Do You Favor A Government Loan To The Detroit 3?

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Comments

  • euphoniumeuphonium Member Posts: 3,425
    Geittner is asking for permission today to take over AIG

    AIG is mostly an insurance conglomerate, not a banking institution and the insurance companies are already regulated by the states in which they have filings to do business.

    Considering his past owed tax problem, he has no standing to be where he is.
  • tlongtlong Member Posts: 5,194
    "When the airlines went bankrupt, did Boeing go out of business?"

    Your comparing apples to organes: Boeing makes over 80% of its planes vs. auto suppliers make 75%+ of cars, GM is mostly final assembly, very difference scenario


    Better get your facts straight. Boeing has been moving more and more to only final assembly. The 787 is shipped in complete modules and "snapped" together. Full nose sections with cockpit, instruments, wiring -- shipped in one piece to Boeing. Center fuselage - one piece. Wings - one piece. More final assembly than even GM. Major subassemblies are made in Europe, Japan, Kansas, etc.
  • circlewcirclew Member Posts: 8,666
    ...as Obama hinted toward making sure the Auto industry will be saved. Let's see how much this puppy will cost!

    Regards,
    OIW
  • bpizzutibpizzuti Member Posts: 2,743
    AIG is mostly an insurance conglomerate, not a banking institution and the insurance companies are already regulated by the states in which they have filings to do business.

    Considering his past owed tax problem, he has no standing to be where he is.


    AIG turned itself into a financial services conglomerate as well, through AIGFP. It also managed to get itself regulated by the Office of Thrift Supervision by buying a single thrift that was maybe 0.5% of the entire company. That kind of dodge is what the government wants to start avoiding.

    They should be able to break them up. As Newt Gingrich said recently, "If you're too big to fail, you're too big to manage."
  • garyangaryan Member Posts: 3
    There is some misconception out there that the current situation facing GM and Chrysler is because they build lousy cars that no one wants to buy. We are all seeming to miss that the day after Lehman Brothers failed, auto sales dropped an additional 20% - overnight. In addition, since the banks tightened credit and many dropped out of the business, sales dropped twice as much as traffic - traffic (people who want to buy) has dropped by 20% and sales are off by 40% - this means there are buyers out there who can't get credit. While GM and Chrysler had problems before, they could have survived this downturn until the bank problems....my mother lives on GM pension as my father worked for GM for 37 years....should the failure of banks to properly judge home values and credit default swap risk be the reason why my Mom's pension is defaulted? Should the hard working people of Detroit be put out of work, because CitiCorp got too big, or no one was willing to regulate Fannie or Freddie? Should an entire industry be swept away because people bought speculative real estate that they couldn't afford? I say that would be a shame and as American's we should all step in and help......
  • circlewcirclew Member Posts: 8,666
    I respect your point of view....but those companies you support were bleeding for years...this was just the fatal dagger. Toyota is hurting as well as the rest of the auto firms. They just do not need massive taxpayer funds to support a drastically needed change in business model to be competitive and profitable. SUV dependence in a volatile energy market was another excuse that just supports bad management decisions.

    Regards,
    OW
  • anythngbutgmanythngbutgm Member Posts: 4,277
    Again, as been mentioned before, there is way too much "lumping" going on here. "An entire Industry" is not on the verge of failure here, just GM and possibly Chrysler. Lumping Ford in to make the point is unfair and incorrect. ;)
  • andre1969andre1969 Member Posts: 26,038
    Wasn''t the original Chrysler model introduced in 55 or 56? Think that the original was better proportioned than the big-finned 57.

    Yeah, the original Letter Series was 1955, called the C-300. It used the Chrysler body with an Imperial grille, and a hopped up 300 hp version of the 331 Hemi. It was a good looking car. The 1956 was called the 300B. It had modest tailfins, and the front fenders peaked above the headlights, giving the car a bit of a forward thrust, and a more aggressive stance. Its standard engine was a 354 Hemi with 340 hp, and optional was a 355 hp version, the first time a domestic production car broke the 1 hp per cubic inch barrier. Of course, that was gross hp, not net. Net hp was probably around 260-270.

