GM plans to export China-made cars to U.S.

GM plans to export China-made cars to U.S.

LINK: http://www.autonews.com/article/20090511/ANA02/905119971/1131

Cliffs notes please for those of us who don't want to pay for a subscription?

Sorry. I don't have a subscription either! :shrug:


WASHINGTON -- General Motors plans to sell cars in the United States that it makes in China, starting in 2011. That could make GM the first major automaker to import Chinese cars to the U.S. market.

The car maker expects to sell about 17,335 of the China-made vehicles in the United States in 2011, and triple that number to 51,546 in 2014, a planning document circulated by GM among U.S. lawmakers shows. The gains would come, the document says, as GM's total U.S. sales surge 50 percent in the next five years.

The plans are subject to change pending the outcome of negotiations with the UAW.

Many of these vehicles are likely to be small cars similar to the upcoming Chevy Spark, which will be built in South Korea, though the models will be different from any currently built in the United States by any automaker, an industry official said in an interview.

Even at the higher 2014 level, though, cars from China would still account for only 1.6 percent of GM's 3.1 million total expected sales in the U.S. that year, the 12-page document says.

The automaker is trying to meet a government-imposed June 1 deadline to restructure operations and cut over $40 billion in debt, or risk bankruptcy. The UAW has criticized GM's restructuring plan because of increases envisioned by the plan in U.S. sales of cars made overseas.

"We are in dialogue with the UAW, and my view of a dialogue is that it is a good idea to have an open book on all the different subjects," GM CEO Fritz Henderson said in a media conference call today. "We have a philosophy of building where we sell, and not only do we think that is the right thing to do, but the most profitable thing to do historically."

UAW officials did not immediately respond to requests for comment.

In a May 5 letter to senators, the UAW criticized GM plans to increase U.S. sales from other countries.

"GM should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries," the letter from UAW legislative director Alan Reuther said.

The GM document also reveals plans to sharply increase sales of cars it makes in Mexico and South Korea while reducing the number made in Canada.

Mexico-made vehicles sold in the United States would jump from 317,763 in 2010 to 501,316 in 2014, according to the document.South Korea-made vehicles sold in the United States would more than quadruple from 36,967 in 2010 to 157,126 in 2014. On the other hand, Canada-made vehicles would fall from 431,708 in 2010 to 330,610 in 2014.

GM's U.S.-made vehicles would hold steady during the five-year period at about two-thirds of the total sold domestically.

Cliffs notes please for those of us who don't want to pay for a subscription?

Starting in 2011, General Motors will start importing cars from China. They expect to steadily increase imports to the US to over 51K cars by 2014.

GM also expects to increase imports to the US from Korea from the current 37K to 157K by 2014.

Finally, GM expects to increase production of Mexican made US cars from 317K to 501K, also by 2014.

According to Fritz Henderson, no federal backed loans will go to funding any of this (though engineering or design work for some of these vehicles made elsewhere will undoubtedly be done here... covered by taxpayer money).

Here's a link.
http://www.detnews.com/article/20090508/AUTO01/905080456/1148/auto01/GM+predicts+2+million+U.S.+sales+in++09++will+impo rt+cars+from+China+in+2011

Wonderful. I'm sure in no way will this news be ammunition for the ToyoHondissan buyers who claim their cars are more American than GM/Ford/Chrysler. :rolleyes:

GM is placing a big bet that the US dollar will be strong in 5 years, that is a bet I wouldn't take.

The Chinese currency is artificially under valued to help exports, once it goes free floating GM China's cost are going to go through the roof. At the same time, the Federal Reserve is running the printing presses at full speed, it is only a matter of time before we see a weaker dollar against foreign currencies.

This will be nothing be ammo for people who think GM's quality sucks.

This reads like someone smoking a crack pipe-

The gains would come, the document says, as GM's total U.S. sales surge 50 percent in the next five years.

- the Federal Reserve is running the printing presses at full speed, it is only a matter of time before we see a weaker dollar against foreign currencies.
If the U.S. keeps printing money to support its budget it won't matter where a vehicle is made because no one will be able to afford to buy one at all - we'll see inflation rates so large that we'll all be wishing for the good old days of the late 70's when the inflation rate was only in the low 20% per year range.

