Do You Favor A Government Loan To The Detroit 3?

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Comments

  • kernickkernick Member Posts: 4,072
    Your posts comparing public, non-profit and corporate employees as having the same goal is not correct.

    All for profit businesses and corporations need to make profit or at least break-even, or they fail. Businesses and corporations can lose money for any year or years, as long as they have accumulated enough profits, or someone is willing to loan them money through stocks or bonds.
    When a corporation or business doesn't make a profit, it goe sout of business - just like Circuit City is doing now, or Wang computers did , or Digital Equipment Corp, or Polaroid, U.S. Steel.
  • kernickkernick Member Posts: 4,072
    But why would you loan money to the suppliers? Why not loan money to Caterpillar, Dupont, Dow, Pfizer, IBM, HP, Boeing, Microsoft, GE, homebuilders, ...? They're all hurting too? The whole economy is.

    Why wouldn't the suppliers do the same thing that Caterpillar is doing and cut until their production meets the demand? They are cutting workers and closing plants. Why wouldn't the suppliers do so?

    If we give loans to the suppliers, and they keep plants and workers exactly what are they going to be doing? Are they going to build parts for the 16M vehicles that used to be sold? Or will they work 1/2 the day to make parts for the 10M vehicles that will be sold, and play cards the rest of the day?

    All businesses need to adjust their production based on the amount sold. it is impossible for the government to loan $ to everyone to keep their businesses going.

    Given the number of managers and executives we have, and the pay they earn, they should be managing the business, so it is and stays profitable. If we as a society say that is not what managers and executives do - they just need to show up, and then when the business bleeds money, the government somehow magically creates wealth to pay everyone, then you could argue we don't need managers and executives.

    So we could say every corporation should eliminate every office worker - saving tons of money, and we'll just let the government manage it all?

    What we're doing as a society and the government is dabbling in more and more is REWARDING FAILURE. They are rewarding business systems that have lost all the money they made years ago, lost a lot of their marketshare, have not made good decisions, and refuse to change with the times.

    These businesses are run so badly, they have made so many bad decisions, that NO ONE is willing to put their own $$ into these corporations. These corporations can not issue new stocks and bonds to raise new funds. They can't loan from banks. No one is willing to invest their own $$ in these guys! What does that tell you?

    How many people here are buying auto supplier bonds and stocks? Let's here how much you're investing?
  • anythngbutgmanythngbutgm Member Posts: 4,277
    I just think that unhealthy suppliers will do a lot more to hurt the overall N. American Auto Industry which is a key part in the overall economy.

    Actually I agree with everything you just said, so I retract my statement. :shades:
  • kernickkernick Member Posts: 4,072
    I just think that unhealthy suppliers will do a lot more to hurt the overall N. American Auto Industry which is a key part in the overall economy.

    I think a lot of people here confuse 2 different things - they are: 1) being against the current owners and corporate mismanagement; and 2) just wishing for the collapse of the industry. These are 2 totally different things.

    I would like to see any of the D3 or suppliers who can not manage such to change and make a profit to fail. Call the D3 - A, B, and C. Instead of the taxpayer supporting A, B, or C indefintiely, I would like to see them go out of business and the workers and plants restarted being owned by new auto companies D, E, and F.

    Companies D, E, and F would reset wages, work rules, quality, dealer networks, their overall size for the market ... such that they make a profit. They do not need taxpayer $. And if D, E, or F fail in a few years, they will be replaced by someone else.

    I half-jokingly said if GM wants to sell Hummer today, I'll make them an offer, take the parts and plants off their hands, make the existing workers a new offer or hire new workers, and start taking orders tomorrow over the Internet at greatly reduced prices (as I wouldn't have dealers and all those costs or inventory laying around).

    There are plenty of companies that could come in and setup a much more efficient and less costly system than GM, Chrysler and Ford has.

    What you hear on TV is a bunch of bulloney from the guys who are making $$ by selling their sob story. They have many people convinced that if GM, Ford, Chrysler, and the UAW (and suppliers) don't exist that it will be the end of the U.S. economy. This makes no sense when you consider that companies have come and gone in all industries throughout the last 2 centuries; even in the auto industry.

