General Motors stock skids on bankruptcy reports

[Harvey]

Originally posted by: BoberFett

Originally posted by: Harvey

Not much. They made their deals in other times. They signed legal, binding contracts that included retirement benefits, and employees who put in their time and their contributions to the retirement fund kept their end of the bargain and relied on GM's management to keep the fund solvent. Responsiblity for the retirement fund, itself, only recently shifted from GM to the unions.

I certainly hope you argued as vociferously in defense of the insurance and banking executive bonuses which were legal, binding contracts signed in other times.

I certainly did NOT. There's a vast difference between an entire group of working stiffs who devote their entire working lives to earn low to middle income stability and moderate comfort in their retirement and mega-buck "bonuses" paid to Wall Street sharks who are already making mega-bucks for piss poor, greed driven decisions in an attempt to suck even more quick bucks over a few months or years at the expense of everyone else.

If you want some equivalency, think about the GM execs who paid themselves mega-bucks and golden parachutes while they led the company to this highly predicted failure.

 

[BoberFett]

Originally posted by: Harvey

Originally posted by: BoberFett

Originally posted by: Harvey

Not much. They made their deals in other times. They signed legal, binding contracts that included retirement benefits, and employees who put in their time and their contributions to the retirement fund kept their end of the bargain and relied on GM's management to keep the fund solvent. Responsiblity for the retirement fund, itself, only recently shifted from GM to the unions.

I certainly hope you argued as vociferously in defense of the insurance and banking executive bonuses which were legal, binding contracts signed in other times.

I certainly did NOT. There's a vast difference between an entire group of working stiffs who devote their entire working lives to earn low to middle income stability and moderate comfort in their retirement and mega-buck "bonuses" paid to Wall Street sharks who are already making mega-bucks for piss poor, greed driven decisions in an attempt to suck even more quick bucks over a few months or years at the expense of everyone else.

If you want some equivalency, think about the GM execs who paid themselves mega-bucks and golden parachutes while they led the company to this highly predicted failure.

In that case don't make your argument based on the existence of contracts, because clearly that's not important to you. Just admit that you're arguing emotion instead of logic.

 

[Hacp]

The best solution to this would involve no government money. GM should wipe out the creditors, stakeholders, and unions and start from scratch. Let the investors take the hit, not the taxpayers.

 

[CADsortaGUY]

Originally posted by: BoberFett

Originally posted by: Harvey

Originally posted by: BoberFett

Originally posted by: Harvey

Not much. They made their deals in other times. They signed legal, binding contracts that included retirement benefits, and employees who put in their time and their contributions to the retirement fund kept their end of the bargain and relied on GM's management to keep the fund solvent. Responsiblity for the retirement fund, itself, only recently shifted from GM to the unions.

I certainly hope you argued as vociferously in defense of the insurance and banking executive bonuses which were legal, binding contracts signed in other times.

I certainly did NOT. There's a vast difference between an entire group of working stiffs who devote their entire working lives to earn low to middle income stability and moderate comfort in their retirement and mega-buck "bonuses" paid to Wall Street sharks who are already making mega-bucks for piss poor, greed driven decisions in an attempt to suck even more quick bucks over a few months or years at the expense of everyone else.

If you want some equivalency, think about the GM execs who paid themselves mega-bucks and golden parachutes while they led the company to this highly predicted failure.

In that case don't make your argument based on the existence of contracts, because clearly that's not important to you. Just admit that you're arguing emotion instead of logic.

Exactly. Also, it's laughable that harvey thinks these jobs were "low to middle income" jobs. These people make more than the average manufacturing worker. Hell, it's almost 2X the average for just assembly workers.

 

[Harvey]

Originally posted by: BoberFett

Originally posted by: Harvey

Originally posted by: BoberFett

Originally posted by: Harvey

Not much. They made their deals in other times. They signed legal, binding contracts that included retirement benefits, and employees who put in their time and their contributions to the retirement fund kept their end of the bargain and relied on GM's management to keep the fund solvent. Responsiblity for the retirement fund, itself, only recently shifted from GM to the unions.

