We all know where you work. I am quite sure Scott does as well and was trying to subtly tell you that you are out of your mind if you think for one minute that your job and life won't be impacted a great deal because you feel GM should be allowed to fail...and it actually does.

 

Actually, it is a bailout - we can call it anything else we wish but when the Federal government steps in a gives/loans money to a company that hasn't done anything to actually deserve it or earn it then it's a bailout even if by some miracle, GM pays the money back.

However, what the transaction is called isn't the problem...the problem is that everyone seems to see the problem as a cash flow issue. It is not. GM's business model is unsustainable long-term even with a new infusion of cash.

Unless they severely CHANGE they will eventually fail or the government will have to just take it over completely and there will be no GM company - I suppose we can order a new "car" when we file our 1040s.

GM's failure will have a tremendously negative on our economy and negatively impact EVERY manufacturer whether located in the U.S. or not but that does not mean that artificially propping them up is an answer.

 

Actually, while there has been a lot of assumptions, it simply isn't true that "everybody knows".

As for my job and my life, I never said it wouldn't be impacted.

My position has nothing to do with "feeling" - wrong is wrong and bailing out companies, even GM, is wrong.

However, you have nothing to worry about anyway...the Government is falling all over itself to give GM money so I've no doubt they'll get their 25 or 50 of 75 billion. I've also no doubt that in six or nine or twelve months from now we'll all be back here again and people will be arguing about why GM needs even more money.

 

First - why isn't it anyones' business?

Second of all - and this isn't gonna sound nice....

But IF you are saying that GM should not receive loans from the Government, then how do you justify what the United States government has done for Nissan?

How do you justify that Japan manipulates the yen?

How do you justify that Japan's auto market -- and just about every other Japanese market -- is for all intents and purposes 'closed?'

 

I'm still curious as to those who say GM needs to change....change to what?? (sounds like change for the sake of change...kinda' like the election...nobody knows what the promised "change" is supposed to mean, but it looks good on a campaign button).

Hasn't GM ALREADY changed drastically from what it was just a few years ago??

Buyouts, legacy costs transferred to the UAW, downsizing, cosing plants, upgrading all products, etc....sounds like real change to me.

Oh sure, they could lop off some levels of decision making, but it's not like they aren't trying....

 

First, I don't think anyone here is sitting here in front of our computers with pompoms rooting for the US auto industry and the MILLIONS of jobs it provides to disappear.

Let's think about this from a financial standpoint though. If GM is loaned this money, how are they going to pay the government (a.k.a. the American taxpayer) back if they can't make a profit? There's so many reasons why this is happening, reasons mentioned ad nauseam in numerous other threads. The way I see it, after the passing of the $700 billion "bailout" and seeing how the government is doing such a wonderful job overseeing that in conjuction with watching GM lose money hand over fist, frankly I don't think many of us trust either the government or GM with OUR money right now.

The bottom line is if I'm going to loan some of my money, there better ***damn well be some strong-@$$ strings attached to it! I DO NOT want to loan GM BILLIONS of dollars so their stupid fatcats can have a big crack party with it! I want to know how it's going to be spent, and how on earth GM plans to pay it back. Oh, and what assurances do we (the taxpayers) have that GM (and the US auto industry) won't disappear if they are loaned this money? I think if the taxpayers are to make sacrifices, EVERYONE needs to make sacrifices. In the event GM is loaned government money, if GM's upper management and the heads of the UAW can't come to a workable solution that allows GM to operate as a PROFITABLE corporation and pay off it's debt to us RIGHT ***KING NOW, then ALL those folks in charge need to be FIRED. If the government can't make and enforce policies that support American manufacturers and properly oversee the money that WE lend to these failing organizations, they need to be FIRED.

I'm ***king tired of this $h!t.

 

But more loans alone is not going to get GM over the hump. As was mentioned earlier, it will just subsidize their cash burn for a few more months.

GM has been managing their downward spiral for at least 30 years, probably more. Every few years there's a big re-organization, pronouncements that they're finally competitive with the Japanese, and a promise that they've turned the corner. I've heard this exact same song probably a dozen times and it's not yet once been true. Not once. So I'm beyond skeptical that current GM management has the wherewithal to get themselves out of their mess this time.

GM needs huge, drastic, earth-shattering changes in order to survive. No more little tweaks here, small changes there. They pretty much have to start at the bottom and re-invent themselves from the ground up. Leave no stone unturned, have no sacred cows. That means getting rid of at least three divisions, maybe more. That means getting rid of thousands of dealerships. That means ripping up union agreements and creating pay and benefit packages that are appropriate and reasonable for the work being done (I don't see how anyone can argue that the union isn't a major source of GM's troubles when legacy costs add over $1000 to each car). Yes, this is going to cause pain for those dealerships, employees, and retirees that will be affected. But there's simply no choice anymore: if GM doesn't take these drastic actions, there will be nothing for anyone.

