The Brian Sullivan Blog
  • November 13, 2008 04:03 PM EST by Brian Sullivan

    Motor City Wants Its Bailout, Too

    Hard hit Detroit is looking for money from the Federal government.   Not the Detroit-based automakers, but the city itself.

    From the Detroit Free-Press...

    The Detroit City Council passed a resolution today calling for a $10 billion bailout for the city of Detroit.

    Council President Pro Tem JoAnn Watson sponsored the resolution to use the money for public service employment, to fund mass transit plans and to place a moratorium on home foreclosures for two years.

    Full story here.

    I wrote about this back on July 24th, only half joking when I said we should "bail out Michigan."   With so much exposure to the hurting U.S. auto industry Detroit's situation is dire.    And here's the even sadder part of the story: there is a huge need for talented, hard working autoworkers at new plants in the South.   I'm sure Toyota, Hyundai, BMW et al. would love to have some of the experienced people from Michigan.  The problem is that while the worker may be able to get hired, how can they move if they can't sell their house?   Ultimately many of the out of work autoworkers may be, in a sense, stuck in Michigan.

    Instead of throwing money at a problem that's not going away anytime soon, perhaps we need to find real solutions to match up good workers with good companies in different areas.

Bud Keeler

Having been a union member followed by a member of management I can tell you it is quite simple, unions are like children - always pushing for more and management has been like poor parents, unwilling to draw the line and listen to the children rant and rave. Tough love is needed, but it will not come from the $ driven politicians in D C. A good bankruptcy can sort it out, we do not need much production fight now anyway. If they must give away $50B guve ut to car buyers, individuals only, $8,000 tax credit, refund or outright gift. No strings, if they want an foreign-american car OK, if they want an US-Mex-Can car OK too. But let the consumer vote. With $8000. down I bet a car loan will not be hard to find. Those of us not in the new car market will be able to get a good, recent, model used car at a good price

November 15, 2008 at 12:10 pm

Dennis

For all the bleeding hearts out there that think we should bail these loser's out How about the 17 to 20 million that GM spends a year for Viagra for the auto workers? that is GM alone!and not Ford or Chrysler added on! OH!lets don't forget those job banks that the union dose not like to talk about,paying 1000's not to work and getting up to 100% of their pay.This alone has cost the auto companys billion's,all this is passed on to the person that is buying a car that the UAW has built.Most Americans don't have a clue this is going on, this is just not right.Anyone can do a search on Google and get more info then thay can stand on these subjects,take these issues plus all the other problems and it is time to suck it up Detroit and pay for your sins!!!

November 14, 2008 at 2:40 pm

Leslie Opp

They should not receive any tax payer dollars because parts of the company are not in the U.S. They spent all those years outsourcing to improve the bottom line instead of actually fixing what was wrong with the company and they now expect US tax payers to bail them out! Incredulous! I say hell no!

November 14, 2008 at 1:59 pm

Henry

One of the biggest problems is the cost of providing health benefits to both current and retired employees. These plans are too rich and too expensive. No one should get "free, no cost" health insurance. Everyone should have to pay something. No one should be able to have any medical procedure or visit and not have to pay. People should not be able to have a five dollar co pay. Having employees and retirees pay a portion of health insurance costs and a reasonable co pay - such as 15 or 20 percent should not be burdensom as long as there is protection against catastrophic protection is provided. Having everyone participate in costs will make all of us use the system more widely and be fair to everyone in the long run. Henry

November 14, 2008 at 1:22 pm

joe campbell

Mo Voter, I could not have said it better. I was wondering if I was the only one who felt this way. Thank You, Thank You, Thank You.from a different Joe.

November 14, 2008 at 12:51 pm

Grant

Joe, you missed it just barely. In a perfect world fuel would be cheap and never run out. Arab states don't set the oil price. Oil sells for what anyone is willing to pay. Auction style. That life saving pill that cost a half cent is Aspirin. Payroll alone at a local drug manufacturer is about 28 million a year. Our non-union employees are some of the best compensated in the region and guess what! We are still hiring! It can take 5 years or more for a drug to go from discovery to full scale production. It's expensive. As for the J.D. Power statement. That is a half-truth depending on the model. There is no foriegn equal to a Hummer, F-250 or 350, Chevrolet 2500 or 3500, Ram 2500 or 3500, Expedition, Excursion, Suburban, Escalade or any other gas guzzler I forgot to mention. I'm not even sure why I call them foriegn auto-makers. Americans make the here! Also if I'm not mistaken Toyota outsold GM 3 consecutive quarters before the financial meltdown. Try this slogan on. Union Yes! Union Proud! Union Unemployed! Because thats where it all leads. I can't wait for the big 3 to dump the rest of their unfunded pension plan (that unions demanded) onto the taxpayes. I know Union members pay taxes too, but it's kind of difficult to pay taxes when you're out of work.

