When the US Auto industry started to fall it took down so many other jobs with it. Its funny but we the american people still keep buying From other parts of the world.
What will we do when we have lost all the jobs? The best days of the USA are gone and we are about to fall and fall hard. When this takes place what part of the usa will go to Canada? Thats the part i want to live in. The rest will fall into whos hands?
Corporate Greed is killing us. Its ok for them at the top to keep making the big money so they continue to move more and more jobs out of the US. We will soon have only two classes in the USA if this keeps up.
It was the unions of this countries that helped build the middle class and forged this country. I am not a Union man but i do understand one thing, and that is that i had a better life because of the unions.
GOD HELP US FOR WE NO NOT WHAT WE DO.
We are not a smart people , We are a selfish people, when we buy we want so much for so little and we dont want to pay for the true value. We want to have it all and have it now. Cant work for it as our parents did, we just want it. In our minds its ok for us to make good money but its not ok for others to make it. But its ok to send our money over to other countries.
So America keep sending your money over and some day they will buy us all up.
I just looked it up and my reduced age 62 benefit has 11.3 yrs. already covered with my paid in total so far. I've paid in more than I thought! The full (66+) benefit will take 8.1 yrs to recoup already and that is without interest also. Then, however, throw in nearly another decade of me working and paying in about 75% of the age 62 payout amount per month. It's starting to look a lot like 14-18 years of collecting to break even without including any interest. This is what I claimed earlier. 16 yrs was a very good guess, but I figured all this out a year or two ago.
I also managed to time buying my first house just perfect too. Fixed mortgage rates were 17.5% the month I closed on it. They keep referring to 1982 today on the news as the last time Calif. had the same unemployment rate as it does today, 10.1%. Back then, we signed up to pay interest in the teens and complained just a little, as long as we had our 2 jobs and the 12 year old car ran good. Today we trash our country's economy by defaulting if our mortgage rate isn't below 7%.
Delphi is bankrupt and one fifth of what it was a decade ago in terms of US employment.
Go 800 miles NW and eye the damage. The transplant manufacturers are trying to lower the returned value to Japan from 85% of each transplant sale to something slightly lower by throwing a few tidbits to the remnants of Delphi and that makes everything honky dory? 31,000 GM and Delphi jobs are gone from my county. That's county, not country. The transplants have hired about 1/2 that amount in the entire state and at about 1/2 the wage, and we make the Tundra, Sienna, Camry, Subaru and Civic here now.
The big problem is that the values of homes have fallen only about a third of the way down from the current peak
Here is San Diego the worst areas lost about 25% of their homes value. You can apply for tax reduction by showing your home is not worth what you paid for it. Condos took a bigger hit and are a flood on the market with the highest foreclosure rate. The good news is first time home buyers are finding homes they can afford. And banks are happy to unload the inventory. It makes it tough on people like myself that would like to sell. I have to find a buyer with 20% down to get a bank to talk to them. If the bank owns it they may even pay all closing costs to unload their homes. The beach areas are down less than 10% so if you were looking for a bargain in LaJolla forget it.
I still have a problem with bailing anyone out. They got into the mess let them get out. That includes Citigroup, AIG and the homeowner that took on a mortgage for more than they make. Will anyone learn from this is the question? I cannot see helping the automakers carry on business as usual.
Well, perhaps I should say they're the least biased rather than unbiased. They're the only place where you can get the crackpots from both ends of the political spectrum. :shades:
Great place to go for arguments about bailouts, lemee tell you.
FIRE'EM THATS WHAT ANY BIG BUSINESS WOULD DO WITH IDLE EMPLOYEES.
THIS GOVERNMENT SUX. A REBELLION IS IN ORDER.
IN GOD WE TRUST! :mad: AS FAR AS THE GOVERNMENT BAILIN OUT THESE MORONS WHO GOT THEMSELVES INTO THIS MESS. SCREW'EM THAY MADE IT LET THEM GET OUT OF IT.
Coming from a steel industry back ground which also impacted your state in the 80s and 90s the underlying issue with your stats about job losses is that a lot of your jobs simply moved south.
In addition the old paradigm of vehicle making was based on 'X' amount of direct labor ( jobs ). The more modern approach is based on 75% of 'X'. That's productivity and the normal course of events.