I certainly hope you argued as vociferously in defense of the insurance and banking executive bonuses which were legal, binding contracts signed in other times.

I certainly did NOT. There's a vast difference between an entire group of working stiffs who devote their entire working lives to earn low to middle income stability and moderate comfort in their retirement and mega-buck "bonuses" paid to Wall Street sharks who are already making mega-bucks for piss poor, greed driven decisions in an attempt to suck even more quick bucks over a few months or years at the expense of everyone else.

If you want some equivalency, think about the GM execs who paid themselves mega-bucks and golden parachutes while they led the company to this highly predicted failure.

In that case don't make your argument based on the existence of contracts, because clearly that's not important to you. Just admit that you're arguing emotion instead of logic.

No, I'm not arging emotion over logic. I'm arguing both equity (fairness) and contract law. The reason the bankers and the adamin said they could NOT do anything about the Wall Street bonuses was based on contract arguments, much of which I believe is specious, at best. I only went to law school for a year, and I found lots to dispute in that assertion. One possible counter-arguement could be that those grab and run Wall Street assholes failed to perform under their contracts, but going further than speculation would require knowing the terms of those contracts.

There is no question that employees who worked for decades with good work records fulfilled their obligations. There is every reason to argue that the bankers failed dismally.

You do raise the question of why you're in such a hurry to screw thousands of people who worked hard and and paid taxes their entire lives for their hard earned security in retirement while you're so eager to pay off those who robbed us blind and shafted the economies of the U.S. and most of the world. :roll:

 

[boomerang]

Originally posted by: Hacp
The best solution to this would involve no government money. GM should wipe out the creditors, stakeholders, and unions and start from scratch. Let the investors take the hit, not the taxpayers.

Just to make sure I've got this clear, the health care and pensions of their current and former workers should just vaporize, right?

Every man for themselves and all that kind of rhetoric? Or would the screwing you get for the screwing you gave be more appropriate?

There's a scenario that I have heard no one address. A likely scenario too. Since GM can find no funding for bankruptcy except from the feds, how about if after the bankruptcy, it's decided to just keep them alive as a zombie car company? The feds bitch so to speak. Kept alive to manufacture those clean, green, cars that everyone wants to buy? It will take a good 2 to 4 years to start producing the models that will make the feds happy. The car market is in the toilet with no end of a pullout in sight so it will absolutely be necessary to keep them on life support for that period of time - at a minimum. With a manipulation of the gasoline market and the relaxation of safety standards (necessary to reduce weight to achieve the mileage standards) the feds could create an artificial market for just the kind of cars they mandated GM to build.

The feds have got so much invested in them, (especially after a bankruptcy) that to let them die, would create an enormous public outcry. By that I mean more enormous than keeping them alive. It fits right in with the fed agenda of controlling corporations and determining who lives and who dies.

 

[soccerballtux]

Usually the only people in support of taking money from some people and giving it to others are those who don't have any money in the first place.

 

[CADsortaGUY]

Originally posted by: boomerang

Originally posted by: Hacp
The best solution to this would involve no government money. GM should wipe out the creditors, stakeholders, and unions and start from scratch. Let the investors take the hit, not the taxpayers.

Just to make sure I've got this clear, the health care and pensions of their current and former workers should just vaporize, right?

Every man for themselves and all that kind of rhetoric? Or would the screwing you get for the screwing you gave be more appropriate?

There's a scenario that I have heard no one address. A likely scenario too. Since GM can find no funding for bankruptcy except from the feds, how about if after the bankruptcy, it's decided to just keep them alive as a zombie car company? The feds bitch so to speak. Kept alive to manufacture those clean, green, cars that everyone wants to buy? It will take a good 2 to 4 years to start producing the models that will make the feds happy. The car market is in the toilet with no end of a pullout in sight so it will absolutely be necessary to keep them on life support for that period of time - at a minimum. With a manipulation of the gasoline market and the relaxation of safety standards (necessary to reduce weight to achieve the mileage standards) the feds could create an artificial market for just the kind of cars they mandated GM to build.

