How many more apartments and homes will be built to accommodate they workforce. Yes restaurants and barbers. Car dealers, mechanics, salesmen etc. It is money well spent by the city. Michigan offered the same. Michigan has an anchor around their neck. It is the UAW. The only hope I see for Michigan to gain any real jobs back is to vote in right to work. It may be too late for even that. I can understand the concern losing auto MFG jobs. They are the life blood of many towns and cities throughout the Midwest. How has Indiana been about to get Toyota and Honda into their state? Does Ohio and Michigan have more regulations and high corporate taxes?
Everyone in Chattanooga is on pins and needles wondering if the plant will actually open anytime soon. It could wind up mothballed for a while like the new Toyota one in Tupelo (although only the infrastructure work is being done in 'nooga afaik).
"GM is staying afloat only with the help of government loans, of which it is seeking more."
GM has told the U.S. Treasury Department it needs $2 billion next month or will run out of cash.
But the answer might be no more money.
"It's a two-edged sword," Conway said. GM's shares fell 29 cents, or 11.3 percent, to $2.26 in early trading. Shares have fallen 91 percent in the last year.
Looks like they will get more cash. :mad:
I doubt whether the Auto Team decides on C11...that would cost much less since the assets/business can be valued more easily and there would be a finite amount to restructure. Adding more cash with no return is the current state of the process. No Sales, no business.
And they've shown their analysts are too optimistic on how many vehicles will be sold this year, showing their worst-case was still too high than even what is likely.
>How many more apartments and homes will be built to accommodate they workforce.
I would suspect 99% of the employees will commute to the workspace. They might move but then that leaves housing vacant where they were living. More blight. Unsold homes.
The sales drops is roughly paralleling the stock market. It really isn't surprising that people watching their 401K's and other investments being slashed by 40-50% are not in the mood to buy a new car.
It is also not surprising that with a median income of about $40K in this country, that the average person can not afford to pay the average price of $22K(?) for a new car.
I think Dave mentiooned how much better a 2009 car is over one made in 1970 or so. Well all those advancements have added considerable cost, maybe so much so that the average person can not afford them? Maybe there will be a significant market for the auto company that decides to concentrate on building "strippers". I believe Nissan did this with a versa model, selling it for $9,999.
Of course everyone wants a loaded model, and the last few years the banks and GMAC and such put marginally qualified people in expensive, loaded vehicles. Great result! Maybe they should have been buying decent, low-cost, vehicles. Somehow people got by in 1970 on many models without having Bose stereos, heated mirrors, TPM, alloy wheels, metallic paint, power seats, ... The first 10 years I drove my cars (2 used, 2 new) never had AC.
And it is rather ironic (including myself) that my house is nowhere near as optioned as my car. My car has Bose, AC and an alarm system, whereas my house has none of those. I spend about 30 min/day in my car and about 12 hr/day in my house. It's like my 17 year-old stepson has an expensive cellphone, but doesn't have the money for McDonald's. Are we all :confuse:
I rather miss the beautiful simplicity of my 1968 Buick Special Deluxe wagon. Funny, I don't remember roasting to death in the car in the summer despite its lack of AC.
Funny, I just got a cell phone for the first time in my life and it's only because I'm piggybacking off my girlfriend's plan. I rarely use it.
As for lower income folks in sensible low-cost cars? Fuhgeddaboutit! Even po' folks like to be stylin' and profilin'!
>the tooling was Japanese, the support for the tooling (good paying jobs) were mostly Japanese and the parts that support the plant were Japanese, along with the parts to support the tooling were Japanese.
Of course. Do you expect them to start here from ground zero? They already have established vendors for tooling Japan, who provide quality work. As time passes, local vendors will be established who can provide quality tooling. Till then, they will be imported. Why are you so shocked at that?
We already have or HAD excellent tool and die manufacturers right here in the United States! The Japanese don't NEED to go back to their home country for parts, machine tools, and dies - THEY WANT TO!!! :mad:
But he noted that each of the 2,000 manufacturing jobs is expected to generate an additional six to seven jobs from employers.
This only applies to transplant jobs. D3 jobs do not spin off as many jobs inspite of the even higher pay.
As Dennis Miller said on Leno the other night, half of all of us will be getting a person to sponsor over the next 4 to 8 years, ultimately sponsoring the other half of all of us. UAW may be part of the 'sponsored' if enough of us buy imports.
Every dealer selling Toyotas in the U.S. is paying state sales tax on the sale of every car, and sales tax from car sales makes up more than 50% of all state sales tax received in many places.
And let's not forget the federal income tax and social security tax that is paid by the worker's salary, this allows them to pay the property tax on their house, and for most states there is also income tax that is paid.
So the 5% sales tax makes up for the fact that the other 95% goes to Japan, etc? Isn't the tail wagging the dog?
