FROM CNN's Jack Cafferty:
When it comes to President Obama's plans for the struggling car companies, many autoworkers say the administration is being much harder on them than the many failing banks.
Some auto workers have called ousted GM CEO Rick Wagoner (pictured) a sacrificial lamb, scapegoat, and fall guy.
The president of one United Auto Workers chapter calls it the "age-old Wall Street vs. Main Street smackdown," adding that there's lots of money available to banks that are "apparently too big to fail, but they're also too big to be responsible." Meanwhile he says auto manufacturing and middle class jobs have to meet a higher standard.
Many workers even sympathize with General Motors CEO Rick Wagoner, calling him a sacrificial lamb, scapegoat, and fall guy. They believe the government hasn't given the same harsh terms to insurance giant AIG or the banks in which it's taken an ownership stake. And they're absolutely right.
Michigan Governor Jennifer Granholm calls President Obama's moves quote "a bit of tough love," and says she hopes the financial industry gets "as tough a scrutiny as the auto industry has."
Also, a piece in 'Politico' asks why the banks get carrots while the auto industry gets the heavy stick. They say the White House believes it gave both GM and Chrysler a chance to prove they could come up with a plan for survival, and they didn't.
Also, although the collapse of the American auto industry would devastate workers, suppliers and executives, it probably wouldn't destroy the broader U.S. economy, like the collapse of certain financial institutions could. And since the public seems to have bailout fatigue, this was a chance for the president to show he's not willing to stick the taxpayer with the bill once again.
Here's my question to you: Some autoworkers say President Obama treated car companies worse than Wall Street. Are they right?
Interested to know which ones made it on air?
Katie from Springfield, Massachusetts writes:
He should be tougher on the car companies. They haven't had a viable business model in years, so why should we hardworking Americans bail them out? If GM tanks, it really doesn't affect me as I don't work in a related industry, but if Wall Street fails that affects every facet of our economy - our jobs, pensions, businesses, banks, everything. GM's failure is GM's problem, Wall Street's failure is EVERYONE'S problem.
Jerry from Encino, California writes:
The auto companies and especially GM have been begging for this for years. Successive managements steeped in a seemingly inescapable corporate culture of failure have guided GM downhill for years, while the likes of Toyota have taken successively larger shares of market. The auto workers, in forcing their unrealistic demands, are complicit in the GM failure.
Paul from Henderson, South Carolina writes:
Jack, Whatever happened to American Motors, Packard, Studebaker, and Nash or Montgomery Wards for that matter? They came and went and due to various circumstances; their time was over. A company comes to an end because of its refusal to change or its inability to meet the demands and needs of a changing public. The auto industry with its overpaid, arrogant workers and executives has come to the end of the line.
Jim from Reno, Nevada writes:
Jack, I don't know. Looks about the same to me, especially in light of the pounding AIG took over the bonuses. If some Wall Street companies seem to get away with more, maybe it's because they are "too big to fail." That phrase seems to apply to AIG but not to GM. I don't really understand why.
Shirley from Ohio writes:
If the automobile industry got one penny of taxpayers' money, then I believe they were treated fairly. The banks got off easy because they were the first panhandlers in line. President Obama had to draw the line somewhere.
President Obama has been very stern with Wall Street and the autoworkers have to realize that there has been a lot more corruption on Wall St. then the auto companies. It will take years to undo the corruption. The auto companies are at thier own fault for being where they are. Thier lack of quality has hurt thier business and is the sole reason why thier competitors don't need a bailout. I personally don't want to give any tax dollars to a drowning company.
"Wall Street" and financial companies are substantially sound enterprises that made a series of very recent, bad decisions. Their executives should bear more of the cost of restoration, but they can return to successful operation. The auto industry has decades of stubborn refusal to adapt to modern circumstances and has had its butt whipped by foreign-based companies operating in the US. It has basically a failed business model, not just a recent spate of greed and bad judgment. The two deserve different government responses.
I don't think either one was treated poorly. Obama gave all of them money(our money) to help them get back on track. To date there has been no progress and just wasted money being spent to save a couple of sinking ships. Insanity is doing the same thing over and over and expecting a different result. I would consider throwing money at these companies insanity of the highest level. With that said I think that Obama crossed the line when he made the GM resign. He has no right to do that even though I agree that the GM did a poor job, that is up to the company or shareholders to make that decision.
I didn't vote against President Obama, but I do think he is being fair in regards to this stimulus / bailout plan. I trust the President, and will support his plans to get the economy up and running again. Wall Street robbed stockholders, CEO's awarded and received outrageous bonuses for business dealings that were at the bottom line crooked. It doesn't matter if Automakers or Wall Street feel they were cheated in this stimulus plan, President Obama will clean this thing up.
Yes, car companies have been treated worse than Wall Street so far, but there's a simple reason. We've known and done nothing about the problems in our auto industry for decades. Everyone and their mail man knows the solution to that industries woes. The Wall Street problem is newer, so we're still working on a solution.
It is largely a matter of perception. The economics of the car companies is relatively transparent making it more open to inspection. The economics of the financial institutions is opaque and difficult to understand. I suspect we will have to depend on our experts to deal with the regulation of the financials while the regulation of the auto industry will be a much more public and tumultuous affair.
Yes, they're right, but what choice does he have?
The auto workers are too responsible and patriotic to bring the house down, if everything doesn't go their way.
Wall Street on the other hand has demonstrated that it is totally irresponsible and could not care any less for this country.
As the president has said, the first priority is getting our heads above water. After that, Wall Street will be dealt with by the Justice Department and the IRS. How lenient do you think the judges will be on the tax cheats?
Yes they are, but it should not be a surprise. Back in the 80's, the government decided to back the financial over manufacturing because the profits to be made were so much greater and so many less workers were needed to make these profits. Every administration since then has followed this theory, which has led us to this crisis we are in.
Obama is treating the car companys worse than Wall Street and the car companys disserve it.
The AIGs of America are getting all the money they need and more.
I say let them all file bankrupcy and stop giving them tax payers money.
The administration thinks by helping Wall Street and the banks they are helping Main Street. These institutions have never helped main street and could care less. We are in this situation because of greed and the Republicans helped that greed. People are hurting all over this country. The stimulus should of went to the people, that would of gotten the economy going, not wall street or the car manufacturers.