November 14, 2008 at 12:42 pm

Mo Voter

Joe, Greed is the problem, the greed of UNION autoworkers who now want all of their goodies on the backs of the taxpayers. Unions have outlived their usefullness, and the big three automakers are one of the best examples why. Pushing a button, or turning a bolt are not worth $40+ an hour plus benefits. You union thugs are going to have to get over yourselves and live in the 21st century. The way I see it, UAW workers can either get rid of the union and the associated costs or they can be unemployed and unemployable. You have to face the facts, having pushed a button or turned a bolt for a living doesn't qualify you to do much else. You can either coninue to work as a non-union employee with a REASONABLE wage, go back to scholl and actually learn how to do something other than complain, or be unemployed. Your choice, as a taxpayer I don't want to support you, and neither does most of the rest of the country.

November 14, 2008 at 12:08 pm

Jim C

Larry, is right. The airlines are next. The governement should stop getting involved with private industry. Another $25 billion to the auto industry will pay to union workers employed, even though there's nothing to build. What happens when they blow through that money? Now, cities such as Philadelphia and Detroit are asking for bailouts too. What is wrong with this picture? Let's start by cutting the salaries of Congress and have them pay for healthcare out of their own salary. If they want to earn a living spending other peoples money, mayben they need to remember what it's like to struggle to make ends meet.

November 14, 2008 at 11:33 am

Joe

I must commend Business Organizations and FoxNews in thier accomplishment in reinforcing this false belief that unions are the culprit in the Big 3's extensive losses. And even sadder that workers in non-union shops, working for these imported car companies; Toyota, Honda, Nissan etc., are so broken down mentally and physically; over-worked, 15 minute breaks, less pay in which they have to find a second job to catch up with rising food costs, fuel cost, minimal medical coverage, etc., etc., etc., are taking up the torch; while the CEO's of these companies are laughing to the bank with the profit's they've made on the backs of American Citizens - is a testament as to how DUMB and GULLIBLE people really are in this country.In fact, they do not take into account the PHARMACEUTICAL COMPANIES making a life saving pill that cost 1/2 a cent to produce and charge $20.00 to $100.00 to the US PUBLIC. Yet they sell to other countries for half to one-third the cost that AMERICANS have to pay. They (Those against Unions) do not discuss the MEDICAL BENEFITS the BIG 3 pay; PREMIUMS have risen because hospitals raised their prices for half-hazard care. Increased premiums? you would think that these hospitals would get a 5 star rating for service and bed-side manner...NOT!! Fuel cost? OIL COMPANIES raked in BILLIONS IN PROFITS, while American Citizens in Union and Non-Union shops had to get a second job just to cover the cost of fuel. Let's not forget the rise in FOOD COST's which is a result of the rise in FUEL COST's. Hey, if it get's shipped in a semi-truck you'll gonna pay more. Let's not forget about the TRUCKER's; God Bless Them, without them you wouldn't have clothes, food, computers, tv's and every little item in your house - some of whom parked their rigs because of rising fuel costs. AND LET'S NOT FORGET OUR MIDDLE EASTERN FRIENDS (FOES) who cut oil production so that the price of oil can remain high. BUT WE SHOWED THEM, WE CUT BACK ON OUR TRAVELING SO IT CAUSED THEM TO LOWER THE PRICE OF OIL BECAUSE DEMAND WAS DOWN. BANK'S DON'T WANT TO LOAN MONEY OUT SO YOU CAN BUY A NEW CAR; CREDIT CRUNCH = NO LOAN FOR A HOUSE, CAR AND EVERYTHING ELSE. OH! OH! OH! STOP THE PRESS'S LET'S NOT FORGET THE PROPOGANDA WAR THAT JAPANESE AUTOMAKERS, NON-UNION WORKERS, BUSINESS'S, AND REPUBLICAN'S HAVE WAGED IN PREACHING THIS INSANITY THAT IMPORTED CARS ARE BETTER IN QUALITY, WHEN JD POWERS AND ASSOCIATES HAVE SAID OTHERWISE IN WHICH AMERICAN CARS WERE BETTER IN QUALITY THEN JAPANESE IMPORTS. THE BIG 3's FAILURE IS A DIRECT RESULT OF RISING FUEL COST'S (oil companies and middle eastern saudi king's), RISING HEALTH CARE COST'S (Pharmaceutical companies, Health Insurance companies, hospital's inflating price's on services), FOOD COST's (the result of fuel cost's), BANK'S (not extending credit for car loans) and of course the PROPAGANDA WAR that Business, Republican's and Non-Union workers have waged in preaching that Unionism is the culprit rather than looking at the TRUE BIG PICTURE in this GLOBAL MESS...GREED.