    As for the Charger police car, most of them are actually just the 3.5 V-6 model. It puts out 250 hp, and performs about the same as an Impala with the 3.9, or the Crown Vic with the 4.6 V-8. While the Hemi would blow any of them away, it's also a lot more costly. With police cars, I think the Impala is often favored because of its low cost, and the Crown Vic because of its durability and low cost to fix. I don't think the Chargers, even in V-6 form, are particularly cheap.

    Once upon a time, Chrysler used to dominate the police car market, but those days are long since gone.
  • lemkolemko Member Posts: 15,261
    I believe the Highway Patrol division of the Philadelphia Police uses Hemi Chargers. I understand the best police car of all-time was the 1969 Dodge Polara 440 used by the California Highway Patrol. Remember that 1971 Plymouth Fury coupe we saw at Carlisle that was a police car underneath due to an assembly snafu? It even had a police speedometer. That's one case where the buyer immensely benefitted by somebody screwing up in the factory!
  • steverstever Guest Posts: 52,454
    "In news from around the world Monday, auto magnates in Japan and Russia have seen their fortunes crippled, the outlook for Germany's economy has worsened, German automakers may pull out of the shortened Tokyo auto show and French supplier Valeo's chief executive has stepped down over a strategy disagreement."

    Global News: Auto Riches to Rags From Europe to Asia (AutoObserver)
  • dbostondriverdbostondriver Member Posts: 559
    In Cambridge, Ma they use Dodge Charges as police cars. I have to admit that they look great and intimidating.
  • dtownfbdtownfb Member Posts: 2,918
    garyan, I respect what you are saying but you need to step back and look at GM and Chrysler though a different set of eyes. This day has been coming for quite a while. Yes, the economic downturn has accelerated this but the blame rests with the management of GM. GM has not turned a profit since the second quarter of 2004. US new car sales were in the neighborhood of 17M during that year. near record car sales and they still could not turn a profit. GM made a conscience decision to kill their original electric car back in 1999 because they did not want to invest in its development when they could instead make more money selling pickups and SUVs. Of course the development of the passenger cars suffered as well during this time which is why GM is always playing catch-up to Honda and Toyota. In 2007, they re-negotiated the UAW contract. As a manager, you should know how much you can pay your employees and still make a profit. they don't at GM. Now they are back pedaling with the UAW contract even though they knew they would have trouble meeting the demands. they should have drawn a line in the sand and said we can't afford these salaries and benefits anymore and showed everyone why they can't.

    GM is in too much debt, has too many workers and too few sales of profitable cars. the best thing that can happen to GM is a chap. 11 bankruptcy. They need to get from under these pressures so they can re-structure. The fact the bondholders aren't willing to negotiate is very telling. No one has faith this company can survive even with additional loans. All this talk of re-structuring cost money; money they don't have and time they don't have. Which is why I laugh anytime Nardelli and Wagoner talk about their future plans on being profitable. I don't want to see job losses either but the reality is Gm is no longer a viable company. The bailout money (bailout is the proper term here since there is no chance of repayment) will only extend the agony.

    Chrysler? Please! Why should we support a Fiat/Chrysler merger? Let Cerberus find investors to support this merger if it is such a great plan.

    GM reminds me of Bethlehem steel. Inefficient, bloated, poorly managed, over paid, etc. Somehow rebounded from them going out of business. Do I want to see the job loss? NO! Do I feel bad for people like your mother (and my brother-in-law's father)? Absolutely! Because you did nothing wrong and were made a promise. Put the blame on the right people: management of GM. They caused this problem not the government.
  • circlewcirclew Member Posts: 8,666
    Wasn't that the same Cop Car in Vanishing Point that continually crashed while Kowalski evaded them successfully in that 426'er R/T Challenger??

    Regards,
    OW
  • dave8697dave8697 Member Posts: 1,498
    A tank of gas in my '87 astro was about 12% of it's value last summer.
  • andre1969andre1969 Member Posts: 26,038
    I understand the best police car of all-time was the 1969 Dodge Polara 440 used by the California Highway Patrol.