It does appear that the treatment of car companies was quite different than the treatment the financial industry received. But then again, we don't know all the details of what took place behind the scenes and out of the public view.
They've gotten their bailouts - but they didn't get the unregulated use of it. So in a way, the answer is yes. But the problem is, Wall Street was a situation where it was built on a house of cards, which took down a lot when it fell down, and Detroit has been systematically ignoring the warning signs that they were not being competitive and listening to what people wanted. In that way, the answer is no, they are getting what they deserve. Auto makers who are offering smaller vehicles with better gas mileage, and with sticker prices lower than a house costs, are still doing business. The ones who who didn't listen and see what was happening are failing. Free market system...
It does seem that way, doesn't it . It would appear that the Washington "insiders" feel that while the union workers' contracts are "non-binding", the contracts of finanical sector exucitives are sacred and not to be questioned. Reeks of "Washington Business As Usual" in my opinion.
Of course! The wall street firms are filled with men and women who went to school with the politicians, their families knew the families of the politicians, the firms give large political donations, and many of the workers migrate into and out of politics on their way up the corporate ladder. The auto workers are not part of this educational or political class, they are just numbers on a balance sheet. That is the difference.
Mountain Home ID
Don't read too much into what Obama did to automobile manufacturers. With the auto industry, who has had more than one bailout, and a lot more warnings of what could happen if they didn't get their ducks in a row, and now that could has turned to will happen. You see sometimes you have to just throw out a more steam approach to get something done, if not, they will no longer have the taxpayers to bail them out. As for the banking industry, and Wall Street they must now show positive action, or the just may end up out on the street too. These companies have many jobs to hold hostage against further by the government, but they have been forewarned.
Jack: The car companies were treated diferently than Wall Street. Wall Street does not employ 3 million people, but the 3 American car companies do. America needs the car companies to make the new generation energy saving cars that run on electric and natural gas. Cars which do not polute the air.
John from Alabama
The GM auto workers can blame GM's management, not President Obama. Clearly, GM management failed to deliver a proposed bail out package to the administration which had any chance of working.
I expect GM management felt they'd get the money one way or the other and once they ran out, they could always come back for more. Not this time and not on Obama's watch.
Remember Jack, the money given to banks went out under Bush's watch not Obama's. I expect if the Obama administation had dealt with them, the results would have been similar to what we're seeing with GM.
They are right. But if Obama hadn't been like that, people would have criticized that he treated them better. He can't please everybody. My opinion is it would have been better if so much tax money was not used for bailouts. But assuming that it was necessary, then the government must not have hesitated in dictating terms and seeing that the money was used properly, like a dad poring over his child's homework. If he was not hard on Wall Street and is hard now with Detroit, maybe he learned his lessons and that's for the better for everybody.
If he is, it is rightfully so. Historically the auto industry has been far more dependent upon government bailouts in the past than Wall Street has. I wquld like to suggest that the auto industry limit their supply to meet the demand. The huge automobile inventories only drive up costs which are passed on to the consumer. If automobiles were made to order, the customer could get what they want at a more reasonable price. In order to get Americans to "buy American," stop producing Dodge trucks with Mitsubishi engines or other such nonsense.
Obama is treating the car companies well. He is giving them billions and billions of dollars. But he is treating the workers like cannon fodder, making them give back everything they gained and more.
Jack: You have heard of "double standards,"--and here is an example of how it applies.
President Obama needs to treat all the big company CEO'S the same. This is not fair to get rid of GM CEO, if thats the case,he needs to get rid of AIG'S,Wallstreet and any other companies CEO's thats part of the same bail out plan.
Oh give me a break Jack please.The car companies are NOT where they are because of the economy.They dug themselves a hole long ago and its coming back to clean thier clock.I wish the union membership would stop blaming Mr Obama and blame their management for losing money for 20 years and never ever inovating.
They have been given way more chances than Wall Street and they used them all up.
Helping the Autoworkers isn't a popular choice and Obama likes to do and say what is popular. We the American people are fed up with our money being spent so carelessly.
It appears that way. But why should we be surprised? Most of his advisors come from Wall Street. Is there anyone in his cabinet or an advisor who comes from the auto industry?
Port Aransas, Tx
The US auto companies are only partially responsible for the shape they are in now. Our politicians sold us out with their naive, if not stupid laws. Example: you can buy a german car in the US 15-20% cheaper then in Germany, where they are manufactured! German tourists travel to the US, buy a german car, send it back to Germany, pay the 19% import tax and still save enough money to pay for the vacation. At the same time US. cars are sold 30-40% higher then in the US. You do not have to be a financial genious to figure out, there is something wrong with the US. import laws that allow such dumping prices to take a market share. Germans, japanese, koreans laugh at our stupidity, flood the country with their products and could buy a great part our country with the dollars we gave them!!
The other way, try to set up a business in Japan or Korea or export products to those countries and you will experience a major problem.
The cozy relationship between Washington and Wall Street has been a problem forever. Not too many ex-Detroiters in the House, the Senate, in the cabinet, or on staff in D.C. The auto companies are symbols of labor and production, not the architects of complex financial instruments. Union workers are to blame, even the retired ones. The industry is inefficient, cumbersome, out of touch with consumers. Wall street is high-tech, cutting edge and unfathomable.I guess there is more value in profting with smoke and mirrors than in building something.
Jack rick wagoneer should have been fired long ago. If I run my company in the ground I will be fired. Truth is Ford makes a better automobile. Maybe GM should catch up.
It appears you are correct, it looks like this administration has no love for the auto makers. Wall street is as guilty as the big three auto makers in mis managing their companies, however Tim Geithner will always lean towards wall street as he is an alumni.
Yes they are right, but unfortunately, you can't bite the hand that feeds you.
I bet if the automaker's lobbyists were bigger contributors to our elected officials on Capitol Hill, the proverbial shoe would be on the other foot.
This is outragous that we give bankers bonuses when they make millions of dollars and run scams on Wall street and blame auto workers for making too much money.