I can understand GM's business decision to go this route.

But, I do wonder if, when all this is over, those who insisted that the government had to step in and save GM will be happy with the GM they get.

:lol:

Wait....

:lol: :lol:

I have nothing to add to this thread other than sounds of laughter.

*sigh* when will this end? What is happening? I hope they have room for me as a customer at Ford or Dodge.

For cars under say $20,000, I dont think we'll ever see a GOOD one built here at home again. We cost too much to pay and insure. I guess I look at it like would you rather have GM import cars or China/Korea/Japan import cars and pay no taxes/employ no Americans.

I can understand GM's business decision to go this route.

But, I do wonder if, when all this is over, those who insisted that the government had to step in and save GM will be happy with the GM they get.

The party that's currently funding GM's survival (that is the US Government) is going to advocate small cars however they can be delivered. If America didn't want this kind of involvement, America shouldn't have voted in our current President. Seeing as how they did, we will have to live with such wackiness at least until the 2010 mid-term elections... maybe somewhat beyond.

Once the dust settles though, it's still a free country. Americans aren't going to fall all over themselves to buy small cheap cars (remember the Yugo? No?). The marketplace will have the final say on the whole circus.

For cars under say $20,000, I dont think we'll ever see a GOOD one built here at home again. We cost too much to pay and insure. I guess I look at it like would you rather have GM import cars or China/Korea/Japan import cars and pay no taxes/employ no Americans.

Isn't that what Mexico is for? I'd rather keep the money in North America. Higher Mexican standards of living is good for the USA. Just look at our good neighbors to the north.

If the U.S. keeps printing money to support its budget it won't matter where a vehicle is made because no one will be able to afford to buy one at all - we'll see inflation rates so large that we'll all be wishing for the good old days of the late 70's when the inflation rate was only in the low 20% per year range.

Most of the inflation has already been done. But it has been exported, and when those chicken come home to roost I fear we could see the dollar drop as much as 50% in one year.

I agree with you about mexico, its even a smaller global carbon footprint. But why build a product on our content when their content is going to be the main consumer of that good. Korea or China will be producing the american small cars, its a done deal. Canada and Mexico will make the NA product lines with a few plants left in Michigan and Texas for good PR.

I try to buy American as much as possible, but I've been noticing lately that there aren't even American alternatives in some categories. Last month it was Angle granders, we'll see what this month holds. Also, I've been Jeep shopping, built in Toledo, you would think nothing is more American, its on got a 57% rating. Sad.

I agree with you about mexico, its even a smaller global carbon footprint. But why build a product on our content when their content is going to be the main consumer of that good. Korea or China will be producing the american small cars, its a done deal. Canada and Mexico will make the NA product lines with a few plants left in Michigan and Texas for good PR.

I try to buy American as much as possible, but I've been noticing lately that there aren't even American alternatives in some categories. Last month it was Angle granders, we'll see what this month holds. Also, I've been Jeep shopping, built in Toledo, you would think nothing is more American, its on got a 57% rating. Sad.

Well I guess the plus side to a weak dollar is that is is better for US manufacturing :shrug:

yeah, which means the mexicans will go to canada instead.

you can look at it this way or not, obama's administartion is trying ot save this company, whereas i bet someone else would have left it to go bankrupt. meaning no camaro. hmm.

yeah, which means the mexicans will go to canada instead.

you can look at it this way or not, obama's administartion is trying ot save this company, whereas i bet someone else would have left it to go bankrupt. meaning no camaro. hmm.

So what would you rather have; a Chinese Camaro or a Ford Mustang? :lol:

Oh yeah, and FAIL.

yeah, which means the mexicans will go to canada instead.

you can look at it this way or not, obama's administartion is trying ot save this company, whereas i bet someone else would have left it to go bankrupt. meaning no camaro. hmm.
Save it? Wall Street is saying GM will go bankrupt; that it's inevitable. Automotive News has even reported that GM is considering moving it's headquarters.

well then i surely hope none of you buy a camaro anytime soon, a 100,000 mile warranty is no good if the company that built it is no longer in business.

last time i listened to wall street, people stopped caring about living, and MEOW!

well then i surely hope none of you buy a camaro anytime soon, a 100,000 mile warranty is no good if the company that built it is no longer in business.

last time i listened to wall street, people stopped caring about living, and MEOW!
No worries about the warranty, Mr. O. will take care if it (with your and my money of course).

