yes, Bernanke's idea would make sense if you figure in the fact that future dollars will be worth less than debt incurred in past dollars.
And it can be tied in to the thread's topic by just examining what's being done for a moment. Bailing out the Big 3 with dollars that don't actually exist in "now" time also means debt that can be paid back easier because the worth of the pay-it-back money is coming to us at a reduced cost.
All you need are some fancy printing presses, employees paid by the taxpayers, good ink and paper and some time! Endless reams of cash to fill any automakers needs at any future time. Would you like some hot apple fritters and Starbuck's coffee to go with that debt relief, Sir? :P
I previously posted what I would have liked GM to do with "GM Canada" and in the light of what is going on in Chrysler, again, acknowledging that it is probably too late now, the following is a similar recommendation for Chrysler's handling of "Chrysler Canada":
In this case, I do not know whether all the "brand names" and such are Chrysler property. I *think* they are, but I am not bothering to check them.
I believe that Chrysler owns or owned the Packard company brand names and Packard at that time owned Cord and Auburn brand names. If not, then some of the following would not work.
I would like to see Chrysler rename it Canadian subsidiary as:
"Packard - Plymouth (Chrysler Canada) Corporation" (or something along that line).
The new company would start out renaming the current Chrysler-Jeep products with Plymouth, Packard, Cord and/or Auburn names. Rights for designs and technology would cover all previous and current products and maybe the next 5 years without royalties, but after that, the new company would have to negotiate further rights, and would be free immediately to license on its own from other companies, or do its own development.
Fiat technology from Italy would be included in this set of licenses.
The "Chrysler Canada" part of the name would be dropped from the company name after the 5 year term (subject to future negotiations).
I think this is feasible because the Plymouth brand name is not "dead" in the minds of the general public. There are many Plymouth vehicles still on the road. As for the "Packard" names, they are weak brands now, and have no particular Canadian aspect, but they were respected brand names with good histories, which could be resurrected with proper handling. Chrysler in Canada has not done as badly as in the US. In all, I think Canadian investors could find such a proposed company worth investing in, and the sale of shares would be a "legitimate" way of raising funds for Chrysler US.
The important footnote for all this is the fact that the Canadian banks are just about the only banks in the *world* right now, who are not in trouble. So there *is* investment money around, if you can put together a good package.
Well, however it turns out, they'd be wise to drop the Chrysler name...it's too tainted now. Maybe Dodge too.
I think they still own the rights to the AMC, Eagle, and American Motors names, don't they? Those might be strong enough brands in the US if needed. Especially if they want to wrap themselves in the flag like GM did. :shades:
There is precedent already for this kind of 'investment'.. It's been done successfully already. In addition the ATF has already stated its goals. *Inject money to stabilize the situation *Take some or all of the ownership *Restructure a near-dead corpse of a company *Keep oversight on the money invested *Stay out of the day-to-day running of the business *Sell the ownership portion at some time when the market recovers *Make a profit.
Not only no, but hell no!!!! Ford got smart and told the feds to buzz off; GM and Chrysler wanted the bucks and now look at what is going to happen to them!( It's already started) Keep the govt out of private business; it works better that way!
U R right about that ... until the beggars come looking for a handout of their own accord. Then what they are saying in effect is "We suck at this business thing, we just don't get it. Please help us Papa."
It's not like the Feds went in and took them over for public safety reason, the two of them begged to be taken over. Hell one parent company, Cerberus wanted out so bad that they said ..."We don't want any part of Chrysler any more anyone that wants it can have it for free."
It's not like the Feds went in and took them over for public safety reason, the two of them begged to be taken over.
Actually, it was more like "please give us money so we can keep doing the same old things we've always done." They didn't want government involvement, just government money, without strings.
I wonder if those hedge funds will still manage to drive Chrysler into a Ch7 by demanding 100 cents on the dollar for their bonds. I hope whatever deal they get, it's worse than the 28 cents on the dollar they were offered previously..."You guys had your chance, now take this or leave it."
Of course then real life hits, we remember that the guys with money are the ones who actually run this country, and they get their 100 cents on the dollar, and everyone else, including the taxpayer, has to take a powder. :sick:
Actually, it was more like "please give us money so we can keep doing the same old things we've always done." They didn't want government involvement, just government money, without strings.
You know the definition of insanity is doing the same thing over and over and expecting different results.
hey, are you sayin' all of us regulars here are just mindless blobs expecting something big to happen as a result of all of this insani....ummm....pleasure we're taking part in? :P
I'm not singling us out here. I've been hosting bulletin boards, message boards, etc. since about 1994, so there's ample evidence to support my response...LOL
But to get back to the topic at hand... when did the govt throwing money at a problem ever solve the problem and not create a whole slew of widely ignored, yet easily apparent to anyone who takes the time to see, consequences?
well, what you say is true, but your comment just prompted me to think of possibly another need for government...ummm...assistance up ahead. If we're gonna make the switch-ola eventually over to hybrids and all-electrics, shouldn't Uncle Sam be releasing some detailed information as to what kind of re-charging station infrastructures ought to be built?
And where they should be located, how many per population base, etc.? That to me would show that they're on-board the "green" automobile train, right. I know they've approved the use of Fed.monies as rebates on green-car purchases, and $7,500 is not really chump change. So the Obama Administration appears to be behind the "green" automobile movement quite a bit.
But we're gonna need some help in re-charging, especially on long trips, eh? I wonder if anyone's heard any online or newspaper/car mag. chatter on this issue. I think it's related to loans to the Big Three, too, because it's clear they are still wanted and their survival partly depends on how they become sufficiently "green." It doesn't appear important now, but it is indeed important in the long run.