The fact is that as it has happened during the entire history of country the new more efficient jobs have moved from the unionized North-Central rust belt to the non-union sunny South. Nothing new to see here it's been happening here ever since the textile mills moved out of Mass, RI and CT in the 19th Century. This is the history our country.
>anyone who wants a new vehicle is going to really have an incentive to buy the vehicle while the vouchers exist. That means when the vouchers are used up or expired, there really is going to be little demand. So what vouchers would do is have the factories humming now, and then BOOM - the factories wouldn't need to run for the next year or 2. That's not very efficient.
Actually, it is very efficient way of letting them know their market value:
1. If D3 sales go gangbusters with the vouchers, it gives them a lease to survive
2. If the D3 sales drop or even stay constant even with vouchers handed out, it is a signal for the D3 to close shop.
In this fashion, the public will be responsible for their survival or downfall directly. No government funding will be needed directly. The government will reimburse D3 ONLY for those vouchers that actually were involved in a sale. No money upfront is involved. Much like a mail-in rebate. This time it is the manufacturer who is doing it. In fact, this process is called a Ship & Debit type of transaction. The D3 will have to submit claims to the government periodically to get their money.
Because you're subsidizing GM, period. You're subsidizing one of their worst cars...and you're subsidizing their Korean design unit.
Mostly the problem is, with only 10k of voucher value, that's the ONLY car people can buy if they can't get credit. No Focuses, no Calibers, nada. So the government voucher program, if limited to only 10K, would be supporting GM's GMDAT design/production facility on South Korea by selling a ton of Aveos. How does this help the U.S. economy?
Actually, it is very efficient way of letting them know their market value:
They already know the market-value of their values is not enough to cover their costs. They have years of data on this - losses each year. And BTW, there is no fixed market-value to anything; market-value continually changes 24/7.
If D3 sales go gangbusters with the vouchers, it gives them a lease to survive
I don't want the government to pay in any shape or form - no vouchers, bailout, loans, grants or whatever you call them. Private investors and banks can use their money., as they have done for many years in many firms.
Answer this - why won't private investors put their money into the D3, if the D3 has a chance to turn things around? Investors are putting billions of dollars into money market and Treasuries to make 0.1% or so. Why do you not think they'd invest in the D3 at the low prices they're at, and the chance to make so much money?
Basically when the banks, Wall Street and millions and millions of investors don't buy your stock or corporate bonds, the vote is in on viability.
>with only 10k of voucher value, that's the ONLY car people can buy
Eh? Come again?
With 10K voucher, you can buy a Cadillac for the price of a Corolla, a Malibu for the price motorbike......This would make the good designs from GM go up in popularity, crushing the imported ones since a Camry and Accord will cost way more.....
With 10K voucher, you can buy a Cadillac for the price of a Corolla, a Malibu for the price motorbike.
Assuming one can get a loan for the difference in price. Which a lot of people can't because of this little thing called a "credit crisis," which is one of the reasons for the current problems.
If they can't get a loan for the difference, then all that 10k voucher is going to do is get someone an Aveo. And I predict they would be exchanged for MANY "free" Aveos, thereby stimulating the Korean economy quite nicely. It would be either that or toss them, and most people are NOT going to toss them.
I'd be willing to bet that if they suddenly had those $10K vouchers that the first thing dealers would do would be to put $10K worth of crap on the cars to build the price up...
The manufacturers would end all the employee pricing...
I actually think cars would be cheaper but not down by $10K with the rebate.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
I'd be willing to bet that if they suddenly had those $10K vouchers that the first thing dealers would do would be to put $10K worth of crap on the cars to build the price up...
The voucher system aimed only at the D3 will never get off the ground. Why?
It's taxpayers money first. Toyota, Honda, Nissan, Hyundai, BMW and MB are much much much larger taxpayers than any of us ( probably ). Would you allow your money to be given as a gift to a competitor to increase it business at the expense of decreasing your business.
Then like it or not to the D3 faithful, the transplants make American vehicles. Some are far more American than even the D3 issues. The Federal Govt will not give cash gifts to one American company at the expense of another American company.
It won't happen.
Now they might give vouchers to buy any vehicle with a Domestic Content greater than say 55%.....any vehicle. With this it would stimulate a whole variety of sections of the country.
One thing a $10K voucher will do is jack up the price of a car. It may have some increase in sales, but only from people on the margin. Most are hunkering down right now, so I wouldn't expect it to blow the doors off of car sales since people would still have to come up with another $10K to buy an average vehicle and pay the tax and license on it.