Now lets look at the taxes. First, soc. sec. you get back if you live long enough. Second, who pays more tax, a $75,000 GM worker or a $32,000 Honda worker in Greensburg? I bet the Honda worker pays no federal income tax. Third, who has disposable income to support other jobs in the area?
Consumers Report comes out and Chrysler quality has fallen even further. Teaming up with Fiat isn't going to fix this mess. I think its time to pull the plug. GM has issues too. The new CUV's didn't look too pretty, but the Malibu did. It has a fighting chance, but management needs to get more realistic and responsive, otherwise we'll probably have to pull this plug too and just focus on Ford. I don't mind trying to help out these large employers and their impact on our economy as long as they are trying and have a realistic chance. But if Chrysler can't build a competitive product, what's the point? As for GM, they've got to make bigger changes to their ways and stop living in the past, or treating government assistance like they are welfare queens. It seems incredible that Ford is the one that works out the health funding issues with the UAW when GM and Chrysler are the ones begging for the public dole. I'm starting to think they are just focused on how much and how fast they can get Uncle to pay up.
If you can't give buyers good solid reasons why to choose your products over Toyota or Honda, then giving them more assistance is just delaying the inevitable ending. Better to cut the cord in that situation.
Second, who pays more tax, a $75,000 GM worker or a $32,000 Honda worker in Greensburg? I bet the Honda worker pays no federal income tax. Third, who has disposable income to support other jobs in the area?
Considering that GM worker is about to be out of work because GM paid him so much that they don't make a profit on those cars, I'd say soon he'll be paying ZERO taxes and have ZERO disposable income.
Ford is the one that works out the health funding issues with the UAW when GM and Chrysler are the ones begging for the public dole.
That is SUCH an interesting point. Can someone point a flashing neon sign at the above? Here we have GM and Chrysler, supposedly with 19 out of 20 toes in the grave, begging for help from anyone and willing to do whatever it takes to turn it around. And in the other corner we have Ford, who is just fine thank you we don't need any bailouts.
And yet Ford is the motivated one and strikes a deal first. Seems more like GM and Chrysler haven't cared for a long time, and now that they think the government (meaning us) will keep them afloat, don't see any reason to start caring.
So the 5% sales tax makes up for the fact that the other 95% goes to Japan, etc? Isn't the tail wagging the dog?
Wow, you don't understand how sales tax works. Let me explain it, and I'll try to go slow. You buy a car for $100. In a state with 7% sales tax, you pay the state 7 dollars when you register your car. The other 100 dollars still goes to the seller, costing you a total of $107. Oh and I didn't go in to any of the other fees. I hope I didn't lose you on this.
Now lets look at the taxes. First, soc. sec. you get back if you live long enough.
What you pay in today, goes to the recipients today. Funds paid in by future workers will be going to you.
Second, who pays more tax, a $75,000 GM worker or a $32,000 Honda worker in Greensburg? I bet the Honda worker pays no federal income tax.
So using your logic, we would all be better off if every worker had their salary multiplied 10 fold as they would now pay more taxes. Too bad my company would go bankrupt. And last I knew someone making 32K does pay federal income taxes.
Third, who has disposable income to support other jobs in the area? Anyone who buys groceries, pays rent/mortgage, has a phone, pays an electric bill, or buys clothes. Every time they spend money, they are helping their local economy.
That $75K a year worker at GM (who must be making more than what the UAW crowd is claiming) isn't paying dollar one into taxes because they are being paid out of tax money that we keep giving GM. Sure, they are technically paying in, filing tax returns and all but they are a net loss - a HUGE net loss for us.
Better to let Fordhandle the domestic business.
BTW, the idea that we need GM plants to take over in time of war like WWII is outdated. Back then we didn't have full time military construction outfits. We have ever since.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
".....I doubt whether the Auto Team decides on C11...that would cost much less since the assets/business can be valued more easily and there would be a finite amount to restructure. Adding more cash with no return is the current state of the process. No Sales, no business."
Could it be that, provided GM and Chrysler play the game and jump through all the government's hoops, that this could be the government's version of C11 w/o calling it that?
And yet Ford is the motivated one and strikes a deal first.
I think the UAW historically negotiates their contracts with the perceived strongest automaker first. The other two would usually fall in line and adopt the resulting contract.
All bets would be off in this economic situation I'd think.
Really? I think so too. But were they cost competitive enough? Were they proven enough to the standards expected by the Japanese manufacturers? Do you think they will trust the manufacturers of critical tool & die when they see the resulting (D3) products in such bad shape?
Tooling manufacturers are already here. And have been here for over 100 years providing quality tooling for American companies. If you think that they are going to switch tooling vendors and risk not getting some kickback from Japan Inc? Japans automakers has been selling the American public a scam. It wants to wrap itself in the American flag at every turn. All the while its stripmining our country to death. I used to buy that "Japan is helping America" pile of crap. Not anymore.