For cars under say $20,000, I dont think we'll ever see a GOOD one built here at home again. We cost too much to pay and insure. I guess I look at it like would you rather have GM import cars or China/Korea/Japan import cars and pay no taxes/employ no Americans.

While I realize it is not a GM product, the Ford Focus, a C-class car, is being built in the US (Wayne Assembly). The new "Euro Focus" will be built in the renamed MAP (Michigan Assembly Plant) which is across the street from Wayne Assembly. Other C3 variants will also be built in the US, including Louisville Assembly.

MAP is being retooled, as we speak (they used to build the Expedition and Navigator there, when it was called MTP).

A small car can be built in the US, at a profit. GM just has not figured out how to do it. B-class cars............... no.

No worries about the warranty, Mr. O. will take care if it (with your and my money of course).

And the alternative to this would have been what, exactly???

*sigh* when will this end? What is happening? I hope they have room for me as a customer at Ford or Dodge.


plus 1...this news really blows GM...no matter how good it looks on paper..:mad::(

And the alternative to this would have been what, exactly???

Well I'm already paying for my neighbor's health care and mortgage, so why not his car too. :|

And the alternative to this would have been what, exactly???

Let GM go under, collapse the US economy, send the USA into s 2nd Great Depression. That seems to be what a lot of people want.

And the alternative to this would have been what, exactly???
Let failures fail.

What's happening is the trip people (the taxpayers and those who wanted to save the U.S. auto industry at any cost) signed up for but I wonder if they really understood what the true destination was going to be?

Let GM go under, collapse the US economy, send the USA into s 2nd Great Depression. That seems to be what a lot of people want.

Ya know, I'm beginning to wonder about that doom-and-gloom scenario. Recall that GM has been "right-sizing" itself for decades now....since it isn't the employment and resource monster that it used to be, I do question what the worst case scenario would be. I am aware of supplier impact, etc. and I know that things would be hard in the short term.

As a GM fan I am happy the company is still limping along. But the capitalist in me does still wonder.....and then you throw out this report and I become even more skeptical.

I will not buy a Chinese-built car. I've owned GM vehicles practically my whole (not so long) life. The thought of owning a Ford used to make me gag. But I would not hesitate to purchase a USA-build Ford over a Chinese Chevy....

Once the dust settles though, it's still a free country. Americans aren't going to fall all over themselves to buy small cheap cars (remember the Yugo? No?). The marketplace will have the final say on the whole circus.

Let's not forget that Yugos were essentially FIATs....;)

Let GM go under, collapse the US economy, send the USA into s 2nd Great Depression. That seems to be what a lot of people want.

People keep throwing this line out there, but I have yet to see any real evidence that it would happen. Hyperbole.

People keep throwing this line out there, but I have yet to see any real evidence that it would happen. Hyperbole.

It will certainly be enough of a shock to the system to test our economies over all strength. Social Security is already close to not bringing in enough money. GM bankruptcy and the 100's of thousands unemployed would certainly push that over the edge.

http://www.google.com/hostednews/ap/article/ALeqM5itEsngHqX8_Z7vFalDVcYKaRANpQD984VJH80

It will certainly be enough of a shock to the system to test our economies over all strength. Social Security is already close to not bringing in enough money. GM bankruptcy and the 100's of thousands unemployed would certainly push that over the edge.

http://www.google.com/hostednews/ap/article/ALeqM5itEsngHqX8_Z7vFalDVcYKaRANpQD984VJH80

Social Security has been going bankrupt for decades now, where have you been? :lol: Then again, it's a ponzi scheme so I don't see why anybody is really shocked by it. I'm all for just cutting our losses on the whole program. So with that said, I have no idea why you're injecting social security talk into this discussion.

I'm sorry, but I just can't buy the whole doomsday talk that we'll go into a full blown depression if GM goes away. People seem to think that the people will just go to living in boxes and the factories will simply disappear into the abyss. Other companies and investors will come in and buy the bits and pieces up and start new companies or expand their existing ones. Some of the best companies in the world today got their starts during economic hard times.

In my own personal opinion, Americans are not fond of the cold hard truth. Particularly when the facts point out some harsh realities.

