UAW's actions force bailout to die in the Senate

[GoldenBoy812]

By TOM KRISHER â?? 10 hours ago

DETROIT (AP) â?? General Motors is saving every cent it can, from shutting down escalators at night to limiting workers' choice of pens, in case it needs to fight to survive beyond year's end and until a friendlier Washington takes over.

Yet even a truckload of penny-pinching might not be enough.

GM has already cut its U.S. work force by almost 80,000 people this decade, reducing it to 96,000, and it has idled five factories and laid off 11,000 domestic workers this year alone.

The cost-cutting has accelerated as cash has dwindled. Factory supervisors who are seldom at their desks have had their landline phones and voice mail yanked. Elevators and escalators are shut down at night at GM's headquarters towers in Detroit.

The slimmed-down choice of pens in office supply cabinets: one each of black, red and blue.

"It seems trivial, but when you have 100,000 employees or however many using supplies, they don't need to be that prolific. It adds up," said spokeswoman Renee Rashid-Merem.

All the while, the once-mighty icon of American industry and its smaller competitor Chrysler LLC edge closer to bankruptcy.

Experts say their best shot is for President-elect Barack Obama to persuade the outgoing White House to free up emergency loans from the $700 billion federal bailout, or to have the Federal Reserve make a loan.

The $14 billion auto-industry bailout bill died in the Senate late Thursday after the United Auto Workers refused to accept Republican demands for swift wage cuts to bring UAW workers' pay in line with Japanese carmakers.

Senate Majority Leader Harry Reid said he hoped President George W. Bush would tap the Wall Street bailout fund for emergency aid to the automakers.

Barring that, GM and Chrysler must continue to cut even the smallest expenditures and hold off payments to parts suppliers as they hoard cash and try to stay alive until Obama takes office Jan. 20 and could take his own action.

GM has hinted it might not make it through the end of the year before running out of cash. But GM board member Kent Kresa said earlier this week that the company might make it into the first quarter, depending on auto sales.

"Certainly it has been stated that we need the money quite soon," Kresa told The Associated Press. "I can't specifically state before the end of the year, but certainly in the first quarter and early in the first quarter."

GM wants a total of $18 billion in government loans, including $4 billion before this year runs out. And Chrysler, which is looking for $7 billion in loans, may be even closer to the edge.

Its CEO, Robert Nardelli, said its cash would drop to $2.5 billion, its minimum to survive, at the end of the year. It has cut 32,000 workers since private equity firm Cerberus Capital Management LP took over control in August of last year, including 25 percent of its salaried work force last month.

The other of the Detroit Three, Ford, is not yet seeking government loans but wants a $9 billion line of credit that it might need to tap if the depressed U.S. auto market doesn't recover. It says it can last through 2009 because it borrowed billions two years ago, when credit was freely available.

The possibility remains that a deal can still be worked out in the Senate. Republican opponents, mainly from Southern states, probably don't want to bring the industry down, said David M. Hart, associate professor of public policy at George Mason University in Virginia.

"It's certainly not beyond the scope of possibility that they'll get this thing through," Hart said. "I think it's hard for Republicans to have this on them. There's a lot of pressure. They might work out a deal."

Hundreds of thousands of jobs hang in the balance. The Detroit Three employ 239,000 workers in the U.S. Counting other businesses that depend on the automakers, economists estimate that 2.5 million jobs would be lost if all three companies went out of business.

Susan Helper, a professor of economics at Case Western Reserve University in Cleveland who has studied the auto industry, said GM and Chrysler's suppliers are the key to keeping the automakers out of bankruptcy protection if they are forced to stretch and try to make it past Obama's inauguration.

Suppliers, also cash-strapped, may start demanding payment in advance before shipping parts. If enough suppliers get nervous and start demanding cash, the companies could run short.

"Then you have this game of musical chairs where everyone wants to make sure they're not the one left without a chair," she said. "That very process can bring the whole structure down. Right now the suppliers have been incredibly disciplined and not saying, 'Hey, pay us first,'" she said.

Already, a small number of GM suppliers have sought cash on delivery, but the company is working through the situation, CEO Rick Wagoner said last week.

"I would say there are a couple situations that we are managing, but on balance I'd say it's really held in there quite well," he told the AP.

