I'm fed up!
12-12-2008, 01:26 PM
#1
Registered User
Thread Starter
Join Date: Mar 2001
Location: The Golden State
Posts: 13,711
I'm fed up!
First I realize outside of writing my congressman (done.. both senators) and posting the views I have, there is not much I can do. However, the frustration remains at how so many people...not just congressmen who know nothing about the auto industry, but a few people on this very site... simply don't comprehend the situation that's going on, or if they do understand, they still seem hellbent in destroying the US manufacturing base (and potentially what's left of the economy) on petty and downright disproportionate concerns.
First of all, the loan itself.
Washington just approved a $700,000,000,000 financial GIVEAWAY to Wall Street financial corperations. This money isn't a loan. As sold, it was the Feds buying up bad morgages and loans so these institutions wouldn't close the money lending gates which would throw a shaky economy into a depression. It didn't work out that way. Instead, banks horded the cash and restricted lending anyway. Others took the money, and changed nothing and went back for more cash. The fact that we handed over far more money than what the US Department of Defense spends in an entire year... including executing 2 wars... was mindnumbing enough. The fact that there was virturally no rules or oversight on all this free money.... no mere words can describe the complete stupidity.
Then there the auto industry.
3 executives show up in private planes to ask for taxpayer.... or else. None were prepared to answer real questions & they rightfully got their heads handed to them, kicked out, and told to return when they had an idea how they were going to return to profitability. When they return, the original $25 billion turned into $34 billion. Obviously, someone screwed up (that was a potential PR disaster in itself), but next to $700 billion in free cash, a $34 billion loan complete with plans of how the big 3 were going to become profitable again and agreement to have a federal overseer was a no lose proposition.
Of course, there were the fringe groups. The enviromentalists who wanted to use the money to force the Big 3 to make nothing but hybrids & eliminate the auto industry's challenges to California setting CO2 standards. On the opposite end, there were those who wanted to kill off the union by giving the big 3 the chance to make cars overseas and import them, as well as those who felt that the only thing for the big 3 was bankrupcy.
The core and majority of the congress knew what the stakes were. The fringe groups on one end were pushed aside. Pelosi ended her oppositions based on using the $25 billion set aside for higher mileage & green vehicles. Democrats were set to throw the treehuggers demands to language barring lawsuits to state emissions laws out the window. Republicans in the house also made impressive compromises, and the loan passed the House.
But in the Senate, where a single person can kill a bill if there isn't 60 votes to stop him or her, a small group of southern so-called conservatives who happen to have substantial import automotive manufacturing facilities in their home state derailed the entire package that even the White House was prepared to sign. In front of cameras they profess that they simply didn't believe these American auto companies were never ever going to be worth saving, and continued to push for bankruptcy reorganization. However, behind the scenes, their real goal was to destroy the UAW, my next area.
The UAW has tried many times to organize import factories in their home states. Each time, unsuccessfully. The workers in these plants get pretty much the same wages and benefits as the UAW. Living in an area where the cost of living is lower and the employers provide great working conditions means the UAW doesn't have a real chance. These senators (either out of payback, or to prevent future efforts) are willing to destroy the US automobile industry to protect the foreign based companies in their states and stick it to the UAW. Keep in mind, that although they say they want to attack supposedly high UAW wages, since the UAW took the responsibility of health care and now only are responsible for the actual manufacturing positions in a plant, plants they work in are just as cost competitive as the ones run by imports.... again, a threat to those with intrests in foreign based automakers.
Finally, those who seem to have issue with any idea of the Government attaching any conditions to their loaning of money to the US automakers... I have an issue with you on this subject.
First, General Motors and Chrysler are about to collaspe. I want you to read that sentence again, and focus on the word "collaspe".
That means, The End That means Game Over".
That means without this loan, there is NO General Motors... or Chrysler
And they both got to this point.....ON THEIR OWN!
One can blame the recession, the lack of credit, high fuel prices till recently, or even adopt the "Perfect Storm" position. However, when you cut to the chase, all automakers aren't in the same prediciment. Even all American automakers aren't in the same prediciment.
