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Big Three Submit Their Re-Education Plans

From an overjoyed Associated Press:

Big Three automakers to submit plans to Congress

By KEN THOMAS and TOM KRISHER, Associated Press Writers

WASHINGTON – Detroit’s automakers, making a second bid for $25 billion in funding, are presenting Congress with plans Tuesday to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.

General Motors Corp., Ford Motor Co., and Chrysler LLC would refinance their companies’ debt, cut executive pay, seek concessions from workers and find other ways of reviving their staggering companies

Top executives from the Big Three failed last month to convince a skeptical Congress that they were worthy of $25 billion in loans. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., ordered them to outline major changes, including the elimination of lavish executive pay packages and assurances that taxpayers would be reimbursed for the loans.

All three companies are filing separate plans. Congressional hearings are planned for Thursday and Friday…

GM will outline efforts to negotiate swapping some of the company’s debt for equity stakes in the automaker, either shares or warrants for them, said two people briefed on the company’s plan.

With eight separate brands, GM will also discuss efforts to shed brands but it would prefer to sell them instead of shutting down Pontiac, Saturn or Saab, said one of the people briefed on the plan. Killing off brands, like GM did with Oldsmobile in 2004, would require cash the company doesn’t have, the person said. The people briefed on GM’s preparations didn’t want to be identified because the plan hadn’t been completed.

Some members of Congress have urged the Big Three executives to take major pay cuts as part of the deal. Chrsyler Chief Executive Robert Nardelli said he would work for $1 a year, and a similar commitment is expected from GM CEO Rick Wagoner. Ford plans to include a pay cut for Ford CEO Alan Mulally, although the size of the cut was not immediately available

Cash stockpiles at GM and Chrysler are dangerously close to the minimum amount required to run the companies, meaning they could have trouble paying all their bills by the end of the year.

GM, according to its quarterly report filed with the Securities and Exchange Commission, owes creditors $45 billion and it must pay more than $7.5 billion early in 2010 to a United Auto Workers trust fund that will take over retiree health care payments.

Ford owes more than $26 billion, with $6.3 billion due to its UAW trust fund at the end of 2009. Chrysler, a private company, does not have to open its books, but its CEO, Nardelli, has said it would be difficult for the company to make it without federal aid. All three likely are negotiating with the UAW for delays in payments to the trusts.

The companies are expected to seek other concessions from the United Auto Workers, including the elimination of the much-maligned jobs bank in which laid-off workers keep receiving most of their pay.

Alan Reuther, the UAW’s legislative director, declined to say what kinds of concessions the union might take but said “we realize that all stakeholders need to come to the table to do what’s necessary to ensure the viability of the companies. We’re prepared to do our part.”

The plans to Congress may also discuss more symbolic issues such as the use of corporate jets. During the congressional hearings, the executives were sharply criticized for traveling to Washington, D.C., separately by private jets.

Ford said that Mulally will travel by car when he returns later in the week. Chrysler and GM said their CEOs will not fly by corporate jet, but neither company has said if the executives will fly on commercial airlines or drive

Yes, by all means they must discuss whether these CEOs should travel by corporate jet or car.

After all, you would never catch Nancy Pelosi flying around in a private jet.

This article was posted by Steve Gilbert on Tuesday, December 2nd, 2008. Comments are currently closed.

30 Responses to “Big Three Submit Their Re-Education Plans”

  1. 1sttofight

    seek concessions from workers

    Seek??? Seek??? Seek???

    How about flat out telling them that if they want to keep their frigging jobs THEY will take an immediate 50% across the board pay cut.

  2. Mr Michael

    Here’s something this Blue-collar worker can’t understand: Why would you promise to ‘low bid’ your management in a time when you need the best? In a world of you-get-what-you-pay-for, I would think that an assurance that you would find the Best and the Brightest to manage your failing companies would reassure any potential investors.

    If the Auto Companies go through with this plan to pay people in management positions less, expect even WORSE management from those people.

    Or am I mis-understanding something from down here?!?

  3. 1sttofight

    Why would you promise to ‘low bid’ your management in a time when you need the best?

