The Detroit “Bailout” – dnd

With the congressional hearings and press coverage there have been any number of opinions about what to do to keep US automakers afloat, or if we should. The finances involved are complex and much beyond the understanding of the sound bites presented by the press.

Despite the immense complexity of this problem, one thing is clear: the cost to US auto manufactures to produce its products is greater than the foreign competition, particularly those from Asia. What is often cited in the cost are the health care benefits promised to retirees.

I don’t have the numbers on how many of these retirees are eligible for Medicare, or the benefits they receive. I do know that each active worker’s cost contributes about $37,000 per year to pay for the retirees medical benefits. The most automated and sophisticated automotive assembly plant in the world is the Hyundai plant in Alabama. They are not impacted by these legacy health care costs. When subtracted from what Detroit auto workers make, the wages are about the same.

One does not have to be a financial genius to understand that if we had universal health care coverage it would go a long way to solve many of (though not all of) the problems of the US automotive industry, along with other US industries as well.

Universal health care coverage is not a short term solution. But it is one that is necessary for long term viability of US business in a global market.



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93 responses to “The Detroit “Bailout” – dnd

  1. It seems to me that thing that so many people refuse to accept is that sound social policy is sound economic policy. The cost benefits of universal health care is two fold, by lifting the burden of health care from the employer not only do you make American industry more competitive on the world market, but a healthy society is a productive society.

  2. dog's eye view

    Agreed, agreed, agreed.

    Got to get rid of the toxic “it’s socialism” mindset.

    Use the more accurate: “it’s good business practice and what a healthy society needs and deserves to function.”

  3. chefsheila


    I can enlighten you to what the bottom line was so we can defend these poor people.

    The Union fought and got a decent health care package for all workers at the big 3. GM was the more generous.

    But generous doesn’t mean too lavish in health care. It meant that these people were taken care of in their retirement.

    In the last 8 years, the ratio of retirees has swelled and the cost in health care has blown out of control too. Add that into the Big 3’s poor planning and out right greed, you have a Huge problem.

    Right along with the bogus “$77 an hour number, right is trying to paint the union as despicable.

    $28 an hour is not a lot to ask for and the right to keep your health care into the most important time for it, you old age is not a lot to ask for too.

    Its not the workers fault that US Auto manufacturers haven’t kept up with quality and energy requirements.

  4. chefsheila

    BTW, $28 an hour is the top tier worker….

  5. chefsheila

    Opening UAW contract ‘what has to be done’
    Union steps up to boost companies

    The UAW, which became a lightning rod last month in tense Congressional hearings over proposed assistance for Detroit’s automakers, made a bold move Wednesday to pave a smoother road for the Detroit Three.

  6. chefsheila

    So in reality, the Union gave up the “Jobs bank” and delayed payment fromt he big three to the healthcare package that was set up for retirees.

    The Jobs bank, which most Americans are unaware of, was he Union’s attempt at unemployment insurance. The State of Michigan is broke and doesn’t have unemployment insurance anymore. With a HUGE amount of unemployed workers because of layoffs, the Jobs bank would have given a little money to live on while trying to figure out what to do.

    The Union took on the payment of health care for retirees last year when the Big three had to drop the cost from their budget. This just means that no one over 65 who is retired from the Auto Industry is going to be able to continue their medical treatments. They are now in the medicare system which has been broken anyway.

  7. chefsheila

    Hey, I want you all to understand some of what is going on 😉

    Because its darned unfair for the Press to be so negative about all this.

  8. chefsheila

    SO! Blagovjevich tried to SELL Obama’s seat in the Senate…….LOL Outrageous!

  9. dog's eye view

    LA Times story yesterday on Paul Volcker and 2-3 links on Obama/economy stories.

    Paul Volcker is back, and he warns of tough times ahead,0,1657062,full.story

  10. chefsheila

    I don’t care……Republican or Democrat or Independent…..Get rid of the bad seeds and lets start all over again!

