NorthWest Florida Republican

After the insane display of hubris by the big three motor companies at last months grovelling in Congress for a loan to keep the unions at bay, GM, Chrysler and Ford have returned with their tails between their legs and rightfully submissive.

Briefing Congress on their plans they came up with figures they believe would help keep them running. For how long they couldn’t exactly say. But it ‘might’ actually work if they are allowed to do what they want with the money.

The original request in November was for an additional $25 Billion in loans. But after the hearings I just can’t see the current request limiting itself to $25 Billion.

GM alone wants $4 Billion just to last through this month. Then an additional $14 Billion for after that.

Now, my math isn’t all that great but that is just less than 5 months if they burn through $4 Billion a month. And with sales declining 37% in November alone, I can’t see how they intend on making money without some serious soul searching and reduction in forces.

On top of this, Chrysler wants $7 Billion right away. Nothing about its needs for future operations. How much more do they need to ‘retool’ as well.

Ford seems like the only one who can actually weather the storm. They only need $9 Billion. But they don’t actually have to have it. It is a safety net just in case things get worse.

That adds up to about $34 Billion. Only $9 Billion more than they asked for last month. How much more would it be next month if we waited to give them an answer?

This is on top of the $25 Billion in loans already given to the automakers.

Even after their briefing they still insist that letting the automakers go under would affect 3 million jobs. The UAW and leaders in the auto industry are trying to scare people into believing that 3 million jobs would be lost if they don’t get these loans.

Let’s look at that a bit.

If the Automakers declare bankruptcy, they will have an opportunity to reorganize. No one will lose their jobs until they figure out what needs to be done. Then positions will be eliminated, finances renegotiated, and loans made depending on how well they convince people they have solved their problems.

Of course this does depend quite a bit on UAW and their reluctance to make any concessions or reductions in benefits.

The biggest drain on the Automakers is the benefits package that the UAW has strong-armed out of the automakers. Employees laid off from plant closings are kept on almost full salary while they await open positions. It is called the Job Bank. Of course they can only stay in this Job Bank for about 7 years. Once that time is up they are released to file for unemployment. But they frequently get around that by actually working a job for a short period of time before returning to the Job Bank.

Pretty nice huh… Get paid over $50k a year to not work. Wish I could scam that out of the company I work for.

Due to the large amount of public outcry about this though, the UAW is starting to lean towards those concessions as a means to get loans from the Government to keep their coffers full.

Sorry, I mean so that the automakers can keep production going.

Maybe Union leaders are actually starting to worry.

“We can’t have a union if we don’t have factories,” said General Holiefield, a UAW vice president who is the union’s liaison with Chrysler. – Bloomberg

I wouldn’t count on it though. Once things start going good they will be sure to reinstate those concessions. Might not even wait that long. Could be as soon as they start getting cash flow to keep the automakers going.

Either way, this entire deal is just astounding. The figures increase on a weekly basis and who knows how many more times the automakers come to the Government and ask for loans.

And Congress is willing to hand out the money. The only reason they didn’t this time is because people stepped up and started questioning the handouts going to all of these corporate entities. Without a single bit of it going to actually help the general public.

How much longer will Congress hemorrhage money? How much more in debt must we be before the insanity stops? How much more will the taxpayers be required to pay before it is too much? How much longer will voters continue to vote in irresponsible government officials?

Congress needs to stop handing out the money and take a step back. Wait for a couple of months to see what affect the capital injections have that they have already authorized and made.

And as far as the automakers are concerned, if they are having the trouble that they say they are having then maybe it is high time for them to declare bankruptcy. Once they restructure then Congress can loan them the money.