US rules out extra car industry bailout

the thing that is so bogus on this whole thing is the alternative fuel car is being sold in Brazil and Ford makes it!

they could have done the same thing here all along they make for OTHER COUNTRIES,just not here! WTF

reply to post by Frankidealist35

US rules out extra car industry bailout

Why does the car industry need $25 billion in the first place?

It seems to me like they just want in on the economic bailout.

I don't understand why they want it. Why they need it. They are failing. Can't they just restructure their company like they are supposed to?

Would you PLEASE make your mind up!

You posted a new thread, titled "I want socialism."

If you want socialism, then you should WANT the government to bail out the auto industry, because in a socialist state, the state either OWNS the companies, controls the companies or assists or buys into the companies.
So which is it? Do you want socialism, or do you want capitalism, where lousy companies like GM are allowed to fail, due to their own stupidity, poor management, greedy unions, and poor insight into the market place?

While I am against the bail out to the car industry, I have to be realistic.

The American Car industry is one of the last American staples left in America.

Once gone we will be followed by a depression.

Since the dot.com bubble the Markets has never been he same, the fake stability and the illusion of prosperity was nothing but a dream.

Now the house of cars are falling, If a nation can not produce a nation can not build wealth.

Without wealth we are a nation Dependant on foreign money to survive and to function.

As we become dependent we lost our sovereignty.

Something that people do not care to even think about it.

Once the car industry is gone, America will have noting left but debt, deficit and a nation of nothing but unemployment, lower income jobs and the very rich at the top.

While we allowed our congress to bail out the most wealthiest in the nation at a cost of 2 trillion dollars to our national debt we now give the back to at least one side that actually provide jobs to the American workers.

But who I am to question the corrupted leaders of our nation, after all they are ones that has allowed for the economical mess to get worst.

reply to post by marg6043

While I am against the bail out to the car industry, I have to be realistic.

The American Car industry is one of the last American staples left in America.

Once gone we will be followed by a depression.

Marg, although I frequently agree with you, I have to disagree with you on this. First, there is not enough money in the US treasury to bail out the Big 3. The 25 billion that they want will only get them through to March of 2009, by their own admission. Furthermore, all that 25 billion will do is pay debts that they have already incurred. It will not do one thing to turn them around. The US auto companies have been going downhill for decades. A combination of ridiculous union contracts, poor decisions of model production, failure to significantly retool for new technologies, and greedy executives and board of directors, have doomed those companies. All a bailout would do is postpone the inevitable. They have huge inventories of gas guzzlers that nobody wants, union that won't compromise, and foreign competition, some building cars right here in the US, that ARE providing the cars that people want.
Furthermore, if they are allowed to fail, foreign companies that have plants here in the US will be able to pick up market share, which will provide jobs, albeit, not union jobs, for many of the displaced workers. Trying to save a dying person is a valiant deed, trying to revive a dead person is fools play.
We need to stop the bailout mania, in addition, to my argument above, because if we don't every company in America will be queued up outside Congress, with their hands out.

reply to post by ProfEmeritus
The reality is General Motors has some very profitable divisions.

Adelphi Electronics makes the engine and emission system not only under the hood of every General Motors car but every Honda and Toyota as well as it holds the patent on the technology that allows Ultra Low Level III emissions required for California which is the worlds single largest auto market.


Adelphi also is the source for almost all High Capacity Air-conditioning in Hondas and Toyotas as well.

Delco Parts makes a tidy profit as well.

Onstar has teamed up with several other non General Motors manufacturers like Lexus to offer its satellite navigation, diagnostic and concierge services and is profitable.

X-M Radio too is another profitable division of General Motors.

Cadillac has done extremely well in the past several years.

Buick has long targeted its production volume for a very well gauged niche market it consistently turns a profit.

Chevrolet has struggled a bit but remains very viable with its wide selection of highly fuel efficient cars like the Cobalt and offers a wide variety of value oriented sedans as well as a line of high quality, powerful and durable trucks.

Pontiac is dead weight and should be jettisoned but means closing upwards of 3300 franchised dealers and possibly up 250,000 people working in them would loose their jobs.

GMC like Pontiac is redundant cross branding whose management and administrational costs don’t justify its existence but again you close 2800 dealerships coast to coast and you have another 150,000 people out of work directly.

General Motors definitely can survive as a viable company given assistance.

One of its hugest costs is maintaining its dealership structure off over 12,000 dealers.
All of whom are creating a huge burden on General Motors now as frozen credit markets have decreased sales up to 40% not a lack of interest in the product.

In reality the hugest hurdle General Motors has is Americans themselves who insist on often paying 2 to 3 thousand more for what is often a lesser Toyota or Honda because of misconceptions about quality and reliability that are deeply engrained in many consumers who will not even shop or test drive American brands.

