Thursday, November 20, 2008

Economics--Auto Bailout Questions

After reading the article "Auto Bailout Aimed at Unions, not Companies," please answer the following three questions by commenting below:

1. In what way did the author best prove her point that the unions are the major recipient of the proposed auto bailout?

2. In your opinion, is it the union's fault for asking for high demands concerning health care and pensions or the automakers' fault for agreeing to those demands? Answer in a sentence or two.

3. Are unions a necessary tool in 2008? Or, have conditions and wages reached a fair point for workers, thus leaving unions a relic of the past?


Responses are due by Monday at 8:00 AM. Be sure to put your first name and last initial on your answer (ex: Bobby J.).

26 comments:

Nicole H said...

1. The author explains that the unions are charging 9% interest while the government is charging 5% interest. Thus, the unions are making much more than the government.
2. It is the automakers fault for agreeing to health care and pension increases. Anyone can ask for something but the opposing party doesn't have to say yes.
3. I believe unions are still necessary in 2008. Without unions, workers would not receive fair wages and they would be working in horrible conditions.

Anonymous said...

1.)In the article the author points out that that GM owes the fund 1.7 Billion Dollars. The union also charges 9% interest as opposed to the governments 5%. It says that even if the company gets a loan, the first payment will have to go to the fund rather than the company itself.
2.)I think it is the companies fault for agreeing to it. At that point in time they obviously didn't foresee the struggles that they are facing now so they quickly agreed to a very high demand and interest from the union.
3.)I think that unions are not necessary for 2008. This is because companies have made wages fair and the working conditions a lot better. Unions just cause problems for companies with all the boycotting and striking that they cause.

Anonymous said...

Danny B.
1. The automakers already have fuel efficient cars and hybrids. U S consumers can already finance the the car loans. The bailout is about the UAW.
2. It is natural for a union to want the best for their employees. The big three should not have caved in so easily years ago. the UAW has negotiated the company out of business. Poor choices by the automakers.
3. Getting rid of unions would put the trust in the owners hands. The reality is that some owners would abuse the relatively powerless workers while there are some ethical owners who would keep conditions the same. Unions however have become too powerful and greedy themselves. Unions should protect workers, not start wars for them. (Like the Jedi Knights, not soldiers but gaurdians of the peace.)

Graham W said...

1) The bailout is aimed at the union because of union workers retirement funds. If the automakers were to go bankrupt, the union workers may never receive the benefits that they were promised. This is proven by the fact that GM owes $34 billion dollars in cash and stock to the trust fund. If they receive money, this is the first place it is going.
2) There is no doubt in my mind that it is the automakers fault for agreeing to the unions demands. If the automakers were aware of the purpose of unions in the first place, then maybe they would see that they want more and more money and do not care what happens to the company as long as it is there for their taking.
3) Unions are not a necessity in the 21 century. Working conditions in the US are constantly under a close watch by a plethora of organizations thus eliminating the need for unions. In terms of wages, it goes like this. If the UAW had been eliminated a long time ago, the big three may not be in the situation that they are today. For this reason, there would not be a need for a bailout or the possibility of massive job loss. I don’t know about those UAW people, but for me I would rather have a job than have a few cent raise.

Anonymous said...

1. The author points out that the loans are not linked to fuel efficiency and international competitiveness because the Big Three have fuel efficent cars that people buy, like the Chevy Aveo and Ford Escape Hybrid. It is linked to the UAW because the Big Three need the money to pay back the trust fund.

2. It is the union's fault for asking such high demands. The automakers had to comply or else the union could go on strike.

3. I think unions are a relic of the past. Conditions are fine today in America and wages have become fair enough. All unions do is ask companies for ridiculous demands.

Anonymous said...

