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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
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You can google for the entire article. When you take a look at many American cars today, these aren't bad products. They're just not as good as Audi, Volkswagen, Mercedes or Lexus—the list goes on and on. When you see some of the stuff that Pontiac in particular has been doing for the last 20 years—it's insulting. And the interiors especially are insulting.... I don't understand it. We can build the greatest fighter planes on the planet. It's not like technology is the problem. There is no reason why there should be this kind of separation between Europe, Japan and us. Everyone wants to make the product issue about price. But I had a MINI Cooper S for a couple years. That car was sturdy and it looked good. It was smart, it was fast and it was fun. And that's a relatively inexpensive car... If it's a coin toss between buying American or buying foreign, we'll buy American every time. If it just comes down to the exact same product at the exact same price, we'll buy an American car because we're patriotic. We'll do the right thing, but not if it costs more and not if it's a subpar product. What the American Big Three have forced us to do is start being unpatriotic, so we ended up buying cars from other manufacturers. Remember Audi's problems? Audi was a joke 10 years ago. ...And Audi picked themselves up from the ashes. How? Started making good cars. Well, I think that's your answer. |
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This makes more sense than out bailout boondoggle. Give the money to the tax payers and let them decide which automakers survive. BUENOS AIRES, Dec 6 (Reuters) - Argentine automakers will sell basic models at cost through state-subsidized loans in a plan to protect jobs in Latin America's third-biggest economy from the global economic slowdown, government officials said on Saturday. Local plants of Renault SA (RENA.PA: Quote, Profile, Research, Stock Buzz), General Motors (GM.N: Quote, Profile, Research, Stock Buzz), Peugeot (PEUP.PA: Quote, Profile, Research, Stock Buzz), Ford Motor Co. (F.N: Quote, Profile, Research, Stock Buzz) and other automakers will participate in the government's plan to protect 150,000 auto industry jobs and to keep production from falling steeply next year. "We have agreed with the plants that these cars will be offered without a profit margin and the dealerships will also reduce their profit margin," Industry Secretary Fernando Fraguio told a news conference on Saturday. The $890 million government auto loans program is part of a $3.8 billion economic stimulus package announced on Thursday by President Cristina Fernandez. Each automaker will offer two of its most economic models for the plan, while the government will provide three different financing packages with interest rates much lower than market rates, to be funded by the social security system. http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN0632016920081- 206 |
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...and this is for GM and C only! Ridiculous! The Big Three executives spent two consecutive days on Capitol Hill this past week pleading for as much as $34 billion in loans to help their industry survive. But they made clear that $15 billion would be enough to keep them running until the end of March 2009. GM has indicated it needs about $10 billion to last that long, while Chrysler chief executive Bob Nardelli said his company would need $4 billion. Ford's chief executive, Alan Mulally, said Ford did not anticipate needing any federal cash during that period. 3 Months = $14B Regards, OW |
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Replying to: kdhspyder (Dec 06, 2008 3:40 pm) Unfortunately there likely isn't enough current US plant capacity at Ford and the transplants to meet all of the lost GM volume. So it will take imports and they won't be using those US vendors. |
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Replying to: berri (Dec 06, 2008 5:25 pm) Well, one of them just might! If GM dies, I'll probably have a massive stroke or heart attack!!! 
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Replying to: lemko (Dec 06, 2008 5:35 pm) Why? Hasn't it occurred to you that Cadillac might do better without the bloated GM corporate albatross around its neck? |
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I don't have enough financial experience to know if this is doable. 1 - GM spins off only Cadillac into a smaller company. 2 - GM spins off a Chevy company with only the best non-Cadillac cars and trucks 3. The remaining GM company has lousy vehicles and huge debt. It declares bankruptcy and goes into Chapter 7/liquidation. The result: a competitive Cadillac company and a competitive Chevy company, neither with any debt.
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Replying to: berri (Dec 06, 2008 5:25 pm) That is absolutely FALSE. We will sell 6,000,000 less cars this year and probably the next couple years. GM did not make 6 Million cars. If anything a GM total liquidation would boost Ford into a very good money making position. It would also help the imports that do indeed buy parts from the same suppliers as GM. It might be what Delphi needs to pull out of the doldrums and C11. More people filed for first time Unemployment this week than the total GM workforce in the USA. You also forget the most important advantage to a GM liquidation. There are people with money that would love to take over some of the GM nameplates and continue to build those cars. They may even use UAW labor if they can get contracts that don't bury them before they start. Kerkorian one of the big stockholders at one time is probably still interested. No one in their right mind would buy them in their current condition.
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Replying to: tlong (Dec 06, 2008 7:23 pm) That is not a bad idea if the UAW contracts in their 2200 pages would not put a monkey wrench in the works. And would the retirees from Chevy & Caddy have a hold on the company? Some plan like that where a new owner comes in and starts hacking all the dead weight from the company. You know like Congressman Dingell's wife that is a high ranking GM executive.
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Replying to: gagrice (Dec 06, 2008 7:32 pm) Yes, I don't know if the contracts would pass along or if they could be "GM-only" contracts. Then if GM bellies up the pension guarantee corp of the government takes over. The current GM shareholders would get new shares of Caddy, new shares of Chevy, and remaining GM's value would drop to zero. The remaining factories and assets of the remaining GM corp sold off to pay as much of the $66B in debt as possible. The new Caddy and Chevy companies would not have the GM name any longer, which would be a good thing. Then with new leadership in both of those companies, they could rise from the ashes and really kick butt. |
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