    The auto suppliers in this country will be in much better shape if GM, Ford, and Chrysler, who have squeezed the suppliers over the years to cut the cost each year; were gone. It would be better for the suppliers to have companies D,E and F making autos, and paying the suppliers a decent amount for the parts.
  • euphoniumeuphonium Member Posts: 3,425
    How successful has Alan Mullaly (sp?) been at Ford with applying what he learned at Boeing?

    If not very successful, what are the obstacles & how can they be done away?
  • kernickkernick Member Posts: 4,072
    Why do you think I know anything specifically about Mullaly at Boeing? What do you think about the Red Sox making Varitek an offer, considering he can't catch Wakefield's knuckler? :)
  • joem5joem5 Member Posts: 201
    No tax break if I purchase an American car would make up for the repairs The big 3 lost a generaton 40 years ago and still doesn't get it.
    It's quality stupid. :sick:
  • dave8697dave8697 Member Posts: 1,498
    hardly anybody in America creates profit in what they do for a living. Our car, however, needs to be phenominal. The best in the world. yet affordable to the masses who mostly don't work at making a profit. Expect this system to operate smoothly even in the worst downturn in ages?
  • gogogodzillagogogodzilla Member Posts: 707
    I take it that you'll settle for 2nd or 3rd best in your cars, then?
  • dave8697dave8697 Member Posts: 1,498
    So thats it. we ARE 40 years into payback time. It's really working good. Our economy is finally coming around. Only problem is everything about America sucks. The government, democrats, republicans, teachers, cops, firemen, judges, criminals, everybody driving an American Car, the utility companies, all retailers except those selling foreign cars, everyone on wall street, the guy who fills potholes, and certainly all construction workers. Lets make it payback time for all them too.
  • dave8697dave8697 Member Posts: 1,498
    I certainly wouldn't consider my car selection as make/break me. Pain of a so so car choice for me is a $325 repair, 4 years after the warranty runs out. Joy of a good choice is one $65 battery and oil changes in 8 years.
  • gagricegagrice Member Posts: 31,450
    When was the last time you bought an American Car? I Bought one in 2005 that was a disappointment. My 1998 Suburban was great. I hear all the talk of how good GM is getting. I just don't buy it. Though I think Toyota has dropped down a peg or two also in the last couple years. At least on their made in America cars. Maybe Americans need to look around and see if they are doing as good of a job as their Dad's did. I say no bailout for anyone except ME :shades: :shades: :shades:
  • jack137jack137 Member Posts: 19
    TARP loans to the car makers should not be made as loosely as the ones simply handed over to the hogs on Wall Street so they could still get their Bonuses. The Car Makers stubbornly refused to make the kinds of cars I actually wanted to own, or that would meet my needs. I feel that they were also involved in preventing importation of just the kinds of cars I WOULD LIKE to buy - e.g.: VW Golf TDI's.

    By now, the arguments FOR diesels have become muted since diesel fuel prices have reached stratospheric levels. No, I believe that Detroit will NEVER willingly give us what we really need to get out of the clutches of the Arab Oil Barons unless their arms are severly twisted by Washington.

    I can't decide which is worse - the pigs on Wall Street slopping at the public trough, or the greedy OPEC people lying to us about a great increase in "world demand" for petroleum. Now Washington wants to get on my list by spewing out TARP funds to its friends. When will President Obama keep his promise to reform Washington, at least? It looks like the same old crew of "expert advisers" somehow managed to evade the housecleaning usually attendant on a change of parties in Washington and that's why we are getting a new bailout package full of pork. Obama greatly imperils the success of his presidency when he listens to these same-old, same old "experts".
  • circlewcirclew Member Posts: 8,666
    Please send Obama your post. Those guys are not getting it, particularly the press guy at CNBC, the resident expert.

    Regards,
    OW
  • circlewcirclew Member Posts: 8,666
    Agreed, My 2003 has almost $4K repairs before 50K miles.

    And I'm supposed to now go buy another one because J.D. Power says it's ok now?

    Heh heh!