One fact some Americans struggle with is that being able look for a job is a right, but having a job is NOT.

Some time back I was waiting for a flight out of Detroit. Any smoker who knows the Wayne County airport knows that the Fox lounge is where you can have a cigarette.

I had the chance to meet a gent from England who was in the employ of a British firm which make home and commercial plumbing products. The subject of China came up in the conversation. He advised that his company was forced by financial realities to move all their production to China. Labor and regulation issues had driven their competitors to China and thus his company had to follow suit. He told me what I already knew; a business which is price competitvely driven will have to match or beat the competition on price and costs dictate price.

He said that as much as they didn't want to relocate their production, their competitors had, so they were FORCED to follow suit. The consumer demanded they follow suit.

I certainly don't believe all GM product will be imported, no where near.

I think most will agree that to compete you have to compete and exceed at all levels. That means technology, design, quality, AND all other cost management.

Most Americans DO NOT care why a product costs what it costs. They don't care who made it. They care about how good it is and what it costs them to own it. It's a case of the right of free association. Abstract notions of morality just don't factor in unless peer pressure make them a consideration.

Yes, some do care. Some do look at where something is made and make choices based on that.

"What's in it for me?" is the general rule.

GM has to compete based on product and price. Getting that assured is the only goal reorganization should have. Any playing of favorites for politics is not straightening anything out for any period of time. Consumers are the decision makers in the final analysis. Doing what they want better be the key as they are the only "sacred cow" you can't afford to piss off.

I will not buy a Chinese GM car. Period. Ever. End of story. I will only buy Canadian/American built, American-comapny owned cars. Period. I talked my mother-in-law out of an Equinox 2 years ago because of the Chinese 3.4.

Of course, realize I am not the typical American consumer. My Sharp microwave was built in North Carolina. Our solid cherry bedroom set we purchased 2 years ago was made in NH. My wife's new saddle was made in TX. The Xtant amplifiers in both of my Camaros were made in the US. (I don't think ANY other electronics I have are US made!).

ANY TIME I CAN BUY AMERICAN, I do. I check the label on EVERYTHING I buy, and if there is a US made equivalent, even if it costs me more, I buy it. My wife laughs along with me when we're at a horse tack shop and I flip everything over before I buy it...she does now, too! Our dog doesn't even have Chinese chew toys! I have a Craftsman lawnmower instead of a Honda!

I'm obssessed...and I wish I wasn't alone on this one.

I will not buy a Chinese GM car. Period. Ever. End of story. I will only buy Canadian/American built, American-comapny owned cars. Period. I talked my mother-in-law out of an Equinox 2 years ago because of the Chinese 3.4.

Of course, realize I am not the typical American consumer. My Sharp microwave was built in North Carolina. Our solid cherry bedroom set we purchased 2 years ago was made in NH. My wife's new saddle was made in TX. The Xtant amplifiers in both of my Camaros were made in the US. (I don't think ANY other electronics I have are US made!).

ANY TIME I CAN BUY AMERICAN, I do. I check the label on EVERYTHING I buy, and if there is a US made equivalent, even if it costs me more, I buy it. My wife laughs along with me when we're at a horse tack shop and I flip everything over before I buy it...she does now, too! Our dog doesn't even have Chinese chew toys! I have a Craftsman lawnmower instead of a Honda!

I'm obssessed...and I wish I wasn't alone on this one.

I salute your choice.:yes:

Let GM go under, collapse the US economy, send the USA into s 2nd Great Depression. That seems to be what a lot of people want.

You see, that's precisely the problem! Give us the necessary money, or else doom and gloom and armageddon. Because the federal government insures these failures, there is no incentive to prevent them - after all, the government insures us. Thus, reckless policies by the banking/car/whatever industry.

The bailout game has been played for many many decades. It's unfortunate that public at large is absolutely ignorant of history and keeps making the same mistake over and over and over again.

And you seem to have bought into the whole "let GM fail, and the whole economy will collapse" fear mongering tactic. No, things would not be pretty. But let this happen once, twice, and companies would learn. Perhaps it would be best to start with the banks though - no bailout whatsoever.

Sigh, one can only dream of such unrealities.

