Auto Bailout, Round 2

Our government should let them go bankrupt so a stronger group of auto companies may rise from the current mess created by the UAW.

Our government should let them go bankrupt so a stronger group of auto companies may rise from the current mess created by the UAW.

Hyundai workers in the USA make about $27.00 an hour.

GM workers make about $70.00 an hour.

You can blame the unions for a lot of the problems in Detroit.

SteveyDee, that $70 figure includes the cost of their hard-won fringe benefits of health insurance, pension, etc. My guess is that the non-union Hyundai workers have few fringe benefits if any. Don't forget the CEOs make salaries in the millions. Why exactly is it that the CEOs make a hundred times the workers pay?

Will the US Grow as a Nation?

A Cross Cultural Comparison of a Congressional Decision

Recently we have been faced with the question as whether as a nation do we stand and support each other as a nation or do we remain an immature country. The reason for stating this point is whether to help the big three auto companies with a bridge loan. Within all the western countries that have a domestic auto industry like Germany, Spain and Great Britain, all of them give financial support to their auto industry on regular bases. There are many important reasons why they do this.

One reason is that those countries know that their country can not survive financially if they allow themselves to believe in a pure form of Darwinian capitalism. This thinking is related to the fact that social human behavior in a corporate setting behaves in a racial mature manner not in a Darwinian style. For example the European countries have matured and have learned through experience that pure capitalism does not mix well in a true market. This is because it actually becomes destructive force to the health of their nations. The answer is that they have changed their ideology to a more social democracy form of governments. This does not mean that they have become completely socialistic it means that there democracy has matured and is more supportive as a nation.

The next viewpoint to look at is whether a decision to support the auto industry is morally right. A tool to use to answer this question is the study that was done by (Kohlberg 1971) in which he lays out his six stage model of moral development. The fifth and sixth stages are a blueprint that emphasizes the need for moral decision making to be well-though out and ethical. This means that a decision should have a positive means to an end. In other words the voting decision that congress decides on should have a positive affect rather than a negative outcome. In other words if congress votes correctly they will support the auto workers because this will in the end be a positive outcome for the American public. But if they decided not to support the auto workers this would be considered under (Kohlberg 1971) an immoral decision by congress. This is because too many Americans will be hurt by the no vote.

The next point then is whether the US congress decides to remain a selfish nation and only help the rich or do we understand that greed limits our ability to think objectively and support our auto industry. I hope that congress will choose to think in a mature manner and vote to approve a bridge loan to the US auto industry.

Charles Vega

Masters in Organizational Management

BA in Sociology & Criminal Justice

Labor cost per hour, wages and benefits for hourly workers, 2006.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

According to AAUP and IES, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits).

Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D. (see graph above, click to enlarge), and 52.6% more than the average worker at Toyota, Honda or Nissan.

Source: Professor Mark J. Perry's Blog for Economics and Finance

Name: Mark J. Perry Location: Flint, Michigan, United States

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University in Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. Since 1997, Professor Perry has been a member of the Board of Scholars for the Mackinac Center for Public Policy, a nonpartisan research and public policy institute in Michigan.

These figures for the Big 3, do not include legacy costs for pensions & healthcare. Nor the cost of the UAW unemployment fund ...where the employee receives 95% of their previous pay and benefits when laid off.

The point is the average UAW worker with a high school degree earns more than 3.6 times what the average of all working people in Maine makes . Yet the companies and the unions are coming to you and asking for your tax dollar in order to keep their failed system and business models and gas guzzeling SUV producing cars on the road.

The american worker is the american consumer. Is it not like a cat chasing it tail. Loan money so the companies can sell more cars, then add stipulations that put production people out of work. Then further close dealerships that lay off sales forces as well garage workers?

GM Chrysler and Ford have a total market capitalization of less than $8 Billion. They are asking for $34.0 billion. 4 times their market cap. (this figure does not include they TARP requests) No bank on earth would make a deal like that without asking for a bancrupty reorganization. Why should the US taxpayer settle for less security than a bank?

They deserve to go bankrupt! The country will survive, a stronger auto industry will rise and the wasteful union bosses and slugs can suffer for a bit...they deserve it!

'vichet' is spot on.

IN REFERNECE TO THE COLLEGE PROFESS0R. YOU ARE MAKING MORE THEN THE GOVENOR OF THE STATE OF MAINE. WHAT MAKES YOU WORTH SO MUCH? YOU DIDN'T INCLUDE THE BENIFITS IN YOU ARTICLE, I BET THEIR BETTER THEN THE AUTO WORKER. AND HOW ABOUT THE WORKING CONDITIONS.

Actually bud55bud those figures did include benefits.

A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River. Both teams practised long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid-off one rower, halted developmen t of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India .

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US . The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses.

IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

Let them go down after what they did to Preston Tucker and the Tucker Torpedo.