1) The "Big Three" owe ridiculous sums of money to the UAW at a greater interest rate than they would owe the government, were they to receive the bailout package. The author of the article argues that there were no loans to assist the employees laid off from Lehman Brothers, Bear Stearns, and Citigroup.
2) Unions are always asking for improved conditions, benefits, etc. It's what they do. It is the fault of the automakers for agreeing to terms that they are now unable to honor.
3) I think unions are definitely necessary now; they will always be necessary. Without unions, companies would be free to hire and dismiss employees based on the willingness of these employees to agree to poor wages and working conditions. Unions make powerful statements that people simply can't make by themselves.

Anonymous said...

1. The author talked about how the UAW granted the automakers to defer their VEBA payments, but they are getting very antsy for their money now. Also, the UAW is charging the automakers a 9% interest rate while the government is only charging them a 5% interest rate.

2. I think it is the automakers fault for agreeing to the high demands of the union. If something is proposed to you, you don't always have to agree with it; you can compromise and find some type of equilibrium.

3. I believe unions are a necessary tool in 2008. I mean in this situation here with the UAW allowing their VEBA payments to be deferred, they are currently being ripped off. Yes, they might have asked for some excessive benefits for health care and pensions, but regardless, when you commit to something, you can't just back out of it or try to stay away from it. In other words, I think unions are necessary in order for the workers to be treated fairly.

Anonymous said...

1.The author best proved her point that the unions are the major recipients of the proposed auto bailout because they are the ones making more money than the government. The unions are charging 9% interest while the government is only charging 5%. Also, they are the best recipients because the loans aren’t connected to fuel efficiency but to the UAW because of the need to pay back the trust fund.

2.I think it is the automaker’s fault for agreeing to the high demands of the union’s pertaining to health care ad pensions. It is the automaker’s fault for agreeing to these demands without negotiating even when they know unions are only fighting for their own personal benefits.

3.Unions are still necessary tools in 2008. Although conditions and wages have reached a fair point for workers, unions are not relics of the past. Unions will always be needed to ensure the security and well being of workers and to make sure power is used fairly within companies.

Anonymous said...

1. The author proved her point by pointing out how much money the Big Three owe the trust fund. Not only that, but the interest rate of the fund is almost twice that of the government.

2. I think it is the automakers fault for agreeing to the union’s demands. Unions are going to try and get as much as they can out of companies, so it’s natural that they’re going to ask for more than they need.

3. I think unions are still necessary in 2008. While conditions and wages are fair now, unions are needed to keep companied in check. If we got rid of them, companies would then be able to treat their workers however they wanted.

Anonymous said...

1. If the Big Three were to receive the bailout that they're after, the money would be used to pay into the retiree benefit program that the UAW mandates. The Big Three, in total, are going to need to come up with $60 billion in cash and stock for the benefit programs.

2. Both the UAW and the automakers are responsible for the mess that they're in. The UAW's demands have been ridiculous, especially relative to the benefits foreign automotive workers receive. On the other hand, the automakers should have known that they'd never be able to realistically cover these costs.

3. I believe unions are still necessary to check the power of corporations, but we see problems when there are no institutions to check the power of unions. When a single union destroys the international competitiveness of an entire industry, they are inadvertently harming the workers that they're trying to protect in the first place. There ought to be a balance of power between industry and union--not unlimited power for unions.

Anonymous said...

1. The author proves her point that unions are the major recipient of the proposed auto bailout. Together the Big Three owe $60 billion to the trust fund. They already have hybrids and fuel efficient cars. If the government gives them the proposed $25 billion loan, then the first payment would have to go to the union. They need to pay back the money they owe.
2. It is the automakers fault. They were experiencing an economic high and therefore, gave into their workers' demands. Now they have to pay the price.
3. Unions are not necessary in 2008. The point of the union is to protect workers. However, workers no longer have to give as great of an effort. They are given a certain amount of money because it is guaranteed by their union rathan than because their work ethic. A person gets what they put into something. Minimal work should equal minimum pay. Also workers are actually losing money when they enter unions. They have pay money to the union from the paycheck. Conditions have reached a point where unions are no longer needed. Unions are used in a great deal of companies, and they are doing just fine.