WRONG. The autoworkers had better wake up, or more precisely the autoworker unions had better wake up. It's better to make some real concessions and still have a job than have no job at all. This is a dangerous game of chicken that the union is playing. They better be careful or chicken might just be for dinner and Toyota and Honda will be the honored guests.
The autoworkers will complain what a raw deal they are getting; however they forget how well they were paid compared to others. I'll bet most teachers with a Bachelor and Masters degree's earn a lot less.
Not bad for people with at best a high school education.
I agree the car companies are being treated to more intense scrutiny than Wall St. It's kind of the same principle one sees in a football game: the guy who throws the first punch isn't seen by the referees but the poor doofus who throws the second punch gets nailed.
Life ain't fair...deal with it, automakers. And get yourself some of the same lawyers and administration insiders that Wall Street has.
Jim – Willowick OH
Oh Please, just because your company has been horribly mismanaged for decades and your jobs are in jeapordy don't whine about the government handing you a blank check. Blame your CEOs. Besides the failure of GM isn't going to collapse the global financial markets, AIG on the other hand....
Yes, they are right. Why is it that the auto companies and unions have contratcts that can be "abrogated" but the Wall Street recipients of bailout funds don't? Why is it that the auto companies must provide business plans spelling out how the loans will be spent, but Wall Street recipients of bailout funds don't have to provide any plans? Worst of all, why must auto company employees lose pay, benefits, and parts of their pensions but Wall Street recipients of bailout funds are allowed to get bigger and enrich themselves at our expense?
American workers need jobs, higher wages, better health care, and decent pensions. You don't get out of a recession by taking those things from workers and giving the majority of funds to the self-serving people who caused the trouble in the first place.
Recovery is going to take longer than it needs to.
San Clemente, Cal.
Yeah, right! The auto manufacturers got a bad deal.
Why? Because the head honcho of GM only gets to walk away with a paltry $20M or the TAXPAYER'S MONEY, as opposed to a hundred million?
What exactly is it going to take for the American people to wake up and get angry at those who are laughing all the way to the bank, ON OUR DIME!
I do not think that the car companies are being treated worse than the financial companies–I think this is more of a media idea. There have been resignations of Fannie and Freddie and AIG's CEOs. Then we no more have Washington Mutual, Merrill, Lehman so it seems that there have been changes in management as well as companies that have gone bust, by the wayside, or at least no more as they were. As for GM, they were warned many, many months ago and still can't seem to comply–there is obviously something very wrong there and if Waggoner wasn't able to do this, it seems that it was time something happened! There may be some more bank CEOs to go in the future too–things change all the time.
If the American people want to get upset about bonus–look at the ones given to Jack Welch of GE and Nieridelli (sp?) of Home Depot. This has been going on for quite some time and maybe people are just waking up and deciding this type of thing needs to stop!
Possibly but all things are relative and one thing for sure . . . Not EVERYone could be or WOULD be treated equal. The taxpayers SURE aren't getting any breaks in any of this!!
There was going to be pain somewhere. My only thoughts on it are these . . . . there should have been ZERO bailouts and stimulus plans!! That way everyone would have equal reason to cry. Mistakes were made, possibly crimes were committed, now it's payment time! No deals.
If the auto companies don't like how Obama is treating them, it is their own fault. If they wnted to be treated better they should have written a bigger campaign finance check(bribe) and done an even lousier job on the assembly line.
The Big Three deserve the treatment they are getting from Obama. Unlike Wall Street, who know they messed up, the Big Three continue to act like dinosaurs who viewed the Ice Age was 'unfortunate'.
What is unfortunate, despite Obama's efforts, is that they may never 'get it', and will become extinct.
Dave from Erin, ON
Walstreet controls the money politics needs money. How many hundreds of millions of dollars does wallstreet pump into political campains on both sides of the isle? How many bankers lost their job when they should have gone to jail? Heck the poor slob working for a living doesn't stand a chance. The auto companies have to redo contracts while wallstreet colects a bounus yup this is justis in America.
I do not think the treatment of the car industry was as vicious as some have made it out to be. Their CEO's needed to be put on the red carpet and if that meant they should be asked to step down, so be it.
Maybe the companies involved will now realize they have to have CEO's who will look out for their employees and the people of this country and NOT THEIR OWN POCKETBOOKS.
The one thing we all have to remember is that this mess begain during the PAST 8 YEARS when you know who was in charge!!!!
I sincerely believe that the same treatment should be given to the WALL STREET IDIOTS and the SOONER THE BETTER!!!!
Absolutely. It just goes to show that the Wall Street people in this Administration are taking care of their well connected friends and neighbors, the poor working slobs in the midwest be damned.
It sure seems that way. But maybe he sees hope for the financial sector and no hope for the car companies.
Of course they are right, The wall street gang donated big $$$$$$ to Obaba and his buddies in Congress as did the UAW. Notice how Obaba has left the Auto Makers out to dry while not touching the UAW nor the wall street boys?
Mike Huckabee once referred to Wall Street as "Las Vegas East". So Wall Street investors are perceived as the high rollers or big-time gamblers of the East Coast. So YES, I do believe that the government has been more lenient with Wall Street than with the auto industry.
Sure Obama treated wall street better,For over 30,years the auto companies were told that they needed to make a better car than Japan, but no they thought just buy american was enough.
Were America we can build a car 20-30 yrs ahead of every-body else.
the day we do that is the day we see so many job openings & not enough workers.
I have to agree with the autoworkers 100%. The politicians know where their priorities lie. Think about it. What does the Big Three Auto Makers haven't got, that Wall Street does. Lots of money.
The Car Companies arent being treated worse than Wall St financial manipulation companies, the employees are being treated worse.
Wagoner should have been removed last fall, mainly because of his past bad decisions. But removing him now seems like a Token move to appease anti Domestic Auto people.
The Autoworkers and related employees, are mostly lower to middle income workers nationwide. Theres only so much you can save for crisis when your pay is so close to an ever rising cost of living.
The WallSt workers start at close to 6 figures, so even the ones laid off were making a lot of cash, the ones still there and the execs are getting paid ridiculously based on a business model that was Clearly Non-Viable as they took down the entire world banking system with them.
The worst part is the Banking industry is at fault for most of the automakers sales problems.
