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post #1 of 55 (permalink) Old 11-14-2008, 07:18 AM Thread Starter
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No GM bailout, get ready for a rollercoaster ride.

It is looking more and more like the GM Bailout is not going to happen before Obama's inauguration. The Senate still has 49 seats controlled by the Republicans and even the Democrats in the Senate have their doubts.

However the $25billion loan that was already approved may be redone to eliminate red tape and get the money to them quicker.

http://www.reuters.com/article/marke...0081114?rpc=44

All in all, I think it is only a matter of months before GM declares chapter 7 bankruptcy and is liquidated. Chrysler will do the same, I'm just not sure when it will happen. It will be a miracle if they can manage a Chapter 11 reorganization.

So what is going to happen after that? I have a few predictions...

Should GM declare Chapter 7 an liquidate:

1. immediate unemployment for nearly 200,000 people.
2. Stock market crashes again.
3. Oil drops below $40.
4. The Chevy and Caddy brands will be bought up. Hopefully by Kerkorian but I wouldn't be surprised if middle eastern money ends up buying them. Some of those jobs will resume eventually. Several models will cease to exist.
5. The GMC, Saturn, and Pontiac brands will be wiped from the face of the Earth.
6. The Buick brand will be bought by the Chinese, some of those jobs will resume. This will finally give the Chinese the inroad into the US market they've been looking for.
7. I have no idea what will happen to Saab or Hummer, but it won't be pretty.
8. THOUSANDS of car dealerships will close (like James Wood in Denton) Others will scale back drastically.
9. I'm not sure what happens to Opel and Vauxhaul. I think the Holden brand will be sold.

For Chrysler:

1. The Chrysler and Dodge brands will die almost immediately.
2. All dealerships without a Jeep brand will close.
3. Jeep will be purchased and resume production. However I think there is a very good chance that production moves overseas.
4. Chrysler's newer factories will be bought by other car companies like Hyundai.

For Ford:
1. Ford will survive intact and perhaps be very strong after 2011. Their upcoming product portfolio is just too damn good. Also, their re-organization has made a lot more progress than GMs has. The Ford Family is scared and actually listening to Mulally.
2. I think there is still a chance that Mercury will die. However Ford has made indications that some of their European products will be used rebuild that brand.


If GM manages to get itself into Chapter 11 and finds financing, they will probably kill off a lot of brands (if they have any intelligence). They will also dump retiree pension and health care plans. The UAW will not cease to exist but its influence will be greatly diminished.

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post #2 of 55 (permalink) Old 11-14-2008, 07:38 AM
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On the flip side if they get a blank check from the gov, the same thing will happen, just further down the road...... It's a lose-lose situation.
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post #3 of 55 (permalink) Old 11-14-2008, 07:52 AM
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Originally Posted by Sgt Beavis
The UAW will not cease to exist but its influence will be greatly diminished.

as it should be. When they show a factory worker dressed in ALL WHITE working on the asembly line, something is terribly amiss.

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post #4 of 55 (permalink) Old 11-14-2008, 11:13 AM
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The experts have said that if any of the big 3 go under it will cause 3 million Americans to lose their jobs. It will also cost the U.S. Government over a 150 billion dollars in lost tax revenue for 2009,2010,2011 and so on. If you are a Congressman you have to ask yourself several important questions. First one is are you willing to risk your own job when your constituents vote you out of office because your actions cost them their jobs. The second question is what programs are congress willing to give up when they lose all that tax revenue. Given the alternatives I think a 50 billion dollar loan to the Automakers is a no brainer.

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post #5 of 55 (permalink) Old 11-14-2008, 11:24 AM
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what really chaps my ass though is that a couple billion of that 50 will go towards the silver lined pockets of the ceos and top ranking hierachy of gm and all those side brands multi million dollar salaries. now thats fuckin' bullshit if you ask me. i bet if all those men took their salaries down to a 'mere' 100-200k a year, thatd open up alot of budget for the companies to reorganize and save american jobs. but do they care? hell fucking no. theyll suck the moneypit dry until it all goes down the tube and brings everybody down while they relax on their lawnchairs in the hamptons laughing their asses off.
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post #6 of 55 (permalink) Old 11-14-2008, 11:25 AM
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Originally Posted by FreightTrain
The experts have said that if any of the big 3 go under it will cause 3 million Americans to lose their jobs. It will also cost the U.S. Government over a 150 billion dollars in lost tax revenue for 2009,2010,2011 and so on. If you are a Congressman you have to ask yourself several important questions. First one is are you willing to risk your own job when your constituents vote you out of office because your actions cost them their jobs. The second question is what programs are congress willing to give up when they lose all that tax revenue. Given the alternatives I think a 50 billion dollar loan to the Automakers is a no brainer.