Japans automakers has been selling the American public a scam. It wants to wrap itself in the American flag at every turn. All the while its stripmining our country to death. I used to buy that "Japan is helping America" pile of crap. Not anymore.
And to quote a (Japanese) colleague who visits the US quite often "Here I am working my [non-permissible content removed] off, living in a small house, using public transportation, saving money, which then goes to the US to provide them larger homes and cars - and they complain that we are exploiting them?"
It is not that black and white, my friend Who do you think is going to pay for the Trillions Hope and Change Obama is handing out?
A better way would be for the government to provide vouchers towards the purchase of a D3 vehicle. You can have up to $10,000 in vouchers towards each purchase, with each voucher face value = $1000. Using the census estimate for 2007, the total value of the govt voucher would be $187 billion.
The people will flock to buy the cars that are best offerings from the D3, and automatically the fittest will survive.
Ironically, if the D3 still cannot make a decent profit from those sales, it would be time for them to close shop.
For people with max $10,000 worth of vouchers to buy cars, don't the banks have to start lending to people? otherwise the selection goes Aveo, Yaris, Versa ....ummm...that's it.
So say these vouchers that the government pays for are good for 2009 and 2010, ending on Dec. 31, 2010 (or you pick the day when they run out); what happens after that?
I mean think about this - 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.
Also why would you give vouchers to people to buy automobiles, and not give vouchers for people to buy computers, TV,s, furniture, and clothes all of which are being affected similarly by the economy? During a recession weak companies fail - in ALL industries.
The only way it would be any good is for vehicles with at least 80% USA content. That would include some Toyota and Honda models. Not many D3 models. Other than trucks. VW plans to use 80%+ in cars made at their new TN plant.
They already recieved one huge check, and they shouldnt have gotten that in my opinion. What have they done recently? Advertising good fuel economy vs the competition ok, seems like thats the only smart thing theyve done.
Take a few lessons from Ford, I dont know what thier secret is, but they arent begging for cash.
I agree; this is the problem with low or no interest loans too; there is only just so much demand for cars. If you increase incentive to buy now it only serves to cannibilze future sales. the automakers (and many other industries) have cannibilized their furture sales whle consumers who made those future buys with credit instead of cash. I'm not sure why everyone is so surprised that this artifical demand would dry up sooner or later.
they have a new 3.6 liter V6 with twin turbochargers that has V8 HP and Torque with V6 gas mileage. It will only be on Lincolns and Flex and one other car. They had to spend a million test miles to perfect it. They can't afford to slip up like the Jetta 1.8T.
Better gas mileage in $40k cars is where all the research goes these days. I guess I just can't afford good gas mileage.
My take on Fed taxes: for joint filers, std ded. is 10,900. If have 2 kids, then $3700 x 4 exemptions is 14,800. The stimulus makes the tax on the next 8000 = zero. Then the child tax credit takes $2k off what you owe. What do you have to make to pay your first dollar in Fed taxes? Answer is $47,040 to pay $1.00 in taxes. Then look at % with 2 kids from UAW vs transplants. UAW are all in their 50's and 60's and not likely to have kids under 16. At least transplant workers didn't bail out GM and Chrysler. You have to pay taxes to contribute to the bailout. GM employees, on the other hand, do pay taxes even if their employer does not.
Ford hocked every asset they had to get a line of credit. GM, having previously done that, didn't have that option.
So basically, Ford realized that when they had to hock everything they owned that they'd better get serious...while when GM did it, it was just business as usual?
first, not all sales tax is 7%. Actually only 4 states have 7% or more. Some have zero %. It would take an average of 5.3% for my 5/95 split to be perfectly accurate so I might be off BY a FRACTION of ONE PERCENT. I stand with 'Is the tail wagging the dog?' when we see sales tax on imports as the benefit on lost American jobs?
Did you ever figure out how much soc. sec. you pay in? How about how old you have to live to to get it all back WITHOUT INTEREST? (not including use of medicare either) Yes, it's a long time. About 16 years for me. I include the 50% that my employer pays on my behalf, even though I don't add that 7.65% to my claimed income. I still stand some chance of living that till 62+16 and getting it back so I can't yet consider it as tax paid for my gov. to use for others.
An individual without any dependent would pay tax at $32k, but not much. It would take $47k as a joint filer with 2 kids to pay tax of $1. taxes increase exponentially with income in the US for the lower middle class.
On disposable income, I mean what's left after necessities.
So the 5% sales tax makes up for the fact that the other 95% goes to Japan, etc? Isn't the tail wagging the dog?
Sorry you have absolutely no idea of what you are writing about. NONE whatsoever. Your lack of business knowledge is clouded by a UAW induced fog that makes you blind to reality.
I will give you one example and then tell me if your position makes sense at all.