Isn't this essentially political posturing trying to get the CAW to cave? Notice they are talking about increasing imports from everywhere but Canada, where they are decreasing numbers, essentially saying, "we don't need you". :think:

It's unfortunate that public at large is absolutely ignorant of history and keeps making the same mistake over and over and over again.
Actually, wasn't the public at large very much against a bailout of GM and Chrysler as well as against all the TARP and Stimulus nonsense?

I think the public were the ones who had learned from history.

Isn't this essentially political posturing trying to get the CAW to cave? Notice they are talking about increasing imports from everywhere but Canada, where they are decreasing numbers, essentially saying, "we don't need you". :think:
I doubt any CAW concessions would make Canadian production costs lower China producing costs and I think production costs is what this move is all about.

Wonderful. I'm sure in no way will this news be ammunition for the ToyoHondissan buyers who claim their cars are more American than GM/Ford/Chrysler. :rolleyes:

Toyota imports roughly 1.5 million vehicles into North America every year, or 45% of their annual North American sales. American's from all over kept saying GM needed to be more like Toyota. Well this is it, aren't we proud of this fine accomplishment!?!?!?! Our country is simply becoming stupid.

General Motors plans to sell cars in the United States that it makes in China, starting in 2011. That could make GM the first major automaker to import Chinese cars to the U.S. market.

None of the Chinese produced Prius' make it to US shores?

This is not a good thing for us hardcore American product guys. I didn't get a Hemi engine in my Jeep because they're made in Mexico (along with some electrical bugs). I sure as hell won't buy a car made in China, even if it's a new Corvette that costs $20K.

This would be an interesting experiment. Place two identical GM cars side-by-side in the middle of a suburban mall. One has a sticker price of $24,000 on it. The other has an additional option on its sticker that reads: "Domestic Production option... $5,000." The only difference is that it was produced in the U.S., whereas the other was produced in, say, China. Then ask folks which they would purchase.

I will not buy a Chinese-built car.
:bow:

YOU COULD HAVE STOPPED RIGHT THERE AND HAD ME WITH YOU 100%.

I'm not going to get into yet another flame war about global policy and global economics. I am utterly amazed at how people ignore 1500 years of history and the lessons it offers us to help guide us forward. To he11 with learning something from the past... full speed ahead... into oblivion. :rolleyes:

Manufacturing is the key to economic growth... period. If you have it, you are the king of earth. If you don't, you are a follower of some other nation that does.

One other thing... all these comments about Mr O and how he is paying the neighbor's mortgage... I don't recall the previous president imposing or enforcing any policy to prevent the financial industry from allowing banks to give loans to people who couldn't afford them. I also don't recall Mr. O being the president that stood before congress last August and initiated the bank bailouts. Recall McCain was touting how he was first to leave the campaign trail to get back to Washington for the special hearings on a Friday night.
And AT LEAST the car company loans are LOANS. What Mr. B gave away was a free gift.
Mr. O, as you refer to him, is no more to blame for this mess than anyone, and he has appointed republicans to his administration to help fix the problems we face... more effort than can be heaped onto the previous lot.

So let's tone down the blame-game on the sitting stooge we have now for a while. I'd personally rather see the stupid family that bought a house they can't afford take 10 more years to pay it off rather than see it sit empty and see banks and lenders lose even more money on it (because they'll just come back to the government for more free handouts if that happens).

One other thing... all these comments about Mr O and how he is paying the neighbor's mortgage... I don't recall the previous president imposing or enforcing any policy to prevent the financial industry from allowing banks to give loans to people who couldn't afford them.

Meh, actually GWB DID try to reform Fannie and Freddie but was blocked repeatedly. Alarm bells were going off about the risky sub-prime mortgage practices back in 2005, if I remember correctly. Here ends the politics portion of the program. :)

And AT LEAST the car company loans are LOANS. What Mr. B gave away was a free gift.

Proud, it is becoming more and more apparent (at least, to me) that these loans will probably never be repaid. I could be wrong though.

I don't recall the previous president imposing or enforcing any policy to prevent the financial industry from allowing banks to give loans to people who couldn't afford them.
In a free enterprise system, people are supposed to be smart enough to understand what they can afford and what they can’t and understand that an adjustable rate mortgage means that the rate will adjust.