  11. This is an amazing story about Blagovjevich if it proves to be true. This will give the right wing fringe crazies a lot to cluck about!

  12. dog's eye view

    The Big 3 CEOs say: hey, we are happy to share the spotlight! Welcome, Rod B.

    What a good opportunity to throw someone under the (American made) bus and say you won’t stand for corruption (if the charges have merit; haven’t read anything yet).

  13. dog's eye view

    How nice for the Chicago Tribune to have something to report besides its own corporate woes.

    Talk about not being able to choose your parent!

  14. dnd

    It’s true:

    CHICAGO – Illinois Gov. Rod Blagojevich was arrested Tuesday on charges of conspiring to get financial benefits through his authority to appoint a U.S. senator to fill the vacancy left by Barack Obama’s election as president.

  15. dnd

    Corruption in Illinois politics? Who knew! 😉

  16. dog's eye view

    Chi Tribune breaking news on arrests of Gov. B and his aide.

    Renowned US Attorney Patrick Fitzgerald is the prosecutor.

    Includes link to story on corruption published yesterday.

    Timeline of the Blagojevich investigation:,0,2480425,print.story

  17. dog's eye view

    Brian or Sheila: blog ate my post; had 3 links to Chicago Trib stories. Plz free it. Many thanks!

  18. dog's eye view

    From Patrick Fitzgerald’s statement:

    “The breadth of corruption laid out in these charges is staggering,” U.S. Attorney Patrick Fitzgerald said in a statement.

    “They allege that Blagojevich put a ‘for sale’ sign on the naming of a United States senator; involved himself personally in pay-to-play schemes with the urgency of a salesman meeting his annual sales target; and corruptly used his office in an effort to trample editorial voices of criticism.”

    Per Chicago Tribune, second link.

  19. As you know putting too many links in a post is a problem, please be more careful in the future, thanks.

  20. dog's eye view

    Thanks Brian. Take it 2 links might be the limit? Noted.

  21. horsedooty

    so my question about the “Big Three” is, did the 3 CEO’s of the auto makers decide to petition Congress after a meeting at the local Detroit IHOP or how did they get together?

  22. chefsheila

    Doots, Its well known that all three have had regular meetings for decades. So, I’m sure that when GM starting sounding the alarm two years ago, they were trying to help each other.

    one goes, so goes the rest of them. Ford is in great shape. But they know that they are linked to the other two and will be sucked down with the ship.

    GM is the sinking ship. The financial crisis is the whirlpool they are trying to tread water in.

  23. I could go for a waffle, ihop doesn’t sound like such a bad idea right now.

  24. dnd


    Great Chicago links. Yet another reason I think Fitzgerald should have been named AG.

  25. dnd

    I wouldn’t say Ford is in “great shape.” They’re sitting on a pile of cash which will hold them over, unlike GM and Chrysler.

    The big three need to do a little head scratching (butt scratchin”?) and figure out why the Japanese and Korean’s are eating their lunch. It’s not rocket science.

  26. Ford also has a bigger presence in overseas markets than GM does.

  27. horsedooty


    Waffles may not be the IHOP specialty. The “P” in IHOP is for pancakes. They do that very well.

  28. dnd

    Ford will be making it’s new fuel efficient “global” Fiesta in Mexico.

    I’d say if they want help from the Feds, they might want to rethink that…

  29. dnd

    They have IHOPs in Manhattan?

  30. no, the closest one I know of is in Teaneck, NJ

  31. Teaneck was the second-most populous municipality in Bergen County (as of the 2000 Census), and lies at the crossroads of Interstate 95 and the eastern terminus of Interstate 80. In 1965, Teaneck became the first community in the nation with a white majority to voluntarily desegregate its public schools, after the Board of Education approved the plan by a 7-2 vote on May 13, 1964.[7][8]

    That’s pretty impressive!

  32. horsedooty

    never knew IHOP served waffles never occurred to me to ask. I go to the Waffle House when I crave waffles.

