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The nation’s top auto executives are on Capitol Hill this week begging for a lifeline, but the request is just a tad more desperate for General Motors Chief Executive Rick Wagoner.
While it is almost impossible to predict what Congress will do about the industry’s controversial request for another $25 billion in aid, without federal action it’s likely that GM would be forced to file for bankruptcy protection, analysts say. A move like that could have a slew of side-effects, not least of which would be undermining car-shoppers' confidence in GM.
Earlier this month, the nation’s leading automaker revealed it is going through cash at a rate of $2 billion a month and will run out of money next year unless it receives an urgent injection of cash from Congress. GM was down to about $16 billion in cash and other available assets at the end of September, and the company says it needs a minimum of $11 billion to $14 billion to survive.
As the days pass and GM’s money burns away, a bankruptcy filing is a distinct possibility. Many analysts, commentators and even lawmakers have suggested that a Chapter 11 bankruptcy filing is the best option for GM. Under Chapter 11, GM would gain protection from its creditors while it reorganizes its operations.
Harvard economics 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.”
For Wagoner, any bankruptcy filing could cost him his job. If GM were to file for Chapter 11, creditors would gain new power in bankruptcy court, and they probably would look long and hard at the management team, said Douglas Baird, a law professor at the University of Chicago’s Law School.
“There’s a distinct possibility [Wagoner] will lose his job, but not because he has to,” Baird said. “The company’s creditors are the ones that own the company, and they might decide he’s the cat’s pajamas, but you might also find a lender to finance the turnaround that says, ‘I’m willing to lend, but not if he’s the CEO.’”
A bankruptcy filing would not mean that GM immediately ceases operations. Typically, a Chapter 11 bankruptcy gives a company “breathing room” to work out its affairs and implement a new business plan, according to Baird. Workers can still go to work, consumers can still buy cars and get them serviced, and dealerships can continue to sell them, he said.
“You don’t just shut down and throw the asset away,” he said. “You continue to run it, but you tell the creditors they won’t get paid back in full for their investment, and you continue to operate the company as you restructure it and figure out its value.”
However, GM probably would face an extra dilemma in bankruptcy.
Typically, companies that go into bankruptcy need financing to continue their operations and meet customer needs, and GM would need a lot. Retailer Circuit City, for example, which recently filed for bankruptcy, successfully negotiated a $1.1 billion debtor-in-possession loan to keep stores open as it restructures. Lenders who provide debtor-in-possession financing to a bankrupt firm have priority over other creditors.
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.”
It’s quite feasible that another automaker — one in a stronger financial position, such as Honda or Nissan — would swoop in and buy parts of GM in a bankruptcy. Sales of subsidiaries often happen in bankruptcy, Baird said, but they typically represent a worst-case scenario.
The bankruptcy judge would gain enormous power, determining whether the company should be broken up and sold off or reorganized to emerge largely intact, said Baird.
GM executives say the company needs a bridge loan to get the company through the downturn until auto sales pick up. But others say GM, Ford and Chrysler have too many plants, their expenses are too high and they need fewer dealerships, said Baird.
“If you have a restaurant that serves bad food and no one comes to eat, that’s a business plan problem,” he said. “In that case, you need a day of reckoning, and that’s a particular story that some people think corresponds to GM and is consistent with what Chapter 11 bankruptcy can do; it creates an environment in which you can do the tough stuff of restructuring.”
A bankruptcy would also raise questions about the solvency of GM’s pension funds. In a bankruptcy, the government’s Pension Benefit Guaranty Corp. would be on the hook to fulfill GM’s promises to pay a monthly pension to its retired workers. GM and the PBGC are reportedly in discussions over the health of GM’s two pension programs to gauge the impact of a potential transfer to the federal agency.
“The question here is whether there is a shortfall in the funding GM has put aside for this, and the answer is we don’t know, but it would not shock me if the PBGC had to pick up shortfalls in their pensions,” said Baird.
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 | Bailout with a price: Chapter 11 bankruptcy | Associated Press | Wed Nov 19 | 6 |
 | A Practical Look at Chapter 11 For General Motors -- Analysis From Leading Economists | Voxeu.org | Thu Nov 20 | 1 |
| GOP's Bankrupcy law is makign this recession worse. | Business Week | Wed Nov 19 | 3 |
| More Americans slipping into bankruptcy - International Herald Tribune | International Herald Tribune | Wed Nov 19 | 0 |
| Detroit: If They Fail, Let Them | The Milwaukee Journal Sentinel | Tue Nov 18 | 0 |
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8.2
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1.1
{"commentId":4127842,"authorDomain":"lynne-brinkley"}
Let'em go! Time for the "saving/bail out" to stop! Greed should not be rewarded!
{"commentId":4127842,"threadId":"423451","contentId":"2129044","authorDomain":"lynne-brinkley"}
- 4 votes
#1 - Wed Nov 19, 2008 3:22 PM EST{"commentId":4127857,"authorDomain":"ghetto-otaku"}
I call it a "Bailout Bonanza"......
{"commentId":4127857,"threadId":"423451","contentId":"2129044","authorDomain":"ghetto-otaku"}
- 1 vote
{"commentId":4131334,"authorDomain":"nick-williams612"}
Anyone see them actually testify? They kept floating numbers between 2 and 5 billion a month just to keep from filing bankruptcy. These guys are CEOs, shouldn't they have a better handle on their books and business if they're getting paid millions a year? Maybe another way of looking at it is, 3.5, plus or minus 1.5 billion. What the hell kind of margin of error is that? I wish I could negotiate my salary like that.
