Canada Announces $4b Auto Bailout Package

[gordiecanuk]

This is a real tough one...its easy to type away on the internet and call CAW/UAW members overpaid and all that...but to me that's kicking a man when he's down. Sure sure, I can just hear some saying now...I wish I was that down, making the money those guys make.

Thing is, lifestyles and identities are built around our incomes. The guy making 30K a year, with nothing saved says, "dang...if I could just make 40 I'd have some savings left at the end of the year". Then a year or 2 later, he's making 40...but now he replaced the old beater he was driving, and took the girlfriend on a nice holiday. So now he says...'dang, if I could just make 50K, yeah 50 would do me...then I'd be able to put some aside". Then he a year or so later he's making 50K but now he's gotten married, moved into a better apartment and there's still nothing left"....and on and on it goes. Expenses rise to meet income, its the same for a lot of people.

Now he's facing the prospect of possibly losing his job altogether, or if he manages to keep it...his wages will just about be cut in half.

I do think there needs to be wage parity between Japanese auto makers operating in Namerica and UAW/CAW members...but I'm thinking its a lot to do it all in one fell swoop.

Why not graduate it in, over a 2/3 year period, in 6 month or quarterly installments? It would make it easier for workers to adjust. The big 3 aren't going to become competitive overnight...it's gonna take at least 2 or 3 years before they can return to profitability in any case with the way the economy is right now.

In another 2 years or so, the big 3 would have substantially lowered their wage costs and would be better able to compete with the Hondas and Toyotas...without pulling a 'shock and awe' attack on their employees' wages.

[Jerry J. Fortin]

What the big three do is their business. Loaning them money when the banks would not was our business. Now after all is said and done, they will rationalize their operations. Union members will lose their jobs and the ones that don't will lose benefits and wages. In the end the tax payer is the one that loses out.

When these companies pull a chapter 11 down south, the Canadian divisions will as well. The CEO's will get paid off and bought out. The workers will lose jobs and pensions. The investors will lose their money. The tax paying citizen will pick up the tab for all the loans that will not be repaid.

[Oleg Bach]

What the big three do is their business. Loaning them money when the banks would not was our business. Now after all is said and done, they will rationalize their operations. Union members will lose their jobs and the ones that don't will lose benefits and wages. In the end the tax payer is the one that loses out.

When these companies pull a chapter 11 down south, the Canadian divisions will as well. The CEO's will get paid off and bought out. The workers will lose jobs and pensions. The investors will lose their money. The tax paying citizen will pick up the tab for all the loans that will not be repaid.

No way in hell should money be sent to people who insist that they must continue to live in the manner they are accustomed too. I really don't give a damn about 14 million dollar homes with pillows on the bed created by designers at 1000 dollars a pillow. Either ensure that the workers will not enter poverty then we are talking - I don't wanna hear about how some bastard will be forced to move to a million dollar dwelling from a 14 million dollar obscenity. To hell with them.

[Argus]

Why not graduate it in, over a 2/3 year period, in 6 month or quarterly installments? It would make it easier for workers to adjust. The big 3 aren't going to become competitive overnight...it's gonna take at least 2 or 3 years before they can return to profitability in any case with the way the economy is right now.

In another 2 years or so, the big 3 would have substantially lowered their wage costs and would be better able to compete with the Hondas and Toyotas...without pulling a 'shock and awe' attack on their employees' wages.

The Japanese plants are non-union. Generally speaking, union shops always make more than non-union shops. But as someone pointed out, their real wage costs represent only 10% of the price of a vehicle. If they cut their staffing costs by 40% that would allow them to sell cars for uhm, 4% less. Anyone here going to change what kind of car they buy for 4%?

Not saying the wages aren't too high, but they're not the real problem. The real problems are lousy management, lousy processes, and lousy, dull, unimaginative vehicles.

[Jerry J. Fortin]

Argus, why should the tax payer be burdened with the cost of corporate welfare? If the business cannot turn a profit it should not be in business. Once again I must state that operations and production are the responsibility of the corporate effort. How those companies are managed and how their managers are compensated are the business of the corporation.

As a matter of government regulation I can see where there is the possibility that corporate governance could be legislated to prevent some of the problems, but not very many.

[punked]

Argus, why should the tax payer be burdened with the cost of corporate welfare? If the business cannot turn a profit it should not be in business. Once again I must state that operations and production are the responsibility of the corporate effort. How those companies are managed and how their managers are compensated are the business of the corporation.