But to get back to the topic at hand... when did the govt throwing money at a problem ever solve the problem and not create a whole slew of widely ignored, yet easily apparent to anyone who takes the time to see, consequences?
FIAT is what they will be called, and it doesn't matter anyway, because this venture is so doomed from the start!! It doesn't stand a chance in hell of surviving.
Now here is an option for a forward thinking capitalist. Charging stations on long trips. Hmmmm
Now where do we stay on long trips across the country or to visit relatives fairly far away from home....????????? [Marriott, Hilton, Hampton Inn, Motel 6]. Just like PPV movies charging stations I'm certain will be a staple of the traveller's oases of the future. It would take little or no additional investment to equip these hotels/motels with such stations. Parking garages in big cities?
shouldn't Uncle Sam be releasing some detailed information as to what kind of re-charging station infrastructures ought to be built?
1 step earlier in the planning and execution will be where does that extra electricity come from, especially in areas that are already susceptible to brown-outs, and pleas to reduce electricity usage during certain days. Yes I know the theory is that everyone should recharge at night; but the reality is people will forget or don't care, and will need to recharge during the day.
But we're gonna need some help in re-charging, especially on long trips, eh?
That could be difficult based on the size of batteries and the energy that would need to be transferred. Since most driving is local, why not keep electric-vehicles lighter, smaller and less expensive by keeping their range down. If you need to take a long trip 2 or 3 times per year, then let the rental companies stock 1 million gasoline or CNG vehicles, that you rent. We shouldn't try to make and use a hammer to be a sledge-hammer. Different tools for different jobs, and don't fight the physics.
let the rental companies stock 1 million gasoline or CNG vehicles, that you rent.
"Let" the rental companies???? Can't tell you how ominous that sounds.... I hope the government will "let" me buy the kind of car I need, want, and can afford..... Otherwise, this doesn't sound very much like America to me.
Last year I believe that the DOE estimated that there is currently ( yuck ) enough capacity on the grid to recharge 70% of the vehicles on the road today; 175 million units.
Since we hardly generate any electricity from oil, using electricity as a transportation fuel enables the full spectrum of electricity sources to compete with petroleum. Plug in hybrid electric vehicles (PHEVs) can reach oil economy levels of 100 miles per gallon of gasoline without compromising the size, safety, or power of a vehicle. If a PHEV is also a flexiblefuel vehicle powered by 85 percent alcohol and 15 percent gasoline, oil economy could reach over 500 miles per gallon of gasoline. Ideally, plug-in hybrids would be charged at night in home or apartment garages, when electric utilities have significant reserve capacity. The Department of Energy estimates that over 70 percent of the U.S. vehicle market could shift to plug-in hybrids without needing to install additional baseload electricity-generating capacity. In addition, the U.S. is the world’s biggest potential market for electric cars which can be sold as second or third family car. Thirty one percent of America’s households own two cars and additional 35% own three or more vehicles. There are over 75 million households in the US that own more than one vehicle and that can potentially replace one or more gasoline only cars with cars powered with made-in-America electricity.
*Inject money to stabilize the situation *Take some or all of the ownership *Restructure a near-dead corpse of a company *Keep oversight on the money invested *Stay out of the day-to-day running of the business *Sell the ownership portion at some time when the market recovers *Make a profit.
I will repeat myself. You are extremely optimistic, considering we have Jimmy Carter II at the helm. There was no real talk on concessions by the older UAW workers. All cuts are in the future with VEBA taking some toxic assets for the future health care of the retirees. That alone is $7B per year. Do you think that BO will just stand by and let VEBA default on those voters? He is a micro manager and a very poor one. I don't look for this economy to recover with the inflationary stimulus in place. Government does not belong in business except as a regulatory agent. Every $trillion printed dilutes the rest of our money by that amount.
The cuts foreseen by the older workers are that they have the VEBA to supply their needs. The VEBA will be run by the UAW and overseen by Treasury. All the needs of the retirees have to come from this fund. That's up to the UAW which is running it.
There's no justification for any of your opinions except that you believe them. I've only stated the expressed goal of the Treasury and its ATF watchdog.
The goal is no different than the ConRail situation noted pervioiusly. In fact it's exactly the same. Your opinion and reservations are noted.
What I understand you saying though is that you hope the economy doesn't recover because you don't like Obama and his team and you surely don't want to see them succeed in this. You'd like to be able to continue to b*tch about incompetence in DC too. God forbid things should turnaround.
Extra money in circulation means very little. It can be taken out of circulation as easily as it was put in. The Fed knows how to do this. What the Fed admits that it doesn't know is 'How to reverse a serious drop in the economy'. No one knows how to do it. There is no formula.
That article you posted is written with the same optimistic-slant as the marketeers of GM use when writing of the healthy, bright-futured GM. They may be using averages in their statistics, when they need to consider what happens to the system when there are high demands.
The fact is that many areas of the country are asked to cut-back on electricity usage many days, or suffer rolling black-outs.
To nvbanker: I think you are conditioned to believe that any proposal must involve the government ? I do not want the government involved in any way to tell individuals what vehicle they can buy. I'm simply saying that most people could use electric vehicles daily (if the electricity is available), and voluntarily rent a longer-range vehicle when necessary (that would be most economical). Of course if you have the $ buy 1 of each (electric and gasoline vehicles and use each part-time).
But isn't it interesting that one of the D3 have gone bankrupt and there is no apocalypse. In fact before and after Chrysler's bankruptcy filing the stock market has done very well!
What I understand you saying though is that you hope the economy doesn't recover because you don't like Obama and his team and you surely don't want to see them succeed in this.