    Do you really think they could do any worse?

  4. Liberals Demise

    Are you kidding me? Asking the BIG 3 CEO BOZOS to agree to a pay cut is like asking Barney to stop trolling the Mens’ Clubs!!

  5. JohnMG

    Mr. Michael; …..”In a world of you-get-what-you-pay-for, I would think that an assurance that you would find the Best and the Brightest to manage your failing companies…..”

    This is too rich fo me not to comment.

    Substitute “country” for “company” in the above quote and you’ll be quick to realize that ISN’T what we’ve done at the voting booth. Unless I’m mistaken!

    Two things come to mind here. Either our elected officials are grossly over-paid, or ‘we the people’ can’t AFFORD really competent leaders so we have to settle for what we CAN afford. My solution is to fire the whole shittin’ works and start over

  6. wardmama4

    As someone who can’t imagine the Liberal Lion (for example) flying commercial – I wonder exactly how many Congresscritters fly their own private and/or chartered jets, what percentage of their ‘trips’ are on the taxpayers ‘dime’ and finally am I the only one who thinks that their private healthcare plans and retirement plans are the so-called golden parachutes (which they themselves vote for themselves) that they condem the CEOs of having (which is approved by the shareholders)?

    Hypocrite thy name is Democrat.

  7. JohnMG

    wardmama4; …..”can’t imagine the Liberal Lion…..”

    That’s a mis-print, right? You really meant liberal, lyin’, didn’t you? Or liberals lyin’? Or lyin’ liberals……………

  8. proreason

    “our elected officials are grossly over-paid, or ‘we the people’ can’t AFFORD really competent leaders”

    Why is it that the self-described poorest member of Congress, our beloved vpotus-elect “Pugs” owns a 6,000 square foot mansion on 14 wooded, lakeside acres in Delaware?

    Yet, the market value of America’s retirement funds are 40% below the same time last year.

    And Harry Reid makes Plugs look like a saint. Luckily for Harry’s sensibilities, there won’t be many tourists vacationing in DC in the next few years. Better to have the smelly rates scurrying around their burrows out in the sticks while Harry benevolently exercises his power.

  9. U NO HOO

    In the interests of full disclosure I confess I worked for Ford for a short time early in my professional life. I left amicably.

    Driving to DC in a hybrid, WOW, that will make a real difference.

    For the record Ford had an electric car prototype in 1966 that would be on the market in five years. Ho, ho, ho…

  10. U NO HOO

    In “defense” of legacy costs they go back to the ’60s. ’70s, ’80s.

    People aren’t buying? My newest car is a ’99 model and I just don’t need to replace it or my older, ’95 and ’97 models and all three run fine.

    Let the job bank UAW members buy new cars until the grande tres are back into good shape.

  11. ptat

    I wonder, Harry, did the big 3 stink up the place? Could you please comment on their smell? I know BO is a really huge concern of yours nowadays……

  12. BillK

    1st, I’m a bit disappointed in your comment:

    How about flat out telling them that if they want to keep their frigging jobs THEY will take an immediate 50% across the board pay cut.

    Why, just to appease the class warriors?

    Yes, they’re doing a horrendous job, but even if all three CEOs took a $0 salary for perpetuity, how would that help these companies’ bottom lines one iota?!?!

    It’s literally like throwing a glass of water on a raging forest fire; it might make you feel good but it will actually accomplish nothing.

    It’s like the whole private jet controversy when her majesty Ms. Pelosi rarely flies commercial, often citing the same “security” rationale the CEOs did.

    Certainly their salaries should be tied to performance, so in some perverted way if they actually convince Congress to bail them out they deserve the millions they would have otherwise been paid…

    Obligatory disclosure: I haven’t purchased a “Big Three” vehicle since 1997, and the only reason I even considered one then is, frankly, because no import outperforms a Jeep Wrangler on an off-road trail, something still true today.

