any fallout from a Big three failure stops once it hits strong, viable companies.

The domino will fall if GM cracks, that isn't a debate. Any industry tied to the auto will suffer killing off any weak company that can't withstand the shockwave or adapt quick enough.

I serious doubt it could mirror the great depression. It would worsen the current recession but fall short of 25% umemployment and bread lines.

The market needs to clean itself. Pushing make believe money around does nothing for anybody.

 

http://blogs.moneycentral.msn.com/to...r-bailout.aspx

As Minyanville's Kevin Depew wrote Monday:

"With continued bailouts we will emerge from a lost decade with an economy and society crippled by the cost of bailing out businesses that operated with irresponsibility and a near total disregard for not just taxpayers but for their very own shareholders."

 

excuse me - but where do you work at GM?

Because you say -- and I quote: "GM is asking for BILLIONS of dollars from US WITHOUT A PLAN." That implies that you KNOW there is no plan.

You are wrong and you do NOT know what you are talking about.

There is a VERY DETAILED PLAN -- and you can believe that our government will go thru it with a fine tooth comb..which is MOST APPROPRIATE.

We would not be in this position had the market gone from, say, 17 milllion a year to 14million - the problem is:

It's dropped well below 12 million
Gas went thru the roof
The housing market collapsed
The banking industry collapsed and people can't get loans.

We made many many many changes - so did Ford and Chrysler -- and WE ARE ALL IN THE SAME BOAT --

As I see it -- YOU are not part of ANY solution.

 

To me the bottom line is this...

For decades the big 3 have made terrible decisions regarding internal structure, vehicle designs/quality/marketing, and finances. The American car companies have proven to be years behind on everything up until just recently in almost every aspect. Last but not least, they have allowed the UAW to simply walk all over them. If it wasnt for the sheer size of the Big 3 they would have been out of business years ago.

....But, now because the country has so much invested in the success of the big 3 we almost have no other choice than to bail them out. Yes call it a loan if you want, but not many other people would be able to get a loan based on such a bleak and pathetic financial situation... this people is a bail out and yes it is needed.

PS...

I was the guy who when you asked at the tech center who wouldnt buy a new camaro.... I raised my hand

Corvette ftw

 

Scott don't take this the wrong way because I don’t mean it as a jab.

But as I just read your post here, you stated "the plan" that GM has been using in the recent past. Obviously bad things have happened and the company is in dire straights.

I think what many here are asking for is a "new" plan to get GM out of this hole. I assume the upper management is in meetings every hour these days discussing how to make GM profitable again after the government "bailout/loan" (whatever you want to call it).

But is there some dumbed down power point that us the tax payers can see to at least see how the government funding is planned to spent?

I want GM to succeed and I think it is a part of this country that needs to succeed. however if I am going to take some cash out of my pocket I just want an idea of where the money is going.

I'm not getting any warm and fuzzy feelings right now. I think like many people watching this situation, I don’t have a very clear idea of what the direction is.

 

Do you read every bill your representatives vote on? You may, but I sure don't. That's why we elected them, to make those decisions for us.

I may be in the minority, but IMHO, I'd rather wait to see the final details, because you just know whatever plan GM has in the works today, federal officials are going to make huge changes to it before it ever is approved.

 

I don't, but I feel this decision has a bit more riding on it than other bills passed.

Very true.

 

As long as GM retains the same basic structure, the same management and the same UAW, the is no plan, be it an old plan, a current plan or a new plan, that is going to save GM nor is there any amount of money that the government could borrow from China that will make a difference.

GM needs a total reorganization - they need to approach this as if they were going through a Chapter 11 restructuring even though it isn't.

If they do anything less then they have no hope of surviving in North America; at least not without forever being at the taxpayer's feet begging for more money.

 

One thing that was brought up earlier was the inability to forgive the big 3 for past vehicle quality mistakes. I wonder if this same grudge is the main driving force behind the public's "let them die" attitude.

That would be my biggest fear.

 

If done by simply handing GM management a bag of money, then I'd find it hard to disagree. But that's not what I'm advocating.

You simply don't just give that much money to any company and walk away trusting they will do the right thing. Companies simply are not geared to be trustworthy or honorable. They are geared to get the most money possible, and cut the risk to their own money. If someone else pays the bill, they are all for it. AIG is a glaring example.

