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December 12, 2008 04:14 PM UTC

Friday Open Thread

  • 89 Comments
  • by: Colorado Pols

“Leadership has been defined as the ability to hide your panic from others.”

–Anonymous

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89 thoughts on “Friday Open Thread”

  1. Looks like they were successful in getting what the company owed them.  Great news that they won’t have to wait for a bankruptcy court to give them money they need immediately.

    The workers cheered and chanted “Yes We Can,” as they celebrated after approving a $1.75 million agreement to end their 6-day sit-in.

    snip

    Illinois Rep. Luis Gutierrez, who helped broker the deal, says each former Republic employee will get eight weeks’ salary, all accrued vacation pay and two months’ paid health care under a deal with a JPMorgan Chase and Bank of America.

    Again, good.

    My question is this:  How long before we hear about how unfair this deal was, and how someone needs to force the factory back into business?

    I have a sandwich that before June, this factory will somehow become a national story again.  Takers?

    2. two months pay and vacation days and keeping them covered with health insurance during that time amounted to an average of $7,000 a piece. Gee, that comes to 42K a year in a high cost of living metro area.  

      Not exactly the kind of high off the hog wages righties are always complaining about while they fight to the death for the right of CEOS running failing companies to keep the Bush tax cut on their millions in salary and bonuses.  

      Nope, it’s always the workers fault.  The nerve of those  workers wanting enough for a halfway decent life when there are multi-millionaire CEOs out there in danger of having their income taxes raised a couple of percentage points.

  2. This is interesting. From Joseph Stiglitz – a Nobel Prize winner.  

    The debate about whether or not to bail out the Big Three carmakers has been mischaracterised. It has been described as a package to help the undeserving dinosaurs of Detroit. In fact, a plan to bail out the carmakers would benefit shareholders and bondholders as much as anybody else. These are not the people that need help right now. In fact they contributed to the problem.

    …

    The US car industry will not be shut down, but it does need to be restructured. That is what Chapter 11 of America’s bankruptcy code is supposed to do. A variant of pre-packaged bankruptcy – where all the terms are set before going before the bankruptcy court – can allow them to produce better and more environmentally sound cars. It can also address legacy retiree obligations. The companies may need additional finance. Given the state of financial markets, the US government may have to provide that at terms that give the taxpayers a full return to compensate them for the risk. Government guarantees can provide assurances, as they did two decades ago when Chrysler faced its crisis.

    With financial restructuring, the real assets do not disappear. Equity investors (who failed to fulfil their responsibility of oversight) lose everything; bondholders get converted into equity owners and may lose substantial amounts. Freed of the obligation to pay interest, the carmakers will be in a better position. Taxpayer dollars will go far further. Moral hazard – the undermining of incentives – will be averted: a strong message will be sent.

    Some will talk of the pension funds and others that will suffer. Yes, but that is true of every investment that has diminished. The government may need to help some pension funds but it is better to do so directly, than via massive bail-outs hoping that a little of the money trickles down to the “widows and orphans”. Some will say that bankruptcy will undermine confidence in America’s cars. It is the cars and carmakers themselves – and the dismal performance of their executives – that have undermined confidence. With industry experts saying $125bn (€94bn, ВЈ84bn) or more will be needed, with bail-out fatigue setting in, why should US consumers believe that a $15bn gift will do the trick of a turnround?

    1. A good list of good reasons to force a filing.

      All the folks saying “We can’t let Detroit go bankrupt” are the ones who have a vested interest in the status quo, perhaps held up with a bailout.  

      Politics aside, Chapter 11 is so obvious.  It allows fixing the otherwise unfixable like retiree benefits.  

        1. What about the national security implications of being entirely dependent on foreign companies, all subsidized by their governments to one degree or another, for all of our military vehicle needs?  Neither our security as a nation nor the health of the economy for the struggling middle class will be a part of any chapter 11 solution.  That concerns me.  

          Southern lawmakers aren’t talking about all the tax incentives their states offer to those non-union foreign companies that provide the lower paying jobs they prefer to see for the ordinary worker.  But it’s well to remember that when Rome quit producing anything but a few soft greedy elite and a ton of mouths to feed and became completely dependent on imports from the “barbarians” it didn’t end well for them.  

      2. And they will be there, on Day One, to ensure that they get their slice of the assets when the Bankruptcy proceeds begin.

