There are problems with a couple of those. Rewriting union contracts outside of bankruptcy requires permission of the union. That could be doable, if the government is willing to put the UAW (and CAW) on the spot. I.e., making a loan contingent on UAW/CAW agreement. But it's hard to see the politicians willing to take on labor like that.

Discontinuing divisions without compensation would require changing the law that requires compensation for taking away a franchise. I'm not sure that even Congress can do that, since it might be unconstitutional. This could be done under bankruptcy, if the judge goes along.

It would be interesting to know how you think those particular bullets might be accomplished.

 

Constitutional? None of this bailout BS is anything close to Constitutional. Were Constitutional concerns being even slightly addressed there would be no bailout for anybody at all...period.

Which does raise an interesting point...there are some who love to paint the issue of bailing out GM as some sort of patriotic imperative yet those who raise that argument apparently have no problem trampling the Constitution to to make it happen. Ironic (and sad).

 

Time magazine article states that not only would Chrysler and Ford not be able to survive if G.M. goes under but others like Toyota would no longer be able to build here either:

http://www.time.com/time/business/ar...0.html?cnn=yes

 

You're absolutely correct, some of these steps would require extraordinary powers to skirt existing laws if all parties don't agree to it. Bankruptcy would indeed make many of these changes easier but we all know bankruptcy is not a viable option. However when the government steps in with taxpayer money it won't be a no-strings-attached gift; they will attach provisions it. Things like making sure major stakeholders such as unions and dealerships are willing to make concessions and sacrifices. And I actually don't think the government would be afraid to take on labour in this case ... I'm sure they realize that GM cannot survive (and therefore pay back the loans) with the existing agreements in place. In fact, I'd be willing to bet that such arrangements are what's holding up the loan deals right now. They have much more power to negotiate such changes now, before the money is handed over.

 

Funny thing about mentioning Pearl Harbor. There seem to be many parallels with the Navy and GM if you think about it. The Navy needed something like Pearl Harbor to destroy the old command that believed in the power of Battleships vs the power of modern technology and techniques (aircraft and aircraft carriers)

No one disagrees with that Pearl Harbor was a tragedy. However was it unforeseen, unavoidable or without blame? The biggest advantage to rise from the massive destruction of our fleet was the shift in thinking in Navy high command. The second advantage was the scrapping of our great yet outdated Battleships. When they were gone the Navy had to use our remaining aircraft carriers.

Without the destruction at Pearl, I doubt that change in Navy thinking would have ever occurred. It is easy to look at Pearl as the tunning point in Navy battle philosophy; not by choice but by circumstance.

GM is simply the US Navy from WWI, an old toothless ***** who should be put down, regardless of her former beauty. Absolute destruction at GM is the only way I can for see the required changes that need to take place. Kill it and start over.

Unfortunately many will discover that it is impossible to operate any new American automobile company and be profitable. The reasons why can be found in our laws and political factions which all claim to be helping; in reality they are the problems.

 

Amen, Mr. Settlemire.

For myself personally, since I was 21 first joining this board in 2001, I've been waging the battle cry of "Buy American." I no longer work for a GM dealer (which, conincidentally, has been in business since 1948, but will be closing its doors by January or so ) where I learned a lot and cut my teeth, but I do work for a Chrysler/Dodge/Jeep store, as many of you know. Since starting as a salesman back in October 2000, I have done nothing but watch the continual decline in market share of the Big 3, despite putting out significantly better products...from all 3 companies.

Why has this happened? Why are Toyota and Honda seen as being "the same as GM" in terms of their impact on American workers? Why has the consumer literally brainwashed themselves into believing that, despite domestics putting out BETTER AND BETTER products, they literally run like sheep to the local Toyota dealer to buy yet another Toyota??

Some ironic things I've noticed as of late...

1) The guy that just lost the election? His personal car is a Toyota Sequoia. There was a spot on MSNBC the day after the election, showing him and his wife leaving wherever the hell they spent Election night.
2) A conservative radio host was on Hardball on MSNBC last night, claiming the bailout was fruitless. Chris Matthews asked her what she drove...she responded "a Nissan." He pressed her further, and all she said was "I had Fords for years...but I really like my Nissan."
3) More and more customers enter my showroom, claiming the Honda Pilot next door is the same as buying my Jeep Grand Cherokee when it comes to supporting the economy. Press them harder, and explain about all the jobs attached to this Grand Cherokee, and their eyes glaze over. Its a losing battle, every time.


I used to fight this battle hard, on this board and in the showroom. ProudPony has literally read my mind, and spit it out verbatim, on this board for the last couple years, as I've posted less and less. His posts are so astute, and to the point, often there is no real need for me to comment, because unlike so many others on here, he gets it...and he's doing what I used to do.

These days, I'm a very old 28 year old, trying to navigate a Chrysler store after it had the worst month in its history in October. I'm not looking for pity, and I know full well if the mischevous (sp?) little bastards at Cerberus get their way, a viable company is going to get cut in a million little pieces...which leaves me doing, what, selling Jeeps for the Chinese and Dodge Rams for Nissan? Who the hell knows...