    Regards,
    OW
  • circlewcirclew Member Posts: 8,666
    No. Just GM would do it for me.

    Regards,
    OW
  • circlewcirclew Member Posts: 8,666
    So you would agree $4K in 50K miles in repairs, you do not buy another, correct??

    Regards,
    OW
  • kernickkernick Member Posts: 4,072
    hardly anybody in America creates profit in what they do for a living.

    This really has little credibility. I'm really not going to waste time explaining the purpose of corporations and businesses to you. I'll give you one sentence - Every store, restaurant, bank, auto dealer, auto manufacturer, other manufacturer, hospital, insurance firm, and any little business in every town around the country, and every company listed on every stock-exchange has a goal to make profit. if they don't make profit more often then they lose money, then they fail.

    When a company fails like GM or Chrysler they go out of business, and some other group of people with money come in and start making the product that the failed company makes, up to market-demand. Right now if GM or Chrysler failed, the consumer/market wouldn't care because it only wants 10M vehicles while the auto makers are setup even after their cuts, to make 15M.
  • gagricegagrice Member Posts: 31,450
    I fully agree with you and welcome to the Forum...
  • hpmctorquehpmctorque Member Posts: 4,600
    That YouTube video is a riot! Fortunately we're not quite at that point, yet, but we do seem to be heading in that direction, and at a quickening pace.
  • dave8697dave8697 Member Posts: 1,498
    A Jetta is $400 in 3000 miles for repairs per my neighbor. That's $4000 in 30000 miles.
    My last 2 GM's bought new had 36k mile bumper to bumper warranty. When I had it in for a failed tire (belt sep), they found and replaced both front shocks which had leaked. They wanted me to pay to have my brakes cleaned, not realizing I had once got the second hundred thousand miles and then some out of previous GM's without cleaning anything but the silt out of the carb. I passed on that service then and finally had to pay for the first repair right at 48,000 miles. The battery terminal had rotted off the battery but looked like it was still in place.

    Based on my experience, I can handle what a GM throws at me. I don't expect perfection. I'm not going to be flying in it.
  • dave8697dave8697 Member Posts: 1,498
    there are 159 million taxpayers. what percent do you think work for a profit producing entity?
    My guess is 25-30%
    excluded are:
    almost all gov't workers - a 35% chunk right there, includes the military
    all retired people
    all unemployed people - anywhere from 8 to 14% here
    all in jail
    all on soc. sec. pre retirement such as disability
    all on welfare
    all stay at home parents - another big chunk
    all D3 workers and many of their suppliers employees
    The half million May '08 college grads who still don't have their first job
    all non-profit businesses and organizations like churches, united way, etc
    and then the ones that recently landed there like workers for circuit city, lehman bros, indymac, fannie mae and on and on and on.
    My guess is 70-75% of the 159 million don't have to show that they turned a profit at the end of the day.
  • kernickkernick Member Posts: 4,072
    There were 155M workers according to the U.S. Labor statistics.

    This does not include "retired", "unemployed", "in jail" "disabled", "welfare" "stay at home" "college grads". Those people exist but are not part of the employed.

    No one is arguing that public employees need to show a profit. A profit is for businesses not government.

    GM, Ford, Chrysler and suppliers are businesses, just like Boeing, Marriott, Circuit City, Wang, Digital, Microsoft, Apple, Pfizer, Johnson & Johnson, Dupont, Exxon. Proctor&Gamble. They all need to make profits to stay in business. When they lose more than they profit over the years, and the markets and banks aren't willing to loan them any more, they go out of business. That's the rules.

    Churches, the military, your city/county/local governments are not businesses. You give them money and they provide services. They are not there to make profits for shareholders or owners. There are no shareholders or owners.

    If you don't understand there, go read a book on it. I've taken Masters level courses in Finance, accounting, and management, and have a pretty good handle on it. If you don't want to believe fine, that is your right, but what your posting is incorrect.
  • tlongtlong Member Posts: 5,194
    You didn't answer OW's question.
  • gagricegagrice Member Posts: 31,450
    Are you for real? What does any of that have to do with companies in the private sector making a profit?