        I’m amazed that all of you assume that once you hit the legal proceedings of Chapter 11, that everyone with a claim will simply shrug their shoulders and go away.

        These proceedings will take place in Michigan, where there will be immense public pressure to protect the workers, and the case will be tried in the media EVERY DAY.

        If GM and Chrysler go into Chapter 11, the resulting legal warfare will last for years, and guarantee that any significant restructuring will not happen.

        1. There is not a great option, not even a good one.  Chapter 11 will remove more influence of the UAW and other parties moreso than smoke and mirrors bailout “restructuring.” I think the hard decisions, such as retiree benefits are more likely to be ruthless and untouchable coming from BK court.

          And I’m going to guess here, but probably they are chartered in Delaware. Would bankruptcy proceedings be there or in Michigan?  Or BK’s choice?  

        2. They are not interested in what is best for America, but only interested in protecting their current economic power. I can understand their position, but is that the spirit and tack they should follow?

          They have this right of course under existing law to clog up the courts and defend their massive employment benefits.

          Just how successful will they be in influencing federal bankruptcy court with their public arguments … your thoughts?

          1. ….what an unusual concept!

            Unlike the wealthiest Americans, 18 families funding the effort to be rid of the Inheritance Tax, the GM execs fighting CAFE, the tobacco farmers, the Cubans, the ranchers, the miners, AARP, …….

          2. There you go again spouting incorrect garbage. UAW, AFL-CIO, Police, Fire, Teamsters, Postal Workers and every other member of a union, an association and working men and women  are  are all patriotic and want the best for the U.S.A and her citizens.  

            To say they are not is a total pile of horseapples.

          3. by a Chapter 11 filing. Everyone who has a stake in GM will send their lawyers to the Bankruptcy court hearings, and they will all do their best to protect their clients claims – INCLUDING labor.

            Like all of the other suppliers to GM, the UAW has a contract with GM. It’s not going to magically go away when GM declares Bankruptcy. The court can do something to that relationship,  but it wont be without the filings and objections of the UAW’s lawyers.

            I’m not sure where the proceedings will be, but GM lists their Global and US headquarters in Detroit. I’ll have to dig deep thru their investor relations website to  see if the “live” somewhere else…

            1. The court can do something to that relationship,  but it wont be without the filings and objections of the UAW’s lawyers.

              Because the company’s solvency really has nothing to do with the UAW’s priorities.

              1. When GM goes tits-up and tries to dodge all of it’s fiscal responsibilities via Chapter 11, why wouldn’t a creditor demand his maximum payout by the court?

                Are you saying that the metal suppliers should just shrug their shoulders, and assume that they’ll get nothing? Energy Companies? Marketing Firms? That Chapter 11 is this “get of jail free” card that MegaCorps get to play?

                I’d say the UAW has been as reasonable as any other creditor or company involved in this process. Your pervasive prejudice against all things union seems to demand that they utterly surrender and should be happy with minimum wage and nothing else.

                There was a negotiation between GM and UAW. Both sides signed it. Now both sides need to give up something, not one side giving up everything.

    2. The question I have, and I have not read the entire article, only that which is posted here, is the question of marketing the product.  

      It is not the confidence that bankruptcy will undermine, it is the fact that consumers would be wary to buy a car from a company whose future is murky.  With a car, you need to protect resale value, and you need to be able to get parts and maintenance.  Can bankruptcy courts guarantee that?

      I don’t think so.  

        1. Yeah, but you actually have to have the capitol to make things to sell.  

          My question to all of you folks championing Chapter 11, can ANY of you tell me a corporation that in the past 2 or 3 decades that has filed for Chapter 11 and came out the other side in better shape?  To my knowledge there has never been a bankruptcy of a consumer products corporation on the scale of a GM.  

          Also, how exactly will Chapter 11 benefit the thousands and thousands of suppliers that would have to wait for an indefinite period to get payment?  Remember, these are the folks that employ 750,000 workers.

            1. People typically buy airline tickets on credit cards and credit cards insure those purchases if the airline ceases operation (I know, I had an ATA ticket when they stopped flying–and I got my money back).

              You buy cars on credit or with cash and if the company goes under, you still make payments on purchase price of the car even though the value is virtually gone (talk to any who is trying to sell an Oldsmobile now) and the warantee is worthless (talk to anyone who owned a Daewoo when they went under).

              Airline and the auto industry are an apple to orange comparison.