Ok, and then what?

I agree that any of the big automakers going under would be very bad, but what is the long term solution for these companies?
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post #7 of 55 (permalink) Old 11-14-2008, 11:50 AM
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If they do go under, they will just reorganize. Shit-canning the unions that helped put them where they are, will be step #1. Like it or not, GM is up to $80 per hour of labor by the time they pay for all the retiree's pensions, health care, etc. Toyota is around $40. It's not a good thing, but it's just business.

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post #8 of 55 (permalink) Old 11-14-2008, 12:00 PM
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I've got mixed feelings on a bailout, but if GM does belly up, look for 10% unemployment and a Dow around 5000.
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post #9 of 55 (permalink) Old 11-14-2008, 12:06 PM
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What should happen is Chapter 11 for both, shit can the unions as debtors, then the government should strategically bail out the suppliers to GM/Chrysler that get fucked by chapter 11, Chevy and Dodge use a lot of the same suppliers!, then move toward culling the non-profitable models and those that are multiples of the same car.

At GM, Hummer, SAAB and Euro brands get sold off...period. Saturn, Buick and Pontiac close. GMC is closed. Scale the company back to core products and no more than 10 or 12 models total. Simplify options groups like Nissan did 10 years ago and voila, you might have a profitable car company losing only about 1/2 the jobs as just closing the doors.


Chrysler...hmm. Trucks stay alive, Jeep does well, shit can current small car line up in favor of their deal with Nissan. Rethink Midsize/fullsize cars for something more mainstream market like the LH platform did back in 92-96. Again, scale the company back to fewer models and concentrate on things that will be popular for the next 10 years with higher power, lower weight and cheap...that is what defined the Dodge Brand for years.

This cuts the union out as the biggest current problem, forces these two companies to restructure for success and still protects the myriad of suppliers ONLY at a much reduced cost to the government. All positives for the longer term.

Allowing the business to continue as is and giving them any money will only prolong the inevitable....Death by Unions....the USPS is going through the VERY same problem of having too much overhead costs due to retirement benefits.



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post #10 of 55 (permalink) Old 11-14-2008, 12:11 PM
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Quote:
Originally Posted by FreightTrain
The experts have said that if any of the big 3 go under it will cause 3 million Americans to lose their jobs. It will also cost the U.S. Government over a 150 billion dollars in lost tax revenue for 2009,2010,2011 and so on. If you are a Congressman you have to ask yourself several important questions. First one is are you willing to risk your own job when your constituents vote you out of office because your actions cost them their jobs. The second question is what programs are congress willing to give up when they lose all that tax revenue. Given the alternatives I think a 50 billion dollar loan to the Automakers is a no brainer.
Are you trying to say that if GM goes under that it is congress that cost all of these workers their jobs?

If our government continues to spend money it does not have to temporarily prop up failing business I think we are all going to be surprised at the depth of the depression we will face.

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post #11 of 55 (permalink) Old 11-14-2008, 12:29 PM Thread Starter
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Originally Posted by slow06
Are you trying to say that if GM goes under that it is congress that cost all of these workers their jobs?

If our government continues to spend money it does not have to temporarily prop up failing business I think we are all going to be surprised at the depth of the depression we will face.
While it isn't Congress that will cost those jobs, the perception will be there that they did nothing when they had a chance. I don't agree with it but that perception is going to be there.

Congress (or rather the federal government) does have some indirect blame here. They have never stepped back for a moment to consider how their regulation hurts the US Auto industry.

For example:
The EPA mandated that only low sulfur diesel may be sold in the US from 2008 onward. However they never mandated that anyone had to actually make the stuff. US based refineries decided to simply not make it. They kept making regular diesel and sold it to China and countries that don't mandate low sulfur diesel. The US actually became a net exporter of Diesel. This is why Diesel prices have risen so much in the US. We are now getting the bulk of our Diesel from Europe and they simply don't have the capacity.

Then there is the lack of inaction on Congress' and the Administration's part. It was quite well known in the early half of this year that oil prices were being forced up through unregulated speculation by hedge and pension funds. There were several tools at the disposal of the President that could have, at least partly, taken the wind out of those sails and brought prices down to Earth sooner. There are actions the Congress could have taken too. Neither did anything and we saw $4.00 a gallon gas which made the bottom fall out on not just SUV sales but pickup truck sales.