The rest of the article can be found here:
AP Source

GoldenBoy812 Reviewed by GoldenBoy812 on 12-12-2008. UAW's actions force bailout to die in the Senate The rest of the article can be found here: AP Source Rating: 5

[Dutch Pimp]

The Rise and Fall of the American Empire is near. It was fun, while it lasted....:thumbsup:

[killerweed420]

I don't think the failure of the loan is UAW's fault. They just wanted the rest of the company to take a pay cut just like they were going to do, but they wouldn't agree to it. Its just good old fashion greed that is making car companies collapse. Everybody wants to get rich. Good riddance as far as I'm concerned. I worked for Ford for over 15 years and they deserve to crash and burn. Even more so GM. Chrysler shouldn't be helped at all. They are a privately owned company. And all of them are primarily foreign owned now anyway. Let them collapse. Someone with a little common sense will buy whats left of them and rebuild them into stronger companies.

[RamblerGambler]

Let's hear it for the GOP. Why settle for a recession when you can have a full blown depression on your hands?

[maladroit]

"The $14 billion auto-industry bailout bill died in the Senate late Thursday after the United Auto Workers refused to accept Republican demands for swift wage cuts to bring UAW workers' pay in line with Japanese carmakers."

- i see you substituted in your own headline rather than use the associated press headline...your headline should read: republican actions force bailout to die in the senate

[RobPA]

Let's hear it for the GOP. Why settle for a recession when you can have a full blown depression on your hands?

Thats total bullshit. For once the GOP is standing up to President Bush. UAW are so thick headed, they dont realize they are lucky just to have a damn JOB right now, there companies are collapsing!! The UAW dident want to commit to pay cuts bottom line, you should see some of the crap these people complain about on the UAW messageboards. The UAW needs to make concessions in pay just like our hard working autoworkers in the south have done for years, they are thriving right now. When GM collapses and the UAW are out of jobs then maybe they will realize the idiocracy. Its like these people think they deserve money even if there damn company is COLLAPSING, what are they thinking??!!

[RobPA]

"The $14 billion auto-industry bailout bill died in the Senate late Thursday after the United Auto Workers refused to accept Republican demands for swift wage cuts to bring UAW workers' pay in line with Japanese carmakers."

- i see you substituted in your own headline rather than use the associated press headline...your headline should read: republican actions force bailout to die in the senate

Im so glad it died and I hope it continues to die. Good job GOP, this is the best work in 8 years. :thumbsup:

[8182KSKUSH]

BAILOUT!!:gunfighter2::jumphappy::jumphappy: :clap::clap::clap::dance:

[yokinazu]

having had my living made as a by-product of the auto industry i am really torn on on this issue of the bailout. on one hand i say yes we need to do this because of the fact our economy is mainly supported by the auto industry, or let me restate that, used to be mainly supported. so the impact of the auto industrys collapse would be horrific. i know some that only see the employees of GM or chrysler as lossing theyre jobs but in reality there are millions who (for lack of a better expression) leach off the auto industry. me being a leach my first job out off the army was as a machinist in a place that supplied GM, Ford and Chrysler. in the mid 90s we there started seeing the slow decline of the big three and started changing the product that we made to suit other industrys incase we couldnt beg from theyre table any more. this also met making parts for the japanese cars wich were made in Ohio. this whole thing with the auto industry and possibly even this recession has ben coming for a long time. but not only do these people lose theyre jobs but this will efect even that ccashier at wal-mart. who seemingly have nothing to do with the auto industry. but what kinda angers me is the fact that congress more or less hands the finacial insitiute 700 billion dollars with no strings attached, and wont give the auto industry 14 billion. the banks have effected mostly people who have or had money. GM going down effects the working class. i dont know can ya see my point.

but one part of me says screw them and the UAW they rode in on. im sick of hearing these over paid under work jackasses whine cause they cant live on 30 dollars an hour.(i grew up in Ohio wich is thick with UAW) while im out bustin my ass for a third of that and i seem to be makin it( ok 2/3). then the capilist way is you either sink or swim you dont sell your product - you make no money- you dont pay bills - you go outa businiss. now step four is - ask govt for bailout - continue sinking.

but my bleedin heart liberal self says that no matter what we do we have to help the people first and for most.( by the way i said help not welfare state)

[GoldenBoy812]

To be fair, for the most part it has been the same republicans who were against the financial bailout who are also against the Detroit bailout. Although Shelby represents Alabama, a state where Toyota and Mercedes produce cars via non union labor, he was also one of the nay's for wall streets version...

n your own headline rather than use the associated press headline...your headline should read: republican actions force bailout to die in the senate

With all due respect, it was not the republican senators who came to Detroit begging them to take their money. If wages are already similar, what was it specifically that UAW would not concede to?