just factor in getting screwed over as the cost of doing business, but it's really tough for smaller companies to go to trade shows.

[Embar Angylwrath]

I will say this in defense of unions...

If management didn't give employees an excuse to organize, they wouldn't organize. The best way to break a union is give non-union workers in the same shop better benefits and pay. But the shop has to be open to non-union workers.

I'd like to hear the leftists on this board weigh in and give thier opinion about the fairness of closed shops. Should every company have the right to hire non-union workers, and should every union have to respect the rights of the non-union workers to work? Do the leftys feel that "crossing the picket line" to work is reprehensible? Or an indication that maybe the union is asking for too much if there are would-be employees willing to work for what the company offers?

[Ddrak]

You must seem to think that auto suppliers' parts are interchangeable among companies. It's not the case.

The parts aren't, but the tools that make the parts sure are. It really doesn't cost a lot to retool a company to make different parts - especially if you already have the castings and the like working elsewhere. As you pointed out a few posts back, the industry worked in a "just-in-time" manner anyway so the biggest issue of what to do with excess inventory also flies out the window.

Nor is it the case that 'demand will always be there' - lenders are not releasing money to individuals to buy new cars at the rate that you'd need to make up for 40 percent losses in sales at all members of the Big 3 - or 90 percent if they go bankrupt, seeing that very few people will buy a car from a company that might not be around tomorrow.

I'm not sure what you're talking about. You seem to be jumping around, because the number is 100% under my theory of letting GM go bankrupt and dissolve between Ford/Chrysler or a foreign company buying up their assets and US based manufacturing plants.

The demand will be there. Maybe not at the levels of 5 years ago, and sure they'll have to lay off a bunch, but that's independent of whether you let GM fold or not. Your "3 million unemployed if we let GM break up" number is bullshit because the demand that is there will still be there whether GM breaks up or not. It's just how you break up the supply side.

Unfortunately, this is not a country with a strong national welfare system like Australia. What you propose guarantees to extend the recession, which just makes all automotive companies' problems worse in the US (and manufacturing as a industry).

How will it extend the recession? Are you suggesting that letting GM break up will magically make money go somewhere else? Right now the only way to keep GM afloat is dump taxpayer money there instead of dumping it somewhere else that it could be put to better effect to stem the recession. Money has to come from somewhere and the fastest way to end a recession is take a big axe to the dead wood while supporting the businesses that won't hold you back coming out of it.

If management didn't give employees an excuse to organize, they wouldn't organize. The best way to break a union is give non-union workers in the same shop better benefits and pay. But the shop has to be open to non-union workers.

I sort of have a problem with that. The real way is to treat unions as a provider of employees. Pay the raw wages to the unions and let them take out the benefits they want to offer to keep their workforce. If the unions offer compelling value for both sides then they survive.

If unions didn't continually force inefficiencies into employment arrangements then I'd be far more supportive of them. It's all the waste and overheads they demand to ensure more jobs that makes the whole thing stupid. The fallacy of this entire thread is looking at "cost per worker" - the far more telling number is "labor cost per vehicle made" which should include all pensions, health care etc. I'd be willing to bet the difference between foreign companies and the US companies is far higher than even the $70 number indicates.

As for comparing to Australia - you're talking about a nation that's virtually lost all of its manufacturing ability due (in part) to high labor costs and union refusals to negotiate in good faith to keep companies running.

Dd

[GINLAAN]

The parts making business in this country was lost well over 10 years ago to the Chinese.

[Partha]

Holy shit, I think Dd thinks Christmas comes year round.

The parts aren't, but the tools that make the parts sure are. It really doesn't cost a lot to retool a company to make different parts - especially if you already have the castings and the like working elsewhere. As you pointed out a few posts back, the industry worked in a "just-in-time" manner anyway so the biggest issue of what to do with excess inventory also flies out the window.

Which car company, pray tell, considering they're ALL pulling back? You expecting Opel to make a breakthrough in the US market in 2009? And after all, if no one is buying parts because they already have existing contracts with suppliers that they're reducing orders on now, why exactly would they take out new contracts from a supplier that has to retool, and lay off it's workers while it retools?

I'm not sure what you're talking about. You seem to be jumping around, because the number is 100% under my theory of letting GM go bankrupt and dissolve between Ford/Chrysler or a foreign company buying up their assets and US based manufacturing plants.

