Should the government bailout the American car companies?

[pound]

well initially yes people did lose their jobs, but once everything shook out in the long term other airlines filled the gaps and needed workers to do it.

[1QWIKBIRD]

Originally Posted by Tsar

If working in wal mart is not your cup of tea, than it is your problem not mine. If you need a job, find one. Simple as that. It's totally different than not finding a job you want or like. But it is pretty easy to find a job that people typically do not like, such as wal mart. I will always stand by my statement. My family has done it, so can others.

Congrats to you and your family, but you "did it" during a robust U.S economy, which no doubt provided more opportunity than a crippled U.S ecocnomy. That is undeniable.

Wonder what would happen if you "did it" when the bottom has fallen out of the economy with soaring inflation and unemployment? I applaud your family's efforts and I agree that some people need to get off their @$$ and get to work, but don't oversimplify.

That said, the governement needs to throw the Big Three a bone here, not just cut them a blank check like the banks got, but do something. Two things drive the US economy, housing/construction and cars. Why? Because they are the only significant manufacturing sectors left in this country and one of them is in the toilet (housing) and the other is ready to flatline. The combined effect of this on the US labor force and economy isn't something I want to see. A bailout is no guarantee to success, but you have to try.

Chris

[redbanditZ28]

A few months back I was watching autoline detroit and I could have sworn they mentioned that GM sells a lot of cars in Korea. And I thought I heard that their Buick line was popular in some Asian country. I was never under the impression that GM had trouble selling outside of the country, unless things drastically changed over the last few months, which wouldn't be surprising. I always thought GM cars were actually more popular in foreign countries than they are here. At least that is what I have read in some media websites or watched on tv.

[BigAls87Z28]

Originally Posted by redbanditZ28

A few months back I was watching autoline detroit and I could have sworn they mentioned that GM sells a lot of cars in Korea. And I thought I heard that their Buick line was popular in some Asian country. I was never under the impression that GM had trouble selling outside of the country, unless things drastically changed over the last few months, which wouldn't be surprising. I always thought GM cars were actually more popular in foreign countries than they are here. At least that is what I have read in some media websites or watched on tv.

GM now sells more cars outside of the US then in the US.

But there are major restrictions to that.
In Japan, GM or any other big auto maker outside of the Japanese have massive amounts of restrictions on building, or selling vehicles in that country.
In China, if you want to sell cars in thier country, you have to team up with one of thier companies in a joint venture and share profit.
Western Europe, there are a lot of financial restrictions on importing cars, which is why GM, years ago, purchased Adam Opel and later on, Saab. GM is also making some headway in Eastern Europe, where there are NO restrictions! They just opend up a 300million dollar plant in Russia, and the Chevy Lacetti just surpased the Ford Focus as the #1 selling car in Russia.

There is a lot of hope for GM if they can make it out of this alive. Its all about surviving the next year or two. Not only do they have the UAW thing kicking in, but also a massive title wave of product that they are ready to launch, several new advanced powertrain set ups, the Volt, and with all the pent up demand for a new car that should explode on the market, anyone still around to enjoy the wave will be happy.
America can make back that 25 billion quickly from all 3 automakers. I wouldnt hold my breatho n that 700 billion...

[Tsar]

Originally Posted by BigAls87Z28

Congrats, you can say wow. English isnt so bad now is it?

No it's not, I can actually say it in 3 languages.

Id say that MOST of the people that "will never buy again" due to a failure in thier car turned out to be an OE, or Operator Error.

Stats? You can't just tell me "most" and leave it at that. Anyone can pull out random numbers.

Can I blame the people who have a bad taste in thier mouth? No. But to totaly ignore, remove themselves from the thought of every owning ANY American automobile ever again because thier Geo Metro was a POS.

Im not saying that people should buy American to be American. But people need to due thier own research, test drive the cars, and be happy with thier purchase.

I'm all for it, but the problem is once someone had a bad experience they tend to stay away from the product. When I will be buying a car there is no doubt that I will do my research and not just plainly go on some stupid myth. But that is me, we as car enthusiasts are not "average" Americans who do not know how to replace a tire, we have more info to base our decision on unlike them. We can make a better choice, for most people cars are an A to B transport and nothing more. So if they bough GM ten years ago, and it broke down 9 times in 36 months and later they bought a honda that did not, well why would they switch back?

Once again I'm all for shopping around, and I'm not one of the people who would ignore a car for a past manufacturers mistake, but we are not talking about me here.

People do want the Big 3 to have the money. Most people are upset that they will get it with no strings attached. But most people do want this.