When Delphi makes parts for the Tundra .... does Delphi turn around and send that money to Japan?? You simply don't understand the structure of auto sales so please go to school and get some background in accounting and business before going off 1/4-cocked. It's embarassing to see Americans write such drivel in this day and age. It shows that our schools have done a horrible job of educating the masses about how things really work.
I believe that in Fall of 2007 when Ford hocked everything they saw that they were going to need a huge cushion for the restructuring. They moved first. But at the time they were in dire straights. That's why they got the funds. GM was in a somewhat better situation at the time so didn't see any need to mortgage their future as much as Ford did. Chrysler wonders if the wonderful 90's are ever going to end. :surprise:
Call it luck or incisive foresight by the new Ford team but they moved when there was credit available. GM moved too late. Chrysler wonders what all the ruckus is about.
Gov't has a lot of rethinking to do. They need to shrink as the economy retracts. If my house loses 18%, my prop taxes go down 18%, my local gov't needs to lay off 18% of their workforce. Then my house falls 5% more due to the unemployed and 5% more need to be laid off from gov't jobs. As house prices escalated at a rediculous rate in '03-'05, the gov't should have adjusted tax rates to keep total tax collected only growing at long term inflation rates. Instead they hired more people when the number of houses providing support didn't change. Then in some neighborhoods, up to 10% of the people in those houses were soon without jobs. Those people don't have anything to do and now the gov't is trying to be creative in not lowering my taxes as my house has fallen 18%. The same goes for ins. co's. I don't think there's a high demand for Canadian lumber that is driving up rebuilding costs anymore. New housing starts are off 75%. Insurance companies are trying to bookkeep $250,000 to build a house you can buy new for $180,000.
There will be winners and losers after all chips fall. Are all gov't levels laying off people at the same rate as GM is? demand for cars has fallen. Demand for gov't services never went up in the first place and is falling now. No trade to regulate, no new construction to inspect.....
When all the pain has been distributed and our houses have hit true bottom, the stock market has hit true bottom, and layoffs have maxed out, then we will look around at the devastation and head for the nearest Toyota dealer, glad that GM is gone? But don't wonder why, when we never recover from that bottom.
I wonder if the Japanese Parliament house has as many American cars in their parking lot as ours has Japanese?
GM sold around (60%?) of GMAC to Cerberus and maintained the rest I believe. GMAC is big into mortgages as well as car loans. I wonder how much lower tier junk assets they hold? GE has been plunging in stock price because of their finance arm. If GMAC takes a dump like Citicorp and Bank of America this is going to have potentially a big impact here. GM will have more financial hits and may become even more hobbled in obtaining financing for their dealers and customers. Meanwhile, between GMAC and Chrysler, what happens if Cerberus goes insolvent? I suppose Uncle is left holding the bag? This GMAC area needs to be defined and may make it an even poorer idea to put a bunch of cash into GM and Chrysler. I think Ford Credit stayed out of this subtier debt stuff and stuck to conventional car loans.
Most Japanese take mass transportation or they drive cars that are smaller than the Aveo. What cars do the D3 make that are smaller than the Aveo? Do you realistically think that these drivers are going to drop off their kei cars in favor of an Escalade? Avalanche? 300? King Range F150? C'mon be serious.
The truth of the matter is that the D3 make nothing that the largest segment of buyers want, kei cars. OTOH the transplants here make exactly what the bulk of what we want, midsized cars, minivans and trucks.
The solution is simple....for the D3 to succeed in the Japanese market they need to make kick-azz kei cars and sell them for a $500 profit each. The only problem is that the Japanese population is more and more disinterested in autos. The D3 would be investing in a shrinking market. That's a sure way to get deeper into trouble.
Gov't has a lot of rethinking to do. They need to shrink as the economy retracts. If my house loses 18%, my prop taxes go down 18%, my local gov't needs to lay off 18% of their workforce.
If there was any logic in our government that is the way it should work. Much of the stimulus bill is to create 160,000 new government jobs. More busy work jobs that have NO value to the country or the tax payer. CA could cut a lot of jobs. They would rather tax us more and keep their dead weight buddies. The University System in CA is the largest employer. 150,000 high paid jobs in 10 campuses.
There ain't no money to bail out the automakers. Unless they keep printing more making what we have worth less.
I live in California, and I say close all the prisons send all the prisoners over to IRAQ AND AFGHANISTAN. Maybe if they are lucky to come back alive and in one piece, we put them in a mental hospital and let the tax payers foot the bill at $100.000 year each. Then if they are lucky to get out the mental hospital, we put them in a special housing program, at $12,000 a year each. California is known for taking care everyone but the people who do the right thing, follow the law, pay taxes and I can't even get a job with the gov't, because I'm an American. Go figure! and now they what us to bail out the autodealers, banks, homeowners, etc. And I couldn't get a loan from the bank to get a car, couldn't get a car to go look for a home to buy, couldn't buy a home because the bank said I didn't make enough money. Now I'm wondering if I can go to the bank get a loan since I own some shares.