Prior to last year all 3 were working out new deals with the UAW to cut costs, legacy healthcare costs and shedding employees as we in Michigan know. They also had been retooling already for Hybrids for over a year when they came to congress for money.
Prior to last year, the banking industry was still encouraging fraud, and falsely rated illegally packaged mortgage securities and playing games with the world banking industry making sure they continued to make profits off the misfortune of others.
Jack, I don't understand why they are bailing out wall street when they don't contribute anything to the gnp. However, I worked for G.M. and I do understand them wanting them to re-organize the top. They would hire supervision that didn't have a clue to manage some very talented workers. I worked in tool and die and they gave me a political science graduate as a supervisor to tell me how to do my job. I feel sorry for the poor people that are doing the real work and not getting bailed out. They needs to be tough and I can't wait to hear the loud popping sound when management pulls their heads out of there butts. I just hope the little guys don't get hurt in the process.
It appears that many, if not most, on Wall Street made their money and have run. It's hard to get that money back. But for the car companies, the workers need long-range jobs and retirement security. The U.S. needs car companies as the basis of our heavy industrial economy. We really can't afford to let them fail, and I think the Obama administration is doing the right thing by being tough on them. At the same time, I don't want any ex-CEO to walk away with $20 million in severance benefits when the union workers are being asked to reduce wages and/or retirement benefits.
Yes!!! They should have donated to the Obama fund like AIG. They have only themselves to blame.
Every time I start to feel bad about the way Congress and President Obama are treating the car companies, I remind myself about the gas crisis in the mid 1970's. The car manufacturers have had a long time to clean up their act. They chose not to.
Jack, It migh look that way but the auto industry has been acting irresponsibly a lot longer than Wall street so they should know better. Besides we are talking apples and peaches. The two industries have nothing in common except bad managment.
Jack c'mon let's really compare apples to apples. We can all drive German, Japanese and even Chinese cars in the interim whilst GM and Chrysler restructure.
I don't see us importing a banking system from China if we sit by and let this one fail.
I have trouble feeling bad for high school graduates who are making more than I hope to make when I graduate from law school next year (which is not cheap to attend). They even make more than people I know who work in the financial sector.
I don't know yet. I'll have to wait and see if i get a check from Chrysler next month.
Jack, both the auto industry and Wall Street are getting too much. We need to let bankrupcy and restructuring address both of these giants rather than trying to fix the situation with tons of money that we are borrowing from China.
Terry of Austin.
Gee how bad can he be treated if he walks away with $20 million, and as for the workers who said they would not give up a nickel because you know you will get bailed out, I hope you all go down the tubes, you are not the only car makers or the best car makers in America. With your attitude you deserve to be taken down.
Yeah, so what? Life is not fair. Things are tough all over. Tell your union.
No way jack...don't they realize their high salaries and absurd benefits they receive have made Gm and Chrysler the least competitive car companies in the world... car companies deserved to get a chance, but anything after that is a waste of money.
No, they are not right. I don't think President Obama should be criticized for doing the best he can for Americans who received a bum deal in this economic crisis.
Mr. Cafferty, the answer is No! I think the President has learned from past mistakes. This "take charge" attitude is what I have been longing to see, when dealing with the beneficiaries of the bailout. These irresponsible, selfish, and corrupt people needed to be told what to do. Next step, Mr. President should do the same with the banks. I am definitely for more of this type of Government.
Dear Jack, I'd say that each segment of this finanical meltdown has been dealt a plan leading them out of the morass they created because of their unique forms of greed, narrowmindness, arrogance, self-importantness and self-made superiorty. They deserve what has been outlined for them and much, much more. The party is over.
It may seem for those workers as if pres. Obama does treat them worse. Unfortunately they forget that the company they work for makes huge operational losses and can't even come up with a plan to make the companies profitable in the future. The banks on the other hand need help as a result of huge write-offs on toxic assets, but are still profitable when it comes to day to day operations. It still remains questionable why the taxpayer is the first to bailout the banks in stead of the bond-holders first, stock-holders second and taxpayer last.
Yes, it's unfair to hire a wall street suck-up like Geithner to treat financial institutions with kid gloves and bailouts-on-demand and then show "tough love" to automakers. Let both industries go into bankruptcy like main street folks do!
Give me a break! Pres. Obama took a beating for giving money to organizations with failed strategies and leaders. Now he insists on better leadership and he's suddenly ruthless. The ruthless ones are those who attack the President regardless of what he does.
Richard in Frisco, TX
Treated worse? I think it's wrong to consider any group receiving billions of dollars from the government as having been treated badly. The auto industry is being held far more accountable than the financial companies receiving those billions, but I consider that a good thing. Is it fair? Is it fair that my small business closed and i still make my monthly mortgage payments? Life isn't fair. I was taught that as a child and I think all those feeling they're being treated unfairly with the way they're handed billions of dollars need to learn the same lesson.
The UAW worked hard to achieve this honor. At least let them enjoy it. Raleigh NC
They are right. President Obama should have treated Wall Street like he treated the auto companies.
The Wall Street managers, VP's, and C's and the like deserve to be sent off to GITMO.
I think it's a long awaited wake up call to the auto industry, dying unions and many old time top down management to start analyzing "outside of the box". For too many years, they have done the same unproductive job, so this was needed to change the way we think. Now, maybe they will get rid of the "number crunchers" and let the "engineers" take over the leadership roles so they can start producing energy efficient and desirable cars for the future.
Absolutely they are being treated worse.
With the Bank bail-outs, Obama is plain REWARDING the CROOKS who got us INTO this mess!
And THAT is true, HOWEVER you "sugar coat' IT!
Sure the car companies are being treated worse because they have had years to change. The us auto industry has been out of touch for years with the desires of the consumer. They move as slow as the government with regard to change. after so many billions, it is time for swift, desive action. This is happening. The financial institutions were working below the radar with their fraud – give it time, they too will be treayed as scum.
It's a joke to even think otherwise; Of course they are!
While I can understand not letting Wall Street collapse; they received the Velvet glove compared to the Latex one that the Automakers did. Don't take me wrong; I can't stand the bailouts, all of these companies should have been kept in check and once they had reached X size, time for the Regulations and Laws that we're supposed to have, would have taken effect.