The Federal government isn’t supposed to or even be able to control who private banks and mortgage lenders do or don’t give loans to. What they did have some ability to control and what Bush did try to control was Fanny and Fredie but those efforts were defeated by Congress.

Even if GWB had been out on the street making bad loans all on his own I don’t see why taxpayers should now be made to pay the mortgages of anybody else. Most of these people shouldn’t have ever bought a house because they weren’t ready to buy a house; the government stepping in and using tax dollars to prop them up doesn’t make them any more ready for home ownership.


I also don't recall Mr. O being the president that stood before congress last August and initiated the bank bailouts. Recall McCain was touting how he was first to leave the campaign trail to get back to Washington for the special hearings on a Friday night.
Actually, while he wasn’t president yet, Obama was very vocal in his support for TARP, the various bailouts and making loans to the auto companies.

Coming out in favor of all the TARP and bailouts were one of the issues McCain and Obama agreed on. Many analysts think McCain could well done much better in the election had he opposed all that garbage instead of going along with it.


And AT LEAST the car company loans are LOANS. What Mr. B gave away was a free gift.
Loans get paid back. I haven’t seen any evidence that such will ever happen.

I will not buy a Chinese-built car. I've owned GM vehicles practically my whole (not so long) life. The thought of owning a Ford used to make me gag. But I would not hesitate to purchase a USA-build Ford over a Chinese Chevy....

GM or someone from GM if your reading this..If GM starts making Chinese made cars I am out of the game with you...I will wear the blue oval very proud..

I am the one in my family and friends that everyone goes to for car purchasing advice. I tell them to go domestic and to more the point I try to get them to buy GM...well I cant say I am a huge factor but I will more than no doubt make sure that Ford will be the way to go if there is a chinese GM car imported here..

I am getting real sick of made in China here in the U.S.

The United States is made in China now..that sickens me to no end..

I will not buy a "made in China" vehichle. I'm sick of our production shifting overseas and I'm doing everything in my power to buy american made products only. Sadly it's not the least bit easy.

The USA as we know it is a dead man walking.

One other thing... all these comments about Mr O and how he is paying the neighbor's mortgage... I don't recall the previous president imposing or enforcing any policy to prevent the financial industry from allowing banks to give loans to people who couldn't afford them. I also don't recall Mr. O being the president that stood before congress last August and initiated the bank bailouts. Recall McCain was touting how he was first to leave the campaign trail to get back to Washington for the special hearings on a Friday night.
And AT LEAST the car company loans are LOANS. What Mr. B gave away was a free gift.
Mr. O, as you refer to him, is no more to blame for this mess than anyone, and he has appointed republicans to his administration to help fix the problems we face... more effort than can be heaped onto the previous lot.

So let's tone down the blame-game on the sitting stooge we have now for a while. I'd personally rather see the stupid family that bought a house they can't afford take 10 more years to pay it off rather than see it sit empty and see banks and lenders lose even more money on it (because they'll just come back to the government for more free handouts if that happens).

You don't know your history as much as you may think you do.

Same here. I WILL NOT buy a Chinese made GM product. If GM shipped ALL Camaro production to China today, I would NEVER buy one. The new 2010 Mustang looks SWEET! Anyway, just saying...

Actually, I'm sick of HAVING to buy Chinese made **** altogether.

When I was truck shopping back in the day for my used Silverado, I wouldn't even test drive one that's VIN started with a "3".

EDIT: I'd like to add that I don't have a problem with some components being made in China (complete engine and transmissions I would have a "problem with"), I fully understand we're in a world economy. What I'm against is a 100% Chinese vehicle being sold in the states as a GM product.

EDIT: I'd like to add that I don't have a problem with some components being made in China (complete engine and transmissions I would have a "problem with"), I fully understand we're in a world economy. What's I'm against is a 100% Chinese vehicle being sold in the states as a GM product.


my thoughts exactly..

Some parts in Falcon and Commodore are made in China (windscreens/glass, wheels etc...) so I don't know why a similar arrangement can't work in the USA.

Further, we've been getting some imported Korean cars for quite some time in Australia so perhaps the time has come where some imported cars (e.g. small cars that don't have much profit margin) can be sold under the GM umbrella for a profit.

As long as the 'core' vehicles continue to be made in the USA, I don't see the problem.

