Should the government bailout the American car companies?

[SteveR]

Originally Posted by Tsar

Don't know how credible Canadian newspapers are but anyways.



http://www.agoracosmopolitan.com/hom.../19/02867.html

and that goes back to a problem I posed back in like September of when the stock prices fall to these lows, and there is the possibility of a government intervention, and the projection of the stocks going up, the problem with foreign controlling stakes being bought in essential American infrastructure becomes a huge issue.

[Tsar]

Originally Posted by DevilDougWS6

because you kept posting how it was no big deal and everyone that would become unemployed could just go find another job because "your family did it".

I fully comprehend both sides of the argument, but to me worthless dollar is a bigger issue for my future. As stated before, skilled people will find new work, people who work at the car wash, that were magically included in the 3 million figure, can go and find some other menial work. However, people who have failed to diversify themselves will be out of a job, and that's their fault. And yes anyone can go out and get a job, I can go get one right now and start on Monday, and If my company was going out of business I would.

Anyways, I've been over this already, if you have failed to comprehend the issue I was talking about than... well too bad for you.

[Savage_Messiah]

Originally Posted by Tsar

Don't know how credible Canadian newspapers are but anyways.



http://www.agoracosmopolitan.com/hom.../19/02867.html

Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.

Lol... Mao-founded company.... lemme rephrase, communist leader-founded company (this is backwards already), wants to in a very capitalistic move, buy out 1-2 American automakers.


Who's got a fallout shelter?

[2RARE84s]

Originally Posted by Savage_Messiah

Who's got a fallout shelter?

I already started digging.. wanna help?

[Tsar]

Originally Posted by Savage_Messiah

Lol... Mao-founded company.... lemme rephrase, communist leader-founded company (this is backwards already), wants to in a very capitalistic move, buy out 1-2 American automakers.


Who's got a fallout shelter?

Well I look at it as a guaranteed success. It would be the same if Putin founded an arms dealer

[BonzoHansen]

IMO this means RW is on his way out & fast....this will be in tomorrow's WSJ.

Bankruptcy Is Option to GM Board
WSJ NOVEMBER 22, 2008

DETROIT -- Members of General Motors Corp.'s board of directors are willing to consider "all options" for the ailing auto maker, including an eventual filing for bankruptcy protection, a stance that puts them in rare disagreement with Chairman and Chief Executive Rick Wagoner, people familiar with the matter said.

As part of his push to win a federal bailout for the company, Mr. Wagoner told Congress this week that GM management believes bankruptcy protection is not a viable option for the company. Instead, GM is focusing on persuading lawmakers to provide financial help, Mr. Wagoner said.

The board, which in the past has publicly offered Mr. Wagoner its strong support, agrees that seeking government funding is the company's top priority. But it isn't willing to dismiss the possibility of a bankruptcy filing, say people familiar with the thinking of the board's outside directors.

In a statement provided to The Wall Street Journal on Friday, GM said the board had discussed bankruptcy but didn't view it as a "viable solution to the company's liquidity problems." The board "is committed to considering all options in light of circumstances as they may develop." A GM spokesman, Tony Cervone, said that management is considering doing everything in its power to avoid a filing.

GM said Mr. Wagoner declined to be interviewed. Several of GM's board members could not be reached for comment on Friday. It is unclear whether the board has hired independent advisers to help it evaluate options it may have to consider.

New signs of tension in the boardroom could complicate the next few weeks for Mr. Wagoner, 55 years old. In the past month, he has had to acknowledge GM is using cash at an alarming rate. Mr. Wagoner said that as soon as January, amid frozen credit markets and a collapse in demand for automobiles, the company could fall short of the minimum levels it needs to stay out of bankruptcy court. On Friday, GM shares closed at $3.06, up 18 cents, or 6.25%. A year ago, the stock was trading at about $42.
MORE

Friday's split represented at least the second time in recent weeks the board has shown a willingness to oppose Mr. Wagoner. This fall, Mr. Wagoner's management team presented a plan to potentially merge with Chrysler LLC. Some directors gave that plan a cold reception, according to people familiar with the meetings. By early November, when GM was set to report deep losses and $6.9 billion in cash outflows for the third quarter, the board encouraged GM management to quit the merger talks and focus solely on its liquidity crisis, these people said.