I've been a vocal critic of Wagoner on here before so I'll say it again: he's clearly demonstrated he's not the man for the job, and he has to go. He's too married to the GM way, too attached to the glory days to make the difficult, emotionless decisions that are required. This may meet with a lot of opposition on here, but I think the man that can best save GM is Carlos Ghosn. His turnaround of Nissan was nothing short of amazing. He's known for being ruthless at cutting costs and looking at every possible option. This is what GM needs now more than anything: someone who is not afraid take on the dealers, the union, or the other GM bureaucrats who get in his way. The time for being Mr. Nice Guy has long since passed.

I think we can all agree that government loans are undoubtedly required at this point for GM's survival. Hopefully, when this happens, it will have many strings attached:

• at least Wagoner, and perhaps other senior managers have to go. Maybe even Lutz: he's been with GM for 7 years and they've done nothing but get in worse shape during that time. There have been at least as many duds produced on his watch as there have been decent cars
• the board of directors has to go
• no more golden buyouts ... if people have to be let go (white collar or blue collar), they get the legal minimum
• ability to re-write union contracts, including the VEBA
• ability to discontinue divisions without billions in lawsuits
• ability to terminate dealerships that don't meet certain volume levels

(some of these points would obviously require oversight from the government to ensure as much fairness as possible)

I honestly don't see any other option for GM at this point.

 

Is isn't anyone's business because I post here as a private citizen, not as an employee of any particular company - I've loved and owned GM products both before and while I've worked for Nissan and likely, after I work for Nissan as well should GM survive and still be building cars I want.

As to what the U.S. has done for Nissan...that's awfully broad...could you be more specific?

I don't try to justify any country's actions that I think are wrong..I'm also not in a position to do anything about them. I also don't think that the Federal government should step in and do things that are equally wrong.

I think my position on the bailout is pretty plain - it's simply wrong for the Federal government to step in and do this; it doesn't suddenly become right just because it's GM or Ford or Chrysler doing the asking.

 

I think Mr. Ghosn is busy enough without taking on GM's problems...maybe who GM needs at the helm is Steve Jobbs or Bill Gates???

Your points, however, are well taken.

Nissan absolutely would have failed were it not for Carlos Ghosn; however, is is not the second coming; he simply had the power to come in and cut through the Japanese Bovine Scatology and do what needed to be done...he did things that the rest of the world, including anyone in Japan would have said simply could not be done at a Japanese company...he just did them anyway and saved Nissan.

GM needs some similar, drastic surgery; not the same surgery but change that is just as drastic as Nissan needed.

 

Buickman has a set of pretty damning quotes about "accounting controls" from GM's reports. Yes, I know it's Buickman, but fraud or not, even GM admits it's books might be a bit funny.

 

I think we're beyond that point now, the decision has already been made, it's a done deal. The powers that be are just working out the details and timing now.

However, I will agree this has all the hallmarks of a crooked deal for the taxpayer -- Detroit is proposing that we give them money with no accountability, no real turnaround plan, and no new management. Sorry, it doesn't work that way. Once the goverment steps in, now our national interests come before the shareholders' and the bailout plan should reflect that.

 

I beat ya to it by dropping the F-bomb in a post last week by suggesting that GM suspected it couldn't hold up its obligations to the VEBA plan when it signed onto the latest contract. This, of course, is separate from the numerous accounting issues in the past decade. And the whole Delphi debacle wasn't exactly on the up-and-up.

 

This is exactly the type of dramatic response needed to save GM, if you ask me. Not that it is especially different than how most business make choices on a daily basis. But dramatic when compared to the action demonstrated by the comatose GM Board of Directors.

 

As an aside... less and less for us americans is contingent on buildng a better mousetrap. At the present time it's more about building a cheaper mousetrap that meets governmental edicts.

Were I to venture a guess, the eradication of the big three car makers here should scare the Japanese and Korean makers. The Chinese will out "cheap labor" them in a heartbeat. Not to mention China and India rule the steel market.

I figure the PR value of having auto manufacturing plants here serves little point if the U.S. declares that it cares little about where things are made as compared to their price.

Korea has caused no small concern for Japan with their pursuit of the auto market.

China will hand Japan and Korea their *** in a labor and materials pricing war. Some may welcome such a scenario.

 

More than Fraud...I think the biggest issue is that it costs GM a few thousand dollars more to make each vehicle than it's competitors. Then couple that with the fact that GM vehicles typically sell for less than import competiton (due to consumer attitudes)...and you have an obvious structural issue that will come to a head. Add to that the pension plan which had the same issues as Social Security and things get even dicer.

Lastly, take an unimaginable decline in sales...and throw in being bent over by Cerebus with GMAC and this disaster is competley understandable fraud or not.