November 14, 2008 at 11:31 am

Vincent Scarafino

I find it incredible that the government has provided GE with such a large level of help and is not willing to do anything for GM. The transplant companies you reference provide only assembly jobs and the profits go to foreign companies, exacerbating our balance of payments problems. I don't believe any of these southern plants have significant job openings at this time. Some are in danger of being closed.

November 14, 2008 at 10:29 am

Shawn

When you hear Washington say we can't let the big 3 fail then that should be a signal that they should fail.Let them file chapter 11 and get out of the strangle hold of the unions and poor managers. We do need a American car BUILT in America but it has to be done SMART. Why should we spend more tax payer dollars on more government programs that in the end do nothing to really boost the nations economy. Who needs mass transit if you don't have jobs to transit to. Your football, hockey and basketball teams can only employ so many.

November 14, 2008 at 10:22 am

Larry

Thomas, Is it the union's fault that the managers of the automakers are so inept? Your post blames management for not being able to manage. These are the same managers that signed the union contracts. These automakers need dependable workers and made them a promise that if they worked hard they would get a retirement. Now when it comes time to keep the promise, the CEOs are more than willing to take bonuses but not fulfill their obligation to the people who make the product. Also, if you looked at an Org. chart of the big 3 there are probably (for want of a better analogy) too many chiefs and not enough indians. I really like the financial institutions comments in DC yesterday; "Oh, we won't use bailout money to pay bonuses." You have go to be kidding! These criminals get bonuses on our dime while they pass out pink slips to the front line workers. If you want to place blame, look in the mirror. Do you have that 52" plazma, or the latest version of the iPhone? How about that new crossover SUV? We all want cheap stuff but we don't want to pay for it. If we are going to embrace socialism, let us nationalize the airlines, rail, shipping, etc. It has to stop. Look how well it worked with the Post Office. Larry

November 14, 2008 at 9:59 am

michael defrancesco

I'd say before any more dollars from Feds, management and unions have to come to a solution for the long term. It might be structured so that those union workers within five years of retirement are protected as is; there is a point when the "30 and out" has to go the way of the old cars; pension's have to convert to 401K's and contributions from the company should be basic, and above that level have to be tied to the company performance. If management and unions won't talk or won't agree, let the companies fall into bankruptcy and force a major restructuring.

November 14, 2008 at 9:34 am

Don Tremaine

It's not so much the motor companies as it is for the UAW union. Detroit his a giant machine that can not spin on a dime. This same thing during Detroit down in the 790s when the first gas crunch came. The federal government made too many mandates on them. It takes these guys about 10 years to turn a design. They build what was selling, trucks and SUVs. Whenever there is such a radical change in the demand , Detroit can not respond. GM has been building awsome vehicles for quite some time. Americans went to the Japanese cars in the 70s when Detroit was struggling to put out more economic vehicles, and never went back. Don

November 14, 2008 at 9:30 am

ed

Please learn grammar: its, not it's

November 14, 2008 at 9:08 am

6ftrabbit

The Southern States have enough out of work people, thank you. We convinced Nissan et al, to build here to provide jobs for our own people, not to draw more people from other states.