    The 1969 Polara was the peak of copcar performance, at that time. It was downhill from there, bottoming out around 1981-82, but then things started to improve. Here's what the site www.allpar.com says about the '69 Dodge...

    "1969 was the year of the ultimate squad; for a quarter century afterwards, nothing could match its performance capability - the 1969 Polara Pursuit. This was the apex of the high-power era, the last year before lower compression engines and tightening emisions requirements. The 1969 Polara Pursuit, with its 375 bhp 440, sleek new "fuselage" bodystyle, and standard 3.23 axle, could do 0-60 in 6.3 seconds, the quarter mile in 14.3 seconds (at over 99 mph), and run out to a top speed of (or, by some accounts, above) 147 mph!"

    However, I don't know where, exactly, those performance stats came from. Allpar also says that the Polara topped out at 149.6 mph on the Chrysler proving grounds in Chelsea, Michigan.

    I was always under the impressoin that the Polara 440 copcar had a stronger engine than that, and now seeing it's just the 375 hp setup, I have to question those results. Consumer Reports tested a 1969 Charger with the 375 hp 440 and the 3.23 axle. That would be a much lighter car, yet they were only able to get 0-60 in 7 seconds. I forget what their quarter mile time was. So either CR's testers just don't know how to drive, or there's something iffy about the '69 Polara's performance stats.

    FWIW, it was the 1994-96 Caprice with the LT1 350 that finally hit a higher top speed. I don't know how it did in 0-60 or quarter mile, though. I think the Impala SS, which is the same car, would do 0-60 in around 7 seconds or so.

    There's a used car dealer about a mile from me, that sometimes gets in old ex-police cars. They recently had a 2004 Intrepid, with only 41,000 miles, that I was sorta tempted by. It had the 3.5 V-6 with 250 hp. Intrepids made pretty good police cars, in just about every respect but one. Braking. Push them too hard, and they could actually burst into flames! Anne Arundel County, Maryland, still uses Intrepid police cars. They're a 2-tone light and dark blue, that I find pretty attractive. I guess they must be getting their money's worth out of them, since the last Intrepid to roll off the assembly line was September 2003. I figure if the cars were crap, they would've been retired by now.

    That dealer also had a couple of police Chargers for sale. I remember one of them only had something like 3,000 miles on it! I dunno what jurisdiction it came from. It was midnight blue. I'm guessing maybe it was some gov't agency car or detective car? FWIW, the Intrepid was a dark green, which wouldn't be any jurisdiction around here that I know of. So I guess it could've been an undercover car or something?
  • gagricegagrice Member Posts: 31,450
    This sounds like C11 to me. GM is playing chess with the lenders and the UAW. No one wants to give up their position. Time to file for BK...

    WASHINGTON (Reuters) - President Barack Obama said on Thursday that struggling U.S. auto companies could expect "some" government aid if they commit to restructuring their businesses.

    "I know that it is not popular to provide help ... to auto companies," he added. "If they're not willing to make the changes and the restructurings that are necessary, then I'm not willing to have taxpayer money chase after bad money."

    "Everybody's going to have to give a little bit: shareholders, workers, creditors ... suppliers, dealers," he said. "Everybody is going to have to recognize that the current model -- economic model -- of the U.S. auto industry is unsustainable."


    http://www.reuters.com/article/newsOne/idUSN1838682720090326
  • euphoniumeuphonium Member Posts: 3,425
    BO has never been a business man. He is a socialistic politician.

    Basic Business Rule: NEVER LOAN TO LOSERS.
  • imidazol97imidazol97 Member Posts: 27,690
    Bo is so brilliant in his economic understanding and descriptions. For example: "Obama has long said Detroit should build more fuel-efficient vehicles rather than focus on gas-guzzling sport utility vehicles and less efficient pickups."

    I wouldn't have figured that out. Must be Chicago expertise.

