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Old 12-04-2008, 03:36 PM   #21
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I'm not in favor of any kind of a bailout for the US auto industry. The Big Three and the UAW got themselves into this mess, and they need to figure a way out- a handout isn't going to fix the root cause of their problems- high manufacturing costs, unrealistic compensation and pension programs, and product problems. Besides, the last multi-billion $$ government-sponsored financial incentive package ($400/taxpayer) went straight to Walmart for imported crap consumer goods-in essence, just free TV's and ipods for most Americans and job security for the Asian factory workers...so, I'm not inclined to up the ante and buy everyone a car this time around ... But a free house? now that's another matter altogether...)
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Old 12-04-2008, 04:33 PM   #22
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Some sort of bankruptcy is the only answer to this mess.
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Old 12-04-2008, 04:35 PM   #23
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Some sort of bankruptcy is the only answer to this mess.
I'd be inclined to agree, but the ripple effects on the economy might be pretty ugly. I am loathe to throw money down the automotive rathole (especially Crapler), but if these companies can make a credible case that they will be able to make it with a little help from Uncle Sam I suppose I would reluctantly come down on the side of helping them.
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Old 12-04-2008, 04:36 PM   #24
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We rented a Pontiac G6 for 10 days last month and totally agree with Saluki, we were also shocked at how much we liked it--great handling, fabulous mileage, very comfortable for the 3,000-plus miles we put on it. Definitely would consider a domestic next time.

I think the Big 3 (or one of them at least) should consider making a 5- or 10-year warranty standard--imho it wouldn't cost them that much and the longer warranty put a lot of Kias and Hyundais into U.S. garages.
I think longer warranties would be a smart move for the domestics. GM's warranty is 5yrs/100k miles on the powertrain. Ford's is 60k/5yrs...these are transferable to the 2nd owner. Chrysler has unlimited miles/unlimited yrs to original owner.
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Old 12-04-2008, 04:38 PM   #25
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I think longer warranties would be a smart move for the domestics. GM's warranty is 5yrs/100k miles on the powertrain. Ford's is 60k/5yrs...these are transferable to the 2nd owner. Chrysler has unlimited miles/unlimited yrs to original owner.
Those are all powertrain only warranties, correct?

I want a bumper to bumper warranty for let's say, seven years and transferable to next owner, to inspire my purchase....
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Old 12-04-2008, 04:39 PM   #26
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I think longer warranties would be a smart move for the domestics. GM's warranty is 5yrs/100k miles on the powertrain. Ford's is 60k/5yrs...these are transferable to the 2nd owner. Chrysler has unlimited miles/unlimited yrs to original owner.
So, did the lifetime warranty help Crapsler?
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Old 12-04-2008, 04:41 PM   #27
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I'd be inclined to agree, but the ripple effects on the economy might be pretty ugly. I am loathe to throw money down the automotive rathole (especially Crapler), but if these companies can make a credible case that they will be able to make it with a little help from Uncle Sam I suppose I would reluctantly come down on the side of helping them.
I think that the unions will never give up enough to make this work unless they are brought to their knees by some sort of bankruptcy.
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Old 12-04-2008, 04:46 PM   #28
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so is the stang gonna be a classic or does it just become worthless first? what's a studebaker go for these days? maybe if i put it in self service storage for 20 years.