  33. horsedooty


    Just checked out the IHOP site and there are several in the Bronx and Brooklyn. There is one at w.135th and 7th (adam clayton powell jr blvd)

  34. Teaneck is fine, I’m by there at least twice a month when I take the bus to my client in Hackensack. And besides that ihop looms large in my childhood and teenage memories. I was raised in the next town. Teaneck is the big Jewish shopping area of that area.

  35. Nannymm

    Good morning!
    Brian, get a Belgian Waffle Maker. Then you can have excellent waffles any time you like. I make them alot.

    Is anyone really surprised about Blagojevich? He’s been essentially living on borrowed time, waiting everyday to see if he would be indicted. If even one tenth of the allegations about him are true, he’s going up the river for a long long time.

    Thanks, dnd, for another quality post. I agree that Universal Heathcare is a necessary component if we are to solve this financial crisis for the long tern, not just for the auto industry but for all sectors of our economy. When will we wake up and realize that our piece meal system is inadequate, inefficient, and harmful? Hopefully, Obama will get us there and do it soon.
    BTW…have you all noticed that it always seems to come back to healthcare? Whether the issue is Medicare, S-chip, the economy, veterans, etc., we always come back to the intersection of healthcare costs and availability and how it affects the issue.

  36. I have a waffle iron, I didn’t say I wanted to make a waffle, I said I wanted to eat one!

  37. dnd

    I don’t think I’ve been to an IHOP since those late nights in college. The Waffle House in Placerville, CA is perfect for a day of wine tasting at the vineyards of El Dorado county.

    But my favorite place is a local diner where they’ll put a fried egg on top of your pancakes. It’s not on the menu, but they don’t mind. Call me weird, but I prefer a fried egg to butter and syrup.

  38. Nannymm’re too funny, Brian!
    As a kid, my friends and I used to take the #7 to Flushing so we could go to IHOP. Great blueberry syrup for the pancakes!

  39. dnd

    “we always come back to the intersection of healthcare costs and availability and how it affects the issue.”

    Well stated. Unlike so many other plans, universal healthcare coverage isn’t attacking the symptom, it’s attacking the problem.

  40. horsedooty

    out in LA, there are several places called “Chicken and Waffles”. Sorta in the ghetto but never experienced any trouble. Great late night viewing of some of the finest weirdo’s in the whole LA Basin.

  41. Nannymm

    And you aren’t? LMAO!

  42. dnd

    Watching the Fitzgerald press conference, I think Obama made a mistake putting Eric Holder at AG. Assuming he’s confirmed and not seriously dinged with the involvement in the Marc Rich pardon, I think Holder will do fine. I just think Fitzgerald would be better. It’s pretty clear the guy is brilliant, non-partisan and relentless.

  43. dnd

    Try it. You’ll like it.

  44. chefsheila

    dnd, From what I gather, Fitzgerald turned down a chance to be vetted for AG.

  45. Nannymm

    Maybe Fitzgerald has no interest in a political appointment. But I do agree that he would have been an excellent pick.

  46. chefsheila

    I loved all the different syrups at IHOP when i was a girl. 😉

  47. chefsheila

    He must be on a Mission from God to clean up Chicago. He’s doing a great job.

  48. dnd

    “Fitzgerald turned down a chance to be vetted for AG”

    Where did you hear this? Your inside sources? I can’t imagine he’s not squeaky clean. I’d be surprised if he didn’t want the job.

  49. dog's eye view

    interesting re Fitzgerald turned down vetting for AG. Maybe because he wanted to be sure to finish current cases; he married for the first time not long ago and might want to stay in Chicago for now; maybe because perhaps President Obama will have more than one AG over the course of an eight-year term.

  50. dnd

    Speaking of Chicago and a mission from God:

  51. Nannymm

    I love this line, “That seal has no opinion.”
    Too bad the Bush Justice Dept. didn’t follow that.

