CEO 1$ value menu?

December 2, 2008 10:20 AM

Ford's new Business Plan proposal has been released. Ford CEO Alan Mulally said he'll work for $1 per year if the company has to take any government loan money.

Other cut-backs include:

"Canceling all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year."

As well as:

"The company also said it will sell its five corporate aircraft."

posted by Mastercheddaar (90 comments total)

That's below the federal minimum wage! Jail the bastard.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 10:23 AM on December 2, 2008 [2 favorites has favorites]

Pander-tastic!
posted by Artw at 10:23 AM on December 2, 2008 [3 favorites has favorites]

East Manitoba Regional Junior Kabaddi Champion '94 - Maybe he's not eligable as he gets tips?
posted by Artw at 10:24 AM on December 2, 2008

GM's chief is driving a Chevy Malibu hybrid to Washington? If he's really looking to do some penance he should drive a Chevy Suburban or Avalanche, or one of the other guzzlers that GM has dumped on us over the years, around Seattle for a while. We are not kind to those vehicles in these parts.
posted by gurple at 10:26 AM on December 2, 2008

Aren't we basically living in the "Safe Harbor/Risk Factors" right now? I would think that proper plan at this time wouldn't involve looking off into a sunny horizon.
posted by cimbrog at 10:27 AM on December 2, 2008

Did he say anything about building better cars?
posted by box at 10:28 AM on December 2, 2008 [15 favorites has favorites]

A buck a year ain't gonna undo $28 mil in 4 months, asshole.
posted by gman at 10:30 AM on December 2, 2008 [6 favorites has favorites]

"Mulally said he'd work for $1 per year if his firm had to take any government loan money."

Is that total renumeration or merely his salary?

Hmmm Salary $2mil, compensation, $21million. Smells like bs to me.
posted by lalochezia at 10:31 AM on December 2, 2008 [3 favorites has favorites]

No, no, it's millionaires suffering alongside non-millionaires, just like the TV news people demanded!
posted by Artw at 10:33 AM on December 2, 2008 [1 favorite has favorites]

Did he say anything about building better cars?
posted by box at 10:28 AM on December 2 [+] [!]

That's for foreigners.
posted by Artw at 10:34 AM on December 2, 2008 [2 favorites has favorites]

How about if he just pays us to buy his cars?
posted by spirit72 at 10:37 AM on December 2, 2008

BUIILD. A. FUCKING. BETTER. FUCKING. CAR. ASSHOLES. I don't care if they pay him 400 billion to do it, give us a car that you know your engineers could give us if it wasn't for the massive oral sex you give the oil and other shit companies.
posted by spicynuts at 10:38 AM on December 2, 2008 [2 favorites has favorites]

Or, you know, start spreading the bjs around....maybe.
posted by spicynuts at 10:39 AM on December 2, 2008 [3 favorites has favorites]

If he really wants to suffer by way of earning his suckling spot at Uncle Sam's bounteous teats, he should only be allowed to own Ford cars.
posted by Joe Beese at 10:41 AM on December 2, 2008

A buck a year ain't gonna undo $28 mil in 4 months, asshole.

No kidding. I love it when these jerks act like they are making the supreme sacrifice when in reality they are already sitting on a mountain of cash. Pathetic.
posted by scarello at 10:41 AM on December 2, 2008 [1 favorite has favorites]

Did he say anything about building better cars?
posted by box at 10:28 AM on December 2 [+] [!]

They said in the release and in the article that they plan on by 2011 and 2010 releasing a commercial electric van and a Focus like compact that is ran on pure battery as well. They will also work on hybrids for models that they are currently producing.

As for all their promises, if they can do half of what they promised it sounds like the government should back them up. Ford has came up with something stating what they plan to do with the 9 billion that we might have to give them. This is a lot more than what wall street did for their 700 billion. Also I kinda of own a new mustang (well used 2 years old) and I don't want my warranty to be worthless :>(
posted by Mastercheddaar at 10:41 AM on December 2, 2008

He'll work for $1 a year, but what about the size or nature of his golden parachute? $1 / year is meaningless if he gets a $10 million dollar severance package when he leaves just prior to the company going bankrupt. As others have pointed out, he also makes tens of millions per year in 'other compensation.'

If he really wanted to be convincing, he'd take nothing in the short term and tie all of his compensation to the medium and long term success of the company.

Selling the corporate jets is more of the same grandstanding. They won't even be reduced to flying first class. They don't have to own jets to fly privately. I bet they'll either buy lots of NetJets shares or charter flights on an ad hoc basis. One even wonders how much luck they'll have selling the jets in this economy.
posted by jedicus at 10:42 AM on December 2, 2008 [1 favorite has favorites]

BUIILD. A. FUCKING. BETTER. FUCKING. CAR. ASSHOLES.

Actually, Ford builds pretty decent cars. In the last couple of years many of their models have found there way into top ten lists of affordability, safety, and efficiency. In fact, Ford hasn't been hit as hard as GM, as they went smaller sooner and have been competing relatively well against foreign manufacturers who, incidentally, are also getting hit hard right now.

Oh, wait, I see: you just want to be angry at something and yell. Got it. Okay then, let me try -

FIX. THE ECONOMY. ASSHOLES. SO PEOPLE. CAN START. BUYING CARS AGAIN.
posted by billysumday at 10:44 AM on December 2, 2008 [11 favorites has favorites]

Not only too little, too late but also too often (as in we've heard this before). Shut 'em down. (And put the workers on WPA-style green energy projects)
posted by DU at 10:48 AM on December 2, 2008 [1 favorite has favorites]

Actually, Ford builds pretty decent cars. In the last couple of years many of their models have found there way into top ten lists of affordability, safety, and efficiency

except for the Ford Focus. It's frustrating to hear talk about hybrid whatever, when the domestics can't reliably build compact cars. Ford Escorts have 'vintages' some years are actually decent (at least for reliability) but then they just forget and it all goes to shit, or they build the focus...

if they can't build a conventional comapct car what makes you think they can build a hybrid...
posted by geos at 10:51 AM on December 2, 2008

Actually, Ford will be dropping a pretty sweet little compact soon with the new Fiesta.
posted by billysumday at 10:57 AM on December 2, 2008

“If he really wanted to be convincing, he'd take nothing in the short term and tie all of his compensation to the medium and long term success of the company.”

