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Friday, December 19, 2008

Automakers bail out

posted by Bob at Friday, December 19, 2008

9 Comments:

Anonymous Anonymous said...

What a big lie from the Bush administration.

Saying were not going to bail out the auto industry and then doing it with tax payor dollars from a fund designed to bail out wallstreet.

I have little sympathy for the corporate auto industry bums who abandoned fuel economy vehicles of the late 70s early 80s that brought us fuel economy cars like the dodge omni, plymouth champ, horizons, escorts, chevettes.

Wouldn,t bringing these cars back be better than spending our tax dollars to fund auto makers promise to deliver affordable fuel economy vehicles that everyone can afford when in fact what auto makers have now is still not affordable and accessible to the average american ?

How about the fuel economy standards that Federal regulators fail to implement ?

I have lots of ideas but I want to hear from some of you hear what you think about this and whats happened so far.


Thanks


Jeff Matiatos

11:33 AM  
Anonymous Anonymous said...

A bunch of rich investors ask congress for 700 billion dollars and they get it with little discussion. Blue collar workers need 1/20th of that and have a payment plan to pay it back and we get a month of hearings and a failed bill.

That's what's wrong with this country. We don't give a shit about the working class.

12:55 PM  
Anonymous Anonymous said...

1:44,

Elvis Presley lived in Public Housing to.
Go back to bed you jack off in the night !

Brian

8:34 AM  
Anonymous Anonymous said...

Back to the auto loan.

Without the insults and language I do find it pretty low that the Wall Street execs came with their hands out and got 40 times (not 20)the money without Congressional hearings, no oversight, and very little strings attached. We were told that money was going to be used to extend credit to 'main street'.

I'm watching and reading the same news you are and notice that no one is extending credit and its quite the opposite- they are making it harder for people- which leads to the second biggest item people buy with credit- cars. The housing market is already in the toilet around the world and now the auto markets arr there.

We do see that the Wall Street bailout went to pay off executive bonuses, and protect the status quo.

The auto loan, not bailout, has a pay back schedule, progress markers to watch their development along the way, cuts to the wages of the workforce, plant closings, lots of dealerships closings and mergers, and mandatory restructuring.

Its a good investment. We did it for Chrysler back in the 80's and it paid off well for the company and the country which collect every penny plus interest back.

I also noticed that we didn't ask any of the Wall Street execs how they got to Washington.

Eric

12:42 PM  
Anonymous Anonymous said...

Jeff, the auto makers didn't abandon the fuel efficient cars, we the consumers did.

The Chevette was replaced by the Cavalier, which was recently replaced by the Aveo. The Escort was around for a long time, and replaced by the Focus. Dodge replaced the Omni with the Neon, which was discontinued in 2005. The brought out the Caliber a couple of years later. So with the exception of a couple of years from Chrysler, we've had econoboxes available to us from the big 3 continuously.

One other point to toss out there, GM has already been cutting their labor costs, rather dramatically. Five years ago, GM's total labor cost was around $18 Billion dollars. This year, it's $8 Billion. Think about that for a minute. GM workers are making $10 BILLION dollars LESS than they were five years ago.

I don't have answers, just more questions, but I hope to hear some more intelligent discussion about it...

1:49 PM  
Anonymous Anonymous said...

Thanks for that very informative and comprehensive answer.

Was gas really that cheap back then where we no longer wanted those kinds of autos ?

I don't think the autos you mentioned that took place of the cars I mentioned got better mpg.

Just different styling that people wanted.

How was it that the automakers first said they NEEDED at least 34 Billion and our government had earmarked 25 billion, but they settled for 17.4 billion ?

They will be on their hands and knees asking for more on an indefinate basis and the Obama administration will probably open the check book with as much as they want.

Once they file for bankrupsy, does that protect them from having to repay the loans ? Of course, and if they go bankrupt, we never see it again and they start up as a new company under another name ?



Jeff Matiatos

2:22 PM  
Anonymous Anonymous said...

By the way 1:44, I don,t care for the use of vulgor and abusive language, but when you throw it at me, expect the same in return.

You want to talk civil, I'll talk civil.

Jeff Matiatos

2:26 PM  
Anonymous Anonymous said...

A little perspective. While people are complaining about the relativly small auto bailout. The massive investment banking bailout has been a waste.

The 116 banks that so far have received taxpayer dollars to boost them through the economic crisis gave their top tier of executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007, an Associated Press analysis found.

That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to 53 of the banks that have shared the $188 billion that Washington has doled out in rescue packages so far.

Some banks trimmed their executive compensation in the face of faltering performance that foreshadowed the current economic crisis, but they still granted multimillion-dollar packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

Such bonuses amount to a bribe for executives "to get them to do the jobs for which they are well paid in the first place," said Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services committee.

"Most of us sign on to do jobs, and we do them best we can," said Frank. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"

The AP review of annual reports that the banks file with the Securities and Exchange Commission found that the average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

Among other findings:

_ Lloyd Blankfein, president and chief executive of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.

This year, Goldman's seven top-paid executives will work for their base salaries of $600,000, with no stock or cash bonuses, the company said. Last spring, before Wall Street's staggering losses and layoffs mushroomed, Goldman described its pay plan as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company, after gains last year, on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

_ Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.

_ John A. Thain, chief executive of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, came to Merrill Lynch in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.

Like Goldman, Merrill tapped taxpayers for $10 billion on Oct. 28.

The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Asset Relief Program, a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks to prevent wide economic collapse.

The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes. Some banks are forgoing bonuses and restricting other compensation.

The records detailing last year's pay packages show that personal financial advice was among the executive perks. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay financial planners.

At Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs, paying as much as $233,000 for an executive's car and driver, told its shareholders that financial counseling and chauffeurs were needed so executives would have more time to focus on their jobs.

JPMorgan Chase chairman James Dimon ran up a $211,182 tab for private jet travel last year when his family lived in Chicago and he was commuting to New York. The company received $25 billion in bailout funds.

Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, D-Calif., questioned that rationale, saying executives visit many locations more vulnerable than the nation's security-conscious commercial air terminals.

Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions _ something particularly hard to take when banks then ask for rescue money.


Eric

9:28 AM  
Anonymous Anonymous said...

Who did these two clowns Paulsen and Bernanke consult with first when they went to congress to pull the wool over their eyes to get the money ?

Eric, either these two are master liers or congress is as nieve as the most nieve.

I am not satisfied that Bushes and congresses overseeing of the auto loans to car makers, holds them accountable enough.

They seem to be hiding most all IF ANY, of the requirements for paying back the loans.

Just what are these requirements and will the tax payors ever see their positive investment in the auto loan bailout money ?

10:09 AM  

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