  52. dog's eye view

    darn it. Blog just ate my post entirely. It was along lines of:

    dnd: I just erased the very same question re Fitzgerald!!

    But inquiring minds do want to know, whether the “no to vetting” is insider knowledge, was reported and not noticed, or is gossip.

    Because Fitz lives and works in Chicago; he could have been vetted and held 1:1 meetings with Obama and any principals and it might have gone unnoticed.

    Also: maybe Obama is saving him for some special prosecutor work where he needs an especially well respected leader. Like going after war profiteering, or tracing the almost $1billion allegedly missing or spent without record in Iraq, or other investigations/prosecution of malfeasance.

  53. dog's eye view

    Fitzgerald’s work on the Bl… investigation proves why you need honest and nonpartisan US attorneys.

    How many times must the door hit Bush/Cheney/Rove on the way out, hmm?

  54. chefsheila


    Still have friends and contacts….a bunch of Flies on the inside walls of the transition team.

  55. chefsheila

    And, For my knowlege. It has been well known that Fitzgerald stated in DC that he didn’t have any desire to be AG back when he was working on the probe for classified leaks.

  56. chefsheila

    When will Obama speak?

  57. dnd

    Thanks. But when your president-elect calls, most answer that request. He must really not want it for some reason.

  58. chefsheila

    It seems to me that I remember him saying that he’s not affiliated with a particular party for a reason and that is so he can be “Clean”. Fitzpatrick has felt almost like a Monk in his dedication to the Law.

    I think he’s really driven to clean up Chicago.

  59. dnd

    “It seems to me that I remember him saying that he’s not affiliated with a particular party for a reason and that is so he can be “Clean”. Fitzpatrick has felt almost like a Monk in his dedication to the Law.”

    Well how freaking perfect would that be for a post-partisan administration? Here’s a guy that would resign in protest if pressured by the administration. There’s a reason I put him in as AG for my fantasy cabinet pick.

  60. chefsheila

    He was there for mine too…..the reason I enquired to some friends. I was so frustrated. But you can’t force someone.

  61. dnd

    Can you ask your inside friends what Gore and Obama are talking about?

  62. chefsheila

    lol dnd,

    I WISH I KNEW!!!! I would love to ask, but I don’t want to kill a good thing by asking too often.

    I would LOVE to see a Climate Change Czar. Wouldn’t you?

  63. chefsheila

    Hey, Chris Cillizza feels the same way,

    Obama and the Gore-acle To Meet

    The news that President-elect Barack Obama will huddle with the man who used to be the next president of the United States — Al “The Goreacle” Gore — has set tongues a-flapping in Washington about the possibility that the former Tennessee Senator might join the new Administration in some sort of role.

    According to guidance provided by the Obama transition team, the focus of tomorrow’s meeting will be “energy and climate change and how policies in this area can stimulate the economy and create jobs.” Um, boring.

    Our understanding is that there are no plans to discuss a potential job for Gore, but a boy can dream, right?

  64. dnd

    Yeah, I’d like to see a climate change czar. But I’d prefer it to be a Republican who can emphasize that going green is good for business. I think Gore best serves as being a climate gadfly.

  65. chefsheila

    Here’s a tidbit from TPM…..Plus apparently a blurb I heard today that Rahm Emmanual seems to be the one who turned this in….

    Not sayin, just looks as if the Obama Administration turned this guy in because he tried to get a payoff from Jarrett?????

    Obama And Blagojevich: Obama’s Response?

    By Greg Sargent – December 9, 2008, 11:42AM

    Okay, here’s your Blagojevich thread. As you may have heard by now, Illinois Governor Rod Blagojevich was arrested today on charges he tried to sell or trade Obama’s Senate seat.