The real reasons US car makers are in this situation are based on decisions THEY made, for whatever reason. Selling off a financial arm. Merging with a smaller foreign car maker that ended up essentially raping them. Putting all the development money into 1 egg basket. Setting up a business model where 70% of it's money came from selling trucks. Footdragging on restructuring their product lineup. Using as cheap materials as possible on cars. Designing things "made to break". Having a parent company that simply wanted a company's finance arm and dump the rest. There were all decisions made by the companies themselves... not the government. And they are at the verge of going under.
Whatever strings the government attaches is better than the alternative.
If the government dictates the US auto industry plant a tree for every car they sell, or adopt a hobo off the streets for each day they don't turn around, or open an orphanage in Calcutta, who gives a s*it! As long as they have money to turn themselves around. Once they DO pay back the government loan, they can make an agreement with Genaral Dynamics like they did with AM General and produce M1 Abrams tanks for public street use if they want. The issue is to survive NOW!
Anyone who thinks General Motors will find another source of money or will survive bankruptcy is living on another planet.
The reason why GM went to the government is because no one else will finance them! GM went to Ford looking for a merger, and Ford all but ran away at full speed. Look at the losses GM incured over the past 5 years. GM is also almost hopelessly in debt. It's going to take quite awhile for GM to recover to the point to where it can easily borrow money again, and perhaps a decade before they have a positive balence sheet. Why?
Toyota has a market value of about 100 billion dollars. By comparison, GM's net worth is NEGATIVE $5.4 billion. GM has a net asset value of NEGATIVE $48 billion. GM's working capita is NEGATIVE $3.7 billion. GM has $190 billion in liabilities.....And all of this was before October's meltdown.
http://www.financialsense.com/editor...2008/0804.html
IF GM goes into bankruptcy, there is so much GM owes that it will go into immediate liquidation. In the current credit enviroment, the only entities with the cash to pick up key pieces like Cadillac or Chevrolet will have an address in India or China. The technology from the Volt could very well end up as a Toyota or Honda. Corvette & GM's DI V6 could end up under foreign ownership.
Complaining about any government conditions to GM getting a loan is directly saying that you want to destroy the General Motors corperation, Period. If the Feds are installing mechinisms that ensure the companies will become profitable and that taxpayers get their money back, there is no excuse and no reason not to support federally backed loans for the US auto industry... conditions or not.
The government setting conditions will enable GM to improve enough to at least restore their credit rating so they can continue to recover. Over at Chrysler, government conditions will FORCE Cerberus to actually make Chrysler work. On top of all this, the US will not only retain it's automobile industry, but with Toyota and Honda becoming a bit tarnished in recent years and US auto industry's belated focus on standardizing models sold around the world, it's a very realistic chance for the US auto industry to regain alot of ground it's lost the past 20-30 years.
This is the last stand.
The issue isn't UAW pay, fuel economy standards (a moot point now that actual CAFE in the marketplace is well above where it was predicted), or the psychotic worry that the government is going to dictate no more performance cars (get help, please). The issue is General Motors surviving. The issue is Chrysler surviving. The issue is at the minimum, 1-3 million jobs.
On the other hand, if you simply want to hand Toyota & Honda the US market (and the lions share of enthusiast car executives) that a weakened Ford can't take, and are hellbent in sending your money for your next Corvette or Chevrolet to a corperation in India or China, then simply keep harping that nonsense about government strings attached, UAW pay, and the other garbage that clouds the issue & throws the baby out with the bath water.
It's working for Senator Shelby and his Japanese transplant factories.
Maybe in a year from now when GM & Chrysler are gone, and the vacuum from the collaspe finally hits your finances, maybe you'll wake up.
Then again... maybe not.
First of all, the loan itself.
Washington just approved a $700,000,000,000 financial GIVEAWAY to Wall Street financial corperations. This money isn't a loan. As sold, it was the Feds buying up bad morgages and loans so these institutions wouldn't close the money lending gates which would throw a shaky economy into a depression. It didn't work out that way. Instead, banks horded the cash and restricted lending anyway. Others took the money, and changed nothing and went back for more cash. The fact that we handed over far more money than what the US Department of Defense spends in an entire year... including executing 2 wars... was mindnumbing enough. The fact that there was virturally no rules or oversight on all this free money.... no mere words can describe the complete stupidity.
