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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: gagrice (Dec 08, 2008 5:21 pm) They have a short position paper out on the subject: "Collapse or partial collapse would have a significant ripple effect"... pdf file |
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Replying to: steve_ (Dec 08, 2008 5:01 pm) What's also not considered in these studies is where is the US in say, 5 years in either case? Still bailing out the D3/2/1 every year with tax dollars, or sprouting new businesses in the ashes of the old industries. |
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If I had the floor at the auto rescue talks: BY MITCH ALBOM • DETROIT FREE PRESS COLUMNIST • November 23, 2008 OK. It's a fantasy. But if I had five minutes in front of Congress last week, here's what I would've said: Good morning. First of all, before you ask, I flew commercial. Northwest Airlines. Had a bag of peanuts for breakfast. Of course, that's Northwest, which just merged with Delta, a merger you, our government, approved -- and one which, inevitably, will lead to big bonuses for their executives and higher costs for us. You seem to be okay with that kind of business. Which makes me wonder why you're so against our kind of business? The kind we do in Detroit. The kind that gets your fingernails dirty. The kind where people use hammers and drills, not keystrokes. The kind where you get paid for making something, not moving money around a board and skimming a percentage. You've already given hundreds of billions to banking and finance companies -- and hardly demanded anything. Yet you balk at the very idea of giving $25 billion to the Detroit Three. Heck, you shoveled that exact amount to Citigroup -- $25 billion -- just weeks ago, and that place is about to crumble anyhow. Does the word "hypocrisy" ring a bell? Protecting the home turf? Sen. Shelby. Yes. You. From Alabama. You've been awfully vocal. You called the Detroit Three's leaders "failures." You said loans to them would be "wasted money." You said they should go bankrupt and "let the market work." Why weren't you equally vocal when your state handed out hundreds of millions in tax breaks to Mercedes-Benz, Hyundai, Honda and others to open plants there? Why not "let the market work"? Or is it better for Alabama if the Detroit Three fold so that the foreign companies -- in your state -- can produce more? Way to think of the nation first, senator. And you, Sen. Kyl of Arizona. You told reporters: "There's no reason to throw money at a problem that's not going to get solved." That's funny, coming from such an avid supporter of the Iraq war. You've been gung ho on that for years. So how could you just sit there when, according to the New York Times, an Iraqi former 20 chief investigator told Congress that $13 billion in U.S. reconstruction funds "had been lost to fraud, embezzlement, theft and waste" by the Iraqi government? That's 13 billion, senator. More than half of what the auto industry is asking for. Thirteen billion? Gone? Wasted? Where was your "throwing money at a problem that's not going to get solved" speech then? Watching over the bankers? And the rest of you lawmakers. The ones who insist the auto companies show you a plan before you help them. You've already handed over $150 billion of our tax money to AIG. How come you never demanded a plan from it? How come when AIG blew through its first $85 billion, you quickly gave it more? The car companies may be losing money, but they can explain it: They're paying workers too much and selling cars for too little. AIG lost hundred of billions in credit default swaps -- which no one can explain and which make nothing, produce nothing, employ no one and are essentially bets on failure. And you don't demand a paragraph from it? Look. Nobody is saying the auto business is healthy. Its unions need to adjust more. Its models and dealerships need to shrink. Its top executives have to downsize their own importance. But this is a business that has been around for more than a century. And some of its problems are because of that, because people get used to certain wages, manufacturers get used to certain business models. It's easy to point to foreign carmakers with tax breaks, no union costs and a cleaner slate -- not to mention help from their home cou ntries -- and say "be more like them." But if you let us die, you let our national spine collapse. America can't be a country of lawyers and financial analysts. We have to manufacture. We need that infrastructure. We need those jobs. We need that security. Have you forgotten who built equipment during the world wars? Besides, let's be honest. When it comes to blowing budgets, being grossly inefficient and wallowing in debt, who's better than Congress? So who are you to lecture anyone on how to run a business? Ask fair questions. Demand accountability. But knock it off with the holier than thou crap, OK? You got us into this mess with greed, a bad Fed policy and too little regulation. Don't kick our tires to make yourselves look better. Thank you Mitch |
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Replying to: steve_ (Dec 08, 2008 5:01 pm) Jaws dropped as Zandi, under questioning by Committee Vice Chairman Richard Shelby (R-Ala.), expressed his belief that it would take between $75 billion and $125 billion -- nearly 1 percent of the entire nation’s gross domestic product -- to keep the Big Three out of bankruptcy. But no one disputed the assertion, nor did they seriously dispute Zandi’s prediction that a $34 billion would only clear the way for the automaker to return asking for more. Cost to Resist Bankruptcy Perhaps 62vette's barber was correct at $500B!! Regards, OW |
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Replying to: Vinnmar (Dec 08, 2008 5:35 pm) |
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Replying to: Vinnmar (Dec 08, 2008 5:35 pm) |
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Replying to: Vinnmar (Dec 08, 2008 5:35 pm) So the rationale is: look at all the money we have already wasted. What's some more? That's twice for me today - ROTFLMAO!!!!!! 
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Here is the best of both worlds: Bailout could bring bankruptcy-like reorganization The U.S. government’s proposed rescue package for the Detroit Three automakers is intended to help them avoid the potential devastation of bankruptcy. But some of the benefits of Chapter 11 reorganization might come as a part of the legislation, without all the drawbacks of a bankruptcy protection filing. The companies will undergo a “restructuring process akin to bankruptcy reorganization,” according to a report by the Wall Street Journal. This includes renegotiating agreements with unions, suppliers, and creditors. The process would involve “fewer rigors,” and would have the government, not a judge, in control. If the Congress passes the rescue package, the reorganization program would be managed by the ‘car czar’ appointed by the government. At this moment, it appears Kenneth Feinberg, who managed the 9/11 victims’ families’ fund, is likely to get that job. In addition to orchestrating a possible reorganization of the Detroit Three, the ‘czar’ would also have to be informed of any transaction of $25 million or more and any “material change” in their financial condition. Lastly, the czar would have the ability to force any of the companies into bankruptcy if they fail in their duty to restructure and become viable. Any effort to force reorganization of the Detroit Three in a Chapter 11-like manner should appease observers on both sides of the bailout debate. On the one hand, the Detroit Three won’t have the stigma of being bankrupt — something that could result in drastically lower sales. On the other hand, creditors, suppliers, and unions won’t be getting a free lunch. I LIKE IT!  Regards, OW |
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See like we're Liking What We Hear with regeard to the bailout, but I'm wondering how GM's full page apology is going to play. There was already sentiment in Congress that Wagoner has to go. The reaction to the apology might push more of the public towards that conclusion too.
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Replying to: pf_flyer (Dec 09, 2008 5:19 am) |
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