Problem is that we let Congress stay in their jobs for too long, they get softened by the lobbyists with the short sited profits. If Congress were to get their terms limited like the Presidency, I could see how influence would be different from the lobbying world. Looking at Alaskan Felon Ted Stevens...how does someone stay in their seat for that long? He should have been gone years ago, same holds true for all the Politicians in Washington.
Clean up Washington every 8 years from all corners of public office and we'd have a MUCH different United States.
There is a doube standard on how the white house is treating auto industry. I haven't seen AIG come with a reliable recovery plan and still is given billions of dollars in help
Despite their loses year after year, the auto industry never took heed except Ford. Therefore it is justified that out of the three only one comes out strong. Its survival of the fittest. This will give Michigan an opportunity to have another industry. Yes, it may take years.. but its necessary to let the dinausaur die so that other beings can survive. Obama is doing the right thing, by challenging the auto industry to step up or die..
Dana, Novi, MI
In my opinion there have been far too many "carrots" and not enough use of the "stick".
I find all of the jockeying for attention and whining to be ludicrous. I don't feel that the administration has gone far enough. Any company that accepts funds from the government as part of a bailout should expect tight controls on what they can do with the funds... be expected to report what they are doing regularly... and have a significant repercussion for failing to make changes. The old ways will not work.
It's all about responsibility and entitlement. We, as private citizens are never cut these breaks by these same lenders on the personal level. Our houses will still be foreclosed upon, our cars repossessed, our credit hindered as we run to Bankruptcy court for protection. Why are the rules different just because a bank or AIG chose to make bad decisions.
Let them fall. Expect them to perform. Force them to pay it back!
Yes they are being treated different. You can't take over a country and turn it into a socialist government from a republic with just a small portion of the manufacturing sector, you have to control the banks first (All the money). Then you can take the large companies first, because you'll own the debt the Manufacturers owe the banks. Then you can take the entire free market totally out, do away with it and rebuild it. Real change !!!!
I'm sitting with some old gm people drinking watching your program. They have officially declared they are voting republican in four years. The treatment of blue collars through this economic crisis has been abhorrent. The bail out has been far to generous to those already in the top 10 of our country financially. The good old boys gotsta go.
The boys with the big bucks, the Wall Street robber Barons get to write their own tickets with taxpayer dollars. AIG gets to pay out bonuses to their pampered six-figure employees, but the working class union guys have to give up pay and benefits to help save the company. The rich seem to call the shots no matter who's in the White House. Makes me want to puke. I'm a veteran, a union guy, and I've paid my own way. I've played by the rules and I'm struggling to get by When do I get my bailout, Jack?
The real issue is... should the administration have treated the carmakers and the banks equally? The carmaker issue is framed by the loss of numerous jobs. The Wall St. issue is framed by the loss of all Americans' ability to finance purchases. The car industry is nowhere if the banks are not fixed so people can finance car purchases.
That being said, what should happen? Business is meant to be Darwinian. You do not bail out banks nor car companies. Failed business models = failed businesses. That applies in all industies, including cars and banking. Chapter 11 for all of them... let the come out stronger on the other side.
You only have to look at the numbers Jack,
and then you know how it truly is with Obama.
30 Billion for Car industry almost 11 Trillion for Wallstreet
and the offshore banks.
It's the same old story – The haves (banks) get preferred treatment and the have nots(us in the middle class) get screwed. It never has felt good and it doesn't now. We should at least get kissed first.
The Big Three cooked their own goose when their CEOs breezed into Washington on private jets. They seem to be getting the "stick" more because of their visability. The Wall Street "Wunderinds" are no less guilty of arrogance but we haven't seen their faces as much. Both groups screwed up the economy as Bush slept and Uncle Dick bought gold. Time for another round of "stick" for the lot of them.
Perhaps we should go back not too long ago and look at the airline industry – companies filed bankruptcy (multiple times) without bailouts, restructured and yes, some are still here. My husband is a pilot and lost over 50% of his pension, took a significant cut in pay and benefits and now commutes to work out of another city (we can't afford to live there) and is gone 5 days a week. The auto industry employees and union representatives have had their heads in the sand. Now it's time to pull them out and negotiate contracts that work for the company as well as the employees, if it's not too late. And corporate executives need to stop the greed that also got these companies into the trouble they are in. I'm glad someone is finally saying enough is enough!
Obama is not partial to wall street. Obama has said that the bailouts given to the finance companies were approved by the previous administration and has not shown great interest to put controls on them as they were subject to litigation. But he has made it very clear that future bailouts to any group will come with strict strings attached.
It is apples and oranges. First, the auto companies had a wake up call some 30 years ago + and decided not to take the hint. Second, the financial industry was turned loose by the previous administration which led to the down fall and their downfall.
As much as it pains me, the financial institutions are needed to in order for people to buy cars from the auto car companies. Without them, they'll just be standing there twisting in the wind with nothing.
Certainly the car companies are treated differently....They don't have long time friends in the presidents cabinet. I want to add that I supported and voted for Obama, but I wonder if he is making the decisions or if he is letting Geitner and Summers do what they want to do. George Bush let Paulson have too much power and I think maybe that is what is happening here!
There is a huge double standard when it comes to the auto industry and the financial industry. It's born from the stigma that the big 3 rightfully earned over the past three decades making crap cars. Unfortunately, like all stigmas, it is hard to break. Over the past 5 years GM and Ford have started to make stylish, fuel-efficient, and reliable vehicles that are comparable with their foreign counterparts. People who don't know anything about the car industry wouldn't know that though because they refuse to give American cars a chance because of the stigma which is no longer accurate. And this proud liberal Democrat says BUY AMERICAN.
Obviously there has been harsher treatment for the auto industry vs the banking industry. However, this is due to the fact that the auto industries failure would not cause world wide financial hardship the sameway that failure in our banking industry would. Anyone with an ounce of inteligence would understand this, but to date the unions have never been accused of any intelectual thinking but instead finding a way to line their respective pockets. Unions need to take a good look at their responsiblities for where America is right now and stop pointing fingers at everyone else! Thanks to unions, we are priced out of most manufacturing markets and that is not going to change until our own thinking changes.