On the flip side, although no large organization is trustworthy, government is the lesser of 2 evils.

Dan, you once again completely miss the issue.

1. People are not able to get car loans. A normal person making $50K per year can no longer get 100% financing on a new car, and those that can find financing on a new car must put down a larger amount.

2. The UAW no long is an issue in any of this. As a matter of fact, the UAW is of great benefit to the Big 3. a) They have graduated pay scales where newer hires get paid less than starting wages in the past (essentially a sizable pay cut for non senior members), b) The US auto industry is no longer being dragged down by medical benefits since now the union assumes them, c) Unions have agreed to concessions that make unionized factories no more expensive to run than non-unionized factories imports are setting up in the south. Today anyone who looks at the union as what's currently dragging down US automakers isn't worth listening to because they simply are not looking into what's happening today.

3. China doesn't sell cars here. In fact, you should be kissing China's bottom because it's China that's allowed the US to run these horrifying deficits built up the past 7 years because we prefered to go to them to borrow money (with interest) than to pay our own bills.

4. Japan is an issue only because they filled in a vacuum (cars) that was created by the US auto industry's focus on trucks and SUVs.

You're getting out of line Bob.

Umteenth time.

A. GM isn't looking for a "Bailout". They are looking for federally backed loans... meaning they intend to have the government as co-signer.

B. If the government (meaning the taxpayer) is going to cosign a GM loan, which is of importance because of the risk to the economy, the government (meaning taxpayer) needs to be assured that GM actually has a plan to turn itself around and simply isn't going to use the money to feed a cash furnace that does little more than incenerate money with nothing to show for it.

C. As a condition of reciving the money, the government should have the right to first investigate what put GM in this position, and if necessary have the power to remove anyone that created this situation, even if it means replacing the entire board with federal regulators.

This way, not only will the loan be paid back, GM will be a better run company in the end.

All anti-government BS aside, it worked extremely well with Chrysler in the early 80s.

 

i think that is the scariest thing i've seen online yet today

seriously? do you not even care to see a dumbed down version for the average folk? you really want to just throw it to the least liked congress in history to make that decision without you having any clue as to what it involves?

 

Did anyone ask for this when it came to the credit crisis? When the gov't started to buy securities (these were not loans) from companies, the gov't gave no stipulations on how the money would be spent. I don't recall anyone on this board asking how the money would be spent...

That was for 750 billion (the bigger numbers were for tax breaks).

25 billion is 3% of that. Yes, GM needs to spend money the right way. GM needs to restructure. GM has problems to figure out. So do the other car manufactures.

IMHO, not asking for all of this information about what the AIG's of the world were going to do with the money they received, but demanding information from GM on a much smaller number sounds like the general public is penny wise and dollar foolish.

 

The public's wallet shouldn't be opened until your books are opened. The same problem exists here as with the banks - there's a whole lot of "rot" that will only continue to cause problems unless it's dealt with, and so let's put everything on the table.

Well, uh - yes!

That's only a true statement if we talk about direct employees. Space constrants prohibit me from expounding upon what the Big 3 have done to the US supply base. It'd be interesting to know how many jobs have been "protected" or "saved" at the Big 3 and how many have been lost at domestic suppliers due to the use of imported parts.

But the trend is getting worse for "US domestic content" (which includes parts from NAFTA zones - like Mexico) on "domestic" vehicles, where as the transplants continue to place more and more business with domestic suppliers.

This is a bit of a false choice, considering that option #1 is by no means that easy. In fact, I think it's damn near guaranteed that a loan given to the Big 3 right now will only delay the day of reckoning. If that's not the case, great - let's see Rick stand up in front of Congress and use his financial background to explain exactly how and when these loans will be repaid.

And while he's at it, maybe Rick can explain exactly when GM realized it was in trouble, and we can compare this to public statements to the contrary. Yeah, I know that the past couple months have been particularly bad, but it was clear months ago that this was shaping up to be a terrible year in the industry, and yet all we heard from GM were optimistic sales forecasts and claims that the company's fundamentals were solid.

 

I want to see the final deal after the politcos add in all the pork before I pass judgement on whether or not its a good deal for taxpayers.

 

you clearly do not visit the lounge very often