Interesting that if a foreign producer did this in their home market we'd have a lot of Americans yelling about fair trade practices against US vehicles.
I'm still thinking a liquidation of Chrysler and an orderly bankruptcy restructuring of GM is the best way to go. If the economy stays soft all year, Ford will probably become a problem child as well. That will be even more complicated because of the Ford family favored stock class interests. I would insist that go away before any US tax dollars go there. You might have a bit more foreign interest in acquiring parts of Ford if they get into trouble later.
You got that right. We were talking about it the other day at work, only spending money on absolute necessities, those of us still with jobs are staying tight, cash is good. My tax refund and anything coming my way from the stimulus package is going in my money market account.
The fact is that as it has happened during the entire history of country the new more efficient jobs have moved from the unionized North-Central rust belt to the non-union sunny South. Nothing new to see here it's been happening here ever since the textile mills moved out of Mass, RI and CT in the 19th Century. This is the history our country.
That statement needs to be repeated. You are exactly correct. The work has never stayed in one place too long. Well maybe the auto industry stayed in Michigan too long. They actually believe building cars is their right. Even GM in their infinite ignorance could not manage to get it right. They do not deserve a nickel of our money. That includes all the entities lined up to steal from the tax payers.
That is a legitimate point. Whatever a car is discounted by will be taken from the resale value. If they set the content minimum at 80% it will eliminate all but 3-4 models.
Ahh .. the difference though is that the bailout money is a loan. From that loan we the taxpayers, including Toyota, Honda, MB, BMW will / should make a profit in lending it to GM. This is good business.
The voucher system is a gift of taxpayer money to the D3. It never has to be paid back and there is no profit to be made from giving it away. It'll never fly.
The bailout money is also taxpayers money, lest you forget.
We've already been thru this discussion a few weeks ago. It is not correct to say it's okay to make another bad decision, based on the fact that a bad decision was made before. The government loans to the D3 or any other company in the private sector is not normal, benefitting some citizens and hurting others. Supporting GM and Chrysler hurts those companies competitors, by lowering the competitors sales. Government should be neutral, setting equal and fair rules (emissions, CAFE, ...) for all to follow - that's it .
I sincerely think that by trying to keep the entire D3 in business, they are hurting the chances of 1 or 2 of them coming out of this depression healthy. By supporting Chrysler and GM, they are keeping some people from going to Ford to buy their products. What the government is going to end up with on a course of loans, is all of the D3 being small and losing money, and requiring loans.
If loans continue, we'll end up with 3 too large car companies, with high costs, borrowing money, instead of 1 or 2 bigger companies that are fairly healthy, and have enough business to support their legacy and current costs.
I would also like to see if 1 or 2 of these corporations go under, that some individuals with some new ideas on how to make and sell cars would then be able to buy a plant or 2 cheap, and start a new company.
I'm sure Chrysler would be happy to sell some folks a factory or two (or a baker's dozen of them), but good luck getting financing.
Starting a new company reminds me of Tesla Motors. They are out there, although sometimes it's hard to tell if they are selling cars or shares of stock.
So your poison is deciding whether to give a loan to a known failing company or loaning money to an unknown startup. :P
Then there's that third option where you fire sale everything (and even if you pick up a factory for peanuts, you'll still need some bucks to buy supplies and hire workers until you can turn your cash flow on).
That leaves some outfit like Chery or Tata I guess, assuming they have enough reserves to pick up the slack.
>Ahh .. the difference though is that the bailout money is a loan. From that loan we the taxpayers, including Toyota, Honda, MB, BMW will / should make a profit in lending it to GM. This is good business.
What I am proposing is also a loan, albeit only to the extent that vouchers are turned in. The regular bailout is all money upfront. If the voucher system is used, the only money that will loaned out will be dependent on the # of vehicles D3 sold. Makes sense?
Actually, GM was offered the same opportunity as Ford, and GM management haughtily told the lenders it didn't need the money, as its upcoming, razzle-dazzle new vehicles would turn around the company.
I agree with all of this. I think Chrysler can't die soon enough. It has no future in this market and the management of Cerberus has already pulled the plug on making it into a world class competitor.
By it hanging around it's taking customers away from GM and F which also have to shrink btw. It's just that with C still sucking up customers for a while GM and F have to shrink more than they would otherwise.