              I personally would not buy a car from a company in bankruptcy…and I have exclusively bought American (except for one Suzuki I had when I was in college).

          2. In CH.11 they can file for immediate payment and/or get a bank loan to cover it in the short term.

            As I’ve said, there isn’t any great solution.  Whatever path is chosen, someone is going to experience pain.  

          1. That’s the point.  Interest cost would be nearly eliminated, and a more workable agreement on inclusive labor costs would be negotiated by a judge.

            That’s the whole point of the bankruptcy filing.

            1. If someone purchases the warranty business, they’re purchasing a business where there’s no income.  The service business has most of its profits going to those doing the service, and the parts business is barely profitable.

              1. It looks like the Labor contracts in the parts business might need to be renegotiated, too.

                The market for Autos in the US is huge.  It’s not just going away.

          2. …My thought was only a hypothetical. If one of more of the dinosaurs wenty belly up, customers could still get what they need for ten (?) years or more via a court ordered company creation.  Not intended to be profitable or for the long run.  Setting up the possibility of something like this before divvying up assets or Chapter 7 might give customers confidence to keep buying, too, and thus avoid the actual need!

            I’m just trying to be creative!  

      3. I am the proud owner of a brand new Chrysler product.  It’s a Jeep 4-door JK, and it’s my favorite car I’ve owned, so far.

        I have an interest in Jeep sticking around, and I’m not an idiot.  Someone can sell Jeeps, bankruptcy or no.

        1. I wanted a hybrid, but it had to be an American-made car. It was Ford Escape vs the Vue, but at the time I got a good employee discount at Saturn, and they threw in a ton of extras to close the deal.

          I did have some issues with the Windows XP OS on the hybrid engine, but after multiple software updates (yes, it’s true) the thing gets me 35mph city and 45 highway.

          GM can make a car that Americans want, uses advanced technology and saves on gas and the environment. They just need to tell the Ass-hats at corporate to concentrate on making those cars, instead of freakin’ monster trucks…  

            1. The ones that will whine and squeal when gas goes back up to $2-3 dollars a barrel?  

              Oh, yeah, there’s a run on Monster SUV’s and trucks now that the Big 3 a desperate to dump their fuel-thirsty dinosaurs, but what happens to sales when gas goes back up? When all the massive discounts and rebates go away?

              And, what’ll happen to sales when the 25% tariff on foreign pickups goes away? Even the Cato Institute calls it the shameful secret to auto sales…  

                1. When I read the initial releases about it, I thought Pontiac finally had an answer to Subaru’s stranglehold on the outdoor lifestyle vehicle.

                  I was at the LA auto show when the unveiled the thing, and it was one of the most uncomfortable moments in marketing history. The silence was so deafening, you literally could here people talking from across the convention center floor.

                  No, I mean things like the Ford Escape and Focus, all of GM’s E85 vehicles, the Chevy Malibu hybrid, and maybe even the Dodge Caliber.  

                  1. That Aztec and the Oldsmobile equivalent are the ugliest cars from the rear that Detroit may have ever produced.  It looks like two cars of normal height piled one on top of the other. It is a perfect example of a series of very, very bad decisions that could have been stopped at a thousand points along the way to production.

                    Your anecdote confirms it.

                    And anyone that bought one should have their Esthetics License revoked.

                    2. …it was the only SUV-ish vehicle made that had a built-in expansion tent, refrigerator, outlets, everything you needed for an extensive car-camping trip.

                      I always thought they designed the thing by taking a camping trailer, and shoving it up the ass of a Volkswagen Beetle…

        2. You are right about Jeep never dying.  It is a brand that has moved from Willys to American Motors to Chrysler without dropping a beat in sales.  

          My 1989 Cherokee with 211,000 miles could be driven back to Colorado tomorrow without thought of problem. On the way to Florida, 2000 miles, it used less than a 1/2 quart of oil.

          Almost all repairs and problems I’ve had in eight years have been appropriate for the mileage (or bad replacement parts.)

        3. Don’t you know Willy’s Overland went out of business decades ago! 🙂 So did Kaiser, and AMC, previous builders of the marque.

          My point is, if there is a need, someone will fill it, you can buy new-built parts for cars up to 40 years old these days, with varying degrees of quality to be sure.  But if there are enough people looking for GM parts that fit a certain class, someone will make them, same thing about a type of car.  That’s part of what the market is about.