Last time I saw a poll on this it was 65% against. But feel free to prove me wrong with some data.

My point is...why do we have to give the banks the other 350billion? I dont see the need. Banks seem to be doing ok now. Outside of Citi cutting 53k people today, rates are cut so low that there is no reason the banks should not be lending.
I say throw 200billion back into the kitty, and 150b to the Big 3 and Tier 1 suppliers to sure them up.

I say stop PRINTING money and stop giving them away to ANYONE. No one has addressed the issue of inflation and how that would be horrible for our future. Sure it is not that hard to print a few trillion dollars, but I do not want to live in Zimbabwe.

Then you move foward to prevent this from happening again. The Big 3 must move towards profitability, and the goverment must work with them for that goal.

For some reason I doubt that Big 3 will turn over night. Maybe it's just me.

Prices of food have been climing for many reasons. First it was fuel costs, then it was costs of something else, now its inflation.

They have been climbing because of inflation, with a few other causes. They just didn't say that on TV.

Its not as simple as just finding another job. If 16% of Americans dont have a job to spend money, then even places like walmart will not be able to hire the people because no one is spending becaue no one has money.

Actually Wal Mart is posting record profits, Aldi is expanding at a rate of 100 stores per year. I could look up some other retail food stores that I'm sure are not doing terribly too bad (as long as they are not over priced) but I have to go to class soon.

When people do not have money, THEY WILL GO TO ALDI AND WAL MART because they are cheaper = more expansion for both of the above = more work. I do not think they would be expanding if they were suffering losses, especially aldi because they operate on cash only policy.

Towns will colapse, the city of Detroit will become a ghost town, industry as a whole will falter faster then ever before.
America will lose its core manufacturing and industry OVERNIGHT!!!
You know what, the Big 3 are also some of the largest purchasers of medication for the UAW, but guess what will happen when they cant buy the drugs? Drug companies will then take a hit, healthcare for the US will dry up. Beyond the secondary supplier jobs, it would hit so hard.
And who is gunna build all our wepons? With most of all the major manufacturing gone, it will be outsourced.

Look up the sky is falling.

Its a big more complicated then just getting a job at Walmart. When 3 million people are jobless overnight, in an economy where no one is hiring, its gunna hurt REAL bad. Its not like we have this vast and expansive job bank for Americans to fill.

Plenty of places are hiring, at least right now. You just have to search for it.

I just clicked on my schools website, and we have 44840 job openings RIGHT NOW, in all sorts of different fields! Strangely enough I do not want any of them, but that doesn't mean that there aren't any opportunities.

Originally Posted by NJSPEEDER

Good, so your example is a few people looking for a job, how does that apply to a scale of millions? Are there a million openings at WalMart? How about the local grocery store? Does every employee have the knowledge or education to adapt to every job opening in the paper? Do all of these newly unemployed have the savings or opportunity to get re-educated to qualify for other positions? Would a few million people be able to find new jobs at comparable income levels to continue to contribute the same way to the economy?

The answer to all of these questions is no.

Just like so many other debates you enter, it is clear that despite all of the reading you have obviously done, you have no concept of scale.

-Tim

If you made yourself obsolete throughout your career and can not find a job, that is your problem. Stop being one dimensional. I'm a big believer in personal responsibility, it doesn't seem like many people here are. And I clearly do know that giving away money that one does NOT have is BAD. What was that debt thingy again? Oh yea, 10,632,143,514,606.64 (that's in trillion for people who do not know numbers) at this very second. That means I (and YOU) owe about 35k, for what? I have never been late on any payment in my life, in fact my credit score is in higher 700's, which is top 2% of the country. Yet people want to be in bigger debt which will eventually lead to a default. Lets print more money!!!

Hey I wanna buy a Ferrari F-430, lend me some money!

Originally Posted by 1QWIKBIRD

Congrats to you and your family, but you "did it" during a robust U.S economy, which no doubt provided more opportunity than a crippled U.S ecocnomy. That is undeniable.

Wonder what would happen if you "did it" when the bottom has fallen out of the economy with soaring inflation and unemployment? I applaud your family's efforts and I agree that some people need to get off their @$$ and get to work, but don't oversimplify.

I do not want any part of my mothers credit, I did not do anything, she did. With that said, she worked in Stop and Shop and Cleaned peoples apartments when she got here. Those jobs will be here no matter what. Rich will always be rich, and well Wally World is doing pretty good. Hell my dad used to ref little league games for extra 50 bucks on the weekend, or right before he got to work. As Adidas says, Impossible is nothing - and to me people are just lazy and want a hand out (for the most part)

[Tsar]

Originally Posted by BigAls87Z28

Eastern Europe, where there are NO restrictions! They just opend up a 300million dollar plant in Russia, and the Chevy Lacetti just surpased the Ford Focus as the #1 selling car in Russia.

