Here's how I think the Auto bailout will go

[doc03]

The model is already in place,(the steel industry back in 2002-3). Back then the steel industry was in similar condition. Here is what they did, the companies agreed to consolidate, shut down over-capacity and outdated plants. The Union's pensions were dumpped on the Pension Benefit Guarantee Corporation and a VEBA plan was set up to administer retiree health insurance.
I think they will make GM and Chrysler merge. I would expect them to eliminate the GMC truck line and maybe Buick or Pontiac and eliminate a lot of Chrysler models also maybe sell some of their foreign interests. The Union will have to give up their pensions to the PBGC. Below is a link showing the PBGC maximum monthly pension payments. I think the Big 3 already has a VEBA plan set up under their last contract.

http://www.pbgc.gov/workers-retirees/benefits-information/content/page789.html

The main problem with the Auto industry, labor wise that is, is the hourly costs due to legacy costs. They eliminate the pensions and health insurance for retirees they have labor cost parity with the foreign transplants. This not what I think should happen but I think this is basically what will go down. I don't know how well funded their pension plans are, but if they are underfunded Obama may have another problem dumpped on him if he has to bailout the PBGC.

[Skink]

1. Didn't they borrow against pensions like congress borrows against SS?

[doc03]

2. I don't think they are permitted to borrow from the pension

plans but when these SOBs get short on money they usually get a waiver on pension funding. Something else Cheney was the one who pushed * into helping steel at least he was able to see the national security problems if you lose the industry. Cheney was the one that came out in favor of helping the auto industry too citing national security. Also Paulson was the brains behind the steel bailout.

[Lifetimedem]

3. The PBGC

Is woefully underfunded.

The retirees will in fact become wards of the taxpayers

[doc03]

4. I'm one of them, I thank you for your support n/t

[Johonny]

5. Why would they merge GM and Chrysler

GM is already too big with too many product lines. If anything they should force GM to either break off production lines or consolidate themselves.

[doc03]

6. From what I heard GM and Chrysler are talking merger

again. Myself I would break the two into like 5 different companies.