Now I'm wondering if I can go to the bank get a loan since I own some shares. Welcome to the Forum. If I could move my place in the sun elsewhere I would get out of CA as well. Hope you did not buy Citigroup as my wife's financial wizard had her do. Only a couple hundred shares at $17. I wonder if any bank will be solvent by the time the Feds get done.
By printing more and more money it actually doesn't affect us that much except to put more $$$$ into the economy. It doesn't really matter how that $$$$ gets there as long as it does. The less well-to-do are a good means of getting more money in circulation because typically they're NOT savers, they're spenders.
A prime example is the Billions given to the banks. What did they do with it? They socked it away on the Balance Sheets and didn't spend it.
As to our money being worth-less that's only in relation to other currencies, meaning imports and exports. By doing this, making the currency worth less, it makes our exports cheaper and thus more in demand....increasing our production. It also makes imports more expensive thus keeps them at the borders...giving our own home-grown facilities more options to sell their products.
In the near term massive infusions of $$$$ are a good thing for everyone. I think that they didn't go far enough. IMO they will have other bailouts, buyouts and stumuli bills far bigger than what we've seen so far.
Ford hocked everything they saw that they were going to need a huge cushion for the restructuring. They moved first
I must have my timing off - I thought that GM had mortgaged everything (or sold parts of stuff like GMAC) before Ford and didn't have an "easy" way left to raise money like Ford did in '07.
It's the banks themselves that made themselves insolvent. Our best hope is that the Feds wake up soon and follow the 'swedish model'.
Any bank that is in trouble...BANG !! You're dead. The Feds move in and take it over on the spot. All investors lose everything. All top management is sent home that day. This actually costs us little or nothing.
Bad assets are marked down to real value and then sold off. $800,000 townhomes in CA worth only $350,000? Mark it down to value and sell it off to a new investor. When all this garbage is flushed from the banking system then the resulting stronger - smaller - entity can be sold to a new group of shareholders via an IPO.
It's brutal and draconian but it gets the job done in the least amount of time. Right now we, via the Feds, are being spoonfed sewage by the banks. 'Ooops we found another cesspool of loans. We need another $[..] Billion in bailouts to make this mess go away." 6 months from now...'Ooops we found another..........'
The bankers did this to themselves ... and thus to us. They deserve being kicked out with nothing but a box full of personal effects. If we via the Feds end up owning every major bank but one or two then that's the 'swedish model'. The Swedish taxpayers ended up making money from it.
>My take on Fed taxes: for joint filers, std ded. is 10,900. If have 2 kids, then $3700 x 4 exemptions is 14,800. The stimulus makes the tax on the next 8000 = zero. Then the child tax credit takes $2k off what you owe. What do you have to make to pay your first dollar in Fed taxes? Answer is $47,040 to pay $1.00 in taxes.
Interesting. Doesn't the earned income tax credit also give a check for each adult and the new form of tax breaks for "95% of American taxpayers" is a rebate rather than tax credit so that it can be given to those who pay no taxes.
>Did you ever figure out how much soc. sec. you pay in? How about how old you have to live to to get it all back WITHOUT INTEREST?
Several years ago the tablulation was put out that it took like 3 years of payments for the typical recipient then to get back what they had paid into social security. To get back with interest it was like 5 years or so. I assume that was a nominal 2% or so rate for interest to accrue on the amounts.
I have searched the net for info now but can't find it. I'd like to see a tabulation for current recipients.
I do agree with letting the bank go and protect those within the FDIC limit. Homes have not come down quite as drastic as you surmised. A $1.4 million 1000 square foot home in Coronado is now selling for $1.3 million. The hardest hit part of San Diego is the farthest out suburbs where the homes have lost 25%. Sales on bank owned are quite brisk. Our unemployment is still at 7% while a big part of the state is at 12%. Sadly we have not dumped any of the useless government employees. Only those at the low end that were actually doing some work. Like school maintenance people. The administrators all are still knocking down way more than they are worth.
Oh I think CA is getting bailed out. More money to waste on worthless projects. Sports stadium anyone?
I was watching Fox News and reading a book so my memory isn't sharp. But someone had a graph of home values all made relative in dollars. The valuation of home values went too high and too low in points. The drops at the Depression and then a few years later were fairly steep. In between were some periods of being over-valued and then drops. There was a 70s peak IIRC and then drop at Savings and Loan debacle. Then the current overvaluation was 3-5 times as large as the 70s overvaluation.
The big problem is that the values of homes have fallen only about a third of the way down from the current peak (of excess) and yet the President was calling for a stop to the falling home values by the government's doing something to stop it. The point was that home values haven't come back down to the median line or even close. The point was money thrown at protecting the overvaluation in homes was going to be waste in itself and I suspect inflationary.
