GM really only has two options:

1) Get a bailout and act as if they are in Chapter 11, or

2) Avoid a bailout and declare Chapter 7.

The UAW can biatch all it wants, but either way they're getting a pay or benefit cut. GM can't file for Chapter 11 absent a government loan because no bank at this time is willing to lend them the money they need to go through restructuring.

If GM files for Chapter 7 bankruptcy, everything stops overnight. Their assets are liquidated, everybody is fired, and within six months the other two domestic auto manufacturers will likely fail as well, since the parts companies that they all share will start going under once their invoices aren't paid. Ironically, the Japanese car companies might also have to close up shop in the US since they are also dependent on the same parts suppliers.

Chapter 11 will stave off the inevitable until later, which we might need at the moment. Chapter 7 will create 3 million newly unemployed in under a year.

Either way, the UAW is only helping put the final nails in their coffin. Either they are going to let the company crash out of spite, or they are going to fold on some of their demands because they are not, quite frankly, realistic anymore.

The power of the unions will be severely diminished in either circumstance. They HAVE to know that.

I say we just let Canada have Michigan, then it can be their problem.

Agree, but cut the pay of the executives first though.

JimmyCarter'sSecondTerm: I say we just let Canada have Michigan, then it can be their problem.

The governor of Michigan is a Canadian spy anyway. Might as well.

/And Captain Kirk...
//And Jack Bauer!!!!

Masso: Agree, but cut the pay of the executives first though.

I support cutting pay for both executives and the union workers. The only people not overpaid at GM are the few poor non-union laborers and some of the middle management guys who get absolutely screwed.

Mugato: Agree, but cut the pay of the executives first though.

Um, if a company needs a government bailout, shouldn't the executives of said company be fired altogether? I'd be fired for a whole lot less than farking the company up to the point of asking for welfare.

Not entirely. Not all of the executives were involved in the decisions, or even supported the decisions, that created this mess. Doesn't make sense to just fire everyone assuming they had to be incompetent.

By that logic you'd have to fire all the line workers because the cars are poorly built.

General Motors is a benefits company that makes cars.

Dancin_In_Anson: BalugaJoe: General Motors is a benefits company that makes cars.

Mine if I borrow that?

You'll have to ask Hugh Hewitt. He said that on his Friday show. Although kudos to BalugaJoe for keeping it alive. It's completely true.

Dancin_In_Anson: Mine if I borrow that?

Sure, he did.

Well, if you're looking at total company failure or a pay cut, which would you choose?

Hmmm... keep my job, lower the pay (but it probably is still over $20 an hour), lower benefits (still covers most everything, more costs passed on), but still pays better than 90% of the jobs out there... nah, I'd rather be unemployed! What the fark is wrong with these assholes?

The execs should have watched Caterpillar a long time ago.

A better way to do this might be to say we'll match a preferred stock purchase from private investors.

Unfortunately, a bailout of some kind is probably the way to go. But it should come with strings. The money should be used to move forward, not prop up huge legacy costs. I feel for the guys who were lied to all those years that they would be taken care of. Maybe the union pension funds can help bail the retired guys out. Seems to me that was part of why they paid all those union dues...peace of mind.

USX and Eastern Airlines are two examples of how hardball union tactics failed. The UAW has to come to grips with its own mortality on this one.

Luckily, GM is cutting retiree health care for management. If they can cut retiree health care for union workers as well, they might be able to come out of this without Chapter 11. No health benefits will most likely result in increased mortality for GM retirees, saving GM billions in pension payments.

Its a win-win.

SharkTrager: Not entirely. Not all of the executives were involved in the decisions, or even supported the decisions, that created this mess. Doesn't make sense to just fire everyone assuming they had to be incompetent.

You'd have to start firing guys that are either retired or dead. The seeds of this mess were planted in the '80s. The Big 3 and the UAW signed some really awful CBAs way back then, and the Big 3 bought labor peace at the price of their long term survival.

Simple, the company is too big, the unions are to big, the salaries are to big and the benefits are too big. Plus their cars suck.