Of GM's 14 board members, nine have been in place since Mr. Wagoner became chairman in 2003. Many were elected when Mr. Wagoner's mentor and predecessor, Jack Smith, was running the auto maker. Lead director George Fisher, the retired chairman of Eastman Kodak Co., several times in recent years voiced support for Mr. Wagoner as the company racked up billions in losses. Other directors include Phil Laskawy, the retired Chairman of Ernst & Young, who was recently named Chairman of Fannie Mae, and University of North Carolina president Erskine Bowles, who was chief of staff for President Bill Clinton.

In a break from its traditional monthly board meetings, early in the summer the board started convening by phone each Friday. In recent weeks it has added several more weekly teleconferences to discuss how GM should approach the liquidity option.

On Friday, GM said it is pushing ahead with new cost-cutting measures. It said three plants in the U.S. and one in Ontario, Canada, would extend their normal two-week holiday shut-downs into January. It also said it would close down an Ontario truck plant sooner than it had planned.

GM also confirmed it is ending leases on two of the five remaining corporate jets in its fleet. The move comes after Mr. Wagoner and Detroit's two other auto CEOs were chastised in Congress for flying corporate jets to meetings this week in which they asked for billions of dollars in public assistance.

"We understand the symbolic issue of people showing up in Washington in corporate jets," GM spokesman Tom Wilkinson said. "We're very sensitive to that."

Mr. Wagoner and the chief executives of Ford Motor Co. and Chrysler LLC were in Washington hoping to get $25 billion from the $700 billion fund administered by the Treasury Department for troubled financial institutions, or to persuade Congress to accelerate the release of $25 billion in loans that had already been pledged to Detroit through an Energy Department fuel-efficiency program.

Mr. Wagoner, Ford's Alan Mulally and Chrysler's Robert Nardelli told lawmakers they have been restructuring their companies and need bridge loans to carry them through until the economy recovers. Mr. Wagoner asked the government for $10 billion to $12 billion in immediate funding.

All three expressed concern that a bankruptcy filing by any one of their companies could cause a collapse of the others. Because the companies share suppliers, one maker's failure could bring down the supplier network, they say, impacting one or both of the others. They also point to studies showing that consumers would be unwilling to buy cars from bankrupt auto makers, out of concern that warranties may not be honored or spare parts could become unavailable.

Lawmakers were skeptical that the companies had taken the tough steps to put their companies on the road to profitability. After enduring two days of harsh criticism, the Detroit CEOs were told to come back by Dec. 2 to describe how they'd use taxpayer funds to become "viable."

On Friday, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said in a letter that auto makers must provide "a forthright, documented assessment" of how much cash they need to become stable for the long term. They also said the companies, if granted loans, must make the government senior to all other creditors, meet fuel-efficiency targets, limit executive pay and offer warrants to allow taxpayers to profit if the companies recover.

Some in Congress remain convinced that bankruptcy is a possible avenue. Republican Sen. Bob Corker of Tennessee, a member of the Senate Banking Committee, said Republican senators have been discussing a so-called prepackaged bankruptcy, in which creditors agree to restructure debts before a company seeks court protection.

Companies sometimes are able to use such an option to avoid long stays in bankruptcy court. Bankruptcy experts warn, however, that a bankruptcy proceeding for a large company such as GM could get bogged down because of its complex union and dealership contracts and array of creditors.
—Sharon Terlep and Josh Mitchell contributed to this article.

[foff667]

Has anyone talked about the fact that laid off workers still receive 95% of their pay even though they aren't building cars as part of their contract?

The whole thing has been about the profit margin but I'm not sure if this has been talked about, obviously if they are paying a premium for these workers and then laying them off & still paying 95% of said premium thats gotta hurt. There was someone on LS1tech talking about someone getting this pay for up to 40 weeks at a clip.

Thats just crazy IMO and if something isn't done it will continue from my understanding, again I'm the last guy you'd be asking about the in's & outs of GM but man, something needs to be done about that.

-Bill

[BigAls87Z28]

Originally Posted by foff667

Has anyone talked about the fact that laid off workers still receive 95% of their pay even though they aren't building cars as part of their contract?

The whole thing has been about the profit margin but I'm not sure if this has been talked about, obviously if they are paying a premium for these workers and then laying them off & still paying 95% of said premium thats gotta hurt. There was someone on LS1tech talking about someone getting this pay for up to 40 weeks at a clip.

Thats just crazy IMO and if something isn't done it will continue from my understanding, again I'm the last guy you'd be asking about the in's & outs of GM but man, something needs to be done about that.