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post #12 of 55 (permalink) Old 11-14-2008, 12:35 PM Thread Starter
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Originally Posted by FreightTrain
The experts have said that if any of the big 3 go under it will cause 3 million Americans to lose their jobs. It will also cost the U.S. Government over a 150 billion dollars in lost tax revenue for 2009,2010,2011 and so on. If you are a Congressman you have to ask yourself several important questions. First one is are you willing to risk your own job when your constituents vote you out of office because your actions cost them their jobs. The second question is what programs are congress willing to give up when they lose all that tax revenue. Given the alternatives I think a 50 billion dollar loan to the Automakers is a no brainer.
I'm not in agreement with many of "the experts" many of "the experts" said that none of this economic mess was going to happen to begin with. Many of "the experts" said that we needed the $700billion bailout to free up the credit markets but it hasn't. Many of "the experts" are simply full of shit.

If the big three go under, it will cost jobs. However several of those factories will eventually reopen under new management. Korean, Indian, Chinese, and middle eastern interests will buy a lot of that capacity and put it to back to work. The jobs that are permanently lost are going to be a result of killing off the over capacity that exists today. It will hurt, it will cost jobs, it may even result in a great depression. But in the long run it could be much better for the US than if we simply bailed them out...


BTW, Rick Wagoner reaffirmed today that ONLY Hummer is for sale. He made it clear that GM has absolutely no plans to reduce the brands it has. In other words, Red Ink Rick is going to "stay the course"

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post #13 of 55 (permalink) Old 11-14-2008, 12:41 PM
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Originally Posted by Sgt Beavis
I'm not in agreement with many of "the experts" many of "the experts" said that none of this economic mess was going to happen to begin with. Many of "the experts" said that we needed the $700billion bailout to free up the credit markets but it hasn't. Many of "the experts" are simply full of shit.

If the big three go under, it will cost jobs. However several of those factories will eventually reopen under new management. Korean, Indian, Chinese, and middle eastern interests will buy a lot of that capacity and put it to back to work. The jobs that are permanently lost are going to be a result of killing off the over capacity that exists today. It will hurt, it will cost jobs, it may even result in a great depression. But in the long run it could be much better for the US than if we simply bailed them out...


BTW, Rick Wagoner reaffirmed today that ONLY Hummer is for sale. He made it clear that GM has absolutely no plans to reduce the brands it has. In other words, Red Ink Rick is going to "stay the course"

Lets not forget that because of that huge surge that they saw, and all the profit. Now that prices are starting to stabilize where THEY SHOULD be, OPEC keeps holding their bullshit meetings and keeps cutting production until they see oil at 60-80 a barrel as the normal rate. Because of the greed and ignorance of wall street, energy conservation has gone down, but the price continues to climb. Gas has slowly dropped to a more acceptable rate, but that won't last once OPEC has another cut and wall street concentrates on oil again.

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post #14 of 55 (permalink) Old 11-14-2008, 12:54 PM Thread Starter
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Lets not forget that because of that huge surge that they saw, and all the profit. Now that prices are starting to stabilize where THEY SHOULD be, OPEC keeps holding their bullshit meetings and keeps cutting production until they see oil at 60-80 a barrel as the normal rate. Because of the greed and ignorance of wall street, energy conservation has gone down, but the price continues to climb. Gas has slowly dropped to a more acceptable rate, but that won't last once OPEC has another cut and wall street concentrates on oil again.
Well, OPEC keeps saying that they are going to cut production but supplies haven't fallen. The reality is that even at $40 a barrel, oil is very profitable.

Remember, none of OPEC's members actually have to obey production limits and they have a history of totally ignoring them. Why cut back when your fellow Cartel members are not? Why let them get all that money?

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post #15 of 55 (permalink) Old 11-14-2008, 12:58 PM
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Originally Posted by FreightTrain
because your actions cost them their jobs.
That's some bullshit right there. Our government has nothing to do with 30 years of poor management on GM's behalf.

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post #16 of 55 (permalink) Old 11-14-2008, 12:59 PM
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Well, OPEC keeps saying that they are going to cut production but supplies haven't fallen. The reality is that even at $40 a barrel, oil is very profitable.

Remember, none of OPEC's members actually have to obey production limits and they have a history of totally ignoring them. Why cut back when your fellow Cartel members are not? Why let them get all that money?

You are very right, they have alot in reserve right now, that they can cut production to lower cost, but they say at 60-80 they can use the to offset the cost of the expensive exploration of new oil, it is the biggest fucking crock of shit I have ever heard. Fuck OPEC.

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post #17 of 55 (permalink) Old 11-14-2008, 01:47 PM
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I hope they dont let that happen Im not buying a car from some mideast or a chinese mothefucker. I guess ford is the best company atleast they arent broke not yet anyways

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post #18 of 55 (permalink) Old 11-14-2008, 02:17 PM
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NEW YORK (CNNMoney.com) -- If General Motors really does run out of money by the end of the year, as it predicted was possible, the impact would be felt far and wide - to hundreds of suppliers, rival automakers and ultimately dealers across the nation.

