GM CEO Wagoner to Step Down
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What difference does it make if a the state of South Carolina gives money to BMW or congress gives money to Detroit? The concept is the same. It's taxpayers money that is handed out. The difference is that GM creates more jobs and actually NEEDS the money where as BMW is doing most of their R&D in Germany and doesn't need the financial help so WTF?!
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Joined: Mar 2005
Posts: 3,123
From: Melbourne, Australia
The only problem here is that a tax break won't fix GM's systemic problems.
At least the core problems were identified in the viability assessment and actions are being taken to fix GM.
If the government's actions work then the whole country will benefit and the money invested into GM will be paid back... and then some.
At least the core problems were identified in the viability assessment and actions are being taken to fix GM.
If the government's actions work then the whole country will benefit and the money invested into GM will be paid back... and then some.
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Joined: May 2008
Posts: 213
The only problem here is that a tax break won't fix GM's systemic problems.
At least the core problems were identified in the viability assessment and actions are being taken to fix GM.
If the government's actions work then the whole country will benefit and the money invested into GM will be paid back... and then some.
At least the core problems were identified in the viability assessment and actions are being taken to fix GM.
If the government's actions work then the whole country will benefit and the money invested into GM will be paid back... and then some.
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Joined: Mar 2005
Posts: 3,123
From: Melbourne, Australia
And since when has the tax payer had the right to question any of the governments motives? Everywhere you look, the government could easily find new ways to save tax payer's money. The auto industry is demanding a small fee by comparison to other government ventures...
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Joined: Nov 2001
Posts: 254
From: OSHAWA
I thought it was clear enough. The difference is: First, SC doesn't give cash. They give tax breaks. The federal government is giving GM cash. Second, SC can choose to give tax breaks to help SC if it chooses. The federal government is taking cash from people in Florida and Montana to give cash to an insolvent company in Michigan. I know you see that's wrong, even if you don't want to admit it.
Congress can pull the plug and let GM fail on their own but I think they see hope that GM can be viable again.
Just look at the stance taken towards Chrysler, they basically said merge with Fiat or die, they could have been harsher on GM had they wanted to be.
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Joined: Dec 2008
Posts: 203
From: U.S.A.
There is a difference between where I choose to invest my money and perhaps loose it, and the federal government taking my money from me and throwing it into companies that are already insolvent.
At least snce Lexington and Concord.
At least snce Lexington and Concord.
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Joined: Mar 2005
Posts: 3,123
From: Melbourne, Australia
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Joined: Nov 2000
Posts: 2,139
From: Commerce, mi, USA
Agreed. I'm a pretty heavy conservative, but some amount of nationalism / protectionism is needed. With industry gone, we'll be producers of nothing but service, and there is no way a purely service-based economy is going to sustain us in the long haul.
I don't want to have to ask China to build us more F-22 Raptors.
I don't enjoy the idea of bailouts at all (but I much prefer loans like Chrysler had in the '80s and what GM has asked for now to the more involved bailouts of today...), but the chump change the automakers are after pales in comparison to the ginormous dollars the financial institutions have received. Not to mention, it isn't like the government had no hand in the industry being where it is today...
I don't want to have to ask China to build us more F-22 Raptors.
I don't enjoy the idea of bailouts at all (but I much prefer loans like Chrysler had in the '80s and what GM has asked for now to the more involved bailouts of today...), but the chump change the automakers are after pales in comparison to the ginormous dollars the financial institutions have received. Not to mention, it isn't like the government had no hand in the industry being where it is today...
I worry some about GM's forthcoming taskmasters dictating all kinds of 'green' product thrusts at GM. But then the optimist in me realizes - the government can 'mess up' GM's product plans for a while... but ultimately people will just buy 'non-green' vehicles like big trucks and SUV's from whoever sells 'em instead. I'm confident that after the dust settles, GM will come thru this with a competitive cost structure, a sane dealer network, and a fighting chance to maintain their heritage of making some of the best cars and trucks in the world
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Joined: Apr 2001
Posts: 3,698
From: USA
A couple things....
