A GM Collapse Would Signal Hope for Robin Hood

Republicans are supposedly the ones who promote "Reverse Robin Hood" policies -- help the rich at the expense of the poor. Robin Hood is supposedly a prototypical member of the Democratic Party. So far neither party has done a whole lot to earn their reputations.

For example, it was Democrats in Congress who pushed against Republican resistance to pass a massive Wall Street bailout. The Democrats' argument was essentially that helping Wall Street would eventually trickle down to regular people. Their only attempt to earn their reputation was to expertly avoid using the phrase "trickle down." How can they sustain their reputation when they make such arguments? How can Republicans sustain theirs when they miss such opportunities?

HOPE IS AT RISK

Senator Obama's victory gives hope that the Democratic party will be prevented from promoting any other Reverse Robin Hood policies. Can we sustain that hope through current events in the auto industry?

Workers at GM, Ford (F), and Chrysler are not among the poor by any definition: those workers' salary and benefits total more than $70 per hour!! Yes, I typed that correctly. Very few American workers earn that much per hour. GM, Ford, and Chrysler shareholders are not among the poor either: the poor own little if any stocks. So a GM bailout would benefit rich workers and rich shareholders. I guess the argument is that a GM bailout would trickle down to people who really are poor, or at least middle class.

Many of us hope that President-elect Obama will not tolerate trickle down nonsense. The problem in this situation is that the United Autoworkers Union was a strong and visible supporter of Obama, and the auto industry is in deep trouble NOW. Will our hopes be dashed within days of the inauguration?

HOPE CAN SURVIVE

I see three reasons to continue hope.

1. First, President Obama may stand up to the UAW. Maybe he would even insist that we cannot tax the average American to bail out those who are already more fortunate than most Americans!
2. Second, GM is failing so fast that it might not last until inauguration day. Thus it might be Bush who stands up to the UAW -- he has done well on that lately. I admit that Bush's actions on this matter are not consistent with the Republicans' Reverse Robin Hood reputation, but I take solace in the fact that Secretary Paulson initiated the Wall Street bailout, even if many fellow Republicans did oppose it for a few days.
3. Third, a fast failure may result in Bush's living up to the Republican reputation by bailing out automakers before inauguration day -- not exactly Robin Hood's outcome, but at least Obama's record would be untarnished.

A rapid and decisive GM collapse would allow us to continue to hope that President-elect Obama represents genuine change: leading politicians of the Democratic party will no longer tax the average American to bail out the rich, regardless of whether those rich do business in Detroit or in New York City.

Disclosure: None

Comments

[PeteK:]

Mr. Mulligan,
Just excellent.
Well said.

2008 Nov 18 07:44 AM

[Tori:]

Mr. Mulligan - You're an idiot....
1. You think Obama is going to stand up to the union? He got elected on the backs of union workers and then conveniently resigned his senate seat the Sunday before they desperately needed his vote. I guess that was his way of voting "present" again!
2. President Bush has never been a friend of the auto industry.
3. Don't worry....President Obama has many more chances to "tarnish" his record, he's already proven himself to be a coward. I voted for him and am already disillusioned....

2008 Nov 18 07:54 AM

[Bill Jencks:]

Sorry, not convinced, through poor argument. In UK the auto industry failed because they couldn't compete with Asia and particularly Japan. It's the same with America. The American auto industry has had ample opportunity over the last ten or fifteen years, to learn from the Japanese, Korean and Taiwanese car industries - but they still carry on producing all those gas-guzzlers. But 20 yrs ago, the UK car industry died, the major companies became foreign owned and then died completely again because they just couldn't compete for quality or price. Same, same for the US. So now this article is saying, "Support the auto-industry..." !!

So the government ends up paying for a dead horse.

But who really ends up paying...yeah, that's right - everyone - even the poor...

2008 Nov 18 08:10 AM

[MG37:]

The solution to the auto problem seems to me simple, and easy. Each current employee and retiree invest in a bailout fund to the tune of $15,000 each.
They have the most to gain(in fact, all the gain) from having these
companies remain in business.For this they recieve terms the same as
goverment plan and will become part owners of their golden egg.

2008 Nov 18 08:14 AM

[David Martin:]

Sales of autos are not going to recover for the foreseeable future.
Massive overcapacity has to be reduced, and the US big 3 are by far the weakest and most poorly run.
Not that that will stop the Government spending taxpayers money in a vain attempt to preserve the living dead.