Hardly the case. I have a house that has been on the market over a year. I would like to get out from under the 2 extra mortgage payments and enjoy my retirement. I just don't think printing more money and going deeper into debt is a workable solution to the recession. I am not alone in this belief. I think Obama is making the same mistakes both FDR and Carter made in similar situations. Have you seen any improvement with the $900B stimulus that had to be pushed through with no one getting to read or debate it. This government makes the last look totally open and honest. Which was not the case as you would probably agree.
Bailing out the automakers is a huge mistake. These are not loans like the Chrysler loan of 1980. Iococca had a plan to make Chrysler viable. What plan do they have now to justify $Billions of tax dollars? I will get back to you when you start feeling the pressure selling Toyotas that are competing against the printing presses of the US government.
Now you are giving the Fed praise. Seems just a short time ago you were pointing out the failure of the Fed under Greenspan. The Fed is a failure since its enactment in 1913. As is all the other banking programs controlled by Washington. I don't see a glimmer of hope in the future with the direction we are being dragged. Thankfully it is those that voted for it will have to pay the price. We are selling our Grandchildren down the river.
Hardly the case. I have a house that has been on the market over a year.
Where at? I'm shopping.
Have you seen any improvement with the $900B stimulus that had to be pushed through with no one getting to read or debate it.
Quite a few read it. Whether they debated it or not is....debatable. :shades: But one thing the decisive-action type deal has managed to do is restore some confidence to the market, which is a big and important part of any economic recovery. People can have all the money in the world, but if they don't spend it, we don't have an economy.
That was the reason behind the government announcing that they would back the warranties too. All about giving the potential consumer some confidence, so they'll spend money when they otherwise might not, given current economic conditions.
Want to learn economics? Start by studying psychology. It's a significant part of macroeconomics.
"Thankfully it is those that voted for it will have to pay the price. We are selling our Grandchildren down the river."
Just like the generations before us have sold us out since no president has paid down the debt....
I sympathize with you gagrice because you can't sell your house. The one thing people seem to keep forgetting is it was the financial capitals of the world: NYC, San Francisco, London, Tokyo, etc. that is responsible for this global recession and the almost complete collapse of our financial markets. Because of this, the center of the financial world will be in DC until we can fix this mess.
Plain and simple, we were consumed with greed the last 5-6 years and are paying the price. Blame BO, blame Bush, blame ACORN, blame sub-prime lending but make sure you include yourself as well. We all allowed this to happen and participated in one way or another.
Back to the loans. Probably a bad move loaning Chrysler any money but none of us has the responsibility of president of the USA. It's easy for us to write that Bush should not have loaned them the money in December but another thing when your job is to oversee the USA. I do believe we would have lost both GM and Chrysler along with a slew of suppliers, dealerships and workers. Would it have been Armageddon for the US auto industry? Probably not since I believe other car manufacturers would have stepped in but things would be a whole lot uglier instead the seeing signs that the economy may be close to stabilizing (hopefully). Because the government was forced to stepped in (another point people keep missing), we may be able to keep some of the jobs and maintain some semblance of a US auto industry. As much as I am not a fan of the UAW, I still hate seeing massive layoffs. And the last thing we need is another 100k workers laid off.
Amen! Our entire economy is based on two words: consumer confidence.
It can be a false sense of confidence also. I was confident when I bought the home I am in that the other would sell. I am sure GM figured over the years that their market share would increase. How about the confidence people showed in people like Madoff? I think this current market of optimism is built on vapor. What is there to be confident about? Losing 100k UAW jobs is nothing when we are losing 600,000 per month. Many of those jobs are people that did not make enough to save much.
I think the Stimulus is one big gamble that will end up a bigger mess than it is anticipated to fix. What I have read of the stimulus is a lot of big government and very little work projects. I think the roads part is like $3.3B. Not much out of a $trillion.
Actually given the passenger vehicle fleet subject: aka big four UAW/Ford/GM/Chrysler.
The most interesting will be the projected (10 M) verses actual 2009 MY sales !!!
Another issue which has not been addressed in public by ANYBODY is the (most important from a capitalistic view) issue of what will take the over the "profit" generation work horse duties of the totally vilified (by most blue states) SUV's/PU segments that UAW/GM/Ford/Chrysler have been hitched to for at least 3 decades.
If one wants to politicize the discussion: what happens when the "red" states follow the lead of the "blue" states and STOP buying American Suv's and PU trucks aka buy Toyota/Nissan/etc.,etc.SUV'S/PU's... :P .... FF to ah reality.....
Keep in mind this is EXACTLY what is unfolding as the "good MY sales" have gone from 16-17M to (projected) 10 M 2009 MY sales !!!! :surprise:
So for an old example, Sen John Kerry (former presidential candidate) had to waffle when asked if he drove an American SUV... I think he wound up getting rid of it.
I'm withholding judgement on the two auto bailouts to see if they work. Unlike you I'm not going to write them off as failures before there's any chance of seeing if they work out. I personally think that both will work out just fine because greed conquers all in our Capitalistic society. When the market recovers and both GM and Chrysler are printing money since they've freed themselves from their huge debt burdens and their huge legacy costs there's no reason why they can't make money. If that's the case, and I stress IF, then some sharpies such as the current bondholders that are screaming so loudly may gather several billions together and buy out the US Treasury's share and a good part of the UAW VEBA's share.
It only requires the market to turn around. The two companies will have extraordinarily good cost structures and they may even make small diesel trucks!!!
I blame Alan Greenspan for almost everything that has happened in this mess. Him personally. The Fed was his vehicle but it was his theories and his immense power inside Washington for 25 yrs that got us in this economic meltdown.