Then there's that third option where you fire sale everything
There is no difference between your option 1 and this option. Everything has a particular value today - a steak dinner, a car, an auto plant, or a whole company. It has 1 value. That value is the most someone is willing to pay for it. There is no difference between a regular sale and a fire-sale. A fire-sale is simply the description for something that has lost so much value.
Because GM and Chrysler do not sell their assets means they are UNWILLING to do so, and take the loss. Some of us may have Citi or Fannie Mae stock - very similar situation. Maybe we're holding onto it because we don't want to sell so low. That's our right, but then again maybe we need to sell it to pay bills. But of course if the government is chump enough to give me money, there's no forced sale, right?
That leaves some outfit like Chery or Tata I guess
Do you have a paradigm that a non-auto company can't get into the auto business? Why couldn't Boeing, GE, Walmart, Exxon, or Warren Buffett buy some of the assets? Many of those know how to manufacture something far more complicated than an auto.
Do you have a paradigm that a non-auto company can't get into the auto business? Why couldn't Boeing, GE, Walmart, Exxon, or Warren Buffett buy some of the assets? Many of those know how to manufacture something far more complicated than an auto.
I don't think any of those concerns could make it as an automobile manufacturer.
Boeing and GE are good at costly, high-tech stuff, like airplanes, satellites, MRI machines, jet engines, etc. I could maybe see one of them taking over Tesla and building a $100K+ car, but nothing at a $15K-$20K price point.
Walmart doesn't build anything. It sells what others make. Why do you think they could become a car manufacturer? What might make sense is for Walmart to contract to one of the D3 to build them a special, low-cost vehicle that Walmart only would sell. They do this with some of their products, like TV sets.
What does Exxon produce beyond oil/gas?
Warren Buffet also has never built anything. I think anytime he tried getting into a business that built anything, he came out on the short end of the stick.. The original Berkshire operation - didn't he buy that just as all the textile business was moving out of the northeast to the south? He is very good at making money, but that's not the same as making a successful car or truck.
I don't think any of those concerns could make it as an automobile manufacturer.
That is ridiculous. Why? Because GM, Ford and Chrysler are failing because of their system. What the U.S. auto industry needs is efficent management and structural systems. Any company or individual with funds could take over Ford, GM's and Chrysler and run it better than them. I or even you - who i don't know could run the D3 better then they do. How's that possible?
Because the D3 are locked into their current size and structure with all their contracts. They have little room to maneuver.
If anyone buys the D3 assets are they going to be paying D3 pensioners - No? Do they need UAW workers with the 2,200 page contracts - no. Do they have too many dealers - no, they only sign on about 50% of what they have now. Do they have the stigma of the D3 - no, mostly gone if they market correctly. Would a new auto company be sized right - yes (Ex. say GM has 10 plants they're paying for, when the market only is buying 50% of what it used to - the new company would only buy and run the 5 best plants - much less costly!).
So in summary, someone else can build vehicles a lot cheaper than the D3 can, who have all these excessively expensive agreements.
When you buy a company, you assume their contracts and obligations. That's why no one's buying them now...if you buy pieces of it at a liquidation, then you're not stuck with their contracts and obligations.
Problem is, they're not going to liquidate like that as long as they're getting "bridge loan" handouts. Which means anything they sell will have contract and obligation strings attached. Which are the root of the whole problem in the first place. :shades:
There is no difference between a regular sale and a fire-sale
I disagree (figures, right? ).
In spite of what people think of Calibers or Aveos, both GM and Chrysler brands have a tangible value. Goodwill and intellectual property, etc. Just buying the building gets you the steak but no sizzle. So you wind up paying McDonald's prices but you have to start from scratch and claw a long time before having a shot at becoming Ruth Chris.
>That leaves some outfit like Chery or Tata I guess >Do you have a paradigm that a non-auto company can't get into the auto business?
Chery is a only an automotive company and only 11 years old.
TATA is a over 100 year old Steel company (est. 1907) that has grown in many sectors & services including automobiles. So yes, non-auto companies can get into the Auto business.
In spite of what people think of Calibers or Aveos, both GM and Chrysler brands have a tangible value.
Really?! My perception of those brand names right now is "Loser", and the brand drags down the value. I think that is reflected in many peoples' views in that sales are declining faster than others, and the depreciation is worse for the D3 vehicles. If anything having a Pentastar or GM badge drags down the value of a vehicle.