2008 Nov 18 08:52 AM

[DTD:]

Read that a few times and I'm still trying to figure out what point, if any, the article is trying to make.

I love how people in the auto-industry hate-club like Mr. Mulligan are quick to throw out numbers like $70 per hour when nobody else in the world has a realistic measure for their total hourly compensation. Why not use the numbers that people can actually relate to? Approx $28/hour plus a very nice benefit package. And then make sure you also mention that the new UAW contract has a two-tiered wage system where new hires receive about $17/hour with less of a benefit package.

Then there are all of the other cuts and restructuring that GM has been doing in recent years to remove billions of dollars in cost from the operation. How convenient to forget all of that when your intent is to criticize the industry/

2008 Nov 18 08:52 AM

[msoori:]

You people are amazing. When we put a dumb guy in the white house for 8 years no body from finance blogs complained. Not a word. Why should they? When the hen house is handed over to the wolves, I guess they would be happy. Now, all the blogger are coming out everyday, even before the new president takes office. At least have the decency to give him the same chance you have given to Bush, not once, but twice.

If you have forgotten about the Bush years, read this and the links in it xmplary.blogspot.com/2... If nothing else be happy that self centered, mediocre at best leadership is out the door.

2008 Nov 18 08:55 AM

[Elaine Supkis:]

This stupid story that the GOP was against the bank bail out is PURE BULL.

I was there at the hearings in DC!!! The entire GOP half of the committees hearing Paulson and Bernanke all wanted one thing: more tax cuts. Or they would not support the bill!

Note that when the bill was laden with tax cuts and goodies, they cheerfully voted for it! This was right on the heels of the US suddenly running our government deficits at half a trillion IN ONE MONTH.

Mr. Mulligan is selling a stew here. He is passing along a major propaganda point put up by right wing commentators. I am still furious with the reporters in the room that day.

I took notes. Most of them ignored the pre-hearing testimony where the GOP side lined up to demand tax cuts. The entire GOP contingent LEFT THE ROOM when Paulson showed up. This was because they were busy plotting their move to kill the Democratic legislation by voting against it. This so irritated the Democrats, the Chairman of the committee demanded of Paulson, 'And Bush will not veto the bill when we pass it?'

He asked that three times. This is because he expected the GOP to trash the bill so they could blame the Democrats for the bail out. Then force the Democrats to pass a GOP bail bill with the tax cuts. Got that?

I hope everyone understands the underhanded games that go on in DC.

This is Elaine Supkis of EMSnews.wordpress.com

2008 Nov 18 09:51 AM

[odawa1996:]

Funny thing is that I have worked in the automotive industry for one of the Big 3 for over 15 years and I don't make over $70 an hour in pay and benefits. Yes, there are some people who make that but the majority of my peers don't. You know I once heard that all farmers in America make less than $10K annually. Just because I heard it doesn't make it true.

2008 Nov 18 10:07 AM

[Tori:]

One in 10 American jobs depend on the American Auto industry, as well as the health of communities, dealers and suppliers in all 50 states. Nearly 3 million employees, retirees, and their families also depend on us for their pensions and health care. The cost of allowing this industry to fail would be catastrophic: 3 million jobs lost within the first year; U.S. personal income reduced by $150.7 billion; a government tax loss over three years of more than $156 billion. This level of economic devastation far exceeds the $25 billion of government support that the industry needs to bridge this current period.....

2008 Nov 18 11:04 AM

[jtareen:]

Let us assume for a moment that GM fails and vanishes. Who is going to warranty repairs on their new cars?There must be tens of millions of GM cars and trucks out there which are still under warranty. Does anyone have a view on this?I guess same would be true for Ford and Chrysler.

2008 Nov 18 12:55 PM

[bobbobwhite:]

Obama will support a Detroit bailout for one main reason: blacks work at the Big 3 in disproportionate numbers relative to the overall population. If Big 3 workers lose their jobs, the entire state of Michigan will drop into a deep depression, with harsh econ/social ripples much farther out. And, much worse local area social repercussions may also occur such as rioting and looting and burning.

Count on some form of Fed bailout to these 3 companies that do not deserve a penny of taxpayer money as businesses, but will get a bailout due to the impact on all who depend on the auto companies for their living.

The much larger USA forestry industry had to change its ways to survive; why not the auto industry? Also, we don't make TV's, cameras, or music sound equipment here any longer, as we have assumed more modern industries such as medical, tech, and clean/green energy. Social change has to occur, and not all of them please everyone. Get on with it and get it done.