{"commentId":4131334,"threadId":"423451","contentId":"2129044","authorDomain":"nick-williams612"}
- 4 votes
{"commentId":4135842,"authorDomain":"president-bush"}
Let the sinking ship sink and let the unions sink with them.
{"commentId":4135842,"threadId":"423451","contentId":"2129044","authorDomain":"president-bush"}
- 2 votes
{"commentId":4136997,"authorDomain":"michaellittell"}
I hate to say "let them die" only because of how many jobs and families that adversely affects - but letting them die might just be what this country needs to kickstart a new, viable, 21st century electric-vehicle program.
I don't know how many of you have read about this, but Barack Obama is committed to completely re-engineering the outdated national electric grid into a new "smart grid" designed for the 21st century (check it out repoweramerica.org). This new grid will support (among other things) plug-in consumer vehicles and "pay-as-you-go" electricity. (I believe commercial vehicles will run on natural gas, at least in the short term).
Anyway, my thinking is this; If the big 3 are bailed out now, won't they just continue to make gasoline-based consumer vehicles the same way they have in the past?... Maybe a hybrid here and there, but certainly progress at a snail's pace due to them being so "in bed" with big oil?... Versus say, actually letting them die which forces American necessity to finally be the mother of new invention and innovation? Who says it MUST BE GM, Chrysler and Ford that continue to dominate our American vehicle manufacturing industry?
Let necessity and capitalism spurn innovation!... and regardless of who comes out on top (the big 3 or new companies), definitely reinvest in AMERICAN workers to fully realize the next generation of American vehicles.
{"commentId":4136997,"threadId":"423451","contentId":"2129044","authorDomain":"michaellittell"}
- 3 votes
{"commentId":4138017,"authorDomain":"fatboyslimsin"}
Who are GM, Ford & Crysler trying to kid? It looks like perhaps the Senate is not fooled. Maybe at last US carmakers can return to the businesss of making cars people want instead of playing the market on car finiancing contracts. I think allowing chapter 11 for any of the US auto makers is only slightly worse than allowing them to continue as they are. If they want their hand in the public purse then they have to step up to meet design and efficency targets.
Ironically there was a photo essay on the same page as this article about the LA Motor show. Of the 8 pics shown only # 8 was of a us car, the new Mustang and not very impressive. All the imports were the stars, that's where it's gone wrong. The product is the root of the problem and poor labour management processes. Where's the innovation, great design & slick marketing for products people want now?
{"commentId":4138017,"threadId":"423451","contentId":"2129044","authorDomain":"fatboyslimsin"}
- 1 vote
{"commentId":4180199,"authorDomain":"gpapp-1"}
What is wrong with the ney sayers here, The Feds just spent $ 150 Billlion to save AIG - an insurance company with 90,000 employees world wide that sells "paper products" Don't tell me that all the policy holders couldn't have taken a hair cut , bought another policy from another company on day 2 and go on with life. Here we have millions of employees world wide and the 8th largest company ( American) in the world in crisis asking for a pittance $ 25 Billlion - aid package, is Washington making a smokescreen of the Auto Sector while the $150 Billion AIG bailout goes without debate - come on America what is going on here? Write the check to the Autos who have fed millions of families for decades - not to mention near half of revenues earned by the so called " autoworkers" went to UNCLE SAM in taxes each year - the shareholders of GM earned profits which also were taxed by UNCLE SAM - Has our Government and society not benefitted from this auto giant ? Throw them a life line and take some shares for the loan , then have the unions take a hair cut and close a few more plants and get this machine back on track. Last, if we allow the auto plants to fail, how would we ever mass produce arms and weapons again in a time of war or crisis without the infrastructure in place - are we going to buy the stuff from China or Japan?
All in all these automakers and the unions for decades have repeatedly told our Government that the Asian automakers have an unfair advantage as they "assemble" autos here but they import the engines and drivetranes (the big money content) from their mother countries when the Big 3 do it all here. The big 3 pay taxesin America while most of the revenue realized from the Asian built cars goes back to Japan.
If we provide a bailout to the Big 3 - lets top that up with a $5,000 tax credit over 3 years to any one buying a new big 3 car. That will kick start the industry !!!
{"commentId":4180199,"threadId":"423451","contentId":"2129044","authorDomain":"gpapp-1"}
- 1 vote
{"commentId":4473800,"authorDomain":"mnoah43470"}
I feel for the workers in the plants but not for the shiny corporate buildings loaded with a workforce and pay packages that could be cut in half. trim the executive pay and the workforce in the office buildings could probably be cut in half.
{"commentId":4473800,"threadId":"423451","contentId":"2129044","authorDomain":"mnoah43470"}
{"commentId":4501083,"authorDomain":"rmiddleton00"}
I feel nothing for their employees.
Right now more people are tightening their belts, working less hours, lowering wages etc to keep their jobs and spending everyday worrying about how to pay their bills.
The greedy labor of the Big 3 (UAW) are only thinking about how to keep it all. They claim to be protectors of American Labor ignoring the Global Meltdown. Pointing out how they provide millions upon millions of jobs to other Americans and if the Big 3 fail America will. However, they are not willing to take any concessions to make sure those millions of American workers will have jobs.
I feel sorry for the Big3 support system, not the greedy labor. They are just as greedy as any CEO.