So you wind up paying McDonald's prices but you have to start from scratch and claw a long time before having a shot at becoming Ruth Chris.
Surely we can point out many companies that started out with premium products and premium prices - Bose, Starbucks, Tommy Bahama, ...
Strongly agree. Stop the loans, some of the D3 go CH7, and liquidate some or all of their assets, and someone picks up the good pieces and makes vehicles using efficient management systems.
Someone would pay big bucks for that brand. Or GMC trucks and Dodge Rams. And those folks may as well be the ones buying the factory with all the tooling in it. If GM or Chrysler gets sold off piecemeal the overall value would be less.
Dare I admit that I've never heard of Tommy Bahama? :shades:
I agree that Corvette and some other parts of the D3 have considerable value. But I don't really have any vested interest or bias, other than I don't want the government and thus our tax $ involved in supporting ANY failing corporate entity. Thus I don't care if the D3 are able to survive with Ch11, 1 or 2 need to go to Ch7, they get loans from the Chinese government, or if they shutdown X% of their operations.
They have many experienced executives, accountants, lawyers, and outside fianncial consultants. they should do what gets their stockholders and creditors the most $. But again, I could care less whether they can get $10B or $10 for a brand or division. Good luck to them, I wish them no ill will.
But if they keep insisting they aren't going to sell this, or downsize fast, ... then the losses they have should be allowed to force them into dissolution of some sort. That is for them to figure out what is best, not you or I, Geithner, or Obama.
Dare I admit that I've never heard of Tommy Bahama?
I'm sure you googled it by now. More impressive then the overpriced clothing, is the overpriced furniture.
Comments
Its funny but we the american people still keep buying From other parts of the world.
What will we do when we have lost all the jobs? The best days of the USA are gone and we are about to fall and fall hard. When this takes place what part of the usa will go to Canada? Thats the part i want to live in. The rest will fall into whos hands?
Corporate Greed is killing us. Its ok for them at the top to keep making the big money so they continue to move more and more jobs out of the US. We will soon have only two classes in the USA if this keeps up.
It was the unions of this countries that helped build the middle class and forged this country. I am not a Union man but i do understand one thing, and that is that i had a better life because of the unions.
GOD HELP US FOR WE NO NOT WHAT WE DO.
We are not a smart people , We are a selfish people, when we buy we want so much for so little and we dont want to pay for the true value. We want to have it all and have it now. Cant work for it as our parents did, we just want it. In our minds its ok for us to make good money but its not ok for others to make it. But its ok to send our money over to other countries.
So America keep sending your money over and some day they will buy us all up.
The full (66+) benefit will take 8.1 yrs to recoup already and that is without interest also.
Then, however, throw in nearly another decade of me working and paying in about 75% of the age 62 payout amount per month. It's starting to look a lot like 14-18 years of collecting to break even without including any interest.
This is what I claimed earlier. 16 yrs was a very good guess, but I figured all this out a year or two ago.
I also managed to time buying my first house just perfect too. Fixed mortgage rates were 17.5% the month I closed on it. They keep referring to 1982 today on the news as the last time Calif. had the same unemployment rate as it does today, 10.1%. Back then, we signed up to pay interest in the teens and complained just a little, as long as we had our 2 jobs and the 12 year old car ran good. Today we trash our country's economy by defaulting if our mortgage rate isn't below 7%.
Go 800 miles NW and eye the damage. The transplant manufacturers are trying to lower the returned value to Japan from 85% of each transplant sale to something slightly lower by throwing a few tidbits to the remnants of Delphi and that makes everything honky dory? 31,000 GM and Delphi jobs are gone from my county. That's county, not country. The transplants have hired about 1/2 that amount in the entire state and at about 1/2 the wage, and we make the Tundra, Sienna, Camry, Subaru and Civic here now.
2014 Malibu 2LT, 2015 Cruze 2LT,
Here is San Diego the worst areas lost about 25% of their homes value. You can apply for tax reduction by showing your home is not worth what you paid for it. Condos took a bigger hit and are a flood on the market with the highest foreclosure rate. The good news is first time home buyers are finding homes they can afford. And banks are happy to unload the inventory. It makes it tough on people like myself that would like to sell. I have to find a buyer with 20% down to get a bank to talk to them. If the bank owns it they may even pay all closing costs to unload their homes. The beach areas are down less than 10% so if you were looking for a bargain in LaJolla forget it.