    I a private company makes no profit they go broke, assets sold to pay the debts. In the government when you run out of money from all the wasteful programs you just print a bunch more. Unless you are in state government. Then you tell everyone that they are taking off the 1st and 3rd Friday without pay :shades:
  • circlewcirclew Member Posts: 8,666
    to consider ALL options. For those who keep forgetting, this bailout is really a government controlled reorg. Call it what you want but all signs point to more funds that will need to be allocated to the US industry. Ford is on the brink and C needs to sell a bunch of cars to dealers this month or will not make the grade established by the package rules.

    Cadwalader will advise the government on how automakers might be able to do some restructuring out of court, such as gaining concessions from unions and suppliers, the people said. That would make a court-supervised bankruptcy easier, they said.

    Here is the story.

    U.S. Hires C11 Lawyers
  • gogogodzillagogogodzilla Member Posts: 707
    And that's your choice. You *CAN* actually buy what you want.

    What's even better, so can everyone else.

    When we start seeing people demanding, and getting, the right to dictate another's behavior simply because you don't like it... well, then we have a problem.

    So, you can go and buy the car you want. I can buy the car I want. Bobo the Wonder Chicken can buy the car it wants. And if more people are buying a certain type of vehicle... and our US automakers don't offer a similar quality vehicle at a similar cost... well, then they die.

    Why we are surprised at that, I'll never understand.
  • bpizzutibpizzuti Member Posts: 2,743
    and our US automakers don't offer a similar quality vehicle at a similar cost... well, then they die.

    Why we are surprised at that, I'll never understand.


    I think the problem these days is that the US Automakers are surprised at that.
  • dbweaverdbweaver Member Posts: 88
    A person shoudn't need to go to colledge to learn not to spend more than they have coming in. Or to borrow more than they can pay back. Their parents should teach them that.
    We obviously have elected officials who haven't learned that! They talk about all this money they are going to borrow to spend but they never mention paying it back!
    I sure would not loan the government of the United States any of my money.
  • circlewcirclew Member Posts: 8,666
    (and our US automakers don't offer a similar quality vehicle at a similar cost... well, then they die.

    Why we are surprised at that, I'll never understand.
    )

    I think the problem these days is that the US Automakers are surprised at that.


    Well, surprise, surprise. Agreed and very valid and apropos at this time!.

    When what the D3 expected is more than what happened in reality, they are disappointed. And the more they expect and the further away reality is from their expectations, the nastier the surprise.

    When what happens is not what they expect, they have to rethink their understanding of the world.

    Regards,
    OW
  • bpizzutibpizzuti Member Posts: 2,743
    I sure would not loan the government of the United States any of my money.

    You already did. If you have any sort of investment (401k, IRA, pension, sometimes even a savings account) the institution managing it likely invested part of your money in U.S. Treasuries...which are debt instruments of the government.

    A person shoudn't need to go to colledge to learn not to spend more than they have coming in.

    You're right about that (though not about the spelling, heh), but somewhere between freshman year and graduate school graduation, I think some people learn different...auto CEOs, wall-street bankers, politicians. I think I'm gonna go for my MBA just to figure out where they learn it.
  • gagricegagrice Member Posts: 31,450
    Remember all the rhetoric in the campaign about stimulating the economy with work on the infrastructure around the USA? Well as the Stimulus bill gets fine tuned it seems that only about 4% of the $800 billion is designated for infrastructure. The rest is PORK as Usual. I think they have tossed out all the ideas that would have induced US to buy a new car. I guess we will see as it unfolds If it ever does. No bridges to NOWHERE. NO Bridges at all will be more like it. No mention of saving the D3 from themselves.
  • dieselonedieselone Member Posts: 5,729
    I heard last night on Bloomberg that the Chinese car manufacturer Geeley may still be in talks to buy Volvo from Ford. The price range they were throwing around was $6 billion. While I'd like to see Ford get the cash from the sale, but don't know if I like the idea of a Chinese company/government owning Volvo. I thought this rumor was put to bed a few months ago.
  • imidazol97imidazol97 Member Posts: 27,699
    >Remember all the rhetoric in the campaign about stimulating the economy with work on the infrastructure around the USA?

