US Big 3 ask for $34bn dollars...

Here's some thing interesting. If you add the unemployed men and women, 6.5 men+ 5.5 women=12%

Employment Situation Summary

Try it again.

Both the number of unemployed persons (10.3 million) and the unemploy-
ment rate (6.7 percent) continued to increase in November. Since the start
of the recession in December 2007, as recently announced by the National
Bureau of Economic Research, the number of unemployed persons increased by
2.7 million, and the unemployment rate rose by 1.7 percentage points. (See
table A-1.)

The unemployment rates for adult men (6.5 percent) and adult women (5.5
percent) continued to trend up in November. The unemployment rates for
teenagers (20.4 percent), whites (6.1 percent), blacks (11.2 percent), and
Hispanics (8.6 percent) showed little change over the month. The jobless
rate for Asians was 4.8 percent in November, not seasonally adjusted. (See
tables A-1, A-2, and A-3.)
http://www.bls.gov/news.release/empsit.nr0.htm
It's not even Feb.

Crashed my browser when I did the link.

I think the math is misleading. 6.5% +5.5% =12%

Am I wrong?

 

Fuzzy math there.

You have 10 of group A and 10 of group B

You lose 1 from group A and 1 from group B

Group A's losses 10%
Group B's losses 10%

total losses 2/20 = 10%

NOT 10% + 10%

 

Should have looked closer at the tables.Here's where I got confused.
About 1.9 million persons (not seasonally adjusted) were marginally
attached to the labor force in November, 584,000 more than 12 months
earlier. These individuals wanted and were available for work and had
looked for a job sometime in the prior 12 months. They were not counted
as unemployed because they had not searched for work in the 4 weeks pre-
ceding the survey. Among the marginally attached, there were 608,000 dis-
couraged workers in November, up by 259,000 from a year earlier. Discour-
aged workers are persons not currently looking for work specifically be-
cause they believe no jobs are available for them. The other 1.3 million
persons marginally attached to the labor force in November had not searched
for work in the 4 weeks preceding the survey for reasons such as school
attendance or family responsibilities.

 

Simply order $34bn dollars worth of cars, trucks, ...

Instead of a loan, could we (the government) just buy $25B (now $34B) worth of vehicles over the next year? Look at the police vehicles, city trucks, buses, USDA, FEMA, and all government owned vehicles in your own city and you'll quickly agree there's room for an update. The govt. hands out $34B worth of vouchers to various agencies, who get to shop between the (former) Big 3 so they have to compete with each other for the business.

Help me with the math.. isn't $25B about 1 million vehicles at $25K each?
At $34B it must be around 1.36 million vehicles?

The common sense part is that people go back to work. Not just the Big 3, but the guy who makes axles at Dana, the gal who makes seats, dads who make radio parts, tires, and so on. All of a sudden, people feel confident about their future if they know there's a backlog of production. They buy houses, computers, fix up their home...and the circle goes on.

Not to over simplify, wage concessions, quality, mpg, and etc. need to be addressed. Just loaning them $34B does nothing to jump start the economy. Building vehicles gets us going again, no guarantee when it runs out of steam, but....it's a start toward something positive.

 

LakeDog ...
And in 3 months the circle (and another 34B) starts again. How many times do you want to do that ?

This story is getting old. The only part I found new and impressive was Detroit bumping up their demands by $9B in two weeks. That HAS to be some sort of record, and speaks to their arrogance, incompetence, or most likely -- both. No wait, I know. They were surprised by the poor Nov. 08 sales.

 

UPDATE...

"Several officials in both parties said a key breakthrough on the long-stalled bailout came when House Speaker Nancy Pelosi bowed to Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars. The California Democrat spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added."
Congress, White House talking $15B auto bailout - Yahoo! News

SHOULDN'T THE OIL COMPANIES BE BAILING OUT DETROIT???
Didn't ExxonMobil report $150Billion Profit last year, followed by Chevron, and so forth?
Wasn't this PROFIT made possible due to $3/gal gasoline combined with DETROIT SUVs???

 

I really don't understand the game of chicken DC has been playing of where the auto welfare money comes from. Regardless, I'll be interested to hear the details of how the 15B is squandered.