In a free enterprise system, people are supposed to be smart enough to understand what they can afford and what they can’t and understand that an adjustable rate mortgage means that the rate will adjust.
I have advocated for years that the typical consumer is a moron. The educated consumer is the exception... not the rule.
I agree with your theory 100% and I wish it were true, but sadly it isn't.

More details in the next statement...

The Federal government isn’t supposed to or even be able to control who private banks and mortgage lenders do or don’t give loans to. What they did have some ability to control and what Bush did try to control was Fanny and Fredie but those efforts were defeated by Congress.
MY PROBLEM is that the bank execs were PRESSURING and even FORCING their agents to make loans - risky or not. HONESTLY... tell me you have not received junk mail offering you $10,000 or more and "you are pre-approved... take that vacation, buy a car, remodel your home... just return this form in the pre-paid envelope". They were rated on the money they lent out, regardless of the risk. Several have now testified that they were even forced to make quotas. THAT indicates a willing and knowing desire to defeat the fundamentals of capitalism and basic common sense too. When execs at lending institutions are forcing their loanwriters to meet quotas by giving loans to whoever walks in the door. With the nut-cases we have in thepublic at-large today, you have to expect that there will be many who will jump on such offers knowing full-well they can't afford it.

Tommy Two-Toes will at least tell you that he's going to cut your legs off if you don't pay him by next Tuesday.

Even if GWB had been out on the street making bad loans all on his own I don’t see why taxpayers should now be made to pay the mortgages of anybody else. Most of these people shouldn’t have ever bought a house because they weren’t ready to buy a house; the government stepping in and using tax dollars to prop them up doesn’t make them any more ready for home ownership.
Again, I don't want to pay anyone's mortgage either. My understanding is that the government is allowing lenders to re-write the loan and extend the terms so that the payment is low enough for them to afford... up to 40 year notes in some cases. I have no problems with that - as long as the buyer is still making the payments.


Actually, while he wasn’t president yet, Obama was very vocal in his support for TARP, the various bailouts and making loans to the auto companies.

Coming out in favor of all the TARP and bailouts were one of the issues McCain and Obama agreed on. Many analysts think McCain could well done much better in the election had he opposed all that garbage instead of going along with it.
Your points are 100% on. My point was he was not the president at that time, and the idea was not his.... no more. Some people seem to think he masterminded all these bailouts and has done it since taking office.


Loans get paid back. I haven’t seen any evidence that such will ever happen.
Much to my shagrin, I am agreeing with you again. I think Chrysler stands a decent chance of paying back the required loans in time, GM I give a 50/50 shot at right now. All the money for the banks... most of it is in some off-shore account funding some executive's island home in bermuda or the Caymens now... and it's gone. :mad:

You don't know your history as much as you may think you do.

Please axept this opportunity to edgumcate me.
I am very eeger to lurn what you know.

Again, I don't want to pay anyone's mortgage either. My understanding is that the government is allowing lenders to re-write the loan and extend the terms so that the payment is low enough for them to afford... up to 40 year notes in some cases. I have no problems with that - as long as the buyer is still making the payments.

Yeah, but the latest I have heard about these "breaks" given to these people is that the loans are now configured so that the only amount they are paying on each month is the interest. I'm not sure if it's true or not, but if it is, you're not really doing these people any favors.

There is a natural order and balance to things in this universe. We became the nation we are today due to our low labor costs and technological advancements in the 19th and 20th centuries. As foreign nations bought our products our wages went up along with the cost of our products.

As we move into the 21st century production levels in labor intense products has shifted to emerging markets where they now have the advantage of low cost labor. This is a natural progression, and nothing to be feared. As we and other foreign nations buy these products produced in emerging markets, their labor costs will increase; thus their products will become less of a deal to us.

Again the balance will shift from them to another and another country, raising the entire worlds living standard. This is why the US has moved from heavy production to high tech, financial higher education related services (legal/medical/R&D/engineering).

However Americans would rather digress to labor intense manufacturing rather than progress to higher level service. These services of course require more effort of the individual American and perhaps that is the problem.

Again the balance will shift from them to another and another country, raising the entire worlds living standard. This is why the US has moved from heavy production to high tech, financial higher education related services (legal/medical/R&D/engineering).