Then there the auto industry.
3 executives show up in private planes to ask for taxpayer.... or else. None were prepared to answer real questions & they rightfully got their heads handed to them, kicked out, and told to return when they had an idea how they were going to return to profitability. When they return, the original $25 billion turned into $34 billion. Obviously, someone screwed up (that was a potential PR disaster in itself), but next to $700 billion in free cash, a $34 billion loan complete with plans of how the big 3 were going to become profitable again and agreement to have a federal overseer was a no lose proposition.
Of course, there were the fringe groups. The enviromentalists who wanted to use the money to force the Big 3 to make nothing but hybrids & eliminate the auto industry's challenges to California setting CO2 standards. On the opposite end, there were those who wanted to kill off the union by giving the big 3 the chance to make cars overseas and import them, as well as those who felt that the only thing for the big 3 was bankrupcy.
The core and majority of the congress knew what the stakes were. The fringe groups on one end were pushed aside. Pelosi ended her oppositions based on using the $25 billion set aside for higher mileage & green vehicles. Democrats were set to throw the treehuggers demands to language barring lawsuits to state emissions laws out the window. Republicans in the house also made impressive compromises, and the loan passed the House.
But in the Senate, where a single person can kill a bill if there isn't 60 votes to stop him or her, a small group of southern so-called conservatives who happen to have substantial import automotive manufacturing facilities in their home state derailed the entire package that even the White House was prepared to sign. In front of cameras they profess that they simply didn't believe these American auto companies were never ever going to be worth saving, and continued to push for bankruptcy reorganization. However, behind the scenes, their real goal was to destroy the UAW, my next area.
The UAW has tried many times to organize import factories in their home states. Each time, unsuccessfully. The workers in these plants get pretty much the same wages and benefits as the UAW. Living in an area where the cost of living is lower and the employers provide great working conditions means the UAW doesn't have a real chance. These senators (either out of payback, or to prevent future efforts) are willing to destroy the US automobile industry to protect the foreign based companies in their states and stick it to the UAW. Keep in mind, that although they say they want to attack supposedly high UAW wages, since the UAW took the responsibility of health care and now only are responsible for the actual manufacturing positions in a plant, plants they work in are just as cost competitive as the ones run by imports.... again, a threat to those with intrests in foreign based automakers.
Finally, those who seem to have issue with any idea of the Government attaching any conditions to their loaning of money to the US automakers... I have an issue with you on this subject.
First, General Motors and Chrysler are about to collaspe. I want you to read that sentence again, and focus on the word "collaspe".
That means, The End That means Game Over".
That means without this loan, there is NO General Motors... or Chrysler
And they both got to this point.....ON THEIR OWN!
One can blame the recession, the lack of credit, high fuel prices till recently, or even adopt the "Perfect Storm" position. However, when you cut to the chase, all automakers aren't in the same prediciment. Even all American automakers aren't in the same prediciment.
The real reasons US car makers are in this situation are based on decisions THEY made, for whatever reason. Selling off a financial arm. Merging with a smaller foreign car maker that ended up essentially raping them. Putting all the development money into 1 egg basket. Setting up a business model where 70% of it's money came from selling trucks. Footdragging on restructuring their product lineup. Using as cheap materials as possible on cars. Designing things "made to break". Having a parent company that simply wanted a company's finance arm and dump the rest. There were all decisions made by the companies themselves... not the government. And they are at the verge of going under.
Whatever strings the government attaches is better than the alternative.
If the government dictates the US auto industry plant a tree for every car they sell, or adopt a hobo off the streets for each day they don't turn around, or open an orphanage in Calcutta, who gives a s*it! As long as they have money to turn themselves around. Once they DO pay back the government loan, they can make an agreement with Genaral Dynamics like they did with AM General and produce M1 Abrams tanks for public street use if they want. The issue is to survive NOW!
Anyone who thinks General Motors will find another source of money or will survive bankruptcy is living on another planet.
