Edmunds.com | Inside Line | Auto Observer Your Account | Help | Directory
You are here:
![[F]](http://a332.g.akamai.net/f/332/936/12h/www.edmunds.com/media/townhall/webxicons/site.gif){kind=small}
Forums
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
|
..will encourage it to be more forward-looking about the health of the two hosts. Perhaps, but don't hold your breath you say. Point taken. We'll see. |
|
|
Replying to: kdhspyder (May 06, 2009 2:54 pm) GM has not made a decent profit in 20 Years. In all likelihood we will never get back to the vehicle sales levels spawned during the Dot.com and housing bubbles. If GM did not make a decent profit when some of the other auto makers made record profits. What makes you think they will anytime in the future? Or is it just your salesman's optimistic outlook? This is not 1980, and it is not Chrysler led by Lee Iococca. It is C & GM led by a guy that thinks Cinco de Quatro is a clever statement.
|
|
|
According to several sources the rights of the bondholders are being violated by the President and staff. They are trying to use the media to brow beat them into taking less than they are entitled to under the 5th Amendment. If the Obama administration expected the senior creditors of Chrysler to fold their tents under political pressure, they may have gotten a rude shock today. Thomas Lauria, who accused the White House of threatening the creditors withn humiliation at the hands of the White House press corps, has filed a motion to halt the administration’s machinations on behalf of the UAW in the Chrysler bankruptcy. Lauria and his allies claim that the Obama administration has violated the Constitution in their bid to devalue the senior creditors’ holdings on behalf of junior creditors, and have some precedent to support the allegation. The Treasury Department relies on TARP as the purported authority to justify the disparate treatment under the 363 Sale, even though TARP was enacted after the Senior Lenders’ liens on the Debtors’ property were already in place. The Supreme Court long ago recognized, however, that a secured creditor’s interest in specific property is protected in bankruptcy under the Fifth Amendment. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 594 (1935) |
|
|
Replying to: gagrice (May 06, 2009 3:09 pm) GM currently is servicing $27 Billion in long term debt. Only about $9 Billion is 'attached' to current production facilities. It has factories and facilities today that can make 5 million vehicle annually. In addition to the debt on the plants to build these 5 MM units it has to cover the cost of maintaining these facilities. However the current annual sales is only about 2 million units. Finally GM incurs $2000 to $4000 on each vehicle as legacy costs. This would normally be the profit for say Toyota or Honda. Soon these legacy cost will be gone.
|
|
|
Replying to: kdhspyder (May 06, 2009 4:18 pm) DETROIT (AP) -- General Motors Corp. notified shareholders Tuesday it is planning a reverse stock split that would give them one share of new stock for every 100 shares they currently own. The automaker said in a filing with the Securities and Exchange Commission that the deal would be part of an agreement with the Treasury Department in which the government would assume at least half of GM's debt in exchange for company shares. GM will send the information to shareholders currently holding a total of 610.5 million outstanding shares. GM spokeswoman Julie Gibson said the company is merely notifying shareholders of what it may do if it reaches deals to swap debt for stock with the Treasury Department and bondholders. The company, she said, is not making an offer to shareholders. GM has received $15.4 billion in U.S. government loans and faces a June 1 deadline to restructure or be forced into Chapter 11 bankruptcy protection. Under GM's plan, the U.S. government would get a 50 percent equity stake in exchange for about $10 billion in loan forgiveness. For the deal to work, GM has to reach agreement with the United Auto Workers to swap stock for about $10 billion of the $20 billion in payments GM must make into a trust fund that will take over retiree health care expenses starting next year. The UAW's stake would total about 39 percent. Bondholders would get 10 percent and current stockholders would get 1 percent. It sounds to me like the stockholders could force GM into liquidation if enough of them can control the board. |
|
|
Replying to: ruking1 (May 06, 2009 10:12 am) Yeah, but are they better than the competition? Only in some cases...trucks...Fusion blows them away, Malibu is competitive, but the domestics have been inconsistent at best, and really bad at worst. Even Buick has been out-couched by Toyota. Even Ford, the best of the three, still has some ways to go to be consistently competitive. You want people to buy your product? Build the best product. All there is to it. Party doesn't even enter into it you know. I bet you can even find some UAW guys driving imports.
|
|
|
Replying to: gagrice (May 06, 2009 3:45 pm) First, the few holdouts in the Chrysler case only hold about $200 million out of $6.9 Billion in debt. The largest portion of the debt is held by the TARP banks and they have accepted ( reluctantly ) the 29c offer. The other tiny investors want more. they want Chrysler liquidated so that they can recover 50c or 60c on the dollar. Second, This is all normal business negotiations that Chrysler can't do on its own because its parent orphaned it last year. Third, the judge will rule on the issue. It's in his hands now.
|
|
|
Replying to: gagrice (May 06, 2009 3:45 pm) Not at all. As you may or may not recall, part of the whole bailout deal was that the company's debt to the government would be highest in terms of seniority. As in the taxpayer gets paid back before even the bondholders. We already know the sole stockholder, Cerberus, already got wiped out. You hear them complaining? This is just the bondholders squealing because their (risky) investment choices went sour. Again. You see, that "All investments involve risk" fine print isn't supposed to apply to multi-million dollar investment houses that own their own herd of lobbyists. |
|
|
Replying to: gagrice (May 06, 2009 4:33 pm) I don't think the legacy is gone from the tax payers standpoint. And will the VEBA bunch accept worthless GM stock when they look closely. I have no idea what GM is doing. I wonder if anyone in their management team knows. Huh?? There is nothing in the legacy costs that involve the taxpayers unless GM or Chrysler are forced into liquidation and the retirees are thrown on the PBGC. Then we step in to keep them afloat. The legacy costs of the D3 will disappear forever when the VEBA goes into effect. The union reluctantly agreed to accept shares of the new Fiat/Chrysler in lieu of cash to fund the VEBA and it also agreed to accept less than what was negotiated 2 yrs ago. But what is certain is that the vehicle maker is free of this burden. Presumably this is the trial balloon for the GM BK. |
|
|
Replying to: bpizzuti (May 06, 2009 4:42 pm) No. I don't. It is more than apparent they don't/can't/want to build the best products- all there is to it. They haven't for a good 4 decades. All there is to it is to let them go Chap 11. Yet, the Democrats want to preserve the ability to make lousy cars (on my dime, yours also), which they don't/won't buy. I vote they do it on folks' who wants it dime, not those that can see reality and DON'T want it! Democrats do not buy them in any numbers to make the big 4 profitable. The majority buy "import cars" NON GM/FORD/Chrysler. You are completely ignoring the implications and the utter disingenousness of it all. Even you agree that 2/3rds or 67% of the big three make lousy cars. My take is all three do, so we are not far apart. As you point out even their OWN workers drive imports. (like you think they are stupid)
|
|
You are here:
Forums
Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
New? Join Now!
Forum Tools
Search Forums
Browse by Vehicle
Browse by Board
Browse by Topic
Today's Chats