The Fed as a group knows how to take money out of circulation that's easy. They demand overnight that each bank hold more cash in reserve. Do that progressively over time and huge chunks of cash disappear from the economy. One unknown fact to most Americans is that the $700 Billion bailout is nothing compared to what the Fed has injected in to banking system over the last 6 months to really stimulate, $2 - $3 Trillion. The Fed has noone it reports to and it can inject cash or take it out as it deems necessary. It doesn't borrow it and it doesn't need to account for its source. When it needs more it just prints more, when it wants less in circulation it just takes it out and sets it on fire. No loans, no costs, no nothing.
The point I was making is that the Fed as a group is very comfortable in controlling inflation from too much money in circulation. They've stated that they know how to do this. What they don't know how to do is inject cash into an economy on a macro level to right the foundering ship. In fact since this is the first instance since the Great Depression of such a serious economic fall every economist on earth, living and dead, only has theories on how this should be done. The theory being utilized now is John Maynard Keynes' who published his theory after the last Great Depression.
Just like the generations before us have sold us out since no president has paid down the debt....
I'm glad that someone else pointed this out too.
Gagrice. Our national debt will never be repaid. There's no need to do so. In 200x whenever the current notes come due...the current administration will just roll them over and push them out another 10 or 20 or 30 years. We are only on the hook for is the interest cost. That's called leverage. As long as the economy grows the interest is a small cost of doing business.
I don't want them paying off the national debt. To do so would mean much higher taxes to pay both the interest and principal.
You are right it can be a false sense of confidence. We all got bamboozled and sucked into this mess. The promise of above average return on investments will do that to you. Trust is hard to restore. Wall Street will have a hard time recovering from this mess.
I hope the stimulus package works as well. I would have liked to see the fat trimmed down a bit but Pelosi and Reid had other plans. it's a gamble we had to take unfortunately.
Hmmmmm. didn't think to go back that far but now you have peeked my interest...
Back to cars: What happens to the deal with the UAW and Fiat if the bond holders don't want to negotiate? I imagine a chap. 11 liquidation will be necessary. Who gets the money from the sales? Of course the secured bond holders get paid first but what about VEBA?
You'd crater the economy far worse than what's happening now. Our economy is built on a credit basis, meaning debt basis. It's not a bad thing as long as it's controlled.
When debt gets out of control we end up in the mess we're in. When debt is over-controlled then we end up in the deflationary quagmire of the 70's when there was no incentive to improve and growth disappeared.
As in everything it's a matter of keeping a good balance. That was Greenspan's primary blindspot, which he ruefully admitted last Fall.
Of the bond holders 70% of the debt is held by 4 of the TARP banks, Citi, JPM Chase, Goldman Sachs and Stanley Morgan. They have reluctantly agreed to accept 29 cents on the dollar...roughly a 100% profit.
The other 30% are held by a group of 10-20 gamblers who took a shot at making a windfall if Chrysler were liquidated. The estimated value of a liquidated Chrysler was 45-50 cents on the dollar. These gamblers own the balance of the Chrysler debt at 10-15 cents. They are the ones that rejected the 29 cent offer. They wanted Chrysler to go to liquidation so that they could make a bigger profit.
It's this group that is holding up the process. They won't divulge most of the names of this group for fear of public outrage at wanting to see Chrysler liquidated, all the workers sent home and all the retirees dumped on the PBGC.
They saw the breakup value of Chrysler being 50 cents on the dollar....but now it appears that certain very valuable parts of Chrysler are going to be spun off into a new fresh debt-free company called Fiat-Chrysler for example. At that time the value of the remaining 'estate' of the old Chrysler is far far less than 50 cents. The remaining trash might be worth 10 cents. Ooops. They made a bet and it went bad.
Now instead of getting a quick profit of 100% or more they are faced with breakeven or a small loss and potentially having to take shares in the new Fiat-Chrysler entity.
But it's only business and business is just an ongoing negotiation. Check in next week for a new twist based on new offers on the table.
The other 30% are held by a group of 10-20 gamblers who took a shot at making a windfall if Chrysler were liquidated. The estimated value of a liquidated Chrysler was 45-50 cents on the dollar. These gamblers own the balance of the Chrysler debt at 10-15 cents. They are the ones that rejected the 29 cent offer. They wanted Chrysler to go to liquidation so that they could make a bigger profit.
It's this group that is holding up the process. They won't divulge most of the names of this group for fear of public outrage at wanting to see Chrysler liquidated, all the workers sent home and all the retirees dumped on the PBGC.
They saw the breakup value of Chrysler being 50 cents on the dollar....but now it appears that certain very valuable parts of Chrysler are going to be spun off into a new fresh debt-free company called Fiat-Chrysler for example. At that time the value of the remaining 'estate' of the old Chrysler is far far less than 50 cents. The remaining trash might be worth 10 cents. Ooops. They made a bet and it went bad.
I heard one of them is Oppenheimer, and they're STILL planning on gumming up the works during Ch11...it makes sense for them financially for Chrysler to just liquidate; unfortunately, that hurts all of the other stakeholders involved. The taxpayer now being one of the stakeholders, I wonder if they'll actually get away with it, or be forced to take a loss.
Saw a CHP (California Highway Patrol ) car off to the side of a 4 lane (each way) side of the freeway, servicing a "customer." It seemed to be a 2009 Dodge Charger. I wondered if it had a Hemi !!??
I think it is part of the stimulus bill. The states are given money to service their new Government Motors vehicles. So CA being the innovator they are decided to use the CHP to do roadside maintenance and generate a bit more cash for the MT CA cash registers. :shades:
It seemed to be a 2009 Dodge Charger. I wondered if it had a Hemi !!??