Stop Income Tax For Two Months by Newt Gingrich

Rep. Louie Gohmert (R.-Tex.) has proposed a very important tax-cut alternative to the Pelosi-Paulson big-government bailout plan.

Where the Pelosi-Paulson plan takes the taxpayers’ money and puts it under the government’s thumb so that predatory politicians and micromanaging bureaucrats have more and more control over the American economy, Congressman Gohmert’s plan puts the money back into the pockets of the American people and allows them to choose.

In the Pelosi-Obama model, Washington politicians and Washington bureaucrats decide which auto companies to save and with how much money in huge taxpayer-funded checks (bringing with them politician oversight and bureaucratic micromanagement in a manner guaranteed to kill entrepreneurial innovation and market-oriented flexibility).

In the Gohmert model of empowering the American people, you -- not some bureaucrat -- decide which auto companies ought to prosper by your decision about which cars you want to buy. If Washington wants to develop a better energy-environment strategy by having a tax credit for buying electric cars or hybrids or flex fuel cars, that changes the incentives for both customers and manufacturers but keeps the playing field fair and market oriented by letting you decide which product you want to buy.

In this citizen-empowerment model, you the customer pick the winners and losers and you have the power to decide where to spend your money and which innovations fit your values the most.

And there’s more: Under Gohmert’s idea, you don’t have to buy a car. If you need the money for your mortgage, a child’s college tuition or maybe even to save for a rainy day you can do it.

Rep. Gohmert figured out that the volume of money being thrown around by the U.S. Treasury, Congress and the Federal Reserve is so massive that it would finance a tax holiday for every working American.

Think of the scale of spending we are facing.

For the $350 billion second bailout installment Treasury Secretary Henry Paulson is going to request, every American taxpayer could have a two-month tax holiday from both income tax and the Social Security-Medicare (FICA) tax.

That means that for all of January and all of February you would pay no federal income tax and no FICA tax, which -- for most Americans -- amounts to about 33 percent of your gross income.

Furthermore, House Speaker Nancy Pelosi has proposed an additional $700 billion as a stimulus package.

That would pay for an additional four months of a tax holiday.

Thus, if you combined the Pelosi and Paulson proposals, you could create a tax holiday through June.

That would mean no working American would pay a penny in income tax or a penny in FICA tax for the first six months of the year.

And that would mean no business would pay a penny in matching FICA tax for the first six months of the year.

As a pro-small business, pro-jobs creation, pro-market stimulation measure, imagine the power of that much extra money in the hands of the American workers and the American entrepreneur.

Imagine how many more people could afford to keep their homes, how many people could pay down some of their debt, how many will be able to rebuild some of their retirement funds, how many people might find the extra resources to start a new business or expand their existing business.

Now that would be a stimulus plan that stimulates the American people. That is quite a change from the big business, big bureaucracy, big politician model we have seen in Washington recently.

Where Pelosi and Paulson would stimulate bureaucrats and politicians, Gohmert would stimulate American workers, American businesses and American productivity.

In the long run, we will get more economic growth and more revenue for federal, state and local governments from a growing economy with more creative businesses, more productive private markets, and more incentivized workers.

The Gohmert plan is a plan to get America growing again. It is not a bailout plan. It is an economic growth plan.

As speaker of the House, I helped balance the federal budget for four consecutive years and to pay off $405 billion in federal debt.

That was the first time since the later 1920s (70 years) that the federal government had four consecutive years of a balanced budget.

We balanced the budget by controlling spending, reforming welfare and trimming bureaucracies while cutting taxes for the first time in 16 years to increase economic growth and therefore increase government revenues from a bigger economy with lower taxes rather than weakening growth by trying to get more revenues through higher taxes in a smaller economy.

As a fiscal conservative committed to balancing the federal budget, I would not normally recommend a tax holiday on this scale.

However, when the alternative is a Pelosi-Paulson spending increase that is Washington-centered, politician-controlled, and bureaucratically micromanaged, the Gohmert plan is a dramatically better approach that will produce far more freedom, much less corruption, and return power and control back to the American worker.

Call your congressman and senators (202-224-3121) and urge them to sign on to the Gohmert plan for economic growth, smaller government, and greater freedom. You can also sign this petition in support of Gohmert's plan.

Those who would rather see bankruptcy will get a kick out of the letter I got tody. This is a letter from the bankrutcy curt. The letter states an amount of 20,478.22 plus 327. for work done on thisw case. The irony is that that amount is just about the amount the contract called for this 28 years worker to recieve after serverance and vacation time. Still have not seen any of this. The lawyer for the trustee and the trustee have already recieved 78,000 ---138,000---87000---251,000--- 151,000 ----17,000 We can object to this newest amount and there will be a hearing? You know what they call one hundred lawyers aboard a sinking ship? A very good start.