I still have a problem with bailing anyone out. They got into the mess let them get out. That includes Citigroup, AIG and the homeowner that took on a mortgage for more than they make. Will anyone learn from this is the question? I cannot see helping the automakers carry on business as usual.
No, you just get different bias that you happen to like better. Not the same thing.
You want unbiased you go watch the Centrist News Network. :shades:
You're kidding, of course, when you say CNN is unbiased? It must just be a bias that you like better.
2014 Malibu 2LT, 2015 Cruze 2LT,
Great place to go for arguments about bailouts, lemee tell you.
THIS GOVERNMENT SUX. A REBELLION IS IN ORDER.
IN GOD WE TRUST! :mad: AS FAR AS THE GOVERNMENT BAILIN OUT THESE MORONS WHO GOT THEMSELVES INTO THIS MESS. SCREW'EM THAY MADE IT LET THEM GET OUT OF IT.
In addition the old paradigm of vehicle making was based on 'X' amount of direct labor ( jobs ). The more modern approach is based on 75% of 'X'. That's productivity and the normal course of events.
The fact is that as it has happened during the entire history of country the new more efficient jobs have moved from the unionized North-Central rust belt to the non-union sunny South. Nothing new to see here it's been happening here ever since the textile mills moved out of Mass, RI and CT in the 19th Century. This is the history our country.
That's worse...means the government is basically handing out Chevy Aveos. A car designed in Korea, incidentally.
Actually, it is very efficient way of letting them know their market value:
1. If D3 sales go gangbusters with the vouchers, it gives them a lease to survive
2. If the D3 sales drop or even stay constant even with vouchers handed out, it is a signal for the D3 to close shop.
In this fashion, the public will be responsible for their survival or downfall directly. No government funding will be needed directly. The government will reimburse D3 ONLY for those vouchers that actually were involved in a sale. No money upfront is involved. Much like a mail-in rebate. This time it is the manufacturer who is doing it. In fact, this process is called a Ship & Debit type of transaction. The D3 will have to submit claims to the government periodically to get their money.
Mostly the problem is, with only 10k of voucher value, that's the ONLY car people can buy if they can't get credit. No Focuses, no Calibers, nada. So the government voucher program, if limited to only 10K, would be supporting GM's GMDAT design/production facility on South Korea by selling a ton of Aveos. How does this help the U.S. economy?
They already know the market-value of their values is not enough to cover their costs. They have years of data on this - losses each year. And BTW, there is no fixed market-value to anything; market-value continually changes 24/7.
If D3 sales go gangbusters with the vouchers, it gives them a lease to survive
I don't want the government to pay in any shape or form - no vouchers, bailout, loans, grants or whatever you call them. Private investors and banks can use their money., as they have done for many years in many firms.
Answer this - why won't private investors put their money into the D3, if the D3 has a chance to turn things around? Investors are putting billions of dollars into money market and Treasuries to make 0.1% or so. Why do you not think they'd invest in the D3 at the low prices they're at, and the chance to make so much money?
Basically when the banks, Wall Street and millions and millions of investors don't buy your stock or corporate bonds, the vote is in on viability.
So how does a bailout guarantee that the money does not go towards the Korean design cars?
Eh? Come again?
With 10K voucher, you can buy a Cadillac for the price of a Corolla, a Malibu for the price motorbike......This would make the good designs from GM go up in popularity, crushing the imported ones since a Camry and Accord will cost way more.....
#2: I vote for the voucher if the govt is hell bent upon helping D3.
I think I made myself ample clear now. Thanks!
Assuming one can get a loan for the difference in price. Which a lot of people can't because of this little thing called a "credit crisis," which is one of the reasons for the current problems.
If they can't get a loan for the difference, then all that 10k voucher is going to do is get someone an Aveo. And I predict they would be exchanged for MANY "free" Aveos, thereby stimulating the Korean economy quite nicely. It would be either that or toss them, and most people are NOT going to toss them.
The manufacturers would end all the employee pricing...
I actually think cars would be cheaper but not down by $10K with the rebate.
Some would, I bet.
It's taxpayers money first. Toyota, Honda, Nissan, Hyundai, BMW and MB are much much much larger taxpayers than any of us ( probably ). Would you allow your money to be given as a gift to a competitor to increase it business at the expense of decreasing your business.