Money spent on keeping jobs and manufacturing of the US automakers is much more practical than keeping people in homes on which they overspent and could ill afford. The banks got rich along with the people pimping loans for the underwealthy who shouldn't have been put into homes or mortgages. Now people want us who have paid for our homes with careful spending and buying to subsidize those who are entitled to a home. For me, I put money into keeping Detroit manufacturers alive and subsidizing them rather than Japan or Korea (or China).
Comments
http://www.indiana.honda.com/indiana.cfm
"GM is staying afloat only with the help of government loans, of which it is seeking more."
GM Posts $30.9-Billion Loss for 2008, Second Biggest Ever
Edmunds.com Predicts February Car Sales: Not Looking Good
But the answer might be no more money.
"It's a two-edged sword," Conway said. GM's shares fell 29 cents, or 11.3 percent, to $2.26 in early trading. Shares have fallen 91 percent in the last year.
Looks like they will get more cash. :mad:
I doubt whether the Auto Team decides on C11...that would cost much less since the assets/business can be valued more easily and there would be a finite amount to restructure. Adding more cash with no return is the current state of the process. No Sales, no business.
Regards,
OW
http://www.marketwatch.com/news/story/gms-sloppy-bookkeeping/story.aspx?guid=%7B- 667FC67B%2D7722%2D4A8E%2DA5B7%2D0605E7726BCD%7D&dist=TQP_Mod_mktwN
And they've shown their analysts are too optimistic on how many vehicles will be sold this year, showing their worst-case was still too high than even what is likely.
I would suspect 99% of the employees will commute to the workspace. They might move but then that leaves housing vacant where they were living. More blight. Unsold homes.
2014 Malibu 2LT, 2015 Cruze 2LT,
It is also not surprising that with a median income of about $40K in this country, that the average person can not afford to pay the average price of $22K(?) for a new car.
I think Dave mentiooned how much better a 2009 car is over one made in 1970 or so. Well all those advancements have added considerable cost, maybe so much so that the average person can not afford them? Maybe there will be a significant market for the auto company that decides to concentrate on building "strippers". I believe Nissan did this with a versa model, selling it for $9,999.
Of course everyone wants a loaded model, and the last few years the banks and GMAC and such put marginally qualified people in expensive, loaded vehicles. Great result!
And it is rather ironic (including myself) that my house is nowhere near as optioned as my car. My car has Bose, AC and an alarm system, whereas my house has none of those. I spend about 30 min/day in my car and about 12 hr/day in my house. It's like my 17 year-old stepson has an expensive cellphone, but doesn't have the money for McDonald's. Are we all :confuse:
Funny, I just got a cell phone for the first time in my life and it's only because I'm piggybacking off my girlfriend's plan. I rarely use it.
As for lower income folks in sensible low-cost cars? Fuhgeddaboutit! Even po' folks like to be stylin' and profilin'!
Of course. Do you expect them to start here from ground zero? They already have established vendors for tooling Japan, who provide quality work. As time passes, local vendors will be established who can provide quality tooling. Till then, they will be imported. Why are you so shocked at that?
This only applies to transplant jobs. D3 jobs do not spin off as many jobs inspite of the even higher pay.
As Dennis Miller said on Leno the other night, half of all of us will be getting a person to sponsor over the next 4 to 8 years, ultimately sponsoring the other half of all of us. UAW may be part of the 'sponsored' if enough of us buy imports.
And let's not forget the federal income tax and social security tax that is paid by the worker's salary, this allows them to pay the property tax on their house, and for most states there is also income tax that is paid.
So the 5% sales tax makes up for the fact that the other 95% goes to Japan, etc? Isn't the tail wagging the dog?
Now lets look at the taxes. First, soc. sec. you get back if you live long enough.
Second, who pays more tax, a $75,000 GM worker or a $32,000 Honda worker in Greensburg? I bet the Honda worker pays no federal income tax.
Third, who has disposable income to support other jobs in the area?
If you can't give buyers good solid reasons why to choose your products over Toyota or Honda, then giving them more assistance is just delaying the inevitable ending. Better to cut the cord in that situation.
Third, who has disposable income to support other jobs in the area?
Considering that GM worker is about to be out of work because GM paid him so much that they don't make a profit on those cars, I'd say soon he'll be paying ZERO taxes and have ZERO disposable income.
That is SUCH an interesting point. Can someone point a flashing neon sign at the above? Here we have GM and Chrysler, supposedly with 19 out of 20 toes in the grave, begging for help from anyone and willing to do whatever it takes to turn it around. And in the other corner we have Ford, who is just fine thank you we don't need any bailouts.
And yet Ford is the motivated one and strikes a deal first. Seems more like GM and Chrysler haven't cared for a long time, and now that they think the government (meaning us) will keep them afloat, don't see any reason to start caring.