Sure, the Big 3 is going hat in hand and all predicting doom, and if you kill GM they will magically find the money to buy the parts. Or maybe you're betting on the Opel theory again.

I've heard better fantasies, but they are on audio books and I get 'em at Barnes and Noble. Lemme repeat: Expansion of a failing industry in a bad market during a global recession: Not. Gonna. Happen. Oh yeah, and high school economics taught me that demand is not inelastic, too.

How will it extend the recession? Are you suggesting that letting GM break up will magically make money go somewhere else? Right now the only way to keep GM afloat is dump taxpayer money there instead of dumping it somewhere else that it could be put to better effect to stem the recession. Money has to come from somewhere and the fastest way to end a recession is take a big axe to the dead wood while supporting the businesses that won't hold you back coming out of it.

Ahh, neoconomics at it's finest. Tell me something: Where will the money all those workers at the shuttered plants come from when they don't have jobs because the company went bankrupt and no one's buying their cars? The government. Who will pay for the pensions? The government. This is the exact analogue to the health care situation. We can pay a bit now, keep the companies afloat until the credit strings loosen, or we can pay a lot more later as a bunch more unemployed blue and white collar workers flood the market and government revenue takes a bigger hit.

The fallacy of this entire thread is looking at "cost per worker" - the far more telling number is "labor cost per vehicle made" which should include all pensions, health care etc. I'd be willing to bet the difference between foreign companies and the US companies is far higher than even the $70 number indicates.

Well, yes. We don't have the social system or the tax rates that foreign companies deal with. I'm sure GM would look a lot better on the bottom line if we had single payer and COLA adjusted welfare systems, too. Which leads us to....

As for comparing to Australia - you're talking about a nation that's virtually lost all of its manufacturing ability due (in part) to high labor costs and union refusals to negotiate in good faith to keep companies running.

...except, of course, that our unions are doing givebacks as we speak and your solution is to reduce us to being Australia without the extensive social net. Thanks, but no thanks. That's the biggest turkey I've seen since the Detroit Lions took the field on Thanksgiving.

[Partha]

Came back to it too late to edit, but I wish to apologize for my tone in the preceding. I blame the Gamera* rays from the prior post for inflaming the Economics 101 side of me to the point where I treated Dd like Rsak, which is wrong.

*-made as much sense as a giant radioactive turtle that flies via jets from it's legholes, that is.

Embar -

I'd like to hear the leftists on this board weigh in and give thier opinion about the fairness of closed shops. Should every company have the right to hire non-union workers, and should every union have to respect the rights of the non-union workers to work?

I've worked in both closed and open shops. As long as management gives the union a fair chance to organize new workers and there are clauses in the contract so the management can't just up and fire union guys and replace them with nonunion (read: cheaper) guys on a whim, I have no problems with open shops - in fact, the open shop I worked at was a pretty peaceful place. Likewise, the only problem I have with 'scabs' is that management is breaking their agreement with the union - folks gotta eat.

[Ddrak]

Which car company, pray tell, considering they're ALL pulling back? You expecting Opel to make a breakthrough in the US market in 2009? And after all, if no one is buying parts because they already have existing contracts with suppliers that they're reducing orders on now, why exactly would they take out new contracts from a supplier that has to retool, and lay off it's workers while it retools?

If there's not enough demand to sustain GM even if you split it to other manufacturers that don't have the same overheads GM can't get out of then you're just saying the government should back up a failed company regardless of viability simply because it employs people. That's bullshit economics on any scale.

Sure, the Big 3 is going hat in hand and all predicting doom, and if you kill GM they will magically find the money to buy the parts.

Maybe they will, maybe they won't. Demand won't be much different for the auto industry as a whole whether GM lives or dies so there's no "magic" involved. The current demand GM supplies would spread itself over the other suppliers which would have to increase capacity to sustain it. 20% of the market doesn't just dry up.

Tell me something: Where will the money all those workers at the shuttered plants come from when they don't have jobs because the company went bankrupt and no one's buying their cars? The government. Who will pay for the pensions? The government. This is the exact analogue to the health care situation. We can pay a bit now, keep the companies afloat until the credit strings loosen, or we can pay a lot more later as a bunch more unemployed blue and white collar workers flood the market and government revenue takes a bigger hit.

You're assuming GM will become viable again. I think the taxpayers stand to lose over and over again as they continue to bail out poor business practices of the past that have left the company with overheads around twice that of their foreign competitors. A company faced with that simply can't compete on any scale and it's stupidity to attempt to keep it afloat by throwing tax dollars at it.