The reason why GM went to the government is because no one else will finance them! GM went to Ford looking for a merger, and Ford all but ran away at full speed. Look at the losses GM incured over the past 5 years. GM is also almost hopelessly in debt. It's going to take quite awhile for GM to recover to the point to where it can easily borrow money again, and perhaps a decade before they have a positive balence sheet. Why?
Toyota has a market value of about 100 billion dollars. By comparison, GM's net worth is NEGATIVE $5.4 billion. GM has a net asset value of NEGATIVE $48 billion. GM's working capita is NEGATIVE $3.7 billion. GM has $190 billion in liabilities.....And all of this was before October's meltdown.
http://www.financialsense.com/editor...2008/0804.html
IF GM goes into bankruptcy, there is so much GM owes that it will go into immediate liquidation. In the current credit enviroment, the only entities with the cash to pick up key pieces like Cadillac or Chevrolet will have an address in India or China. The technology from the Volt could very well end up as a Toyota or Honda. Corvette & GM's DI V6 could end up under foreign ownership.
Complaining about any government conditions to GM getting a loan is directly saying that you want to destroy the General Motors corperation, Period. If the Feds are installing mechinisms that ensure the companies will become profitable and that taxpayers get their money back, there is no excuse and no reason not to support federally backed loans for the US auto industry... conditions or not.
The government setting conditions will enable GM to improve enough to at least restore their credit rating so they can continue to recover. Over at Chrysler, government conditions will FORCE Cerberus to actually make Chrysler work. On top of all this, the US will not only retain it's automobile industry, but with Toyota and Honda becoming a bit tarnished in recent years and US auto industry's belated focus on standardizing models sold around the world, it's a very realistic chance for the US auto industry to regain alot of ground it's lost the past 20-30 years.
This is the last stand.
The issue isn't UAW pay, fuel economy standards (a moot point now that actual CAFE in the marketplace is well above where it was predicted), or the psychotic worry that the government is going to dictate no more performance cars (get help, please). The issue is General Motors surviving. The issue is Chrysler surviving. The issue is at the minimum, 1-3 million jobs.
On the other hand, if you simply want to hand Toyota & Honda the US market (and the lions share of enthusiast car executives) that a weakened Ford can't take, and are hellbent in sending your money for your next Corvette or Chevrolet to a corperation in India or China, then simply keep harping that nonsense about government strings attached, UAW pay, and the other garbage that clouds the issue & throws the baby out with the bath water.
It's working for Senator Shelby and his Japanese transplant factories.
Maybe in a year from now when GM & Chrysler are gone, and the vacuum from the collaspe finally hits your finances, maybe you'll wake up.
Then again... maybe not.
Last edited by guionM; 12-12-2008 at 01:52 PM.
12-12-2008, 01:48 PM
#2
Registered User
Join Date: Aug 2000
Location: Sterling Heights, MI
Posts: 6,166
Sobering post. That is why I was so flabbergasted when Wagoner sat up there and flinched when Congress asked him if he'd work for $1. Does he not understand that they have to do WHATEVER it takes to get an influx of cash now?
12-12-2008, 01:53 PM
#3
Registered User
Join Date: Jan 2008
Location: Filthydelphia, PA
Posts: 204
Everytime I read one of your posts, and then read the first line of your signature, I can't help but chuckle.
12-12-2008, 02:00 PM
#4
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Thread Starter
Join Date: Mar 2001
Location: The Golden State
Posts: 13,711
I don't see any whining involved when the question is the destruction of the General Motors Corperation... which so happens to make the vehicle named in this very website.
The Whiners are those that derailed this bill at the expense of the auto industry of the United States of America and up to 3 million potentially unemployed people.
If you feel that is whining, then I think we all need to pray for you.
12-12-2008, 02:06 PM
#5
Registered User
Join Date: Feb 1999
Location: northeast Miss.
Posts: 2,887
It must have been a cold slap in the face for people like Wagner to be talked down to and mocked by the morons in congress. Hell even Bush has higher approval then they do, lol.