"Once the first domino falls, it rapidly takes out all the other dominoes," said Dennis Virag, president of the Automotive Consulting Group.

Suppliers would be among the first to feel those effects since GM only manufactures the body, the engine and the transmission used in its cars.

In the United States alone, GM spends $31 billion on parts from 2,100 different suppliers. These include the "direct suppliers" involved in producing a vehicle - those that provide everything from steering wheels and seatbelts to brakes and airbags - as well as "indirect suppliers" - those that make things such as gloves, protective eyewear, shop rags and lightbulbs.

Although lawmakers appear to be souring on providing a $25 billion bailout to automakers, the impact of a GM failure on the industry as a whole - and therefore the economy as a whole - is weighing heavily in their decisions.

So far this year, 23 major auto-related companies, most of them parts suppliers, have filed for bankruptcy, according to consulting firm Grant Thornton. They are struggling since car makers have cut back as sales have slowed and raw-material prices have risen.

"I would argue that in today's environment, with the stress that's already on the supply base, they can't take another hit," said Kimberly Rodriguez, a principal at Grant Thornton's automotive practice. "The ripple effect would be huge," she added.

Impact on rival car makers
As supplier companies fail, that would have a direct impact on Ford and Chrysler, since the three domestic auto manufacturers share about 70% of their suppliers, Rodriguez estimated.

One executive who works for a Detroit automaker, and who did not want to be named, said the impact of GM - or any of the three - failing would be dramatic and very challenging.

Not all those affected would suffer equally, but it is hard to predict which companies would be hit hardest, because the relationships among the various suppliers and automakers are complex, he said.

Impact on dealers
A GM failure would also affect about 14,000 dealers in the United States, according to the industry newspaper Automotive News. That is almost half of the nation's 29,000 dealerships that specialize in domestic vehicles.

But even if those 14,000 GM dealers also offer foreign cars, the risk of losing their supply of domestic vehicles could force many of them out of business, said Paul Taylor, an economist with the National Automobile Dealers Association. Already, he noted, the industry is expected to lose about 700 dealers by the end of this year, up to 80% of which will be domestic-brand stores.

Car companies are wary of publicly discussing the possibility of financial disaster because it makes it harder to sell the cars that are on dealer lots today, said consultant Virag. Customers don't want to buy from a company they fear may soon be insolvent.

"It's a difficult situation that the automakers are in," said Virag. "To talk about bankruptcy would only exacerbate the situation, but not talking about it isn't helping."

But whether a bankruptcy would help suppliers and everyone dependent upon GM is still uncertain.

If it is determined that GM could file for bankruptcy under Chapter 11 rules, rather than a Chapter 7 liquidation, the automaker could potentially reorganize. That way the company could seek permission to pay outstanding bills to "critical suppliers" that it absolutely needs, said Robert Sanker, a Cleveland bankruptcy attorney who has represented creditors of bankrupt auto suppliers.

Still, Sanker said, relatively few suppliers would be granted "critical supplier" status in court, leaving many more that would have payments cut off.

And GM is says it is not considering Chapter 11, but rather is continuing to seek government assistance. "Bankruptcy reorganization is not an option for GM because it would create more problems than it would solve," said spokesman Dan Flores.
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post #19 of 55 (permalink) Old 11-14-2008, 02:33 PM
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You think the stock market is down now, we haven't seen anything yet if GM fails.
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post #20 of 55 (permalink) Old 11-14-2008, 02:52 PM
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For anyone that thinks it's ok for GM or any of the big 3 auto workers to fail read this link.

http://www.marketwatch.com/news/stor...20B0DFCFA10%7D

It's more than just union workers that will be affected by them going out of business. Not only will it destroy our national economy alot of local economies will be hit hard with dealerships closing. It's kind of pathetic to see some of the guys posting that it's ok to bail out wallstreet fat cats to the tune of 700 billion, but heaven forbid we save some average Americans' jobs with a 50 billion dollar loan.


Sgt. Beavis,

I'm with you when it comes to government mandates and the EPA sticking their noses to far into the auto business. The same thing goes for the only welfare railroad in this country, Amtrak. Everyone including Politicians demand Amtrak be run as a private business and that they strive to become profitable. It sounds good in News Paper Headlines, but the truth is those same politicians refuse to let Amtrak become profitable. Currently they are forcing Amtrak to resume service between New Orleans and Florida even though Amtrak loses millions of dollars on this run every year. A couple Politicians were upset that Amtrak hasn't resumed service on this route after the damage from Hurricane Katrina was repaired. So Congress decided to attach some strings to Amtrak's budget this year. If they want any money they must present a plan to Congress within 9 months detailing how they will resume service between New Orleans and Florida. How can Government demand a company become profitable when they won't let them run their business the way it needs to be run? Also, How can Government demand Amtrak become profitable when no other passenger rail service in the world exisits without some form of government subsidies? The answer is it can't, but it sure looks good to voters when you demand that Amtrak must turn a profit in News Paper Headlines.