I have to agree with this. Though that is giving up a big chunk of change in salary there.

Still - are folks for the wall street bailout, but against this? I’m pretty clueless here.

I mean, the beef was they flew to congress in corporate jets. So they not only stopped doing that, they sold them. But no, they’re still pricks?

I dunno, the signal to noise ratio (in the media) on this is way way too high. I mean, what’s the objective?
*crickets*

If it’s keeping some jobs, and it’s a loan not a bailout, and they’re getting their act together, all that, I’d be for it.
The amount of money being talked about here is peanuts to the wall street bailout.

If it’s something else, then, meh.
posted by Smedleyman at 11:00 AM on December 2, 2008

Nah, just make it so their only compensation is salary. No stock options or that junk. That way it's clear how much they're paid, AND the gov't gets 50% back in taxes.
posted by blue_beetle at 11:04 AM on December 2, 2008 [1 favorite has favorites]

Yeah, it's a Mazda2, which is supposed to be pretty sweet.
posted by smackfu at 11:05 AM on December 2, 2008

Can't we just hang him from the capital Dome like everybbody wants? I mean why bother actually doing something when it would be some much more satisfying just to execute him? Helpful person that I am, I'm pretty sure I can find some old ladies to knit at the front of the crowd.
posted by happyroach at 11:12 AM on December 2, 2008

Maybe it's just me, but I thought huge corporations that require government bailouts employ more egregiously-high paid executives than just the one CEO.
posted by shakespeherian at 11:20 AM on December 2, 2008

Look, you asked for stunts, you got stunts. Bailout please!
posted by Artw at 11:25 AM on December 2, 2008 [2 favorites has favorites]

I gotta stand up for Ford as well. My dad taught me to be a Ford man when I was a kid and I'm now driving a 2000 Ford Escort w/ 190K miles that I bought off of ebay for a thousand bucks 2 years ago and it's running great.

I'm waiting for work to release on of the Ford Fusions that we've got in the fleet right now so I can buy one of those. They've got a nifty 6 speed transmission that's got acceleration off the light and a higher ratio gear for high MPG on the freeway. And the new drivetrain feels like riding on air.

My last car was a 2000 Mercury Cougar that was sweet as hell until it got repoed. It, like the Fusion, are produced in conjunction with Mazda and are both sweet rides.

That's not to say that GM/Chrysler are shit, but then again they've never made anything I'd want to own, and I can't really recall knowing anyone who's owned one. Maybe that just comes from growing up in the blue collar midwest corn country. To each his own, though.

If only one of the big 3 survives, I think Ford is in the best position. Compared to the other two they seem to have the best lineup and best business acumen. Matter of fact, I'm really close to picking up some Ford stock as my monthly investment pick.
posted by daHIFI at 11:29 AM on December 2, 2008 [1 favorite has favorites]

The anger on this has never made much sense to me. 700 billion to Wall Street? Grumble, OK - if it will save the economy. 25 Billion to the automakers? Kill the bastards! How dare they!

And speaking of electric cars, why isn't GM dusting off the plans for the EV1 they introduced and then got rid of in California?
posted by never used baby shoes at 11:37 AM on December 2, 2008 [3 favorites has favorites]

Pfft. Invoice on those guys is like $0.75. Gotta check edmunds before you go.
posted by condour75 at 11:41 AM on December 2, 2008 [1 favorite has favorites]

The Wall Street bailout happened to keep the entire economy from collapsing, or so we were told.

The Auto bailout is to keep a million or so people from being laid off and to keep these companies from going bankrupt.

While they're both bailouts, one was very necessary and the other keeps the a couple of huge companies from going under.

I think that as painful as it's going to be, we need to let these companies fail or at least work out some other type of financing agreement if they want to stay in business.

What's the point of having a "free market" if the government has to step in to save companies all the time?
posted by bshort at 11:48 AM on December 2, 2008 [2 favorites has favorites]

I mean, the beef was they flew to congress in corporate jets. So they not only stopped doing that, they sold them. But no, they’re still pricks?

Here's my beef. Isn't the whole point of this capitalism thing that those who are smarter, more industrious, and just plain good at their jobs are rewarded, thus producing the best outcomes for everybody? You build a better mousetrap, create a company to mass produce it, and run the company wisely. You get rewarded for your smarts and skill with lots of money. Society at large is rewarded with jobs at your wisely run company and better mousetraps. The losers (besides the mice) are those who built poorer mousetraps and ran their companies unwisely, which, the theory goes, gives them an incentive to build an even better better mousetrap and to run their companies more wisely.

But here's a situation where the people who ran the Big Three automotive companies have demonstrably failed at their jobs in a pretty spectacular fashion. They are being outcompeted by those who did build better mousetraps and who ran their companies wisely.

On the other hand, there's me. I had a job, and I was good at it. I was regularly praised by my employers and customers. Whenever I asked my superiors how I could do a better, they were at a loss to tell me. I was laid off the day before election day. The same no doubt goes for thousands and thousands of people in the automotive industry who were laid off because these CEOs were lousy at their jobs.

I did everything right and was punished. They did everything wrong and are rewarded with more money than I could ever dream of making in three lifetimes. That says to me that the system is broken. Or maybe it was based on lies from the beginning.