So if we follow your previous logic, Russians should put some big ass tariffs on GM because they are foreign, and make them equal to all the Russian auto manufacturers ( that would be horrible ). After all that is what they want to do to keep the National (Piece of Crap) Brand going. And they will eventually, the problem is Russian people are SO SICK OF SUBPAR (Russian craptastic cars) product that they would rather buy a 15 year old BMW than a new Russian car.

Here is a product that awesome Russian manufacturer has produced for as long as I can remember myself. I would choose ANY car over that, and that costs around 10k I believe...


At least they are getting some decent cars from GM and Ford now.

[Frosty]

I think we should give you two your own forum.

[Tsar]

Originally Posted by Frosty

I think we should give you two your own forum.

I'm just bringing back some life into this section

[BigAls87Z28]

Originally Posted by pound

The big three produce X number of cars per year. That means there is consumer demand to buy X number of cars. There is also a minimum amount of labor required to produce those cars. If one of more of the big three go away people will still want to buy X number of cars. Someone else foreign or domestic will step up to meet the demand for these vehicles and they will need to hire people to do it and will need to buy parts from suppliers. Just because a company is closing its doors doesn't mean there is no demand for products that they sell. Take a look at the airlines. Plenty of them have gone under, and their competitors filled the demand for flights and had to hire people to provide those flights. Also, I'm not retarded.

Everyone keeps comparing the Airlines to the Big 3.
This would be like Boeing and General Dynamics going out of business, not Conti, American or United.
The airlines sell a service. Services can be recreated elsewhere.
If you stop production of the actual air planes themselves, then where is American gunna be able to purchase it? What about the suppliers to Boeing? What abotu the military implications? What about the steel mill workers who supply the metals for airplanes?

The Big 3 going under would put this country into an economic tail spin farther and faster then it is in now. That would mean that more people would have less money to buy things, be it that the other import automakers can kieep up or not.
People are also not going to just be honky dorry about this either. There will be a massive, probably mostly from the mid west, hatred for import auto companies. Dont be upset if you drive a Camry in kansas city, and you come out to a smoldering wreck.

[BigAls87Z28]

Originally Posted by Tsar

So if we follow your previous logic, Russians should put some big ass tariffs on GM because they are foreign, and make them equal to all the Russian auto manufacturers ( that would be horrible ). After all that is what they want to do to keep the National (Piece of Crap) Brand going. And they will eventually, the problem is Russian people are SO SICK OF SUBPAR (Russian craptastic cars) product that they would rather buy a 15 year old BMW than a new Russian car.

Here is a product that awesome Russian manufacturer has produced for as long as I can remember myself. I would choose ANY car over that, and that costs around 10k I believe...


At least they are getting some decent cars from GM and Ford now.

Sure, if Russia wanted to put up restrictions on imported and even domestic built cars made by foreign companies, that is up to them.
They dont, and everyone is taking advantage of it, including GM. Its good for GM, and right now good for Russia. But Russia's auto copanies isnt nearly as strong, nearly as great, nearly as helpful to Russia's economy. Russia has an auto industry that is based off other countries automakers. VW, GM, Ford, and Toyota all have tried to make headway there.

But in the end, it has NOTHING to do with what is going on with America's auto makers.

[LS1Hawk]

Just read this on Bloomberg: http://www.bloomberg.com/apps/news?p...t8&refer=japan

GM Collapse Would Have `Huge' Global Impact, Nakagawa Says
By Keiko Ujikane and Keiichi Yamamura


Nov. 18 (Bloomberg) -- Japanese Finance Minister Shoichi Nakagawa indicated that his government wouldn't protest any U.S. decision to prop up General Motors Corp. because a collapse of the automaker would hurt the rest of the world.


``The auto industry is a hugely important employer and there are so many related industries,'' Nakagawa said in an interview with Bloomberg Television in Tokyo today. ``The effects would not simply be the collapse of a single company. The effects would be huge -- not just for America, but for Europe and Japan as well.''



GM, Ford Motor Co. and Chrysler LLC are seeking government aid as industrywide sales have plummeted to a 17-year low. Failure of a U.S. carmaker would risk the collapse of parts makers that also supply Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., disrupting production at the Japanese automakers' North American factories.