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post #21 of 55 (permalink) Old 11-14-2008, 03:01 PM
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Quote:
Originally Posted by FreightTrain
For anyone that thinks it's ok for GM or any of the big 3 auto workers to fail read this link.

http://www.marketwatch.com/news/stor...20B0DFCFA10%7D

It's more than just union workers that will be affected by them going out of business. Not only will it destroy our national economy alot of local economies will be hit hard with dealerships closing. It's kind of pathetic to see some of the guys posting that it's ok to bail out wallstreet fat cats to the tune of 700 billion, but heaven forbid we save some average Americans' jobs with a 50 billion dollar loan.


Sgt. Beavis,

I'm with you when it comes to government mandates and the EPA sticking their noses to far into the auto business. The same thing goes for the only welfare railroad in this country, Amtrak. Everyone including Politicians demand Amtrak be run as a private business and that they strive to become profitable. It sounds good in News Paper Headlines, but the truth is those same politicians refuse to let Amtrak become profitable. Currently they are forcing Amtrak to resume service between New Orleans and Florida even though Amtrak loses millions of dollars on this run every year. A couple Politicians were upset that Amtrak hasn't resumed service on this route after the damage from Hurricane Katrina was repaired. So Congress decided to attach some strings to Amtrak's budget this year. If they want any money they must present a plan to Congress within 9 months detailing how they will resume service between New Orleans and Florida. How can Government demand a company become profitable when they won't let them run their business the way it needs to be run? Also, How can Government demand Amtrak become profitable when no other passenger rail service in the world exisits without some form of government subsidies? The answer is it can't, but it sure looks good to voters when you demand that Amtrak must turn a profit in News Paper Headlines.

While I agree with you on some counts, your hard on for unions is just hard to overlook. You have a vested interest in their survival so you are definitely looking at this situation through rose colored glasses.

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post #22 of 55 (permalink) Old 11-14-2008, 03:03 PM
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You think the stock market is down now, we haven't seen anything yet if GM fails.
No shit, free falling will happen.

The fact is, the government won't allow it to happen, it's too chic to pump government money into poorly run companies.

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post #23 of 55 (permalink) Old 11-14-2008, 03:12 PM
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While I agree with you on some counts, your hard on for unions is just hard to overlook. You have a vested interest in their survival so you are definitely looking at this situation through rose colored glasses.

--wes
Actually I'm a live and let live kind of guy. I know that no one person or organization is right 100% of the time. I disagree with my union on plenty of issues and my union is totally different from the UAW and we have no ties with them. It just really pisses me off to see Americans say it's ok for other Americans to lose their retirement because they are union. Truth be known, every single American benefits from Unions in some form or fashion wether they are a union member or not. Anyone that doesn't beleive this needs to open their eyes and ask themselves if Corporate America gives two fucks about them.

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post #24 of 55 (permalink) Old 11-14-2008, 03:26 PM
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I'm on the line. The hard working folks that work at plants and at the dealerships need Uncle Sam's help. But then again I read this, and I feel they should sink.

Chrysler gives bonuses, asks for bailout

"Chrysler is asking the government for a bailout. It's laying off employees and cutting salaries. It's a company in trouble.

Oh yeah, it's also paying $30 million in bonuses to dozens of top executives.

That's the end result of a poorly-timed plan to keep Chrysler together as it was being sold. The company didn't want top executives to leave during the transition, so it promised big money for people who stuck around. Now, Chrysler is asking the government for billions of dollars in aid while it writes million-dollar bonus checks out to A-list employees. How's that for awkward? - MSN

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post #25 of 55 (permalink) Old 11-14-2008, 03:45 PM
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Actually I'm a live and let live kind of guy. I know that no one person or organization is right 100% of the time. I disagree with my union on plenty of issues and my union is totally different from the UAW and we have no ties with them. It just really pisses me off to see Americans say it's ok for other Americans to lose their retirement because they are union. Truth be known, every single American benefits from Unions in some form or fashion wether they are a union member or not. Anyone that doesn't beleive this needs to open their eyes and ask themselves if Corporate America gives two fucks about them.

Again, I belive they had their place and did contribute to a more fair/just employment standard. However I also think they have run their course. They are archaic in both design and function. In a free market/right to work environment there is no need for them. The market would dictate a fair and just compensation package for the work being done, just like every other industry.

