GM asks for $16.4B more, Chrysler $5B more

[MetalMat]

My fellow people, how long are we going to let the govt use our money for these things? I think it is getting close to having an old fashion lynch mob up on capitol hill!

 

[Chunkee]

Originally posted by: MetalMat
My fellow people, how long are we going to let the govt use our money for these things? I think it is getting close to having an old fashion lynch mob up on capitol hill!

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the
other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."

~~~~~ Dr. Adrian Rogers, 1931 ~~~~~~~


QFT!!!

 

[Genx87]

Originally posted by: coolVariable

Originally posted by: GroundedSailor

It is estimated that 70% of the parts that go into a car come from suppliers. And these suppliers further depend upon their suppliers for sub parts / materials etc. Think how many suppliers will go under, and the impact on the economy, if GM were to go under.

//thread

That isnt the thread. Every business has a supply chain. Does that mean we should be forced to prop them up with tax payers money?

The gambling industry employs about 2 million people and is getting slammed. Think of all the suppliers of food, drink, cups, towels, chips, dice ect who could potentially be out of work? Probably more than the auto industry. Should we extend them 30 billion to stay afloat during these economic times?

 

[Ktulu]

Originally posted by: Socio
What ticks me off is they have already been given billions and made no changes to help themselves with that money. They should have been left alone and forced to restructure, shrink themselves down to a more self sufficient status.

Um, they've made a shitload of changes and have more changes to come. Unfortunately with such a gigantic company change just doesn't happen overnight, I honestly don't know what you expect to see in such a short amount of time.

 

[Squisher]

Originally posted by: smack Down
It really doesn't matter if it cost 100 billion for bankruptcy and 50 cents to bail them out. The US government should not be held hostage.

Whether you and I like it or not the government is closely intertwined in all of our lives and has made and will continue to make decisions about things that seem they should keep their noses out of.

The notion that the government should spend $100 billion, some of which is mine, just to stand on some altruistic principle and for the pleasure of seeing an entire region of the country suffer through a full blown 1930's depression that will surely drag down the rest of the country seems a little sadistic and masochistic.

Michigan unemployment is at 10.6%, if GM goes under it'll go to 20+%. There is no one outside of the government to provide DIP money for chapter 11 and I doubt anyone wants to buy more than a few tertiary assets under Chapter 7.

 

[sammyunltd]

GM should really get rid of Buick and GMC, and stick only with Chevy and Cadillac (and some sporty Pontiac models).

Likewise, Ford should get rid of Mercury and solely focus on Ford/Lincoln.

As for Chrysler, they should let Dodge handle pick-ups, Jeep SUVs, and Chrysler sedans/coupes.

That wasn't so difficult, was it? I just don't get why these CEOs can't come up to that.

 

[Modelworks]

Chrysler deserves nothing , not one single cent. If they need bailing out then their parent company should do it, they have more than enough cash to bail them out. Also I was watching the news and the way Chrysler is set up , if they did go into bankruptcy later on guess who gets the spoils ? Fiat. We pay to bail them out and the $5 billion we invest would end up going to the Italian car company. Screw that, let them bail themselves out.


GM where do we draw the line. $18 Billion now ? What about in 6 months ? Another $10 billion ? Where do we say enough is enough ? If they are too big to fail now, they will be too big to fail in 6 months.

 

[PingSpike]

Originally posted by: Chunkee

Originally posted by: MetalMat
My fellow people, how long are we going to let the govt use our money for these things? I think it is getting close to having an old fashion lynch mob up on capitol hill!

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the
other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."

~~~~~ Dr. Adrian Rogers, 1931 ~~~~~~~


QFT!!!

I guess Dr. Adrian Rogers forgot that you can always print more money!

 

[coolVariable]

Originally posted by: Squisher

Originally posted by: smack Down
It really doesn't matter if it cost 100 billion for bankruptcy and 50 cents to bail them out. The US government should not be held hostage.

Whether you and I like it or not the government is closely intertwined in all of our lives and has made and will continue to make decisions about things that seem they should keep their noses out of.

The notion that the government should spend $100 billion, some of which is mine, just to stand on some altruistic principle and for the pleasure of seeing an entire region of the country suffer through a full blown 1930's depression that will surely drag down the rest of the country seems a little sadistic and masochistic.

Michigan unemployment is at 10.6%, if GM goes under it'll go to 20+%. There is no one outside of the government to provide DIP money for chapter 11 and I doubt anyone wants to buy more than a few tertiary assets under Chapter 7.