If you think this is not about policy and will not effect the cars you can buy-
You need to get your head out the sand..end of story.
http://online.wsj.com/article/SB123845591244871499.html
Why is GM's stock still going down?
Simple fact is, shareholders are about to get hosed. The only two options now are either a bankruptcy which makes the stock worthless, or a package where the UAW and bondholders are issues new stock in exchange for releasing GM's debt obligations. In this scenerio, current sharholders will have their stock severely diluted.
Why should the government give GM tax payer money?
This one is easy. The cost of a bankrupt GM hurts the governments balance sheet much more than the cost of the bail out. GM has been an huge income generator for the government for years in terms of tax income, paying employees health benefits and retirements and so forth. Replace GM with a defunt entity, and not only do you lose that income, you now have added income and health care costs for the laid off employees and urban decay in the ghost towns of GM"s shuddered plants.
While I am a blue collar capitalist, I also thing that sometimes you have to use common sense. The taxpayers get a way crappier deal if GM is allowed to fail than if they are bailed out. That being said..some things are going too far. According to the WSJ, there will be administration officials implanted into the companies. When does that happen? I mean if GM got a lon from a bank..would there be bank officials in the company "overseeing" things?
The problem is..now rather that ripping of the bandaid and putting up the money to fix the structural issues in GM once in for all, we are getting tired up bickering over periphial stuff. Wagoner getting fired was nothing but a distraction from the fact that the administration basically did nothing punted the ball off two more months with the same threat of bankruptcy. Imaging This has not happened with the banks...despite the fact that Citibank for instance is spending half a billion to put their name on a stadium.
If you think this is not about policy and will not effect the cars you can buy-
You need to get your head out the sand..end of story.
http://online.wsj.com/article/SB123845591244871499.html
With GM, the Obama administration is interested not just in preserving jobs, but in pushing other policy prescriptions, in particular creating a "company of the future" with clean and energy-efficient vehicles, a frequent campaign theme during Mr. Obama's quest for the presidency.
Simple fact is, shareholders are about to get hosed. The only two options now are either a bankruptcy which makes the stock worthless, or a package where the UAW and bondholders are issues new stock in exchange for releasing GM's debt obligations. In this scenerio, current sharholders will have their stock severely diluted.
Why should the government give GM tax payer money?
This one is easy. The cost of a bankrupt GM hurts the governments balance sheet much more than the cost of the bail out. GM has been an huge income generator for the government for years in terms of tax income, paying employees health benefits and retirements and so forth. Replace GM with a defunt entity, and not only do you lose that income, you now have added income and health care costs for the laid off employees and urban decay in the ghost towns of GM"s shuddered plants.
While I am a blue collar capitalist, I also thing that sometimes you have to use common sense. The taxpayers get a way crappier deal if GM is allowed to fail than if they are bailed out. That being said..some things are going too far. According to the WSJ, there will be administration officials implanted into the companies. When does that happen? I mean if GM got a lon from a bank..would there be bank officials in the company "overseeing" things?
The problem is..now rather that ripping of the bandaid and putting up the money to fix the structural issues in GM once in for all, we are getting tired up bickering over periphial stuff. Wagoner getting fired was nothing but a distraction from the fact that the administration basically did nothing punted the ball off two more months with the same threat of bankruptcy. Imaging This has not happened with the banks...despite the fact that Citibank for instance is spending half a billion to put their name on a stadium.
Last edited by formula79; Mar 31, 2009 at 10:13 PM.
Registered User
Joined: Nov 2000
Posts: 2,139
From: Commerce, mi, USA
A couple things....
Why should the government give GM tax payer money?
This one is easy. The cost of a bankrupt GM hurts the governments balance sheet much more than the cost of the bail out. GM has been an huge income generator for the government for years in terms of tax income, paying employees health benefits and retirements and so forth. Replace GM with a defunt entity, and not only do you lose that income, you now have added income and health care costs for the laid off employees and urban decay in the ghost towns of GM"s shuddered plants.