More than likely, it was just a 3.5 V-6. While the Hemi is available in the police package, most Charger copcars are just ordered with the 3.5, as it's fairly competitive.
Here's the results of the MIchigan State Police 2009 testing...
Ford Crown Vic 4.6, 3.27 axle: 0-60 in 8.84 seconds, top speed 128 mph Ford Crown Vic 4.6, 3.55 axle: 0-60 in 8.79 seconds, top speed 120 mph (odd, I thought the 3.55 would improve acceleration more than that) Chevy Impala 3.9: 0-60 in 8.37 seconds, top speed 139 mph Dodge Charger 3.5: 0-60 in 8.79 seconds, top speed 136 mph Dodge Charger 5.7: 0-60 in 5.96 seconds, top speed 146 mph
So the Charger 5.7 blows the rest of them away, but almost seems overkill compared to the others. Interestingly the Crown Vic, which seems to be the favorite of police forces everywhere, is at the bottom of the barrel. Still, it's fast enough, and has other advantages, such as durability, ruggedness, relatively cheap to fix, competitive price, etc.
That was stagflation. Stagnant wages coupled with high inflation. IE - the worst of both worlds.
Only those that survived the late 1970s know how much worse it was than this recession. To compare to the great depression is a joke. I see people today living in fancy tents in tent cities because they let the house they were flipping go back to the bank. Many sponging off the governments, both Federal and State. Doing all the things they missed when they had to work for a living. Unemployment pay is way overly inflated in many states. Takes away the incentive to look for a job with any sort of urgency.
The UAW workers will finally see what it is like to be laid off with normal unemployment pay. Unless Obama feels sorry for them and hires them through ACORN at $100k per year to recruit illegals to vote.
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And it can be tied in to the thread's topic by just examining what's being done for a moment. Bailing out the Big 3 with dollars that don't actually exist in "now" time also means debt that can be paid back easier because the worth of the pay-it-back money is coming to us at a reduced cost.
All you need are some fancy printing presses, employees paid by the taxpayers, good ink and paper and some time! Endless reams of cash to fill any automakers needs at any future time. Would you like some hot apple fritters and Starbuck's coffee to go with that debt relief, Sir? :P
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I previously posted what I would have liked GM to do with "GM Canada" and in the light of what is going on in Chrysler, again, acknowledging that it is probably too late now, the following is a similar recommendation for Chrysler's handling of "Chrysler Canada":
In this case, I do not know whether all the "brand names" and such are Chrysler property. I *think* they are, but I am not bothering to check them.
I believe that Chrysler owns or owned the Packard company brand names and Packard at that time owned Cord and Auburn brand names. If not, then some of the following would not work.
I would like to see Chrysler rename it Canadian subsidiary as:
"Packard - Plymouth (Chrysler Canada) Corporation" (or something along that line).
The new company would start out renaming the current Chrysler-Jeep products with Plymouth, Packard, Cord and/or Auburn names. Rights for designs and technology would cover all previous and current products and maybe the next 5 years without royalties, but after that, the new company would have to negotiate further rights, and would be free immediately to license on its own from other companies, or do its own development.
Fiat technology from Italy would be included in this set of licenses.
The "Chrysler Canada" part of the name would be dropped from the company name after the 5 year term (subject to future negotiations).
I think this is feasible because the Plymouth brand name is not "dead" in the minds of the general public. There are many Plymouth vehicles still on the road. As for the "Packard" names, they are weak brands now, and have no particular Canadian aspect, but they were respected brand names with good histories, which could be resurrected with proper handling. Chrysler in Canada has not done as badly as in the US. In all, I think Canadian investors could find such a proposed company worth investing in, and the sale of shares would be a "legitimate" way of raising funds for Chrysler US.
The important footnote for all this is the fact that the Canadian banks are just about the only banks in the *world* right now, who are not in trouble. So there *is* investment money around, if you can put together a good package.
I think they still own the rights to the AMC, Eagle, and American Motors names, don't they? Those might be strong enough brands in the US if needed. Especially if they want to wrap themselves in the flag like GM did. :shades:
*Inject money to stabilize the situation
*Take some or all of the ownership
*Restructure a near-dead corpse of a company
*Keep oversight on the money invested
*Stay out of the day-to-day running of the business
*Sell the ownership portion at some time when the market recovers
*Make a profit.
It's not like the Feds went in and took them over for public safety reason, the two of them begged to be taken over. Hell one parent company, Cerberus wanted out so bad that they said ..."We don't want any part of Chrysler any more anyone that wants it can have it for free."
LOL!
Actually, it was more like "please give us money so we can keep doing the same old things we've always done." They didn't want government involvement, just government money, without strings.
I wonder if those hedge funds will still manage to drive Chrysler into a Ch7 by demanding 100 cents on the dollar for their bonds. I hope whatever deal they get, it's worse than the 28 cents on the dollar they were offered previously..."You guys had your chance, now take this or leave it."
Of course then real life hits, we remember that the guys with money are the ones who actually run this country, and they get their 100 cents on the dollar, and everyone else, including the taxpayer, has to take a powder. :sick:
You know the definition of insanity is doing the same thing over and over and expecting different results.
Where does that leave online forums posters??? :P
Well, it was just HANGING there waiting to be hit!
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But to get back to the topic at hand... when did the govt throwing money at a problem ever solve the problem and not create a whole slew of widely ignored, yet easily apparent to anyone who takes the time to see, consequences?