    You didn't believe all the talk about bipartisan cooperation and transparency, did you? The president seems overwhelmed by having to try to get people to do things by actually working with the republicans. He campaigned as an economy expert and we're getting stuff my high school junior can figure out ain't gonna work and will cause inflation in a few years because of all the worthless money they're printing.

    > I guess we will see as it unfolds If it ever does. No bridges to NOWHERE. NO Bridges at all will be more like it. No mention of saving the D3 from themselves.

    Since the bill was supposed to create jobs NOW instead of 2 years from NOW, we're not getting what was promised.

    I don't know if the study of prostition in Dayton is still in the list of things in the bill. I can't see it creating jobs other than already high-paid psychologists and friends of the mayor getting plum jobs. A city on its way down.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • gagricegagrice Member Posts: 31,450
    The Chinese may ultimately own all the Domestics. Might as well own the Swedish Car companies.
  • dtownfbdtownfb Member Posts: 2,918
    There are shovel ready construction projects that are on the shelf and can start within months. Unfortunately with all the typical DC partisan fighting, the American people are the ones losing.

    The part I can't understand is why does this stimulus package have to include EVERYTHING? Why not get a bill passed to deal with the infrastructure projects (spending bill)? This is something both sides seem to agree on. Then you can deal with tax cuts, green projects, healthcare, etc?

    Either way I'm thinking there is no way GM can execute any plan without either a chapter 11 or a government backed bankruptcy plan. They simply can't make the cuts they need to make because of contracts, agreement, debt load, etc.
  • dtownfbdtownfb Member Posts: 2,918
    Right now, they are the only ones willing to risk buying a car company in these economic times. Buying Volvo would give them instant credibility plus access to a company that prides itself on safety. Something the Chinese need to break into the US market. Heck, all of Ford's cars are now five star safety rated.
  • gagricegagrice Member Posts: 31,450
    There are shovel ready construction projects that are on the shelf and can start within months

    According to those on the inside there is only 4% of the stimulus aimed at infrastructure. It is just the biggest collection of Pork EVER conceived by Congress. It is 8 years of built up frustration all thrown into one gigantic PORK Bill. Time to pay back those that paid to get Congress and the President elected. And this is the bill they have chosen. Even some Democrats are embarrassed to sign on it is so flagrant. I would not hold my breath on any roads or bridges being repaired by this bill. Even the administration admits that it will be 5% of the bill:

    The stimulus bill includes about $45 billion in transportation spending, much of which can be spent on projects "that can be implemented immediately," Transportation Secretary Ray LaHood told CNN. LaHood

    So just what is planned for the other $755 Billion? Maybe that is to bail out the D3. :sick:
  • imidazol97imidazol97 Member Posts: 27,699
    >only 4% of the stimulus aimed at infrastructure

    And only a small part was going to be spent in the next 18 mos. I thought stimulus meant spend now. The long-lasting spending on things that will have to be renewed due to social program pressures (a euphemism) will put us in high inflations in a few short years with the extra dollars being printed in DC just like in Carter.

    And the real insult is they were so darned worried about doing something to help US companies that they wanted to insult them for using airplanes, imagine that. Notice how Daschle and his known tax problems and his ones not so well publicized were tied to having a driver and car to use--isn't that sort of like traveling on a jet for business? It is to me.

    This whole charade about not helping the US car manufacturers really gets to me. Whether someone blames the UAW (they get some but not all) or not, the insult is there in DC. I wonder if Japan hassled like this over subsidizing their car manufacturers when they were breaking into the US market.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • gagricegagrice Member Posts: 31,450
    I would not give up hope on bailing out the D3. I think the over riding issue is bringing the D3 in line on what they build. I don't think that Obama is that concerned about a handful of fat cat UAW workers. He has a Global Warming agenda that will make what we drive line up with Congressional mandates.
  • lemkolemko Member Posts: 15,261
    Firefighters better start extensive training in auto accident rescues. You're going to see a lot of GRUESOME accidents! Volvo will plummet from being one of the safest cars in a collision to one that'll collapse like an accordion and mashing the driver into the shape of a frisbee.
  • kernickkernick Member Posts: 4,072
    This whole stimulus package should have consisted of 2 things - tax cuts to individuals and tax cuts to businesses.