Then like it or not to the D3 faithful, the transplants make American vehicles. Some are far more American than even the D3 issues. The Federal Govt will not give cash gifts to one American company at the expense of another American company.
It won't happen.
Now they might give vouchers to buy any vehicle with a Domestic Content greater than say 55%.....any vehicle. With this it would stimulate a whole variety of sections of the country.
Interesting that if a foreign producer did this in their home market we'd have a lot of Americans yelling about fair trade practices against US vehicles.
I'm still thinking a liquidation of Chrysler and an orderly bankruptcy restructuring of GM is the best way to go. If the economy stays soft all year, Ford will probably become a problem child as well. That will be even more complicated because of the Ford family favored stock class interests. I would insist that go away before any US tax dollars go there. You might have a bit more foreign interest in acquiring parts of Ford if they get into trouble later.
You got that right. We were talking about it the other day at work, only spending money on absolute necessities, those of us still with jobs are staying tight, cash is good. My tax refund and anything coming my way from the stimulus package is going in my money market account.
That statement needs to be repeated. You are exactly correct. The work has never stayed in one place too long. Well maybe the auto industry stayed in Michigan too long. They actually believe building cars is their right. Even GM in their infinite ignorance could not manage to get it right. They do not deserve a nickel of our money. That includes all the entities lined up to steal from the tax payers.
Or you could buy a year or two old used model that has taken the similar deep depreciation hit. :P
> It's taxpayers money first.
The bailout money is also taxpayers money, lest you forget.
The voucher system is a gift of taxpayer money to the D3. It never has to be paid back and there is no profit to be made from giving it away. It'll never fly.
We've already been thru this discussion a few weeks ago. It is not correct to say it's okay to make another bad decision, based on the fact that a bad decision was made before. The government loans to the D3 or any other company in the private sector is not normal, benefitting some citizens and hurting others. Supporting GM and Chrysler hurts those companies competitors, by lowering the competitors sales. Government should be neutral, setting equal and fair rules (emissions, CAFE, ...) for all to follow - that's it .
I sincerely think that by trying to keep the entire D3 in business, they are hurting the chances of 1 or 2 of them coming out of this depression healthy. By supporting Chrysler and GM, they are keeping some people from going to Ford to buy their products. What the government is going to end up with on a course of loans, is all of the D3 being small and losing money, and requiring loans.
If loans continue, we'll end up with 3 too large car companies, with high costs, borrowing money, instead of 1 or 2 bigger companies that are fairly healthy, and have enough business to support their legacy and current costs.
I would also like to see if 1 or 2 of these corporations go under, that some individuals with some new ideas on how to make and sell cars would then be able to buy a plant or 2 cheap, and start a new company.
Starting a new company reminds me of Tesla Motors. They are out there, although sometimes it's hard to tell if they are selling cars or shares of stock.
So your poison is deciding whether to give a loan to a known failing company or loaning money to an unknown startup. :P
Then there's that third option where you fire sale everything (and even if you pick up a factory for peanuts, you'll still need some bucks to buy supplies and hire workers until you can turn your cash flow on).
That leaves some outfit like Chery or Tata I guess, assuming they have enough reserves to pick up the slack.
What I am proposing is also a loan, albeit only to the extent that vouchers are turned in. The regular bailout is all money upfront. If the voucher system is used, the only money that will loaned out will be dependent on the # of vehicles D3 sold.
Makes sense?
We are now learning how well that one worked...
By it hanging around it's taking customers away from GM and F which also have to shrink btw. It's just that with C still sucking up customers for a while GM and F have to shrink more than they would otherwise.
There is no difference between your option 1 and this option. Everything has a particular value today - a steak dinner, a car, an auto plant, or a whole company. It has 1 value. That value is the most someone is willing to pay for it. There is no difference between a regular sale and a fire-sale. A fire-sale is simply the description for something that has lost so much value.
Because GM and Chrysler do not sell their assets means they are UNWILLING to do so, and take the loss. Some of us may have Citi or Fannie Mae stock - very similar situation. Maybe we're holding onto it because we don't want to sell so low. That's our right, but then again maybe we need to sell it to pay bills. But of course if the government is chump enough to give me money, there's no forced sale, right?