It's not that they flew private jets to Washington to ask for money. It's that they fucked up so badly that they have to ask for my public money for their private enterprise, and yet they get to keep their jobs and I don't.
posted by vibrotronica at 11:48 AM on December 2, 2008 [47 favorites has favorites]

From:

The anger on this has never made much sense to me. 700 billion to Wall Street? Grumble, OK - if it will save the economy. 25 Billion to the automakers? Kill the bastards! How dare they!

to:

And speaking of electric cars, why isn't GM dusting off the plans for the EV1 they introduced and then got rid of in California?

Perhaps the anger stems from the automakers selling a product of poor quality, with yesterday's technology. Why waste $25+ billion on propping up companies who make things no one wants, run by management who are detached from reality? The money would be better spent retraining workers to make something else.
posted by Blazecock Pileon at 11:48 AM on December 2, 2008 [2 favorites has favorites]

Hey, instead of cutting your salary to $1 in a giant PR stunt, why don't you put some money where your mouth is and lobby for CEO pay limitations?

He's making such a sacrifice. What a trooper.
posted by graventy at 11:49 AM on December 2, 2008

affordability, safety, and efficiency.

Oh, wait, I see: you just want to be angry at something and yell. Got it. Okay then, let me try -

FIX. THE ECONOMY. ASSHOLES. SO PEOPLE. CAN START. BUYING CARS AGAIN.

No, I am saying build a car that can do what an engineer operating without the constraints of cozy relationships with big oil can build - 50mpg or 75 mpg engines, for example. 32mpg is not 'efficient'. That is part of my definition of 'better'.
posted by spicynuts at 11:51 AM on December 2, 2008

Why won't Honda and Toyota build better cars?
posted by theclaw at 11:53 AM on December 2, 2008

What's the point of having a "free market" if the government has to step in to save companies all the time?

But it's not a free market. Foreign governments invest heavily in national auto manufacturers, whereas the US does not invest directly in GM and Ford (or at least, not yet). It's better for the country to have a manufacturing base, no matter how poorly it performs in the marketplace, just like it's better for the country to have a stable and functioning agricultural base. Matters of security, employment, and stability. Do I hope that GM and Ford get their act together and start producing better and more efficient cars? Of course. But there are reasons besides pure and rigid economic ideology to keep these companies and their many employees going. And, again, I think it needs to be repeated that Ford really has turned itself around, and if it weren't for this shit global economy that is forcing lots of businesses to go under, it would be doing really well right now, all things considered.
posted by billysumday at 11:54 AM on December 2, 2008 [5 favorites has favorites]

No, I am saying build a car that can do what an engineer operating without the constraints of cozy relationships with big oil can build - 50mpg or 75 mpg engines, for example. 32mpg is not 'efficient'. That is part of my definition of 'better'.

Well, I think it's unreasonable of you to ask only Ford and GM to build a car like that. Toyota and Honda certainly aren't building cars that get 75 mpg. The Prius does well in the city, and they've done well for themselves by getting that model into the market sooner than comparable makes from the other manufacturers. But when you really look at the cars that all of the manufacturers currently have in production, there's just not that much difference between brands.
posted by billysumday at 11:59 AM on December 2, 2008

Also, stop paying homage to efficiency and green energy with one side of your face and fighting mandatory efficiency regulations with the other side. So let me revise my yelling:

BE. A. FUCKING. BETTER. FUCKING. CORPORATE. CITIZEN. ASSHOLES.

K?
posted by spicynuts at 12:00 PM on December 2, 2008

I'm pretty sure that Mulally is thinking that Ford won't need the loan. They're the best positioned of the big three and they have significant cash reserves in hand.
posted by mr_roboto at 12:00 PM on December 2, 2008 [1 favorite has favorites]

Toyota and Honda certainly aren't building cars that get 75 mpg.

I was using 'assholes' as a generic blanket indictment of all auto manufacturers. Ford just happened to be the asshole mentioned in the thread. If you are getting trounced by foreign competitors and you could probably trounce them by building extremely efficient cars and you won't because of historical coziness with oil, then I have no sympathy.

In retrospect, I take it back. You are right. I just wanted to yell. It seems the only recourse in these times. So here's some more:

LOUD NOISES!!!!!!!!!!!!!!!!!!!
posted by spicynuts at 12:03 PM on December 2, 2008

Is that total renumeration or merely his salary?

My thoughts exactly. From what I understand, most of the CEOs who only get paid $1 in their salary typically receive a few million in stock options.
posted by champthom at 12:03 PM on December 2, 2008

Toyota and Honda certainly aren't building cars that get 75 mpg.

They are building and selling cars that get much better mileage and perform more reliably than American cars, though. If there was a sense that domestic automakers could even compete on the same level -- putting aside the ideal of making a better car, for a moment -- the atmosphere in DC would probably be different.
posted by Blazecock Pileon at 12:14 PM on December 2, 2008

bshort:The Wall Street bailout happened to keep the entire economy from collapsing, or so we were told.
The Auto bailout is to keep a million or so people from being laid off and to keep these companies from going bankrupt.


Blazecock Pileon:Perhaps the anger stems from the automakers selling a product of poor quality, with yesterday's technology. Why waste $25+ billion on propping up companies who make things no one wants, run by management who are detached from reality? The money would be better spent retraining workers to make something else.


And losing a million jobs right now wouldn't exacerbate the economic mess the banks created? The banks played fast and loose with a bunch of shit, took unacceptable risks, created products no one understood to hide those risks, but we will save them. The auto companies have made poor product and bad decisions for decades, I don't disagree, but we resist saving them because....well, I just have a hard time seeing the difference here. Both industries made shitty decisions. Both deserve to die under the rules of a capitalist marketplace.

I guess what I am struggling with is the whole concept of "too big to fail" - what this seems to be showing is that no industry/company/sector should ever be allowed to become that. Or if they become that - and I have no idea how this status should be assigned - that there is then some type of reciprocity. Too big to fail = too big to be left unsupervised/without oversight/without controls/without public benefit when things are good...I don't know what the equation is.