{"commentId":4501083,"threadId":"423451","contentId":"2129044","authorDomain":"rmiddleton00"}
{"commentId":4127849,"authorDomain":"ghetto-otaku"}
It never goes good when a big name company files under chapter 11...
......this is going to be BIG if they go under......
{"commentId":4127849,"threadId":"423451","contentId":"2129044","authorDomain":"ghetto-otaku"}
- 1 vote
#2 - Wed Nov 19, 2008 3:23 PM EST{"commentId":4128981,"authorDomain":"jlt75"}
Nobody in his or her right financial mind is going to buy a car from auto maker in bankruptcy. Once GM and the others go bankrupt, they're done for. Don't buy into all this hogwash about how the auto companies will come out of bankruptcy "leaner and more competitive." That's pure fantasy. Once they go into Chapter 11, stick a fork in them--they're done.
{"commentId":4128981,"threadId":"423451","contentId":"2129044","authorDomain":"jlt75"}
- 2 votes
{"commentId":4132443,"authorDomain":"mcrutchfield"}
No kidding, Wilfred.
Here in my town, the local Dodge dealer is selling its trucks for HALF PRICE. That's right, a $50,000 truck for $25,000, and a $25,000 truck for $12,500. And they're still having trouble moving them. Sounds like the "market" already knows what's in store for Chrysler.
{"commentId":4132443,"threadId":"423451","contentId":"2129044","authorDomain":"mcrutchfield"}
- 4 votes
{"commentId":4134389,"authorDomain":"nick-williams612"}
Crutch -- I don't think it's because the public knows what's in store for Chrysler. I think it's because vehicles that only get 25 MPG highway are over priced at even $12,500 when gas is three to four dollars per gallon.
{"commentId":4134389,"threadId":"423451","contentId":"2129044","authorDomain":"nick-williams612"}
- 2 votes
{"commentId":4148886,"authorDomain":"mcrutchfield"}
This is a local example I'm citing. In the same car mall, there is also a Chevrolet store, a Ford dealer that sells trucks almost exclusively, a Toyota store that sells lots of their huge new truck and there's even a Hummer dealer. Only the Dodge dealer is selling for half price. That's well behind wholeback-- meaning the actual cost from the manufacturer.
And gas here is $2.19 a gallon, regular.
{"commentId":4148886,"threadId":"423451","contentId":"2129044","authorDomain":"mcrutchfield"}
{"commentId":4127975,"authorDomain":"bibrot"}
A bailout for the auto industry would be like flushing money down the drain.We have to straighten out the foreign trade. I heard the other day that for every 5 foreign cars let into the usa only 1 american car is going overseas. They say build the foreign cars in the usa to keep our people working but when the car is sold doesn't the bulk of the money go back overseas? Also , I heard on the news a few days ago that Chrysler gave out 30 million in retention bonuses to 50 of their executives. They're handing out bonuses and begging for money to survive. Something is seriously wrong with our country. You find it hard to buy anything made in america anymore. That has to change. Its time for us to help ourselves first and then if we can help others. God Bless America!
{"commentId":4127975,"threadId":"423451","contentId":"2129044","authorDomain":"bibrot"}
- 2 votes
#3 - Wed Nov 19, 2008 3:30 PM EST{"commentId":4131177,"authorDomain":"nick-williams612"}
Those guys should still get their bonuses though. They're not to blame for the current financial turmoil. They've worked hard at lacking the foresight and innovation to end up here. The blame should fall on the home buyers who asked for loans they knew they couldn't pay back. They created all these 'toxic' assets and should be the ones to tighten their belts, not the executives. We should encourage them to keep working hard at wasting money and give them the $25 billion they're asking for.
{"commentId":4131177,"threadId":"423451","contentId":"2129044","authorDomain":"nick-williams612"}
- 2 votes
{"commentId":4132951,"authorDomain":"schao"}
The big-3 would be treading water if there is not a major recession and a major credit crunch.
Recession resulted from earlier inflation, energy/fuel cost, toxic assets, speculation, inaccurate ratings and others, which are most derrived from WALL STREET and blue collars... who are now refusing loans and providing credit to mfg industries so that they can make MO MONEY through picking the dead. I am not for the Big-3, but we gotta call a SPADE, SPADE!!!!! Each group is simply trying to get away with more and more, after getting their 700BILLION bail out...
{"commentId":4132951,"threadId":"423451","contentId":"2129044","authorDomain":"schao"}
- 2 votes
{"commentId":4128111,"authorDomain":"suthalo1"}
They have to bail out GM, Ford and Chrysler LLC. How could they let America's only automobile manufacturers go under?????? Not to mention the countless numbers of Americans that will be unemployed if this were to happen. Forget Wall Street, worry about the manufacturers!
{"commentId":4128111,"threadId":"423451","contentId":"2129044","authorDomain":"suthalo1"}
- 4 votes
#4 - Wed Nov 19, 2008 3:38 PM EST{"commentId":4501101,"authorDomain":"rmiddleton00"}
Pretty easy when your labor costs are higher than your competitions
The foreign manufacturers also have plants here, share part suppliers etc. Granted they get a tax break, but it is not even comparable to their labor vs. the big 3.
{"commentId":4501101,"threadId":"423451","contentId":"2129044","authorDomain":"rmiddleton00"}
{"commentId":4128232,"authorDomain":"checkmate007-2002"}
I don't see Toyota, Honda, Nissan asking for a bail out. Even with Toyota and Honda making cars in the US they are not going to congress for money. Time for the Big 3 to get their act together, make a vehical that not only American's want to buy but the world.