Yup. the ripple effect through the financial industry will also be enormous when all of those assets vanish into thin air. Bail them out and turn all the states they operate in into right-to-work states! The unions must be broken!
It's the unions fault the big three are not profitable.


even more

//thread

 

[Squisher]

Originally posted by: coolVariable

Originally posted by: Squisher

Originally posted by: smack Down
It really doesn't matter if it cost 100 billion for bankruptcy and 50 cents to bail them out. The US government should not be held hostage.

Whether you and I like it or not the government is closely intertwined in all of our lives and has made and will continue to make decisions about things that seem they should keep their noses out of.

The notion that the government should spend $100 billion, some of which is mine, just to stand on some altruistic principle and for the pleasure of seeing an entire region of the country suffer through a full blown 1930's depression that will surely drag down the rest of the country seems a little sadistic and masochistic.

Michigan unemployment is at 10.6%, if GM goes under it'll go to 20+%. There is no one outside of the government to provide DIP money for chapter 11 and I doubt anyone wants to buy more than a few tertiary assets under Chapter 7.

Yup. the ripple effect through the financial industry will also be enormous when all of those assets vanish into thin air. Bail them out and turn all the states they operate in into right-to-work states! The unions must be broken!
It's the unions fault the big three are not profitable.


even more

//thread

I am not going to gloss over the fault of the union in this. The union protected the lack of productivity in the past. The culture at all the domestics 20 years ago was pathetic. If they had been as productive then as they are right now maybe GM would have more in the bank to weather this financial storm.

But, you can't fault the union for extracting as much in wages and benefits as the market will bear. The market has changed and the union has changed with it. Right now the union autoworker is as productive and has a similar wage and benefit package as the non-union foreign transplants. The largest difference of any comparison comes from retirees. The foreign transplants just haven't been around long enough to have any of this baggage.

As of right now, if you were to jettison all the retirees pay and benefits and bring union autoworkers 100% in line with their non-union counterparts you might see a reduction of $100-200 per vehicle.

I have to think the lion's share of blame goes to those non-union management that approved of designs that people didn't want to buy because they were uninspiring and lacked reliability.

But, yeah, fuck the unions. Why focus on the real problem when we have an axe to grind.

 

[Elfear]

Originally posted by: SickBeast
I just did the math on the Canadian bailout of the auto industry.

Based on the initial $4 billion that our government has promised the industry, that works out to $200,000 for each of the 20,000 employees of GM and Chrysler here in Canada.

Now, they are saying they will give them an extra $3 billion. That works out to $375,000 per employee. The government will never recoup that in taxes even if each employee works for 40 years for GM or whatever.

IMO the money would be better spent elsewhere, and if nature runs its course, companies like Honda and Toyota will create new jobs to fill the gap.

I would assume that in the US the figures are similar to what I just quoted in terms of cost per job saved.

Oh please no. Then we would have boring cars all over the place.

I think GM needs to restructure to be profitable in the future. Maybe Chapter 11 would be a good move at this point if they could come out of it more lean and competitive.

 

[Ktulu]

Originally posted by: SickBeast
I just did the math on the Canadian bailout of the auto industry.

Based on the initial $4 billion that our government has promised the industry, that works out to $200,000 for each of the 20,000 employees of GM and Chrysler here in Canada.

Now, they are saying they will give them an extra $3 billion. That works out to $375,000 per employee. The government will never recoup that in taxes even if each employee works for 40 years for GM or whatever.

IMO the money would be better spent elsewhere, and if nature runs its course, companies like Honda and Toyota will create new jobs to fill the gap.

I would assume that in the US the figures are similar to what I just quoted in terms of cost per job saved.

You do realize Toyota is offering 18,000 US workers buyouts, right? YES, Toyota wants to cut it's US workforce. I'm sure Honda will start feeling the affects of the bad economy soon just as Toyota is finally feeling it. They won't be able to help anyone but themselves. You people need to realize that Toyota and Honda are just any regular company looking for profits, they're not trying to save the world.

 

[Carmen813]

Originally posted by: Genx87

Originally posted by: Veramocor
Government should come up with a special bankruptcy plan (GM only screw Chrysler one bailout only). Call it chapter X or something. GM declares a chapter 11 like bankruptcy, the government guarantees warranty claims, government supplies a restructuring loan. In exchange the government gets 1st payment status on the loans and a percentage of the company.

In this quasi chapter 11 GM can ditch dealerships, unwieldy union contracts, and excess brands.

Or you can let the company file and restructure or be split up abd consumed into other more healthy competitors. I see the govt getting involved as prolonging the pain. Much like a cancer patient being pumped full of medicine to live 1 more day.

Woohoo another cancer metaphor!