The feds have got so much invested in them, (especially after a bankruptcy) that to let them die, would create an enormous public outcry. By that I mean more enormous than keeping them alive. It fits right in with the fed agenda of controlling corporations and determining who lives and who dies.

Why do I as a tax payer have to pay for these people who had too many eggs in one basket? What happens to us normal workers when our company goes bankrupt? Do you think we get continued "benefits"? Heck no.

Now, I'm not saying we should take it to zero, but for us tax payers to have pay for some company F-up is F'd up. My 401K took a hit - shouldn't you tax payers pay the loss? Seriously - I don't see how some of you can defend these ridiculous lifelong "benefits" - especially in light of bankruptcy.

 

[frostedflakes]

Kind of OT, but what does this mean for GM shareholders? Asking because someone I know is invested (like $1k I think) in GM stock. I was under the impression that common stockholders tend to get shafted during bankruptcy proceeding, but the person I know is convinced the stock will be fine. Tried telling them to sell that shit a few weeks ago when the bankruptcy idea was first being thrown around. :roll:

 

[ebaycj]

Originally posted by: Hacp
The best solution to this would involve no government money. GM should wipe out the creditors, stakeholders, and unions and start from scratch. Let the investors take the hit, not the taxpayers.

That's what you need to realize. Nearly every taxpayer IS an investor in GM.

 

[LegendKiller]

Originally posted by: Fern

Originally posted by: dullard

Originally posted by: LegendKiller
Ever hear of DIP financing? That was more or less what the government did.

With with DIP financing, you have no guarantee of getting the debt repaid. Even if the debt is repaid, you have no guarantee that you'll get your lost interest back (the government had to pay interest to borrow the money). Even if you get the principal and interest back, you have no way of recovering the harm done to the economy due to having a massive zombie car company in the news for months.

I'm not disagreeing with, but this is what I rea dof DIP financing:

What Does Debtor-In-Possession Financing - DIP Financing Mean?
Financing arranged by a company while under the Chapter 11 bankruptcy process. DIP financing is unique from other financing methods in that it usually has priority over existing debt, equity and other claims.

I'm curious if our bailout ($13.4B) money has this priority?

Even so, it was likely a poor idea. They'll probably need, and get from our gov, real DIP financing in the bankruptcy. That's why I think the bailout idea was a poor one even if it is secured.

Fern

When it comes down to it, nobody primes the government.

 

[Fear No Evil]

Originally posted by: Harvey

Originally posted by: BoberFett

Originally posted by: Harvey

Originally posted by: BoberFett

Originally posted by: Harvey

Not much. They made their deals in other times. They signed legal, binding contracts that included retirement benefits, and employees who put in their time and their contributions to the retirement fund kept their end of the bargain and relied on GM's management to keep the fund solvent. Responsiblity for the retirement fund, itself, only recently shifted from GM to the unions.

I certainly hope you argued as vociferously in defense of the insurance and banking executive bonuses which were legal, binding contracts signed in other times.

I certainly did NOT. There's a vast difference between an entire group of working stiffs who devote their entire working lives to earn low to middle income stability and moderate comfort in their retirement and mega-buck "bonuses" paid to Wall Street sharks who are already making mega-bucks for piss poor, greed driven decisions in an attempt to suck even more quick bucks over a few months or years at the expense of everyone else.

If you want some equivalency, think about the GM execs who paid themselves mega-bucks and golden parachutes while they led the company to this highly predicted failure.

In that case don't make your argument based on the existence of contracts, because clearly that's not important to you. Just admit that you're arguing emotion instead of logic.