12-12-2008, 02:13 PM
#6
Registered User
Join Date: Aug 2005
Location: Wichita, Kansas
Posts: 179
It is unbelievable that so many are willing to toss the last major source of American manufacturing into the flames. Yet they will support the corporate gluttons in the financial sector. I hate the idea of any bailouts. I hate the UAW. But the American auto industry is worth saving. I can only try to wrap my head around the potential impact of this-Millions of jobs (factories, suppliers, dealerships), complete collapse of Detroit, crazy unemployement. I don't see how this does not spiral into an all out depression.
12-12-2008, 02:19 PM
#7
Registered User
Join Date: Nov 2001
Location: Portland, OR
Posts: 1,646
Do you think there's another aspect at play here, a sort of egotistical "not on my watch" stare down? On GM's side Wagoner doesn't want to bo the one to dismantle GM down to Chevy and Caddy (maybe Buick) and "ruin GM's heritage" (my interpretation), Cerberus doesn't want to be exposed as in it for a quick buck with Chrysler; while certain congressional elitists won't admit Detroit was at least showing signs of turning things around? First to blink loses more than pride?
A very simplified account of my perspective for the sake of brevity.
A very simplified account of my perspective for the sake of brevity.
12-12-2008, 02:25 PM
#8
ALMIGHTY MEMBER
Join Date: Mar 2000
Location: Detroit, MI USA
Posts: 2,301
CUT TO THE CHASE............
There are two choices here that you and I as taxpayers have to choose from:
Choice number #1 -- Loan the Big Three 36 Billion - and, looking at their plans, you'll see that even in a sick market, they can start to pay back the loans by 2012 -- WITH INTEREST............
OR
Choice number #2 -- Assume about 170 BILLION in liabilities as the avalanche gains momentum -- and that's a very LOW figure by the way -- for all the liabilities of pensions, health care, etc - that you and I as taxpayers will have to chin -- with no payback.
On top of that, I invite you to look at the trade imbalance -- take the Auto Industry and a chunk of the supplier base out of the equation and tell me what happens to that imbalance.................
OK-
Done.
There are two choices here that you and I as taxpayers have to choose from:
Choice number #1 -- Loan the Big Three 36 Billion - and, looking at their plans, you'll see that even in a sick market, they can start to pay back the loans by 2012 -- WITH INTEREST............
OR
Choice number #2 -- Assume about 170 BILLION in liabilities as the avalanche gains momentum -- and that's a very LOW figure by the way -- for all the liabilities of pensions, health care, etc - that you and I as taxpayers will have to chin -- with no payback.
On top of that, I invite you to look at the trade imbalance -- take the Auto Industry and a chunk of the supplier base out of the equation and tell me what happens to that imbalance.................
OK-
Done.
12-12-2008, 02:31 PM
#9
Registered User
Join Date: Apr 2000
Location: CNY
Posts: 2,224
Great post, Guion, as always.
It boggles my mind that some people care more about theories, prinicibles, and ideologies rather than their fellow countrymen.
These people can hold onto their "free market" and "competition" beliefs, but they'll be holding on to them all the way to the bottom.
Americans need to stand up for Americans.
Not tomorrow, or next week, or next year.
RIGHT NOW!!
It boggles my mind that some people care more about theories, prinicibles, and ideologies rather than their fellow countrymen.
These people can hold onto their "free market" and "competition" beliefs, but they'll be holding on to them all the way to the bottom.
Americans need to stand up for Americans.
Not tomorrow, or next week, or next year.
RIGHT NOW!!
12-12-2008, 02:35 PM
#10
Registered User
Join Date: Apr 2000
Location: CNY
Posts: 2,224
CUT TO THE CHASE............
Choice number #2 -- Assume about 170 BILLION in liabilities as the avalanche gains momentum -- and that's a very LOW figure by the way -- for all the liabilities of pensions, health care, etc - that you and I as taxpayers will have to chin -- with no payback.
Choice number #2 -- Assume about 170 BILLION in liabilities as the avalanche gains momentum -- and that's a very LOW figure by the way -- for all the liabilities of pensions, health care, etc - that you and I as taxpayers will have to chin -- with no payback.
Scott,
It would be WAY WORSE than that.
