Govt to lose $14B of auto bailout funds

[Vette73]

that is my main complaint. how they went about it. it was not so much to save the company but the unions power. then they went about and screwed bond holders in a way that should be against the law.

all in all it was not done in a way i agreed with.

It was not union power but the less cost factor. Pensions are guaranteed by the Employee Retirement Income Security Act of 74. Bond holders are not guaranteed and know going in their risk/reward ratio. In fact giving the Union part ownership weakens them as they now are part of MGT. Hard for the union to say THEY are screwing you as they are also them.

The Gov tried to help the workers as they, the Fed Gov, was on the hook no matter what, bond holders not so much.

 

[piasabird]

Let the overpaid auto worker union slobs lose their jobs. It is a correction that gets rid of fraud and abuse and will reduce the cost of automobiles.

 

[theeedude]

How much money would the government have to pay out in unemployment if the US auto industry and supplier base collapsed?

 

[Patranus]

How much money would the government have to pay out in unemployment if the US auto industry and supplier base collapsed?

A lot less than $140,000 per person.

 

[theeedude]

A lot less than $140,000 per person.

A number you pulled out of your behind. GM and Chrysler alone employ 250K people. Once you start counting the suppliers, you are getting into multiples of that. This was a good deal for the taxpayers.

 

[DirthNader]

The fact that GM and Chrysler both emerged from the process as much stronger companies is a testament to the fact that the process worked. GM is producing some top class cars now and is finding ways to build them here, with American workers, at a competitive cost. I picked up a Chevy Cruze ECO a couple months ago and love it.

Do you really believe that "producing some top class cars now and is finding ways to build them here, with American workers, at a competitive cost" is due to the bailout?

Cycle time on mass-market automotive product is far longer than that. The stuff that GM and Chrysler are producing now was in the works before the bailout. When I worked at the Milford Proving Grounds we were seeing early production builds 2-3 years before the cars made it to market, and we were way down the product development pipeline.

I've also worked at GM plants designing the production tooling; we were a couple of years ahead of vehicles going to market, and that was after decisions were made on where (geographically speaking) to build the product.

The bailouts may have allowed GM and Chrysler to survive long enough for stuff already in the pipe to see the light of day, but implying that cars on the road today are what they are because of restructuring that happened after the fact is wrong.

 

[Genx87]

A number you pulled out of your behind. GM and Chrysler alone employ 250K people. Once you start counting the suppliers, you are getting into multiples of that. This was a good deal for the taxpayers.

More people are employed by the gambling industry. Should we also bail them out for fear of their distribution network collapsing? It is a never ending crisis when you let govt run an economy.

 

[Howard]

This is actually chump change compared to some of the other pork going on, and it seems as though it was a pretty successful endeavour.

 

[ProfJohn]

This is actually chump change compared to some of the other pork going on, and it seems as though it was a pretty successful endeavour.

Very true.

$14 billion to save the car industry is a MUCH better deal that the $600 billion Obama and the Democrats spent to stimulate a lot of nothing.

 

[theeedude]

Very true.

$14 billion to save the car industry is a MUCH better deal that the $600 billion Obama and the Democrats spent to stimulate a lot of nothing.

That is your opinion. There are plenty of jobs saved because of stimulus.

 

[Jhhnn]

Very true.

$14 billion to save the car industry is a MUCH better deal that the $600 billion Obama and the Democrats spent to stimulate a lot of nothing.

As if you had a clue. It's still a better deal than our newest aircraft carrier, however, at $6.2B.

Even Gates argues that we don't need 11 carrier groups, but what would he know?

http://www.acus.org/new_atlanticist/debate-do-we-need-11-carrier-groups-no

 

[Ape]

That is your opinion. There are plenty of jobs saved because of stimulus.

Credible Link?

 

[fskimospy]

Bailouts done in the correct way are fine.

Government bailouts that involved union kickbacks and too much government interference are not.

Sadly the government was the only entity with enough money to save GM & Chrysler, but we should have done it in a way that respected bankruptcy laws and didn't favor unions over bond holders and that limited long term government involvement.

