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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
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: wevk (Dec 07, 2008 6:05 am) You got your "Greens" in DC just drooling over the opportunity to own a car maker they can mold into an alternative transportation company. Cost is not even considered by this bunch. They will try to force US all into a Yugo that is powered by the Sun with peddles to assist on the long up hill roads. Fortunately we have a Congress that rarely agrees on anything, but when it is lunch time. The buildings at GM will be all rusted out before they can come up with a bailout plan. We will give them a few billion so everyone gets a nice Christmas. Then it will be on the shoulders of the new team to get the job done. I would be looking for a new job if I worked for GM or Chrysler. The UAW workers at Ford may survive if they back off on blocking progress. For those that did not see it. This IS progress, and it could have been built in the USA, but for the UAW. http://info.detnews.com/video/index.cfm?id=1189 |
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When the big guys become so BIG and it can kill the economy to let them fail, then they are too big. Today companies (Banks, manufacturers) are just plain too big. This Bigness does not bring a better life for the people. There is a point where bigger and bigger deos not provide any real benefit. Not to the shareholders maybe only the CEO's - then when there is trouble the people need to bail them out, wth our tax dollars. The globalization at any costs is not working. As Michael Moore was saying on Larry King Live - we need to bail them out but the people will need to tell the big three what kind of vehicles they will be doing. I say we need to bail them out but then make sure it never happens again. |
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Replying to: berri (Dec 06, 2008 1:43 pm) So I guess you never expect much out of a new president and Congress right? for they have the whole country to change and only 4 years? And Wagoner has had a single corporation and 14 years. 
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| Is Wagoner being told This Way Out? | |
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Replying to: kdhspyder (Dec 06, 2008 3:25 pm) Ironic that the one who arguably had nothing to do with this mess is the one who can clearly see the problem...another reason why I believe that Ford will be the last man standing. |
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SUVs at altar, Detroit church prays for a bailout DETROIT, Dec 7 (Reuters) - With sport-utility vehicles at the altar and auto workers in the pews, one of Detroit's largest churches on Sunday offered up prayers for Congress to bail out the struggling auto industry. "We have never seen as midnight an hour as we face this week," the Rev. Charles Ellis told several thousand congregants at a rousing service at Detroit's Greater Grace Temple. "This week, lives are hanging above an abyss of uncertainty as both houses of Congress decide whether to extend a helping hand." Local car dealerships donated three hybrid SUVs to be displayed during the service, one from each of the Big Three. A Ford Escape, Chevy Tahoe from GM and a Chrysler Aspen were parked just in front of the choir and behind the pulpit. Ellis said he and other Detroit ministers would pray and fast until Congress voted on a bailout for Detroit's embattled automakers. He urged his congregation to do the same. Other Detroit-area religious leaders -- including Christian, Muslim and Jewish leaders convened by Cardinal Adam Maida -- have urged Congress to approve an auto aid package. But the service dedicated to saving Motown's signature industry at Greater Grace Temple was the highest profile effort to mobilize support yet. |
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You'll see in the below the Chicago Tribune is going Ch11. The whole newspaper industry is seeing less advertising $. I'd guess so is every newspaper, and every magazine, and every TV and radio station. Are we going to bail them out too? http://www.marketwatch.com/news/story/Tribune-could-file-bankruptcy-WSJ/story.as- px?guid=%7B71F8BA18%2D2283%2D4844%2D8818%2D6269BB00CF08%7D Or Dow Chemical this morning announced an 11% cut in employment and 20 plants closing. I guess they don't have any lobbyists? Maybe when Dupont and Exxon Mobil cut they can all go for a bailout too? Oh, I can't forget the homebuilders. Let's bail them out too. And I hear income in Vegas is down; we can't let that area which is already suffering large home price decreases to suffer more. How about bailing out all of Nevada? |
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Strings attached Congress could set tough bailout conditions. Here are some possibilities. •Appoint a "car czar" to oversee automakers' restructuring •Force companies to file for bankruptcy if they don't meet loan terms •Require GM and Chrysler to merge •Cut hourly workers' compensation and scrap the UAW Jobs Bank •Compel bondholders to accept a debt-for-equity swap •Prevent companies from lobbying against states' global warming initiatives Nothing about dealer franchises, at least not that I can see. If they force GM and Chrysler to merge, they will have 11 brands and what, 10,000 dealers? How will they rid themselves of the 7000 dealers and 7-8 brands they need to? Will the "car czar" have a hand in that, and the ability to suspend existing laws in this area so that the necessary cuts can be made? http://www.autonews.com/article/20081208/ANA03/812080320/1200 (registration link) PS there is also this: Some lawmakers floated the idea of requiring financial institutions that are getting federal aid from the $700 billion rescue package to make loans to automakers. While that sounds intuitively tempting, I think it would be a bad idea - we only just got done rescuing them from bad debts, now we want to saddle them with new ones?
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here's an interesting article highlighting an ad that GM is running basically apologizing to the public. It seems like they finally get it. This is the tone they should have had during their first visit to Washington back in November. http://www.autonews.com/article/20081208/ANA02/312089881/1018 I'm not an economist nor an expert in the auto industry but the numbers just don't add up for GM. They are $66B in debt; their common stock is worth less than $5B; they have made a profit since 2004 when sales were over 16m; there is no way they will show a profit with current sales and structure; too many dealerships that will require billions to close; etc. I'm in favor of a pre-packaged bankruptcy so we can save some jobs and get GM to profitability. |
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Here's an article on the Saturn franchises. Supposedly, their franchise agreement is unique and may allow GM to kill this brand fairly inexpensively. Of course it could all in up in court. DETROIT — Saturn's franchise agreement is different from those of General Motors' other brands. The Saturn agreement required dealers to sign the Federal Trade Commission's Franchise Disclosure document, says Mark Johnson, president of financial advisory and brokerage firm MD Johnson near Seattle. Subscribe to Automotive News "Nobody at any car store since the beginning of time has ever signed one of those except Saturn dealers," Johnson says. "The whole document tells you how you could potentially lose all of your investment through debt and losses through this franchise." Saturn confirms the unique agreement. Saturn spokesman Steve Janisse says, "Everything was done differently with Saturn, and this was one of those things." Janisse says Saturn has a different legal structure from other GM brands. Saturn has a Franchise Operations Team, which has a limited say in brand operations. The FTC document favors the manufacturer, Johnson says, "so GM is in a much better position to terminate Saturn than any other manufacturer with any other brand." In the late 1980s, GM cherry-picked the best dealers for the new dealer network. The dealers have heavily influenced the company. Janisse says GM's seven other brands operate under a Dealer Sales and Service Agreement, a personal service agreement between the dealer and GM. For dealers, Johnson says, the good news is that state franchise laws probably would trump any signed documents in a court of law.
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