All the lost revenue, lost taxes, unemployment insurance, welfare, foreclosures, bankruptcies, and on and on.
And not just for the direct employees of the Big 3, but for everyone related to it.
That's upwards of 3 million people.
Like Dr. Zandi said at the 2nd Senate hearing. "If we allow them to fail, it will be cataclysmic."
12-12-2008, 02:38 PM
#11
Registered User
Join Date: Jan 2003
Location: Cleveland, OH
Posts: 176
It's not that simple.
The financial industry situation is different, equally complex and has no merit as a counter arguement.
UAW involvment, blame and existence is a problem. Has been for decades and no one is gonna look the other way now. The belief that they specifically are targeted seems unlikely.
Senator opposition is not the voice of the foreign automakers its the reasonable questioning of the public majority. At least thats what arguements they make. Sure they may have someone whispering in there ear but that does nothing to take away from the basis of the arguement.
the fact is the deal was close, real close. UAW couldn't just take care of one little concern and blew the deal up.
The financial industry situation is different, equally complex and has no merit as a counter arguement.
UAW involvment, blame and existence is a problem. Has been for decades and no one is gonna look the other way now. The belief that they specifically are targeted seems unlikely.
Senator opposition is not the voice of the foreign automakers its the reasonable questioning of the public majority. At least thats what arguements they make. Sure they may have someone whispering in there ear but that does nothing to take away from the basis of the arguement.
the fact is the deal was close, real close. UAW couldn't just take care of one little concern and blew the deal up.
12-12-2008, 02:45 PM
#12
Registered User
Join Date: Apr 2000
Location: CNY
Posts: 2,224
"One little concern", huh?
OK dude. Whatever.
OK dude. Whatever.
12-12-2008, 02:52 PM
#13
Registered User
Join Date: Jan 2004
Posts: 929
CUT TO THE CHASE............
There are two choices here that you and I as taxpayers have to choose from:
Choice number #1 -- Loan the Big Three 36 Billion - and, looking at their plans, you'll see that even in a sick market, they can start to pay back the loans by 2012 -- WITH INTEREST............
OR
Choice number #2 -- Assume about 170 BILLION in liabilities as the avalanche gains momentum -- and that's a very LOW figure by the way -- for all the liabilities of pensions, health care, etc - that you and I as taxpayers will have to chin -- with no payback.
On top of that, I invite you to look at the trade imbalance -- take the Auto Industry and a chunk of the supplier base out of the equation and tell me what happens to that imbalance.................
OK-
Done.
There are two choices here that you and I as taxpayers have to choose from:
Choice number #1 -- Loan the Big Three 36 Billion - and, looking at their plans, you'll see that even in a sick market, they can start to pay back the loans by 2012 -- WITH INTEREST............
OR
Choice number #2 -- Assume about 170 BILLION in liabilities as the avalanche gains momentum -- and that's a very LOW figure by the way -- for all the liabilities of pensions, health care, etc - that you and I as taxpayers will have to chin -- with no payback.
On top of that, I invite you to look at the trade imbalance -- take the Auto Industry and a chunk of the supplier base out of the equation and tell me what happens to that imbalance.................
OK-
Done.
And yet self-serving scum like Shelby are willing to make us all suffer the final decline of American manufacturing and the nation itself.
Permanently.
Shameful and disgusting.
12-12-2008, 02:57 PM
#14
Registered User
Join Date: Nov 2000
Location: Dollars, Taxes
Posts: 641
Toyota has a market value of about 100 billion dollars. By comparison, GM's net worth is NEGATIVE $5.4 billion. GM has a net asset value of NEGATIVE $48 billion. GM's working capita is NEGATIVE $3.7 billion. GM has $190 billion in liabilities.....And all of this was before October's meltdown.
http://www.financialsense.com/editor...2008/0804.html
For the record, I do support a big 2.8 loan...
12-12-2008, 04:05 PM
#15
Registered User
Join Date: Sep 1999
Location: Stockton, Ca. USA
Posts: 666
Can someone tell me this. Why does Chrysler need money? Their new owners have tons of cash, they should spend their own money, not ours. Personally I think GM is too far gone to save, and this coming from a GM guy for life.