    The tax cut to individuals of course would give people $ in their pockets to pay mortgages, pay credit card bills, and spend at the consumers' choice - choosing the better products and services made.
    The tax cuts to companies would be fair as assistance would go to all industries. Companies are laying off people because profits are declining, or they're losing money. By cutting business taxes this would keep profits higher and thus reduce layoffs. Combined with increased consumer spending many jobs could be saved.

    This plan would not unfairly reward the companies that screwed up over the years, at the expense of those who played by the rules, planned well and worked hard at median wages.

    I don't see how the type of jobs this stimulus plan is going to create is going to help people who make cars, are software engineers, realtors and retail workers get employed. The stimulus package ignores helping those in the private sector, and creates a bunch of temporary public-projects workers.
  • bpizzutibpizzuti Member Posts: 2,743
    This whole stimulus package should have consisted of 2 things - tax cuts to individuals and tax cuts to businesses.

    We handed money to the banks and they hoarded it. We hand money to people and businesses and...they'll hoard it. The problem isn't getting people money, they HAVE it. The problem is getting people to SPEND it...no one wants to, I bet including you. They currently don't have the confidence in the economy to risk spending

    The only way out of a recession is the USE of wealth...meaning spending. Either people spend, or businesses spend...or the government has to spend. That one's the least desirable of the three, but if no one else will, then that's all that's left.
  • smr36smr36 Member Posts: 59
    Tax cuts are an inefficient stimulus. Mine will be deposited into a money market account. I think many others will do the same. There is a conflict between what's good for a taxpayer individually and good for the overall US economy. The best way to stimulate the economy would be to rehire laid off teachers, extend unemployment insurance, repair roads, bridges, provide health care for poor etc, etc, etc. In other word spend wisely on needed projects which the private sector is unable or unwilling to do.
  • wvgasguywvgasguy Member Posts: 1,405
    The part I can't understand is why does this stimulus package have to include EVERYTHING

    As always it is hard to hide pork in a bill that is specific as to what it wants to accomplish. They added too many things that should be debated in the normal budget. This should be a stimulus plan and it needs to be dolted out in increments where the action is well defined
  • wvgasguywvgasguy Member Posts: 1,405
    And the real insult is they were so darned worried about doing something to help US companies that they wanted to insult them for using airplanes

    Fortunately when you limit CEO's to $500K/year you eliminate the need for the airplanes. When your CEO is making $15,000/day it is not hard to justify a private plane. The savings is real. maybe now instead of jets they will get the little 4 seater prop planes
  • wvgasguywvgasguy Member Posts: 1,405
    The only way out of a recession is the USE of wealth...meaning spending

    Which is why all benefits returned to consumers need to be in the form of a prepaid credit card that has a 6 month term to use it.
  • wvgasguywvgasguy Member Posts: 1,405
    The best way to stimulate the economy would be to rehire laid off teachers, extend unemployment insurance, repair roads, bridges, provide health care for poor etc, etc, etc. In other word spend wisely on needed projects which the private sector is unable or unwilling to do.

    How does paying more unemployment or providing health care stimulate the economy?
  • steverstever Guest Posts: 52,454
    The Latin America Herald Tribune reports that GM is going to expand operations in Brazil using TARP money.

    I suspect that the GM Brazil head got it wrong but meanwhile we'll inflame the flames. :shades:
  • bpizzutibpizzuti Member Posts: 2,743
    Which is why all benefits returned to consumers need to be in the form of a prepaid credit card that has a 6 month term to use it.

    Now that is NOT a terrible idea...the best thing to do would not be to just hand out money...we've been trying that and it hasn't worked. The idea is to get people to SPEND money, which means one has to incentivize any hand-outs. Instead of a tax cut, make it a credit..say, for creating jobs, or buying a car (didn't that just fail to be added to the "stimulus?" Instead of hand outs, we'll basically pay them to spend money for a while. That I could live with.
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