Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Wheeeeeeeee Late Night Extra:

BBC NEWS | Business | US car bail-out fails in Senate

A $14bn (£9.4bn) bail-out deal for the US car industry has failed to get Senate support, raising fears of job cuts and a possible industry collapse.

Bipartisan talks on the rescue plan collapsed over Republican demands that the United Auto Workers (UAW) union agree to swift wage cuts.

The White House said the plan was American carmakers' "best chance to avoid a disorderly bankruptcy".

Bush - of all people - is now saying that it's possible some of the TARP money could be diverted to Detroit.

Maybe. Perhaps.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Dec 12th, 2008 at 04:08:18 AM EST
[ Parent ]

Markets tumble as auto bail out collapses

Equity markets across Asia tumbled on Friday as the proposed bailout for US automakers collapsed in the US Senate, wiping out the tentative signs of improved sentiment in the region and sending the dollar to a fresh 13-year low against the yen.

The Hang Seng dropped 5.5 per cent to 14,758.39, while the index of mainland Chinese shares traded in Hong Kong lost 6.8 per cent to 7,911.76. The Nikkei ended the day down 5.6 per cent at 8,235.87, while the broader Topix lost 4.2 per cent to 813.37.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Dec 12th, 2008 at 04:26:07 AM EST
[ Parent ]
I think this calls for a new tag:

[dvx's Fail-Out!TM Technology]

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Fri Dec 12th, 2008 at 04:27:04 AM EST
[ Parent ]

Detroit reeling as $14bn auto rescue fails

The high profile effort to agree legislation to lend $14bn to the US auto industry collapsed on Thursday night, leading the Bush administration to hold open the possibility that it would seek funds from its financial rescue plan instead.

Efforts to agree a deal in the US Senate ended in failure when Harry Reid, the leader of the Democratic majority, said negotiations with Senate Republicans were at an end and warned that millions of jobs were at stake as a result.

"It's over with," Mr Reid said. "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight. Millions of Americans, not only the auto workers, but people who sell cars, car dealerships [and] people who work on cars are going to be directly impacted and affected."

Both Democrats and Republicans said the sticking point was a demand to push Detroit to bring down labour costs to a par with foreign manufacturers in the US. Democrats said the move made unrealistic demands on the United Auto Workers union, while Republicans argued that no effort to restructure the industry would work without such a step.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Dec 12th, 2008 at 04:28:53 AM EST
[ Parent ]
Or Class War as it's more usually known.

What is it going to take to clear these shuffling economic corpse sniffers out of politics?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Dec 12th, 2008 at 04:56:13 AM EST
[ Parent ]
me thinks 2 1/2 million out of work in one fell swoop would be a fitting grande finale to the reign of the bushmen!

especially if they all take a bus to washington to 'have a beer' with you-know-who...

jeez, this wait for jan 20 is s-t-r-e-t-c-h-i-n-g out like a guitar string ready to....snap.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Dec 12th, 2008 at 06:48:47 AM EST
[ Parent ]
But GM and Chrysler won't just vaporize off the face of the planet. There is a certain demand for new cars, and since a big chunk of the supply is from the Detroit companies they will still have a business six months from now. It will just be a much smaller business.

Plus, car dealerships are completely independent from the car companies, so whether a given dealer can hang on or not depends on local conditions, not the total size of the manufacturer. So the dealerships won't vaporize, either.

I suspect that the executives at GM and Chrysler have already set up their golden parachute contracts so that they are protected (e.g., end-of-year bonus delivered in cash the week before bankruptcy is declared). Then it is simply a matter of reorganizing, which consists of closing perhaps half of the plants and "laying off" those workers.

After that, you just operate under "don't need to make a profit" bankruptcy rules for three or four years, taking down any possibility of profit by the other manufacturers--just as has happened in the air transport industry that also has excess capacity.

by asdf on Fri Dec 12th, 2008 at 09:22:29 AM EST
[ Parent ]
oh, i agree totally, there is no reason on god's green earth why these companies could not start turning healthy profits within a few short years, but you'd have to give the CEO position to Devilstower, lol!

meanwhile back at the SUV ranch...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Dec 12th, 2008 at 10:17:47 AM EST
[ Parent ]

Display:

Occasional Series