    Isn't there irony in that the policians (some of them) in DC want Detroit to be more efficient and spendthrift while DC is spending our kids' futures with huge deficits in a very inefficient way all the way proclaiming that He, Bo, is going to cut deficits in half!

    And he's giving advice to DC but we have AIG and other banks sucking up funds for their and some congresspeople's mishandling of controls on Fannie, Freddie, Sally, etc.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • dbostondriverdbostondriver Member Posts: 559
    As our President said, "The only thing less popular than bailing out the banks, is bailing out the auto industry."
    http://money.cnn.com/2009/03/26/magazines/fortune/motor_world.fortune/index.htm
  • dbostondriverdbostondriver Member Posts: 559
    Looks like the GM and Chrysler get a lifeline. Lets see what strings are attached.
    Only time will tell if this pays out.
    http://news.yahoo.com/s/ap/20090327/ap_on_go_pr_wh/obama_autos
  • nippononlynippononly Member Posts: 12,555
    There goes another $21 billion.....down the toilet......

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • mikefm58mikefm58 Member Posts: 2,882
    As our President said, "The only thing less popular than bailing out the banks, is bailing out the auto industry."

    I think he's got that in reverse. I'd much rather bailout the auto companies than the same dumb [non-permissible content removed] banks that got us in this mess in the first place. At least I'd know my money is going to the middle class rather than some bank VP who counts on his million dollar bonus just for showing up to work on time.
  • circlewcirclew Member Posts: 8,666
    I would say get ready for another $75B more!

    SANTA MONICA, Calif. -- March car sales to be reported April 1 by manufacturers look a lot like February car sales, and that's not a good thing since March traditionally marks the kick off of the busy spring selling season.

    "If sales continue at this pace all year, we're looking at a Seasonally Adjusted Annual Rate of only 8.9 million vehicles sold, which is slightly more than half of 2007 sales," said Edmunds.com CEO Jeremy Anwyl.

    Industry vehicle sales, both fleet and retail, are expected to come in at 774,000 units in March, according to a forecast by Edmunds.com, parent of AutoObserver.com. That's a 42.7 percent decrease from March 2008. And while March sales are up 12.7 percent from February, that's barely over half the normal hike between the two months.


    No way the US companies can downsize fast enough to make a profit. Expect more bleeding of your tax dollars. This should be on a level of the Banks Bailouts VERY SOON!

    Regards,
    OW
  • nippononlynippononly Member Posts: 12,555
    I would say that people have their wallets locked closed when it comes to a potential car purchase, which raises a question that has been raised before here at Edmunds: would it have been (or would it still be now) better for the government to just give huge cash incentives to Americans to buy domestic-branded cars? I mean after all, if they give the automakers a ton of money and people continue for another year to not buy cars, the automakers will still fail. There has to be a fairly robust market (13 million annual sales at least) for these automakers' recovery plans to have any hope of working.

    I think the next round of cash-burning should be spent propping up tier 1 suppliers and giving huge cash incentives to Americans to buy GM and Ford cars. Forget Chrysler, at this point we are better off without them if Fiat won't pay to take them over.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • gs42gs42 Member Posts: 54
    No automaker can survive in this climate with the same old business practices. Dealers will start going broke here very soon and that will snowball fast by this fall.

    Japanese and Korean companies may be in the best shape as their governments won't let them fail. Ford? Wait until 2010 and they will be broke also. The imaginary market "recovery" of the past two weeks was driven by lies and deceptions which won't hold water for very long.

    Citi and BOA profitable the first two months after losing billions in Q4? Maybe they can cook the books so our bailout money makes them look to be in the black. We need a watchdog group to oversee the remaining TARP funds so that they don't get slipped under the table to these weasels. AIG will get whatever it wants since they insure the pensions of Congress...no conflicts there!
  • circlewcirclew Member Posts: 8,666
    Car companies will need drastic changes to the supply systems. It cost too much to blindly make inventory these days.

    I say blindly because even the high-paid forecasters are proven wrong each month on their predictions of sales. It's a crap shoot and the sooner they set up a supply system with make-to-order from the consumer to delivery, the sooner a working business model will emerge.

    image

    I do not want to pay for bloated supply chain costs and dealer mark-ups.