Wanna continue to exist/have a job? SIMPLE. Lower wages, stop designing crap, stop having 35 different SUV models and reduce the size of the company.

/Oh, and kill Hummer

somedoctorguy: USX and Eastern Airlines are two examples of how hardball union tactics failed. The UAW has to come to grips with its own mortality on this one.

Its a little bit more complicated than that. When Frank Lorenzo owned both Eastern and Continental, he put Continental into bankruptcy for 1 day to void all of the union contracts and give everyone a 50% paycut. Congress passed a law preventing this before he could send Eastern into bankruptcy.

Lorenzo slowly sold off Eastern assets and moved equipment from Eastern to Continental. He told his employees he was giving them a 50% pay cut. A strike resulted and he moved Eastern into bankruptcy. The bankruptcy judge ruled that Lorenzo was unfit to run Eastern Airlines and Lorenzo was fired. Gulf War I happened and oil ran up in price and the airline collapsed.

Is Robert "More H1-Bs Please" Reich proposing a 50% pay cut?

Is Robert "More H1-Bs Please" Reich proposing a 50% pay cut?

THIS!

BizarreMan: What if the UAW Executives take a pay cut too? Seems to me that everybody involved there needs to sacrifice a bit.

All intelligent union members soon notice that the guys calling for strikes keep getting paid even if the strike means no income for the "strikers". And usually the strike ends with just about what the company offered in the first place.

It's the same kind of morons that take the "I don't care what we do as long as we do something" attitude that keep modern unions alive.

If GM goes chapter 7, do they still have money to pay for pensions?

Interesting information. (new window)

The chart above shows average hourly compensation (additional data source here) for the Big Three ($73.20) and Toyota ($48.00), compared to average hourly compensation for Management and Professional Workers ($47.57), Manufacturing/Goods Producing ($31.59) and all workers ($28.48), data available here.

Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM, Ford and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?

Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda and Volkswagen take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.

any word on completely nixing the genius idea that is the job bank?

/heckuva job there, uaw.

Do What Now Question Mark: Interesting information. (new window)

I think the decision making execs should have pay cuts and most definitely the Union workers. The UAW isn't innocent here. Although I agree that people should have a good living, their benefits and wages are astronomical. I remember reading somewhere that about $1500 per GM car goes towards the UAW's health benefits alone? Geez, what kinda plan is that? I want in.

I also like the idea of giving Michigan to the Canadians ;)

nashBridges: The power of the unions will be severely diminished in either circumstance. They HAVE to know that.

Considering a lot of union leaders are elected, and the UAW is not known for their high number of Economics PhDs, it is quite possible that they in fact have no idea. Especially since any cut in pay or benefits has to be voted on. People are incredibly short-sighted and stupid when it comes to money.

Unlike a successful parasite, the UAW has killed its host. Now it wants to American taxpayers to become the new one. I suggest that we not sign on for that, but that's just me.

The Air Force went through a restructuring in the early 90's. Had too many Staff sergeants or something. My memory is kind of foggy, 'cuz I was partying most of that time. I recall they had a sort of "pool" of people who could take like 3 different forms of a "buyout". Like 40,000 bucks or a certain amount of money per month for a few years. Argh, can't remember all the details. I was an E-4 at the time...it really didn't affect me. The thing was...if you didn't take the money and they decided to "cut you free" - you got a pat on the back, an "Attaboy!" and a swift kick in the ass.

So, anyways...

I worked with a particular (arrogant S.O.B.) Staff seargeant who was completely rest assured that on "cut day", they'd wouldn't cut him. Oh no. Not him. He was an excellent technician! He was the creme de la creme! The cool whip on a motherfarking piece of cherry pie!

Can you see where this is going? Yeah, you can see it.

/chop

You should have seen the look on his face. Actually, the looks on his face, 'cuz he was pretty damn depressed up until the day when they fired his sorry ass.

If these farkin jerks would just make a reliable, inexpensive car that doesn't look like the Urkel-mobile then perhaps they would turn a profit.

Government to auto industry -- We can give you $25 billion but only if you cut wages and benefits to the workers.