Yes, there will be a bunch of unemployed people but it won't be the "3 million" you are touting. If you look at the plant and its employees as a whole you're essentially faced with a situation of government money going into the system and money to creditors, ex-employees and employees coming out in the case of a bailout vs. government money going in and only money to ex-employees and more recent ex-employees coming out. Frankly, I think the latter is a better deal for the taxpayer.

We don't have the social system or the tax rates that foreign companies deal with. I'm sure GM would look a lot better on the bottom line if we had single payer and COLA adjusted welfare systems, too.

GM would look a lot better on the bottom line if it hadn't been making stupid deals with the unions for the last 30 years that mortgaged their financial future for immediate gains. That's all there is to it. Had they stood up to the UAW and told them to fund their own pensions, to put money aside for their own health care and take the pay rise instead of the benefits then things would be a lot different. If you choose to bail out companies for making those sorts of retarded decisions then you're simply saying that you're happy for management to rely on the taxpayer to back them up whatever dumbass things they do and America will become less and less competitive as a result.

your solution is to reduce us to being Australia without the extensive social net.

Actually, my point is that's your solution. Throwing good money at bad companies that make bad deals with unions too greedy for their own good? Yep - best way I can think of to kill manufacturing in the long term.

Dd

[Partha]

If there's not enough demand to sustain GM even if you split it to other manufacturers that don't have the same overheads GM can't get out of then you're just saying the government should back up a failed company regardless of viability simply because it employs people. That's bullshit economics on any scale.

It worked for Chrysler - tell me why it won't work now. Manufacturing, especially of wheeled vehicles such as the ones your own army is buying from GM, is too important to national security to allow it all to be built by foreign companies. That's a political reality. Further, as we've pointed out repeatedly, they 'get out of' a large chunk of overhead in January.

The current demand GM supplies would spread itself over the other suppliers which would have to increase capacity to sustain it. 20% of the market doesn't just dry up.

Where exactly are they to get this money to increase capacity? From the banks?

/GLaDos

That was a joke. Ha-ha. Fat Chance.

/GLaDos

You're assuming GM will become viable again. I think the taxpayers stand to lose over and over again as they continue to bail out poor business practices of the past that have left the company with overheads around twice that of their foreign competitors. A company faced with that simply can't compete on any scale and it's stupidity to attempt to keep it afloat by throwing tax dollars at it.

GM was viable all the way into 2007, mind you - until the recession started. And you're still using the bullshit $70 dollar figure even though in one month a large chunk of that goes away.

Yes, there will be a bunch of unemployed people but it won't be the "3 million" you are touting.

You have proof of this statement beyond the 'we'll have employed people west, north, south and east of GM' variety?

If you look at the plant and its employees as a whole you're essentially faced with a situation of government money going into the system and money to creditors, ex-employees and employees coming out in the case of a bailout vs. government money going in and only money to ex-employees and more recent ex-employees coming out. Frankly, I think the latter is a better deal for the taxpayer.

Of course, this is conveniently forgetting all the downstream businesses that will still be working if GM is saved vs. all the people they'll be laying off when they're not - and unemployed people tend to inject less capital into the economy and less tax revenue to the government. Funny, that, innit?

GM would look a lot better on the bottom line if it hadn't been making stupid deals with the unions for the last 30 years that mortgaged their financial future for immediate gains. That's all there is to it. Had they stood up to the UAW and told them to fund their own pensions, to put money aside for their own health care and take the pay rise instead of the benefits then things would be a lot different. If you choose to bail out companies for making those sorts of retarded decisions then you're simply saying that you're happy for management to rely on the taxpayer to back them up whatever dumbass things they do and America will become less and less competitive as a result.

I'm going to post this quote from another thread. You go tell the person involved that they're full of it, K?

The banks made shitty financial decisions from a combination of:

- Short term gain of risky loans outweighed the long term risks in their analysis.
- Other banks were doing it, and if they didn't then their shareholders would elect a board that would.
- There wasn't enough oversight by anyone on what the actual risks were in cutting up loans and selling them piecemeal.
- No one important enough really considered what this would all mean if there was a significant downturn in real estate that meant a foreclosure would result in a property with significantly less value than the loan amount.

