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Comments
He also qualified his support of a bailout. He said if this were 1999 and the economy is humming and unemployment at 4% he'd let them go bankrupt. Doing so now would only worsen the recession. He's got a point.
But no matter who is President, they're simply not going let the automakers take down the economy. It's not that a bankruptcy filing by a company, even as big as GM, would be enough to take us down. But given the current emotional state of the economy, we don't need anythng more piled on top.
Just a gut guess, but I'm thinking that any "bailout" package is going to void UAW contracts and force labor costs back into line. And if there's resistance to that, then the other option is a REAL bankruptcy filing which will get the automaker out from under those contracts.
Now how would that play out for real? Imagine GM filing Chapt 11 so they can restructure. Suddenly their labor costs are eased. How long does it take for the other automakers to follow suit and try to find a way to cut their labor costs?
I know that's a simplistic view that ignores parts suppliers and creditors and all that, but at the core of this, within the walls of the Castle of the Domestic Automaker, looms the labor cost dragon.
Bubbles grow and burst all the time. The dot.com bubble, housing bubble, oil and gas prices... UAW wages have been moving in one direction for a loooong time.
Without a feasible business recovery plan, all the bailout money in the world will not save GM. Get all the pain out of the way now instead of waiting until later and causing another setback when everything is finally starting to recover. GM's problems started long before the financial crisis and bailing them out will only prolong the inevitable.
I doubt it. Private businesses file for bankruptcy and go out of business every day, so why should the automakers receive special treatment when they haven't done enough on their own to make things better?
It is simply unfair for the government to step in and save automotive industry related jobs when workers in other industries are also losing their job by the thousands. Selective private business protection by the government is unfair and will eventually backfire.
I'm not sure how I feel about Waggoner's assertion that GM is ready to move forward and just needs this money to "tide it over". It bothers me that people seem to think we can avoid ALL pain or that the pain will be "fair".
And the numbers that get thrown around bother me, as if $25 billion was some insignificant amount compared to the $700 billion financial package.
Nobody ever puts those in perspective.
The automakers want $25 billion? OK, let's break out the checkbook. According to the US Census Bureau population clock there are approximately 305,699,790 citizens in the US. Do we want to write a check for $81.78 for each of us to do this thing? Is it worth $327 to my family of four ONE time? Will that get the job done?
But this seems like crack... if we "save" one private industry, where do we stop?
The airline industry certainly is important to the business world, yet a fair number of airlines were allowed to go into bankruptcy protection and restructure themselves and are still flying today.
I've said it before. I need assurances that this money isn't going down a perpetually hungry black hole. I need to hear what pain the automaker and the UAW is going to take in exchange for the taxpayer's pain. Right now I'm only hearing how this money will help them avoid pain.
But, this was Lee Iaccocca's deal. Lee, and all the other execs with Chrysler at the time were running the show with both Chrysler and their new acquisition.....AMC.
Matter of fact, most of the AMC/Renault team was blamed for much of the problem with AMC. It didn't take long for them to be jettisoned and for Chrysler's design and engineering teams to take over. They were responsible for something of a renaissance of the Jeep brand....overhauling and reengineering all the Jeep vehicles.
The design/engineering portion of AMC/Renault (Eagle) didn't last very long in the marketplace. The most influential portion of that team had a hand in the development of the Eagle Premiere. But, even that car was thoroughly re-designed by Chrysler engineering (spawning the successful "cab-forward" design for the Dodge Intrepid and Chrysler 300M).
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I want to hear from the "big 3" how they're planning to right their own ship....how they're going to use the money....and, how/when they plan to be solvent again...for now, and in the future.
I'm not hearing anything like that now. All I'm hearing is "give us money".
There are questions that need to be asked and need to be answered. That's a big part of why were in the place we're at right now. Here's how I THOUGHT it went:
So, you'd like to borrow some money for a (insert CAR, TRUCK, BOAT, HOUSE here)?
Um yea...
OK, let's take a look at your credit...
Hmm... sorry, but since you can't afford this loan, we can't give it to you. Have a nice day.