Government to Wall Street and banks -- Here's $700 billion. No strings attached. Have fun. Let us know if you need more.

Government to AIG -- Here's $150 billion. Ditto.

70Ford: ...

The hot chicks are a total non sequitur, but an awesome one.

Like anyone's buying a POS GM anyway.

/make autos that are shiat, and shockingly, nobody's buying
//let's reward them!

If these companies actually made quality cars, they could justify their existence. I know they're cars are generally cheaper than Japanese imports, and if they are equal or better quality, then why is it that no one is buying their vehicles, while Toyota and Honda seem to be doing much better than they are?

It doesn't matter if the government is bailing them out or not, if people continue not to purchase their crappy cars. Sooner or later they will have to declare bankruptcy.

nashBridges: GM really only has two options:

1) Get a bailout and act as if they are in Chapter 11, or

2) Avoid a bailout and declare Chapter 7.

The UAW can biatch all it wants, but either way they're getting a pay or benefit cut. GM can't file for Chapter 11 absent a government loan because no bank at this time is willing to lend them the money they need to go through restructuring.

If GM files for Chapter 7 bankruptcy, everything stops overnight. Their assets are liquidated, everybody is fired, and within six months the other two domestic auto manufacturers will likely fail as well, since the parts companies that they all share will start going under once their invoices aren't paid. Ironically, the Japanese car companies might also have to close up shop in the US since they are also dependent on the same parts suppliers.

Chapter 11 will stave off the inevitable until later, which we might need at the moment. Chapter 7 will create 3 million newly unemployed in under a year.

Either way, the UAW is only helping put the final nails in their coffin. Either they are going to let the company crash out of spite, or they are going to fold on some of their demands because they are not, quite frankly, realistic anymore.

The power of the unions will be severely diminished in either circumstance. They HAVE to know that.

Ding ding ding. Smartest thing written on Fark this week.
Winning post.

Suck it, UAW.

JimmyCarter'sSecondTerm: I say we just let Canada have Michigan, then it can be their problem.

You know what? Sometimes I think I'd be ok with that.

/you know where I am.

JimmyCarter'sSecondTerm: I say we just let Canada have Michigan, then it can be their problem.

What makes you think Canada wants Michigan? They'd probably take the UP (which is almost Canada anyway), then ditch the rest.

70Ford:

Great, thanks. Now I have to leave fark and use the internet for the purpose it was built for.

I don't buy it that the unions are killing the car companies. The blame has to be spread around. If the companies were run well it wouldn't be an issue. It wasn't that long ago that Auto companies profits were in the $Billions. They had a big chunk of the domestic market. But they just made crap cars and the buyers went away. That and there is too much waste. My dad worked at GMs Tech Center. The managers in engineering used to load up their departments with staff. The larger the staff, the higher the status for the manager. You multiply that attitude through all the departments and you got one flabby company. Not that unions are blameless. They need to be more flexible.

A big problem is more the retirees health care and pensions. I think the big 3 is going to use this crisis to dump those liabilities.

The UAW is a huge problem for the automakers. Outrageous wage and benefits loads that are just not realistic are held onto with white knuckles by these Knuckle-head workers.

They are just too expensive and would rather keep a higher wage even if it means layoffs...or worse.

It is time for the UAW to go

BalugaJoe: General Motors is a benefits company that makes cars.

Good one, srsly.

I favor walking away from these giant douchebags. The mentality in Detroit @ GM is, "Hey, we're GM. we're number one. toyota what? Honda who? No, no, we're GM. GENERAL MOTORS. We are the biggest company in the galaxy."

I for one would love to see these arsebags to take a giant hit to their stupid pinstriped ego.

The Marxism is where it's always been. In the masturbatory fantasies of Neocons.

This proposal could cost Obama Michigan on November 4th

jjorsett: Unlike a successful parasite, the UAW has killed its host. Now it wants to American taxpayers to become the new one. I suggest that we not sign on for that, but that's just me.

Oh hell...what's one more blowfly egg among thousands.