In the end, it meant that the banks were screwed because they owned parts of a lot of loans, which they had no idea which actual loans they belonged to. That meant the bank's insurers (ie AIG, Fannie and Freddie) were screwed because they had to pay out on a lot more foreclosures than their risk predictions allowed for. THAT meant that the entire financial industry was screwed because banks didn't want to loan because they couldn't trust their insurers to pay up without going bankrupt, and insurers couldn't garner any trust while they were insuring other banks. Then THAT meant that the entire nation was screwed because companies wouldn't be able to borrow money they needed to make payroll.

So, the government was faced with a choice:

1. Put up a trillion dollars in cash to buy up all the pieces of the loans they could, removing the roadblocks that were stopping the banks from loaning money to each other and worry about where the cash comes from later.
or
2. Let the entire economy come to a standstill, putting a whole bunch of people out of work until the finance industry could start itself up from scratch again.

It was a bailout of everyone in the nation, not just the banks. The real question is "ok - you've sold the future to save the day, so what are you gonna do about the future?"

Hint: It's the same person who said this about the Fannie/Freddie bailout:

It was absolutely the right call, and I think we're all fooling ourselves if we thing "small government" should override common financial sense in cases like this. They shouldn't be turned loose again either.

[Ddrak]

It worked for Chrysler - tell me why it won't work now.

Oh, it'll "work" just like it "worked" for Chrysler. Next financial downturn they'll be straight back begging the taxpayers for more money to save their collective asses. If you're fine propping up a bunch of failed companies that way then whatever - I'm saying it's not a sane way to run a nation.

Manufacturing, especially of wheeled vehicles such as the ones your own army is buying from GM, is too important to national security to allow it all to be built by foreign companies.

You realize what you just said there, don't you? The wheeled vehicles that my country is buying from a foreign company (ie a US one) are too important to be made by foreign companies. Uh, wait, what?

You've got THREE national car manufacturers (ie you can make stuff at Chrysler and Ford if GM goes under) and if it's that important for you to ensure local production (which is bullshit - parts for all sorts of military vehicles are made all over the place) then I'm sure you can just nationalize the parts of GM you need to build the wheeled vehicles and run them with non-union army people.

Where exactly are they to get this money to increase capacity? From the banks?

From the government, obviously. You are paying attention to current events, right? You do know that GM isn't the only one with the hand out, just the one in the worst financial trouble. Nothing I've said about letting GM fail precludes different action on the other two.

GM was viable all the way into 2007, mind you - until the recession started.

All failed companies are "viable" until a downturn. It's like the only part of falling that hurts is the last bit. If your definition of "viability" doesn't include recessions then you've failed at building a solid company.

And you're still using the bullshit $70 dollar figure even though in one month a large chunk of that goes away.

Where did I say "$70"? Where did I even talk about labor costs divided by current employee count? What happens in "one month" - last I looked there was at least 14 months (2010) before they can get rid of the health plan and only by divesting a huge chunk of cash (which lowers their credit rating and exacerbates the "not getting loans" issue). They still have pensions they are contractually obliged to pay that sets their labor costs higher than other manufacturers and you've still not come back to me on the actual labor cost per car produced which is the true measure of overhead.

You have proof of this statement beyond the 'we'll have employed people west, north, south and east of GM' variety?

More proof than you gave for the 3 million number, and I'm the one who challenged the figure you plucked out of the air. Prove your number or agree that you just made it up.

If you look at the plant and its employees as a whole you're essentially faced with a situation of government money going into the system and money to creditors, ex-employees and employees coming out in the case of a bailout vs. government money going in and only money to ex-employees and more recent ex-employees coming out. Frankly, I think the latter is a better deal for the taxpayer.

Of course, this is conveniently forgetting all the downstream businesses that will still be working if GM is saved vs. all the people they'll be laying off when they're not - and unemployed people tend to inject less capital into the economy and less tax revenue to the government. Funny, that, innit?

No, it wasn't forgetting that. You can draw the line arbitrarily big to cover whatever you want. Where is the money that is being paid to those downstream business coming from in a bailout? Oh yeah - the government. Like I said - same inputs and my solution leaves off the government effectively funding GM's bad debt. Why are you so keen to help out GM's loans with taxpayer money?

I'm going to post this quote from another thread. You go tell the person involved that they're full of it, K?

No. I will tell you that you're full of it though - comparing a 1.5 trillion dollar meltdown of the entire economy with one of three car manufacturers. Apples and Oranges.

