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Automotive News & Views United Automobile Workers of America (UAW)
16705 messages, Last post on Nov 25, 2009 at 6:56 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: imidazol97 (Dec 10, 2008 12:06 pm)
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that Bankruptcy (Chapter 11, reorganization, altho also absolutely certain in a Chapter 7, liquidation) of any automaker would allow them to void their contracts... Some say that they could void contracts and debts with suppliers, but not pensions or UAW wage agreements...while I do not have personal experience with bankruptcies that big, it is my belief that while the Court MAY force them to keep pensions, I think the presumption is still on the side of the automaker...the Court cannot make you "find" money that you don't have, so if there is no money for pensions, healthcare, or whatever, I strongly think (notice how I refuse to absoluetly commit, so that if I am wrong I can weasel out of it???...ain't lawyering wunnerful???)...that the automakers can void the agreement...unlike an individual who cannot discharge student loans, alimony or child support, the corporation is still a "legal fiction", a creation of law simply by its incorporation papers...if it is dissolved due to lack of funds, how can ANY court make them honor any agreement or pay anything, if it ceases to exist??? Let's face it...the UAW has pushed the pendulum so far that the automakers cannot make any money with labor as the variable...they simply cost too much...GM should file Chapter 11, downsize by 50%, give the dumped UAW workers a smile and a handshake, and wish them well in their next job...there are too many plants, manned by too many workers, with too restrictive job descriptions, that can be reduced by 50% overnight... Fewer workers for lower market share for fewer cars...they need to dump about 50,000 UAW folks and move on with the hope of growing and expanding in the future... And kiss the union goodbye forever...
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Replying to: dallasdude1 (Dec 10, 2008 5:34 pm) Garrison has said, "the Austrian theory of the business cycles is a theory of the unsustainable boom. It is not a theory of depression per se." He then states, "The story of depression and recovery, which may involve reflation, devaluation, debt restructuring, and/or capital controls, is unique to each individual episode of each economy" (Garrison 2001, p. 120). In Austrian theory, the recession is necessary, and once it sets in and bad investments are liquidated, the economy will self-correct. After 10 years, there are still no signs of economic correction. Austrian theory recognizes that time is required for economic self-correction but that the correction can only occur if the market process is allowed to work. Rothbard (2000) summarized the Austrian policy position this way: If government wishes to alleviate, rather than aggravate, a depression, its only course is laissez-faire—to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch. Any propping up of shaky positions postpones liquidation and aggravates unsound conditions. Essentially it says that the reason that the problems with the Japanese economy continued so long is that the government didn't let bad businesses fail. In short - bailing out GM is a bad idea and will lengthen the problems in the American economy. Once again, we should learn from Japan. - In this case, from their mistakes. |
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Replying to: gagrice (Dec 10, 2008 4:13 pm) Salaried are employees at will. They don't pay dues. UAW are collective bargaining employees.
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Replying to: lokki (Dec 10, 2008 6:39 pm)
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Replying to: marsha7 (Dec 10, 2008 6:39 pm) http://books.google.com/books?id=YKusFQwuem8C&pg=PA1215&lpg=PA1215&dq=labor+agre- ement+and+bankruptcy&source=web&ots=5fgbNmaLrh&sig=j-omxVU-y7mTnO6i0hdvDp7tI8Q&h- l=en&sa=X&oi=book_result&resnum=4&ct=result |
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Replying to: dallasdude1 (Dec 10, 2008 5:39 pm) If you enjoyed the piece on Japan, perhaps you'll also like this piece, written in 2005, on Social Security reform. Social Security Reform: A Free-Market Alternative |
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In Austrian theory, the recession is necessary, and once it sets in and bad investments are liquidated, the economy will self-correct. After 10 years, there are still no signs of economic correction. Austrian theory recognizes that time is required for economic self-correction but that the correction can only occur if the market process is allowed to work. Rothbard (2000) summarized the Austrian policy position this way: If government wishes to alleviate, rather than aggravate, a depression, its only course is laissez-faire—to leave the economy alone. Only if there is no interference, direct or threatened, with prices, wage rates, and business liquidation will the necessary adjustment proceed with smooth dispatch. Any propping up of shaky positions postpones liquidation and aggravates unsound conditions The bank fails, there is a run on the bank. Since we all know that there only about a 20% reserve requirement. The govt has to fire up the presses. Good ole FDIC insurance. As unemployment reaches 25% social unrest occurs. Foreclosures increase and home prices decline due to the increase supply. We can imagine what happens on Wall Street. If the war ends the war machine adds to less demand and therefore less jobs. You are now in complete meltdown of capitalism. You certainly can't be serious, we have had this condition before. Washington is already planning public works program to lessen the hardship. Keynes explains this and since the private sector isn't going to be crowded out, deficit spending is allowable as it would be in time of war. Sitting on ones hands isn't going to make the economy recover, somebody has to fuel it. As WWII did.
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Replying to: dallasdude1 (Dec 10, 2008 5:42 pm) I don't have anything to do with them. I am not a member, but I'll bet they're still counting me as one. |
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Replying to: dallasdude1 (Dec 10, 2008 6:47 pm) I hope you are not referring to me  I have never said Japan has a superior economy (to the US), just that the US Auto companies are not being fair in blaming Japan (or imports) for their problems. In fact (and as you also point out in a separate post), Japan handled its recession in a very "inefficient" manner - Huge amount of tax money was spent in bailing out dead companies in inefficient sectors (no, it was not Autos - but banks and retailers). As a tax payer in Japan, I resented all this, and most of us cited the US model (US was lecturing Japan very loudly at that time). It is therefore disappointing to see that the US itself is now repeating the same mistakes Japan committed - more so because US was seen to be the standard bearer of modern capitalism. This is simply going to strengthen the case of socialists in Japan (which means more bad news for tax payers like me....). There are a couple of differences between Japan and US though.... 1. Japanese debt is all owned by Japanese (who have enormous savings) - So the Govt can simply continue to rob its citizens with low interest rates. In case of the US, it is owned by foreigners, which makes it a lot more unstable (the US can rob them with a massive devaluation of the USD, but that will make future borrowings very expensive, and would thus result in a very painful change of lifestyle). 2. Japan did invest a lot of money on infrastructure (i.e. it was not a direct cash handout to sick companies, but indirectly provided to them through public works) - So the infrastructure now is absolutely top class (unlike the US, which has its roads, bridges and railroads in fairly bad shape). But no, even now I do not think of Japan as the superior economy. They do well in manufacturing, but have nothing to compare with the Silicon Valley entreprenuership.
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