``Japan would support a bailout'' of U.S. automakers, said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo. ``The government isn't concerned about the direct impact of the bankruptcies so much as how the failures might trigger a deeper financial crisis around the world.''



GM this month said it lost $4.2 billion in the third quarter and almost $73 billion since the end of 2004, and that it may not have enough cash to get through the year. Toyota is set to eclipse GM as the world's biggest automaker by the end of the year.


``I believe the U.S. government will adopt policies and take action to prevent a hard landing with responsibility,'' Nakagawa said. ``If the worst-case scenario does materialize, not just Japan but the whole world will feel the effects.''



A GM collapse would cost the U.S. government as much as $200 billion in aid to affected states, unemployment benefits and costs of reviving the economy, according to an estimate prepared last week by Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts.



Job losses would total 2.5 million from an automaker failure in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 study by the Center for Automotive Research in Ann Arbor, Michigan.

[BigAls87Z28]

Originally Posted by Tsar

Stats? You can't just tell me "most" and leave it at that. Anyone can pull out random numbers.

Work in the auto service industry long enough, you realize that a lot of people, like you say below, dont know **** about cars. Look at the blame Ford and Firestone both got for the blowouts in the mid 90's. Soccer moms driving around on 15 psi in thier car, on teh cell phone, yelling at kids, and a squirel pops onto the road. But no, blame was put on Ford for making weak roofs, and Firestone had to recall millions of tires due to weak sidewalls.
But you know what happend? Its not a LAW that every automaker has to put TPM sensors in 07 and future vehicles so that people dont kill themselves.

I'm all for it, but the problem is once someone had a bad experience they tend to stay away from the product. When I will be buying a car there is no doubt that I will do my research and not just plainly go on some stupid myth. But that is me, we as car enthusiasts are not "average" Americans who do not know how to replace a tire, we have more info to base our decision on unlike them. We can make a better choice, for most people cars are an A to B transport and nothing more. So if they bough GM ten years ago, and it broke down 9 times in 36 months and later they bought a honda that did not, well why would they switch back?

I dont blame them for not trying GM again, but some people take that as All GM or all domestic cars are crap. Or even worse, they know of someone who purchased a GM and had problems and use that small example as a reason to never buy. It also goes both ways too.

Last time I saw a poll on this it was 65% against. But feel free to prove me wrong with some data.

You can look at the poll on this board.
I have not seen a poll saying either way, but support for bailing them out in Congress is what is important.

I say stop PRINTING money and stop giving them away to ANYONE. No one has addressed the issue of inflation and how that would be horrible for our future. Sure it is not that hard to print a few trillion dollars, but I do not want to live in Zimbabwe.

No one wants too. But inflation is something that our goverment can deal with, we can bring that back down, we have done it before.
All day on CNBC they talked about it.

For some reason I doubt that Big 3 will turn over night. Maybe it's just me.

Its not overnight. Its not gunna happen right away. But they are developing ways to slim down. GM is at a disadvantage because they have a lot of brands. But the money to cut down on divisions, the money to cut down plants, the money to inject into existing plants to make future product, is not there.
Some have said that GM is looking for the bail out to remove itself of a lot of problems such as paying off dealers, cutting divisions, cutting plants.

They have been climbing because of inflation, with a few other causes. They just didn't say that on TV.

Inflation has only just become a problem.

Actually Wal Mart is posting record profits, Aldi is expanding at a rate of 100 stores per year. I could look up some other retail food stores that I'm sure are not doing terribly too bad (as long as they are not over priced) but I have to go to class soon.

When people do not have money, THEY WILL GO TO ALDI AND WAL MART because they are cheaper = more expansion for both of the above = more work. I do not think they would be expanding if they were suffering losses, especially aldi because they operate on cash only policy.

Well, then thats the answer. 3 million people can just work at Wal Mart.
Outside of Walmart, every other retailer is having problems. Retailers are ready for a poor holiday season.

Look up the sky is falling.

It could.

Plenty of places are hiring, at least right now. You just have to search for it.

I just clicked on my schools website, and we have 44840 job openings RIGHT NOW, in all sorts of different fields! Strangely enough I do not want any of them, but that doesn't mean that there aren't any opportunities.

Ok, so you know what? Im satisfied that even though the Backbone American Industry and Economy will go bankrupt, either Chap 11 or Chap 7, that everyone will be just fine because there are a few thousand jobs out there to take up the slack.
Lets not worry about the massive forclosure numbers that will happen when people have thier income slashed in half. Lets not worry about the draw on unemployment.
It will be a seemless transition and things will be better.
Thread over.