Dd

[Partha]

I made a mistake with the 2010 thing. My bad. You're still a hypocrite on the issue, given that the banks haven't unloosed the strings on the credit purse even with your precious bailout. As a matter of fact, given your tone on the matter, the only thing I'm picking up that's different is that bankers aren't blue-collar workers. Libertarians always so hostile to the middle class?

Oh, yeah.

http://money.cnn.com/2008/11/05/autos/auto_job_losses/

The Center for Automotive Research reported that the total employment impact includes nearly 250,000 jobs lost at the automakers and nearly 800,000 at suppliers.
In addition, the organization estimates another 1.4 million job losses outside the industry, such as those caused when stores go out of business in communities hit by plant closings.

In economic terms, cutting operations in half would reduce personal income by more than $125.1 billion in the first year, and $275.7 billion over three years, the center said. Such a decline in personal income would cost the government tax dollars -- $49.9 billion in 2009 and more than $108.1 billion over three years.

There's your numbers you asked for. Now post yours. Won't hold my breath waiting.

[Ddrak]

Umm... read your article again. It's talking about all three auto makers shutting down resulting in a 3 million dollar job loss. Given the shares are 2:2:1, the best you could claim from just one shutting down and the other two picking among the pieces would be 40% of that number (1.2 million), but reality is the number would be much lower seeing I'm comparing the job losses of a shutdown compared to weathering the recession while the number in that article talks about the losses in shutting down the entire industry from pre-crash.

So, here's my numbers to show your 3 million is a stupidly pessimistic and totally unfounded estimate, from YOUR article:

A 100% reduction in Big Three operations would cost about 3 million jobs in the first year alone.

As for my "hypocrisy", absolutely none there at all. Like I said, you're comparing the meltdown of the entire financial sector (which would kill the middle and lower classes far more than the upper classes that do actually have liquid assets) with the shutdown of a single company in a single industry. You're talking two orders of magnitude difference. It's not even apples and oranges, it's grapes vs. grapefruit.

In any case, if you read my later posts I've criticized the way the bailout was handled. When I posted that the "plan" was to buy up the toxic debt to remove the fundamental issues, rather than to buy up stakes in the banks to give short term relief. I have exactly the same attitude to the motor industry - they need to fix the fundamental issues (self-inflicted high labor costs vs newer foreign owned companies) rather than beg the government for money to continue their proven losing positions.

So, you're basically making shit up. You made up the "3 million jobs" if GM was split up and sold off. You made up that the rescue package I weakly supported was to help "bankers", and you made up that I'm hostile to the middle class. Perhaps when you stop being so angry you'll be able to debate more sanely rather than bitterly picking sentences here and there and switching all over the place with attempted "gotchas".

Dd

[Partha]

If the Big Three carmakers were to cut U.S. operations by 50%, 2.5 million jobs could be lost in 2009, according to a study released Wednesday.

Given the shares are 2:2:1, the best you could claim from just one shutting down and the other two picking among the pieces would be 40% of that number (1.2 million), but reality is the number would be much lower seeing I'm comparing the job losses of a shutdown compared to weathering the recession while the number in that article talks about the losses in shutting down the entire industry from pre-crash.

I'll take 'skimming' for $300, Alex. And while I'm at it...

You're still making the assumption that all 3 will survive the loss of one, I see. Actually, you're betting (again) that if one goes that the other two who are ALREADY ON SHAKY FINANCIAL FOOTING ACCORDING TO YOU (emphasized because evidently you keep forgetting) are going to magically come up with the dough to buy the pieces of GM in a financial climate where BANKS AREN'T LENDING MONEY.

Not to mention all those suppliers you seem to think are going to magically switch production to Daihatsu.

http://articles.latimes.com/2008/nov/17 ... uppliers17

With up to 50% of suppliers “distressed” because of lack of access to new sources of financing and decreased sales, Diehl predicts a “huge increase in supplier liquidations and bankruptcy filings very soon.”

That would create blow-back for automakers. In February, Plastech Engineered Products Inc. filed for bankruptcy protection. The Dearborn, Mich., molded plastic parts maker employed 7,600 people and had plants in eight states. Last year, it sold $1.4 billion worth of engine covers, grill panels, floor consoles and the like to carmakers, including $200 million in parts to Chrysler. When Plastech closed up shop, Chrysler was forced to immediately idle four plants, sending 10,500 employees home until the automaker could find a new supplier.

Most large suppliers sell parts to all three American automakers, plus European and Asian companies such as Toyota Motor Corp. that have plants in the U.S. So the failure of certain suppliers could cut off production beyond the Big Three.