{"commentId":4128232,"threadId":"423451","contentId":"2129044","authorDomain":"checkmate007-2002"}
- 1 vote
#5 - Wed Nov 19, 2008 3:45 PM EST{"commentId":4128588,"authorDomain":"kwiktor"}
Hey checkmate!
Are you aware that the Japanese government subsidizes their auto industry? No wonder they have money!
{"commentId":4128588,"threadId":"423451","contentId":"2129044","authorDomain":"kwiktor"}
- 3 votes
{"commentId":4129104,"authorDomain":"misskitty44411"}
Can you spell communism?
{"commentId":4129104,"threadId":"423451","contentId":"2129044","authorDomain":"misskitty44411"}
- 1 vote
{"commentId":4130393,"authorDomain":"tim-adams"}
I am sure the more money thing would not have to do with the fact that the Japanese companies pay less ($19/hr vs $33/hr) wages and have less then half of the benefits costs and pension costs that the big 3 do. Nah.. that can't be it.
{"commentId":4130393,"threadId":"423451","contentId":"2129044","authorDomain":"tim-adams"}
{"commentId":4128418,"authorDomain":"rpmranch"}
Can you spell Bankruptcy????? That is the best medicine at this point in time......
{"commentId":4128418,"threadId":"423451","contentId":"2129044","authorDomain":"rpmranch"}
- 1 vote
#6 - Wed Nov 19, 2008 3:56 PM EST{"commentId":4128596,"authorDomain":"misskitty44411"}
This is the only way the companies will be able to break the union contracts they have in place. They will emerge and will be able to hire in people at a still decent wage, get rid of the legacy benefits that are killing them and hopefully build a competative product. If not...so be it. The Big 3 is a classic example of a business model that does not work and companies that are being bullied by unions.
{"commentId":4128596,"threadId":"423451","contentId":"2129044","authorDomain":"misskitty44411"}
- 2 votes
#7 - Wed Nov 19, 2008 4:08 PM EST{"commentId":4128660,"authorDomain":"kwiktor"}
Heaven forbid we take car of the working class in this country. Let's only support the rich! Give AIG the 25 billion instead!
{"commentId":4128660,"threadId":"423451","contentId":"2129044","authorDomain":"kwiktor"}
{"commentId":4128847,"authorDomain":"slider3123"}
actually doing so would help the middle class. it will likely open jobs up to those that want to work and make it so you dump unproductive workers for ones that are productive. there's no accountability on the union worker's end as it stands with the current situation.
{"commentId":4128847,"threadId":"423451","contentId":"2129044","authorDomain":"slider3123"}
{"commentId":4129082,"authorDomain":"misskitty44411"}
I didn't approve of the bank bailout either. Most of the working class do not get the benefits the autoworker for the Big 3 does. I make $ and have no health insurance. I still managed to buy one of their products new in '06. However, I do not live beyond my means and have kept my credit good so I can get good rates. I don't have credit card debt and I prioritize and hold myself accountable for my own finances.
{"commentId":4129082,"threadId":"423451","contentId":"2129044","authorDomain":"misskitty44411"}
- 1 vote
{"commentId":4129876,"authorDomain":"rclawrence06"}
And we can get rid of the extravagant salaries and perks for the executives
Let em go broke; get rid of the unions stranglehold and executives pay in the millions
{"commentId":4129876,"threadId":"423451","contentId":"2129044","authorDomain":"rclawrence06"}
- 3 votes
{"commentId":4130203,"authorDomain":"scheerronald"}
The auto companies can have their cars made in Asia or Mexico like most mfg'ers do and we in this country will be able to say "ain't it great we don't make anything here anymore" and their label could say "Made elsewhere".
Look at all tax's the feds are missing from mfg'ers. Wath out folks your tax'es are going to go sky high.
{"commentId":4130203,"threadId":"423451","contentId":"2129044","authorDomain":"scheerronald"}
- 1 vote
{"commentId":4128893,"authorDomain":"maxlibby"}
Jump,Mr. Wagoner,Please,Jump!And take some of those union guys with you!
{"commentId":4128893,"threadId":"423451","contentId":"2129044","authorDomain":"maxlibby"}
- 1 vote
#8 - Wed Nov 19, 2008 4:27 PM EST{"commentId":4128933,"authorDomain":"saulsburycolo"}
GM's Lear jet flew Wagoner to Washington at the cost of $20,000, I guess he's too good to get a cheaper ticket on a commercial flight like the rest of us...I say don't bail them out. All three companies flew these men on their own private jets, FORD and Chrysler too..
{"commentId":4128933,"threadId":"423451","contentId":"2129044","authorDomain":"saulsburycolo"}
- 2 votes
#9 - Wed Nov 19, 2008 4:30 PM EST{"commentId":4131406,"authorDomain":"nick-williams612"}
Corporate jets are a necessity though. They show that you're a big swinging dick when it comes to doing business.
{"commentId":4131406,"threadId":"423451","contentId":"2129044","authorDomain":"nick-williams612"}
- 2 votes
{"commentId":4128958,"authorDomain":"everettspringer"}
I can't believe that this country can give Iraq 10 billion dollars a month that we will never see again and we can't { LOAN } our auto makers 25 billion dollars to help them make it through George Bush's economic disaster he has created... we give Wall Street 700 billion, AIG 152 billion and God knows how many billions to the world,
Wake up America our countrys manufacturers are in need of help this time and its about time we take care of our own people first!!!!!!!!! Do you understand how many people will lose their jobs?? I like my Damn American cars I drive too!..... and keep your Fricking imports...