As a matter of government regulation I can see where there is the possibility that corporate governance could be legislated to prevent some of the problems, but not very many.

Because the majority of Canada supports it. Looks like for once the CPC is not in the minority. Good for them.

http://www.edmontonsun.com/News/Canada/200...26/7856951.html

[GostHacked]

This is something few talk about any more, though it was much in the news a few years back. Mind you, a big part of the problem is the focus by NA auto manufacturers of big, gaz guzzling cars while the preference in Asia is for very small, fuel efficient cars. Besides, NA cars tend to be, well... ugly, or at best bland, inside and out. Still, it's true that the Japanese and South Korean governments have put all kinds of road blocks in place to prevent foreign imports. So have the Chinese, btw, which again few talk much about.

Could it be that Korea and Japan have more restrictions and regulation when it comes to cars? It is possible that NA cars do not meet their standards for fuel efficiency and saftey?? I am going to go with fuel consumption. Could be emmission regulations.

[Topaz]

Could it be that Korea and Japan have more restrictions and regulation when it comes to cars? It is possible that NA cars do not meet their standards for fuel efficiency and saftey?? I am going to go with fuel consumption. Could be emmission regulations.

I agree. if they don't want NA made cars there, they can put any restrictions on and keep them out. So what does our government do, they let in the foreign car makers that keep us out. Seems to me that a lot of the problems for Canada and US is their own government policies! If people aren't paying or can't get a loan for a car then the auto sector will fail and that is not fair playing field. I know of two members of the Cons that sell foreign cars, from Korea. Do you think the government would harm any of their members family business???

[Smallc]

Could it be that Korea and Japan have more restrictions and regulation when it comes to cars? It is possible that NA cars do not meet their standards for fuel efficiency and saftey??

Considering that the company with the most fuel efficient cars is GM, and the company with the highest safety rating is Ford....no.

[Jerry J. Fortin]

North American auto manufacturers have been building cars for our own internal market since the model A. Foreign efforts are simply competing with domestic efforts. The markets in those foreign countries have never been seriously targeted by our manufacturers. if they were then there would be a lot of small economy cars being build there by our companies.

The reality is that we had the money, our markets were more lucrative, and still are larger than their own. Thats why they are here, market share. The reality is that it is a level playing field here. Over there, not so much but we have never really pursued that course of action and now it is to late to do anything about it.

[Smallc]

North American auto manufacturers have been building cars for our own internal market since the model A. Foreign efforts are simply competing with domestic efforts. The markets in those foreign countries have never been seriously targeted by our manufacturers. if they were then there would be a lot of small economy cars being build there by our companies.

Obviously, you don't know all that much about Ford or GMs European, Australian, Middle Eastern, Asian, South American, South African, or Russian operations.

[GostHacked]

Considering that the company with the most fuel efficient cars is GM, and the company with the highest safety rating is Ford....no.

You sure about that?

http://oee.nrcan.gc.ca/transportation/pers...hicles-2007.pdf

http://oee.nrcan.gc.ca/transportation/pers...hicles-2008.pdf

Both years have only a couple GM products on there. And none are at the top.

http://www.fueleconomy.gov/FEG/bestworst.shtml

http://www.forbes.com/2008/05/02/efficient...=nationalpostca

http://www.autonet.ca/autos/news/2008/09/08/6700111.html

Nine of the top 10 American-made vehicles are made by General Motors (nyse: GM - news - people ), and are spread across the company's Chevrolet, Pontiac and Saturn brands. The only non-GM vehicle on the list is the Ford Focus, which ties for the No. 1 spot with the Chevrolet Aveo and Pontiac Vibe. All three fuel-sipping cars get an Environmental Protection Agency (EPA) estimated combined fuel economy of 28 miles per gallon, which, though impressive, still lags behind Asian-made counterparts, such as the Toyota Yaris (31 mpg) and Honda Fit (30 mpg).

Need I go on??

[Jerry J. Fortin]

True enough, but what does that matter? The acquisitions of the big three in other locations does not apply to this debate. How many big three plants are there in Japan? China? Korea? India? Where are the markets? Where are the plants? How many big three vehicles were exported to Asian markets for their consumption?

We are talking apples and oranges here, internal consumption and foreign export.

[Smallc]

We are talking apples and oranges here, internal consumption and foreign export.

My point is, these are multinational companies with diverse portfolios and markets.

[Smallc]

You sure about that?