The question of "equal treatment" is irrelevant; is the administration supposed to handle different situations with the same approach, even when it does not make sense – as Bush did when he viewed almost every situation through the same ideological lens? The only way the auto makers are going to survive is if they are forced to make necessary changes. President Obama is using his power to give all the players ample justification to adjust to the new reality.
The difference is that the screw ups of the banks albeit odious is relatively new. On the other hand the American Auto Industry has been screwing up for decades. They have had ample time and opportunity to turn things around and they failed.
So whatever happens to Wagonor and the auto industry it's their own fault. Lastly, even now they have failed to come up with a feasible plan to save themselves and to turn the auto industry around.
Yes, they are right, that is one of the benefits of going to 4 year college . My advice? go to college and get a degree and community will respect you as well.
Maybe President Obama has some lingering bitterness toward the voters of Michigan. It started in the primaries, where it was fine with him that half their votes counted, and he didn't have his name on the ballot there either. Yes, there is a clear double standard here, Granholm is right. Good luck in Michigan in 2012 to any politician who supports this nonsense. Obama is anti-union period. First the teachers, now the autoworkers. Maybe he is just so awesome that he can do without their votes. Good luck with that.
Let's see. Years ago, Honda and Toyota came to town. The US automakers ignored them. In the recent years, they still ignored the public's buying preference for a better made, forward looking car.. Hmmmm. Then the government offered three times for them to get their act together. NOW, the UAW, the big guys of the big 3 and others wonder what happened. And the people who work for these companies weren't aware until yesterday that there was big trouble???? I'm from a big 3 company family but that doesn't change the situation. When an RN leaves her job to go on the line at an auto company because she can make much better money, what did that tell me...years ago! The ride is over. Be glad you still have a chance to regroup...all of you!
Let's not forget financial institutions make themselves rich using "other peoples money" – our money, but the auto industry produces tangible products – real people making real things. These industries are not comparable, anybody can shuffle money- and they have now proved they need massive regulation just to do that correctly – the hard working men and women in our auto industry deserve better.
p.s. (I'm jealous of Wolf's beard)
Jack The sucking noise you are hearing is the last gasp sounds coming from the autoworkers unions. Unions have managed to either bankrupt or ship overseas nearly every industry they have gotten control over. And now the taxpayers are expected to pay for the union bosses greed. Yes wall street has been treated better, but they haven't been bleeding money for the past ten years.
Has anybody noticed how the republicans were all for the wall street "giveaway", but apoplectic about the thought of one cent going to compaies where there might possibly be a benefit to woring people? Looks like the era of bi-partisanship didn't last very long. Personally I think the idea of any company being "too big to fail" is a ridiculous attempt at a big ripoff.
Until the UAW comes off its high horse and down to earth with the rest of the working class, and abandons the Wall Street attitude of entitlement then they deserve what they get. "They" are the problem with the auto industry today. Comparatively their salaries are way above the normal working class for what they do and they always want more. Wagoner was a problem for caving in to their demands and needed to be replaced just like AIG was delivered a new leader in Liddy. If they had submitted a plan for the bailout that was feasible then Wagoner would still have his job. I'm sure he's not crying right now but taking his first deep breath in years.
I don't think so, but the Issuance and Banks should have been treated the same way… Car companies need jolts like this to lower "legacy" costs. Car companies do not need to lower the hourly rate, but the benefits could be trimmed to be inline with salary employees.
well jack, i feel like Obama has been equally hard on both the auto industries and wall street. i mean the auto industries and wall street have been basically given the same amount of money to help themselves out of this disaster, its just how the heads used it, this is just the opinion of a 15 year old.
The government should have let them all fail. Let the oil industry rescue the automakers they have been in bed together for years. AIG count your blessings hopefully this country will be rid of you as well!
For years, the big three refused to consider making eco cars which Japan did and in doing so, initiated the panic mode of the big three. President Obama is calling a spade a spade. If back then GM would have listened, it would have avoided the dire straits it’s in today. GM has become its own worst enemy. President Obama is only point out to the American public the goofy decisions made by GM executives. GM top advisors are just as guilty. I say fire the whole lot and not just the head.
Who really cares other than his family and friends.
By this time next week the public will not remember his name unless you remind them.
Both wall street, the auto manufacturers and many other industries were blinded by greed, and failed to see the bubble was going to burst at some point.
We, americans, blindly went along with it too because we like our comfort.
Let's quit the blame game and focus on solutions for today and tomorrow. Simple decision-making. Collect factual information, analyze, plan and act.
But that's not sensational, is it? It's just life.
Absolutely! I am an autoworker and am tired of being beat up by everyone and their brother. For those of you who don't pay attention or have no idea what you are talking about, we do not make $70 an hour we never did, we made concessions the past few years. The UAW has not approached the members with further cuts as of yet. We stand to lose everything, pensions, healthcare etc. in a backruptcy, we know what we are up against. We are not thumbing our noses at the company and have been working together for the past few years to become profitable. See.... we realized long before Bush destroyed the country that if management doesn't have a job we don't either and visa versa. It is no longer a us against them scenario. Contrary to what you may believe many of us are college educated but it makes no difference, we work hard for our money, just as teachers and others do. They will be hiring again when the economy picks up, if you think it's so great get your resume ready and please apply to an assembly plant so we can see you cry when reality sets in.
The time has come for the big car makers to make a car that is safe, lasting and and has the ability to do better than 28 miles to the gallon. If they re- tooled their Plants with that purpose in mind lead by executives with that plan maybe, they would have a product that Americans and others around the world would buy. They have the ability , it is time, it could be the time for them if they plan properly.Think green and make a product the world needs.
Maybe GM should give out a few million dollars in bonuses to their workers, then the whitehouse will keep feeding them with stimulous money, the way they are doing it for the banks. After all what's good for the goose...well you know the rest
The Banks got off Easy. I'll tell you. The car companys fill a need, employs hundreds of thousands, and supply a product the country needs. The Banks, well they are always trying to scam the public. Just look at where the real Money went.
I didn't see Obama fire any Bankers. Rick Wagoner was certainly a scapegoat for Obama. I for one think he ran GM just fine. And GM would continue to produce great cars and trucks if the Government (Obama) just kept out of it.
So, Obama, keep your "Green Cars", and stay out of the way. Try getting the Bankers to come clean with all the corrupt Deals.