While I am a blue collar capitalist, I also thing that sometimes you have to use common sense. The taxpayers get a way crappier deal if GM is allowed to fail than if they are bailed out. That being said..some things are going too far. According to the WSJ, there will be administration officials implanted into the companies. When does that happen? I mean if GM got a lon from a bank..would there be bank officials in the company "overseeing" things?
The problem is..now rather that ripping of the bandaid and putting up the money to fix the structural issues in GM once in for all, we are getting tired up bickering over peripial stuff. Wagoner getting fired was nothing but a distraction from the fact that the administration basically did nothing punted the ball off two more months with the same threat of bankruptcy. Imaging This has not happened with the banks...despite the fact that Citibank for instance is spending half a billion to put their name on a stadium.
Why should the government give GM tax payer money?
This one is easy. The cost of a bankrupt GM hurts the governments balance sheet much more than the cost of the bail out. GM has been an huge income generator for the government for years in terms of tax income, paying employees health benefits and retirements and so forth. Replace GM with a defunt entity, and not only do you lose that income, you now have added income and health care costs for the laid off employees and urban decay in the ghost towns of GM"s shuddered plants.
While I am a blue collar capitalist, I also thing that sometimes you have to use common sense. The taxpayers get a way crappier deal if GM is allowed to fail than if they are bailed out. That being said..some things are going too far. According to the WSJ, there will be administration officials implanted into the companies. When does that happen? I mean if GM got a lon from a bank..would there be bank officials in the company "overseeing" things?
The problem is..now rather that ripping of the bandaid and putting up the money to fix the structural issues in GM once in for all, we are getting tired up bickering over peripial stuff. Wagoner getting fired was nothing but a distraction from the fact that the administration basically did nothing punted the ball off two more months with the same threat of bankruptcy. Imaging This has not happened with the banks...despite the fact that Citibank for instance is spending half a billion to put their name on a stadium.
I detest how this administration is clearly plotting to take advantage of GM - for example their injection of "helpers" into GM's staff - but that's going to come with the package for now and there's not much GM will be able to do about it in the short term. Over long term though, I predict these "helpers" and quite possibly the rest of the clowns in Washington will be tossed out themselves, once the folly of "going green" (
) is exposed for the expensive, wasteful hoax it is. I'm all for responsible design and emissions control... but come on... CO2 a pollutant? That "mandate" is on a collision course, worldwide, with common sense.
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Joined: Apr 2001
Posts: 3,698
From: USA
One last thing to consider. If the government has all the power, and GM's plan was so bad...why don't they just tell GM what to do an be done with it...rather than dragging ot out another two months? My guess is because it looks much less like nationalization if the government takes out GM's CEO and board, replaces them with hand picked succesors...and then says "try again". I am willing to bet GM's new plan is almost in lock step with what the administration wants
Last edited by formula79; Mar 31, 2009 at 10:27 PM.
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Joined: Nov 2001
Posts: 254
From: OSHAWA
Agreed. It's a "lesser of evils" situation. Helping GM survive is like buying some gas for a stranded motorist, instead of putting them up for the night in your cabin.
I detest how this administration is clearly plotting to take advantage of GM - for example their injection of "helpers" into GM's staff - but that's going to come with the package for now and there's not much GM will be able to do about it in the short term. Over long term though, I predict these "helpers" and quite possibly the rest of the clowns in Washington will be tossed out themselves, once the folly of "going green" ( ) is exposed for the expensive, wasteful hoax it is. I'm all for responsible design and emissions control... but come on... CO2 a pollutant? That "mandate" is on a collision course, worldwide, with common sense.
I detest how this administration is clearly plotting to take advantage of GM - for example their injection of "helpers" into GM's staff - but that's going to come with the package for now and there's not much GM will be able to do about it in the short term. Over long term though, I predict these "helpers" and quite possibly the rest of the clowns in Washington will be tossed out themselves, once the folly of "going green" (
) is exposed for the expensive, wasteful hoax it is. I'm all for responsible design and emissions control... but come on... CO2 a pollutant? That "mandate" is on a collision course, worldwide, with common sense.The administration has said they're not interested in running GM and I believe they're honest about that.