Anonymous said...

1. She explains that the Unions are charging a 9% interest, while the government is only charging 5%. Therefore, the Unions are requiring the companies pay almost double what the government is requiring.

2. In my opinion, it is all the companies fault for agreeing to the pension and health care increases. All they had to do was say no and there wouldn't have been a problem.

3. I think unions will always be a necessary part of the economy. No matter how far into the future someone looks, there will always be greedy people looking for more and they will take wages away from the little guys in order to get them. That is why I think Unions should remain in our society today.

Anonymous said...

1. The unions are making substantially more money. The reason being, it is stated that the unions are charging 9% interest and the government is only charging 5% interest. Therefore, the unions are making more money.

2. The automakers are at fault. They are at fault because they agreed to terms that had the possibility of not working.

3. I believe unions are not necessary. The reason being, they are basically a type of colt. Further, they cause problems in the economy by demanding unfair things.

Anonymous said...

1. The author best proves her point by showing that the government is charging 5% interest while the union charges 9%. This shows that the union makes more money than the government.

2. It is the automakers fault because they did not have to agree to the high demands of the union.

3. I think that in 2008 there is no need for a union. Basically every company gives fair wages and good working conditions. If there was a company that would not offer good working conditions the media would then do a story on the company and ruin its reputation. In today's society the people would keep the company in line witout a union.

Anonymous said...

1. The author proves her point by citing the facts about interest rates. Because unions are charging a 9% interest rate as opposed to the government’s 5%, the union profit is much greater.

2. It is the automakers’ faults for agreeing to such high demands. It is understandable that they had to meet some union demands to avoid prolonged strikes, but the companies should have negotiated a more reasonable settlement.

3. I don’t think unions are a necessity. I think our country has reached a point with fair labor ethics and government regulations that puts us in a position to eliminate unions.

Joe Orf said...

1. The author states that GM, Chrystler, and Ford collectively owe 60 billions dollars in payment to the trust fund. on top of that after 2010 GM will have a 9% intrest rate on the 5.3 billion dollars stillowed to the trust fund.
2.It is the faultof the automakers. Just because an idea is proposed to them does not mean that they have to accept it. They bit off more than they can chew.
3. Wages and beneftis have not yet reached a point where unions are no longer needed. People across the nation are getting paid unliveable wages. With the help of unions these workers have a chance of hoepfully increasing pay and if needed work conditions.

Anonymous said...

1. The strongest point the the Author makes is the comments saying that the whole reason the companies are in debt is becasue they cannot afford the bennifits for the union workers.
2. It is 100% the unions fault, they continued to take from the auto makers till there was nothing left. If they had been more careful with their demands then they would be facing this problem.
3. I dont think that they are neccisary. There are enough laws to make sure that workers are treated fairly and paid good wages. Not to metion with out union the auto companys would be having problems now.

Anonymous said...

1. The author best proved her point that a loan to the Big Three from the U.S. government would first go to the UAW, by showing the amount the Big Three owes to the UAW: $60 billion.
2. It is the union’s fault for asking for such high demands during an economic crisis in this country. The union should not be forcing the automakers to pay their dues to the pensions with the proposed bailout money at a time when the automakers may be facing bankruptcy. The unions are ruining the automakers chances of getting a loan from the U.S. government.
3. Unions are a necessary tool for 2008, and will be a necessary tool until healthcare is more easily available and more affordable to all workers in this country. However, in terms of negotiating for wages and working conditions, the unions are a relic of the past.

Anonymous said...

1) se proves here point by showing the fact the union's have a 4% higher intrest rate than the government.

2) I think it is the union's fault they new that car companies need workers so the exploited them for extreme benefits.

3) Yes I do belive unions are a thing of the past. They were created to secure safe work conditions and resonable wages. In our society those things are always met so unions just cause more problems than they fix.

Anonymous said...