    Alas, Jeep hasn’t bothered to do what enthusiasts have been begging them to do for most of a decade now, namely add a diesel engine option both for better mileage and low end torque that literally has off-roaders drooling at the prospect (instead they threw a diesel in their Liberty model which is useless off-road but is the target vehicle for grocery getters…)

  13. VMAN

    1sttofight I’m with you or maybe they should just fire all those union thugs. At least start another union, maybe the AUW the Auto Workers United, then those thugs would know what free market competition means. Isn’t there some anti trust law that can be brought against the UAW cause I men who are the big three going to get their workers from?

  14. DEZ

    Yay, I am gonna buy a new car!

    Not likely, a nice sedan costs too damn much, I will not plunk down 20 or 30 grand or more on a vehicle.

  15. 1sttofight

    BillK,
    I was talking about across the board pay cuts, both union and management.

  16. BillK

    1st, that’s more like it.

    But why would the union members take a pay cut when if they get laid off they get 90% of their salary?

    For most workers it’s a pretty reasonable calculus – either 50% of their salary or 0% of their salary.

    If they get 90% of their salary for dropping in at the “job bank” once a week and otherwise get to hang out at home, why would they ever agree to a pay cut?

    Thus for many of them getting laid off would actually be like winning the lottery…

  17. proreason

    Unions have exceeded their shelf life.

    The Big 3 are profitable where unions don’t exist. The Big 3 are important for national security. Auto manufacturing is critical to the national economy. It doesn’t take a math genius to see what should be done.

    But it won’t be done…..because of politicians.

    The politician’s solution……..point gun at someone else’s foot. Fire. Point gun at someone else’s other foot. Fire. Continue firing until feet are unavailable.

    I’m afraid the “unavailable” part is closer than anyone thinks.

  18. BillK

    You might think so, proreason, but at least near me the Unions are running ads telling people to call their legislators and demand they pass card check.

    “No one’s going to give you a secure job, good pay and a pension for Christmas. Call your legislators and demand they pass the ‘Employee Free Choice Act’ to make it easier for you to join a Union.”

    Here are some of their other “winners” which of course are doing just that – “winning” public support.

    http://www.freechoiceact.org/i.....es/our_ads

  19. JohnMG

    BillK; …..”I haven’t purchased a “Big Three” vehicle since 1997……”

    That’s a pretty broad indictment, Bill. But you don’t deal with it from the same perspective as do I. You must never have a need to hook on to a goose-neck trailer with a pick-up, and roll away with over 20,000 pounds in the daily quest of making a living. If you did, you’d find nothing available for the task short of a Dodge, a Chevy/GMC, or, my own preference, a Ford. All of them diesel-powered. And I’ve yet to have a ‘bad’ one.

    As for the diesel options, the up-charge for opting for one over the standard gasoline motor is nearing $10,000. And diesel fuel, which is less costly to refine than gasoline, costs more at the pump thanks to our government. You see, the ‘greenies’ are a pretty influential bunch of enviro-nuts who wield a lot of clout with politicians. So much so that, even though diesel fuel is cheaper to make, even though diesel-powered vehicles are more fuel efficient than comparable gasoline units, and even though they deliver better performance, especially in in instances such as mine, the Nader-ites don’t like them, and “Big Brother” is going to make owning and operating one prohibitively costly. Why else, when regular gas here was costing $3.39 per gallon, was the cost of #2 diesel $4.59 per gallon? The cost to fuel my truck then was about $165 for every trip to the pump.

    New diesel-powered vehicles have to meet the same EPA particulate standards as gasoline motors. Believe it or not, there are foreign and domestic vehicles equipped with diesel motors that cannot be sold here because they cannot make the cut. My youngest son owns a Volkswagen Jetta (diesel) that gets over 40 MPG, but VW can’t market it here any longer because the standards, even with their technology, are now out of reach. You want diesel powered cars? You’re going to have to move somewhere else to get them, or be like Al Gore–be able, and willing, to pay for it, and shift the burden of compliance on to someone else.

    I’m not saying the ‘Big Three’ don’t share in the blame. But get the government and ‘big labor’ out of their bed. When speaking critically of inefficient operations, congress should be the LAST institution to open their collective mouths.

  20. 1sttofight

    At what point will the American people revolt?

    I have a feeling the point is getting very close, will the next terrorist attack be the tipping point?

