GM: Holding a knife to the Volt's throat

Let them go down and you can't imagine the consequences. Unemployment greater than 10% in less than one year.

 

Give them money and they will just fail a little later on. Their business model is unsustainable given their current management and labor structure.

BTW - I never envisioned GM building the Volt they promised so long ago, but this is certainly a unique way for that to come about!

 

+1

... Brad

 

"Let them go down and you can't imagine the consequences. Unemployment greater than 10% in less than one year."

I agree that the failure of Ford and Gm (it's pretty safe to say Chrysler was a failure long ago) would be devastating, not just to the extent that it will cost the country countless jobs, I'm more worried of the consequences of allowing them to continue in their current form. A spike of gas prices into the 5,6 or 7 dollar range in 4-5+ years could have the potential to completely shut down the US and world economies (a fate many of our middle eastern suppliers would be happy to witness). To fund the continued manufacturing of V8 powered SUV's and trucks might avoid a few short term job losses, but the long term sacrifice would be far worse.

 

A British Lesson on Auto Bailouts

“The British Leyland experience is a relevant and cautionary one,” said John Casesa, a principal in the automotive consulting firm Casesa Shapiro Group in New York. “The government got in the business of trying to make a winner out of a structurally flawed company. That’s the risk in the U.S. as well.”

... The French government help for Renault also came amid increasing losses for the company. But Mr. Rhys said that unlike British Leyland, Renault was able to use the financing to create new car models that were ultimately successful. That, along with tough cost-cutting by a newly installed chairman, cleared the road to profitability by the time the government began privatizing Renault in the 1990s.

If Washington does go ahead and help Detroit, Mr. Edwardes said, it is crucial that the government overhaul the management of the Big Three. “Throwing money at them isn’t enough,” he said. “They need money and they need new management. They need both, not one or the other.”

 

Here's another interesting article: What US Auto Makers Must Do to Become Viable Again: Financial News - Yahoo! Finance

In summary, it basically says that Congress and the world is telling the US Auto Makers "Get your act together!" And, to compete, they must make cars that people actually want to buy!

Here's an interesting random fact from the last paragraph of the article: Globally, 12 million cars per year are destroyed. As the economy and auto sales decline, the number of cars being produced is approaching 12 million - which means that the number of cars being produced and destroyed is going to be equal in a few months.

 

Let them fail. I don't want one cent of my tax money going to support these incompetent clowns. The sooner we get this over with the better it will be. Stringing it along will just be pissing more taxpayer money money down the cesspool of GM, Ford and Chrysler. They will file chapter 11, reorganize with a much better cost structure and hopefully get rid of the morons that got them into this mess. Especially two ring leaders, Lutz and Wagner.

 

thats just not true... you can use same money to create new jobs and help those workers get education to do something else.

I think that US Gov has to do something to help big 3, BUT it has to come with strings attached and they have to seriously re-organize...

and in any case, many people will lose they jobs at big 3, just like they have already for past few years...

 

Those people all need jobs? Haven't I said this before? Put them
all to work making and installing PV panels, windfarms, and any
other "green jobs" that come up. Or maybe even building BEVs.
For anybody other than the big 2.5, whose smoldering rubble
should be a pleasing sight in all of their rearviews and bring
home a true sense of justice and pride.
.
_H*

 

Malorn (singled out here only as the local representative of a larger group of voices) seems to be scaling up the knife-to-the-throat proposition. Do this or you'll all die. I am not swayed by this. Indeed the workers need to be making *something* and that something ought to be aimed at large and growing market demands. Philosophically I am drawn to improved energy technology (as Hobbit is) but that is not necessarily the only possibility.

But to continue to concentrate mainly on old-technology inefficient vehicles? I am sure that is not the best use of these human, financial and industrial resources.

As far as the managerial resources, if they're 'all that' they can just circulate their resumes and get snapped up by other companies.

 

Options:

• let oil companies buy GM, Ford and Chrysler - they have the money from profits by their poor economy vehicles.
• let one fail - I'm thinking GM so Ford and Chrysler will 'get religion.' A $25 B. bailout can keep Ford and Chrysler going who can then 'cherry pick' from the GM bones.
• Chinese purchase - Ok that kills our treasury bond sales and completes the crash
• Chapter 11 vs 7 - if GM, Ford and Chyrysler wants some of the $700 B., declare bankruptcy and go into Chapter 11. If there is no loan money, the bankers can 'wash' the $700 B. and the problem is solved. Apparently that is what Paulson is doing now anyway. They have 60 days, barely enough time.

I'm watching Sen. Tom Coburn on C-SPAN talking out of both sides of mouth:

1. Wrong product mix 'too many low economy vehicles' - yet he complains about the "green cars" on the existing $25 B. already in law.
2. Workers make $25/hour too much - yet he seems oblivious to the management and board compensation.

The only thing I like about Coburn is his opposition to a bailout, right action, but the wrong reasons. For political reasons, and not his re-election, there is a reason for having "the big dog" go out of business.

Bob Wilson

 

Yeah, right

Let them do a Chapter 11, fling off all the encrusted feces that now makes them sluggish. Hopefully, the criminally incompetent management will also end up on the street too

Or do you propose the generous taxpayer *increase* the lavish perks and compensation offered to the idiots that drove the Big Three into the ground? You know, reward them for their incompetence

I actually have to prove myself at work. If I were to pull off a teeny fraction of the incompetence shown by the Big Three and their Unions, I would have been homeless a long time ago

One thing I just can't figure out though. Canada has Universal Health Coverage. So why is the Canadian Auto Workers pissing and moaning about needing urgent taxpayer teat money? Why is GM Canada whining that they need the generous Canadian taxpayer to plop a big teat into their mouth?

Something is rotten in Denmark if GM is in trouble in Canada, despite not having the same "health care" costs

 

Of course, we'll have to bail out all those dealerships who *way* overextended, and are now in serious trouble. Fair's fair

 

As should have been with the bank bailout, the auto bailout SHOULD be along these lines:

Give the money to the affected people, so they can bail themselves out, and let the corporate behemoths die.

Just my opinion.

 

The automakers in china are going to the Chinese govt, the germans to the german govt and I would guess that some japanese makers will be going to the japanese govt.

 

The Chinese consumer automakers like Dongfeng are actually government-controlled, with their government holding close to a 70% stake. Their system of doing business is not quite the same as here in the U.S.-- We don't believe the U.S. Government should be in the business of building consumer automobiles.

The Germans aren't bailing out Daimler, BMW or Volkswagen either. The only German automaker requesting a bailout thus far is Opel, which is wholly owned by.... GM. Europe under pressure to join auto bailout- International Business-News-The Economic Times

I haven't seen anything on the newswires that indicate Toyota, Honda and Nissan are asking the Japanese Government for bailouts either.

One thing is clear: A no-strings-attached bailout is NOT in the best interests of the U.S. Taxpayer.

 

Well, no s***, they *always* go to the Communist Party of China. They're kinda controlled by the Communist Party of China

EDIT: justlurkin beat me to it