GM Needs Another $17 Billion
- Thread starter capmac
- Start date
We can debate the morality of the auto bailout endlessly, but the real question is can they ever be viable. It seems pretty clear to me the answer is no. Getting government money will only make matters worse, because they will lose whatever ability they had to deal with the union.
The auto companies' problems are partly the result of onerous union contracts, partly the result of government mandates, partly the result of management, partly the result of the downturn and financial crisis, but mainly the result of "free" trade. You cannot have UAW workers making $75 an hour for unskilled work with lavish health care and retirement plans competing against asians making a fraction of that or europeans whose governments pay all the health care and retirement. GM's and Ford's european units have always made a lot of money. The US is the problem.
It is typical of politicians to pretend there are never tradeoffs. It works for them since you can often delay the full impact of the tradeoff until someone else is in office and responsible. We can let bankruptcy break up the currently uneconomic auto giants and put their assets int eh hands of people who can run themmore efficiently. Or, we can address the trade issues. Or, we can just piss away a ton of money and push the problem down the road. Guess which will happen?
The auto companies' problems are partly the result of onerous union contracts, partly the result of government mandates, partly the result of management, partly the result of the downturn and financial crisis, but mainly the result of "free" trade. You cannot have UAW workers making $75 an hour for unskilled work with lavish health care and retirement plans competing against asians making a fraction of that or europeans whose governments pay all the health care and retirement. GM's and Ford's european units have always made a lot of money. The US is the problem.
It is typical of politicians to pretend there are never tradeoffs. It works for them since you can often delay the full impact of the tradeoff until someone else is in office and responsible. We can let bankruptcy break up the currently uneconomic auto giants and put their assets int eh hands of people who can run themmore efficiently. Or, we can address the trade issues. Or, we can just piss away a ton of money and push the problem down the road. Guess which will happen?
No money for the auto makers? Then no money for banks. They all go down, the market corrects another 50% to the downside and we rebuild. It's going to end up that way anyhow. The only difference is, under the current plan the blue bloods get to keep their jobs and blue collar takes it up the ass. I say everybody takes it up the ass collectively. Otherwise, it's time for this country to go down. Grease up!:eek: :eek: :eek:
You make a very valid point. But unless they come up a strong viability plan (The one they just released is still somehow fuzzy), they will eventually be filing a chapter 11... unemplyment will be around 12%... the midwest will be in the shitter.
This is a very difficult situation to deal with, but everyone is walking around as if they know exactly how to deal with it. I for one don't know how to fix the mess, but I know chapter 11 filing for GM will be bad for everyone from assembly line workers to supply manufacturers who borrowed money from your bank... which will now have more writedowns than they thought. (You can argue that the debt backstopper will take responsibility, but how long will that take?)...And the mess goes on.
The banks definitely deserve to fail before the auto companies do. But the repercussion of that will be even worse.
I say we nationalize the struggling banks that are too connected....and if you wanna scream socialization...then screw you!!!
I say the Gov't takes control of the auto companies, if you wanna scream "Big Gov't"...again, screw you!!!
Let's bite the bullet and skip all this rhetoric. No more pussyfooting!!!!
american auto makers and unions have shot themselves in the foot for many years now with inferior quality products.
Products are substandard and they cant compete with the japanese.
Bailout money only buys them time before they ultimately fail.
Even with new products on the horizon who is going to buy a car with a warranty that may not exist in 1-2 yrs.
No easy solution considering the number of people who will be unemployed from that industry.
Its a sad sad situation
Products are substandard and they cant compete with the japanese.
Bailout money only buys them time before they ultimately fail.
Even with new products on the horizon who is going to buy a car with a warranty that may not exist in 1-2 yrs.
No easy solution considering the number of people who will be unemployed from that industry.
Its a sad sad situation
GM is the gift that keeps on giving:
http://news.yahoo.com/s/nm/20090218/bs_nm/us_autos
GM with 30 billion in sucker loans has a market cap of a bit over one billion. That 17 billion we sunk in it already only keeps it afloat for a few months. We can expect cough up 15 billion a quarter to keep this scam going.
http://news.yahoo.com/s/nm/20090218/bs_nm/us_autos
GM with 30 billion in sucker loans has a market cap of a bit over one billion. That 17 billion we sunk in it already only keeps it afloat for a few months. We can expect cough up 15 billion a quarter to keep this scam going.
I bet if you fired every manager in GM FORD and CHrysler you would have enough to create a buffer. Take those saved assets and pay down debt. Make some zero down 1 month loans with 3% APR and see how many young people would come down to the dealership. Stop Production and revamp the product lines with electric hybrid cars.
Have half the staff work one week and half the staff work the other week until its all done.
When GM is gone what will these workers do? Find a new line of work. GM should go into installing solar panels. Problem solved without giving them 21 billion.
Fire the managers they didn't manage.
Have half the staff work one week and half the staff work the other week until its all done.
When GM is gone what will these workers do? Find a new line of work. GM should go into installing solar panels. Problem solved without giving them 21 billion.
Fire the managers they didn't manage.
Ummm...I think everybody here keeps forgeting that FORD has yet to ask for a bailout...although keyword and tricky phrase here is YET...
While bailouts are very expensive to the taxpayer, they are far from a cure-all for the recipient. Bailout acceptees are beholden to Uncle Sam, to big government and since the GOP has decided to not be conservative any more they are also beholden to liberals and democrats. That means lots of donations to democrats, don't cut any jobs in key districts, promote minorities, drop 8-cylinder engines, promote green everything, sell your plane, don't pay white people too much bonus, provide awesome health care to everybody who ever walked by your company and so on. Basically, you don't ask for a bailout unless you are going down, and by the time the government is done with you, you'll wish you had gone BK.