    According to today’s pool report, Obama canceled an FBI briefing today, perhaps because of the news, and it’s known that top Obama adviser Valerie Jarrett — a.k.a. “Senate Candidate 1,” in the indictment — is at the center of the case, though there’s no suggestion of any wrongdoing on her part. From the indictment:

    In a conversation with Harris on November 11, the charges state, Blagojevich said he knew that the President-elect wanted Senate Candidate 1 for the open seat but “they’re not willing to give me anything except appreciation. [Expletive] them.”
    In other words, the Obama team wouldn’t play. The Obama transition has yet to respond to the story or detail how much Obama and his advisers knew about the probe into the Illinois governor. A reader suggests a two-tiered response for Obama:

    1. I’d hope that Obama will issue a public request for Blago to resign without making a Senate appointment.
    2. I think one of Obama’s best personal PR moves would be to announce that he will request Patrick Fitzgerald to stay on as US Attorney in Chicago.

  66. chefsheila

    What a day for Illinois….

  67. Nannymm

    If that is true, good for Obama and Valerie Jarrett. Turning Blagojevich in was a public service and is to be commended.
    As for Fitzgerald continuing, I certainly hope so! They don’t come any better.

  68. Nannymm

    Well, that story appears to be wrong, Sheila.

    Rahm Source: Story That He Tipped Off Feds To Blago Is False

  69. chefsheila

    Thanks Nanny. You know how these things blow nowadays.

  70. Nannymm

    Sure do, Sheila. But the bottom line as far as I’m concerned is that Obama is not involved.
    Hi Brian. Did you get your waffles?

  71. nope, no waffles for me, I’m still on the “stomach cancer diet”

  72. chefsheila

    Yes, I’m really glad to see that, But the GORDO’S of the world will be foaming at the mouth now.

  73. chefsheila

    This could have been what the News was today….lol

    Obama, Gore talk climate

    According to Agence France-Presse, Mr. Obama told reporters: “All three of us are in agreement that the time for delay is over, the time for denial is over.”

    “We all believe what the scientists have been telling us for years now, that this is a matter of urgency and national security, and it has to be dealt with in a serious way. That is what I intend my administration to do,” he said.

    Obama added that efforts to halt catastrophic climate change and efforts to revitalize the faltering economy can go hand-in-hand. CNN quoted the president-elect:

    “We have the opportunity now to create jobs all across this country, to re-power America, to redesign how we use energy, to think about how we are increasing efficiency, to make our economy stronger, make us more safe, reduce our dependence on foreign oil, and make us competitive for decades to come, even as we are saving the planet,” Obama said.

  74. Nannymm

    Is the C-diff situation improving, Brian?

  75. Obama Birth Certificate Kooks In Court

    Mike Madden chronicles in Salon a day spent watching the people who believe President-Elect Barack Obama isn’t a natural born citizen because of gamma rays emanating from internet porn. It’s a story to be delighted in and savored. It’s the incredibly true tale of “dentist-slash-lawyers” and manic-depression and multiple violations of Godwin’s Law and the “press conference” they held at the National Press Club.

  76. chefsheila

    ….was GORDO There? 😉

  77. chefsheila


    “””and finished her tour-de-force presentation by saying that if Obama can claim he’s a U.S. citizen and win an election, then so could just about anyone. “””

  78. I want to make up a new bumper sticker “I voted for the long legged mack daddy”

  79. chefsheila

    this is the Stuff of “Lifetime” Movies

  80. chefsheila

    ….*sigh* Is Obama going to have to waste time deflecting this crap now?

  81. Rachel just reported that it’s being reported that it was Rahm Emanuel who dropped the dime on Gov. Blagojevich. if it proves true, cool.

  82. Rice, yogurt and banana, how lucky am I If I don’t get to eat some real food soon I’m going to go shoot up a Mexican restaurant!

  83. Nannymm

    Brian, see above, Rahm’s spokesperson denies it.

  84. Nannymm

    Just grab the enchiladas and run.

  85. I once dated a Mexican and he said something very similar.

  86. Nannymm

    Well, good night. Have a good one.

  87. chefsheila


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