I just know I'm angry and frustrated with business and government as a whole right now. A lot of time appears to be being wasted on frivolous things while the house is burning.
posted by never used baby shoes at 12:14 PM on December 2, 2008 [2 favorites has favorites]

The anger on this has never made much sense to me. 700 billion to Wall Street? Grumble, OK - if it will save the economy. 25 Billion to the automakers? Kill the bastards! How dare they!

Perhaps the anger stems from the automakers selling a product of poor quality, with yesterday's technology. Why waste $25+ billion on propping up companies who make things no one wants, run by management who are detached from reality? The money would be better spent retraining workers to make something else.

Yes, because the banks sure weren't peddling products of poor quality, with yesterday's technology. What waste $700bn propping up companies that leverage instruments no wants, run by management who can't even spell reality? The money would be better spent wiping our arses with.
posted by bonaldi at 12:19 PM on December 2, 2008 [1 favorite has favorites]

billysumday: "But it's not a free market. Foreign governments invest heavily in national auto manufacturers, whereas the US does not invest directly in GM and Ford (or at least, not yet). It's better for the country to have a manufacturing base, no matter how poorly it performs in the marketplace, just like it's better for the country to have a stable and functioning agricultural base. Matters of security, employment, and stability. Do I hope that GM and Ford get their act together and start producing better and more efficient cars? Of course. But there are reasons besides pure and rigid economic ideology to keep these companies and their many employees going. And, again, I think it needs to be repeated that Ford really has turned itself around, and if it weren't for this shit global economy that is forcing lots of businesses to go under, it would be doing really well right now, all things considered."

Well, if that's the case then why do people prefer to buy cars that aren't made by Ford, GM and Chrysler? Are these foreign manufacturers putting in some sort of mystical pixie dust that the US manufacturers don't have?

And if that's really what the problem is with the American car industry, then why not place import taxes on foreign autos equal to their inequitable subsidy. Wouldn't that be fairer?

Maybe Ford is awesome right now, but if that's the case, it's really a case of too little, too late. Maybe they can convince a bank to give them a big loan predicated on the idea that their future cars are going to be great. If not, then let them fail.
posted by bshort at 12:19 PM on December 2, 2008

Why do so many people get outraged over the fact that the CEOs came in corporate jets? After all, they own them (the corporation), and for them to drive to DC would be a show of hypocrisy. More to the point is that all showed up without a plan but instead open hands asking for a massive handout without telling us (taxpayers, govt) what they would do with the money! They should have been kicked out at that point and told not to return! In sum: the arrogance and stupidity of showing up without a plan is the sort of thing that sunk them to begin with.
A buck a year? Who cares? How much have they socked away before the "pay cut"?
posted by Postroad at 12:20 PM on December 2, 2008

If everyone lived in NYC like me, we wouldn't need car manufacturers. Just cab manufacturers.
posted by snofoam at 12:21 PM on December 2, 2008 [1 favorite has favorites]

Maybe Ford is awesome right now, but if that's the case, it's really a case of too little, too late. Maybe they can convince a bank to give them a big loan predicated on the idea that their future cars are going to be great. If not, then let them fail.

As pointed out above, Ford is doing well enough to not need the loan. I agree that much of the problem with Ford and GM is that it is too little, too late. Most people who bought an American car in the last 20 years got burned and they'd rather not take a chance again. So they're fighting their own history and the toxicity of their brand. But still, I think this is all great. I don't get what all you sourpusses are so upset about. This is the best of all possible worlds. The auto companies needed to reform, but the country still needs them around. So we get this two month long public humiliation of the Big Three, we shame the CEOs for flying around in their corporate jets, get them to publicly release their business plans in which they state they are going smaller and more efficient, and we get them to forfeit management bonuses and executive pay. This is great! It's what we all wanted! Now give them a loan - a LOAN - and let's be on our way. If only every industry that is asking for a bailout were forced to jump through such hoops, we'd be much better off.
posted by billysumday at 12:26 PM on December 2, 2008

And speaking of electric cars, why isn't GM dusting off the plans for the EV1 they introduced and then got rid of in California?

Because, despite what the movie will tell you, it just wasn't working the way it was supposed to. They promised 150 miles on a charge; 40 was the best people were getting commuting.

Most of the lessons of the EV1 are going into the Volt, but they're still having the same problems with range. It's a heavier powertrain than the EV1, so that's one problem. The other is that battery technology still isn't there.
posted by dw at 12:28 PM on December 2, 2008

I've got a proposal: how about we stop letting companies get "too big to fail"? Once they reach that level how about we hold a big ceremony, give trophies to the board, CEO and other executives, and then split the company into at least two smaller companies that are small enough to fail?

'Cuz I'm getting really damn tired of all these "too big to fail" businesses extorting us by threat of economic doom. "Give us money or a million jobs will vanish!" "Give us money or the economy will crater!"

If no one is too big to fail we can just let 'em fail.
posted by sotonohito at 12:29 PM on December 2, 2008 [5 favorites has favorites]

BUIILD. A. FUCKING. BETTER. FUCKING. CAR. ASSHOLES. I don't care if they pay him 400 billion to do it, give us a car that you know your engineers could give us if it wasn't for the massive oral sex you give the oil and other shit companies.

What's wrong with the cars they build now? I mean I realize they still sell a lot of gas guzzlers, but they have some fuel efficient vehicles now and lots of hybrids. The quality of their newer models (I'm talking about Ford here) is supposedly close to that of Toyota and Honda.
But the problem is, it takes a long time to overturn perceptions. First the cars they build have to last for eight or ten years before people can even tell how long they'll last. And second, even with that evidence available, it can take a long time for people's perception to change.
But either way, it's not like their building the same junk heaps they were in the 1970s.

The Wall Street bailout happened to keep the entire economy from collapsing, or so we were told.

The Auto bailout is to keep a million or so people from being laid off and to keep these companies from going bankrupt.