November 14, 2008 at 9:01 am

Blake

The automakers, like any number of other American industries, needs to figure out a way to shrink gracefully. They are bloated from the bottom janitorial staff to the hallowed halls on the top floor of the corporate headquarters. Not too long ago, these industries were fierce competitors with an eye on making money and innnovating into the future. There is a lot of blame to go around but two things are quite obvious: 1. Top officials have been consistently useless and stale 2. Unions have been blind to the obvious So what now? A bailout will not save the Big 3. The only way to get the American automakers back on track is assistance with gracefully downsizing. If we do throw taxpayer money at these operations, then I submit that the only real way to do it is with a non-partisan funding board (with no representatives from the companies and very little from the Federal Government). The board dispensing the funds should be average Americans who in no way are associated with the industry. The American automakers are blind to reality. The unions are blind and so are the top officials and CEOs. They have no idea what they are doing. Do not be fooled by a "pedigree" America. The fact that someone worked in the industry for 25 years and has a degree from Harvard or another Ivy League school means nothing. In fact, all it means is that they were probably born with money and are even further blind to reality. They have too many plants, too many liabilities, too many models, too little initiative, too many dreams, very little fire in their bellies, and a "whoa is me" mentality. What the heck Detroit? Downsizing takes a lot less money they they would lead you to believe. All it takes is decisive, hard-nosed decision-making. Make the damn decision and move forward. Break the union contacts you need to (consequences be damned) and fire about 75% of all top management. What do you have to lose? You are going down like an out-of-control train anyhow! Everyone already knows that another $50 billion (or even $250 billion) is not going to turn anything around. Detroit cannot fix what ails with money alone.

November 14, 2008 at 8:48 am

jeff saturday

When are these stimulus checks and bailouts going to start coming with a warning ? If your stimulus check lasts longer than four hours , seek immediate medical attention. Ask your congressman if you are irresponsible enough to want a stimulus check or a bailout. If you are responsible , stimulus checks and bailouts may cause nausea and vomiting.

November 14, 2008 at 8:47 am

dublin_king

The culture between the big 3 and the Nissan, Honda or Toyota is very much different. Transplant companies like Nissan, Honda and Toyota do not embrase the Union and work out of company loyality and the possibility of end of year bonuses. The work environment and atomsphere is amazingly different. I'm sure the economic crunch has hurt them as well, but to take a chance on bringing in prior union workers that has not helped the impression of failing American auto companies through high wages and hugh debt is not appealing. Don't fool yourself, the door is not open and arms wide for the UAW in this environment. Just my observation.

November 14, 2008 at 7:43 am

Larry

I have an idea. How about we take all the stock and bonus money that the execs of the automakers have and put it in a fund to keep the workers in their houses. It was the execs that got the companies to this situation in the first place. Then if there is a need for more money to help the workers pay their bills until the auto industry gets back on it's feet, the Wall St firms that got some of the bail out money can contribute as well. Seriously, when will this socialism stop. Are we going to nationalize all the industries. You know the airlines are just around the corner with their hands out too......

November 13, 2008 at 9:20 pm

Chimpanzee #47

Right Right BEFORE the insurance sector, the US cities pre-Christmas bankruptcy filings. I didn't see this coming entirely. 2 years ago I ran into some neat data on bankruptcy and US cities. But this is interesting. Detroit is looking for a means to support itself AND jobs. Wow. Detroit looks more fragile than Dubai right now it seems. And that's strange.

November 13, 2008 at 6:10 pm

paul

Will? All the"Councillor's", without exception"! take a "25% Reduction" in "Salaries & Expense's" in Return?

November 13, 2008 at 5:26 pm

thomas adair

No bailouts for the carmakers, and here is why; 1. Bad management and a failure to change as the market for their products has changed has been the ruin of them. 2. Unions are a ball and chain around the neck of the big 3. As long as the big 3 have unions weighing them down they will continue to flounder. 3. They have already recieved 25 billion and that wasn't enough. Will they be back in 2 months wanting us, the taxpayers, to pay for their mismanagement all over again? I think they need to do a pre-cooked bankruptcy. It keep the majority of the workers working, itwould allow them to reorganize, get rid of some of the baggage they are currently carrying, and become profitable. It worked for the airlines so why wouldn't it work for the carmakers? The way i see it, they can go the bankruptcy route and keep Detroit working, or they can all be out of work in 3 to 6 months.

November 13, 2008 at 5:14 pm

about this blog

  • Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block. Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.

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