No, I'm not arging emotion over logic. I'm arguing both equity (fairness) and contract law. The reason the bankers and the adamin said they could NOT do anything about the Wall Street bonuses was based on contract arguments, much of which I considered specious, at best. I've only went to law school for a year, and I found lots to dispute in that assertion. One possible counter-arguement could be that those grab and run Wall Street assholes failed to perform under their contracts, but going further than speculation would require knowing the terms of those contracts.

There is no question that employees who worked for decades with good work records fulfilled their obligations. There is every reason to argue that the bankers failed dismally.

You do raise the question of why you're in such a hurry to screw thousands of people who worked their entire lives for their hard earned security in retirement while you're so eager to pay off those who robbed us blind and shafted the economies of the U.S. and most of the world. :roll:

Fairness is a fundamentally emotional thing. When people start making an argument on the basis of fairness its usually because it lacks anything quantifiable to back it up.

 

[SickBeast]

GM has 3 retired people collecting a pension for every person they have actively working. That is their main problem, and I'm actually surprised they have done as well as they have in light of this.

They say that due to labour costs, GM has to make their cars $3K crappier just to be able to compete on price.

IMO this will set a good example for unions so that they can see what will happen if they are unreasonable and give the workers too much. The same goes for corporate greed and overpaid CEOs.

There is going to be a lot of pain as result of this bankruptcy. I think the government only gave them the money so that people couldn't point the finger at them when the economy went way down. Now they can at least say that they tried.

 

[boomerang]

Originally posted by: frostedflakes
Kind of OT, but what does this mean for GM shareholders? Asking because someone I know is invested (like $1k I think) in GM stock. I was under the impression that common stockholders tend to get shafted during bankruptcy proceeding, but the person I know is convinced the stock will be fine. Tried telling them to sell that shit a few weeks ago when the bankruptcy idea was first being thrown around. :roll:

They don't tend to get shafted, they get shafted with extreme prejudice. The outstanding shares of common stock will instantly disappear with no recourse whatsoever.

 

[frostedflakes]

Originally posted by: boomerang

Originally posted by: frostedflakes
Kind of OT, but what does this mean for GM shareholders? Asking because someone I know is invested (like $1k I think) in GM stock. I was under the impression that common stockholders tend to get shafted during bankruptcy proceeding, but the person I know is convinced the stock will be fine. Tried telling them to sell that shit a few weeks ago when the bankruptcy idea was first being thrown around. :roll:

They don't tend to get shafted, they get shafted with extreme prejudice. The outstanding shares of common stock will instantly disappear with no recourse whatsoever.

Yeah, that's what I was thinking. Oh well, not my problem. :laugh:

 

[boomerang]

Originally posted by: SickBeast
GM has 3 retired people collecting a pension for every person they have actively working. That is their main problem, and I'm actually surprised they have done as well as they have in light of this.

They say that due to labour costs, GM has to make their cars $3K crappier just to be able to compete on price.

IMO this will set a good example for unions so that they can see what will happen if they are unreasonable and give the workers too much. The same goes for corporate greed and overpaid CEOs.

There is going to be a lot of pain as result of this bankruptcy. I think the government only gave them the money so that people couldn't point the finger at them when the economy went way down. Now they can at least say that they tried.

It's not just unions bucko. On the grandest scale possible, the defined benefit pension plan has been proven to be an untenable situation.

State workers, government workers, municipal workers, teachers, police and firefighters, the list goes on and on and on. Anyone covered, whether currently or in the future, should be extremely worried. The term Ponzi Scheme is a topic heard in the news lately. Pension plans are a Ponzi scheme. They don't work because there will never be enough gains in productivity to support them.

They're over and done with.

 

[StageLeft]

They've been talking openly of this or weeks. I have wondered why some clowns hold onto GM stock, even with it worth $2.

 

[SickBeast]

boomerang, if pensions are a Ponzi scheme, then who is at the top?

