General Motors

[Ddrak]

Should the government bail them out? Is it just pouring money down a black hole? What's better - that or a bunch of unemployed people?

Dd

[Partha]

I'd consider perhaps buying a chunk of the company, with a sunset law that makes the government divest of the company when profitability is reached.

[Fallakin Kuvari]

I'm for bailing them out, I want to see the Chevy Volt come to fruition. Not only do I think it'll be a cash cow for them, its the direction this country needs to head in to get rid of our dependence on foreign oil.

[Minute]

I'm for bailing them out

If you weren't convinced that this is a terrible idea before, this fact alone should do the trick.

I've said it from the start, the original bailout is the slipperiest of slopes and is already sliding us towards events that could literally change the base of our government. In my opinion business and government should almost have a separation of church and state effect. I do believe in antitrust involvement, but beyond I feel that the mixing of corporate and government is not only a horrible idea, but detrimental. In fact, bailing out huge corporations just because they are big enough is the exact opposite of antitrust. How is small business supposed to compete when all you have to do is get big enough and you can fuck up as much as you want and know that the government is going to bail you out.

And now the big 3... who's next? And if you can bailout AIG why not them? Why not every huge company? It's all bullshit. You want to give 700 billion dollars out to stimulate the economy and create jobs? Give it to rising SMALL businesses. Keeping these already filthy rich pukes in business after they have already fucked up is so ass backwards I don't even have a word for it.

I will say that Fall makes 1 good point, though I don't think the Chevy Volt is necessarily the best way to go. America absolutely HAS to start producing some shit, and we are right on the edge of a technology that will easily be the most financially sound for the next, I think, 50 years. Green is it man. If we could just pull our head out of our asses and start mass producing the technology to back this type of stuff we could stay on top, but if not I seriously doubt our ability to stay afloat.

[Lurker]

You want to give 700 billion dollars out to stimulate the economy and create jobs?

That wasn't the purpose of the 700 billion bailout; it was supposed to go towards freeing up credit markets and proping up our financial system.

Economic stimulus and job creation are likely going to have to wait for Obama to take office. His proposals are aimed solidy at the middle class and small business with a focus on job creation. We're going to have to spend some bucks to get out of this hole. It's been frustrating watching Bush bankrupt the government the last eight years and drive up the deficit even when the economy was roaring along. We're going to have to increase the deficit drastically in the short term, but at least we'll have some jobs and upgraded infrastructure at the end.

As for GM, let them declare Chapter 11 like any other failed company. They can still operate while restructuring.

[Klast Brell]

All our laws and economic policies have shifted over to stock and other investments. I don't have to like it, but i have to live with it. Company A and B have their CEO's indited for Bribing a congressman. Company A and B's stock price tumbles. Wall street shits a brick and starts dumping stock in company C just because they are in the same industry. Company C stock value plunges even tho there has been no change to their current or long term profits. With a duty to shareholder value Company C lays off 10% of it's workforce.

To me this is so backwards. So a bunch of investment banks got caught in a trap of their own wishful thinking. So they fucked themselves hard. So what? But because of the SOP on wall street all stock values plummet. One company in the Dow shits in it's own bed. It's stock price drops. Their fractional contribution to the Dow registers as a drop. The Dow is an average after all. But because the Dow is down a little, all Wall Street starts selling. Now the Dow really starts to drop. This could be short term. But sadly it won't. As long as "Joe Six Pack", "Joe Main street" and all the other Joes have money in their pocket they are going to continue to go to the store and buy shit. As long as shit keeps getting bought companies will remain profitable.

You could chalk the Dow up to mass hysteria. But it does not work that way. Companies start lay offs to boost their stock. Joes across America start loosing their jobs. Now they really don't have money in their pocket. Now shit is really not getting bought. The Dow drops lower. And the Dow has a real reason now. And companies lay off more joes. And more shit does not get bought. And even the joes who have jobs are scared that they might get downsized. So those joes start building a cushion in their Checking account in case they get laid off too. And even more shit does not get bought.

Bill gates and Rupert Murdoch could wake up one morning and find their stock was worth 30% less that in was. They would still have more money than any sane person could spend. They are still going to buy the same food, clothing, cars, laptops, etc that they did before. Take it down a few notches. 7 million instead of 10 million is still rich. But when you require 10,000 people to lose their jobs so you can get your 3 million back, that's a whole lot of human misery.

I hate the bail outs. That's my tax dollars going to reimburse people who who's greed blinded them. And you can run the numbers if you want. We could cover welfare for many many years with the bail out money that we are spending. The 700 billion does not include the 125 for the big three auto companies who put all their eggs in the SUV basket. Only an idiot would think that were are going to get out of this for less than a trillion.

But if I want to keep my job. If I want my family to keep their jobs. If I want my friends to keep their jobs. If i want any of them to keep their jobs I have to smile while I eat every bite of that shit sandwich and lick up the crumbs.

[Kulaf]

There is really no reason not to extend loans to GM just like we did with Chrysler....which was a total and complete success.

[Harlowe]

There is really no reason not to extend loans to GM just like we did with Chrysler....which was a total and complete success.

I agree, I'm not as up in arms about the auto industry as I am about this whole banking bailout. Also, Chrysler is a good example of why this is not exactly a bad idea.

[Lurker]

We didn't exactly extend loans to Chrysler. We co-signed loans which is a significant difference. Also, the congressional Act itself was a form of bankruptcy protection where we helped renegotiate debt with creditors. GM currently has about 40 billion in debt. I wouldn't be opposed to some sort of federally controlled "bankruptcy" reorganization of GM. Just extending them some loans is out of the question though.