I'll admit if they were dissolved at this point it would be tragic for the current workers as their quality of life would be affected, but it would likely be better for the greater good of the companies and the economy.

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post #26 of 55 (permalink) Old 11-14-2008, 03:46 PM
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GM has an ABO of $108 billion!?
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post #27 of 55 (permalink) Old 11-14-2008, 03:50 PM
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GM has an ABO of $108 billion!?
lmao! holy shit. I think that means someone isn't getting the full extent of their pension plan, huh?

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post #28 of 55 (permalink) Old 11-14-2008, 03:57 PM
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Still loving this quote...fucking greatness.

"If you're not familiar with GM, it's a health care benefits management firm that sells cars for a loss as a side venture."
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post #29 of 55 (permalink) Old 11-14-2008, 04:01 PM
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Thumbs up

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Still loving this quote...fucking greatness.

"If you're not familiar with GM, it's a health care benefits management firm that sells cars for a loss as a side venture."
Priceless!

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post #30 of 55 (permalink) Old 11-14-2008, 04:07 PM
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Looks like Bush is at least on board with releasing the 25B the automakers were promised a while back:

25B for Auto Makers

Bush wants $25B in loans released to carmakers

White House seeks quick release of $25B in loans to automakers but opposes Democratic plan

WASHINGTON (AP) -- The White House on Friday threw its support behind a plan to speed release of $25 billion in existing loans to the Big Three automakers but rejected a Democratic proposal to use money from a financial bailout to help the troubled industry.

The $700 billion financial rescue package was never intended to help automakers and shouldn't be now, White House spokeswoman Dana Perino told The Associated Press. But since Democratic leaders in Congress are pressing forward with a proposal to carve out a piece of its for the auto industry, she said the White House has decided to pursue a different approach: accelerating the availability of federal loans Congress first approved in September.

Those loans were approved to help automakers build more fuel-efficient vehicles and become more competitive companies in the global marketplace. The administration now supports allowing the loans to be released more quickly than the original legislation prescribed and to be used for more urgent purposes as the companies struggle to stay afloat.

"Democrats are choosing a path that would only lead to partisan gridlock," she said. "We are now actively calling on Congress to amend the loan program."
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post #31 of 55 (permalink) Old 11-14-2008, 04:27 PM
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GM has an ABO of $108 billion!?
Remain calm, all is well!!
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post #32 of 55 (permalink) Old 11-14-2008, 05:28 PM
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So if you're for the bailout, what happens in 1-2 years when they say they need another $25B? I still don't get how "loaning" them all that money is going to fix a company with so much shitty leadership that made the decisions that got them where they are today. I think the the first thing to happen before anyone talks about free money should be a detailed plan that starts with some major changes, people getting shit canned with zero point zero dollars, at the top all the way down to what cars/truck will be built and where they'll come from. If they expect major help from me, in my opinion lots of execs need to get the fuck out with no pay what-so-ever.
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post #33 of 55 (permalink) Old 11-14-2008, 06:48 PM
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So if you're for the bailout, what happens in 1-2 years when they say they need another $25B? I still don't get how "loaning" them all that money is going to fix a company with so much shitty leadership that made the decisions that got them where they are today. I think the the first thing to happen before anyone talks about free money should be a detailed plan that starts with some major changes, people getting shit canned with zero point zero dollars, at the top all the way down to what cars/truck will be built and where they'll come from. If they expect major help from me, in my opinion lots of execs need to get the fuck out with no pay what-so-ever.

I agree. Gut the company or GTFO.
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post #34 of 55 (permalink) Old 11-14-2008, 07:05 PM
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scary times, scary times indeed.... I say we cut foreign aid down to just about nothing. Charity starts right here.

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post #35 of 55 (permalink) Old 11-14-2008, 07:26 PM
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Interesting/scary facts regarding GM:

GM has $136 billion in assets and $193 billion in liabilities (equity of -$57 billion).
For the TTM, GM has lost $18 billion.
In Q3, GM used $7 billion in cash, leaving them with $19 billion in cash.
It's estimated that GM needs $11-14 billion in working capital for day to day operations.

GM has to service $45 billion in debt.

The company still has legacy costs (in 2 years it's supposed to pay $7 billion and get rid of its health care obligations to the unions) and capacity utilization issues.

Moody's just downgraded GM to Caa2. Their debt is trading at 20 to 40 cents on the dollar.

GM stock hit a 62 year low earlier this week.

Recent estimates indicate the dealers are 20% overstocked.

GM's strong markets include China, Russia, and Latin America. All 3 economies are struggling right now. These markets reflect GM's niche: struggling countries that don't demand high quality.

GM car and truck sales were down 45% in October.