{"commentId":4128958,"threadId":"423451","contentId":"2129044","authorDomain":"everettspringer"}
#10 - Wed Nov 19, 2008 4:32 PM EST{"commentId":4131008,"authorDomain":"Lee1010"}
Good for you!
Keep your American car and keep all the repairs that you will have to make on it. In a comparison test around 1994 Ford rated higher than Chevy on safety and longevity because of the number of bolts they used. Chevy had a cheaper truck and a higher death rate in accidents, but it also had higher profits from their truck. Ford had to compete and competing meant lowering their quality.
Toyota didn't have to serve the unions and was in the competition. Guess who won?
Drop the American car companies - period. They will continue to do the same dumb things incessantly until they go bankrupt. Their executives will simply move on to destroy other companies in the future, but their payrolls are the ridiculous point. $40/hour for a high-school graduate? I think not. People with Masters degrees don't make that kind of money. Drop them in the grease and let them feel like "true Americans."
{"commentId":4131008,"threadId":"423451","contentId":"2129044","authorDomain":"Lee1010"}
- 2 votes
{"commentId":4129003,"authorDomain":"jtreadway"}
Do not bail these Union companies out. They are the ones that have priced themselves out of work. They want the new Obama admistration to back this Employee Free Choice Act that would give the Union's open rein to go after independent business that do not need help from the government to keep from going under. I'm all for Employees to be able to choose where they want to work...but who would want to work for an organization that can't stay afloat, only wants the employees for the dues, and goes after stable companies so they can ruin them too. Leave my independent workplace alone!!!!! Fix your own problems.....you made them.
{"commentId":4129003,"threadId":"423451","contentId":"2129044","authorDomain":"jtreadway"}
#11 - Wed Nov 19, 2008 4:34 PM EST{"commentId":4129075,"authorDomain":"ciscovet"}
Some people don't understand; this company burns 2 billion a month. SO if we give them 11 to 14 billion...well lets do the math, Thats 6 months!!! Do you really think the economy is going to turn around in 6 months?? If you do, then your an idiot. These companies will be in the same boat in six months and we will be 25 billion dollars broker.
Listen, if they are asking the government for money, that means they have burned their bridges with all other investors (a.k.a they don't pay back their bills). They MUST be forced into chapter 11 bankruptsy. Thats the only way they can get out oftheir constricting union contracts and crappy upper management
{"commentId":4129075,"threadId":"423451","contentId":"2129044","authorDomain":"ciscovet"}
- 1 vote
#12 - Wed Nov 19, 2008 4:39 PM EST{"commentId":4130556,"authorDomain":"2goldengrams"}
With the Big 3, it isn't only the economy that's a problem. It's their products...............huge gas guzzlers or little flivers which cannot survive an accident (nor can the people in them).
1. Let's say we give them the money
2. Is the American car market going to turn around in 6 months, or even a year?
3. Do they even have anything on the drawing boards that is feasible as far as
fuel-stingy?
4. How many years will it take before the public will want to purchase an American
auto?
5. What if there is a slump again down the road? Let's say 5 or 10 years from now?
6. Does that mean they will ask for another hand-out? (It isn't a bail-out, it's a
hand out!
7. Are the unions going to settle for a re-negotiated contract? They would sooner see
their membership on welfare. They take the dues, but only deliver when it is on the
workers' back.
In the final analysis, what's it going to get anyone? Same old cars, same high union demands, same executive bonuses, same Lear Jets........on and on and on.
{"commentId":4130556,"threadId":"423451","contentId":"2129044","authorDomain":"2goldengrams"}
- 1 vote
{"commentId":4129211,"authorDomain":"iyamacog"}
Starting with the article first line: "The nation’s top auto executives are on Capitol Hill this week begging for a lifeline..."
Riiiight, and yesterday, the big 3 auto maker CEO's arrived in their separate private jets, to ask gvt for that handout 'lifeline'. They really need a large dose of reality shoved down their throats. (tho that will never happen) They actually think a govt band-aid (of $25 bil) will stop the profusely bleeding wound they & the labor unions have created? If so, they are truly delusional. Just like the energy/utility/fuel Ceo's, who continue to rape all of Americans on a daily basis! Is there really a chance of economic survival with greed & power peaks at all levels? When does it cease???
{"commentId":4129211,"threadId":"423451","contentId":"2129044","authorDomain":"iyamacog"}
- 2 votes
#13 - Wed Nov 19, 2008 4:48 PM EST{"commentId":4129485,"authorDomain":"mattkolinski77"}
Agreed. If we give them the money now, they'll be back in 6 months for more, saying that if they don't get it this time, then the taxpayers will lose the $25 billion from before, and on and on.
{"commentId":4129485,"threadId":"423451","contentId":"2129044","authorDomain":"mattkolinski77"}
- 2 votes
{"commentId":4129237,"authorDomain":"everettspringer"}
Some of you Morons here that are crying about Unions are just plain stupid. If it wasn't for Unions most Americans would be working for 2 dollars an hour like your Communist friends in China and look how good they live.. The average auto union employee makes 28 dollars an hour plus health insurance. People thats appromimately $56,000.00 a year and in todays world that ain't alot.