General Motors is worth saving. Ford likely is too.

reply to post by ProtoplasmicTraveler

The reality is General Motors has some very profitable divisions.

Fine, then like any other company, they should keep those divisions and throw the other ones overboard. That is what capitalism is about. We, as taxpayers, should not bankroll a company that doesn't make smart business choices. Every day, companies have to make those hard choices. They don't go to congress with their hands out, and ask congress to allow them to continue running unprofitable divisions. Why should the Auto companies be any different. Either capitalism works for everyone, or it doesn't work. There are no free lunches in a capitalist economy. The free lunches that congress, unfortunately has been hosting with bailouts, run counter to a capitalist society.

I live in Michigan.
If the auto companys go under It Will cause a world wide a Domino effect.
Canada,Mexico,Australia,Japan,Germany,France,Italy to name a Few all make parts for the U.S. Auto Manufacturing Company's.

Steel/metal workers,rubber company's, textile/leather workers,electronics producers,glass workers etc..etc..etc.. DOMINO effect !!!

The Free Trade Agreement and the Deregulation of world markets is what
has caused the downfall of U.S. Manufacturing. Period ! (thx Mr Bush)

Are you willing to purchase a car Made In China, India or South Korea ??
Are You willing to trust your life or your family's life to 'Unregulated' construction of your next car, truck or van ??

China, where workers are paid poverty wages and sometimes forced into labor, has become the fourth largest auto producer in the world behind the United States, Japan and Germany.
Multinational automakers are lining up to sign partnership agreements with the Chinese government to build and export millions of vehicles.

Can my family,friends and neighbors come to stay at your house when we all loose our jobs along with our homes ?? Can we take up all the available jobs in your area?? That would be Millions of us !!

When you want to take your car into the dealership for repair (included on your warranty) and the dealership is closed. What will you do then.

Who will fix your oh so un-safety regulated Chinese car.
Are children helping to build your next shiny new death trap ?

[edit on 19-11-2008 by azureskys]

reply to post by azureskys

Are you willing to purchase a car Made In China, India or South Korea ??

Many people are willing to buy Japanese cars, because the are well made, safe, and fuel efficient.
If the big 3 fail, then companies that produce the cars that fit the above description will be the beneficiaries of their failure. Don't blame the Japanese for what will happen, blame the US auto makers for failing to respond to the market. The big 3 deserve to fail, and yes it will cause problems, but bailing out a dead body will be a total waste of money. No amount of tax dollar money will save a group of auto makers that have CONSISTENTLY failed to provide value. You can't force Americans to buy cars that have failed them over and over.
Blaming NAFTA is ridiculous. It was companies like GM, Ford and Chrysler that pushed for NAFTA at the executive level, so that they could move some of their operations over the border, and now you want to reward those people that pushed for NAFTA.
I have been against NAFTA ever since it was first envisioned, but if you think NAFTA is to blame, then you are really blaming the executives of the Big 3.

I dont Know I f you realize this but the Japan Auto manufactures are seeing their sales dropping very rapidly also.

Honda and Toyota are bult right here in Michigan.
My daughter makes the side mirrors for Corolla.
If the big 3 goes, so does her shop. They were told That Fact Today !!
They have many contracts for assembling parts at her plant and Toyota's
single contract will in no way keep them afloat.
800 People work there and they do not make allof what go's into the final prod's some comes from Mexico some from Germany some from Australia
some from Japan. What happens to those people ?

The Japan auto are of high quality. I wasn't referring to them.

Originally posted by azureskys
I live in Michigan.
If the auto companys go under It Will cause a world wide a Domino effect.

How much money do you propose be given to the auto companies? How many dollars exactly?

Gas will go down again and Detroit will make the same old trucks
they always made.

When working for the Corp you give up your ideas to in house
thieves. So who will put in new suggestions.
The people who put the idea down rule until suddenly they head
up a new division with your idea.

Henry Ford took the Tesla ignition coil out of the Model T.
Some how they are popping up in Hydrogen boost projects.

Gas additives have lowered the power of the gas.
Clean exhaust filters, needed because of poor ignition due to additives
and now useless vapor carburetors, reduce the power further and
and still gives off green house gases.

The Tesla free energy people have not mastered the Tesla car
powered by an iron pipe yet but, needless to say, hold on to your
old fence.

reply to post by ProfEmeritus

Fine, then like any other company, they should keep those divisions and throw the other ones overboard. That is what capitalism is about. We, as taxpayers, should not bankroll a company that doesn't make smart business choices. Every day, companies have to make those hard choices.

Normally I would whole heartedly agree with you on this. These are not normal circumstances and I worry about throwing the baby out with the bath water.