All I can say is, if you're in the market right now for a car, please...more than ever, shop domestic. There is a difference. The products are great. And there are THOUSANDS of us, just at the dealer level, that could use your business. Its amazing how many people smell blood at a time like this, and go out car shopping and try to make ridiculous offers on vehicles, in the hopes we're too stupid and make a deal. No one is getting rich right now...

We all just want to survive, make a living, and most importantly...have a place to go to work. If Chrysler gets cut up (which its likely, still, IMO), I know one thing...I'm going back into the banking world...because the only dealers hiring in the Northeast are import dealers...and I've fought too hard over the past 8 years to sell my soul.


Mr. Settlemire, I wish you and GM the best. I know what you're saying, I know where you're at, and I feel for all of you. We DO need to get this NOW and figure the rest out LATER...otherwise, Armageddon isn't just a theory...its here.

 

Of course it's understandable how GM got here. The health care and legacy costs for GM are HUGE. Costs which Toyota for example, doesn't need to worry about. Whether that's fair or not is almost irrelevant. They are the facts of life.

But there are other things which also brought GM to this moment. You mention GMAC. GMAC was GM's financial arm. A critical strategic asset. What in the world could convince the BoD to sell controlling interest in this entity to another company? I mean it simply confounds me. What poor judgement. Now, Cerberus is putting the screws to GM with that control.

There were so many bad decisions which brought GM to this point.

I really started losing faith in Wagoner/The Board during the Fiat debacle. IIRC, GM payed Fiat $6 billion, ($2B in cash and $4B in stock) if Fiat would just allow GM to walk away - and GM could still be partners in a Polish diesel plant.

$6 BILLION. They should have faced Fiat down on that - or better yet, don't negotiate a "put" option. Stupid. But it was easier to just pay them off with GM Monopoly money.

We are at the point now where GM has to get help from the Feds. No arguments there. I say give GM whatever it needs. The stipulation being, that Wagoner and the Board must resign.

 

Of course it's understandable how GM got here. The health care and legacy costs for GM are HUGE. Costs which Toyota for example, doesn't need to worry about. Whether that's fair or not is almost irrelevant. They are the facts of life.

But there are other things which also brought GM to this moment. You mention GMAC. GMAC was GM's financial arm. A critical strategic asset. What in the world could convince the BoD to sell controlling interest in this entity to another company? I mean it simply confounds me. What poor judgement. Now, Cerberus is putting the screws to GM with that control.

There were so many bad decisions which brought GM to this point.

I really started losing faith in Wagoner/The Board during the Fiat debacle. IIRC, GM payed Fiat $6 billion, ($2B in cash and $4B in stock) if Fiat would just allow GM to walk away - and GM could still be partners in a Polish diesel plant.

$6 BILLION. They should have faced Fiat down on that - or better yet, don't negotiate a "put" option. Stupid. But it was easier to just pay them off with GM Monopoly money.

We are at the point now where GM has to get help from the Feds. No arguments there. I say give GM whatever it needs. The stipulation being, that Wagoner and the Board must resign.

 

Interesting analogy.


I personally don't believe that simply handing GM some cash will save it. I believe that handing GM some cash -along with major structural and leadership changes might save it.

The old guard which still operates GM as if it owns 50% of the market, must be put out to pasture - NOW. A new guard, which can make GM a profitable business at 15-20% market share must replace them - NOW. Nothing short of that is acceptable.

 

Jason,
I hear ya.
I've fought for years to get people to understand the importance of buying American.
Unfortunately, people are too stupid and selfish to understand why they should.
I gave up. It's too hard.

 

GM was in a no win with GMAC. Basically, GM's bond rating was in the ****ter, and it's debt load was making it impossible for GMAC to borrow money at a reasonable cost. GMAC had to be seperated, and backed by a company in better fiancial standing. At the time I remember while most hated to see GMAC get sold to Cerebus...it made sense. No body forsaw Cerbus wanting to offload Chrysler a year or two after they bough it and using GMAC to force GM to the table to buy.

 

Right. But this didn't 'just happen'. It was allowed to happen. This strategic asset should have been protected, the way that Ford protected it's financial arm.

 

One must ponder if the government we have here is learning anything from the plight of the big three? By that I mean is there any ground swell in this past election regarding how uncompetitive you become when you pay folks not to work? That covering everyone's health expenses is not affordable, or sustainable? That making more money than you spend is a very key component to providing any retirement checks for everyone? Anybody voicing that entitlements are cretainly the sign of a caring and generous entity, but total idiocy in the context of a "world" economy?

Any thoughts which were affirmed through votes which we can point out which affirmed the wronheadedness of attempts to be everything to everyone? ...That to attempt to do so is actually the opposite of being lean and mean?

Lean and mean is the way business and thus being competitive works now, but I doubt our government got the memo. I know the majority of voters certainly didn't get it. They will though... they will.

Without some serious soul searching and application of common sense the USA will learn a lot about what "lean and mean" involves.

The bank bailout certainly covered the *** of foreign government's deposits. Some american citizens got a handout too in the process. Sure, getting a loan if you are good for the dough has disappeared, but at least China and Japan won't pull a run on the banks...

 

^ alot of good points. This is the harsh truth.

Everyone was delusional for change they can believe in. What a joke.


Let the industry crash and lets move on.

 

Yes...it is quite a joke...unfortunately it's a joke everyone will have to pay for, not just the 52%.