If you made yourself obsolete throughout your career and can not find a job, that is your problem. Stop being one dimensional. I'm a big believer in personal responsibility, it doesn't seem like many people here are. And I clearly do know that giving away money that one does NOT have is BAD. What was that debt thingy again? Oh yea, 10,632,143,514,606.64 (that's in trillion for people who do not know numbers) at this very second. That means I (and YOU) owe about 35k, for what? I have never been late on any payment in my life, in fact my credit score is in higher 700's, which is top 2% of the country. Yet people want to be in bigger debt which will eventually lead to a default. Lets print more money!!!

Wait till 4% of GDP disappears off the books.

Hey I wanna buy a Ferrari F-430, lend me some money!

Cant, your credit score isnt high enough, and you dont have a job, so stick with your firebird.

I do not want any part of my mothers credit, I did not do anything, she did. With that said, she worked in Stop and Shop and Cleaned peoples apartments when she got here. Those jobs will be here no matter what. Rich will always be rich, and well Wally World is doing pretty good. Hell my dad used to ref little league games for extra 50 bucks on the weekend, or right before he got to work. As Adidas says, Impossible is nothing - and to me people are just lazy and want a hand out (for the most part)

Well, thats it. People are lazy, people are stupid, and people are dumb.
Good thing Walmart is hiring.

[BigAls87Z28]

Germany and Sweeden are moving to support thier auto makers, including Opel and Saab.

http://www.reuters.com/article/rbssC...00251120081117

http://money.cnn.com/news/newsfeeds/...1_FORTUNE5.htm

Why should GM continue to put up with America's ****** I say move HQ to another country, namely Hong Kong, and move foward with people that want to support a business that supports thier country.

[alamantia]

You think Detroit is bad now? I think the govenrment is looking to not have a Beruit within the US border. Think about nation wide results. I wonder how many families would be impacted by every plant shutting down, new car sales haulting. My father works for saturn pontiac service, how long would servic continue, distrabution, parts, etc. I would only venture to say that the auto industry effects a very large portion of our nations economy. In my novice understanding the federal reserve is kept to reconise and dispurse aid in the form of a loan to any pending crisis to avoid further trickle effect of the economy. The auto industry failing would be the beginning of a long cycle of unemployment and that is bad. I hope that we are smart enough to dispurse needed funds in the right areas to rebound this economy, I hope that the Auto industry stays intact. Mergers are just a temporary means to an end. Once great rivals like the New Yourk central and Penn central railroads merged to avoid extinction, it only lasted a few years. And thats back when Railroads were americas greatest monopolys

[BonzoHansen]

Point…............................................ .........

OPINION
NOVEMBER 10, 2008 WSJ
Detroit Auto Makers Need More Than a Bailout
By PAUL INGRASSIA

As President-elect Barack Obama prepares to enter the White House, he must ponder what to do about the world's trouble spots: Iran, Iraq, North Korea, the Caucasus. And, oh yes, Detroit.

On Friday, General Motors and Ford announced more multibillion-dollar losses in the third quarter; closely held Chrysler doesn't publicly report results. When GM, which seems in the worst shape, was 45 minutes late releasing its results, rumors spread that a bankruptcy filing was imminent. It wasn't, but the company says it could run out of cash in the first half of next year. Make that the first quarter if the current cash bleed continues. GM is lobbying furiously for emergency federal assistance, with Ford and Chrysler close behind.

Let's assume that the powers in Washington -- the Bush team now, the Obama team soon -- deem GM too big to let fail. If so, it's also too big to be entrusted to the same people who have led it to its current, perilous state, and who are too tied to the past to create a different future.

In return for any direct government aid, the board and the management should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver -- someone hard-nosed and nonpolitical -- should have broad power to revamp GM with a viable business plan and return it to a private operation as soon as possible.

That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others, and downsizing the company. After all that, the company can float new shares, with taxpayers getting some of the benefits. The same basic rules should apply to Ford and Chrysler.

These are radical steps, and they wouldn't avoid significant job losses. But there isn't much alternative besides simply letting GM collapse, which isn't politically viable. At least a government-appointed receiver would help assure car buyers that GM will be around, in some form, to honor warranties on its vehicles. It would help minimize losses to the government's Pension Benefit Guaranty Corp.

But giving GM a blank check -- which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant -- would be an enormous mistake. The company would just burn through the money and come back for more. Even more jobs would be wiped out in the end.