I have worked closely with a wide spectrum of companies in the auto sector for well over a decade and in General Motors Case it really is not a lack of deman or interest for the products or that the products are so inneficiently produced it prohibits them from being profitible.

What is crippling General Motors and Ford too right now is the Credit Markets themselves. Very few people pay true cash from savings for brand new automobiles. In fact its a bad investment since cars are depreciating assetts from the point of investment onwards. 85% of new car consumers borrow either from traditional banks, secondary finance sources or the home equity lines of credit.

People are rountinely walking into dealerships with upwards of 800 Beacon scores with 860 possibly being the highest and about 480 as potentially being the lowest a consumer might still expect to get financing on some kind of acceptable terms, and despite being in the 800 range are being routinely turned down by banks who simply either wish not to loan any money at all period, or have no money to lend period.

Chrsyler has been a weak link on the food chain for years. Ford and General Motors have been modestly profitable companies up until the Credit Crunch really started drastically effecting consumer financing around the end of the 1st quarter of this year.

The Car Industries problem is the Banks problem.

Please do consider General Motors is the nations second largest employer behind the Federal Government. When conditions are normal in the lending markets they meet their incredible overhead and turn a modest profit. When conditions are this unfavorable in the money markets its impossible not to hemorage cash.

Yet the only thing that ultimately restores the economy and a nation's wealth is it's manufacturing and all we have of that is the Auto, Aerospace, and other inter related Defense Industries.

The problem is in my humble oppinion the artificially created bank crisis. Many are well funded and simply hording cash. Many are well funded thanks to the bailout which was meant to prompt them to stop hording cash.

This is a throwing out the baby with the bath water situation. It hurts short term and long term and it was a viable industry up to the point of the financial crisis, an industry that actually employed tens of millions of people directly and indirectly in a vast network of inside the U.S.A. outsourcing of parts, design, manufacturing, transporting, displaying and selling and servicing.

I don't know if it is wise to throw that away by misplacing frustrations and anger over how non goods producing, wealth generating companies like Brokerages, Banks, Insurance and Assurance Companies have mismanaged and embelzed vast amounts of wealth.

The Auto industry is an Apple, the Banking Insurance Investment Industry is an Orange.

If you decreased unemployment and unfroze the credit markets and put people back to work instead of taking them out of work, the Auto Industry would be profitable again within 9 months from the point credit markets opened up again.

I've just skimmed through the post so far. But I haven't seen anyone bring up one of the biggest problems the big 3 face. Salaries and the union. People in this thread have touched on part of this issue with CEO salaries and bonuses. But they left out the line workers. I have a buddy that has a family member that works for GM. He makes over $74 an hour. the base starting pay at the plant he works at is $34 an hour.

I was watching T.V. the other night and the Union leaders flat out said they were against any concessions that cut the union members pay and benefits. even if it meant saving the union members jobs.

Now I'm Against bailing out the auto industry. and i've had my fair share of unions and how they work and i don't like them. But i think its about time that the UAW and its members face reality. If they want to keep their jobs they better be willing to take some pay cuts and lose some benefits until the company they work for gets back on its feet if it ever does.

Now i've mentioned line workers pay in another thread and people yelled and screamed those employees deserved every penny they make. I say BS! making a car today is nothing like it was even 20 years ago. 20 years ago the big 3 could justify the high wages because the job was more physical, But today the job is easier for the line workers and they make between $34-$74 an hour plus benefits.

So i say force the big 3 into chapter 11, tell the union members its like this take a pay cut or lose your job the choice is yours. I'd rather have a job making half what i was then have no job at all.

And lets not kid ourselves giving them $25 Billion to split 3 ways they each would get $8,333,333,333.33 and it will buy them:
4 months if they just spent $2 billion a month,
6 months if they cut there spending to $1.5 billion.
8 months if they can get down to $1 billion a month.

then what happens in 4, 6, 8 months when the bailout money is spent another bailout? what happens when the next big industry fails are we going to bail them out also? somewhere we have to draw the line. it should have been done at the very beginning when the bankers came black mailing us. every one knew they would take the money and run. whats to stop the big 3 from doing the same?

If the government really wanted to do something to help fix this economy, they would have fixed the damn system, they would have given that $700 billion to the people. No one offered me a bailout before i had to close my own business. no one is offering me a bailout now. why should these corrupt institutions get a bailout. at least when i ran my own business i was honest on my books maybe that's where i went wrong i was honest and wasn't a big fish in the scheme of things.

Originally posted by anachryon

Originally posted by nj2day
There really isn't a choice at this point unfortunately.

Sure there is. Refuse to spend taxpayer money on (more) broken businesses and force the autos into Ch. 11 so they can restructure.

The jobs are gone regardless; we just have to decide if we want to piss $25B+ into a sucking vortex.