And where they should be located, how many per population base, etc.? That to me would show that they're on-board the "green" automobile train, right. I know they've approved the use of Fed.monies as rebates on green-car purchases, and $7,500 is not really chump change. So the Obama Administration appears to be behind the "green" automobile movement quite a bit.
But we're gonna need some help in re-charging, especially on long trips, eh? I wonder if anyone's heard any online or newspaper/car mag. chatter on this issue. I think it's related to loans to the Big Three, too, because it's clear they are still wanted and their survival partly depends on how they become sufficiently "green." It doesn't appear important now, but it is indeed important in the long run.
2021 Kia Soul LX 6-speed stick
Well since you asked....
Washington's Turnaround Artists
Now where do we stay on long trips across the country or to visit relatives fairly far away from home....????????? [Marriott, Hilton, Hampton Inn, Motel 6]. Just like PPV movies charging stations I'm certain will be a staple of the traveller's oases of the future. It would take little or no additional investment to equip these hotels/motels with such stations. Parking garages in big cities?
1 step earlier in the planning and execution will be where does that extra electricity come from, especially in areas that are already susceptible to brown-outs, and pleas to reduce electricity usage during certain days. Yes I know the theory is that everyone should recharge at night; but the reality is people will forget or don't care, and will need to recharge during the day.
But we're gonna need some help in re-charging, especially on long trips, eh?
That could be difficult based on the size of batteries and the energy that would need to be transferred. Since most driving is local, why not keep electric-vehicles lighter, smaller and less expensive by keeping their range down. If you need to take a long trip 2 or 3 times per year, then let the rental companies stock 1 million gasoline or CNG vehicles, that you rent. We shouldn't try to make and use a hammer to be a sledge-hammer. Different tools for different jobs, and don't fight the physics.
"Let" the rental companies???? Can't tell you how ominous that sounds.... I hope the government will "let" me buy the kind of car I need, want, and can afford..... Otherwise, this doesn't sound very much like America to me.
Since we hardly generate any electricity from oil, using electricity as a transportation fuel enables the full spectrum of electricity sources to compete with petroleum. Plug in hybrid electric vehicles (PHEVs) can reach oil economy levels of 100 miles per gallon of gasoline without compromising the size, safety, or power of a vehicle. If a PHEV is also a flexiblefuel vehicle powered by 85 percent alcohol and 15 percent gasoline, oil economy could reach over 500 miles per gallon of gasoline. Ideally, plug-in hybrids would be charged at night in home or apartment garages, when electric utilities have significant reserve capacity. The Department of Energy estimates that over 70 percent of the U.S. vehicle market could shift to plug-in hybrids without needing to install additional baseload electricity-generating capacity. In addition, the U.S. is the world’s biggest potential market for electric cars which can be sold as second or third family car. Thirty one percent of America’s households own two cars and additional 35% own three or more vehicles. There are over 75 million households in the US that own more than one vehicle and that can potentially replace one or more gasoline only cars with cars powered with made-in-America electricity.
http://www.thecuttingedgenews.com/index.php?article=671&pageid=13&pagename=Analy- - sis
Regards,
OW
Regards,
OW
This way, the government can bailout the dealers and stay"green" as opposed to "profitable".
Regards,
OW
Regards,
OW
Regards,
OW
*Take some or all of the ownership
*Restructure a near-dead corpse of a company
*Keep oversight on the money invested
*Stay out of the day-to-day running of the business
*Sell the ownership portion at some time when the market recovers
*Make a profit.
I will repeat myself. You are extremely optimistic, considering we have Jimmy Carter II at the helm. There was no real talk on concessions by the older UAW workers. All cuts are in the future with VEBA taking some toxic assets for the future health care of the retirees. That alone is $7B per year. Do you think that BO will just stand by and let VEBA default on those voters? He is a micro manager and a very poor one. I don't look for this economy to recover with the inflationary stimulus in place. Government does not belong in business except as a regulatory agent. Every $trillion printed dilutes the rest of our money by that amount.
There's no justification for any of your opinions except that you believe them. I've only stated the expressed goal of the Treasury and its ATF watchdog.
The goal is no different than the ConRail situation noted pervioiusly. In fact it's exactly the same. Your opinion and reservations are noted.
What I understand you saying though is that you hope the economy doesn't recover because you don't like Obama and his team and you surely don't want to see them succeed in this. You'd like to be able to continue to b*tch about incompetence in DC too. God forbid things should turnaround.
Extra money in circulation means very little. It can be taken out of circulation as easily as it was put in. The Fed knows how to do this. What the Fed admits that it doesn't know is 'How to reverse a serious drop in the economy'. No one knows how to do it. There is no formula.
The fact is that many areas of the country are asked to cut-back on electricity usage many days, or suffer rolling black-outs.
To nvbanker: I think you are conditioned to believe that any proposal must involve the government ? I do not want the government involved in any way to tell individuals what vehicle they can buy. I'm simply saying that most people could use electric vehicles daily (if the electricity is available), and voluntarily rent a longer-range vehicle when necessary (that would be most economical). Of course if you have the $ buy 1 of each (electric and gasoline vehicles and use each part-time).
But isn't it interesting that one of the D3 have gone bankrupt and there is no apocalypse. In fact before and after Chrysler's bankruptcy filing the stock market has done very well!
Hardly the case. I have a house that has been on the market over a year. I would like to get out from under the 2 extra mortgage payments and enjoy my retirement. I just don't think printing more money and going deeper into debt is a workable solution to the recession. I am not alone in this belief. I think Obama is making the same mistakes both FDR and Carter made in similar situations. Have you seen any improvement with the $900B stimulus that had to be pushed through with no one getting to read or debate it. This government makes the last look totally open and honest. Which was not the case as you would probably agree.