The current economic crisis didn't cause the meltdown in Detroit. The car companies started losing billions of dollars several years ago when the economy was healthy and car sales stood at near-record levels. They complained that they were unfairly stuck with enormous "legacy costs," but those didn't just happen. For decades, the United Auto Workers union stoutly defended gold-plated medical benefits that virtually no one else had. UAW workers and retirees had no deductibles, copays or other facts of life in these United States.

A few years ago the UAW even waged a spirited fight to protect the "right" of workers to smoke on the assembly line, something that simply isn't allowed at, say, Honda's U.S. factories. Aside from the obvious health risk, what about cigarette ashes falling onto those fine leather seats being bolted into the cars? Why was this even an issue?

When GM's bond ratings plunged into junk territory a couple years ago the auto maker sold 51% of its financing arm, GMAC, to Cerberus, a private-equity powerhouse. Then last summer Cerberus bought 80% of Chrysler from Daimler for just 25% of what the German company paid for the company a decade earlier. It looked like a great deal at the time, like buying a "fixer upper" house at a steep discount. Until, that is, you have to shell out big bucks to shore up the foundation, repair the leaky roof, etc.

Cerberus tried hard in recent weeks to sell Chrysler to GM, with government financial assistance. Controlling GMAC's lending to GM dealers and customers gave Cerberus enormous leverage at the negotiating table. Cerberus squeezed hard, say industry analysts and insiders, but the GM board balked. Last Friday the companies said the talks were off -- "for the moment," as the company's chief operating officer put it.

For the moment? How about, like, forever? Buying Chrysler would just give GM an excuse to delay the fundamental task of putting its house in order. Management would turn its energy to producing pretty PowerPoint slides with all the requisite buzzwords: synergies, transformation, downsizing, rightsizing and exercising. What's needed, instead, is exorcising.

A thorough housecleaning at GM is the only way to give the company a fresh start. GM is structured for its glory days of the 1960s, when it had half the U.S. car market -- not for the first decade of this century, when it has just over 20% of the market. General Motors simply cannot support eight domestic brands (Cadillac, Buick, Pontiac, Chevrolet, GMC, Saturn, Saab and Hummer) with adequate product-development and marketing dollars. Even the good vehicles the company develops (for example, the Cadillac CTS and Chevy Malibu) get lost in the wash.

Nevertheless, the current board of directors and management have stuck stubbornly to this structure. The lone exception was a dissident director, Jerome B. York, who resigned a couple years ago. He warned that without fundamental changes the "unthinkable" might happen to GM. Well, here we are.

Which brings us back to what the government should do. If public dollars are the only way to keep General Motors afloat, as the company contends, a complete restructuring under a government overseer or oversight board has to be the price.

That is essentially the role played by the federal Air Transportation Stabilization Board in doling out taxpayer dollars to the airlines in the wake of 9/11. The board consisted of senior government officials with a staff recruited largely from the private sector. It was no figurehead. When one airline brought in a lengthy, convoluted restructuring plan, a board official ordered it to come back with something simpler and sustainable. The Stabilization Board did its job -- selling government-guaranteed airline loans and warrants to private investors, monitoring airline bankruptcies to protect the interests of taxpayers -- and even returned money to the government.

As for Ford and Chrysler, if they want similar public assistance they should pay the same price. Wiping out existing shareholders would end the Ford family's control of Ford Motor. But keeping the family in the driver's seat wouldn't be an appropriate use of tax dollars. Nor is bailing out the principals of Cerberus, who include CEO Stephen Feinberg, Chairman John Snow, the former Treasury secretary, and global investing chief Dan Quayle, former vice president.

Government loan guarantees, with stringent strings attached and new management at the helm, helped save Chrysler in 1980. But it's now 2008, 35 years since the first oil shock put Japanese cars on the map in America. "Since the mid-Seventies," one Detroit manager recently told me, "I have sat through umpteen meetings describing how we had to beat the Japanese to survive. Thirty-five years later we are still trying to figure it out."

Which is why pouring taxpayer billions into the same old dysfunctional morass isn't the answer.

Mr. Ingrassia is a former Dow Jones executive and Detroit bureau chief for this newspaper.

…counter point…............................................ .........

WSJ 11/18/2008

In "Detroit Auto Makers Need More Than a Bailout," (op-ed, Nov. 10), Paul Ingrassia misses the key point: GM was well along in precisely the kind of transformation Mr. Ingrassia is calling for when it was hit with a credit crisis of historic proportions.

