Vendetta1 said:

Nope. I just wish we'd let 'em go under a few tens of billions of dollars ago.

Genesia said:

Genesia said:

Oh please blame it on the unions GM was able to deal with the union costs for many decades but now that's the reason they can't keep up anymore? That's BULLSHIT and you know it but don't want to face the facts.

Everybody knows that GM makes shit cars that are fuel inefficient and cost too much. They make a BAD PRODUCT and have kept on making a bad product untill people didn't want anymore. They are stupid because they should have followed Toyota's lead and place their bets on a future fuel efficient models. But all they could think off was SHORT TERM profits.

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[Edited 6/2/09 5:12am]

I don't blame the unions.

I blame GM for caving to the unions for years. Big difference.

SupaFunkyOrgangrinderSexy said:

Fannie Motors
By the Editors

Government Motors? The name has the proper initials, but the connotation is imprecise. Yes, the federal government now owns a majority stake in General Motors, but the senior administration officials who explained the deal to reporters sounded almost desperate to be rid of the responsibility. (“The government really has no desire to own equity stakes in companies any longer than is absolutely necessary and will actively seek to dispose its ownership interest as soon as it is practical to do that.”) We cannot blame them. GM is a financial basketcase, saddled with uncompetitive labor costs and a mandate to make small cars that it cannot sell profitably. The government will probably seek to move GM into private hands quickly.

What then? Even after the government divests itself of its formal ownership stake, the reality is that GM will remain a government-sponsored enterprise — Fannie Motors might be a better nom de ridicule. All three Detroit automakers now share the same GSE structure (public mission, private ownership) that failed Fannie and Freddie. Going forward, the automakers’ missions are A) to provide health care, benefits, and high-wage employment to the United Auto Workers union, and B) to build the little green cars that President Obama and the Democrats want them to make, and the American people do not want to buy (at least not from Detroit while Japan makes them better for less). In exchange, the Big Three will continue to enjoy implicit and explicit taxpayer support. Even Ford, the only company that did not take bailout money, is expected to help itself to some of the $25 billion in loans that Congress set aside last year to help Detroit retool for its green future.

The administration has emphasized that it will not use its ownership stake to micromanage GM. But we know from watching Fannie and Freddie that the government doesn’t need an ownership stake to push a GSE in the direction it wants it to go. Just ask House Financial Services Committee chairman Barney Frank, who repeatedly made it clear to Fannie and Freddie that their government charters (which exempted them from state taxes, among other things) depended on their willingness serve government ends, i.e., “to make housing more affordable.” Fannie and Freddie proceeded to underwrite America’s adventures in trash mortgages to the tune of $1 trillion. They did what Frank asked them to do. Now we’re on the hook for hundreds of billions, and Frank still has his job.

The government seems determined to repeat this mistake with cars. The consequences probably won’t be as catastrophic or costly, but don’t believe for a second that this is the last bailout for Detroit. The administration stated that it “does not anticipate providing any additional assistance to GM beyond this [new $30.1 billion] commitment.” Note the language. The administration does not “anticipate” providing GM with additional funds, but it hasn’t ruled out the possibility, nor will it. And from a certain point of view, it’s only fair that Washington keep the lifeline open. If D.C. is going to order Detroit to make small, unprofitable cars in high-wage union shops, then Detroit is going to ask D.C. to cover the shortfall.

“Our goal is to get GM back on its feet, take a hands-off approach, and get out quickly,” Obama said. Understandably, he is seeking to reassure a skeptical public that the government will not stay in the auto business for long. But whether the government keeps its shares or sells them, Detroit has been a government project for quite some time. As long as the feds are telling Detroit what kind of cars to make, where to make them, and how to compensate their workers, Detroit will require taxpayer assistance, for the simple reason that the feds are terrible at running businesses. And if you believe otherwise, we’ve got a couple of defunct mortgage companies to sell you.

http://article.nationalre...QxNDg2Y2M=

Tremolina said:

