$25 billion for automakers, passed

[Mercor]

The US senate has passed a spending bill on Saturday the in turn, will end a 26-year ban on offshore oil drilling. This will subsidize federal loans for automakers and offer aid to Gulf Coast hurricane disaster victims.

The spending bill includes $25 billion in loan guarantees for automakers.

http://politicalticker.blogs.cnn.com/2008/09/27/senate-passes-600-billion-spending-bill/

This should give GM and Ford more time before they go under.

I hope they added rules to limit executive and union leaders pay.

 

[jordanf]

Isn't the government forcing the auto companies to make cars that their customers don't really want and certainly don't want to pay for? Seems they should get something for that.

 

[gnome]

Quote from Mercor:

The US senate has passed a spending bill on Saturday the in turn, will end a 26-year ban on offshore oil drilling. This will subsidize federal loans for automakers and offer aid to Gulf Coast hurricane disaster victims.

The spending bill includes $25 billion in loan guarantees for automakers.

http://politicalticker.blogs.cnn.com/2008/09/27/senate-passes-600-billion-spending-bill/

This should give GM and Ford more time before they go under.

I hope they added rules to limit executive and union leaders pay.

It should ALWAYS be the case that when the Gummint involves public money, leaders' compensation should be restricted.

 

[bostonsoxfan]

I thought they were going to cost reduce their way to profitability? The next thing you will see is the american taxpayer paying for the liability of the auto worker's pension plan.

 

[gnome]

Quote from bostonsoxfan:

I thought they were going to cost reduce their way to profitability? The next thing you will see is the american taxpayer paying for the liability of the auto worker's pension plan.

It's "lose, lose", no matter how you slice it.

Because of UAW influence (high wages + retirement and health benefits), American auto makers are at a $2,000 per car price dis-advantage to Asian makers who don't have such union encumbrances.

Either the American makers must charge $2,000 more for an equivalent product, or cheapen the quality by $2,000 to match price. In both cases, discerning car buyers are choosing Asian.

 

[bostonsoxfan]

You are absolutely right. 2K in the hole before you build anything is a problem.

They also have a business strategy problem. You don't get "Good at" making a car for 5 years and then changing the design 100%. They have too many designs and too many car types to achieve the quality results that are needed for today's consumer, never mind that they have nothing to compete on in the small to mid sized car arena.

 

[gnome]

Quote from bostonsoxfan:

"... They also have a business strategy problem. You don't get "Good at" making a car for 5 years and then changing the design 100%. They have too many designs and too many car types to achieve the quality results that are needed for today's consumer

True. When I was a kid, my dad and I used to play a little game of "identifying the car"... make, model, and year.

For example, the '55-'56, '57, '58, '59, Chevy... all very different and distinctive.

But European makers had only subtle differences from year-to-year. We didn't have Asian makers then, but how different are Nissan Altimas from year-to-year?