So get over your union bashing lies and go to the real problem of Americas crooked one way trade policies we have been sold. Thats whats killing this country and if we don't fix it soon no one will have a job left in manufacturing and that my friends is what made America great. The American worker has a right to a decent living just like my dad did 40 years ago and we should not be trading with Communst Basta-ds countries anyways. Import tarriffs were put in place centuries ago for a reason by our forfathers, Why? To protect America, thats why>>>>>>>>>
{"commentId":4129237,"threadId":"423451","contentId":"2129044","authorDomain":"everettspringer"}
- 1 vote
#14 - Wed Nov 19, 2008 4:50 PM EST{"commentId":4130623,"authorDomain":"2goldengrams"}
Unions have outlived their usefulness. They take from the poor and give to the rich...............themselves. I have had friends who would not join a union at their workplace and they were beaten up so badly....THEY COULD NOT WORK. This was a young mother with 3 children. And these are the thugs you think are protecting the working man? Hogwash.
{"commentId":4130623,"threadId":"423451","contentId":"2129044","authorDomain":"2goldengrams"}
- 1 vote
{"commentId":4501165,"authorDomain":"rmiddleton00"}
Unions do not represent the middle class anymore. $28 an hour? you are far over paid for menial work.
Middle class is now a skilled class and not a menial job. Get out of the 1950's and learn to do more than one thing at a time.
{"commentId":4501165,"threadId":"423451","contentId":"2129044","authorDomain":"rmiddleton00"}
{"commentId":4129352,"authorDomain":"lvlisa43"}
It is time that the BIG 3 learn lessons from Nissan, Toyota and Mazda, their executives don't get the perks of the BIG 3 and they aren't in bed with UAW. Time to close shop boys and play with the real boys.
As for private jets, indecent bonuses and UAW salaries, they need to go as well. If the UAW became a dinasour tommorrow, the USA would be better off.
{"commentId":4129352,"threadId":"423451","contentId":"2129044","authorDomain":"lvlisa43"}
- 2 votes
#15 - Wed Nov 19, 2008 4:58 PM EST{"commentId":4134460,"authorDomain":"dustydragon"}
And what lessons are those? Nissan went belly up and is owned by Renault, only a matter of time before they run whats left into the ground milking for what they can and then discarding the carcass like they did to Mack trucks. Maybe they should follow Toyotas way, mmm their flag ship cars V-6 engine failures because of a bad design that they blamed on the owners not taking care of them even if they had a stack of receipts from Toyota dealerships to the contrary. Or maybe the on going issue they have had with hub bearings. Or perhaps the way the frames rot out on the Tundra trucks in less than two years? Or maybe the fire issue they had from bad ignition switches. or the fact that Toyota trucks have the worse fuel mileage of light trucks on the road? Then there is Mazda that with out Ford wouldn't exist. Lets see, Ford Probe, that was a flop and pure Mazda. The Contour/Mystic was another Mazda, and it was an unreliable flop. The last 4 years of Escorts where nothing but Mazda 323 in a different set of clothes, and it was a flop. The Mazda pickups are built, gasp, by the same Ford workers on the same Ford assembly line as the Ford Rangers are. Here's a clue for you, Ford's Focus and Chevy's Cobalt have less recalls then Toyota's Camry, Hondas Accord, Acura's Legend, anything Hyundai builds, Kia builds, or Mitsubishi builds.
{"commentId":4134460,"threadId":"423451","contentId":"2129044","authorDomain":"dustydragon"}
{"commentId":4134723,"authorDomain":"kat-lenz"}
Thanks Dusty, It's about time someone posted the facts.
{"commentId":4134723,"threadId":"423451","contentId":"2129044","authorDomain":"kat-lenz"}
{"commentId":4501181,"authorDomain":"rmiddleton00"}
Yeah thats one thing we never have to worry about, a recall of an American assembled car. It never happens.
{"commentId":4501181,"threadId":"423451","contentId":"2129044","authorDomain":"rmiddleton00"}
{"commentId":4129454,"authorDomain":"mattkolinski77"}
Is anyone planning to buy a GM/Ford in 2010? All they keep saying is they need the money to last until the 2010 product line, and then everything will be fine. Really? I've heard of the Chevy Volt, but what are the other vehicles that are coming out that are going to save them? Or is this just going to continue with bailout after bailout - well, 2010 didn't work, but we have new cars in 2012 - just $50 billion more. Plus we need a few new private jets, so make that $52 billion...
{"commentId":4129454,"threadId":"423451","contentId":"2129044","authorDomain":"mattkolinski77"}
- 2 votes
#16 - Wed Nov 19, 2008 5:05 PM EST{"commentId":4130952,"authorDomain":"2goldengrams"}
I bought a Lexus Hybrid............sure it costs more from the get-go, but it gets 34 mpg. and NEVER breaks down. And it's a mid-sized SUV. It's the best of all worlds. Sorry guys, I couldnt find an American made car that came even close.
{"commentId":4130952,"threadId":"423451","contentId":"2129044","authorDomain":"2goldengrams"}
- 1 vote
{"commentId":4134661,"authorDomain":"dustydragon"}
that thing is as much an SUV as my high school science teacher's VW bus was. Its an over sized station wagon on a unibody chassis, and you and any one who thinks otherwise is deluded. its towing capacity looks good until you read all the small print and find out for every pound of passanger and cargo you put in the thing, lowers the tow capacity by that amount. And your claiming 10 mpg higher than Lexus says its capable of, which I dont buy. 26-28 mpg maybe with a tail wind and no load on flat ground.