Talk of GM bankruptcy filing fuels debate
Some experts say Chapter 11 would help; automaker fears disaster


www.msnbc.msn.com...




Professor Martin Feldstein said Wednesday that bankruptcy might be needed for GM to get out of its current union contracts and become more competitive.

Making U.S. automakers like GM viable to become competitive again “is going to require restructuring the wages and benefits they pay to auto workers,” he told CNBC. “Whether that happens in bankruptcy or it’s done in another managed program, that has to happen.”

Proponents of letting GM go into receivership suggest that a “prepackaged” bankruptcy — one in which a company prepares its reorganization in cooperation with its creditors and implements it as soon as it enters bankruptcy — would allow the automaker to keep operating while it gets relief from its obligations, including its contract with the United Auto Workers union.

But GM executives and advocates for the company warn that a bankruptcy could lead to a disastrous Chapter 7 liquidation, under which the company's assets would be sold off through the court.

“This idea of a 'prepack' bankruptcy is pure fantasy,” Wagoner said in Senate testimony this week. “You’ve been talking about a Chapter 7 liquidation, which would affect the supply base, affect the other two [automakers] and ripple across this economy like a tsunami that we haven’t seen, and it seems to me like a huge roll of the dice.”

---------------------------------


The concern is that in the current environment, few lenders would be willing to provide the $10 billion or more that GM would need, raising the risk of a “free-fall” bankruptcy, said Baird.

“It’s like jumping out of a plane without a parachute,” he said. “A company doesn’t have the cash to pay for its operations, and a bankruptcy judge just sells off all its assets. Companies usually do get the financing they need; even Circuit City was able to get a loan to continue operations. But there is some question about whether GM would be able to get the loan they’d need.”

In a free-fall scenario, a bankruptcy judge would determine which parts of the company should be sold to pay its creditors, Baird said. Creditors are paid on a priority scale, and common shareholders are at the bottom of the list so they typically receive nothing. Creditors at the top of the list usually take a haircut, receiving, say, 50 cents on each dollar invested.

Most important for GM would be trying to hang on to its customers, Baird added.

“You need to put in place a system where car owners’ warranties are protected,” he said. “When people buy a car they like to think a warranty will still hold in four or five years’ time. It’s different than using an airline that’s bankrupt; as long as the flights get you to your destination and back, you tend not to care what happens to the airline after that.”

I am amazed Detroit has not learned anything about Kaizan and Kanban[specially demand driven supply] since the oil shocks of the 70's...They had it coming, if there will be a bail out then just like the bankers bail out it should be conditional and the big 3 should restructure the whole industry more demand driven, which also results in massive dismissals..its stubborn, toyota is taking over the US and the latter doesnt learn anything..

reply to post by ProfEmeritus


I agree, I understand that no matter how much money the automakers get if they get anything the industry is going to fail and go banckrupt.

But my whole point on this is that while we have been scammed into bailing out the wealthiest in the nation with not question ask, nobody in our moron corrupted congress took into consideration how to help the America workers that are the only ones in the nation that provide the taxable income.

Is beyond my comprehesion right now how we allowed policy makerts to think for the rest of America and be happy with disastrous decisions against the tax payer.

You are rigth the time for the American made cars is over, gone and done with it, but now our unemployment rates will only get up, retirement accounts will be depleted and what this nation is going to have left?

The future is looking very dark and very ugly for once a proud nation, and the gulity ones walk free and still able to keep crapping on the American workers.

Watch the braking news today on the unemployment they are nothing but a shame to this nations government.

I wonder how the already shaky markets are going to take this one.

[edit on 20-11-2008 by marg6043]

Originally posted by marg6043
reply to post by ProfEmeritus

 

I agree, I understand that no matter how much money the automakers get if they get anything the industry is going to fail and go banckrupt.

But my whole point on this is that while we have been scammed into bailing out the wealthiest in the nation with not question ask, nobody in our moron corrupted congress took into consideration how to help the America workerts that are the only ones in the nation that provide the taxable income.

Is beyond my comprehesion right now how we allowed policy makerts to think for the rest of America and be happy with disastrous decisions against the tax payer.

True that!!

reply to post by ProtoplasmicTraveler


My friend you just exposed the whole problem that is now falling like a domino effect on every sector of the economy in this nation, from the top to the bottom.

The Market bubble crash was not only to affect the mortgages but anything that was linked to it

And as a revolving debt economy that we has become is not over yet, one by one the casualties of the housing crash will be tumbling down.

The car industry is just on the top big ones to become casualties, when the small businesses at state and local level start to become casualties then you will see the real horrors of what is going in this nation.

This topic is currently being discussed in another thread. Please carry on the conversation there.

www.abovetopsecret.com...

Thread closed.