Wow, you don't understand how sales tax works. Let me explain it, and I'll try to go slow. You buy a car for $100. In a state with 7% sales tax, you pay the state 7 dollars when you register your car. The other 100 dollars still goes to the seller, costing you a total of $107. Oh and I didn't go in to any of the other fees. I hope I didn't lose you on this.
Now lets look at the taxes. First, soc. sec. you get back if you live long enough.
What you pay in today, goes to the recipients today. Funds paid in by future workers will be going to you.
Second, who pays more tax, a $75,000 GM worker or a $32,000 Honda worker in Greensburg? I bet the Honda worker pays no federal income tax.
So using your logic, we would all be better off if every worker had their salary multiplied 10 fold as they would now pay more taxes. Too bad my company would go bankrupt. And last I knew someone making 32K does pay federal income taxes.
Third, who has disposable income to support other jobs in the area?
Anyone who buys groceries, pays rent/mortgage, has a phone, pays an electric bill, or buys clothes. Every time they spend money, they are helping their local economy.
Better to let Fordhandle the domestic business.
BTW, the idea that we need GM plants to take over in time of war like WWII is outdated. Back then we didn't have full time military construction outfits. We have ever since.
Could it be that, provided GM and Chrysler play the game and jump through all the government's hoops, that this could be the government's version of C11 w/o calling it that?
I think the UAW historically negotiates their contracts with the perceived strongest automaker first. The other two would usually fall in line and adopt the resulting contract.
All bets would be off in this economic situation I'd think.
And to quote a (Japanese) colleague who visits the US quite often "Here I am working my [non-permissible content removed] off, living in a small house, using public transportation, saving money, which then goes to the US to provide them larger homes and cars - and they complain that we are exploiting them?"
It is not that black and white, my friend
The people will flock to buy the cars that are best offerings from the D3, and automatically the fittest will survive.
Ironically, if the D3 still cannot make a decent profit from those sales, it would be time for them to close shop.
I mean think about this - 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.
Also why would you give vouchers to people to buy automobiles, and not give vouchers for people to buy computers, TV,s, furniture, and clothes all of which are being affected similarly by the economy? During a recession weak companies fail - in ALL industries.
Take a few lessons from Ford, I dont know what thier secret is, but they arent begging for cash.
Better gas mileage in $40k cars is where all the research goes these days. I guess I just can't afford good gas mileage.
Ford hocked every asset they had to get a line of credit. GM, having previously done that, didn't have that option.
So basically, Ford realized that when they had to hock everything they owned that they'd better get serious...while when GM did it, it was just business as usual?
Did you ever figure out how much soc. sec. you pay in? How about how old you have to live to to get it all back WITHOUT INTEREST? (not including use of medicare either) Yes, it's a long time. About 16 years for me. I include the 50% that my employer pays on my behalf, even though I don't add that 7.65% to my claimed income. I still stand some chance of living that till 62+16 and getting it back so I can't yet consider it as tax paid for my gov. to use for others.
An individual without any dependent would pay tax at $32k, but not much. It would take $47k as a joint filer with 2 kids to pay tax of $1. taxes increase exponentially with income in the US for the lower middle class.
On disposable income, I mean what's left after necessities.
Sorry you have absolutely no idea of what you are writing about. NONE whatsoever. Your lack of business knowledge is clouded by a UAW induced fog that makes you blind to reality.
I will give you one example and then tell me if your position makes sense at all.
When Delphi makes parts for the Tundra .... does Delphi turn around and send that money to Japan?? You simply don't understand the structure of auto sales so please go to school and get some background in accounting and business before going off 1/4-cocked. It's embarassing to see Americans write such drivel in this day and age. It shows that our schools have done a horrible job of educating the masses about how things really work.
Call it luck or incisive foresight by the new Ford team but they moved when there was credit available. GM moved too late. Chrysler wonders what all the ruckus is about.
Gov't has a lot of rethinking to do. They need to shrink as the economy retracts. If my house loses 18%, my prop taxes go down 18%, my local gov't needs to lay off 18% of their workforce. Then my house falls 5% more due to the unemployed and 5% more need to be laid off from gov't jobs. As house prices escalated at a rediculous rate in '03-'05, the gov't should have adjusted tax rates to keep total tax collected only growing at long term inflation rates. Instead they hired more people when the number of houses providing support didn't change. Then in some neighborhoods, up to 10% of the people in those houses were soon without jobs. Those people don't have anything to do and now the gov't is trying to be creative in not lowering my taxes as my house has fallen 18%. The same goes for ins. co's. I don't think there's a high demand for Canadian lumber that is driving up rebuilding costs anymore. New housing starts are off 75%. Insurance companies are trying to bookkeep $250,000 to build a house you can buy new for $180,000.
There will be winners and losers after all chips fall. Are all gov't levels laying off people at the same rate as GM is? demand for cars has fallen. Demand for gov't services never went up in the first place and is falling now. No trade to regulate, no new construction to inspect.....