While they're both bailouts, one was very necessary and the other keeps the a couple of huge companies from going under.

The failure of the big three, especially right now would be devastating for the economy.

What's the point of having a "free market" if the government has to step in to save companies all the time?

Well, what is the point of having a free market if it brings pain and misery to millions of people?

Free markets + bailouts may be a better system overall. Yes, that creates a "moral hazard" but so does allowing the middle class and poor to suffer because of the bad decisions of a handful of billionaires.
posted by delmoi at 12:45 PM on December 2, 2008 [2 favorites has favorites]

This guy thinks he's good enough to get the same salary as the highest-paid CEO in America?
posted by designbot at 12:46 PM on December 2, 2008

They are building and selling cars that get much better mileage and perform more reliably than American cars, though.

More reliable? Kinda. Here's the 2008 JD Power reliability survey. Two American nameplates in the top five: Mercury and Cadillac. Toyota has the #1 imprint -- Lexus -- but also Scion way down in the bottom quarter. Chrysler's down towards the bottom (no surprise there), but Ford above average along with some of their major brands -- Lincoln, Mercury, Jaguar.

Better mileage? Again, kinda. The problem is that Honda/Toyota/Hyundai have been building smaller cars than Ford/GM/Chrysler, so their fleet average will be better. But head to head, the Aveo (which, yes, is a POS) matches with the Fit in terms of mileage. The other thing, too, is you have to keep in mind that MPG is a poor measure of economy, because every mile improvement is a diminishing return.

The real problem here is that GM, Ford, and especially Chrysler failed to position themselves for an oil shock like we had this year, much less the ensuing end of the speculative bubble. They stopped investing in smaller cars except as a way to meet CAFE (and thus the POS Aveo) and overbuilt these huge SUVs. They did not take the long view, and as a result, they're eating it.

But keep in mind as well that Toyota, Honda, and Hyundai are doing equally as bad -- they had just as many SUVs as the Big Three. Toyota just had its credit rating cut. It's just that Honda had the Fit, the only car any of them had that sold well. And also, they're getting national government support, had cash reserves on hand, and have cheap labor in the Southeast building their cars.
posted by dw at 12:52 PM on December 2, 2008 [2 favorites has favorites]

“It's that they fucked up so badly that they have to ask for my public money for their private enterprise, and yet they get to keep their jobs and I don't.”

Yeah, and that’s the other part of this equation - why doesn’t the government demand guarantees/oversight/ etc?

Furthermore - what is it with Ford or GM, whatever, specifically.

I mean I keep hearing “manufacturing base” but Toyota and Honda have plants here, no?

What is it about Ford or GM - or any company for that matter - that makes them “American”?

Right now just looks like a lot of multinationals.

And it kind of feels like extortion. Y’know?
Give us ‘x’ amount of money (or loan us) or you lose ‘x’ amount of jobs and your economy suffers.
(The wall street bailout looks like outright mugging on that score though)
posted by Smedleyman at 12:59 PM on December 2, 2008 [3 favorites has favorites]

The anger on this has never made much sense to me. 700 billion to Wall Street? Grumble, OK - if it will save the economy. 25 Billion to the automakers? Kill the bastards! How dare they!

There'd probably be significantly less rage and resentment about the $25 bil. if we hadn't already just flushed nearly a trillion bucks down the toilet for the Wall Street bailout and if many of us weren't already coping with the fact that we individually "small enough to fail" or be fired or suffer or worry over constantly increasing grocery, utility, shipping, insurance, health care, etc. expenses.

On the other hand, a populace that goes Black Friday shopping by the frothing zillions at a time when record numbers of their fellow citizens are contacting hunger assistance programs doesn't seem to have a whole lot of collective room to talk about profligate asshole auto execs.
posted by FelliniBlank at 12:59 PM on December 2, 2008 [1 favorite has favorites]

Not only too little, too late but also too often (as in we've heard this before). Shut 'em down. (And put the workers on WPA-style green energy projects)

I want to agree with this basic concept but it overlooks the sheer scale of the thing. There would have to be enough green energy jobs not only for former auto-workers, but also all the employees of companies that served the automakers--suppliers, dealers, etc.

And presumably the green energy projects would make use of the production facilities of the automakers? That's not exactly a seamless transition. Even with the government making payroll, there are huge opportunity costs in the delay as plants are converted or go unused.

I'm very much attracted to the idea of a radical restructuring of the industry that makes use of government funds to tide over workers. But the size and the cost of it are gigantic--especially when compared to a bailout package that involves kicking the can down the road for another 6-12 months and hoping the economy improves enough that the automakers can fix themselves.
posted by mullacc at 1:04 PM on December 2, 2008

"Let them fail; let everybody fail! I made my fortune when I had nothing to start with, by myself and my own ideas. Let other people do the same thing. If I lose everything in the collapse of our financial structure, I will start in at the beginning and build it up again."
Henry Ford
posted by qvantamon at 1:22 PM on December 2, 2008 [10 favorites has favorites]

MAKE THE FUCKING OIL COMPANIES FUND THE Big3 BAILOUT. They made record profits off those gas guzzlers.
posted by HyperBlue at 1:30 PM on December 2, 2008 [2 favorites has favorites]

I just had a crazy idea that if the U.S. had universal health care then the Big Three could cut back on some of the bill for the UAW's benefits without the Auto Workers actually losing anything, helping to save a few billion which could be used in research and development to design products for a post-oil industry.

Nah, I'm sure that'd never work.
posted by Navelgazer at 1:32 PM on December 2, 2008 [3 favorites has favorites]

Everyone assumes that if the big 3 went down then the jobs would simply disappear. Is that really the case?
Will there be no increased demand for other cars since a Ford or GM model is no longer available?

Will the ancillary businesses just close up shop? Will they not try to provide other goods or offer their products to the remaining companies?

Will none of these bright, young auto execs decide to maybe give it a go with their ideas instead of the old ideas that caused the failure?

etc., etc.