    I feel like the frog in a pot of water with the burner turned on low gradualy heating the water.

  21. BigOil

    I wonder what the Big Three CEO’s find more humiliating – ruining multibillion dollar corporations because they’re afraid of a union – or having to kiss the rear ends of morons like Reid and Pelosi?

    You have to admit, the Democrats and UAW play a pretty impressive shell game. Distract the masses with CEO pay and travel while 13.8+ billion dollars is headed to the UAW trust fund out of our tax dollars.

  22. proreason

    BillK
    “You might think so, proreason, but at least near me the Unions are running ads telling people to call their legislators and demand they pass card check.”

    Guess what this is a list of….
    1. The press
    2. Politicians
    3. Unions
    4. Educators
    5. Trial Lawyers

  23. proreason

    1sttofight

    “I feel like the frog in a pot of water with the burner turned on low gradualy heating the water.”

    well said

  24. Chinnubie

    1st I feel the exact same way, I hope the BHO security force isn’t looking at this blog or we are gonna be in trouble. The constitution says that when the government is no longer working the way it was originally designed the people have a right to start a new one. I think your right revolt is needed and these constant bailouts are getting everybody closer; at least I hope so.

  25. 1sttofight

    It is time to restore the US Constitution to its original form.

    It is not a “living document” it is set in stone and anyone who goes against it is guilty of Treason.

    I will bet and give my life to prove it.

    If the HNIC wants to send his thugs after me, they be best prepared to die, because I will not give up until the last round is fired and I can no longer heft my bayonet.

  26. cjokry

    The effect of unionization has always been hard on the companies and industries that they impact. These piles of corporate welfare those retards keep handing everyone are only making things worse. These kinds of things mess with the free market’s natural chi. At this rate, our economy will never heal. Especially if the unions gain a stronger hand in the American workforce as we pile on the corporate handouts.

    Still, one observation about these handouts I can’t help noticing: when the recipients are huge, gainful employers standing over thousands of solid blue collar jobs and asking for a small fraction of the kind of money we just forked over to Wall Street (none of their ceos is even considering a pay cut) look how hard they have to beg. These people are workers, after all, and they are their constituents! Look how much harder they have to beg and for how much less! Why is that, I wonder? Nobody asked these bank exec.s to draw up a plan for profitability; in fact, we were all warned that the whole financial sector was just going to keep circling the bowl. And they’ve delivered that. Why do the motor companies have to be reasonably responsible but not the bankers? I’m not saying they shouldn’t be, I’m just saying….

    I don’t know about you guys, but the more time I spend on this site, the more I want a Mitsubishi.

  27. GuppyNblue

    1sttofight
    You speak to the soldier in me.

    That “living document” nonsense is just a bunch bs to undermine rule of law.
    Not only would I give my life but I’d regret not having the opportunity to do so.

  28. DGA

    So. Let the big three go bankrupt. Close the doors on all factories, etc for one week. Post notes saying that all employees can return in one week and apply for jobs. Meanwhile the UAW dry up and starve, with their massive protection racket schemes going belly up. Employees return in a week, and if they want a job, it will pay about what Honda, Toyota, etc in their US factories pay. Which, on average, is about $25 per hour less.

    The alternative? We, the taxpayers, give them a bailout, which gives the UAW a lifeline to continue their thuggery and attempts to pass card check laws. One year goes by and the big three are back in the same boat, deeper in debt, as we the taxpayers would be as well, and are back knocking on congress’s doors again. All in all, an unending downward spiral that can never pull out.

  29. 1sttofight

    I went truck shopping with the young Marine today.

    He is going to pay $4000 more for a Nissan than the Chevrolet.

    The Nissan was made in Tennessee.
    He used to laugh at my old Nissan PU until he drove it several thousand miles while I was at Vanderbilt.

    He will have nothing else now.

  30. Liberals Demise

    “If the HNIC wants to send his thugs after me, They best be prepared to die, because I will not give up until the last round is fired and I can no longer heft my bayonet.”
    While you talk to the soldier in Guppy, the MARINE in me is truely aroused!!!


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