Bailing out the automakers is a huge mistake. These are not loans like the Chrysler loan of 1980. Iococca had a plan to make Chrysler viable. What plan do they have now to justify $Billions of tax dollars? I will get back to you when you start feeling the pressure selling Toyotas that are competing against the printing presses of the US government.
Now you are giving the Fed praise. Seems just a short time ago you were pointing out the failure of the Fed under Greenspan. The Fed is a failure since its enactment in 1913. As is all the other banking programs controlled by Washington. I don't see a glimmer of hope in the future with the direction we are being dragged. Thankfully it is those that voted for it will have to pay the price. We are selling our Grandchildren down the river.
That might be true, but the 18 years old (age of majority?) and above set, OVERWHELMINGLY voted OBAMA .
You would probably agree, be CAREFUL what you wish for: you just might get it !!!
Where at? I'm shopping.
Have you seen any improvement with the $900B stimulus that had to be pushed through with no one getting to read or debate it.
Quite a few read it. Whether they debated it or not is....debatable. :shades: But one thing the decisive-action type deal has managed to do is restore some confidence to the market, which is a big and important part of any economic recovery. People can have all the money in the world, but if they don't spend it, we don't have an economy.
That was the reason behind the government announcing that they would back the warranties too. All about giving the potential consumer some confidence, so they'll spend money when they otherwise might not, given current economic conditions.
Want to learn economics? Start by studying psychology. It's a significant part of macroeconomics.
Just like the generations before us have sold us out since no president has paid down the debt....
I sympathize with you gagrice because you can't sell your house. The one thing people seem to keep forgetting is it was the financial capitals of the world: NYC, San Francisco, London, Tokyo, etc. that is responsible for this global recession and the almost complete collapse of our financial markets. Because of this, the center of the financial world will be in DC until we can fix this mess.
Plain and simple, we were consumed with greed the last 5-6 years and are paying the price. Blame BO, blame Bush, blame ACORN, blame sub-prime lending but make sure you include yourself as well. We all allowed this to happen and participated in one way or another.
Back to the loans. Probably a bad move loaning Chrysler any money but none of us has the responsibility of president of the USA. It's easy for us to write that Bush should not have loaned them the money in December but another thing when your job is to oversee the USA. I do believe we would have lost both GM and Chrysler along with a slew of suppliers, dealerships and workers. Would it have been Armageddon for the US auto industry? Probably not since I believe other car manufacturers would have stepped in but things would be a whole lot uglier instead the seeing signs that the economy may be close to stabilizing (hopefully). Because the government was forced to stepped in (another point people keep missing), we may be able to keep some of the jobs and maintain some semblance of a US auto industry. As much as I am not a fan of the UAW, I still hate seeing massive layoffs. And the last thing we need is another 100k workers laid off.
Want to learn economics? Start by studying psychology. It's a significant part of macroeconomics.
Amen! Our entire economy is based on two words: consumer confidence.
It can be a false sense of confidence also. I was confident when I bought the home I am in that the other would sell. I am sure GM figured over the years that their market share would increase. How about the confidence people showed in people like Madoff? I think this current market of optimism is built on vapor. What is there to be confident about? Losing 100k UAW jobs is nothing when we are losing 600,000 per month. Many of those jobs are people that did not make enough to save much.
I think the Stimulus is one big gamble that will end up a bigger mess than it is anticipated to fix. What I have read of the stimulus is a lot of big government and very little work projects. I think the roads part is like $3.3B. Not much out of a $trillion.
The most interesting will be the projected (10 M) verses actual 2009 MY sales !!!
Another issue which has not been addressed in public by ANYBODY is the (most important from a capitalistic view) issue of what will take the over the "profit" generation work horse duties of the totally vilified (by most blue states) SUV's/PU segments that UAW/GM/Ford/Chrysler have been hitched to for at least 3 decades.
If one wants to politicize the discussion: what happens when the "red" states follow the lead of the "blue" states and STOP buying American Suv's and PU trucks aka buy Toyota/Nissan/etc.,etc.SUV'S/PU's... :P .... FF to ah reality.....
Keep in mind this is EXACTLY what is unfolding as the "good MY sales" have gone from 16-17M to (projected) 10 M 2009 MY sales !!!! :surprise:
So for an old example, Sen John Kerry (former presidential candidate) had to waffle when asked if he drove an American SUV... I think he wound up getting rid of it.
It only requires the market to turn around. The two companies will have extraordinarily good cost structures and they may even make small diesel trucks!!!
I blame Alan Greenspan for almost everything that has happened in this mess. Him personally. The Fed was his vehicle but it was his theories and his immense power inside Washington for 25 yrs that got us in this economic meltdown.
The Fed as a group knows how to take money out of circulation that's easy. They demand overnight that each bank hold more cash in reserve. Do that progressively over time and huge chunks of cash disappear from the economy. One unknown fact to most Americans is that the $700 Billion bailout is nothing compared to what the Fed has injected in to banking system over the last 6 months to really stimulate, $2 - $3 Trillion. The Fed has noone it reports to and it can inject cash or take it out as it deems necessary. It doesn't borrow it and it doesn't need to account for its source. When it needs more it just prints more, when it wants less in circulation it just takes it out and sets it on fire. No loans, no costs, no nothing.
The point I was making is that the Fed as a group is very comfortable in controlling inflation from too much money in circulation. They've stated that they know how to do this. What they don't know how to do is inject cash into an economy on a macro level to right the foundering ship. In fact since this is the first instance since the Great Depression of such a serious economic fall every economist on earth, living and dead, only has theories on how this should be done. The theory being utilized now is John Maynard Keynes' who published his theory after the last Great Depression.