    3. then that’s a sound course. It will take at least 14 billion in loans to go down that course.

      I don’t belive that the Republicans  would support that under Chapter 11, or any other circumstances. They want to destroy the UAW. That’s plain and simple.

      In the meantime, Citigroup gets 300 billion with no strings attached because Bush’s friends from Saudi Arabia are involved.

      Roosevelt and Truman would be amazed that a mere 73 years after the war, Republicans want the USA worker to work for the Japanese and pay the interest on the wealthy tax cut debt to the Chinese from the payroll tax.  

      It’s amazing that the White House did the right thing today.

        1. Yeah I posted an I’m an idiot post.

          I obviously was upset by the attempt of the right to destroy the UAW.

          Thier leadership met the challenge by calling the bluff.

  3. “Military leadership is the process of influencing others to accomplish the mission by providing purpose, direction, and motivation.”

    Personally, if more of our civic and business leaders would embrace this definition of leadership, we would be much better off.

  4. A store that sells new husbands has opened in New York City , where a woman may go to choose a husband. Among the instructions at the entrance is a description of how the store operates:

    You may visit this store ONLY ONCE! There are six floors and the value of the products increase as the shopper ascends the flights. The shopper may choose any item from a particular floor, or may choose to go up to the next floor, but you cannot go back down except to exit the building!

    So, a woman goes to the Husband Store to find a husband. On the first floor the sign on the door reads:

    Floor 1 – These men Have Jobs.

    She is intrigued, but continues to the second floor, where the sign reads:

    Floor 2 – These men Have Jobs and Love Kids.

    ‘That’s nice,’ she thinks, ‘but I want more.’

    So she continues upward. The third floor sign reads:

    Floor 3 – These men Have Jobs, Love Kids, and are Extremely Good Looking.

    ‘Wow,’ she thinks, but feels compelled to keep going.

    She goes to the fourth floor and the sign reads:

    Floor 4 – These men Have Jobs, Love Kids, are Drop-dead Good Looking and Help With Housework.

    ‘Oh, mercy me!’ she exclaims, ‘I can hardly stand it!’

    Still, she goes to the fifth floor and the sign reads:

    Floor 5 – These men Have Jobs, Love Kids, are Drop-dead Gorgeous, Help with Housework, and Have a Strong Romantic Streak.

    She is so tempted to stay, but she goes to the sixth floor, where the sign reads:

    Floor 6 – You are visitor 31,456,012 to this floor. There are no men on this floor. This floor exists solely as proof that women are impossible to please. Thank you for shopping at the Husband Store.

    PLEASE NOTE:

    To avoid gender bias charges, the store’s owner opened a New Wives store just across the street.

    The first floor has wives that love sex.

    The second floor has wives that love sex and have money.

    The third, fourth, fifth and sixth floors have never been visited.

    1. that the Obama administration was part of the team that pulled Blago down. My theory is that Blago or his peps pushed the ‘pay to play’ gig formally and Rahm/Obama recognized that as illegal and unethical and pulled the trigger with the FBI. Rahm should have recognized this as a threat to the Presidency.

      Certainly any effort to advance pay to play by Rahm would be a threat to the Obama administration and Presidency. This would be over and above the Nixon moves that destroyed him.

      Rahm is likely keeping his trap shut because that’s what you do when you play for the US Attorney.

    2. Rahm Emanuel, Hugh.  The article you reference  proves nothing except that Emanuel knows enough to avoid definitive statements until the team checks into everyone’s contacts with the governor’s office, some level of contact being  perfectly normal, and that he was annoyed at being bothered while being a good dad to his kids.  I’m afraid this is probably not the blue dress you so fervently seek.

            1. ….if Quinn is squeaky clean and looks unbeatable in a Dem primary in ’10.  

                A few years ago, Conn. went through a slightly less sordid scandal where the then Gov. John Rowland (a Republican, I might add) was operating a pay-to-play administration.  

                Faced with a near-certain impeachment vote, he resigned, copped a plea to a reduced charge in federal court, and was sentenced to a year and a day in prison.

                His Lt. Gov., a RINO by the name of Jodi Rell, was squeaky clean and experienced a surge of popularity after taking office.  She was elected to a full term in ’06 by a 2-to-1 margin in a blue state like Conn!

                Quinn could end up coming across the same way.