Silly me, thinking things worked like that. :P
I am willing to bet $25B that their plan will not work.
Begging the teacher to change an "F" to an "A" never worked for me. All of a sudden we can give money away to failed businesses???
Regards,
OW
Dealerships are already beginning to go under, so the stronger dealers will be the ones left standing when the smoke clears. Survival of the fittest has been happening for centuries and the automotive market is no different in that regard.
A smaller big 3 means a bigger honda, toyota, and 15 other imports. The resources to compete like develop future technology will mot be there, they will be in S. Korea and Japan. Only the big 3 hire college grads and college coops in significant numbers, even though they are but 3 of the 20 automakers now making cars in the US.
The GM model was based on continual growth. The US gov't is run the same way. The theory is that population will grow, there will be more car buyers (taxpayers) in the future so you can start a program like a pension ($700B bailout) and finance it with future earnings from car sales to a larger population (future inciome tax from a larger population). Having foreigh car imports is then like deporting taxpayers faster than they are born. The plan starts to fall apart. High gas prices increases the demand for the foreign cars because the media brainwashes us into thinking the foreign car is the only good choice for economy. It certainly is not, but maybe most of us don't want to retain technology development in this country. We want to rely on Asia to provide it to us. When 1 in 10 loses their US auto industry related job and every street in the US has a foreclosure on it, the Japanese car that gets the same mileage as the Focus will be the silver lining?
Image.....Is everything. Why should I buy a Ford Focus when for the same money and a quantifiable (using Edmunds) difference in depriciation, I can buy a Honda Civic that retains much more of its original value?
It's going to be painful, but it's long overdue.
Don't forget to include the incredible looking 58 Buick Roadmaster and 58 Olds 98.
Modern iteration by GM of these monstrosities was the recent Pontiac Aztek.
Best case for not giving a loan to the Big 3 would be a picture show given to Congress of some of their grotesque designs vs the leaner and more purposeful Japanese and German cars in the same eras. Big 3 was beaten in design, engineering and reliability for last 25 years and did not take adequate mesures to catch up, let alone excel, until recently.
F150
Taurus
Ranger
Escort
E150
Explorer
Mustang has always led its segment and is the #1 selling sports car.
The above idea is liberal socialistic answer to a capitalistic system that includes both pleasure and pain. Pain is now being endured. Government stay out, NO bailouts and let the market process run its course. Bankruptcy is the only salve that will ease the pain of tax payers. That retired UAW's get a reduction in their undeserved benefits is part of the capitalistic pain. Get real, get tough, get on with it. :mad:
PS. Hardball business is not a "feel good" activity.
The Silverado does not hold a candle to the F150, but that is a whole other discussion for a whole other forum
BTW if you all did not catch it, I don't favor a buy out. If I was positive Ford could survive GM going under I would loudly oppose it. I just don't know what the full ramifications would be.
You can tell all the sad stories you want about UAW retirees and how the changes in the auto industry are going to hurt people. I want to know what it is that makes a UAW worker so special that they rate feeling no pain.
Not to beat an old horse (pun intended) but I imagine the buggy whip makers wanted to continue making as many buggy whips as they always had as well. The difference here is that the auto industry is NOT going away, just undergoing some changing market conditions and adjustments HAVE to be made.
On CNBC they just called it "one of the most irritating press conferences" they've ever heard. And asked the question, Why doesn't the UAW accelerate the concession that are supposed to kick in in 2010?"
And finally I hear someone ask... When are we going to find out what the changes in the Big Three and the way they operate are going to be?
Gettlefinger didn't do anything to help make his case to the public today in my estimation
Until the big 3 and the UAW are willing to set aside their arrogance and stubbornness, there will be no viable solutions put on the table.
link title
Using money that's already been appropriated MIGHT get it to sneak by.
This is like when you r kid asks for $20 for gas and you only have 10 and give it to him and he says "That's OK . You can owe me."
Alcoholism isn't cured by giving the drunk a drink.
Bailing anybody is being an enabler.
