Should the government bailout the American car companies?

[twin99]

I have really mixed feelings about the bail out of the big three

I was really for it and I know it means saving jobs and I am all for that but will giving GM a ton of money really help them?

The problem is that people are still not buying there cars and that's why they are losing money like crazy every month. They need to make sales to generate profit to keep the doors open.

IMO, Bailing them out will only buy some time and delay the inevitable.

The sad part too is that GM is finally starting to put out some really hot cars but I think it's going to be too late.

[BigAls87Z28]

Originally Posted by twin99

I have really mixed feelings about the bail out of the big three

I was really for it and I know it means saving jobs and I am all for that but will giving GM a ton of money really help them?

The problem is that people are still not buying there cars and that's why they are losing money like crazy every month. They need to make sales to generate profit to keep the doors open.

IMO, Bailing them out will only buy some time and delay the inevitable.

The sad part too is that GM is finally starting to put out some really hot cars but I think it's going to be too late.

Wrong. GM still maintains 23% market share in America, more then anyone else.

GM's problems isnt sales, its profits. Giving GM the money would keep GM afloat till it could take advantage of the 20 billion dollar savings come Jan 1st, 2010.
There should be a total of 50 billion dollars, 25 for energy and 25 for restructuring costs, given to the Big 3.

This is gunna turn slightly political, but the Reps dont want to hand out money to the Union backed Big 3 because the the Unions dont back Reps overall, so this is there way of getting back at them. Not to mention their pockets laced with Import cash from Nissian, Toyota and Honda, as well as BMW, MB and VW. Of course they dont want it unless they are gunna get a kick back too.

But I digress....

If GM wanted a bail out, they would ask for 100B. This is a small loan to help restructure thier business due to the massive hurt the economy has put on them. Toyota, Honda and Nissan have felt it even worse, they just have more money to weather the storm. They have all seen thier NA profits drop 40% or more because of the drop of the dollar and rise of the yen.

[SteveR]

The only problem with an arranged bankruptcy is that everyone will lose their pensions, health benefits, stocks, warranties, and jobs. It'll like Enron to the billionth power. Oh, and the courts can opt to erase certain debts GM has, so parts manufacturers, suppliers, etc. will get screwed out of billions of dollars too.

[SteveR]

Originally Posted by WildBillyT

Yeah, that's what I was thinking. Our exports are so heavily taxed when entering other countries, why not try and fire that back.

Exactly, seeing that the US is the #1 purchaser of most imported foreign cars.

[SteveR]

Originally Posted by NJSPEEDER

The auto industry doesn't really need "tax breaks" so to speak, the government just needs to get rid of many of the stupid taxes that are special, just for the auto industry.

1. If you buy a car anywhere in the world you have to pay your home states sales tax to register it, why? This is not done with any other item of any kind, why would you prevent anyone from saving their hard earned on something so expensive?

2. Luxury tax on your way to get to work? Funny, I can buy a $30million home and pay the same tax rate as someone buying a $100k home, but if I want a car that cost $40k or more or a truck that costs $50k or more, I get stabbed in the eye with an extra 2%. WTF?

3. Gas Guzzler Tax. If a "passenger vehicle"(something that the government can't define clearly but is wiling to tax) gets under MPG tier X, you get to pay extra percentage on it Y. Sound like fun? Cause the taxes start at 25 MPG depending what kind of vehicle it is. BTW, a quad cab Colorado is a "passenger vehicle" but a standard cab is a "compact truck", according to the government, one taxed, one not. lol

If they made cars just like everything else, just paying sales tax where ever you buy it and call it a day, the savings to consumers would be hundreds of millions a year. Wanna encourage the economy, make it so people can afford to shop for big ticket items that employ dozens of people at a time to manufacture.