Having their people on the inside might not be a bad thing. It might make em realize a few things about the state of the auto industry that a typical outsider, even the so called experts have very little knowledge of.
The so called "green shift" will take a back seat once they see the true cost of it all and see raw data on demand for these vehicles. It took Toyota over 5 years to start making money on the Prius and if they force GM to only make small fuel efficient cars, they'll soon realize that they'll never get their bailout money back.
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Joined: Mar 2005
Posts: 3,123
From: Melbourne, Australia
The so called "green shift" will take a back seat once they see the true cost of it all and see raw data on demand for these vehicles. It took Toyota over 5 years to start making money on the Prius and if they force GM to only make small fuel efficient cars, they'll soon realize that they'll never get their bailout money back.
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Joined: Mar 2001
Posts: 13,713
From: The Golden State
Here's a taste:
Sen. Jim DeMint (R-S.C.) told the Fox Business Network last week. “We need to let the market and the laws work the way they are already in place.”
Yet this argument — that the government has no business interfering in free markets — ignores an increasingly frequent tradition among Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants.
Those incentives, arriving in the form of tax breaks, training for new employees and even land, have enticed [German automaker Bayerische Motoren Werke] BMW to South Carolina, [German automaker] Mercedes to Alabama and [Japanese automaker] Nissan to Tennessee. The result of the government subsidies has been the steady emergence of the South as an auto-manufacturing powerhouse. Some are dubbing it the “New Detroit” – a region where real estate is cheap and the labor’s not unionized.
Not coincidentally, these Southern states are represented by the same coalition of senators who led the fight against the recent Detroit bailout proposal. That legislation would have provided $14 billion in emergency bridge loans to General Motors and Chrysler, both of which say they lack the finances to survive the month.
Rallying behind the animated opposition of GOP Sens. Bob Corker (Tenn.), Richard Shelby (Ala.), Mitch McConnell (Ky.) and South Carolina’s DeMint, Senate Republicans killed the legislation.
On Friday, the day following the Senate vote, Shelby told CNBC that if the Big Three had only managed their business operations as well as the foreign companies, known as transplants, they wouldn’t be scrambling now for a taxpayer-funded bailout.
“You look at the South,” Shelby said. “You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America.”
But the flourishing of the transplants didn’t come without significant taxpayer help. Shelby’s Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state’s sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts."
Alabama is hardly alone. Corker’s Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on." -
By Mike Lillis -WashingtonIndependent.com
Yet this argument — that the government has no business interfering in free markets — ignores an increasingly frequent tradition among Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants.
Those incentives, arriving in the form of tax breaks, training for new employees and even land, have enticed [German automaker Bayerische Motoren Werke] BMW to South Carolina, [German automaker] Mercedes to Alabama and [Japanese automaker] Nissan to Tennessee. The result of the government subsidies has been the steady emergence of the South as an auto-manufacturing powerhouse. Some are dubbing it the “New Detroit” – a region where real estate is cheap and the labor’s not unionized.
Not coincidentally, these Southern states are represented by the same coalition of senators who led the fight against the recent Detroit bailout proposal. That legislation would have provided $14 billion in emergency bridge loans to General Motors and Chrysler, both of which say they lack the finances to survive the month.
Rallying behind the animated opposition of GOP Sens. Bob Corker (Tenn.), Richard Shelby (Ala.), Mitch McConnell (Ky.) and South Carolina’s DeMint, Senate Republicans killed the legislation.
On Friday, the day following the Senate vote, Shelby told CNBC that if the Big Three had only managed their business operations as well as the foreign companies, known as transplants, they wouldn’t be scrambling now for a taxpayer-funded bailout.
“You look at the South,” Shelby said. “You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America.”
