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Auto industry still looking for bailout

READ MORE: Auto industry still looking for bailout
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Ford, Chrysler, and GM executives asked Congress once again for help bailing out their businesses. Before they headed to the Hill, automakers announced November sales results today. Total sales are the lowest we've seen in more than twenty-five years. When the stock market opened today, Ford was up than 6 percent and GM was up more than 11 percent. Anticipating an auto-industry bailout, Ford, Chrysler, and GM told congress they would cut executive pay, reduce worker benefits, and focus on more fuel efficient cars. In return for the twenty-five billion dollars in loans they want, the companies would give the government stock. Economists say a bailout will lead to major auto industry changes. UNCW senior economist Woody Hall said, “I think you're going to see increased emphasis on fuel efficiency, you're going to see increased emphasis on alternative fuel vehicles, and you are going to see some drastic changes in the types of vehicles that are available for the consumer, and I believe the consumer will buy them.” Car companies hope that's the case, especially after reporting declining sales for the third consecutive month in November. Ford sales were down thirty-one percent, but that paled in comparison to GM's forty-one percent decline. Hall stated, “You've got an excess supply of vehicles on dealer lots. You've got reduced traditional financing mainly from banks and now dealers are looking for alternative financing. And then you've got a lot of uncertainty among the buying public.” Many members of congress hope to save the auto giants because they have a larger impact on the economy. Hall continued, “For every one worker employed by the big three there are estimates that there are five supporting jobs out there. So the ripple effect, the domino effect could be quite substantial.” WWAY tried to speak to some local dealers to find out how they've been affected, but more than a dozen dealerships we called would not talk on camera. But as part of their plan announced in Washington today, some executives said they planned to drastically reduce the number of dealerships across the country. GM alone plans to eliminate more than 17 hundred dealerships.

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It's a Hoax, Don't Buy It!

It is amazing how many people fall for the first shock and awe story they hear from their favorite propaganda source. True, union workers need to understand how to be more flexible with the companies they work for but UAW workers do not make $70.00 an hour! According to the Center for Automotive Research, the average non skilled UAW worker at the big 3 makes around $28.00 an hour. Ask any Corning union employee about their pay. On the average, it's around $18 per hour. GM's big losses were driven by the credit market, not the UAW workers that add around 15% of the total cost of making a vehicle. Remember, when their wages are cut, yours will be next. This is the goal (very important to understand). A compromise needs to be made at the worker level concerning flexibility as well as the management level to make American vehicles more affordable. So what if workers pay checks are cut? We get less tax base, making the rich pay even more to keep the government afloat; There will be less consumer spending, again, hurting those at the top. Last but not least, when the average worker struggles to make ends meet, they usually vote for a political party that will promise to solve their problems at someone else's expense. This never happens and the problem manifests itself.

Excuse me

But you need to read. Union labor costs are in fact slightly over $70 per hour. That's total cost; not just wage. Look at all the things the Union contract requires the automaker to provide. How about 95% of salary in the event of a layoff for one? No Sir; you need to look at your math formula again.

At corning, try 10 to 12

At corning, try 10 to 12 dollars an hour.

Not sure how to proceed

The last thing our economy needs right now is massive job losses due to the automotive industry, but the Big 3 have dug their own holes. They have fought regulation and change for the last 50 years...fought seatbelts, fought airbags, fought mileage standards. Why should any of us believe they are now ready to change into productive, environmentally friendly, profitable companies? The executives at these companies allowed the UAW to make the rules, so maybe the best thing is to let them file Chapter 11 and reorganize with realistic pay scales and realistic goals of producing quality, economical, and affordable vehicles.

Not Quite

Back in the 80's, when Iacocca ran Chrysler and Frank Sinatra did their TV ads, they both did so for $1 and stock options. Iacocca also stood up to the Unions and stated Chrysler did not have $20 per hour jobs. They had $16 per hour jobs. He threatened to shut Chrysler down rather than pay $20 an hour. Of course, he also had them introduce the K-Cars and some other fuel efficent models. I think all of the guzzlers were demolished in Dukes of Hazzard episodes.

$85 an Hour

That's the rate I was charged to change spark plugs, wires and valve cover gaskets on my car at the local dealership (where I bought the car brand new). They went by the book and charged me $806. $600 of it was labor, $206 for parts at a profit. I understand that these dealerships need to make a profit, but I live on a modest income while the owner lives like a King, on the ocean, in a multi-million dollar home. Bail-out, nah.

I

AGREE! I don't take my vehicle to GM or Ford...I CANNOT AFFORD IT! If I need a part I SURELY don't go to the STEALERSHIP for it! Who in their RIGHT MINDS is going to pay 300 bucks for a part I can get at AutoZone for 40....again..THEY have done this to THEMSELVES!

the big 3

Need to abolish the union. Period.

Amen

When they pay a guy $60 (I'm guessing) an hour to plug in a headlight and he will only do six an hour due to union rules, something is very wrong. I've noticed the non-union manufacturers are not begging for welfare. I know Honda is non-union and is doing just fine and the quality of their cars is much higher than any domestic.

Why should we bail them out

Poor management and business decisions over the years and they want our money. Why is that my problem? Over the years they could have made better cars with better gas mileage, but they didn’t and people started buying foreign cars that did. Last January I was on business in Spain and the Ford dealer they were selling cars that got 50 miles to a gallon (changing from liter and metric). If they can do it in Spain why not here? You pay your workers close to $80 an hour and you wonder why you cannot complete with the foreign manufactures. I don’t see them in Washington asking for money. What about the small company owns? Will they be able to ask for and get money? I don’t think so, because they don’t send money to the lawmakers..

Big 3 Bailout

Isn't it unfair to bail out these big guys while the small companies have to settle on their own profits? What an unfair advantage...how can the little guys compete with the big guys getting their slate wiped clean. That'll put the ones who managed their companies wisely out of business. Just help for the rich guys while the small companies do business honestly. No good deed goes unpunished, eh?