    Regards,
    OW
  • gagricegagrice Member Posts: 31,450
    I would not want to buy a car that was sitting for months by the salt air of a port. Only VW has a decent rust policy. Those cars sitting there will all prematurely rust through. Probably the year after the lousy 5 year warranty. None of the Asian imports are willing to warrant against rust more than 5 years.
  • ruking1ruking1 Member Posts: 19,826
    For sure VW is one of few oems that have bodies made from galvanized steel.
  • nippononlynippononly Member Posts: 12,555
    So, what of all the people that live on the coast, which is some 15 million here in California alone? I mean the ones who are driving 10, 15 year old cars with no rust problems? What has saved them from this supposed epidemic of rust?

    It's not 1975 any longer.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • imidazol97imidazol97 Member Posts: 27,690
    A report says Wagoner will be stepping down.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • dbweaverdbweaver Member Posts: 88
    Everone always counts on the next year in business to be better than the last, so they must keep enough inventory to meet the demand. Noone who ever writes a business plan plans for sales to decrease.
    Those high paid forecasters couldn't get paid if you couldn't borrow money (or get a bailout) because your business plan projects a decrease in sales.
    I would not loan them any money becuase thier projected sales would have to be a lie!
  • joem5joem5 Member Posts: 201
    All the incentives stop and alot of dealerships go under,or do prices for cars come down?
  • fezofezo Member Posts: 10,386
    I saw that on Wagoner. Wagoner out at Obama's request.

    Guess we'll have details tomorrow...
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • euphoniumeuphonium Member Posts: 3,425
    Wagoner will say he made the decision "Obama" self! :)
  • dave8697dave8697 Member Posts: 1,498
    VW has good rust warranty but Passat was just selected by CR as most expensive family sedan to own.

    I like the cash to buy a D3 car idea. We are giving $8k to first time home buyers. I am eyeing a new Malibu. With a Silverado, Astro, and Sonoma, I obviously don't need fancy tail lights.

    Worst panel gaps seen lately? '08 Altima front fender to hood? But not quite as bad as '95 Trans Am front fender to anything.

    '10 Camaro? Has anyone seen one at adealership? March 16 debut?
  • iluvmysephia1iluvmysephia1 Member Posts: 7,709
    PR for Rick Wagoner to step down, for starters, eh?

    2021 Kia Soul LX 6-speed stick

  • dbostondriverdbostondriver Member Posts: 559
    Maybe I gave up too soon. It is good to see Obama grow a spine and get rid of Wagoner. Wagoner is the Matt Millen of the auto industry. He has not made a profit in NINE years. Hooray, hooray, hooray. Now only if the Presidents administration will admit to themselves that Chrysler has not hope at being competitive.
    http://www.foxnews.com/story/0,2933,511338,00.html

    And I don't agree with bailing out banks either, but the theory is by helping them, consumers still have credit, so people can still buy things. Therefor the economy doesn't go into the dumps even more. Bailing out GM is just giving money to an un-competitve car company so a couple thousand Union workers can keep their standard of living and bondholders can make interest.
  • dbostondriverdbostondriver Member Posts: 559
    Even if I was given $8,000 to buy a new D3 car I probably wouldn't and if I did it we be a Ford.
  • nippononlynippononly Member Posts: 12,555
    I think the Cobalt SS would be the only domestic model I would be even somewhat interested in if I were handed $8000 to buy domestic. Even then, I think I would probably just let the offer go by. But I have a car that is only 2-1/2 years old. I'm sure there are plenty of people in older cars that would be more interested.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • dbostondriverdbostondriver Member Posts: 559
    A better idea would be a guarantee that the dealer would buy your car back if you got laid off. Oh wait, Hyundai already thought of that. Are they getting taxpayers money? ;)
  • iluvmysephia1iluvmysephia1 Member Posts: 7,709
    Hyundai isn't getting money. But you would be wrong if you tried to state that Hyundai (and by default, then, Kia Motors of South Korea) never gets South Korean Guv-Mint handouts.

