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
|
|
|---|---|
has some pretty good ideas, after you get past the part where he seems to be weeping in his soup for all the unfairnesses (is that a word?!  ) the domestics have had to suffer since WWII. http://www.autoweek.com/article/20081124/FREE/811249987 It's when he invokes the domestics' leadership on E85 that I call foul, but he goes on to promote some new ideas I haven't heard yet that might be a good alternative to a bankruptcy filing. Among them: First, I would invest part of the Troubled Asset Relief Program (TARP) money in the automakers' captive finance companies at competitive rates securitized by the finance or lease paper. This will dramatically reduce incentive costs for the Detroit Three. It also will benefit consumers who are finding it difficult to get financing, even with good credit scores. Second, I would enable the Detroit makers to draw against the $25 billion immediately to cover all investments they have made to date in green technology. That includes hybrid development, plug-in hybrids, EcoBoost, fuel cells and E85. This will keep them going until the next stage. Third, take $250 billion of the TARP money that the current administration will not spend and invest it in the new Industrial Bank of America. This bank will have the mandate to rebuild our manufacturing base, including our auto industry, with the progressive application of green technology. It also will rebuild our power grid with solar, wind and wave technology; it has to be renewable. I especially like the first and third points: a major financing base to promote development of alt power technology, as well as provide reliable, widely available credit for the industry and customers alike (this last is particularly crucial for GM now that it has lost control of GMAC). And the second point makes pulling the already approved $25 billion forward to repay them for investments they have already made seem almost sensible. I would imagine GM's cumulative investment in the Volt is substantial by this point. And Chrysler's in electric cars? And Ford with its own hybrids and EcoBoost? After the three main points the author goes off on a flight of fancy about how he would manage the restructuring of healthcare in America - yes that one is mostly pie in the sky. Fixing healthcare for the domestics and EVERYONE aint gonna be as easy as all that. But then he writes this: Look at selling off certain brands, such as Volvo and Saab. Close Hummer. Buick is a highly successful brand in China, so try to get investment from China in that brand. Develop specific consumer missions for all of the brands; this will help sales in brand-conscious areas such as California And maybe there could be a couple more brands gone between GM and Ford... He makes an emotional appeal for supporting and rejuvenating the manufacturing sector in America, starting with the carmakers. Ultimately, one of the things one must decide in this whole bailout thing is how much one values domestic manufacturing in general, and whether it is worth spending a TON of money trying to save it. But will a cash infusion save it? Global market forces with regard to labor costs dictate that the domestics will continue migrating all their production to Mexico and other low-cost Central American locales, don't they? I think it is inevitable unless they can somehow eliminate the UAW from existence entirely. |
|
|
Replying to: nippononly (Nov 24, 2008 11:05 pm) I have a problem with the last part of this statement. Mr. Wagoner even mentioned it during the grilling , I mean hearings. GM won't finance anyone with a score less than 700. Since when did they become so selective? The other part is I don't know who is having problems getting a loan with a good credit rating. Two of my sons just bought cars in the last month. One a loaded import made by Nissan's high line company and the other bought a pre-owned 7 year old sports car. Neither had a problem getting a loan. Both have excellent credit and the one that bought the used vehicle is only 23 years old but has a FICO score of 751, is about to graduate from college, has a full time job and pays his bills on time. His older brother ain't doing too bad either. Score is way over 7xx also and he is very fiscally responsible. So my point is the money is there for those that qualify for it.
|
|
|
Replying to: rogeliov (Nov 24, 2008 11:25 pm) As long as we're talking about the money being there ONLY if you qualify for it, I'm on board. But we have to stop loaning money to people who cannot pay it back. There are always going to be changing circumstances that cause defaults on some loans. We don't have to increase that number by creating loans that have little or no chance of being paid off from the outset. |
|
|
Replying to: circlew (Nov 24, 2008 2:00 pm) |
|
If GM doesn't get a bailout - NOBODY SHOULD!!! Not Citi, not AIG, not ANYBODY!!! Let 'em all go down in flames! You want cold hard cruel capitalism? Let the market decide!
|
|
|
Replying to: lemko (Nov 25, 2008 6:02 am) What kind of companies do these guys run that they can't afford to fly to DC?  Speaking of images, GM ended its 9 year endorsement deal, estimated at $7.5 per year, with Tiger Woods. Mark Steinberg, Woods's agent, said Woods had been impressed with the way Buick transformed its image, doing away with stodgier models and releasing more updated cars. “We saw that it was going to work,” Steinberg said. “We saw what Buick wanted to do with their brand.” Saw that it was going to work? Buick sales in the US were down 54% from 2000 to 2007 and the average age of a Buick sedan purchaser is 66. Perhaps someone will impulse purchase a $200 pair of sneakers based on a celebrity endorsement. Not so sure it works that way with a $30,000 vehicle. |
|
|
Replying to: rogeliov (Nov 24, 2008 10:00 pm) If you consider a year and a half old PU truck obsolete. The dealer was offering me low book on a full priced Denali. That is an insult to my way of thinking. I proved the value of the truck by finding a buyer willing to pay a decent though not what I would consider a great price for the truck. It was not a roll bar. It was a locking rollup bed cover. The truck was always garaged and did not have a single scratch. It did not get near the mileage EPA suggests. It did much better on a trip through NM and CO. Highest was 22 MPG. Around San Diego I averaged about 16.5 MPG. By the way I got $16,500 for my 7.5 year old Suburban that cost me $35k in 1998. It all adds up to the deterioration of GM from the dealers all the way to the CEO. Bailing them out is throwing good money after bad. I feel bad for those that bought GM stock at $75 and now it is worth about $3.50.
|
|
|
Replying to: pf_flyer (Nov 25, 2008 6:17 am)
|
|
|
Replying to: lemko (Nov 25, 2008 6:23 am)
|
|
|
Replying to: dave8697 (Nov 24, 2008 5:03 pm) Even the Accord loses over $4k in depreciation in year 1. I could have had an Impala for a price that would have virtually made depreciation a non-factor. Nobody pays MSRP, that's just the number that would give GM a viable business plan Well, my Dad's 2003 Regal, purchased used in September 2003, was $10,995. With tax, tags, an extended warranty to ease his mind, and EVERYTHING, the out-the-door price was $12,840. Now this was just the LS model with the regular 3.8 V-6, so it wasn't supercharged. Also, no leather, no sunroof, plastic wheelcovers. To this day, we still don't know why the car was so cheap. It had 19,500 miles on it when Dad bought it, and we knew it had been a rental car, because of some paperwork in the glovebox. The build date on the doorjamb sticker was June 2002, so this car was a very early '03, but still, an '03. That was 5 years ago, and nothing of any interest has gone wrong with the car. I'd imagine that if it was hiding any problems, they would have surfaced by now. My only guess is that the dealership had the car on their lot for awhile, and just wanted it cleared out to make room for something else. I remember they also had a steel blue 2002 Intrepid parked next to the Regal on the lot, for $8995. It had around 39,500 miles on it, and was a base model with the 2.7. Basically, the same car as my 2000 Intrepid. While I have a preference for the Intrepid, I think the Regal was definitely worth the $2,000 price premium. If nothing else, to get a year newer car with 20,000 fewer miles on it. The Regal was also better equipped, having ABS, an oil life monitor, tire pressure monitor, torquier engine, etc. I remember telling my Dad that if he didn't buy that Regal, I would! Oh, as for MSRP, IIRC a 2003 Regal LS stickered for around $26K. But, like you said, nobody pays MSRP. I guess it probably would've sold for more like $21-22K? |
|
You are here:
Forums
Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