As they say, your price may vary. This is 2008 sales from RM Auctions. The 56-57 Golden Hawks originally sold for $2,000 - 3,000. That would give an IRR of about 6%, except that the restoration costs probably ate up most of that.
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1960 Studebaker Champ Pickup $4,675 US
1939 Studebaker Champion $7,975 CDN
1952 Studebaker Champion SDN $3,630 US
1951 Studebaker Custom Project $28,600 US
1957 Studebaker Golden Hawk $41,800 US
1956 Studebaker Golden Hawk Two Door $55,000 US
1962 Studebaker GT Hawk $4,950 US
1948 Studebaker Land Cruiser 4D $5,500 US
1932 Studebaker President Brougham $110,000 US
1931 Studebaker President Four Seasons Roadster $188,100 US
1931 Studebaker President State Coupe $48,500 US
1928 Studebaker Series FB President State Victoria $52,800 US
1956 Studebaker Sky Hawk Coupe
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Old 12-04-2008, 04:47 PM   #29
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so is the stang gonna be a classic or does it just become worthless first? what's a studebaker go for these days? maybe if i put it in self service storage for 20 years.
the Stang is classic enough to be released in 2005 in its popular 1969 body style with modern aerodynamic updates. this was one of the smartest moves Ford ever made. Even here in Nowhere NY, i see them all over the place. This is snow country, not the usual market for such a vehicle. Drivers are...ahem...upper middle aged and young also. Ford tapped into their retro loyalty market and created a new generation of Stang lovers.
did GM or Chrysler do anything similar? just curious...
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Old 12-04-2008, 04:49 PM   #30
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So, did the lifetime warranty help Crapsler?
I'm sure it did help somewhat, but surely not enough to save them. I don't think it's been in effect long enough to cost them anything.
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Old 12-04-2008, 05:41 PM   #31
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I'm sure it did help somewhat, but surely not enough to save them. I don't think it's been in effect long enough to cost them anything.
Yup, and I figure they knew they wouldn't be around long enough to have to fix anything.
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Old 12-04-2008, 11:41 PM   #32
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the Stang is classic enough to be released in 2005 in its popular 1969 body style with modern aerodynamic updates. this was one of the smartest moves Ford ever made. Even here in Nowhere NY, i see them all over the place. This is snow country, not the usual market for such a vehicle. Drivers are...ahem...upper middle aged and young also. Ford tapped into their retro loyalty market and created a new generation of Stang lovers.
Every time I see a Mustang with an automatic transmission it makes me sad. It's like a racing bicycle with training wheels...
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Old 12-04-2008, 11:44 PM   #33
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A couple of more thoughts after discussing this with my liberal friend, who started the conversation with how come we can give AIG 100 Billion and can't give the the big 3 35 billion or whatever today's price tag is. AIG doesn't make anything the Big 3 make cars.

I said good point and than went through a number of arguments.

The two that actually had worked were

1. Shortly after my warranty expired on my Accura I got mailers from 3rd party company offering extended warranty for my car like Warranty Direct. I didn't check the price but I don't think they are super expense a couple of thousand??

Why not have Uncle Sam provide a guarantee that they will honor a warranty of the Big 3 cars. That gets rid of the argument that consumers won't buy from a bankrupt car company and clearly there is a 3rd party industry that already handles this. Albeit not on GM's scale but it would certainly provide work for GM dealers. Say it cost $2K/car and the big 3 make 10 million cars while in bankruptcy the cost to Uncle Sam is only 20 billion, cheap by comparison.

The second argument which worked was this. A speculator can buy GM debt at roughly $.25 on the dollar, e.g an 8% GM bond for $250 meaning that they are collect 32% interest with the potential of a 4x return if the company is still in business 10 or 20 years from know.

As long as GM is out of bankruptcy the speculator collected their ridiculous interest rate at the taxpayers expense. Once bankruptcy happens no more interest payments to speculators (or other bondholders for that matter). Eventually the bankruptcy court sorts out who gets paid what and what percentage of new GM stock each bondholder, suppliers, banks etc own.

Uncle Sam providing the bankruptcy financing is also a reasonable compromise but the only way GM survives is it has to stop paying interest on its debt.
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Old 12-05-2008, 08:46 AM   #34
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So, did the lifetime warranty help Crapsler?
No, neither did the marriage with Daimler Benz........
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Old 12-05-2008, 08:46 AM   #35
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Once again this is a situation that has gotten as bad as it has because of too much govt interferance... not less. For example... most people... even ones that have posted here, have said that the UAW is partially to blame for this. That the UAW was able to get for themselves unrealistic, and certianly unsustainable retirement packages and benefits. Hmm... so why do the Big three just not get rid of the unions to try to make themselves more profitable? Because that would be against the current laws! They by law cannot get rid of the UAW right now, or change the contracts without endless negotiations. If the Big three decided to try it, the UAW would sue them all the very next day... bankruptcy... or not.