There has been talk about a potential merger between GM and Chrysler. For the first 9 months of the year, Chrysler sales were down 25%. The greatest synergy would be the need to only hire one bankruptcy lawyer.

The big three employ approximately 200,000 and affect the jobs of approximately 3 million. A bankruptcy would have tremendous impacts on our economy, particularly the midwest.
If GM files for bankruptcy they would eventually provide huge discounts on their cars and have a terrible impact on its competitors (possibly forcing them into bankruptcy).
Obtaining financing in bankruptcy court would be highly unlikely. Nobody wants to extend that kind of credit to GM, thus increasing the likelihood of a liquidation.
It's difficult to sell durable goods during a bankruptcy. Consumers worry about whether they'll be able to get their cars serviced in the future.

There is no easy solution to this problem. Letting GM fail would cause chaos and could very possibly bring down Ford and Chrysler. The flip side of this is that these problems aren't going away. Companies like GM live on the edge, but when the economy weakens, they are exposed. We are simply throwing money into a money pit. If we do this, we need to recognize what it is...a "work for welfare" program.
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post #36 of 55 (permalink) Old 11-14-2008, 07:29 PM
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If we do this, we need to recognize what it is...a "work for welfare" program.
That's what scares me. You never want to be in a position where you're just throwing cash at a company to keep it afloat solely so that the employees can survive.

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post #37 of 55 (permalink) Old 11-14-2008, 08:00 PM
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Every time the gouv. gives money away

It makes every dollar worth less. How do you decide who NOT to bail out? Once it starts, it will continue till there is no value to a dollar left. Wouldn't it be irony if the unions all went belly up under Obama's management.
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post #38 of 55 (permalink) Old 11-14-2008, 08:19 PM
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So if you're for the bailout, what happens in 1-2 years when they say they need another $25B? I still don't get how "loaning" them all that money is going to fix a company with so much shitty leadership that made the decisions that got them where they are today. I think the the first thing to happen before anyone talks about free money should be a detailed plan that starts with some major changes, people getting shit canned with zero point zero dollars, at the top all the way down to what cars/truck will be built and where they'll come from. If they expect major help from me, in my opinion lots of execs need to get the fuck out with no pay what-so-ever.

I think GM has a chance if gas prices stay low and they can weather the storm until the economy improves. When that is, is anyones guess. My biggest worry is how the big 3 are always caught with their pants around their ankles. I'm not sure if they just suck at predicting future markets or they just don't give a shit. Look at the run up in gas. They were still trying to sell SUVs when gas was $4 a gallon and everyone knew that shit wouldn't fly. GM then rushes to the drawing board and spends billions designing the Volt. During the the run up in gas prices anyone with half a brain could tell you gas prices would not stay at that level for ever and would come down sooner or later. By the way things are going the Volt is going to be released when gas will probably cost under $2 a gallon. Who in their right mind is going to spend 40k on an electric car that is suppose to save you money when you can fill up your SUV for $40. We all know the American consumer has a very short memory so chances are the Volt will go over like a fart in a quiet church.

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post #39 of 55 (permalink) Old 11-15-2008, 12:15 AM
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Problem is they can't weather the storm... At this rate we're talking a couple months till they are insolvent. The days of going to the dealer to trade in your 3 year old tahoe with $10k in negative equity on a brand new one are gone. Even people that have good credit are needing a down payments, and most of them aren't heading out to buy trucks right now. Yeah the sting at the pump is gone, and Americans tend to have short memories, but not quite this short I'm afraid. Companies that have the capital, such as toyota, can afford to dump cash into financing incentives to get people on the lot and out the door with a vehicle, but even their sales are down. The writing has been on the wall for awhile now, Ford has been trying to change for years now, and they may just be able skate through this recession. The rest of detroit is in definitely in the shit

Freight: I know you work under a union, and thats great, but your industry doesn't have to worry about global competition. We aren't going to outsource rail freight to china anytime soon , So the railroad companies aren't trying to compete against others that don't have the added costs of union workers. The blame isn't all on UAW, but it certainly hasn't helped. You can't pay someone that sweeps the floors $26/hr with full benefits and a pension and stay competitive. UAW brings zero to table for the company, they just suck at the tit. Obviously nissan, toyota etc are doing just fine running their assembly plants in right to work states without UAW.

The fed has already spent a few trillion so far, so why not a few billion for GM...