“There are dozens and dozens of tiny suppliers that, if they fail, could shut down GM, Ford or even Honda,” said Craig Fitzgerald of accounting and advisory firm Plante Moran. That possibility was highlighted in a recent report by the Center for Automotive Research, which predicted that the failure of a major carmaker could set off a spiraling chain of failures claiming 2.5 million jobs within a year.

I repeat: SHOW ME YOUR FIGURES. Not 'Dd's fictional account of the recession magically receding once enough people are out of a job.'

[Ddrak]

I showed you my figures, because my argument is simply that your "3 million jobs" number is bullshit. Your own article proved it (I notice you're already moving down to 2.5 million and that's only if the net output of all three is reduced by 50%).

So, like I said, you're making shit up and have absolutely nothing to back it up. I've proven my point with the very article you tried and failed to use to prove yours. Bottom like is your "3 million jobs lost if GM goes under" is a flat out lie, which is all my point ever was and now you've even been nice enough to prove my point for me.

What's more, you're no longer even making sense because you're putting forward strawmen now:

Actually, you're betting (again) that if one goes that the other two who are ALREADY ON SHAKY FINANCIAL FOOTING ACCORDING TO YOU (emphasized because evidently you keep forgetting) are going to magically come up with the dough to buy the pieces of GM in a financial climate where BANKS AREN'T LENDING MONEY.

Where on earth did I say the government shouldn't assist in helping Ford/Chrysler pick up the parts of GM if it goes bankrupt? You've invented this huge strawman that I'm opposed to all government intervention in the overall situation but you're just (again) making shit up. Now, if you take a step back and calm down a little then perhaps you'll stop fighting ghosts that aren't really there and actually read what I write instead of some random bullshit you'd like to get all angsty about.

Dd

[Partha]

I showed you my figures, because my argument is simply that your "3 million jobs" number is bullshit. Your own article proved it (I notice you're already moving down to 2.5 million and that's only if the net output of all three is reduced by 50%).

I haven't moved at all - I pointed out the 2.5 million because you were using the figure of at most 1.2 million. You skimmed and missed it. Big deal, say my bad like I did instead of ignoring it.

So, like I said, you're making shit up and have absolutely nothing to back it up

Got a link? Single one? An expert who says you're more likely to be right than me? Don't argue like Embar. And while I'm at it, here's what you wanted:

More proof than you gave for the 3 million number, and I'm the one who challenged the figure you plucked out of the air. Prove your number or agree that you just made it up.

As the link proved, I didn't pull it out of thin air or made it up, which is a hell of a lot better than you've managed.

Where on earth did I say the government shouldn't assist in helping Ford/Chrysler pick up the parts of GM if it goes bankrupt

Maybe when you said this...

A company faced with that simply can't compete on any scale and it's stupidity to attempt to keep it afloat by throwing tax dollars at it.

...considering that all 3 are, by your discussion of the unions, unable to 'compete on any scale'.

Or maybe it was this:

Actually, my point is that's your solution. Throwing good money at bad companies that make bad deals with unions too greedy for their own good? Yep - best way I can think of to kill manufacturing in the long term.

Or this:

If you choose to bail out companies for making those sorts of retarded decisions then you're simply saying that you're happy for management to rely on the taxpayer to back them up whatever dumbass things they do and America will become less and less competitive as a result.

Gee, dunno where I could have got that idea.

[Ddrak]

I pointed out the 2.5 million because you were using the figure of at most 1.2 million. You skimmed and missed it.

The 2.5 million was the number of potential losses in the long term if the big 3 reduced their output by 50% and never regained ground. My statement was if GM's business went (at least partially) to Ford and Chrysler which would enable them to maintain most of their market share. Sounds like you're the one skimming because you've apparently missed all the details on where the numbers are coming from.

Your position (which you claim to have not changed) was that GM failing would lead to 3 million jobs lost.

My position was your position is wrong.

Your article claims 3 million jobs lost if all three fail.

If only one fails, and fails in a manner that the other two can pick up the pieces (ie a government backed bankruptcy and carving up of GM to other American manufacturers, which has always been my position) then your number is necessarily wrong because ALL THREE WON'T FAIL THAT WAY. Get it yet? Your number is wrong. My claim is right. Give up already.

I do say "my bad" all the time when I actually make a mistake. In this case all the mistakes are yours and you're stubbornly refusing to admit it when your own links are proving you wrong.