When all the pain has been distributed and our houses have hit true bottom, the stock market has hit true bottom, and layoffs have maxed out, then we will look around at the devastation and head for the nearest Toyota dealer, glad that GM is gone? But don't wonder why, when we never recover from that bottom.
I wonder if the Japanese Parliament house has as many American cars in their parking lot as ours has Japanese?
The truth of the matter is that the D3 make nothing that the largest segment of buyers want, kei cars. OTOH the transplants here make exactly what the bulk of what we want, midsized cars, minivans and trucks.
The solution is simple....for the D3 to succeed in the Japanese market they need to make kick-azz kei cars and sell them for a $500 profit each. The only problem is that the Japanese population is more and more disinterested in autos. The D3 would be investing in a shrinking market. That's a sure way to get deeper into trouble.
Now China is another story.
If there was any logic in our government that is the way it should work. Much of the stimulus bill is to create 160,000 new government jobs. More busy work jobs that have NO value to the country or the tax payer. CA could cut a lot of jobs. They would rather tax us more and keep their dead weight buddies. The University System in CA is the largest employer. 150,000 high paid jobs in 10 campuses.
There ain't no money to bail out the automakers. Unless they keep printing more making what we have worth less.
Welcome to the Forum. If I could move my place in the sun elsewhere I would get out of CA as well.
Hope you did not buy Citigroup as my wife's financial wizard had her do. Only a couple hundred shares at $17. I wonder if any bank will be solvent by the time the Feds get done.
A prime example is the Billions given to the banks. What did they do with it? They socked it away on the Balance Sheets and didn't spend it.
As to our money being worth-less that's only in relation to other currencies, meaning imports and exports. By doing this, making the currency worth less, it makes our exports cheaper and thus more in demand....increasing our production. It also makes imports more expensive thus keeps them at the borders...giving our own home-grown facilities more options to sell their products.
In the near term massive infusions of $$$$ are a good thing for everyone. I think that they didn't go far enough. IMO they will have other bailouts, buyouts and stumuli bills far bigger than what we've seen so far.
I must have my timing off - I thought that GM had mortgaged everything (or sold parts of stuff like GMAC) before Ford and didn't have an "easy" way left to raise money like Ford did in '07.
I guess I could go look it up...
Any bank that is in trouble...BANG !! You're dead. The Feds move in and take it over on the spot. All investors lose everything. All top management is sent home that day. This actually costs us little or nothing.
Bad assets are marked down to real value and then sold off. $800,000 townhomes in CA worth only $350,000? Mark it down to value and sell it off to a new investor. When all this garbage is flushed from the banking system then the resulting stronger - smaller - entity can be sold to a new group of shareholders via an IPO.
It's brutal and draconian but it gets the job done in the least amount of time. Right now we, via the Feds, are being spoonfed sewage by the banks. 'Ooops we found another cesspool of loans. We need another $[..] Billion in bailouts to make this mess go away." 6 months from now...'Ooops we found another..........'
The bankers did this to themselves ... and thus to us. They deserve being kicked out with nothing but a box full of personal effects. If we via the Feds end up owning every major bank but one or two then that's the 'swedish model'. The Swedish taxpayers ended up making money from it.
Interesting.
Doesn't the earned income tax credit also give a check for each adult and the new form of tax breaks for "95% of American taxpayers" is a rebate rather than tax credit so that it can be given to those who pay no taxes.
2014 Malibu 2LT, 2015 Cruze 2LT,
Several years ago the tablulation was put out that it took like 3 years of payments for the typical recipient then to get back what they had paid into social security. To get back with interest it was like 5 years or so. I assume that was a nominal 2% or so rate for interest to accrue on the amounts.
I have searched the net for info now but can't find it. I'd like to see a tabulation for current recipients.
2014 Malibu 2LT, 2015 Cruze 2LT,
Oh I think CA is getting bailed out. More money to waste on worthless projects. Sports stadium anyone?
The big problem is that the values of homes have fallen only about a third of the way down from the current peak (of excess) and yet the President was calling for a stop to the falling home values by the government's doing something to stop it. The point was that home values haven't come back down to the median line or even close. The point was money thrown at protecting the overvaluation in homes was going to be waste in itself and I suspect inflationary.
Money spent on keeping jobs and manufacturing of the US automakers is much more practical than keeping people in homes on which they overspent and could ill afford. The banks got rich along with the people pimping loans for the underwealthy who shouldn't have been put into homes or mortgages. Now people want us who have paid for our homes with careful spending and buying to subsidize those who are entitled to a home. For me, I put money into keeping Detroit manufacturers alive and subsidizing them rather than Japan or Korea (or China).
2014 Malibu 2LT, 2015 Cruze 2LT,
2014 Malibu 2LT, 2015 Cruze 2LT,