Business rule #3 is never be afraid to fail and I firmly believe it. Who knows what happens after it all falls apart? I, for one, would like to see. The alternative is not that appealing either, because if you bailout two, why not three? Why not four? At this rate my future kid's kid will be paying for all of this mess and I'm not OK with that.
posted by BeReasonable at 1:43 PM on December 2, 2008 [1 favorite has favorites]

It's utter hypocrisy to offer the auto manufacturers a bailout while claiming that the US supports free trade. Bailing the auto makers out is textbook protectionism of an ineffective industry. The whole point of free trade is that nations that are good at something should do it, and nations that are failures at something should do something else. The US is a failure at auto manufacturing, and should hang it up. It's done better, at lower prices and higher quality, in other countries.
posted by mullingitover at 2:03 PM on December 2, 2008

Man this thread is like watching Neil Cavuto.
posted by billysumday at 2:04 PM on December 2, 2008

Everyone assumes that if the big 3 went down then the jobs would simply disappear. Is that really the case?
Pretty much, yes.

Will there be no increased demand for other cars since a Ford or GM model is no longer available?
I'd wager the demand would remain the same as it is now. The shortfall in meeting the demand would probably be filled by, of course, the Japanese and Korean makers. It's doubtful, though, that this would translate to anything close to approaching a 1-1 job swap, especially when you take into consideration that not all foreign makes have factories in the US. Far from it.

Will the ancillary businesses just close up shop? Will they not try to provide other goods or offer their products to the remaining companies?
They can try. But those remaining companies already have their own suppliers. Sometimes, they are the same suppliers. However, the hit of losing a GM contract could be devastating even to a supplier with multiple contracts.

Will none of these bright, young auto execs decide to maybe give it a go with their ideas instead of the old ideas that caused the failure?
Oh, I'm sure some young turk might try to make a go with a niche vehicle. You know...$200,000 all-electric sportscars or some such. They'll employ a hundred people or so. But it's a fool's bet that anyone would be able to build-up a serious, full-scale car company that would cater to the general consumer market. Unfortunately, that's the scale that would be needed in order to absorb the jobs from one of the big-three.
posted by Thorzdad at 2:13 PM on December 2, 2008 [1 favorite has favorites]

It's too bad that so many of the opponents to these things just come across as "I'M MAD GRRRR".
posted by smackfu at 2:17 PM on December 2, 2008

It's utter hypocrisy to offer the auto manufacturers a bailout while claiming that the US supports free trade. Bailing the auto makers out is textbook protectionism of an ineffective industry. The whole point of free trade is that nations that are good at something should do it, and nations that are failures at something should do something else. The US is a failure at auto manufacturing, and should hang it up. It's done better, at lower prices and higher quality, in other countries.

Yeah! Fuck 'em! The jobs are mostly in the flyover states anyway. Who cares? And, they're union jobs, to boot! Fuck 'em. It's their own fault for actually doing labor for a living, anyway. Who needs manufacturing jobs? They can all work for $9/hr at a call center somewhere. They might have to move to another state, of course. But, so fuckin' what? It's a TECH JOB, baby!

But, keep sending money to the finance industry, please. That's important shit.
posted by Thorzdad at 2:26 PM on December 2, 2008 [1 favorite has favorites]

It's too bad that so many of the opponents to these things just come across as "I'M MAD GRRRR".

Really? I get a sense that people are approaching the $1/yr tactic with more rational skepticism than genuine anger. If anything, with so much money at stake, we need those critical eyes now more than ever.
posted by Blazecock Pileon at 2:27 PM on December 2, 2008

It's utter hypocrisy to offer the auto manufacturers farmers a bailout subsidies while claiming that the US supports free trade. Bailing out Subsidizing the auto makers farmers is textbook protectionism of an ineffective industry. The whole point of free trade is that nations that are good at something should do it, and nations that are failures at something should do something else. The US is a failure at auto manufacturing farming, and should hang it up. It's done better, at lower prices and higher quality, in other countries.
posted by billysumday at 2:34 PM on December 2, 2008 [5 favorites has favorites]

They did not take the long view, and as a result, they're eating it.

I suspect this will the overall economic theme of this point in time in future textbooks. The world was changing, signs were everywhere, and rather than adapt and deal with things... we didn't. Whoops.
posted by Tehanu at 2:36 PM on December 2, 2008

Here's some wacky idea-mongerin':

If the auto manufacturing industry is really vital to the United States' economy, then it should be really, truly socialized. Don't bail them out--BUY them out. Or, if you're feeling especially thrifty, just seize their shit and pay nothing. Keep all the staff, and pay them government wages and government benefits.

Allow new competitors to spring up. When they do, and they're really competitive, and there's more than a handful of them, the government could begin selling off the old Big Three bit by bit.

(That, or buy them out and sell them to foreign companies at bargain-basement prices.)
posted by Sys Rq at 2:42 PM on December 2, 2008 [2 favorites has favorites]

What's wrong with the cars they build now?

The problem with American cars is that they're too damn big, even if they're not SUVs. The Ford Fusion is, by my standards, huge, and I can't believe they've waited this long to reintroduce the Fiesta.

Plus, the amount of automatic transmissions on American cars is ridiculous. I know that people want to drive with the utmost in convenience, but an automatic transmission weighs more, has parasitic loss, isn't as much fun, and takes you out of control of your car.

Even imports have undergone huge generational bloat over the past 20 years- compare the size and economy of an '82 Subaru GL to the latest Legacy, or A1 Rabbit to the latest Golf: Can you imagine Nissan replicating the 50MPG my dad's Datsun 210 used to get?