-Bill

You can look at it one of 2 ways.
1: GM is spending money on workers when they dont make a car
2: GM takes care of thier people

[foff667]

Originally Posted by BigAls87Z28

You can look at it one of 2 ways.
1: GM is spending money on workers when they dont make a car
2: GM takes care of thier people

They need to take care of themselves now.

I wonder what will happen to their employees that they were "taking care of" so well if they do somehow go bankrupt?

What will happen to their former, now retired, employees that they took care of? If cashflow is gone do their pensions just get cutoff?

I mean seriously, its great that they wanted to take care of them through thick and thin but they didn't look out for their own best interests from what I can tell and now its gonna bite em in the butt.

Sounds like their employees didn't really help this situation much but I guess GM just wanted to play the nice guy roll & roll over for the union.

-Bill

[BigAls87Z28]

Well, people have said that GM is a Healthcare Finance company that sells cars on the side.

What you are saying Bill is what the Senate wanted to know about. Its become so common and been for so long, that no one in the auto world would question it, but jobs bank and things like that are perplexing to your average person.

[DevilDougWS6]

Originally Posted by Tsar

Anyways, I've been over this already, if you have failed to comprehend the issue I was talking about than... well too bad for you.

there are a lot of issues being thrown around in here.

[Frosty]

Did you see the Treasury Department is weighing it's options on bailing out Citigroup? Yet another **** up in the financial sector and yet they still can't come up with a plan to throw Detroit a bone...

This is very frustrating to watch.

[damon_Z]

Originally Posted by foff667

...obviously if they are paying a premium for these workers and then laying them off & still paying 95% of said premium thats gotta hurt...

-Bill

It's an outrage, because every other laid off person has to line up in the unemployment line. I think the nicest thing GM should do is just give these workers a cardboard box for them to live in.

[SteveR]

In other news, Congress said today that they'll hand over 10-20 billion to Citigroup. That sure was a quick decision.

[BigAls87Z28]

Awesome!! **** it! Give them 200 billion!!

[twin99]

Originally Posted by foff667

They need to take care of themselves now.

I wonder what will happen to their employees that they were "taking care of" so well if they do somehow go bankrupt?

What will happen to their former, now retired, employees that they took care of? If cashflow is gone do their pensions just get cutoff?

I mean seriously, its great that they wanted to take care of them through thick and thin but they didn't look out for their own best interests from what I can tell and now its gonna bite em in the butt.

Sounds like their employees didn't really help this situation much but I guess GM just wanted to play the nice guy roll & roll over for the union.

-Bill

I read somewhere that there pensions are backed by the US gov't.
So even if GM goes bankrupt they would get money.

[BonzoHansen]

Originally Posted by twin99

I read somewhere that there pensions are backed by the US gov't.
So even if GM goes bankrupt they would get money.

Google PBGC

[BonzoHansen]

IMO He is dead nut on. I'm sending this to my congressman.


If I had the floor at the auto rescue talks...

BY MITCH ALBOM
FREE PRESS COLUMNIST

OK. It's a fantasy. But if I had five minutes in front of Congress last week, here's what I would've said:

Good morning. First of all, before you ask, I flew commercial. Northwest Airlines. Had a bag of peanuts for breakfast. Of course, that's Northwest, which just merged with Delta, a merger you, our government, approved -- and one which, inevitably, will lead to big bonuses for their executives and higher costs for us. You seem to be OK with that kind of business.

Which makes me wonder why you're so against our kind of business? The kind we do in Detroit. The kind that gets your fingernails dirty. The kind where people use hammers and drills, not keystrokes. The kind where you get paid for making something, not moving money around a board and skimming a percentage.

You've already given hundreds of billions to banking and finance companies -- and hardly demanded anything. Yet you balk at the very idea of giving $25 billion to the Detroit Three. Heck, you shoveled that exact amount to Citigroup -- $25 billion -- just weeks ago, and that place is about to crumble anyhow.

Does the word "hypocrisy" ring a bell?

Protecting the home turf?

Sen. Shelby. Yes. You. From Alabama. You've been awfully vocal. You called the Detroit Three's leaders "failures." You said loans to them would be "wasted money." You said they should go bankrupt and "let the market work."