 

[boomerang]

Originally posted by: CADsortaGUY

Originally posted by: boomerang

Originally posted by: Hacp
The best solution to this would involve no government money. GM should wipe out the creditors, stakeholders, and unions and start from scratch. Let the investors take the hit, not the taxpayers.

Just to make sure I've got this clear, the health care and pensions of their current and former workers should just vaporize, right?

Every man for themselves and all that kind of rhetoric? Or would the screwing you get for the screwing you gave be more appropriate?

There's a scenario that I have heard no one address. A likely scenario too. Since GM can find no funding for bankruptcy except from the feds, how about if after the bankruptcy, it's decided to just keep them alive as a zombie car company? The feds bitch so to speak. Kept alive to manufacture those clean, green, cars that everyone wants to buy? It will take a good 2 to 4 years to start producing the models that will make the feds happy. The car market is in the toilet with no end of a pullout in sight so it will absolutely be necessary to keep them on life support for that period of time - at a minimum. With a manipulation of the gasoline market and the relaxation of safety standards (necessary to reduce weight to achieve the mileage standards) the feds could create an artificial market for just the kind of cars they mandated GM to build.

The feds have got so much invested in them, (especially after a bankruptcy) that to let them die, would create an enormous public outcry. By that I mean more enormous than keeping them alive. It fits right in with the fed agenda of controlling corporations and determining who lives and who dies.

Why do I as a tax payer have to pay for these people who had too many eggs in one basket? What happens to us normal workers when our company goes bankrupt? Do you think we get continued "benefits"? Heck no.

Now, I'm not saying we should take it to zero, but for us tax payers to have pay for some company F-up is F'd up. My 401K took a hit - shouldn't you tax payers pay the loss? Seriously - I don't see how some of you can defend these ridiculous lifelong "benefits" - especially in light of bankruptcy.

Relax, my words in regards to pensions and benefits are from the devil's advocate position. I'm not going to tell you that I don't feel the social consequences should be taken lightly, in fact, I think they'll be extremely detrimental to the economy.

I'm not advocating or demanding anything.

My second paragraph could be interpreted by some as sarcasm. But in light of what this administration has done so far, I think it's a likely scenario.

 

[Genx87]

Bu bu bu Pelosi said they were too big to fail!

Jesus H anybody with 2 brain cells knew this was coming. Should have let this happen last Nov and saved the tax payers billions.

btw I see this warranty they are bragging about on their commercials? Is that backed by the taxpayer as well?

 

[boomerang]

Originally posted by: SickBeast
boomerang, if pensions are a Ponzi scheme, then who is at the top?

It's more of a rhetorical statement. The point I was trying to make, and not well I guess, is that they cannot work over the long term. The pension plans at the automakers have been in place long enough to prove that.

Someone mentioned 1 worker supporting 3 retiree's. I think those are probably conservative numbers, especially when considering the massive reduction in employees in the auto industry in the last decade.

Government workers have the most to worry about. Productivity is not a concern in their case, taxpayer dollars are what matters to them.

Remember also, that pension plans are typically invested indirectly in the stock market. We know the state of the market.

Sorry for my poor use of an analogy.

 

[CADsortaGUY]

Originally posted by: boomerang

Originally posted by: CADsortaGUY

Originally posted by: boomerang

Originally posted by: Hacp
The best solution to this would involve no government money. GM should wipe out the creditors, stakeholders, and unions and start from scratch. Let the investors take the hit, not the taxpayers.

Just to make sure I've got this clear, the health care and pensions of their current and former workers should just vaporize, right?

Every man for themselves and all that kind of rhetoric? Or would the screwing you get for the screwing you gave be more appropriate?