That leaves some outfit like Chery or Tata I guess
Do you have a paradigm that a non-auto company can't get into the auto business? Why couldn't Boeing, GE, Walmart, Exxon, or Warren Buffett buy some of the assets? Many of those know how to manufacture something far more complicated than an auto.
I don't think any of those concerns could make it as an automobile manufacturer.
Boeing and GE are good at costly, high-tech stuff, like airplanes, satellites, MRI machines, jet engines, etc. I could maybe see one of them taking over Tesla and building a $100K+ car, but nothing at a $15K-$20K price point.
Walmart doesn't build anything. It sells what others make. Why do you think they could become a car manufacturer? What might make sense is for Walmart to contract to one of the D3 to build them a special, low-cost vehicle that Walmart only would sell. They do this with some of their products, like TV sets.
What does Exxon produce beyond oil/gas?
Warren Buffet also has never built anything. I think anytime he tried getting into a business that built anything, he came out on the short end of the stick.. The original Berkshire operation - didn't he buy that just as all the textile business was moving out of the northeast to the south? He is very good at making money, but that's not the same as making a successful car or truck.
That is ridiculous. Why? Because GM, Ford and Chrysler are failing because of their system. What the U.S. auto industry needs is efficent management and structural systems. Any company or individual with funds could take over Ford, GM's and Chrysler and run it better than them. I or even you - who i don't know could run the D3 better then they do. How's that possible?
Because the D3 are locked into their current size and structure with all their contracts. They have little room to maneuver.
If anyone buys the D3 assets are they going to be paying D3 pensioners - No? Do they need UAW workers with the 2,200 page contracts - no. Do they have too many dealers - no, they only sign on about 50% of what they have now. Do they have the stigma of the D3 - no, mostly gone if they market correctly. Would a new auto company be sized right - yes (Ex. say GM has 10 plants they're paying for, when the market only is buying 50% of what it used to - the new company would only buy and run the 5 best plants - much less costly!).
So in summary, someone else can build vehicles a lot cheaper than the D3 can, who have all these excessively expensive agreements.
Problem is, they're not going to liquidate like that as long as they're getting "bridge loan" handouts. Which means anything they sell will have contract and obligation strings attached. Which are the root of the whole problem in the first place. :shades:
Once upon a time Henry J. Kaiser made and sold little cars. The "Henry J".
Before he folded, Sears & Roebuck, went into selling cars, " Henry J", but under the badge "ALLSTATE'.
Sears learned a lesson from that experiment. "Do what you do, best."
I disagree (figures, right?
In spite of what people think of Calibers or Aveos, both GM and Chrysler brands have a tangible value. Goodwill and intellectual property, etc. Just buying the building gets you the steak but no sizzle. So you wind up paying McDonald's prices but you have to start from scratch and claw a long time before having a shot at becoming Ruth Chris.
>Do you have a paradigm that a non-auto company can't get into the auto business?
Chery is a only an automotive company and only 11 years old.
TATA is a over 100 year old Steel company (est. 1907) that has grown in many sectors & services including automobiles. So yes, non-auto companies can get into the Auto business.
Really?! My perception of those brand names right now is "Loser", and the brand drags down the value. I think that is reflected in many peoples' views in that sales are declining faster than others, and the depreciation is worse for the D3 vehicles. If anything having a Pentastar or GM badge drags down the value of a vehicle.
So you wind up paying McDonald's prices but you have to start from scratch and claw a long time before having a shot at becoming Ruth Chris.
Surely we can point out many companies that started out with premium products and premium prices - Bose, Starbucks, Tommy Bahama, ...
and they all started out private. Bose is still private.
Someone would pay big bucks for that brand. Or GMC trucks and Dodge Rams. And those folks may as well be the ones buying the factory with all the tooling in it. If GM or Chrysler gets sold off piecemeal the overall value would be less.
Dare I admit that I've never heard of Tommy Bahama? :shades:
They have many experienced executives, accountants, lawyers, and outside fianncial consultants. they should do what gets their stockholders and creditors the most $. But again, I could care less whether they can get $10B or $10 for a brand or division. Good luck to them, I wish them no ill will.
But if they keep insisting they aren't going to sell this, or downsize fast, ... then the losses they have should be allowed to force them into dissolution of some sort. That is for them to figure out what is best, not you or I, Geithner, or Obama.
Dare I admit that I've never heard of Tommy Bahama?
I'm sure you googled it by now. More impressive then the overpriced clothing, is the overpriced furniture.