Why weren't you equally vocal when your state handed out hundreds of millions in tax breaks to Mercedes-Benz, Hyundai, Honda and others to open plants there? Why not "let the market work"? Or is it better for Alabama if the Detroit Three fold so that the foreign companies -- in your state -- can produce more?

Way to think of the nation first, senator.

And you, Sen. Kyl of Arizona. You told reporters: "There's no reason to throw money at a problem that's not going to get solved."

That's funny, coming from such an avid supporter of the Iraq war. You've been gung ho on that for years. So how could you just sit there when, according to the New York Times, an Iraqi former chief investigator told Congress that $13 billion in U.S. reconstruction funds "had been lost to fraud, embezzlement, theft and waste" by the Iraqi government?

That's 13 billion, senator. More than half of what the auto industry is asking for. Thirteen billion? Gone? Wasted?

Where was your "throwing money at a problem that's not going to get solved" speech then?

Watching over the bankers?

And the rest of you lawmakers. The ones who insist the auto companies show you a plan before you help them. You've already handed over $150 billion of our tax money to AIG. How come you never demanded a plan from it? How come when AIG blew through its first $85 billion, you quickly gave it more? The car companies may be losing money, but they can explain it: They're paying workers too much and selling cars for too little.

AIG lost hundred of billions in credit default swaps -- which no one can explain and which make nothing, produce nothing, employ no one and are essentially bets on failure.

And you don't demand a paragraph from it?

Look. Nobody is saying the auto business is healthy. Its unions need to adjust more. Its models and dealerships need to shrink. Its top executives have to downsize their own importance.

But this is a business that has been around for more than a century. And some of its problems are because of that, because people get used to certain wages, manufacturers get used to certain business models. It's easy to point to foreign carmakers with tax breaks, no union costs and a cleaner slate -- not to mention help from their home countries -- and say "be more like them."

But if you let us die, you let our national spine collapse. America can't be a country of lawyers and financial analysts. We have to manufacture. We need that infrastructure. We need those jobs. We need that security. Have you forgotten who built equipment during the world wars?

Besides, let's be honest. When it comes to blowing budgets, being grossly inefficient and wallowing in debt, who's better than Congress?

So who are you to lecture anyone on how to run a business?

Ask fair questions. Demand accountability. But knock it off with the holier than thou crap, OK? You got us into this mess with greed, a bad Fed policy and too little regulation. Don't kick our tires to make yourselves look better.

Contact MITCH ALBOM at 313-223-4581 or malbom@freepress.com. Catch "The Mitch Albom Show" 5-7 p.m. weekdays on WJR-AM (760).


http://www.freep.com/article/2008112...811230371/1082

[Frosty]

A-****ing-MEN!

[Tru2Chevy]

What a well written column....

- Justin

[NJSPEEDER]

That hits the nail on the head.

-Tim

[chemicalstylez]

Bail em out. GMs union contract expires in 2010, after that they'll be fine.

[shane27]

the only thing that is going to help companies bail themselves out is, themselves. make better products and reasonable prices and maybe people will start buying again. thanks to the internet people know whats good and what sucks.

companies cant get away with making **** products anymore.

[NJSPEEDER]

The domestics have as high or higher initial quality and customer satisfaction ratings than most of hte imported brands and if you go model line for model line, the domestics all cost less.

You can't reinvent an image over night, that takes time. The quality issues of the 70's and 80's are mere memories now, unfortunately, all too strong memories.

Because of the lack of support from our own government and poor advertising plans, some of the residue of that negative stereotype of the US manufacturers still exists. It won't take much help(to scale of the financial bail outs) to get them through this tough spot, but it will cost the nation immensely if we don't.

I think it is very important to remember that the automotive industry is asking for loans, not gifts. They are not asking for or expecting the free ride that the finance industry got. Just loans, at the fed prime rate, with stipulations of pay back and reorganization plans. This is not the same gift that our congress keeps handing to the financial market over and over again.

-Tim

[Frosty]

Tim is right, image is everything. People still think of the 90's and...hell..even early 2000's. You also have people that might have bought one 80's GM or Ford vehicle and it turned out to be junk, they still swear they'll never buy another domestic. The media doesn't help either...Toyota, Nissan and Hon-duh are Gods in this country, RARELY do you hear of any recalls over the news for them(and yes, they are recalls) yet the second GM or Ford has one it's like someone insulted Jesus...it's all over the news.

GM and Ford will be fine, they made mistakes and were late to the party on what vehicles are selling but they'll come out of this.