/rant

-Tim

The sales tax is based on the state, not the federal level, so states enforce the tax issue on cars because of the dollar value attached. Requiring tax only in the state you purchase it in would turn consumers to travel to other states with lower taxes to purchase cars, thus taking it out of the pocket of the state you live in, or the ones with the higher sales tax rates.

[BonzoHansen]

Originally Posted by SteveR

The only problem with an arranged bankruptcy is that everyone will lose their pensions, health benefits, stocks, warranties, and jobs. It'll like Enron to the billionth power. Oh, and the courts can opt to erase certain debts GM has, so parts manufacturers, suppliers, etc. will get screwed out of billions of dollars too.

It depends on how they structure it. If the feds are willing to chip in cash to the PBGC then the current retirees lose nothing. Fund the VEBAs and the medical problem is now the UAWs problem. There are ways to deal with the current workforce so they lose little in the grand scheme. But I think they can accomplish all this w/o technically filing c11. But it won't happen because it will partially neuter the union. The dems won't allow that.

Equity holders lose everything, most likely.

If they belly up on their own that is what we are gonna have to pay all that anyway, except the veba$$ will need to shuffle off to medicare.

It could be done.

[SteveR]

Originally Posted by BigAls87Z28

Take the morgage bail out of 700 billion. We are giving money to banks, and to other companies buying up smaller banks so they can get a hand out!! AIG is chewing through billions and billions, and nothing is done!!

Yep, and American Express ten days ago filed themselves as a bank now, even though they clearly are not, just so they could get 3.5 billion from the bailout fund. And to top it all off, the markets crashed again last week after Paulson went on tv and said that out of the 700 billion for the bailout, not a single penny is going to what it was intended for. It's just going to get handed out like candy to whoever. Meanwhile, AIG held a get together at some posh resort at a cost of $350,000. Not bad. All our hard earned money lost with BS mortgages and banks structuring them to fail so that they can keep whatever you paid in to date, sell of your house, and write the entire loan plus interest off as bad debt so the government pays them for it. In the end, a $300,000 house will net a profit to the mortgage company of over $1 million. Never mind the over 2 million families that are now homeless over the last year alone for bank foreclosures, or the billions and billions of tax payer dollars used to cover these claimed loaner debts, but then 700 billion is just handed out like acid at Woodstock to whomever the **** has a hand out, meanwhile, the entire economy, job market, auto industry, real estate market, stock market, and every other facet of American life, is sinking like the Titanic. More than 250,000 jobs were lost last month alone, and the projections for the next six months are for more than 300,000 each month. That's 1,800,000 jobs forcasted to be lost by next May, on top of the 1,400,000 that have already been lost in all of this. Meanwhile, these rich fatcat CEOs and CFOs for these failed imploded thieving companies are walking away with money that is just inconceivable. I was ready to head over to the hunting store after watching the former CEO of Lehman sit in front of a Congressional hearing a month ago and was asked just how much money he walked away with when the company went under. To the best of his knowledge, he thinks it's somewhere around $680,000,000, if I remember the number correctly. Not a bad retirement fund. The big picture problem is that the government, the financial institutions, the investors, the speculators, the business leaders, the company directors, the advisers, and everybody else with a key role in all this are all doing one thing, trying to cash out and take home the biggest prize, regardless of the fact that more money has been taken out of the US markets in the last three months than was lost during the entire depression, more than 40% of our financial infrastructure has been lost, and the big piece of news that I'm not so shocked hasn't been repeated, is that during the meeting with the big 3 in Washington last Monday, political leaders asked Paulson what kind of dollar figure he could put together to offer the auto industry, and his initial response was "nothing". The reason being he said, was that just recently, the White House authorized a loan of somewhere in the ballpark of 1.8 trillion dollars. To who? They asked, and Paulson's response was "as part of the details of the loan, I'm not allowed to disclose any details of where the money went". So, basically, the US Treasury was emptied. Not a bad parting FU gift from this administration. I'm sure you won't hear much about that any time soon.

[BonzoHansen]

Steve's on a roll, no enter key required!