Jack, I think Obama has got it right this time. Think about it, what good will saving both industries do? If we bail out Wall Street, the bankers will be buying nothing but Mercedes and BMWs anyway.
For years the over paid, unionized auto workers have been making an inferior product. My 98 Honda Civic runs as well today as the day I drove it off the lot. I wouldn't trade it for anything made in Detroit. They can't come up with a plan to improve their industry. The wide spread greed of their union along with a lack of innovation is what's killing them. How do they expect to be treated?
Are the car companies being treated worse than the banks? Let me see. GM's CEO gets fired and at the same time fifteen of the top bank execs get a civil welcome in Washington. So the answer to the question is yes. Don't you love it when I have a profound grasp of the obvious.
The auto industry has been demonized. I used to work on the assembly line at Chrysler side by side with hardworking men and women who take pride in producing quality products; we froze in the winter and sweated in the summer, but we worked hard and we were proud. Yet Wall Street sits behind glass desks and custom made curtains. The auto industry is not the problem, but it is the solution.
Its very simple, the automotive industry may bring Pres.Obama some votes but the banks bring campaign contributions. Let us not forget his ranking in the senate with campaign contributions. He knowsnot to bite the hand that feeds him. It seems for one to work for Mr.Bush or Mr.Obama one must have been employed by one of the failing banks.
I think the business climate warrants such scrutiny. I hate to say it but aside from the jobs being lost, the implosion of the US Auto makers wouldn't be as bad as people make it out to be.
Just like most businesses they needed to learn to adapt to the changes in the very climate they found themselves in. I think we've been in the age of "high tech" for quite some time with automobiles yet only a handful of companies get it. Those that do, and you know who they are, are years ahead of the competition.
While I would feel for those people who lose pensions, benefits, and jobs. The only blame that can be placed is on a bad business model for the economic and climate issues we've been facing.
But to say that no one saw this coming is somewhat ludicrous. The US Auto Manufacturers have been falling behind for quite some time. Over seas manufacturers keep churning out more efficient quality made vehicles, KIA comes to mind.
Sad thing is I'm betting US Auto makers have had the knowledge, technology, design smarts for decades but for some reason they want a slow transition. In case they haven't noticed the American consumer is voracious in terms of gobbling up the next big thing, iphone, comes to mind. Why wait on technology that is warranted when you can produce it now, it doesn't makes sense.
So yeah, no more money for Auto Companies, that is bad business.
I did not agree with the first around of monetary relief given to the auto industry. The bases for a stable company is the ability to sell your product. If the car companies cannot sell their products, we are only buying time and wasting billions of dollars. in the recent past I purchased my first brand new vehicle. I was proud of purchasing my first american made car, but to my disappointment, it was one headache after another. Better prod
ucts sell better.
I belive that the president came down much harder on the auto makers than he did on Wall street. However if Americans would have bought American cars instead of foreign cars for the last 10 years they wouldn't have needed any bail-outs. And for those Americans out there that think Detroit doesn't make a good car it's only because they haven't bought one for quite a while. If you want to live here in the United States then buy American made products!
This attitude is typical for the auto industry workers. They go on strike when times are good and they are doing well. They think they should be doing better. They go on strike. They demand more or else. They hit a time clock to do a job. They have no overhead. They bring no tools. They stand and do a repetitious job that requires no education and very little training. They expect to be paid better than many college graduates. They are lucky they are getting any help at all. I'm a Democrat.
Of course, they are absolutely right! We need to stop this insane double standard against the people who do the real work in this country. It's not right, and it's simply not fair. Wall St. comes calling for 700 BILLION, and it's "hear ya go, no problem", but when our most important industry asks for 13 billion, it's like they asked for their first born child!
I was in the auto dealership business in the service dept. for years and noticed that when the Honda Accord was the #1 selling car the Co. decided to redesign it making it even better. Ford did the same year after year with the F150 pickup. It takes guts to take THE best selling vehicle and change it. Ford did the same taking the chance with the Mustang retro redesign and it was a success. GM has been lagging behind for decades with tired models & ideas and not much in the way of innovative technology. The new Camaro was due out but now it is too late & gas is too high. Also, most imports have been designed to be easier to repair such things as suspensions and so forth instead of having to disassemble half the car to get to some of these systems.
The auto industry deserves to be treated worse because (a) the government previously bailed out Chrysler; (b) the federal government already heavily subsidizes American car companies by requiring all FBI, ATF, DEA, Secret Service, Marshals and other federal agencies to buy only American vehicles and giving them contracts to build mail trucks; (c) people have been warning American car companies to make a more competive product and to make more fuel efficient vehicle; and (d) American car companies virtually ignored the successful model of car companies like Toyota and Honda in terms of trimming the product line instead of offering four different cars built on the same frame with different bodies and continuing to build gas guzzling SUVs.
If it were not for the greed and irresponsibility of Wall Street, the ripple affects of the credit melt down would not have decimated car sales and the car companies would not be in their current financial situation. The Wall Street idiots are given billions with no strings attached and the car companies have received loans totaling less than 0.5% of the monies given to Wall Street with all sorts of attached strings and mandates. It is not rocket scence to see the discrepancy in the treatment of the financial industry and the car industry.
Well that's a rather silly question considering we have DONATED 2 trillion dollars to the banks, (and growing) and a few measley million to the Auto Industry. This embarrassing amount that he offers the Auto Industry is just as ridiculous as him offering us $13 per week, in his tax cuts.
I find President Obama rather revolting because he thinks the banks are going to be the sole reason why we survive this soon to be depression. IF we survive until 2019 the deficit will exceed 30 trillion dollars
He doesn't care about middle class, the homeowners who have lost their homes, the over 12 million who are unemployed and have lost theirs homes, the kids and adults who are homeless, the blue collar workers. Why should he care about the Auto Industry???
If President Obama really cared about this country he would implement a plan to put 20 million people back to work by June 1, 2009. Everything else pretty much solves itself once people are working.