The 2010 elections
I think people are angry enough that this time it's not going to be an idle threat against Congress. Do the job WE want you to do or you'll be looking for a real job :mad:
To me it seems the CEOs and Gettlefinger are shooting themselves in the foot with their actions, arrogance and 1950s thinking (with the possible exception of Mulally). With Wagoner's comments / thoughts about resignation, acting as though he's playing the Neo character from "The Matrix" in the way he dodges any questions about having a plan in place for long-term profitability, GM may be done. He looks like a deer in headlights to me. And I don't think they made an impression by coming in with prepared statements that were obviously written by someone in marketing and sales. I mean, it's all right to have crib notes of a speech you prepared, and glance down every now and again to remember the fine points, but to not be able to look your audience in the eyes because you're too busy looking down at your speech doesn't exude readiness and knowledge of the subject matter at hand. They weren't even passionate while making those speeches; I mean, the professor was more passionate and he kind of looked like death warmed-over!! And where were the suppliers? These guys should have had some of their core and smaller suppliers there, or at least letters from them.
And with what's been happening with the TARP, AIG, getting fooled by Paulson, their own stupidity and all the other mistakes Congress made just giving the banks money, they need to posture and beat on somebody and unfortunately it's these people.
As for the UAW, I'm not in a position to really know whether their primary cost issue is salary, benefits or excessive work rules and restrictions. However, if the government is hitting the auto workers, it seems to me that they should be doing the same thing to the Wall Street and other financial people and their $700B bailout. Detroit's loan is puny compared to what the banks and financial service companies are getting, and I haven't seen any indication that the finance world is changing their ways either!
Mulally from Ford is OK, but Wagoner needs to go and then bring in someone with a viable business plan and the guts to make the necessary changes at GM to expedite it's recovery. It's long past time for Wagoner to retire.
1) Do you think the Big 3 have too much manufacturing capacity for a market on pace to sell 10-12 million vehicles per year?
YES NO
2) Do you think the Big 3 have a dealer network that is too large to support the sales of 5-6 million vehicles per year?
YES NO
If you answered either question with a "YES", then what do you propose should be done?
If you answered both questions with a "NO", well, then, there isn't any chance that anything that is said, either here in this forum or in the media at large, is going to have any affect on your perspective.
They're all not going to fail at once, so your theories flawed right there. If GM declares BK, that does not change the number of cars that people are going to buy. Ford and Chrysler would benefit by having more sales, along with the others. People who buy GM would probably go to Ford and Chrysler - buying doemstic type cars, rather than the imports.
If the suppliers make parts for Ford, GM, and Chrysler, well then their business will not change. The only thing that changes is that the supplier makes more of parts F and C and none of GM.
The rest of your story, you've probably picked up from the people who would benefit from the $25B, and thus is so biased and phoney, trying to get the gullible public to believe this sort of economic nonsense.
If McDonald's closes today, this does not put the meat suppliers out of business, decrease jobs, and cause a Depression in farmland. Burger King, Wendies and such are going to see more business, hire more, and buy the beef that otherwise McD's would have.
Could you give some examples of that history? I don't see why if GM goes BK the bankruptcy courts couldn't sell off the assets quickly. The government can cut their own red-tape if they want. GM goes bankrupt and I'll be willing to bid on the Bowling Green plant tomorrow, and start the production lines up again on Mon. pumping out Corvettes.
Also if you want to consider startup time and look at history, do some research on what a little motivation can do. The Russians moved tractor factories hundreds of miles during WWII with their lousy infrastructure, and had them up and running within days converting them to making T-34 tanks and cannons. It does not years or months to convert from making a GM mirror to making a Ford mirror especially since the tooling exists, and the suppliers are running at low capacity now.
Detroit's loan is puny compared to what the banks and financial service companies are getting, and I haven't seen any indication that the finance world is changing their ways either!
I'm only asking for $5M so why not throw that my way.
Many may be old, but as Dave just posted, who worked for GM they are very modernized with robotics. The workers are only UAW while working for one of the Big3. If GM sells me, or I buy at auction an auto factory, I can hire who I want.
You appear to assume that bankruptcy is inevitable and GM will not be able to pay back the loan.