I don't want a hybrid or an electric car, unless you can easily work on it yourself like you used to be able to. I don't want a minivan or a 'mid-size' car, and I don't need a huge engine. If GM or Ford could introduce a mini car like the VW Polo with a tiny diesel engine, I might consider buying an American car.
posted by dunkadunc at 2:43 PM on December 2, 2008

America does not need all 3 of the big 3. Clearly there needs to be a culling of the herd there. And anyone who was in management at the big 3 should not get to keep their jobs should they need to take money from the US taxpayers. Take money = lose the jobs of the top executives and all the board members.
posted by gen at 2:51 PM on December 2, 2008 [2 favorites has favorites]

Blazecock Pileon : The money would be better spent retraining workers to make something else.

I absolutely agree. And has a happy coincidence, we have a badly aging infrastructure that is in desperate need of skilled tradesmen. I say we let the companies crash and set their workforce to rebuilding our bridges.
posted by quin at 2:56 PM on December 2, 2008 [1 favorite has favorites]

Ah, Thorzdad, I believe that is my point. I don't believe that is the case at all. Sure, that's what everyone says will happen, but if you stop and think about it that's just plain crazy.

According to the BLS, the number of unemployed in the country is currently at or around 10 million. If the government seriously believed these guys going under would instantly increase unemployment by 33%ish, then you can bet something would have been done already.

3 million people don't just quit working. They get jobs doing something else. Now maybe that something else isn't as well paid as what they were doing, but as muc has that sucks, it's happening all over and has been for decades.

I have alternate suggestions to a bailout.

How about we let one company fail. I'm partial to GM, but screw it, let's just say we'll let it die since they're bitching the loudest and making the direst threats. So, now we bail out two companies and only lose 300,000 jobs plus lets be generous and say an additional 700,000 people get screwed. Not great, but now the other two companies are scared and damn motivated and only 1 million people are out of work. Theoretically.

Or, how about we don't loan money to any company and see what happens. If they go under, let's throw the $25 billion into re-training people for different jobs and see what that gets us. Let's buy up their factories and see what we can do with them. Let's be generous with the small business loans and see what happens.

I have faith in people. I think they will take this big-ass lemon and make a cool and refreshing glass of lemonade.

I have no faith in companies. I think they will take the lemon, sell it to China, piss in my glass and tell me that it is lemonade.
posted by BeReasonable at 2:56 PM on December 2, 2008

Can a car be made that gets MUCH better gas mileage? Sure.(100 KM/L == 235.21 MPG, by the way. )

Making one that won't be a reprise of 'Death of the ball turret gunner' when hit with a H2? Not so easy. Particularly when the NHTSA refuses to touch the bumper height issue.
posted by Orb2069 at 2:58 PM on December 2, 2008

And has a happy coincidence, we have a badly aging infrastructure that is in desperate need of skilled tradesmen. I say we let the companies crash and set their workforce to rebuilding our bridges.

And railroads. And bike lanes. Definitely. Given that GM, Ford and Chrysler's management cannot seem to manage their companies properly, there are opportunities here to rebuild the country's transportation infrastructure that make sense for a post-oil economy, as well as train workers to compete on the global market. There might be some pain at first, but our country could regain some of its manufacturing prowess and actually compete.
posted by Blazecock Pileon at 4:18 PM on December 2, 2008

You know, I'm rooting for Ford on this one. They have been making better cars for a few years now. We own a Focus and it's been nothing but reliable. Nothing like the Escorts of my youth.

GM on the other hand has got to get itself together and build a line of cars that are not only reliable, but inspire some trust in the overall brand. It's common wisdom that American cars are badly designed/built, and I think GM is largely to blame for this perception.
posted by elwoodwiles at 4:42 PM on December 2, 2008

... and perform more reliably than American cars

Again, thats just not true. Ford does really well in reliability ratings, better than most Japanese manufacturers (European manufacturers generally do poorly in reliability).

Mileage is another issue, of course.

Also, let's please stop talking about how car companies need to build "hybrid" cars. Hybrids are not necessarily the best way to get higher gas mileage, plenty of engineers believe you can get better results just by reducing weight and changing materials.

The only standard that matters when it comes to energy usage should be energy efficiency (I'd say fuel economy, but obviously for an electric car that wouldn't make sense). If you can get that with a conventional engine with a great body redesign, great. That may end up being the best option for cheap efficient cars.
posted by wildcrdj at 6:30 PM on December 2, 2008

"The company also said it will sell its five corporate aircraft."

Way too little way too late.
posted by tkchrist at 6:47 PM on December 2, 2008

You know, I'm rooting for Ford on this one. They have been making better cars for a few years now. We own a Focus and it's been nothing but reliable. Nothing like the Escorts of my youth.

We own a Ford Fracas ... er ... Focus Wagon and a TDI Jetta. I got the Focus when my Audi displeased me for the least time and I terminated it. Fucking Audi. It was fancy. It was cool. It was all leather and sexy. But it only started six out out of ten times.

I wanted to just out-right buy something, not make car payments, and drive it off the lot free and clear. The Fracas met all the criteria. Except for mileage, though MUCH better than the Audi, still isn't good enough for a four cylinder.

But LORD-EEE! That thing has, what, five or so recalls?

Now it always starts when I turn the key. And I've put a shit load of rough miles on the thing and I'm very pleased with in general. In fact we've bonded and have a fine working relationship, perhaps even affectionate.

Where as the Audi and I were prone to bouts of physical abuse, angry staring matches, and occasionally attempted to kill each other.

But it's the detail where Ford always fucks up. The molding is crap. The insulation is terrible and road noise can get pretty bad. The body is so cheap it's a ding magnet. Lights always are burning out. Aggravating shit like that that you don't have to worry about with a VW or Audi.

Luckily I'm not a vain type guy who cares what his car look like. In fact I think of it as theft deterrent.
posted by tkchrist at 7:05 PM on December 2, 2008 [1 favorite has favorites]

All CEOs should be paid $1 plus medium-term performance incentives.