              1. have a squeeky clean image.  Ironically, Madigan’s biggest skelaton in her closet is her dad, Speaker of the Illinois House Mike Madigan who is percieved to be (real or imagined) as corrupt an Illinois politician as there ever has been.  Lisa has managed to appear to be a straight shooter in spite of her dad, and is very popular.

                She is a rising star in the party…

      2. I see her staying as AG and letting Quinn inherit the mess that is Illinois politics. When her kids are a bit more grown here (she has two kids–one in diapers) in a few years, she’ll run when Quinn is worn out from trying to clean up Blago’s mess. After all, her dad has been Speaker of the House for nearly 30 years so that dynasty runs deep.  

  7. http://tpmelectioncentral.talk…

    Al Franken’s chances of winning the Minnesota recount may have just gone up astronomically.

    The state canvassing board just voted unanimously that absentee ballots that were initially rejected because of clerical errors — and the current estimate from the hearing is that there could be nearly 1,600 of them, based on some extrapolation — should be counted, probably the single biggest issue that the Franken campaign has been hammering ever since this recount began, and which really seemed up in the air going into this hearing.

    1. This, in addition to the unanimous ruling on counting the 133 missing ballots based on their original tally (with a +46 for Franken result), could mean the end for Coleman.

      Of course, there’s no telling what those absentee ballots say.  If the challenge count goes as Franken’s team suspects, Franken would come up around +50 votes without the absentees.  With the absentees, it’s anyone’s guess (though Franken had a considerable advantage in absentee ballots).

      1.    Besides, Coleman is a RINO so Franken’s defeating him will also make the GOP right wingers happy as they advance Operation Ideological Purity.  

  8. I know it’s off subject but I’m hearing that the GOP has fielded two good candidates to challenge Kathleen Curry and Gail Schwartz in 2010.  Considering their role in shutting down the oil and gas industry it might be possible for the two of them to be ousted.  

    2. Wow, I did not know the power to do such actions was reserved for two women legislators in Colorado.

      They must have also caused the first reduction in global petroleum use in decades.

      Amazing what happens when the full moon comes out and shines on some minds.

      1. I should add the O&G industry dies fairly regularly in Colorado; except for one pile of rock on the West Slope that has never started living – oil shale.

        OBTW I was in the O&G industry back in one of it’s alive and dead periods.

  9. What an entertaining standoff.  Really.

    Corker called his bluff on concessions…

    Senator Bob Corker, a Republican of Tennessee, suggested the fault lay with the U.A.W.’s president, Ron Gettelfinger, whose union declined to agree to allow wage concessions in 2009 as part of a deal.

    But at a news conference Friday morning, Mr. Gettelfinger said the union feared that it was “being set up” by Mr. Corker, who he said was asking the union for concessions that were not sought from other participants in the talks.

    Next is standard union m.o.:

    Representatives for the union, which had already accepted a series of cuts in its current contract, sought instead to push any more concessions back to 2011, when the U.A.W.’s contract with Detroit auto companies expires.

    Get some popcorn.

    I have another bet – I’ll bet that by the end of next week that I’ll be the one cursing George Bush and you all will be praising him.

      1. Sorry you had to do that…

        Anyway, the UAW made some huge concessions in 2007 – legacy costs are already falling as a result of that. They’ve already made concessions on this part of the bailout.

        Considering that labor only accounts for 10% of the cost of producing a vehicle, why are you putting 100% of the blame on the Unions?

        Other than it’s hard-encoded on your DNA?

    2. If Cheney thinks failure to act is bad, then Bush couldn’t be far behind.

      Now… Do they do it as I supposed, by giving more cash to creditors to then re-lend to the auto industry?  Or do they just lend it directly to the car companies because TARP has no real oversight or direction?

      1. All the UAW needed was for GM not to go bankrupt before Jan 20th.

        Get ready as a taxpayer, to purchase the big three for hundreds of billions of dollars.  THey will make no changes of consequence, create shittier and shittier cars, and go out of business anyway, but at least the unions will give Democrat candidates billions.

        I might be drinking a DOUBLE diet coke on Sunday.

        1. A Double Diet Coke sounds good to me! 😉

          I don’t think enough Dems will go along on January 20 to lead to a buyout.  A good-sized investment, maybe.  But Dems wanted far more restrictions and changes from the auto industry than the failed bailout bill contained.  Bush was the one pushing for unrestricted funding, and I can’t even begin to figure that out unless he’s heavily invested in GM.

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