{"commentId":4134661,"threadId":"423451","contentId":"2129044","authorDomain":"dustydragon"}
{"commentId":4501191,"authorDomain":"rmiddleton00"}
I was looking at a Ford a few weeks ago, but the UAW thing pissed me off so I got an Acura. I love it. Even looked it up and found out it has the same amount of foreign made parts as a GMC.
{"commentId":4501191,"threadId":"423451","contentId":"2129044","authorDomain":"rmiddleton00"}
{"commentId":4129728,"authorDomain":"jb-250250"}
I agree with Mr. Springer to a point. We do need to restructure the trade agreements . But let's be honest it was the automakers that started selling out and moving work and buying parts from overseas because of the cheap labor. And in doing so they have been costing Americans jobs for years. Now they want us to bail them out? As for the union- bust it. I have had family that had worked for GM and Chrysler and the fact is that most of the employees that work for the BIG 3 do not deserve the $28.00 an hour. Most of them complain if they have to work more than 2hrs. in a 8 hr. day. I would agree in the bailout if and only if They use only American manufactures for American vehicles, that they bust the union and put the wage scale back in prospective and agree to NO bonuses for executives. If we put Americans back to work then Americans will buy American cars.
{"commentId":4129728,"threadId":"423451","contentId":"2129044","authorDomain":"jb-250250"}
- 1 vote
#17 - Wed Nov 19, 2008 5:23 PM EST{"commentId":4130044,"authorDomain":"garryshown"}
People need to wake up Wages and benifits are not what drives up the cost of cars.when you stand on a Assembly line all day and see how many parts go by and you know how much those parts cost.The math is easy.wages and benefits can be paid for the whole year in about 7 days only about 1% of the cost of a car. Government regulations is what drives the price up. They are the cause of the problem so they should help bail out the auto industry.
{"commentId":4130044,"threadId":"423451","contentId":"2129044","authorDomain":"garryshown"}
#18 - Wed Nov 19, 2008 5:48 PM EST{"commentId":4130313,"authorDomain":"accrew4"}
Let them file for chapter 11 and get rid of the bloated management with their perks and the Unions with their legacy cost. Then the big 3 might be able to compete with the foreign competition. If not then bye by.
Sorry about all the government regulations that have driven up the cost to manufacture anything in the USA. The USA public deserves the politicians that they have placed in office over the years and the polices that are ruining our ability to compete in the world market place.
{"commentId":4130313,"threadId":"423451","contentId":"2129044","authorDomain":"accrew4"}
#19 - Wed Nov 19, 2008 6:12 PM EST{"commentId":4130433,"authorDomain":"joeauten"}
GM made 1 great car. Their EV1, their Electric car.
In 2000 GM manufactured a fantastic electric car. Ran all day on one charge, and was very fast. The demand was huge.
The oil companies did not like this and pressed GM to recall all 10,000 of them. GM towed them away from the owner’s driveways. Took each vehicle and crushed them, and shut down the manufacturing plant.
Don't believe me rent the movie "Who killed the electric car.
Now because of their poor mgt and LACK OF VISION we need to give the money. GM you made your bed, now sleep in it.
{"commentId":4130433,"threadId":"423451","contentId":"2129044","authorDomain":"joeauten"}
- 2 votes
#20 - Wed Nov 19, 2008 6:22 PM EST{"commentId":4130851,"authorDomain":"2goldengrams"}
Google the EV 1 and read what wikipedia has to say. The oil companies are greedy, no doubt, but GM was totally asleep at the wheel on this one. Good thing they aren't rocket scientists.
{"commentId":4130851,"threadId":"423451","contentId":"2129044","authorDomain":"2goldengrams"}
- 2 votes
{"commentId":4131010,"authorDomain":"justcallmejoe247"}
The EV1 failed on account it had no servicable parts. Granted it had brakes, hoses, electrical wiring--but it had no oil pump/spark plugs/pistons/lifters/valves like "regular" internal combustion engines--thus it was a money loser for dealers (who rely on service for a bulk of their profits). It was also a money loser since the EV1 was only offered as a lease vehicle at $500 a month. Check with any GM Service Tech, they will indeed educate you on the subject. Besides Wikipedia is the lowest of the low when it comes to "dictionary"/"encylopedias"
{"commentId":4131010,"threadId":"423451","contentId":"2129044","authorDomain":"justcallmejoe247"}
{"commentId":4134509,"authorDomain":"dustydragon"}
It was a loser because the batteries where not up to the demands, it was ahead of its time. The new Volt improved upon it plus has reliable batteries.
{"commentId":4134509,"threadId":"423451","contentId":"2129044","authorDomain":"dustydragon"}
{"commentId":4130529,"authorDomain":"wmdteam"}
The question we need to ask ourselves is, "Do we want to pay for a funeral or do we want to pay for a turn-around?" If GM goes into bankruptcy, it is not very likely they will get the financing necessary to get them out at the end anymore then Delphi, here in my hometown, could get the financing to get out of banruptcy before the financial meltdown arrived on the scene.
Paying for the funeral costs of such a step or letting everything go under the approach of "market forces" can be just as expensive as supporting a loan now, with given stipulations and requirements for a fuel-efficient turn-around. However, by supporting a loan now with restrictions, we can retain jobs. And it is far easier to retain jobs then to create new jobs in our society especially under the current abnormal situation.