Exactly. Why do Chrysler and General Motors find themselves in a financial fix, these fools never changed their ways 40 years ago. The quality of their product was and is still woefully inferior, they continued to run their companies on quarterly plan instead of having a 5, 10, 15, years plan, and they've refused put their profits during the 80's,90's/early 00's for research and development for fuel efficient cars for a global economy. I forgot, they built big ass gas guzzling tanks. I recall Chicago Cranes Business, Newsweek, The Economist, The Wall Street Journal and The Financial Times all asked, (once upon a time when gas was as low as 89 cents a gallon) What's going to happen to Chrysler, Ford and General Motors if gas prices go to 2 to 3 dollars a gallon? General Motors vice chairman Bob Lutz: As recently as 2004, Lutz dismissed hybrids as "an interesting curiosity," adding that they didn't make sense with gas at $1.50 a gallon.

The last decade or two the Big 3 have quietly have been building plants south of the border and elsewhere. A couple of years ago Chicago Tribune reported the Big 3's decision to go abroad was based in part because all 3 car companies executives conceded, they'd given up hope they could recapture lost market share in the U.S./Canada. All 3 companies said, they were looking to expand their markets in Latin America and Eastern Europe. But no, blame the UAW. I guess it's UAW's fault GM spent $40 billion on labor-cutting machinery and went from being the low-cost producer to being the high-cost producer.

In the case of GM their unwillingness (both labor and mangement) to shut down unprofitable car brands such as Pontiac was a costly mistake. But as I've always said, "When you begin to lose market share, it's your product stupid." The last time I checked UAW workers assemble cars they don't design them.

the bigger they are.....



the harder they fall.

They made their bed, time to lay in it.


Hindsight is 20/20.

Genesia said:

Still blaming the unions indirectly.

Here is the facts:

SHIT CARS
FUEL INNEFFICIENT
TOO EXPENSIVE

Vendetta1 said:

Yeah, probably. I don't feel bad for maybe 30 - 50 top execs that were made millionaires for making bad decisions, but my heart goes out to the other 599,950 people that worked for GM; the millions of regular-guy shareholders that lost their entire investment; and the untold hundreds of thousands (or millions) of people that are going to be directly and indirectly hurt by this (suppliers, businesses that serve soon-to-be-closed GM factories, etc.).

I know you do, too.

And I see RodeoSchro should have been consulted on this. From the article:



So the BK wiped out $37 billion in debt. And in return, we taxpayers pumped in $30 billion.

For an extra $7 billion, we could have bought the debt, turned it into a convertible instrument, and avoided bankruptcy. The risk of our investment would have been the same - whether we hold stock or debt, GM has to be successful for our investment to pay off.

I guess there were other factors at play, but ti sure seems like buying the debt had some advantages.

Hell, now that I've thought about it for 3 minutes, we could have bought the entire $54 billion in debt for that $30 billion. This would have given us an investment at less than par, and it would have taken ALL the debt off GM's balance sheet.

Keep in mind, my idea isn't any cheaper than what the government did; it just avoids the bankruptcy.

Graycap23 said:

Why didn't the government protect this company by keeping the price of ga$oline down?

RodeoSchro said:

While I would rather own stock than debt, my guess GM is supposed to go bankrupt, split up in pieces that are sold off and in the end dissolve.

Tremolina said:

If you own debt, you are ahead of any stockholders in a bankruptcy. If GM goes bankrupt again, under the present scenario, our taxpayer ownership goes away.

Give me debt any day.

GM didn't have to go bankrupt to sell off its parts. In fact, bankrupt companies that sell off parts get less for them than do non-bankrupt companies. Buyers know bankrupt sellers are in a position of weakness. They have to sell.

RodeoSchro said:

I understand but look at the bond holders, they are tanking as well. Besides, the government borrowed 30 billion first, now owns 60% of stock, invests 30 billion more and will get that money back selling out GM to whomever pays an acceptable price.

It's not my idea of a good idea, but I think that's what will happen.

Cinnie said:

That is not GM's downfall.

''What I meant to say is''
Why didn't GM make a car where the manifold DIDN'T leak the antifreeze into the oil, ruining the engine completely only 8 to 10 years into their lifespan?