Thursday, December 11, 2008

Big Three Bridge Loan

Normally, I do not like to comment on politics in this blog. Although I comment on political posts at other blogs, it really is not the reason that I started blogging.
So this post will be a rare deviation from the norm.
I am really starting to get fed up with the grand standing in the House and especially the Republican members of the Senate regarding these loans. They are literally a pittance when compared to the TARP funds that Congress has approved for the likes of AIG and the large banks.
Regardless of what you think of GM, Ford, or Chrysler's products, they are the main economic engine of the state of Michigan. We need this money from Washington ( I would like to point out that Michigan is a donor state to the Federal government. In 2005, Michigan got $0.92 for every dollar sent to Washington, while Alabama gets $1.66 H/T O'Tim).
These funds are not a "bailout". Even if these companies eventually do go out of business, the Federal Government will still get their money back as they will be first in line if a bankruptcy occurs, so there is no risk to the American Taxpayer.
I am now, and have always been, a "we're all in this together" type of person. Michigan has been neglected for years and years by the Federal government and it is time for that to stop.
The "Red States" of the south and west are always carping about paying taxes to Washington but by and large benefit from funds received from "Blue States" Like Michigan, California, New York" and others. Seventeen states pay more into Federal taxes than they get back in the form of Federal spending. They are all "Blue States" with the notable exception of Texas (whuch got $0.94 in 2005).
I will not go into all of the tax breaks that the foriegn auto companies got to locate their plants in non-union states in the south, both Federal and State.
If you agree with me that this is inherently unfair, especially in these extremely trying economic times for Michigan, Ohio, and other states, please write, call, of email your Senator and express your opinion.

I also encourage you to visit this website www.boycottalabamanow.com.

Here is the text of an email that I wrote to Senator Richard Shelby of Alabama:

Senator Shelby;

I am a resident of Michigan. Our state has been in recession since 2002. Although I am employed, many of our people are having trouble finding employment and if you insist on driving General Motors and Chrysler out of business, our unemployment rate could reach 15% or more.That's a depression.

Our state is struggling really bad, and we are all doing the best we can up here. When Wall Street had a crisis, you and others handed them 700 billion dollars. If you divide that up 50 ways, you get 14 billion. Okay, fine. Just give Michigan the money that we sent to Washington to keep our main economic engine alive and stop the grand standing. We are asking for a LOAN. This money will be paid back. I find the hypocracy of Washington politicians telling us that we overpromised workers and retirees ridiculous when your party has gone on a spending spree like a bunch of drunken sailors over the last eight years.I did not see one Wall St. CEO getting humiliated by congress for days on end when they got 50 times the amount of money from the government. You all just handed it over to them and they won't even lend it to anyone. They are using it at luxury resorts and to buy each other's bank, and not to stop the forclosure crisis.

I was disgusted to see how our business leaders were treated by you and others. It will be a cold day in hell before I ever set foot in your filthy swamp of a state. I will never buy anything that is produced by your state. I don't know why you feel that it is the right thing to do to attack a state that has never done anything to Alabama, but if trade war and boycott is what you want, then so be it.

Just remember, there may be a day when Michigan is in a position to help Alabama during a hurricane or some such disaster. I will say "let them suffer, they are not worth the dirt on my shoes".
You need to stop this opposition and not kick a fellow state that is down. We are in desperate need or we would never go through the humiliation you and others are subjecting us to. It is just plain sadistic.

Even President Bush has said that we must not let the American Auto industry die. He is the head of your party. Listen to him.If you do not, Michigan will never forget the mortal blow that you will inflict on us.
I don't know why I am bothering to write this. Someone as arrogant as yourself probably thinks that the "little people" like me don't count. We have seen how you and your corrupt ilk hold the common man in contempt.

Just remember, some day it could be Alabama on the ropes. When that happens, I will personally tell you to go to hell.

Very Truly Yours Tim Gasco, Lifelong Michigan resident and veteran

18 comments:

Chuang Shyue Chou said...

Tim, after reading your piece, I still don't get the rationale for rescuing them. Is it for the jobs?

Tim said...

Yes, it is absolutely about the jobs, Shyue Chou.
More than that, it's about not letting the state and its largest city sink into a depression.
This is our signature industry. These companies have been in business for over 100 years. Look at my post on Greenfield Villiage. These are the companies that helped win WWII. These companies are different than an airline or a brokerage house. Who would buy a car or truck from a bankrupt company? What if you need to get it repaired? No, bankruptcy is not the answer.
You will note that Japan is "bailing out" Tayota. Germany is bailing out Opel. These governments understand that manufacturing is vital to national and economic security. America should too.

Chuang Shyue Chou said...

I would just like to ask, after giving the three companies the money, what next? And what if they continue haemorrhagging?

Regarding strategic interests, those Toyota and Honda plants in the USA will manufacture for the USA as they have American workers, supervisors and are located on American soil.

Opel is GM owned since 1929. Did you know that Opel made most of the trucks for Nazi Germany in World War II? Opel Blitz trucks. And Ford in Germany made a lot of trucks for the German war effort then as well?

Chuang Shyue Chou said...

http://en.wikipedia.org/wiki/Opel_Blitz

Opel Blitz

Chuang Shyue Chou said...

http://en.wikipedia.org/wiki/Opel_Blitz

Another article on the Opel Blitz.

Tim said...

We all know that the Japanese government gives financial support to their automakers and have been for decades.
The real reason that these companies are at a competitve disadvantage in the US is the transplants do not have the legacy costs (pensions, health insurance, etc.) of about 1.5 million retirees. So, I would say unfortuneatly, the retirees, current United Autoworkers members, and white collar workforces will have to take a painful haircut in wages and benefits. The transplants are not taking away sales, EVERYBODY has been their monthly sales figures go down 30% or more. In fact, Ford had less of a decrease than Toyota or Nissan. And like I said, Japan is rendering aid, so why just give up this industry?
As for Opel, I specifically mentioned it because I knew GM owns it and Germany STILL thought that it was worth not seeing those jobs go away. And yes, the Blitz was a cool truck!
I love the old WWII German vehicles and the American ones too.

dmarks said...

It's a bailout, for sure. The feds are backing this up. If the Big 3 go under anyway, the taxpayers are holding the bag.

"The real reason that these companies are at a competitve disadvantage in the US is the transplants do not have the legacy costs..."

Another big reason is that Toyota, Honda, and Subaru have consistently built a better product than the Big 3 now for many years.

Only in the last few years has the gap actually narrowed, or perhaps in Ford's case, vanished.

As for the legacy costs, why not get rid of them? Find some way to give all of the retirees their owned pension so the Big 3 own none of it now, and get rid of the pensions for active workers (and give them a raise to replace the value of it so these workers can each choose to invest the money as they see fit). It would be a big deal to get past this, but once it is done the whole legacy cost problem is entirely gone.

dmarks said...

"I will not go into all of the tax breaks that the foriegn auto companies got to locate their plants in non-union states in the south, both Federal and State."

By the way, these are not worth going into. Tax breaks are not subsidies, bailouts, or handouts. It is not a gift to steal less from people of what they earn.

Pasadena Closet Conservative said...

His birth is a miracle. His love is our gift. His day is a time to rejoice!

Let us rejoice in all He has given us and love one another as He loves us.

Merry Christmas.

dmarks said...

Merry Christmas, Tim!

Chuang Shyue Chou said...

Tim, any new drawings?

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