[Arathena]

I've gotta admit: I'm torn here between the philisophical & intellectual desire to let them fail, because they deserve it royally, and the existential need to put dinner on my table.

I work at a major supplier to GM. Until very recently, it was our largest single customer. Many of our other customers are also suppliers to GM. We will probably survive a GM crash, but it's going to hurt - a lot. The crash of the SUV lines has already killed one product that I was personally involved in.

On the other hand, a complete retooling at the American car manufacturers is going to land in our laps. It would be an industrial feeding frenzy.

[Embar Angylwrath]

We didn't exactly extend loans to Chrysler. We co-signed loans which is a significant difference. Also, the congressional Act itself was a form of bankruptcy protection where we helped renegotiate debt with creditors. GM currently has about 40 billion in debt. I wouldn't be opposed to some sort of federally controlled "bankruptcy" reorganization of GM. Just extending them some loans is out of the question though.

Lurker is correct on the Chrysler thing. But comparing GM to Chrysler is really not relevant. Different times, and different circumstances.

The auto industry is bloated. Too many models to choose from. More competition form overseas companies. The current financial crisis. All of this is different from when the US intervened in Chrysler. Chrysler should file Chap 7 BK and liquidate. They could try Chap 11, but I don't think they'd be able to secure DIP financing. And if the government started providing THAT (financing bankrupt companies), where in the hell does this end???

Sorry, the only way out of this is with some serious pain. Chrysler may fail. Some banks may fail. People will lose homes and declare personal BK. If we just let it happen, it will all be over with in a year or so, and we can rebuild. Propping up companies and having the government decide who lives and who dies is worse than letting the economy correct itself, painful though that might be.

[Partha]

Sure, let's just kill even MORE of our manufacturing base, shall we?

[Kulaf]

We didn't exactly extend loans to Chrysler. We co-signed loans which is a significant difference. Also, the congressional Act itself was a form of bankruptcy protection where we helped renegotiate debt with creditors. GM currently has about 40 billion in debt. I wouldn't be opposed to some sort of federally controlled "bankruptcy" reorganization of GM. Just extending them some loans is out of the question though.

Lurker is correct on the Chrysler thing. But comparing GM to Chrysler is really not relevant. Different times, and different circumstances.

The auto industry is bloated. Too many models to choose from. More competition form overseas companies. The current financial crisis. All of this is different from when the US intervened in Chrysler. Chrysler should file Chap 7 BK and liquidate. They could try Chap 11, but I don't think they'd be able to secure DIP financing. And if the government started providing THAT (financing bankrupt companies), where in the hell does this end???

Sorry, the only way out of this is with some serious pain. Chrysler may fail. Some banks may fail. People will lose homes and declare personal BK. If we just let it happen, it will all be over with in a year or so, and we can rebuild. Propping up companies and having the government decide who lives and who dies is worse than letting the economy correct itself, painful though that might be.

GM should merge with Chrysler.....keep the Jeep brand and kill off it's own SUV lines......keep Dodge and kill off the rest of Chrysler.

[Ddrak]

I think letting GM go into bankruptcy would result in mergers and/or a splitting of GM into smaller parts the other manufacturers would buy. Going to 2 major manufacturers would probably result in a stronger car industry moving forward.

I have no clue what GM going into bankruptcy is going to do to GMV in the UK or GMH here. Interesting...

Dd

[Trollbait]

Here are some of the gotcha's as I see them:

1) Allowing GM into bankruptcy would cost tons of jobs. If GM is not paying for the parts it has purchased that will cost part supplier jobs and force some suppliers out of business.

2) We need to not just give them money. Bad business models should not be rewarded. Instead you appoint an executive to oversee these companies and fire their current leadership.

3) Without a change in the union contracts any bailout will fail. There is a part of the auto industry in America that is thriving. Foreign auto makers who build cars in the U.S. are doing fine. Their workers are paid a comparable wage to the union workers at the big three but they don't have an inch thick nightmare of a contract creating overhead.

Allowing these companies to fail is just NOT an option.

[Ddrak]

If failure isn't an option then they should be wholly government owned. Having a private company that will pocket profits but the public must bail out if it fails is a complete rort of taxpayer money.

Dd

[Embar Angylwrath]

Sure, let's just kill even MORE of our manufacturing base, shall we?

Actually, its called letting the weak manufacturers die.

Let me ask you this, Partha. How much crap do you own that isn't made in America? I'm betting about 90%. Everytime you buy something made overseas, you kill part of the manufacturing base here. Everyone who shops at WallMart, Target, Sams Club, Costco...etc., they help kill the manufacturing base here.

People talk about preserving American jobs, then buy cloths made in China or Brazil. Electronics made in China or Taiwan or Japan. Cars made in Japan (I have one of those myself, and I love it). The fact is, if American car companies made better quality cars, they wouldn't be in the mess they are in. Why should we support a dysfucntional manufacturing base that produces not only a crappy product, but a more expensive one as well?

That's another form of corporate welfare, and I remember you popping blood vessels in your head when you though oil companies were getting special treatment.

[Kulaf]

There is actually very little difference in quality between American and Japanese cars of the same "class" so that arguement fails on an epic scale. If you want to blame anything it is the natural impulse to own an "exotic" foreign import than any actual difference in quality.

[Embar Angylwrath]

I don't know what you've been driving, but American cars typically are rated much lower for dependibility than Japanese cars. Pick up any copy of Consumer Reports that compare cars.

http://www.mylemon.com/blog/2008/10/10- ... f-all.html

Not Consumer Reports, but it is telling, all the same.

[Embar Angylwrath]

http://www.usrecallnews.com/section/aut ... s/nhtsa-pr

Another link, more recent. Note that most of the foreign brands recalled were made here in the US.