Why won't anyone loan them the money then, such that they're begging to the government? Let's look at the opinion here - http://www.marketwatch.com/news/story/Lame-ducks-lurch-toward-a/story.aspx?guid=- - %7BB42C8F84%2D5FF8%2D4F25%2DA0E2%2D8964F117878E%7D
"But the bailout doesn't even remotely solve the long-term issues facing Detroit. Taxpayers and investors can still rightfully wonder what these companies are going to look like when the money runs out. Will they have achieved in a few months the turnaround their executives claim they have been pushing through for the past two years? Anyone willing to bet on that outcome is probably more prayerful than realistic."
GM failure will have an economic impact on lost jobs, govt pension guarantees, etc.
The Wall Street Journal thinks many others will pickup the business lost by Detroit.
http://online.wsj.com/article/SB122714059184542693.html?mod=mktw
Please explain to me why Wall Street's AIG is more important than GM to the economy?
I don't believe AIG should have been bailed out, and I feel the same way about the Big3. The government should not play favorites. There are too many lobbyists in DC to believe intervention in the economic market can be fair. Do you think it looks fair if Chrysler which is owned by Cerberus, who's CEO is former VP Dan Quayle gets billions of $'s? Maybe then Cerberus can funnel mucho $ back to Quayle's friends in DC to get elected? That is why typically the US government does not loan $ to businesses, and allows banks to.
This argument that because A got $, then B should, and we should is what could break this country financially. :mad: We have to stop promoting this drunken-sailor routine. Because we have wasted $ in the past, is not an excuse to say let's wate some more. It needs to STOP.
The silver lining in a 11 year low in the S&P is a little less depreciation comes with the colonization?
Because when large companies get themselves in hot water, they need to borrow money to get themselves out. AIG if it failed had the ability to bring down the entire banking system (because of its unique positioning with regard to the "toxic" mortgages), which would then mean that companies across the whole spectrum of industries would be unable to borrow to get out of hot water, causing a cascading effect into deep recession. AIG was essentially attached to the banks at the hip, and the banking industry (being the industry everyone depends on when things go wrong in the economy) couldn't be allowed to collapse.
GM if it fails does NOT have the ability to bring down the banking system, just as no manufacturing concern does.
NPR is announcing that the Congress has told the automakers "no for now", and asked them to return in December with a detailed turnaround plan. I wonder if Ford will be at that second meeting?
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Ford will have to be at those hearings because it can't let the others get a financial advantage over them. I think Mullaley is doing a decent job, but he had to make some big bets on products and consumers are fickle. Ford still has plenty of risk.
By not giving this bridge loan we as a country are playing with fire. These are not normal times and we need to take drastic measures as a country to sure up our industries or else we may look back on how we used to be a superpower. We have been losing the economic war for decades to countries that do not respect our free trade principals and have been using them to bring our country to it's knees. As a people we need to wake up and start leveling the playing field before it is too late. We also need to stop chasing the lowest price. American business cannot compete with Korean, Chinese, Indian labor rates nor do we want to.
We need to stop being cheap and suport our own. If the playing field were level these countries would not be able to dump on our markets with their child labor and inhuman working conditions and their manipulated currencies to keep their prices low. This survival of the fittest crap is pie in the sky idealism. Toyota is the fittest because they have been the beneficiary of corporate welfare by their govervenment and have a home market that is protected from imports. Toyota is an awesome company but Ford kicks their [non-permissible content removed] in most countries where they compete on a level playing field like Europe.
Ford is in the best shape. There quality is improving and they are launching a lot of cars over the next 2 years. There spending on cars is going to be up to 2/3 of there product spending come 2010. They have also spent the last several years making difficult operational adjustments that have been costly but necessary. GM has not done this to the same extent as Ford. Let's not forget that Ford was gaining moment with a Q1 profit for 2008 that was derailed by gas prices and now the credit crisis.
It blows my mind that anyone would expect the big 3 to present a business plan. They are constantly facing off the wall conditions that noone can anticipate and then critics drag them through the mud. Did anyone see $140 gas? Did anyone see a credit crisis? How can anyone make a viable business plan with external conditions like this.