 

[StageLeft]

Originally posted by: Carmen813

Originally posted by: Genx87

Originally posted by: Veramocor
Government should come up with a special bankruptcy plan (GM only screw Chrysler one bailout only). Call it chapter X or something. GM declares a chapter 11 like bankruptcy, the government guarantees warranty claims, government supplies a restructuring loan. In exchange the government gets 1st payment status on the loans and a percentage of the company.

In this quasi chapter 11 GM can ditch dealerships, unwieldy union contracts, and excess brands.

Or you can let the company file and restructure or be split up abd consumed into other more healthy competitors. I see the govt getting involved as prolonging the pain. Much like a cancer patient being pumped full of medicine to live 1 more day.

Woohoo another cancer metaphor!

As long as I'm on P&N, don't think you've seen the last.

All car companies have to react to a long term reduction in demand for cars. It will be a long while before demand for vehicles is at the numbers it was before this recession. That is indisputable, and the companies cannot possibly maintain size for a 14M car market if it's only at 10M. They have to slash production and workforces. That is the only way. You wouldn't take somebody with pancreatic cancer, pump them full of Vitamin B, and expect them to win an Olympic gold, and this is 100% exactly the same thing.

 

[Thump553]

The present Chapter 11 bankruptcy law is certainly flexible enough to adequately handle a prepackaged Chapter 11 for either GM or Chrysler.

To me the major issues are:

(1) will consumers totally abandon a car company that files Chapter 11 (assuming car warranties are 100% covered under the plan)? Conventional thinking-oft repeated by the car companies-is that they will not. Well we have a perfect experiment running right now with Saab filing Chapter 11 a few days ago. Wait and see.

(2) the out of scale labor costs for the US auto companies are not so much due to wages to current employees, but instead the gold plated health care benefits and huge legacy retirement costs. Correcting this situation solely by cutting current wages is grossly unfair-some sort of overall health care and pension reform is sorely needed.

(3) management style at all the car companies is pretty much molded on the Pentagon model-vast overstaffed bureaucracy that stifle innovation and real product development. It has been this way since at least the end of WWII.

The really sad thing is, if you went back a few years, most people would agree with the statement that the auto industry and commercial banking are the twin pillars of American industry.

 

[BoberFett]

Originally posted by: Skoorb

All car companies have to react to a long term reduction in demand for cars. It will be a long while before demand for vehicles is at the numbers it was before this recession. That is indisputable, and the companies cannot possibly maintain size for a 14M car market if it's only at 10M. They have to slash production and workforces. That is the only way. You wouldn't take somebody with pancreatic cancer, pump them full of Vitamin B, and expect them to win an Olympic gold, and this is 100% exactly the same thing.

I don't understand why people can't see the simplicity of the current situation. Credit cards are maxed and the Home Equity ATM has been shut down. There's simply no money to spend. Everyone has overconsumed for a long time and the economy has to contract. It has no choice.

We can pump money into the car companies but they're not going to sell any more cars than they were. Everybody has a practically new car. How many beaters do you really see on the road these days? Just looking around everything looks 2000+ model year. So why do we think we can drive demand by increasing supply? It's almost like Democrats have become *gasp* supply siders!!!

 

[finite automaton]

I'm just glad the company that I work for doesn't rely on the automotive industry...

 

[StageLeft]

Originally posted by: BoberFett

Originally posted by: Skoorb

All car companies have to react to a long term reduction in demand for cars. It will be a long while before demand for vehicles is at the numbers it was before this recession. That is indisputable, and the companies cannot possibly maintain size for a 14M car market if it's only at 10M. They have to slash production and workforces. That is the only way. You wouldn't take somebody with pancreatic cancer, pump them full of Vitamin B, and expect them to win an Olympic gold, and this is 100% exactly the same thing.

I don't understand why people can't see the simplicity of the current situation. Credit cards are maxed and the Home Equity ATM has been shut down. There's simply no money to spend. Everyone has overconsumed for a long time and the economy has to contract. It has no choice.

We can pump money into the car companies but they're not going to sell any more cars than they were. Everybody has a practically new car. How many beaters do you really see on the road these days? Just looking around everything looks 2000+ model year. So why do we think we can drive demand by increasing supply? It's almost like Democrats have become *gasp* supply siders!!!

Numbers The average car was and probably is still similarly about 9.2 years old. That's not the median, though. I think its number would be different and possibly higher. I cannot find google results on median. One link said the same as average (because the author of one of them didn't understand the difference).

I wonder if that number is dragged down by a minority of really old cars or something because pretty well everybody I run into has a newer car than that. People do replace them far too often. It's like once the loan is paid off (if they even make it that far), the car is about to die so time for a new one. People get used to having car loans and it is socially acceptable to nearly the same degree as a mortgage (it should not be).