I'm glad that someone else pointed this out too.
Gagrice. Our national debt will never be repaid. There's no need to do so. In 200x whenever the current notes come due...the current administration will just roll them over and push them out another 10 or 20 or 30 years. We are only on the hook for is the interest cost. That's called leverage. As long as the economy grows the interest is a small cost of doing business.
I don't want them paying off the national debt. To do so would mean much higher taxes to pay both the interest and principal.
I hope the stimulus package works as well. I would have liked to see the fat trimmed down a bit but Pelosi and Reid had other plans. it's a gamble we had to take unfortunately.
Back to cars: What happens to the deal with the UAW and Fiat if the bond holders don't want to negotiate? I imagine a chap. 11 liquidation will be necessary. Who gets the money from the sales? Of course the secured bond holders get paid first but what about VEBA?
When debt gets out of control we end up in the mess we're in.
When debt is over-controlled then we end up in the deflationary quagmire of the 70's when there was no incentive to improve and growth disappeared.
As in everything it's a matter of keeping a good balance. That was Greenspan's primary blindspot, which he ruefully admitted last Fall.
The other 30% are held by a group of 10-20 gamblers who took a shot at making a windfall if Chrysler were liquidated. The estimated value of a liquidated Chrysler was 45-50 cents on the dollar. These gamblers own the balance of the Chrysler debt at 10-15 cents. They are the ones that rejected the 29 cent offer. They wanted Chrysler to go to liquidation so that they could make a bigger profit.
It's this group that is holding up the process. They won't divulge most of the names of this group for fear of public outrage at wanting to see Chrysler liquidated, all the workers sent home and all the retirees dumped on the PBGC.
They saw the breakup value of Chrysler being 50 cents on the dollar....but now it appears that certain very valuable parts of Chrysler are going to be spun off into a new fresh debt-free company called Fiat-Chrysler for example. At that time the value of the remaining 'estate' of the old Chrysler is far far less than 50 cents. The remaining trash might be worth 10 cents. Ooops. They made a bet and it went bad.
Now instead of getting a quick profit of 100% or more they are faced with breakeven or a small loss and potentially having to take shares in the new Fiat-Chrysler entity.
But it's only business and business is just an ongoing negotiation. Check in next week for a new twist based on new offers on the table.
It's this group that is holding up the process. They won't divulge most of the names of this group for fear of public outrage at wanting to see Chrysler liquidated, all the workers sent home and all the retirees dumped on the PBGC.
They saw the breakup value of Chrysler being 50 cents on the dollar....but now it appears that certain very valuable parts of Chrysler are going to be spun off into a new fresh debt-free company called Fiat-Chrysler for example. At that time the value of the remaining 'estate' of the old Chrysler is far far less than 50 cents. The remaining trash might be worth 10 cents. Ooops. They made a bet and it went bad.
I heard one of them is Oppenheimer, and they're STILL planning on gumming up the works during Ch11...it makes sense for them financially for Chrysler to just liquidate; unfortunately, that hurts all of the other stakeholders involved. The taxpayer now being one of the stakeholders, I wonder if they'll actually get away with it, or be forced to take a loss.
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That was stagflation. Stagnant wages coupled with high inflation. IE - the worst of both worlds.
More than likely, it was just a 3.5 V-6. While the Hemi is available in the police package, most Charger copcars are just ordered with the 3.5, as it's fairly competitive.
Here's the results of the MIchigan State Police 2009 testing...
Ford Crown Vic 4.6, 3.27 axle: 0-60 in 8.84 seconds, top speed 128 mph
Ford Crown Vic 4.6, 3.55 axle: 0-60 in 8.79 seconds, top speed 120 mph (odd, I thought the 3.55 would improve acceleration more than that)
Chevy Impala 3.9: 0-60 in 8.37 seconds, top speed 139 mph
Dodge Charger 3.5: 0-60 in 8.79 seconds, top speed 136 mph
Dodge Charger 5.7: 0-60 in 5.96 seconds, top speed 146 mph
So the Charger 5.7 blows the rest of them away, but almost seems overkill compared to the others. Interestingly the Crown Vic, which seems to be the favorite of police forces everywhere, is at the bottom of the barrel. Still, it's fast enough, and has other advantages, such as durability, ruggedness, relatively cheap to fix, competitive price, etc.
..."Nationally, 75% of Charger squads are Hemi-equipped."
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And this by funnyman Jay Leno ?
Vital statistics
Model Dodge Charger Police Package
Engine 5654cc, eight cylinders
Power 340bhp @ 5000rpm
Torque 390 lb ft @ 4000rpm
Transmission Five-speed automatic
CO2 n/a 0-60mph: 6sec 148mph
Acceleration
Top speed Price $26,930 (£13,423)
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Nothing like a good foreign car !!! NO :surprise: It is built at Brampton Assembly in Canada.
http://en.wikipedia.org/wiki/Dodge_Charger_(LX)
Funnyman Jay Leno also happens to be a serious car-guy. I'd believe him in a heartbeat on the subject.
Only those that survived the late 1970s know how much worse it was than this recession. To compare to the great depression is a joke. I see people today living in fancy tents in tent cities because they let the house they were flipping go back to the bank. Many sponging off the governments, both Federal and State. Doing all the things they missed when they had to work for a living. Unemployment pay is way overly inflated in many states. Takes away the incentive to look for a job with any sort of urgency.
The UAW workers will finally see what it is like to be laid off with normal unemployment pay. Unless Obama feels sorry for them and hires them through ACORN at $100k per year to recruit illegals to vote.