Mr. Ingrassia, a former Journal reporter, laces his argument with colorful tales from the past. It is worth looking at what is actually going on in the present. GM products now compete with the best. The Cadillac CTS, Chevy Malibu and Buick Enclave are just the first of the new generation of cars and crossovers emerging from GM's global product programs. Even in the current downturn, GM intends to keep important new products coming, including the Chevy Volt extended-range electric car.

Similarly, Mr. Ingrassia overlooks the major strides GM has made in resizing its U.S. capacity and increasing its efficiency. GM productivity is now comparable to that of the transplants, according to the Harbour Report, and GM has closed the quality gap as well. GM has accomplished this with half the hourly workers it had in 2000. If that isn't a major restructuring, what is?

Recent labor negotiations have transformed the labor-management relationship in ways that Mr. Ingrassia seems to ignore. The 2007 agreements, when fully implemented in 2010, will finish closing the cost gap with non-union transplants. GM has recently taken more than $9 billion out of its structural cost in North America, and has outlined a plan to enhance its liquidity position by $20 billion through 2009. This is hardly "the same old dysfunctional morass."

Had Mr. Ingrassia still been following GM as a working reporter, he would understand that GM's financial results over the past few years reflect significant charges for restructuring, and that the company was successfully managing this process until frozen credit markets and plunging auto sales brought on the current crisis.

In short, the restructuring Mr. Ingrassia is calling for is well underway. The GM board and leadership have been aggressively repositioning the company for sustainable success. Government loans to help GM weather the credit crisis and complete this transformation would be a good investment in this future.

Steven J. Harris
Vice President
Global Communications
General Motors Corp.
Detroit

[BigAls87Z28]

People are also forgetting that its not a "bail out" but a bridge loan to help retool and gear for a new company. They will have to pay it back asap. I think there is a 4% intrest for the first 5 years, and then it jumps to 7 or so after that, with an increase every year after that.
No bonus's for anyone making over 250k
No dividend for stocks which can hurt GM for investments.

[NJSPEEDER]

Originally Posted by BigAls87Z28

Germany and Sweeden are moving to support thier auto makers, including Opel and Saab.

http://www.reuters.com/article/rbssC...00251120081117

http://money.cnn.com/news/newsfeeds/...1_FORTUNE5.htm

Why should GM continue to put up with America's ****** I say move HQ to another country, namely Hong Kong, and move foward with people that want to support a business that supports thier country.

On BBC last night they mentioned other nations following suit, including Australia propping up Holden, Ford, and some tractor company. Just like the finance bail out, the US takes the lead and offers the solution everyone hates but knows we need and the rest of the world follows.

-Tim

[BigAls87Z28]

Problem is, the US is not giving the loan to the automakers, but everyone else is.

This is embarasing for America. We pour money into banks that have had clearly poor management, and have done more damage to America's economy then the US Automakers ever have.

[Tsar]

Originally Posted by BigAls87Z28

Work in the auto service industry long enough, you realize that a lot of people, like you say below, dont know **** about cars. Look at the blame Ford and Firestone both got for the blowouts in the mid 90's. Soccer moms driving around on 15 psi in thier car, on teh cell phone, yelling at kids, and a squirel pops onto the road. But no, blame was put on Ford for making weak roofs, and Firestone had to recall millions of tires due to weak sidewalls.
But you know what happend? Its not a LAW that every automaker has to put TPM sensors in 07 and future vehicles so that people dont kill themselves.

I never disputed the fact that people are stupid.

I dont blame them for not trying GM again, but some people take that as All GM or all domestic cars are crap. Or even worse, they know of someone who purchased a GM and had problems and use that small example as a reason to never buy. It also goes both ways too.

People who simply rely on a word of another are ... well look above at my previous answer.

You can look at the poll on this board.
I have not seen a poll saying either way, but support for bailing them out in Congress is what is important.

You're not good with poles and such, are you? The poll of this website is irrelevant because it's bias. For any pole to be relevant it must sample random number of people, not people who have a car hobby and are interested in seeing GM succeed. Also unlike timmay believes we do not need to ask everyone to get the "big picture" we can have a sample of random people. But we have been over this before.

No one wants too. But inflation is something that our goverment can deal with, we can bring that back down, we have done it before.
All day on CNBC they talked about it.

I do not see them dealing with it right now. And what happens when the debt becomes too great? What happens when US defaults? What are you gonna say then?

Its not overnight. Its not gunna happen right away. But they are developing ways to slim down. GM is at a disadvantage because they have a lot of brands. But the money to cut down on divisions, the money to cut down plants, the money to inject into existing plants to make future product, is not there.