[SteveR]

Originally Posted by BonzoHansen

Steve's on a roll, no enter key required!

It's just mind numbing to see just how effed up things have gotten in such a short period of time.

[Savage_Messiah]

Originally Posted by SteveR

during the meeting with the big 3 in Washington last Monday, political leaders asked Paulson what kind of dollar figure he could put together to offer the auto industry, and his initial response was "nothing". The reason being he said, was that just recently, the White House authorized a loan of somewhere in the ballpark of 1.8 trillion dollars. To who? They asked, and Paulson's response was "as part of the details of the loan, I'm not allowed to disclose any details of where the money went". So, basically, the US Treasury was emptied. Not a bad parting FU gift from this administration. I'm sure you won't hear much about that any time soon.

[SteveR]

Actually, looking it up right now, the number isn't exact, but it's more like 2-3 trillion to date, and speculators are saying the number could be as high as 4-6 trillion. In addition, Bloomberg, Inc. has filed a lawsuit against the FED for non-disclosure.

http://www.alternet.org/workplace/10..._nobody_knows/

http://investment-blog.net/how-many-...loan-from-fed/

[SteveR]

and speaking of wasted/lost/stolen money, here's a story I'm sure you'll all enjoy. I'm not sure how many of you heard about this, but recently it's being reported that somewhere in the ballpark of $13 billion was taken out as cash, strapped to pallets, and flown over to Iraq, only to magically vanish.

http://www.washingtonpost.com/wp-dyn...nav=rss_nation

http://www.prisoners.com/12bil$.html

http://www.infowars.com/articles/ira...go_missing.htm

[Savage_Messiah]

Originally Posted by SteveR

and speaking of wasted/lost/stolen money, here's a story I'm sure you'll all enjoy. I'm not sure how many of you heard about this, but recently it's being reported that somewhere in the ballpark of $13 billion was taken out as cash, strapped to pallets, and flown over to Iraq, only to magically vanish.

http://www.washingtonpost.com/wp-dyn...nav=rss_nation

http://www.prisoners.com/12bil$.html

http://www.infowars.com/articles/ira...go_missing.htm

And I'm the bad guy for saying we need to pull out and let them fix their own damn country.

[BigAls87Z28]

Jesus
Harold
Christ

13 Billion missing, 2 trillion given to banks with no transparency and no accountability, and these ******* senators are gunna parade the Big 3's CEO's in front of American and bitch them out for "not making cars that people want" and NOT issue them 25 billion dollars FOR ALL THREE OF THEM!!

I am in shock...total and utter shock. We have sold our country down the drain.

[LS1Hawk]

Originally Posted by mc73nova

but we "Americans" are the reason why we are in this situation.

Originally Posted by NJSPEEDER

That is the greatest single line of truth that I have read about this topic on any forum. Very well stated.

-Tim

So very true. We have no one to blame but ourselves. People love to point the finger at the politicians, the CEOs - and yes they are corrupt. But people forget that they are a product of our society. It's like to old saying goes: garbage in, garbage out. Nothing is going to change unless society as a whole changes. Think about it, this economy is already in the crapper and spiraling further and further out of control each day. Yet, the new iPhone comes out and there are lines all the way out the store to purchase this $300 dollar plastic screen because "Oh, my old one which I just got less than a year ago isn't as cool as this one." Don't you think there's something terribly wrong here? People need to get back to basics in this country and slow the **** down, because we're loosing sight of the important things around us. The 50s were historically the most prosperous time for the US. Things were much more simpler and people held things important like family and community. Today that is all gone and everything is about numero uno, and you see it in the things we buy and everything we do: iphone, ipod, myspace...it's ridiculous. It's sad to say it, but maybe this country needs a depression to wipe the slate clean and give people kick of reality. /rant

[Fast92RS]

Ok if the big three go under. I think it will cause a snowball efect that will eventually effect every consumer product. Won't it affect things like the commercial trucking industry, dont they get the parts from the same suppliers as the big three? So manufactures of heavy trucks, ambulances, fire trucks, some military vehicles will all be affected. So 3 million jobs will just be the start of it and I dont think it will be as easy as someone just going out and finding another job.