But the flourishing of the transplants didn’t come without significant taxpayer help. Shelby’s Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state’s sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts."
Alabama is hardly alone. Corker’s Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on." -
By Mike Lillis -WashingtonIndependent.com
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Joined: Mar 2001
Posts: 13,713
From: The Golden State
Exactly - therefore, Wagoner's firing/resignation and GM's stock price plunge really doesn't matter does it? I agree that GM is headed toward bankruptcy (this 60-day extension is just time for the government to get the details lined up, not for GM to produce a significantly better plan and continue on with federal help IMO). Wagoner saw the road the feds were headed down and wanted no part of it.
Wagoner's resignation.
I've been following details of all this closely (perhaps too closely) the past couple of days. At first, it seemed obvious that Wagoner was all but fired for presenting an unrealistic plan to the Automotive Task Force. However, it's now becoming apparent that Wagoner left on his own because I feel he was shown that his leadership was detrimental to the company.
It's recently been brought to light the fact that Wagoner absolutely refused to even consider an organized bankruptcy, and strongly believed up till this weekend that given time & money that GM would eventually recover.
In short, alot of the points that were brought up here by various members were identical to the points the Task Force used to completely blow GM's recovery plan out of the water as (to put it mildly) fairly unrealistic.
I think with the company's future on the line, a good chunk of the US economy on the line, and Mr. Wagoner's "Slow and steady" approach to business along with a proposal that depended on a fast recovering economy with a 90s length boom, and the ability to more than double earnings by selling half the volume GM does now, pretty much convinced him that it was time to go.
Why else would the gov't be saying that the warrantees are safe if they weren't getting ready for bankruptcy?
That’s all I was saying in the previous posts....sure the gov't is keeping them alive for now...but it appears they are just delaying the inevitable. So does that mean we get our billions back? What scares me is the Gov't has its hands in it now. Its only going to get uglier and uglier. Buy your SUV's and gas guzzlers now while you can :-).
Colin
That’s all I was saying in the previous posts....sure the gov't is keeping them alive for now...but it appears they are just delaying the inevitable. So does that mean we get our billions back? What scares me is the Gov't has its hands in it now. Its only going to get uglier and uglier. Buy your SUV's and gas guzzlers now while you can :-).
Colin
But the government isn't going to dictate. They want their money back. They want these guys not only to run like a typical profitable company (which is why this group of people is heavy with finance guys), but also to get taxpayer money back.
I suspect we'll never see all of our Wall Street money again... but with the double standard now in place, I think you can bet the farm that Washington will be quite zealous in getting it's money back from Detroit.
That’s why I was wondering.
His posts seem to be talking about the federal government, senators and representatives, etc. and most and maybe all of the tax brakes, abatements and all the other incentives have come thorough state and local community governments; not the federal government.
I know that’s how it happened in Marysville when Honda moved into Ohio; all the incentives came from the city, county and the state and I’m pretty sure that’s how it has worked for other plants.
Senator Shelby or any of the rest of them really doesn't have any input into it. Actualy, I don't believe that the federal government has the power to do anything about it either way.
His posts seem to be talking about the federal government, senators and representatives, etc. and most and maybe all of the tax brakes, abatements and all the other incentives have come thorough state and local community governments; not the federal government.
I know that’s how it happened in Marysville when Honda moved into Ohio; all the incentives came from the city, county and the state and I’m pretty sure that’s how it has worked for other plants.
Senator Shelby or any of the rest of them really doesn't have any input into it. Actualy, I don't believe that the federal government has the power to do anything about it either way.
Also, state budgets are far smaller and more local than Federal.
While the only way GM & Chrysler could get Federal money was via a LOAN, all the cash that went to the "transplants" were GRANTS.
While the Feds will get their money back from GM & Chrysler (even if they have to sell parts off themselves), the money given to BMW, Toyota, and so forth were huge amounts that came from smaller budgets that took money away from their local citizens.... with the blessings and no small amount of legwork by the respective US senators.