Of course the Democrats couldn't allow a straight up bankruptcy because it would have crushed the UAW and that would never have been allowed to happen. Thus we get the political motivated bailout instead of a total overhaul of these two car companies.

So what's your opinion on the Wall St. bailout then? (I think I have a guess!)

 

[ProfJohn]

TARP worked as it was supposed to and was probably a better deal considering how much more important the bank industry is too the country.

Sadly we have yet to fix the problems that caused all this in the first place.

 

[fskimospy]

TARP worked as it was supposed to and was probably a better deal considering how much more important the bank industry is too the country.

Sadly we have yet to fix the problems that caused all this in the first place.

And the process of TARP ended up giving tons and tons of kickbacks to the ultra rich on Wall St. I don't remember you complaining about those kickbacks though. It's interesting that you attribute the auto bailout to this subversive union influence, do you think Wall St. exerted untoward influence in getting its bailout?

Government intervention was necessary to save the economy, and both bailouts will likely be net gains for America as a whole. I just find it funny that which one people view as corrupt depends heavily on their ideology. If you ask people from the extreme right, the dirty evil unions got their gub'ment money. The other way around and you see Wall St. oligarchs stuffing their pockets. In reality there's an element of that in both bailouts, so why the selective opposition based on it?

 

[mcmilljb]

You get the other $14 billion by not letting Wall Street steal the money from the IPO. Plus you do not let them sell stock until they pay back enough money to fulfill their entire obligation. GM and Chrysler are for-profit businesses, not charities. Hold them accountable for the money they borrowed like we do to private citizens.

 

[rudder]

That is your opinion. There are plenty of jobs saved because of stimulus.

I suppose you are right. We should just keep borrowing money and buying those jobs up at $230,000/each. Borrow enough and unemployment will be zero.

 

[ProfJohn]

And the process of TARP ended up giving tons and tons of kickbacks to the ultra rich on Wall St. I don't remember you complaining about those kickbacks though. It's interesting that you attribute the auto bailout to this subversive union influence, do you think Wall St. exerted untoward influence in getting its bailout?

Government intervention was necessary to save the economy, and both bailouts will likely be net gains for America as a whole. I just find it funny that which one people view as corrupt depends heavily on their ideology. If you ask people from the extreme right, the dirty evil unions got their gub'ment money. The other way around and you see Wall St. oligarchs stuffing their pockets. In reality there's an element of that in both bailouts, so why the selective opposition based on it?

Both bailouts were necessary and both were done mostly right, but both were also flawed in major ways such as giving the unions too much power or allowing the banks to turn around and hand out huge bonuses.

Then again, if I loan my neighbor $1 and he buys a lotto ticket and strikes it rich and then pays me back my $1 should I be upset when he shows up driving a new car? Do I have a right to complain that he took my money and spent it improperly?

I am pretty sure that the banks were required to repay their loans before they could hand out those big bonuses and once they repaid the loans they were free to spend or give away money anyway they choose, that is how this country works.

 

[1prophet]

Whether you agree with the bailout or not, this here is an example of the high profit margin vehicle along with accessories, options and financing that had GM rolling in cash pre-recession.

When the sales and financing of these vehicles tanked so did GM's profits eventually resulting in bankruptcy.

What line of cars exactly are they going to replace that with and still maintain a decent profit so they won't have to get bailed out again?

 

[Vette73]

Whether you agree with the bailout or not, this here is an example of the high profit margin vehicle along with accessories, options and financing that had GM rolling in cash pre-recession.

When the sales and financing of these vehicles tanked so did GM's profits eventually resulting in bankruptcy.



What line of cars exactly are they going to replace that with and still maintain a decent profit so they won't have to get bailed out again?

GM is already making money with $4 a gallon gas.

GMs problem was not making cars that could sell but all the old retirement packages that the old Upper MGT agreed to that current Upper MGT had to pay.

Usually age in a company is not a bad thing but for GM it was a death kneel. New hires don't get the same package/pay that old ones did and the new cars like the cruze, CTS, etc... are selling well. GM looks good right now. And as much fan fare as people give ford, ford has a LOT of debt still on the books. So they are not as clean as most think they are. Even though they also make great cars.