[Tsar]

Originally Posted by BigAls87Z28

Jesus
Harold
Christ

13 Billion missing, 2 trillion given to banks with no transparency and no accountability, and these ******* senators are gunna parade the Big 3's CEO's in front of American and bitch them out for "not making cars that people want" and NOT issue them 25 billion dollars FOR ALL THREE OF THEM!!

I am in shock...total and utter shock. We have sold our country down the drain.

That's only a better reason NOT to give anyone anymore money. If you had 50k in CC debt, making minimum payments, you wouldn't go out and buy a flat screen for another 2500, would you? From your argument it seems like you would, because you would justify it by saying "well I'm already in debt, what's another 2500 gonna do?".

[ChickenLittle]

no.

[BigAls87Z28]

Originally Posted by Tsar

That's only a better reason NOT to give anyone anymore money. If you had 50k in CC debt, making minimum payments, you wouldn't go out and buy a flat screen for another 2500, would you? From your argument it seems like you would, because you would justify it by saying "well I'm already in debt, what's another 2500 gonna do?".

Actually, it would be more like a business that its chief product, (In GM's case, its only product) has either stop selling or selling at such low levels due to outside circumstances. And that no matter what steps you have taken to slim down and reduce your overhead, the people are not buying your product and cannot produce the revenue levels to keep the company moving foward. they will need a loan to move foward to get through this troubled economic times.
We arent bailing out the Big 3, we arent propping up bad business and thats the problem people need to understand. As GM's CEO Rick Wagoneer said yeterday, that late last year GM made massive moves to turn the company around. The press, wall street, everyone saw light at the end of the tunnel. Then this economic meltdown happend, and GM was stuck right in the middle of revamping its costs, revamping its business, putting together a very expensive advanced powertrain program together, when the floor fell out on thier business.

[twin99]

Originally Posted by SteveR

Yep, and American Express ten days ago filed themselves as a bank now, even though they clearly are not, just so they could get 3.5 billion from the bailout fund. And to top it all off, the markets crashed again last week after Paulson went on tv and said that out of the 700 billion for the bailout, not a single penny is going to what it was intended for. It's just going to get handed out like candy to whoever. Meanwhile, AIG held a get together at some posh resort at a cost of $350,000. Not bad. All our hard earned money lost with BS mortgages and banks structuring them to fail so that they can keep whatever you paid in to date, sell of your house, and write the entire loan plus interest off as bad debt so the government pays them for it. In the end, a $300,000 house will net a profit to the mortgage company of over $1 million. Never mind the over 2 million families that are now homeless over the last year alone for bank foreclosures, or the billions and billions of tax payer dollars used to cover these claimed loaner debts, but then 700 billion is just handed out like acid at Woodstock to whomever the **** has a hand out, meanwhile, the entire economy, job market, auto industry, real estate market, stock market, and every other facet of American life, is sinking like the Titanic. More than 250,000 jobs were lost last month alone, and the projections for the next six months are for more than 300,000 each month. That's 1,800,000 jobs forcasted to be lost by next May, on top of the 1,400,000 that have already been lost in all of this. Meanwhile, these rich fatcat CEOs and CFOs for these failed imploded thieving companies are walking away with money that is just inconceivable. I was ready to head over to the hunting store after watching the former CEO of Lehman sit in front of a Congressional hearing a month ago and was asked just how much money he walked away with when the company went under. To the best of his knowledge, he thinks it's somewhere around $680,000,000, if I remember the number correctly. Not a bad retirement fund. The big picture problem is that the government, the financial institutions, the investors, the speculators, the business leaders, the company directors, the advisers, and everybody else with a key role in all this are all doing one thing, trying to cash out and take home the biggest prize, regardless of the fact that more money has been taken out of the US markets in the last three months than was lost during the entire depression, more than 40% of our financial infrastructure has been lost, and the big piece of news that I'm not so shocked hasn't been repeated, is that during the meeting with the big 3 in Washington last Monday, political leaders asked Paulson what kind of dollar figure he could put together to offer the auto industry, and his initial response was "nothing". The reason being he said, was that just recently, the White House authorized a loan of somewhere in the ballpark of 1.8 trillion dollars. To who? They asked, and Paulson's response was "as part of the details of the loan, I'm not allowed to disclose any details of where the money went". So, basically, the US Treasury was emptied. Not a bad parting FU gift from this administration. I'm sure you won't hear much about that any time soon.