2008 Nov 18 02:12 PM

[Jack B.:]

All of you GM bashers and Toyota Lovers read this. This is where all of you people are headed. $75.00 an hour??? Not hardly. Why dont you peopel get your facts straight. Uaw workers pay $2400 a year for their Medical. How much do you jerks pay??? Do any of you have a desire to work n an Assy line??? I doubt you would last more then 2 days.

OT: The Darker Side of Toyota: Human Trafficing
User Forum Topic
Submitted by fat_lazy_union_... on June 20, 2008 - 7:07am
Disturbing if true...Well, someone's got to build all those green Priuses right?

ucarmagazine.com/toyot......

Today the National Labor Committee (NLC) is releasing a 65-page report, “The Toyota You Don’t Know” documenting serious human rights violations by the Toyota Motor Company, which will disturb most Americans.

“Celebrities like Julia Roberts, Leonardo DiCaprio, Brad Pit, Bill Maher and others have led the way in turning Toyota’s Prius into a symbol of concern for our environment,” said Charles Kernaghan, director of the NLC, “We hope that these same celebrities will now also challenge Toyota to improve its respect for human and worker rights. As a start, Toyota should cut its ties to the Burmese dictators and end the exploitation of foreign guest workers trafficked to Japan.”

* Toyota linked to human trafficking and sweatshop abuse: Toyota’s much admired “Just in Time” auto parts supply chain is riddled with sweatshop abuse, including the trafficking of foreign guest workers, mostly from China and Vietnam to Japan, who are stripped of their passports and often forced to work–including at subcontract plants supplying Toyota–16 hours a day, seven days a week, while being paid less than half the legal minimum wage. Guest workers who complain about abusive conditions are deported.

* Prius made by low-wage temps: Fully one-third–10,000–of all Toyota assembly line workers in Japan are low-wage temps who have few rights and earn less than 60% of what full time workers do.

* Unpaid overtime and “overworked” to death: Mr. Kenichi Uchino was just 30 years old when he died of overwork on an assembly line at Toyota’s Prius plant, leaving behind his young wife and two children. Mr. Uchino routinely worked 13 to 14 hours a day, putting in 106 1/2 to 155 hours of overtime–depending on whether work taken home was counted–in the 30 days leading up to his death. Toyota claimed that he had only worked 45 hours of overtime and that the other 61 1/2 to 110 hours were “voluntary” and unpaid. His wife had to go to court — which ruled that Mr. Uchino was overworked to death — to win a pension for their children.

* Ties to Burmese dictators: Toyota, through the Toyota Tsusho Corporation, which is part of the Toyota Group of Companies, is involved in several joint business ventures with the ruthless military regime in Burma. The dictators use these revenues to repress and torture the people of Burma.

* Toyota and the race to the bottom: Toyota is imposing its two-tier, low wage model at its non-union plants in the south of the United States, which will result in wages and benefits being slashed across the entire auto industry.

The National Labor Committee recently documented how the U.S.-Jordan Free Trade Agreement descended into human trafficking with tens of thousands of foreign guest workers held under conditions of involuntary servitude.

2008 Nov 18 03:35 PM

[dj10:]

That's a good idea. Now if we could only the get the bankers and AIG execs to do the same thing and get our $1 trillion back.....


On Nov 18 08:14 AM MG37 wrote:

> The solution to the auto problem seems to me simple, and easy. Each
> current employee and retiree invest in a bailout fund to the tune
> of $15,000 each.
> They have the most to gain(in fact, all the gain) from having these
>
> companies remain in business.For this they recieve terms the same
> as
> goverment plan and will become part owners of their golden egg.

2008 Nov 18 04:08 PM

[ddc:]

GM factory workers do not make $70 per hour. That is BS. It is 45 - 60K per year. Has Mr Mulligan ever read a GM factory worker's W2 or is he relying on hearsay? Stop bashing the remaining US industry that actually produces something and directly effects 3+ million workers in the US.

2008 Nov 18 07:25 PM

[AmericanVOR:]

"So a GM bailout would benefit rich workers "

You're kidding, right? I'm rich???
We are a one-income family and I have no cottage, boat, ATV's, snowmobiles, motorcycles... I'm really living it up!
I have 6-year-old triplets and a very sick wife. I work, parent, and still go to school at 41 years old. What 401K I did have has been cut in half.

I'm feeling real rich here. You want to know about the typical employee? Read on:

home.comcast.net/~Babies3/GM.htm

2008 Nov 18 07:34 PM