 

It's pretty silly that the Bush admin is so adamant about not dipping into the TARP pool for Detroit. Their reasoning is so weak it's laughably sad.

One panelist (whose name, ironically, is Sachs) commented yesterday how Congress could so easily allocate $300B for AIG without requiring their executives to appear in any hearings at all. And we all know how AIG is spending THAT money!!!

 

I have heard, but don't know if it is true, that the reason the Bush Administration won't use TARP money is that it is gone. The Administration was only allowed to spend 1/2 of the $700 Billion and that first $350 Billion is gone. Essentially bush would have to go to Congress to get authorization and he doesn't want to do it.

It is ironic. They are arguing about which pocket to take the money out of. The money will be spent.

The other thing to note is that the $25 billion already authorized is already figured into the balance sheets of the Detroit 3. All 3 CEO's were very clear that the $25 billion was already allocated and if it was used for emergency aid those funds would need to be replaced later.

 

Wouldn't surprise me if it's gone. Would leave JR looking a little funny.

I am wondering if it's not part of the master plan on breaking the unions. No votes no money. Kind of how he didn't do any thing with Enron and the CA electric debacle after the election. No vote no results.

 

This fits this discussion, pretty good reasoning also.

Jon Stewart injects some humor, perspective into Detroit Three bailout - Autoblog

 

Jon Stewart, eh?

His comment about how the CEOs would get back to Detroit if they got the $$$ was conveyed with this photo:



.

 

Doesn't matter much, like he said, all the money given and is going to be given to the stockbrokers and bankers, is basically thrown away, yet money used in the auto industry will be used to keep jobs, and will have an ACTUAL product to show for the money.

 

Nah, I bet it will just go to the CEO, the Board of Directors, and shareholders

 

Oh god, that is just SO true!

 

Alright had to revitalize this thread....

GM decides to give the US taxpayer the finger.

First they're going to lay off 12% of their workforce.
http://www.marketwatch.com/news/story/general-motors-cut-12-us/story.aspx?guid={CD9419A5-F3F3-440B-AFBE-86CDA28ECFDF}&dist=msr_8

But I'm sure glad the US taxpayers gave them money because....
They're going to invest a billion dollars in Brazil
Latin American Herald Tribune - General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program

Damn ain't we happy we gave them all this money so that AMERICAN jobs wouldn't be lost, and the US economy would be saved, for this AMERICAN company!?

 

Point A: Yes, GM is laying of some US white-collar workers but the bulk of the lay-offs (~2/3rds) are in the rest of the world. Like it or not GM needs to match their workforce to their market share. GM is dumping brands, vehicle models, and factories. In the future GM will be focusing on 4 brands in the US; Chevy, Cadillac, GMC, and Buick. The rest (Pontiac, Saturn, Hummer, Saab) are history.


Point B: GM is profitable and growing in market share in South America. They need to expand manufacturing to keep up with demand. Vehicles will be produced in the markets they are sold. We have seen the end of shipping ships full of cars around the world. This is a very good trend from a sustainability viewpoint.

 

Back to point A: how will the US taxpayer benefit from $1B of their money being invested in Brazil ?

 

GM is profitable in Latin America. Those profits help offset the losses in the US. If GM didn't have profits in other markets to help prop up their US operations they would require even more money from the US taxpayer to continue operations in the US.

According to GM's 3Q08 financial statement GM Latin America made $514 Million in 3Q08 up from $374 in 3Q07. GM holds 17% of the market and increased sales by 3% over last year.

You seem to think that GM is taking $1B of US taxpayers money and giving it to their Latin American operations. This is not the case. Instead, the Latin American operations are reinvesting their profits into their operations to continue to grow in an important developing market.

GM has financial problems in the US, not their global operations. If they are allowed to go into bankruptcy you would most likely see a repeat of Delphi. Delphi was GM's parts division and was spun off GM in 1999. It also had profitable global operations offset by huge losses in the US. These losses in the US lead Delphi to file for Chapter 11 bankruptcy in 2005. In the bankruptcy process Delphi has shed 45 of its 53 US plants and cut wages by more than 50% in the plants that remained. Delphi continues to operate 156 plants, 44 joint venture, 53 sales offices, and 38 technology centers around the world. (Full Disclosure: I worked as an engineer for Delphi in 2007.)