I can't believe how our tax dollars are getting squandered. We just keep digging bigger and bigger holes for our childern.

[SteveR]

Bad news for the bailout idea; Republican leader of the House Financial Services Committee says he won't back a bailout for Detroit.

http://money.cnn.com/2008/11/19/news...ion=2008111912

[79CamaroDiva]

Originally Posted by SteveR

Actually, looking it up right now, the number isn't exact, but it's more like 2-3 trillion to date, and speculators are saying the number could be as high as 4-6 trillion. In addition, Bloomberg, Inc. has filed a lawsuit against the FED for non-disclosure.

http://www.alternet.org/workplace/10..._nobody_knows/

http://investment-blog.net/how-many-...loan-from-fed/

Originally Posted by SteveR

and speaking of wasted/lost/stolen money, here's a story I'm sure you'll all enjoy. I'm not sure how many of you heard about this, but recently it's being reported that somewhere in the ballpark of $13 billion was taken out as cash, strapped to pallets, and flown over to Iraq, only to magically vanish.

http://www.washingtonpost.com/wp-dyn...nav=rss_nation

http://www.prisoners.com/12bil$.html

http://www.infowars.com/articles/ira...go_missing.htm

time to move. i hope you learn foreign languages quickly.

[BigAls87Z28]

Originally Posted by SteveR

Bad news for the bailout idea; Republican leader of the House Financial Services Committee says he won't back a bailout for Detroit.

http://money.cnn.com/2008/11/19/news...ion=2008111912

It looks dead either way. Bush will veto it, if it some how gets past the Reps.
They are grilling them on every angle, even calling them out for not taking commercial transportation instead of personal jets.
Perhaps a misstep on PR's part (wouldnt be the first time) but come on people. How many senators took commercial air lines to fly to and from thier houses and washington?

[BonzoHansen]

Perhaps?!?!?!? Giant F-U. The respective BoDs need their heads examined if the CEOs still have jobs next week.

[Tsar]

Originally Posted by BigAls87Z28

Actually, it would be more like a business that its chief product, (In GM's case, its only product) has either stop selling or selling at such low levels due to outside circumstances. And that no matter what steps you have taken to slim down and reduce your overhead, the people are not buying your product and cannot produce the revenue levels to keep the company moving foward. they will need a loan to move foward to get through this troubled economic times.
We arent bailing out the Big 3, we arent propping up bad business and thats the problem people need to understand. As GM's CEO Rick Wagoneer said yeterday, that late last year GM made massive moves to turn the company around. The press, wall street, everyone saw light at the end of the tunnel. Then this economic meltdown happend, and GM was stuck right in the middle of revamping its costs, revamping its business, putting together a very expensive advanced powertrain program together, when the floor fell out on thier business.

I highlighted the failing business part. No matter how you wanna spin this, investing money into a business that's failing or about to fail is a bad idea. Are you gonna argue that investing in a failing business if a good idea?

How many shares of GM stock do you own, Al?

Off topic, aren't you on vaca before your new job? shouldn't you be trying to sex your gf instead of hanging out here.