However Americans would rather digress to labor intense manufacturing rather than progress to higher level service. These services of course require more effort of the individual American and perhaps that is the problem.

I agree with you to a point. The U.S. will always need a healthy manufacturing base for a variety of reasons.

Please axept this opportunity to edgumcate me.
I am very eeger to lurn what you know.

It wasn't that I was completely disagreeing with you, but to further your knowledge some, all of this whole mess got started in 1999. This of course is inconvienent to a group of people who think this is only something that occured with in the last 8 years.

We had already learned this lesson after the Great Depression and rules were put into place to prevent it from happening again. In 1999, they felt differently and thought that we wouldn't repeat our previous mistake from 75 years earlier :lol: due to greater transperancy.

Read up on it here is you want to know more and layeth the smack down on anybody when this topic comes up again:
http://www.investopedia.com/articles/03/071603.asp

In fact, this Act was slowly dismantled all throughout the 90s until it's outright repeal in 1999. When people say that they yearn for the economies of 1990s, they need to realize that much of what we're paying for now is a result of those good times. It was the repeal of this act that allowed security based swap derivatives to be eventually excempted from SEC regulation and oversight.

Of note, Citibank combined with Travelers Group thanks to the repeal of this law giving up what we know today as CitiGroup. Travelers Group brought into the fold the ability of a commercial bank to underwrite insurance.


Just some food for thought for those out there who think this is all of the last guy's fault. This has been 15 years in the making and they should have tried to correct course when the gravity of the situation was discovered, but a certain goofy looking Congressman from Massachusetts played lead blocker for that.

MY PROBLEM is that the bank execs were PRESSURING and even FORCING their agents to make loans - risky or not.


The banks made those loans because of the Community Reinvestment Act. The banks were told that they had to have a certain percentage of loans made in "depressed neighborhoods" or they would have their FDIC insurance pulled.

No FDIC Insurance = No Bank.

The Community Reinvestment Act was passed under Carter and greatly strenghtened and enforced under Clinton. "Dub" allowed the actions taken by the Clinton adminitration to continue.

Make no mistake about it. The government is 100% behind the housing mortgage crisis. Those in congress love to blame the banks since otherwise, they would have to fess up that it is their own fault.

Once the dust settles though, it's still a free country. Americans aren't going to fall all over themselves to buy small cheap cars (remember the Yugo? No?). The marketplace will have the final say on the whole circus.

Primarily what killed off Yugo was the slightly more expensive, but considerably less awful Hyundai Excel. People bought that small cheap car. Look at Hyundai now!

Don't get me wrong, I do not want GM to import Chinese vehicles to the U.S. and would not buy one if they did. But outside car enthusiast circles, don't underestimate what people will sacrifice for cheap.

Primarily what killed off Yugo was the slightly more expensive, but considerably less awful Hyundai Excel. People bought that small cheap car. Look at Hyundai now!

Don't get me wrong, I do not want GM to import Chinese vehicles to the U.S. and would not buy one if they did. But outside car enthusiast circles, don't underestimate what people will sacrifice for cheap.
I agree.

While car nuts buy mostly on passion, what is truly needed by people is transportation that they can afford. If a Chinese made Chevrolet is selling for $5,000 less than its next closest competitor a lot of people will buy the Chinese made car; you don't have to look much further than Wal-Mart to see proof of that.

Interesting...
GM May Trim Imports ‘Substantially’ to Help Win Labor Accord

By Jeff Green and Greg Miles

May 14 (Bloomberg) -- General Motors Corp., facing a probable bankruptcy by June 1, is willing to “substantially” cut planned U.S. imports from China and elsewhere to get a money-saving agreement with the United Auto Workers.

Using U.S. production instead of imports would pivot on whether the UAW can build the vehicles at a cost GM can afford, Chief Executive Officer Fritz Henderson said today in a Bloomberg Television interview. He said Detroit-based GM had forecast a 12-fold increase in imports to 235,000 by 2014.

“This is a discussion we’re having with the UAW,” Henderson said. “We’re most profitable when we build where we sell.”


http://www.bloomberg.com/apps/news?pid=20601103&sid=aYBejCKPE_PM&refer=us

"Gee, sure wish we could build these in the U.S. Too bad it's too expensive."