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post #40 of 55 (permalink) Old 11-15-2008, 12:29 AM
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Quote:
Originally Posted by jakesford
Problem is they can't weather the storm... At this rate we're talking a couple months till they are insolvent. The days of going to the dealer to trade in your 3 year old tahoe with $10k in negative equity on a brand new one are gone. Even people that have good credit are needing a down payments, and most of them aren't heading out to buy trucks right now. Yeah the sting at the pump is gone, and Americans tend to have short memories, but not quite this short I'm afraid. Companies that have the capital, such as toyota, can afford to dump cash into financing incentives to get people on the lot and out the door with a vehicle, but even their sales are down. The writing has been on the wall for awhile now, Ford has been quicker to adjust and they may just be able skate through this recession. The rest of detroit is in definitely in the shit

Freight: I know you work under a union, and thats great, but your industry doesn't have to worry about global competition. We aren't going to outsource rail freight to china anytime soon , So the railroad companies aren't trying to compete against others that don't have the added costs of union workers. The blame isn't all on UAW, but it certainly hasn't helped. You can't pay someone that sweeps the floors $26/hr with full benefits and a pension and stay competitive. UAW brings zero to table for the company, they just suck at the tit. Obviously nissan, toyota etc are doing just fine running their assembly plants in right to work states without UAW.

The fed has already spent a few trillion so far, so why not a few billion for GM...
you can't just have any knuckle head working at a factory, oh yeah wait, that's kind of the point.....
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post #41 of 55 (permalink) Old 11-18-2008, 03:51 PM
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That's some bullshit right there. Our government has nothing to do with 30 years of poor management on GM's behalf.
do you think you could put Gpamps picture in the movie in your sig ?
GET THE fuck out! L O L
kind of unsurprising he's not in this thread , given people are actually talking about something intelligently

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post #42 of 55 (permalink) Old 11-18-2008, 04:00 PM
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We did it for the banks after they fucked up why cant we do it for these corporations. Hell they did it for Chrysler way back in the day and made it to were they could not be in Nascar until they repaid there debt.
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post #43 of 55 (permalink) Old 11-19-2008, 09:25 AM
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Quote:
Originally Posted by jw33
So if you're for the bailout, what happens in 1-2 years when they say they need another $25B? I still don't get how "loaning" them all that money is going to fix a company with so much shitty leadership that made the decisions that got them where they are today. I think the the first thing to happen before anyone talks about free money should be a detailed plan that starts with some major changes, people getting shit canned with zero point zero dollars, at the top all the way down to what cars/truck will be built and where they'll come from. If they expect major help from me, in my opinion lots of execs need to get the fuck out with no pay what-so-ever.
X2 It is what we should have done in the finacial bailout but instead the execs went on a vacation with our tax dollars.

IMO if we don't do that we are just pissing away $25 billion.

All I hear is bla bla bla......
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post #44 of 55 (permalink) Old 11-20-2008, 08:38 AM
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Man Ford and GM stocks are getting scalped right now ........
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post #45 of 55 (permalink) Old 11-20-2008, 08:50 AM
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Originally Posted by mustangguy289
We did it for the banks after they fucked up why cant we do it for these corporations. Hell they did it for Chrysler way back in the day and made it to were they could not be in Nascar until they repaid there debt.

on a side note, nascar fired half of their traveling tech crews in all of the big 3 series on monday.................to lower costs.

real cobras don't have fog lights
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post #46 of 55 (permalink) Old 11-20-2008, 09:34 AM
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if GM fails then every auto maker will gain market share, ford would sell more cars, as would every other auto maker.

of course the bigger problem is that people can not afford cars right now, there is little credit, and not to many people have 30K laying around for a new car. so it does not matter how much money you give them, people still cant afford cars.
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post #47 of 55 (permalink) Old 11-20-2008, 05:37 PM
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I was thinking the other day about this idea . Instead of giving them a loan , why not sign a contract with them to buy "X" amount of vehicles for federal use and sell off the units in circulation right now through public auctions ?
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post #48 of 55 (permalink) Old 11-20-2008, 10:01 PM
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I'll be damned. I like that idea
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post #49 of 55 (permalink) Old 11-20-2008, 11:13 PM
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Quote:
Originally Posted by thesource
I was thinking the other day about this idea . Instead of giving them a loan , why not sign a contract with them to buy "X" amount of vehicles for federal use and sell off the units in circulation right now through public auctions ?
the government already buys cars from the big 3 under contract, and they auction off the old ones
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post #50 of 55 (permalink) Old 11-21-2008, 06:15 AM Thread Starter
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the government already buys cars from the big 3 under contract, and they auction off the old ones
You are correct, but I think he is talking about a total refresh of every car the federal government currently has on hand. Even newer ones.

One possible, that I see, problem is that this would release thousands (hundreds of thousand?) of cars onto the auction market really driving down the resale value of everything else. However that could potentially clear itself up after a year. Another issue is that the Feds wouldn't buy another car for two or three years after that. I'm not saying its a good or bad idea, just a maybe...

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