The employees at GM have been getting paid with taxpayers dollars. They get full pay, great benefits and can put that money into their retirement funds. Why should they gey that? What about the hradworking folks at WalMart or in the food industry? Now the yare whinning about possible layoffs? Someone needs to remind them that not many people can buy cars right now and the government does not have to keep paying them because it would be a hardship if they didn't. There are almost 6 million of us unemployed out here in alot worse shape and the government is not giving us all the pay and benefits our jobs provided. So they should not expect it either. Seems to me there were layoffs in the banking industry too and they are not getting what the auto people are right now, so shut up and take while you can because it wont be available very much longer. and dont take it all out on the union workers either, the salaried employees are all overhead and non essential. GM could save a great deal of money by cutting the salary head count by at least two thirds.
Yes Jack, they are right. Although President Obama has good intentions concerning our economic recovery,he is beginning to act just like he needed to to send a message to big companies' executives that it ain't gonna be business as usual. I wish there was a way to go back and include Wall Street and financial giants like AIG
Yes, the car companies were threatened with bankruptcy, but the banks, and particularly AIG have not. The car companies have been asked to submit plans to restructure themselves, the banks have not.
While I'm as upset as the next person that the financial services firms took on way too much risk, effectively putting us all out on a limb, let's get the facts straight. AIG's prior CEO was kicked out and the Bush administration put in a replacement CEO who now makes $1/year. The Bush and Obama administrations have both decided that it would mean too much pain to all the people complaining across America ( all the average folks) for AIG to be given 30 day marching orders or go down the tube. Why? Because AIG backs 80 million life insurance policies and over 180,000 businesses with its insurance. If it were to go down it would affect 100 million people, yep 100 million. (These are all fact checked numbers by the publishers of TIME magazine so this is not hearsay.) So who is getting bailed out here? AIG, or the life insurance policy holders and business who have paid in premiums for so long?
As for the Wall Street CEOs and banks receiving the same ouster and 30 day order before Chapter 11, if that were to happen, the S&P would be trading at 350, there would be no loans being made, the money supply would contract, we'd have deflation and a situation possibly worse then the depression of 1929-33. Rather than sit back like the Hoover administration in 1929, monetary historian's have concluded an active approach (which is what we're engaged in) is a far better approach. In the words of G. Santanyana "Those who cannot learn from history are doomed to repeat it."
It's going to be the same as the last 8 years. If you belong to the good old boys club you will be taken care of, if your a blue collar worker your the one who has to make the sacrifice. I'm sorry that I voted for him but I won't make the same mistake again next time I'm voting independent
Perhaps President Obama seems hard on US auto manufacturers because he is among the growing numbers of careful auto buyers. I've been involved in retail auto sales for over thirty years. I've watched GM, Chrysler and Ford market share decline over the years because their quality is well below Honda, Toyota and some others. Careful auto buyers will not buy a GM, Chrysler or Ford. These big three have been warned and questioned for many years by people like me and by their customers. Why can't they build a vehicle equal in quality to a Honda or Toyota? They have many excuses. (cost of labor, etc.) but Honda and Toyota and others build these better vehicles in America with American workers. I urge our government to demand GM, Chrysler and soon Ford to match the quality and prices of Honda and Toyota or let them fail. Better manufacturers will pick up the slack and provide jobs.
I think they deserve to be treated worse. The car companies have sold out to big oil for years. If they want a stimulus, why don’t they ask the oil companies?
Jack, I am 65 years old and for more than half of my life the American automobile industry has been headed south, while promising to do the right thing in the very near future ......for the last 35 years.
Our family has purchased Honda cars since 1978 and see no reason the change that practice in the future.
It is going to be tough for the US car makers to compete with foreign competition. Unless they change dramatically.
Removing Wagner from GM is the right step at this time.
The car and bank situation require different solutions!
Sure, there's a difference in their treatments, but it's like comparing the plague to a heart attack. Wrong or not, the banks played by "the rules." While the autos drank beer and smoked never addressing the repercussions of their routine.
Do Wall Street & the banks employ as many people, both in the US and overseas as the auto industry. The forced resignation of Wagoner should help quicken reform of the auto industry. If we say that President Obama is not hard with bank executives, why are some of them trying to return the TARP money.
Jack, Damm Right!!! All this crap about these bankers and executives being irreplaceable, is just that. There is NO ONE who cannot be replaced (and in this case; someone much better qualified and hopefully honest). This is just another example of the people of the U.S.A. bowing to our "supposed" Royalty. Layne A. Antioch, Il.
The auto industry is the new "step-child" with a behavior problem that President Obama wants to put in the attic.
Yes, they're right Jack. I wish there was a way the President can go back and include Wall Street and financial giants like AIG in this kind of controlled bankruptcy that is being asked of some automakers in Detroit.
I doubt an executive from any of these companies would've got any kind of bonus at all if the administration had done this with all(companies) involved.
It's time for tough love.
The union blue collar worker of the Industrial Midwest are the same working class people who were the farmers of several generations ago. The same farmers who had barn raisings, helping their neighbors. But now our government has so sold out to big business that they are making those who built this country, those who would have built your barn a hundred years ago go begging, and give up their hard-fought benefits for relatively far less money than we have shoveled at the banks. AIG alone has sucked down many times what we are now making the auto industry beg for, and where is the oversite for AIG? Instead of giving help to those who might have helped us raise our barns in the past, we are choosing to give the money to the same bankers who would have taken those barns away. We have our priorities seriously screwed up.
The government's aid to the auto industry is wholly insignificant alongside the massive sums given and still being given to wall street, banks and insurers. Despite prior misjudgments, the auto industry makes a needed product and is more deserving. Bankruptcy is a dangerous gamble. and should be avoided if at all possible.
Is this a trick question? Of course the car companies were treated worse than 'Wall Street'. The auto companies are 'blue collar', the common people, not like the bankers, the 'rich, social elite'. And you thought it would be different, that there would be 'change'? Me? I don't think any of them should have got a dime. I railed against the bail outs last years, and was litterally kicked off blogs. Oh well, good luck America.
Hey Jack, The nerve GM has to beg for help enflames me to no end,A few years back I was in a rough patch and they had no guilt taking my truck and putting me out of buisness... I say let them sink
Jack Cafferty sounds off hourly on the Situation Room on the stories crossing his radar. Now, you can check in with Jack online to see what he's thinking and weigh in with your own comments online and on TV.
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