Then they can earn their $40M's and I won't mind one bit.
posted by rokusan at 10:07 PM on December 2, 2008

I got the Focus when my Audi displeased me for the least time and I terminated it. Fucking Audi. It was fancy. It was cool. It was all leather and sexy. But it only started six out out of ten times.... [With the Focus I have] a fine working relationship, perhaps even affectionate.
Where as the Audi and I were prone to bouts of physical abuse, angry staring matches, and occasionally attempted to kill each other.

The saga continues. We date Audis, but we marry Fords.
posted by rokusan at 10:08 PM on December 2, 2008 [2 favorites has favorites]

What waste $700bn propping up companies that leverage instruments no wants, run by management who can't even spell reality? The money would be better spent wiping our arses with.

I keep seeing this. Do people really think that those of us against bailing out super-rich car-making failures were for bailing out super-rich banking failures?

For that matter, what happened to all those people telling us we needed to give failure bank CEOs SEVEN HUNDRED BILLION DOLLARS (really EIGHT HUNDRED FIFTY BILLION DOLLARS after all the pork bribes needed to get the bill passed*)? Do those suckers still think we're getting any of that money back? Are they still sucker enough to think that we need to give failure car company CEOs $25 billion to close down factories, lay off all the workers, and ship production (of SUVs) out of the country, then take their billion-dollar golden parachutes and resign just before the company collapses? Are we going to start seeing Colin Powell shake vials of anthrax at us if we don't start giving free money to more corporations?

At what point does this shit become treason?

*really TRILLIONS AND TRILLIONS OF DOLLARS, thanks to the Fed
posted by dirigibleman at 11:27 PM on December 2, 2008

First the cars they build have to last for eight or ten years before people can even tell how long they'll last.

i'm driving a '97 ford escort and it's in good shape - i've bought used gm and ford cars - gms have been clunky pieces of shit - fords have worked well for me

and chrysler? - i still haven't forgiven them for my old girlfriends' plymouth horizon - a car so bad they should have put an expiration date on the steering wheel
posted by pyramid termite at 12:35 AM on December 3, 2008

About two weeks ago, someone suggested that the auto companies should turn to the oil companies for a bailout -- after all, it's their dope that Detroit is peddling. Do something for your customers, already!

As they said on The Wire, you gotta keep the corner boys happy, since they're your storefont. They stop selling, and youre really out of business.

Besides, a bailout would only be a small cut of what they earned during the past 3 quarters.
posted by vhsiv at 9:04 AM on December 3, 2008

What astounds me about the entire auto bailout *loan* bruhaha is that nobody, when handing 300 billion dollars to various finance companies suggested that workers should be the ones to take the brunt of either scorn or fiducuiary effects. Nor did anyone suggest that Goldman or the rest PAY BACK the money. The auto companies are asking for a loan, and it's being spun as though it were free money to manufacturers.

But somehow, autoworkers, because they're in a union, are suddenly the bad guys. The numbers I've seen thrown around by right wing pundits, which have memed their way into "common knowledge" are ridiculous lies.

This is class warfare, plain and simple. It's the biggest union busting move since the dawn of unionized labor.
posted by dejah420 at 12:28 PM on December 3, 2008 [3 favorites has favorites]

This is class warfare, plain and simple. It's the biggest union busting move since the dawn of unionized labor.

I've wondered this openly, in another thread. However, if workers are offered training and work in other unionized positions -- such as infrastructure reconstruction -- perhaps that might mitigate this issue?

Either way, how to deal with the unemployment issue would be down to the legislators with the hands on the purse strings, so I guess we'll find out where they stand soon enough.
posted by Blazecock Pileon at 2:42 PM on December 3, 2008

This is class warfare, plain and simple.

No it isn't. At all. It's not always even anti-union. It's just anti-UAW. Period. I think even many of their greatest detractors will agree that unions are a good thing up to a certain point, beyond which they help nobody and become a burden to the industry--a burden easily cast aside by outsourcing.

That said, while much of the UAW's actions as a union have helped some workers (excellent wages & benefits) to the detriment of others (expensive labor=massive layoffs), as a lobbying group they seem to be squarely on the side of good. Which is to say, they are on the side of Socialism, an ideology I happen to ascribe to. They've yet to prove their effectiveness in that capacity, however.

They are presently in an excellent position to really push for that universal health care they've been mumbling about for years: A Democrat moving into the White House, their jobs in grave jeopardy due to the recession, their employers possibly having their back for once. The UAW could finally be the heroes of the American working class rather than the knife in its back.
posted by Sys Rq at 7:11 AM on December 4, 2008

(All that said, this is not the fault of the workers.)
posted by Sys Rq at 7:12 AM on December 4, 2008

box, et al write variations on the following: Did he say anything about building better cars?

Being a regular user of a couple of vaguely recent Ford vehicles (a 99 ZX2 and an 01 Explorer), I can say with full conviction that you are full of shit. While they may build cars that you do not personally like, they build cars that don't break down much.

Are they as reliable as my (currently out of service thanks to an ignition issue) 91 Honda? No. Are they reasonably reliable? Yes. The Explorer does drink the fuel at an alarming rate, but that's because it's an SUV, not because it's a crappy vehicle otherwise. It meets its design criteria well. There are some fit and finish issues, but again, the mechanical reliability is fine, and the fit and finish is about what I'd expect in that price range ($10-$15k new, in the case of the ones I have use of). A bottom of the barrel Civic or Corolla isn't exactly leather and wine, either.

And this is coming from a person who would never personally buy an American car. Certainly not GM's economy cars of similar vintage, having seen other people's experiences.

Now, my 1988 Mercury Topaz...don't even get me started on that piece of shit.

My questions regarding loaning the automakers money come down to a couple previously asked. Firstly, why the hell are people bitching so loudly about loans? And secondly, why can't we get health care costs of the books of the big three and everyone else, thus improving the bottom line significantly and restoring competitiveness with the rest of the industrialized world that doesn't make employers pay for healthcare directly?
posted by wierdo at 2:29 AM on December 5, 2008