GM sells more small fuel efficient cars and hybrids than any other company. In almost all vehicle categories, they have top fuel economy or withing 1 - 2 mpg of top fuel economy. In most categories, Ford has very similar numbers. Ford also has higher quality than most other brands. The only problem that the domestic brands have is one of perception.

Edited December 27, 2008 by Smallc

[Jerry J. Fortin]

They certainly are, you are correct. However, these big three companies have the root of their problems here. That root is the fact that their own market share has been compromised be foreign competition. The big three never did try to compete with their own brand in Japan or Korea, forget India and China for the moment. They were outsmarted in business terms and we are now expected to cover their incompetence with our money.

[Smallc]

They certainly are, you are correct. However, these big three companies have the root of their problems here. That root is the fact that their own market share has been compromised be foreign competition. The big three never did try to compete with their own brand in Japan or Korea, forget India and China for the moment. They were outsmarted in business terms and we are now expected to cover their incompetence with our money.

Ford and GM aren't even really allowed to compete in Japan or South Korea. Ford sold something like 600 cars in japan last year. People love to buy Mustangs in Japan, but because of the terrifs the companys have to pay to import, the cost to the consumer is simply too prohibitive. They cant even try to market their mainstream vehicles because people won't buy them because of the huge cost that the company has to pass on to the consumer.

[Jerry J. Fortin]

Ford and GM aren't even really allowed to compete in Japan or South Korea. Ford sold something like 600 cars in japan last year. People love to buy Mustangs in Japan, but because of the terrifs the companys have to pay to import, the cost to the consumer is simply too prohibitive. They cant even try to market their mainstream vehicles because people won't buy them because of the huge cost that the company has to pass on to the consumer.

Yet our governments let those companies in the door. That is a problem, I am willing to admit that. Are you then suggesting that we should do something about that? Are you suggesting that because of this the big three were harmed by government action? What are you trying to say?

[Smallc]

Yet our governments let those companies in the door. That is a problem, I am willing to admit that. Are you then suggesting that we should do something about that? Are you suggesting that because of this the big three were harmed by government action? What are you trying to say?

No, I support free trade. That said, we should be punishing countries like Japan for expecting to be allowed to exports while not allowing imports.

[msj]

GM sells more small fuel efficient cars and hybrids than any other company. In almost all vehicle categories, they have top fuel economy or withing 1 - 2 mpg of top fuel economy.

Sure, this may be the case.

But then, GM probably also sells more big polluting vehicles than any other company.

Don't get me wrong: Toyota is not nearly as pure as people think they are. Toyota sells gas pigs too. So does Honda (although I would think that in Canada, if not North America, Honda would probably be the greenest car company in terms of product mix based on weighted average sales - but I'm not about to crunch the numbers so who knows?).

The difference, however, is that Toyota tends to make money whether they are selling a Yaris or a Sequoia.

GM isn't making much money (and generally losing money) whether they sell an Aveo or a Yukon.

As for perception - GM got away with sales for years (decades) based on the perception that they sold a good product.

It is only fitting that GM loses sales for years (decades if they find a way to survive) based on the perception that they sell garbage.

Perception lags for years and companies have to live with that lag - good or bad.

[Jerry J. Fortin]

No, I support free trade. That said, we should be punishing countries like Japan for expecting to be allowed to exports while not allowing imports.

Why do you support trade that is not free? There is no such thing as free trade by the way.

[Smallc]

Why do you support trade that is not free? There is no such thing as free trade by the way.

There is such a thing as tax free trade. I support that.

[Jerry J. Fortin]

Where is that? Not in this nation.

[Smallc]

Where is that? Not in this nation.

These is in some instances, but not in others. Didn't say we were where we needed to be in that regard.

[Jerry J. Fortin]

In ALL cases of so called free trade, the entire design of legislation was to provide free trade for business. The individual does not come into play at all. So these trade arrangements are designed to benefit business not people. We have a free trade agreement with the US, but I still pay to bring stuff across the border a company does not.

These agreements are not in the best interest of citizens, people need to understand this. How many jobs have we lost to these agreements, ad how many more to come? The concept is that we should be getting a lower price for products we purchase because of the tax savings. The other side of the coin is the loss of tax revenue from the company that used to manufacture the products here, and the loss of income tax from the individuals that used to be employed . Now since the products are actually here, and sold here, they are made somewhere else, imported by somebody else, and retailed by someone else. So the government counts all those minimum wage jobs as created with the importation of these products. Enron accounting practices!