Or, the other option is to let GM sell their industry to China, including their intellectual property, and Chrysler to India and Ford to Nissan. Then we can have an automobile industry which is completely owned for foreign countries and the last major manufacturing sector is wiped out.
Folks, we bailout financial institutions with hardly any restrictions and grant them outright subsidies. Also, we grant huge subsidies to drug and oil companies so they can operate like monopolies with limited concern for how they truly manage their companies in any socially responsible manner and allow them to make exorbitant profits based on our subsidies. So what is so wrong about granting a $25 billion dollar loan to the automobile industry? Yes, I know there is the element of risk. But not to do this will result in a cascade of auto companies, suppliers, workers and people on retirement plunging into the deep abyss. And that will cost us big time too.
{"commentId":4130529,"threadId":"423451","contentId":"2129044","authorDomain":"wmdteam"}
- 1 vote
#21 - Wed Nov 19, 2008 6:29 PM EST{"commentId":4130631,"authorDomain":"Vuenbelvue"}
The CEO of Chrysler is none other than Mr. Nardelli of the Home Depot.
"Nardelli angered Home Depot shareholders when he refused to take questions during a shareholder meeting in May 2006 as the stock was floundering. His rich pay package drew fire; he earned $38.1 million last year. Ultimately he was forced out of the company in January 2007, but left with a $210 million golden parachute in cash and stock options that included a $20 million severance payment and retirement benefits of $32 million.
I think he was there for two years. That's alomost $150 million a year when you include what he made in salary. The site I visited listed his pay at Chrysler at $1 a year and didn't have access to his bonus plan. Steve Jobs at Apple was down at $1 a year but has been gifted or granted almost $100m a year plus given private jets for presents. How much is Mr. Wagoner making and what is the real pay of these CEO's? My emotions and symphony is for the workers of the Big 3, both past and future, but for an indivdual to profit like a Somali pirate captain is hard to bring empathy.
{"commentId":4130631,"threadId":"423451","contentId":"2129044","authorDomain":"Vuenbelvue"}
- 2 votes
#22 - Wed Nov 19, 2008 6:35 PM EST{"commentId":4130633,"authorDomain":"mudfloper"}
$25 billion in aid is requested by the American population. We will settle for this money to be distrubuted to anyone not making over 300,000 per year. This should end up with around 1 million dollars (minus the government cost to distribute it). In order to qualify for this bailout you can't make over the 300 thou a year, the money must go towards paying off ALL of your debts and credit cards FIRST. If you have enough left over, you will have to buy a Telsa Sportster for the mere 100 thou.
Think that will jump start the economy and maybe send a message to the white collar rip off artists that we are done with them?
{"commentId":4130633,"threadId":"423451","contentId":"2129044","authorDomain":"mudfloper"}
#23 - Wed Nov 19, 2008 6:35 PM EST{"commentId":4130675,"authorDomain":"jimdbghs-1"}
RIP U.S. AUTOMAKERS
Enough Is Enough
The U.S. auto companies are burning through $2 billion dollars a month and have not made any profits. The u.s. auto worker get pay way way more then Japanese auto workers and get expensive retirement packages. Soon the u.s. automakers will asked for another $25 billion dollars in bailout next year.
The u.s. auto workers make way more then teachers, law enforcement officers, and nurses.
I don't see Toyota and Honda begging for a bailout. Why should I pay for someone's else retirement and health care in taxes when I have to worry about my own retirement and health care?
Regular people have to filed for bankruptcy when their in debt so why should big companies get a bailout? It's survival of the fittest. Those who can adapt and change will stay and those who wait till the last minute will fade.
Why are u.s. auto workers retirement and health care more important then my own retirement and health care?
I got the below information from FORBES.
Labor cost per hour, wages and benefits for hourly workers, 2006.
Ford: $70.51 ($141,020 per year)
GM: $73.26 ($146,520 per year)
Chrysler: $75.86 ($151,720 per year)
Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)
Transformational UAW Deal? Accept Professors' Pay
According , the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits).
Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D. (see graph above, click to enlarge), and 52.6% more than the average worker at Toyota, Honda or Nissan.
Many industry analysts say the Detroit Three, and especially Ford, must be on par with Toyota and Honda to survive. This year's contract, they say, must be "transformational" in reducing pension and health care costs.
What would "transformational" mean? One way to think about: "transformational" would mean that UAW workers, most with a high school degree, would have to accept compensation equal to that of the average university professor with a Ph.D.
{"commentId":4130675,"threadId":"423451","contentId":"2129044","authorDomain":"jimdbghs-1"}
- 2 votes
#24 - Wed Nov 19, 2008 6:38 PM EST{"commentId":4501230,"authorDomain":"rmiddleton00"}
Do you have any idea how hard it is to recite "Righty Tighty, Lefty Loosey" when facing a lugnut?
Ph.D, I'd like to see them put a tire on twice a day.
{"commentId":4501230,"threadId":"423451","contentId":"2129044","authorDomain":"rmiddleton00"}
{"commentId":4130853,"authorDomain":"ddstern2"}
Hey! - I lost confidence in all American auto makers when they could not produce automobiles as reliable as foreign imports for the last thirty years . They deserve nothing ! I repeat nothing from our pocketbooks.
P.S. Please tell me what J. D. Powers means by "Initial Reliability "? ? ?
Is that an oxymoron or just plain moronic?
{"commentId":4130853,"threadId":"423451","contentId":"2129044","authorDomain":"ddstern2"}
- 2 votes
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