When people are not able to negotiate their own personal situations to mutual benefit... it all falls apart.
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Old 12-05-2008, 08:49 AM   #36
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Once again this is a situation that has gotten as bad as it has because of too much govt interferance... not less. For example... most people... even ones that have posted here, have said that the UAW is partially to blame for this. That the UAW was able to get for themselves unrealistic, and certianly unsustainable retirement packages and benefits. Hmm... so why do the Big three just not get rid of the unions to try to make themselves more profitable? Because that would be against the current laws! They by law cannot get rid of the UAW right now, or change the contracts without endless negotiations. If the Big three decided to try it, the UAW would sue them all the very next day... bankruptcy... or not.

When people are not able to negotiate their own personal situations to mutual benefit... it all falls apart.
Bankruptcy is the only "legal way" to get rid of the UAW. I think the UAW will fight to the death to protect their benefits. The other part of the vicious circle is that if by some miracle GM and the others survive, they will have to downsize their labor by 50%, so instead of 400 retirees per 1 worker, you'll have 800 retirees to 1 worker, further putting them in an untenable position........
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Old 12-05-2008, 08:54 AM   #37
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Why not have Uncle Sam provide a guarantee that they will honor a warranty of the Big 3 cars. That gets rid of the argument that consumers won't buy from a bankrupt car company and clearly there is a 3rd party industry that already handles this.
It would solve the "can I get this car fixed if they go under" sales resistance. It would not, however, give GM the incentive to build better cars--or give the consumer any confidence that they were doing so. When Hyundai guarantees to fix anything that goes wrong for 10 years at their expense it sends a strong message. But, you are right--such a guarantee at this point from GM would be meaningless.

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As long as GM is out of bankruptcy the speculator collected their ridiculous interest rate at the taxpayers expense.
I'm not sure the interest rate is ridiculous--it's exactly what the market demands for this kind of risk
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Uncle Sam providing the bankruptcy financing is also a reasonable compromise but the only way GM survives is it has to stop paying interest on its debt.
And re-negotiates its contracts so that the company is commercially viable. Once these re-negotiations happen, the market (investors) can best judge if GM has a workable business plan. If so, they'll buy the bonds at a reasonable price and government financing is not needed.

I don't think we need anyone in government, beholden to all the special interests who have a dog in this fight, deciding whether or not the automakers should get money. We have another system for that--the market.

Okay, okay--maybe a small govt loan to prime the pump after bankruptcy. But tie the govt money to private money--when investors judge the deal is good one and buy bonds (and any new issues of stock), the government might also buy some. To make it work, the private buyers would have to be in a higher position (if there is a default) than the govt.
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Old 12-05-2008, 09:32 AM   #38
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I monitored the Congressional meetings with the automakers yesterday. Here's my brief summation:

1)The UAW president seems smug and arrogant

2)Waggoner impressed me the most of all the CEOs

3)The Senators are in love with Dr. Zandy

4)Probably Pelosi and her cronies are going to slam through some sort of aid package.

5)GM will Still have FORTY models of vehicles after restructuring........

The MOST interesting thing that I heard over and over was Waggoner referring to the UAW as "THEM", not using the word "WE". Maybe its just me, but I found that statement very troubling. More than likely behind the scenes, the Gettelfinger and the CEOs are NOT friendly at all.........
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Old 12-05-2008, 09:58 AM   #39
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Management probably blames the union for strong arming them into these contract via strikes and the threat of strikes. UAW blames managment for lying about promised benefits.

since the 1970's the policy of the UAW was to take as much revenue as they can in good times and don't give anything back in bad times. almost as bad as local government spending
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Old 12-05-2008, 10:17 AM   #40
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Management probably blames the union for strong arming them into these contract via strikes and the threat of strikes. UAW blames managment for lying about promised benefits.

since the 1970's the policy of the UAW was to take as much revenue as they can in good times and don't give anything back in bad times. almost as bad as local government spending
Agree, but their time seems to be coming, whether they believe it or not.

I saw Waggoner wants to keep Chevy and GMC, that has to be one of the dumbest ideas I have ever heard, they are the SAME DARN VEHICLE, except for different trim.........
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