As the link proved, I didn't pull it out of thin air or made it up, which is a hell of a lot better than you've managed.

Show me where the number for GM and only GM failing is 3 million. You didn't prove that number, you made it up.

Want a link to prove my case? Here!. It clearly places an upper bound on GM closing by stating the number for all three closing as 3 million. Unless you've got some way of proving that Ford and Chrysler employ no people then your statement of 3 million for just GM was pure fantasy.

considering that all 3 are, by your discussion of the unions, unable to 'compete on any scale'

Strawman. I'm only focussed on GM because they are the worst hit and I've never said anything about Ford or Chrysler. While I do acknowledge that the unions make them rather uncompetitive as well, I recognize that sometimes you can't just cut your head off to cure a headache so obviously killing all manufacturing in the US is a pretty daft idea. While the economy could certainly withstand a restructuring of the Big 3 into the Big 2, it wouldn't recover from more than that so I wouldn't advocate anything further and would hold my nose as the government ensured Ford and Chrysler's continuity while essentially giving them the bits of GM in a bankruptcy.

So, quit putting words into my mouth and get back to telling me why all three companies need to survive instead of entering into a government assisted breakup and reorganization of GM.

Dd

[Partha]

The 2.5 million was the number of potential losses in the long term if the big 3 reduced their output by 50% and never regained ground.

Way to move them goalposts, considering that the article said it would be 2.5 million in the first year. And now 'regained ground'? If they go bankrupt, what ground exactly do they regain?

Once again, you seem to think that GM will fold as a seperate entity and that other car companies will both A) pick up the slack that hasn't been shown to be there, considering that auto sales are down damn near 50% already for several companies*, and B) have the money to buy (which they don't) or the financing either from banks or the government to buy (which banks aren't and if you're giving government money away anyways, why not do it in a way that maximizes the number of jobs left, seeing as it's a recession?). I don't, and most economists are on my side in this argument.

* = http://www.thegreenmotorist.com/index.p ... s-figures/

Now it is time to look at how the Detroit 3 fared. In October 2008, General Motors posted a 45.1% decrease when compared to the same month in 2007. That number is a bit smaller this month as the company is only reporting a 41.3% decline in sales in the month of November.

Ford Motor Company posted a 32.6% decrease in domestic sales in November 2008, which is .5% higher than the decrease the company saw in October 2008. Chrysler, who has been embroiled in some heated discussions lately, saw a whopping 47.1% decline in November 2008 sales. This is up sharply from the 34.9% decrease that the company saw in October 2008.

The auto crisis is not specific to American manufacturers; Nissan recently cited the economic downturn as the reason it is pulling out of the Detroit International Auto Show next year. Nissan saw a 42.2% drop in sales in November 2008 with Nissan vehicles showing a 44.4% decrease and Infiniti posting a 28% drop. The two largest Japanese-based auto manufacturers, Toyota and Honda, also posted dismal figures.

American Honda saw a 31.6% decrease in sales in November 2008. Will the low-priced Honda Insight Hybrid be the ace up Honda’s sleeves? Unfortunately, we will not know until the car hits the dealerships in the spring of 2009.

Toyota also posted a significant loss with a decline of 33.9% seen. What is unusual is that one Toyota model posted a huge increase in sales and it was not the Prius. Instead, it was the Toyota Sequoia with its paltry 14/17 (city/highway) fuel efficiency rating. That’s right, gas falls to under $2 gallon in most places across the United States and people seem to have amnesia. Four dollar a gallon gas was not that long ago but the way the Sequoia sold in November (a 52% increase over October) you would think it happened decades ago.

Your position (which you claim to have not changed) was that GM failing would lead to 3 million jobs lost.

My position was your position is wrong.

Your article claims 3 million jobs lost if all three fail

In the first year. Evidently you are allowed to claim long-term periods to support your case, but I'm not, even though I never specified a time-frame. Ok. Fair debating tactic there.

If only one fails, and fails in a manner that the other two can pick up the pieces (ie a government backed bankruptcy and carving up of GM to other American manufacturers, which has always been my position) then your number is necessarily wrong because ALL THREE WON'T FAIL THAT WAY. Get it yet? Your number is wrong. My claim is right. Give up already.

I would love to see your proof, Herr Doktor. Maybe a link? One? One economist? (Hint: I found some.)

Show me where the number for GM and only GM failing is 3 million. You didn't prove that number, you made it up.