The Big 3 have problems but they did not get into this state by themselves. The U.S. government with their Free Trade policies and inept healthcare policies does not help. Anyone can setup shop with no import penalities, no legacy costs and Government sponsorship (Japanes & U.S. State governments looking for an import plant).
The American people also need to accept some blame. We are very fickle and we talk out of both sides of our mouth depending on what is most beneficial to us right now. We have short term memories and goals with no patience or appreciate for long term goals.
I do believe in captialism and basic market principals. That it is why I cannot understand why Americans act like SUV/Trucks and large cars were forced on us. They chose these vehicles and voted with there dollars. If they did not value them the Big 3 would not have made them in such volumes if wedid not demand them.
Now that the American people have changed there interests as easily as the wind blows they expect the Big 3 to just up and start making small cars.
The only reason Europe and Japan have an advantage in average fuel economy is because that is what there governments and people demanded. Americans were drunk on cheap gas and the need to keep up with the joneses while the U.S. gov't was protecting big oil.
We must support our own if we are to survive and allow our future generations to iive the American Dream. This is a great country with unbelievable talent and capabilites. There is no way the Big 3 cannot compete in the U.S. when they are successful in every other market around the world that is not protectionist like Japan and Korea. We owe it to the Big 3 and ourselves to stop the madness of destroying our industries because of unfairn policies that handicap U.S. manufacturing. We are putting our fellow Americans out of work. Soon it will be each one of us out on the street. Then who do we blame and ridicule? At least we can say we sure taught the Big 3 a lesson?
As it circulates around the nation, every person who touches it will have proof in their hands how they are personally impacted by the US auto industry.
Copy this message, and paste it into every forum and comment area of every auto discussion you can find.
Canada, Germany and even Romania has said they are willing to help the US automakers. Where is OUR government????
GM is a lost cause in its present form. Half or third-sized, with new executive management -- that's a different story. The sooner we can get them to that point the better. Which is why there should be no bailout until Wagoner and his first line goes, and there is a plan to radically downsize, including eliminating all but 2 divisions. That may take BK.
Locked up in politics as usual. Bush, like him or not, seemed to offer a reasonable compromise in letting the Detroit 3 tap their currrent $25B in environmental and fuel efficiency subsidy to cover their current liquidity problems. Some in both parties agreed, but then the political machines got into gear. The Dems didn't want to go for it because they need to feed their left and it's push for environment, as well as their loathing of Bush. The Republicans didn't buy in because of their far right beliefs that Adam Smith still defines Capitalism. Each side wants to one up the other. Obama may truly be a centrist hoping to unite government, but he faces a steep uphill battle. Each party seems aligned with their political interests and special interest lobby money. The middle class only counts at election time, otherwise they don't provide the big cash payouts that lobbyists can. We need more politcal parties and some competition in politics. I'm not sure that either party stands for middle class America and its desires any more. Unfortunately, Washington may be more broken than Detroit!
That was the point of a prior post I made. If the bailout does occur it cannot just void the three legal contract that the UAW has in place. Unless the UAW agrees to reopen the negotiations the D3 are stuck with those contracts....unless they go BK.
If I was Gettlefinger I wouldn't budge. I'd want part of that $25 Billion for myself and my members. Otherwise nyet.
The Big 3 have problems but they did not get into this state by themselves. The U.S. government with their Free Trade policies and inept healthcare policies does not help. Anyone can setup shop with no import penalities, no legacy costs and Government sponsorship (Japanes & U.S. State governments looking for an import plant).
Absolutely, absolutely wrong. The detroiters got into the cost, health benefit, unbalanced product portfolion all by themselves. There are hundreds of thousands of other business that have been in existence since the 50's when the irrevocable slide began in Detroit. Many of these business like MS and Intel and Boeing and GE and others just got it right and didn't sell out to the union in order to keep the peace. Look at CAT.
No the detoiters did it to themselves because they weren't willing to make tough decisons. Everyone else in the US was operating under the same system of rules and regs as the vehicles makers. It's just that the detroiters screwed themselves.