1. The author best proved her point by presenting the fact that Chrysler, Ford, and GM together owe $60 billion in payments to the trust fund. The unions have fought their way to get these employee and retiree benefits and it has caused this problem that the big three face today. It is why they need a bailout.
2. I think it is the union's fault for demanding these high demands. They were selfish and the automakers were just trying to do whatg they are supposed to do.
3. I think that today the United States is advance enough that we have grown out of the need for unions. Unions are for hanging grossly unfair working conditions and wages that only occured in the past. Now the country's problem is just making sure everyone has a job in the first place.

Anonymous said...

1. The author claimed that if the auto makers file for bankrupcy before the UAW gets its funds then all bets are off. This means that the retired workers that once made these automakers possible will go without getting any money for awhile and workers healthcare will bge subpar. The company needs to give the automakers money so that the automakers can pay their union dues to UAW.
2. I think it is the automakers fault for agreeing to it. What company can possibly pay four and a half billion dollars a year for health care for workers. That is nearly ten percent of the companies total revenue a year.
3. Unions are totally necessary for the American worker. It is what makes the worker more powerful than himself in raising wages and getting health benefits. All of these things are necessary for the workers to survive in today's economy.

Anonymous said...

1. The author best proves her point by explaining that the Big Three need to pay back a huge sum of money. She also mentions that we have fuel efficient cars that are being bought and that the unions are charging 4% more interest than the government.
2. I think it is the unions fault for asking for these things. If they ask for such benefits and then the company decides not to give them it the company is at a huge risk of loosing many employers.
3. Unions are definitely needed even in 2008. There are so many jobs and people that are not getting paid fairly or the benefits they deserve. Without unions workers would have close to no say in all the financial and important aspects of their job.

luke l said...

1) The UAW, or United Auto Workers, would recieve most of the benefits of the auto bailout. The auto companies must pay the money they owe to the UAW fund for retirees benefits before they pay back the loans from the government. The UAW is charging GM 9% interest on their defaulted payments, whereas the government is charging GM 5% for their loan. Thus, the union is actually reaping the benefits of the bailout more that the government is.
2) It is absolutely the automakers fault for agreeing to increased health care and pensions. The companies' front offices were being soft. The workers are either going to work for you at low benefits or be unemployed because there isn't much else in terms of low-skill work in Michigan. The auto makers should have been brave enough to clash with the UAW head on instead of making concessions to them.
3) Unions are no longer necessary. I believe that companies will treat their workers somewhat fairly. Unions take advantage of their position and use propoganda against companies if they are not getting what they want, which is BS. Companies will treat their workers just fine in contemporary society because the CEO's are much more aware of moral standards today.

Anonymous said...

1.The union charges a nine percent interest where as the government is charging five percent interest. The union is also demanding that payments be made to them first.

2. Blame should not be given to either the unions nor the auto companies. It is natural for people to want health care(a human right) and to be cared for in retirement. The automakers are forced to agree because of the threat of worker strike.

3.Given the goals of unions, they are not completely necessary as their demands will be met in president elect Obama's agenda. Also wages are reaching a fair amount, if not already met. However the threat of a union poses a healthy check.

Anonymous said...

1. The author proves her point because she says that the auto companies have to pay higher interest rates to the unions than the government. She also proves her point because she mentions how the auto companies need money to pay for the health benefits of retirees.

2. I think that it is the automakers fault for giving in to the demands of the unions so easily. This is because people/unions are always going to want the best benefits and then they will want more.

3. I do think that unions are still necessary to ensure fair wages because some owners would take advantage of workers and pay them low wages or decide to outsource the labor.

Anonymous said...

1. The author talks about how the unions will recieve more money than the government would, and that if the company goes bankrupt, the unions will be very mad.
2. I think that is is the automakers fault for giving into the demands of the unions, and now they have to pay for it.
3. I think unions are not necessary today. Companies have good working conditions and fair wages now, all unions do now are just hurting companies.