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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: tlong (May 06, 2009 10:33 pm) I completely agree. |
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Porsche and Volkswagen Consider a Full Merger link title |
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Replying to: gagrice (May 06, 2009 5:49 pm) I think it's in everyone best interest to make this happen, and then make it work. At least then, at 10% equity, the bondholders have an opportunity to make their money back, and then some. BTW, as far as the GM stock thing, I thing the 100-1 stock swap is for regular shareholders only. The formula they are using would allow shareholders to end up with a grand total of 1% of all outstanding shares. |
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Replying to: imidazol97 (May 06, 2009 7:37 am) The baby is out with the bathwater. Time to stamp a new logo on the steel already in inventory. Regards, OW |
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Replying to: kdhspyder (May 06, 2009 2:54 pm) That equity stake is akin to a Ponzi scheme...a sure bet,no doubt! I'm not buying!! WASHINGTON -(Dow Jones)- Financial analysts are casting doubt on General Motors Corp.'s (GM) ability to repay billions of dollars in U.S. government loans, given the company's debt load and sales outlook. GM has acknowledged it can't repay the U.S. loans in the original time frame. It is proposing that the Treasury Department accept majority ownership (51%) of the company in exchange for wiping out about $10 billion in debt. Discussions are ongoing. But even with a large equity stake, the government risks losing at least some of the $15.4 billion it has lent GM since January, analysts said. It would likely take years of profits and a significant appreciation of the company's value for the government to recoup all of its money, analysts said. That time frame would appear to conflict with the Obama administration's insistence that any government takeover of the company be short-lived. "Should a GM bankruptcy not proceed as the government wishes, or demand for GM automobiles doesn't rebound, there is an outsized risk that the government could sustain substantial losses," said Joe Brusuelas, a director at Moody's Economy.com. He called the original decision to lend to GM risky given the company's condition. Aaron Bragman, an automotive analyst with the consulting company IHS Global Insight, said that with a stake in the company, the U.S. government "will be left to wait, and hope that GM can pull out of this nosedive and be a successful company when this is done." Regards, OW |
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Replying to: gagrice (May 06, 2009 3:09 pm)  Regards, OW |
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Replying to: kdhspyder (May 06, 2009 4:18 pm) The Obama administration has already acknowledged that it likely won't recoup $4 billion it lent to Chrysler this winter, conceding the loan was made to a deeply leveraged company "where there was probably never much hope of seeing much recovery." In addition, Chrysler probably won't be able repay in full $4.5 billion in bankruptcy financing from the U.S. and Canadian governments, an adviser to the auto maker said at a court hearing earlier this week Sayonara bailot $$$$.  Regards, OW
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Replying to: tlong (May 06, 2009 10:33 pm) As General Motors (GM) teeters on the edge of bankruptcy, there are issues at play that are unique in today's market, and bring to the forefront some somewhat unknown financial instruments that are causing some bond-holders to root for the auto-maker to go belly up. So, the hot air or gas is about to have a match put to it in a few weeks, like it or not...after all, what's a few billion dollars among friends, RIGHT?  Regards, OW |
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Replying to: circlew (May 07, 2009 3:47 pm) If they can't ... then yes our loans/investments are at severe risk. I think though that making a profit with the right structure is not all that hard to do. It's not a really complicated business if the structure of the company is correct. We the public love our vehicles we are willing buyers. Whether we can recover the full $8.5 Billion that will have been dumped into Chrysler or the $30 Billion that will be the final tab at GM remains to be seen. The alternate is cratering the economies of several Midwestern states and dumping nearly a million retirees on the healthcare systems and their pensions on the PBGC.
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Replying to: kdhspyder (May 07, 2009 4:10 pm) ANY new business model that becomes viable will never support the old economies of those states. I said long ago that the wasted money shoveled to GM and C should have supported the folks on the freight train, not a failed business model that should have died 5 years ago. Simply, bad decisions were made. There is no need to ask a Supreme Court Judge, Congress or the President of the United States to clearly see that. Like I said, buying a car from these companies is a shade of a Ponzi scheme, IMHO. You already lost your money going in!!! Regards, OW |
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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