    2021 Kia Soul LX 6-speed stick

  • dbostondriverdbostondriver Member Posts: 559
    Maybe, but it is not my tax money. South Koreans can only hand out money for so long.
  • iluvmysephia1iluvmysephia1 Member Posts: 7,709
    true, and I was just gonna state that Hyundai doesn't need those handouts now. I don't think it happens often, and their (SK) bankroll does have it's limits, unless I'm sadly mistaken.

    2021 Kia Soul LX 6-speed stick

  • circlewcirclew Member Posts: 8,666
    That was to take your focus away from the additional bailout given DESPITE continued bleeding. A tiny concession for the $$$$, wouldn't you say?

    No biggie, really. Is anyone going to really care?

    Regards,
    OW
  • iluvmysephia1iluvmysephia1 Member Posts: 7,709
    for one, anyway. He claims that R.Wagoner was the best thing to arrive at GM since mass-produced, automotive production lines came in to existence, by Henry Ford.

    2021 Kia Soul LX 6-speed stick

  • berriberri Member Posts: 10,165
    Sometimes I think we've been overhyped by the media which is causing citizen concern about bailouts, and probably increasing consumer fears and holding the markets back some. Personally, I think government backed Chapter 11 may be a better idea, if the lawyers don't soak it so much as to ruin the reorganization. However, looking at this objectively, I have to consider what Bernanke at the fed is saying and doing. He can really be independent here. The blame has been fixed squarely on his predecessor Greenspan, so he doesn't need to be political. Bernanke is a very bright guy well schooled in the depression and deflation. I think the potential right now of major industry or banks failing may be graver than we understand with ramifications that may hurt us badly like lost investments, significantly higher yet unemployment or deflation ruining the value of our personal assets far beyond what the markets have done already. Congress and the political parties need to tone down the political rhetoric and the media needs to relax a bit and let this work through. Obama and his team are beginning to lay out what they will do when the economy settles down to unwind the deficit impacts, so we need to wait and see that before we condemn everything out of hand. It's interesting that professional investors don't seem as concerned as many do, so maybe there is actually more to this situation than we understand and we are being too negative about it?
  • imidazol97imidazol97 Member Posts: 27,690
    >overhyped by the media which is causing citizen concern about bailouts, and probably increasing consumer fears and holding the markets back some.

    All part of the plan.

    >professional investors don't seem as concerned

    Something changed a couple of weeks ago.

    2014 Malibu 2LT, 2015 Cruze 2LT,

  • steverstever Guest Posts: 52,454
    Media hype? I'm surprised the stores haven't all run out of milk, bread and TP from all the non-stop hype trying to scare people into believing the world is coming to an end. :D

    Professional investors - well, a lot of them aren't in it for the long term. Their worst case scenario is a stable market. They make their money when the markets move and they don't care which direction it goes. Lots of financial and employment news hits next Friday so it'll be an interesting (hyped up!) week.

    In addition to Wagoner, Rugged Hummer's fate to be decided by Tuesday. (AP).
  • iluvmysephia1iluvmysephia1 Member Posts: 7,709
    you're right, I noticed it too. Was it Bernenke announcing his Plan to stave off more bank failures? Announcing that he will adjust rates as required and that we can't let Wall St. totally crash, etc. Where's Bab-wa Waa-Waa on 20/20 when we really need her? But I noticed a change a few weeks back, too. Chime in with your clarifying thoughts on this, everybody.

    Remember, we're big on calming nerves right now, without resorting to drugs and alcohol. Right? :P

    2021 Kia Soul LX 6-speed stick

  • steverstever Guest Posts: 52,454
    But I noticed a change a few weeks back, too.

    It's all Sneaker's doing.

    Mar 16, 2009 - Which Is It?

    "The talk about the economy has seemed to turn a corner away from all-gloom-all-the-time lately and the stock market and news about the automakers have been a lot better as well. Kind of makes you wonder if the mess would be a little less stressful had some not spent the last two years or so talking things down."
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