There's a scenario that I have heard no one address. A likely scenario too. Since GM can find no funding for bankruptcy except from the feds, how about if after the bankruptcy, it's decided to just keep them alive as a zombie car company? The feds bitch so to speak. Kept alive to manufacture those clean, green, cars that everyone wants to buy? It will take a good 2 to 4 years to start producing the models that will make the feds happy. The car market is in the toilet with no end of a pullout in sight so it will absolutely be necessary to keep them on life support for that period of time - at a minimum. With a manipulation of the gasoline market and the relaxation of safety standards (necessary to reduce weight to achieve the mileage standards) the feds could create an artificial market for just the kind of cars they mandated GM to build.

The feds have got so much invested in them, (especially after a bankruptcy) that to let them die, would create an enormous public outcry. By that I mean more enormous than keeping them alive. It fits right in with the fed agenda of controlling corporations and determining who lives and who dies.

Why do I as a tax payer have to pay for these people who had too many eggs in one basket? What happens to us normal workers when our company goes bankrupt? Do you think we get continued "benefits"? Heck no.

Now, I'm not saying we should take it to zero, but for us tax payers to have pay for some company F-up is F'd up. My 401K took a hit - shouldn't you tax payers pay the loss? Seriously - I don't see how some of you can defend these ridiculous lifelong "benefits" - especially in light of bankruptcy.

Relax, my words in regards to pensions and benefits are from the devil's advocate position. I'm not going to tell you that I don't feel the social consequences should be taken lightly, in fact, I think they'll be extremely detrimental to the economy.

I'm not advocating or demanding anything.

My second paragraph could be interpreted by some as sarcasm. But in light of what this administration has done so far, I think it's a likely scenario.

I understand, and I wasn't go after YOU - just the notion your post was starting from.

I would agree with the second half as the likely scenario, except I'm not going to underestimate the outcry - I think the ball has started rolling and the movement will get bigger before smaller.

 

[sciwizam]

Originally posted by: Genx87
Bu bu bu Pelosi said they were too big to fail!

Jesus H anybody with 2 brain cells knew this was coming. Should have let this happen last Nov and saved the tax payers billions.

btw I see this warranty they are bragging about on their commercials? Is that backed by the taxpayer as well?

Link

In a bid to boost flagging auto sales, the federal government will pay for any warranty repairs on a General Motors or Chrysler vehicle if either company can't because of financial problems or a bankruptcy filing, President Barack Obama said on Monday.

"Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always," Obama said in a speech. "Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty."

 

[boomerang]

Originally posted by: Genx87
Bu bu bu Pelosi said they were too big to fail!

Jesus H anybody with 2 brain cells knew this was coming. Should have let this happen last Nov and saved the tax payers billions.

btw I see this warranty they are bragging about on their commercials? Is that backed by the taxpayer as well?

You bet!

GOVERNMENT WARRANTY

It is my hope that the steps I am announcing today will go a long way towards answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can -- if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe.

In fact, it will be safer than it's ever been. Because starting today, the United States government will stand behind your warrantee.

From here.

First link I found.

Edit: sciwizam beat me to it.

 

[3chordcharlie]

Originally posted by: SickBeast
GM has 3 retired people collecting a pension for every person they have actively working. That is their main problem, and I'm actually surprised they have done as well as they have in light of this.

They say that due to labour costs, GM has to make their cars $3K crappier just to be able to compete on price.

IMO this will set a good example for unions so that they can see what will happen if they are unreasonable and give the workers too much. The same goes for corporate greed and overpaid CEOs.

There is going to be a lot of pain as result of this bankruptcy. I think the government only gave them the money so that people couldn't point the finger at them when the economy went way down. Now they can at least say that they tried.

The pension is not payed by GM. It is, like most pensions, an investment fund.

Three years ago, GM's pension was $6billion overfunded, according to the genius accountants who predicted 12% average returns forever. At that time I'd imagine they took a nice contribution holiday.

BTW you can thank Canadian hero Conrad Black for blazing the trail of pension-fund pillaging (I believe at Dominion Grocers). Speaking of which, working at a grocery store used to be a career-quality occupation.