They should have thought about that BEFORE they were about to go out of business... One of the clauses in articles of Incorporation in any corporation states that the business will be run for PROFIT. Usually corporations that do not turn profit are dissolved because, well they are not profitable. Look it up, its a bawl to read.

Inflation has only just become a problem.

Well Mr. economist maybe you will educate me but hasn't the US ran a deficit for the past 8 or so years? Where do you think the money comes from, besides China that is, THE PRINTING PRESS! Maybe you can remind me again what happens when you print trillions of dollars that you do not have. Um...how about what happens when you are unable to pay your debt? ok go go go.

Well, then thats the answer. 3 million people can just work at Wal Mart.
Outside of Walmart, every other retailer is having problems. Retailers are ready for a poor holiday season.

You're either a really stupid or you just cannot be separated from GM's nutsack, which one is it?
Every single person out of that 3 million will be out of a job? No, they will find something different, some will work for Toyota or something. Some will work for UPS, granted they will have to adjust from putting a screw in a hole to packaging boxes but I believe they can make it. And omg some will have to work at wal mart and other food retailers to make ends meet. Some will be unemployed, but that's the way life works. Bad companies go out of business and some good people lose their jobs - no doubt eventually they will find a new one.

Ok, so you know what? Im satisfied that even though the Backbone American Industry and Economy will go bankrupt, either Chap 11 or Chap 7, that everyone will be just fine because there are a few thousand jobs out there to take up the slack.

Few thousand jobs that I found in less than a minute. As stated previously, if you are one dimensional and you can not do anything besides assemly work for 74 bucks an hour than you have screwed yourself. I will not feel sorry for you, because you have failed to diversify yourself.

Lets not worry about the massive forclosure numbers that will happen when people have thier income slashed in half. Lets not worry about the draw on unemployment.
It will be a seemless transition and things will be better.
Thread over.

Yea let's rather make out money worthless! Good solution! BTW responsible people save money, so when they need extra cash they can go to the bank and get some. If all of the 3 million people were not responsible enough to foresee possible unemployment or layoff than well, it's their fault. Personal responsibility is a wonderful thing!

Cant, your credit score isnt high enough, and you dont have a job, so stick with your firebird.

That's not the way to do business in America today. The new way is: I buy a Ferrari, and when I can't pay for it, I will ask you for a hand out and you will be happy to give it to me! Get it right, geez.

Well, thats it. People are lazy, people are stupid, and people are dumb.
Good thing Walmart is hiring.

If US was running a surplus budget I would have no problem with any bailout, after all we have extra money. But printing money just for the hell of it, when we are already in a deficit, and making everyone future more ****** because of the actions of the few is just plain irresponsible. Not to mention a possible default if the printing press continues to run, have you ever lived through that? I do not think so, but I have. Cheers.

[Tsar]

I think we should just agree to disagree, none of us will ever convince the other side of their view. I think giving out money to an inferior business is a waste of time and money, and eventually will lead to a default on debt payments. You (no one in particular) think it is the greatest thing since sliced bread.

Kthxbye.

[Frosty]

Originally Posted by BigAls87Z28

People are also forgetting that its not a "bail out" but a bridge loan to help retool and gear for a new company. They will have to pay it back asap. I think there is a 4% intrest for the first 5 years, and then it jumps to 7 or so after that, with an increase every year after that.
No bonus's for anyone making over 250k
No dividend for stocks which can hurt GM for investments.

That's all well and good but what if GM still defaults? Then what?

[alamantia]

The government liquidates all of their assets, Im sure their assets = more than the loan.

[Frosty]

What about all of the other creditors that GM owes? All of the $$ our government "might" make off of liquidating would probably end up in unemployment compensation anyway,lol. Uncle Sam investing in GM is a risk, just like it would be a risk for me or you to buy stock in a company on the market. People can call it a bail out, a loan or anything else. If you think about it this is really an investment...and we all know investments don't always pan out.

[BigAls87Z28]

Between the three of them, the Goverment can get all thier money back. So will the creditors. Everyone else will be left holding thier ass.
The goverment is taking the same risk by giving a trillion dollars to banks who have squanderd billions. At least with the Big 3, there is something to sell. Buildings, real estate, brands, tooling, technology, etc.
If banks default, the Goverment is left handing out money to thoes who had it invested, or throwing more money on top of the trillion they already have.
IMO, that 25 billion is a bit more secure then the banks 1 trillion.

[DevilDougWS6]

i think Al's point was that if/when 3 million people lose their jobs is definitally NOT a good thing, and is a big deal. So what if a few thousand can pick up a new job, its still a situation that should be completely avoided.