I have never said this was only about GM. It is my firm belief that the damage will not stop with GM. In fact, Embar started this whole sidebar talking about Chrysler dying. It's your firm belief that the UAW must be broken and that someone will buy the hulks of the bankrupt companies even though they have no money. It's my firm belief that if one goes bankrupt, a ton of the supply chain will go bankrupt - and that supply chain is not GM exclusive.

link

A further link

So, quit putting words into my mouth and get back to telling me why all three companies need to survive instead of entering into a government assisted breakup and reorganization of GM.

Because if one goes right now, more than likely two or possibly even all three go in today's market. Ironically, many of the same arguments that were made in 1979 are applicable today. The House bill is quite good, and the money has already been provided for anyways, so it's not adding to our current debt to provide it - and in return we will get restructuring, unions will be doing givebacks (just as in 1979), and the government gets stock in the companies.

[Ddrak]

The 2.5 million was the number of potential losses in the long term if the big 3 reduced their output by 50% and never regained ground.

Way to move them goalposts, considering that the article said it would be 2.5 million in the first year. And now 'regained ground'? If they go bankrupt, what ground exactly do they regain?

You're interchanging GM going bankrupt with all three going bankrupt again. If GM goes into a government managed liquidation then Ford and Chrysler can obviously regain ground over time because they are still functioning.

Once again, you seem to think that GM will fold as a seperate entity and that other car companies will both A) pick up the slack that hasn't been shown to be there, considering that auto sales are down damn near 50% already for several companies*, and B) have the money to buy (which they don't) or the financing either from banks or the government to buy (which banks aren't and if you're giving government money away anyways, why not do it in a way that maximizes the number of jobs left, seeing as it's a recession?).

Exactly - the sales are down 50% anyway, so that's 2.5 million lost (assuming your article is correct), which then makes your argument even more absurd that GM going under would be 3 million MORE than not going under. If you're arguing that it's just 3 million compared to the good times then you're just an idiot because you're counting jobs that are lost anyway whether you allow bankruptcy or not. If that's the case, spit it out, because I'm arguing against your apparent position that allowing a GM bankruptcy would cost 3 million jobs more than the position of not allowing it.

As for "maximizing the number of jobs left" - it's stupidity. You do that by simply nationalizing everything in the country and ensuring everyone has a job. Remember, Socialism guarantees 100% employment. So, instead of putting forward some dumb argument about making sure jobs are paid for by the government, the best option is to work towards the best chance for the industry to recover and not require further bailouts in the years to come. The only way to do that is a complete restructuring of the entire industry that eliminates the ridiculous labor overheads that are endemic in Detroit.

Fact is, whether you allow a bankruptcy or not that restructuring has to happen if you expect US auto manufacturing to survive another decade. The UAW will bitch and moan but they're a walking political corpse that will have to come to the cold realization that they're in a global market and they can't price their own members out of a job.

I don't, and most economists are on my side in this argument.

Actually, most economists are on my side as far as I've seen, where my side is that letting GM go into controlled bankruptcy would NOT result in 3 million job losses more than not doing it.

In the first year. Evidently you are allowed to claim long-term periods to support your case, but I'm not, even though I never specified a time-frame. Ok. Fair debating tactic there.

Oh noes - you lose an argument and cry unfair. Get over yourself.

I would love to see your proof, Herr Doktor.

I stipulated the government would ensure the others don't fail. Are you saying the government doesn't have that ability, yet magically has the ability to bail out all three? If I have to prove common sense to you then forget it.

I have never said this was only about GM.

Bullshit. You clearly stated that GM going bankrupt would cost three million jobs. If you misspoke or didn't properly qualify your statement then just say so, because my position has been and always was that GM alone going bankrupt will not cost 3 million jobs and that number is pure hyperbole of the sort that got us into the Iraq War.

It's your firm belief that the UAW must be broken

No it isn't. Stop putting words into my mouth. The UAW must recognize they are not in a monopoly position on labor and act accordingly. You know - face reality?

someone will buy the hulks of the bankrupt companies even though they have no money.

The government has no money to enact a restructuring? Since when?

It's my firm belief that if one goes bankrupt, a ton of the supply chain will go bankrupt - and that supply chain is not GM exclusive.

...

Because if one goes right now, more than likely two or possibly even all three go in today's market.

Absent external influence, yes. That's never been my position though, so quit beating strawmen already.

The House bill is quite good

Not good enough for the Senate, apparently.

Dd